The daily business briefing: April 13, 2021

(Image credit: ROB ENGELAAR/ANP/AFP via Getty Images)

Jump to category:

1. Biden tells CEOs infrastructure plan will help address chip shortage
2. U.S. calls for pause of Johnson & Johnson's COVID-19 vaccine
3. Stimulus checks push federal deficit to record
4. Stock futures drop after agencies recommend Johnson & Johnson vaccine pause
5. Microsoft agrees to buy Nuance for $16 billion

published 13 April 2021

1. Biden tells CEOs infrastructure plan will help address chip shortage

President Biden told corporate leaders in a virtual meeting on the semiconductor shortage that the United States should lead the world in producing computer chips. He used the occasion to tout the benefits of his $2.3 trillion infrastructure plan, which calls for investing $50 billion in semiconductor manufacturing and research. "We need to build the infrastructure of today, not repair the one of yesterday," he told the group, which included 19 technology, semiconductor, and automotive industry executives. "China and the rest of the world is not waiting and there's no reason why Americans should wait." The shortage has delayed a new iPhone and last week forced U.S. automakers to temporarily idle or reduce production at several factories. Intel has announced that it will make chips for car plants later this year.

The Food and Drug Administration and the Centers for Disease Control and Prevention on Tuesday called for a pause in the use of Johnson & Johnson's COVID-19 vaccine. The U.S. agencies said they're reviewing "data involving six reported U.S. cases of a rare and severe type of blood clot in individuals after receiving" the vaccine. Over 6.8 million doses of the Johnson & Johnson COVID-19 vaccine, which only requires a single shot, have been administered in the United States. The federal government will reportedly stop administering the vaccine at federally run vaccination sites, and a CDC outside advisory committee is set to convene for an emergency meeting. The FDA and the CDC noted, however, that "right now, these adverse events appear to be extremely rare."

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

The federal budget deficit surged to a record $1.7 trillion in the first half of the fiscal year, as spending jumped in March due to the latest round of coronavirus relief checks. The half-year deficit was twice as big as it was in the same period a year before. The March shortfall of $660 billion was up by 454 percent over the same month last year. Revenue rose by 13 percent to $268 billion despite the COVID-19 pandemic-related drop in business due to shutdowns and other problems. Spending was up by 161 percent to $927 billion, the third biggest monthly gap in history. Only last June and April were larger. Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, said much of the last year's borrowing was "unquestionably warranted," but added, "We need to start paying for what we spend."

U.S. stock futures were flat early Tuesday after Monday's modest losses, but dropped after news that federal health agencies were recommending a pause in the Johnson & Johnson COVID-19 vaccine. Futures for the Dow Jones Industrial Average were down 120 points. Those for the S&P 500 and Nasdaq were off by 0.3 percent. J&J shares fell by 3 percent in premarket trading. Investors were also cautious as they awaited the March reading of the consumer price index, which was scheduled to be released before the markets open. Economists polled by Dow Jones forecast an average rise of 0.5 percent over the previous month, and 2.5 percent year-to-year. Federal Reserve Chair Jerome Powell and Biden administration economists have predicted a rise in inflation in the next few months as stimulus spending and demand that had been held back by coronavirus lockdowns gets unleashed.

Microsoft announced Monday that it would purchase artificial-intelligence company Nuance for $16 billion. Including the company's assumed debt, the deal values Nuance at $19.7 billion. Microsoft has agreed to pay $56 per share, which represents a 23 percent increase over Nuance's Friday closing price. Nuance's language recognition technology is central to Apple's Siri personal assistant. It also sells the well-known speech-recognition software Dragon NaturallySpeaking used by people with physical disabilities. The deal marks the latest in a series of big acquisitions Microsoft CEO Satya Nadella is counting on to fuel growth. Last year, Microsoft unsuccessfully tried to acquire part of short-video app TikTok, then reached a $7.5 billion deal for videogame company ZeniMax, maker of the popular Doom games.

Explore More

Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.