The daily business briefing: August 9, 2019

Uber posts massive quarterly loss, escalating U.S.-China trade war raises U.S. recession fears, and more

The Uber logo on Wall Street
(Image credit: Spencer Platt/Getty Images)

1. Uber posts $5.2 billion quarterly loss

Uber posted both its biggest quarterly loss and its slowest-ever revenue growth on Thursday. This was the ride-hailing company's first finance report since it went public in May with a dismal IPO, and it is attributing $3.9 billion of the $5.2 billion loss to the stock-based compensation it paid out to employees when it went public. Uber started sharing its financial data in 2017, and posted an overall loss of $878 million in the second quarter of last year. Its adjusted revenue ended up being below analysts' estimates. Uber CEO Dara Khosrowshahi said he expected 2019 to be a "peak investment year," and that losses would slow in "2020, 2021." But Uber didn't provide forecasts or explanations for staffing cuts it announced this week.

The New York Times

2. Escalating U.S.-China trade war raises U.S. recession fears

President Trump's latest round of tariffs on Chinese imports, his decision to label China a currency manipulator, and China's scrapping of new purchases of U.S. agricultural goods will hurt the economies in both countries, economists warn. A Reuters survey of economists conducted Aug. 6-8 and released Friday found that about 70 percent said the latest salvos in the escalating trade war have brought the next U.S. recession closer, and 45 percent of economists surveyed said the U.S. economy will slip into recession within the next two years. The International Energy Agency downgraded its forecasts for global oil demand, citing U.S.-China trade tensions, and reported that global demand for oil in the first half of 2019 was the weakest since 2008. Global markets were trading slightly lower early Friday over trade worries.

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Reuters The Wall Street Journal

3. Walmart stores will no longer have violent video game displays

Walmart confirmed on Thursday that stores received a memo instructing employees to take "immediate action" to remove displays containing "violent themes or aggressive behavior." The memo also asks that employees check to make sure that violent movies aren't playing in the electronics department and hunting videos aren't shown in sporting goods. The move comes after 22 people were killed in a mass shooting at a Walmart in El Paso, Texas, and two managers at a store in Southaven, Mississippi, were killed by a suspect described as a disgruntled former employee. "We've taken this action out of respect for the incidents of the past week, and this action does not reflect a long-term change in our video game assortment," spokeswoman Tara House told USA Today in a statement. Walmart has said it will continue to sell guns in stores.

USA Today

4. Huawei unveils replacement mobile OS for Google's Android if sanctions persist

Huawei Technologies, the world's No. 2 smartphone brand, said Friday that it has developed its own operating system to replace Google's Android if the U.S. maintains its trade restrictions on the Chinese telecom giant. The first phone running Huawei's new Harmony operating system will be unveiled Saturday. "Harmony OS is completely different from Android and iOS," Richard Yu, the head of Huawei's consumer unit, told a developers' conference in Dongguan, southern China. The company can "switch immediately" to Harmony (called Hongmeng in China), but would prefer sticking with Android for now, Yu said.

The Associated Press Reuters

5. Bayer reportedly proposes $8 billion settlement for U.S Roundup lawsuits

Bayer AG has proposed paying as much as $8 billion to settle more than 18,000 lawsuits in the U.S. from people who say their cancer was caused by the glyphosate-based weedkiller Roundup, Bloomberg News reports, citing people familiar with the negotiations. The possibility that Bayer could resolve the massive liability hanging over its head sent shares up 11 percent in early trading on Friday. Bayer CEO Werner Baumann said last week that the German company is "constructively engaging" in court-ordered mediation and would consider settling with U.S. plaintiffs on reasonable terms. Bayer, which has suffered a string of Roundup defeats in California state courts, wants the settlement to cover all current and future Roundup claims.

Bloomberg News Reuters

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