North American Morning Briefing : Stock Futures -2-

July 11, 2022 at 10:26 am

China Evergrande's main onshore unit, Hengda Real Estate Group Co., said in a filing to the Shenzhen stock exchange Monday that most of the owners of a 2020 bond opposed the plan to push back its puttable date, the time when investors have the right to ask the company to buy it back, to Jan. 8, 2023 from the current date of July 8.

China Tech Stocks Fall After Beijing Fines Alibaba, Tencent

Shares of Chinese tech giants fell in Hong Kong on Monday, after Beijing fined some of the country's largest internet companies for failing to make proper antitrust declarations on previous deals.

Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Ping An Healthcare & Technology Co., which were named in the latest executive punishment notices, respectively fell 6.4%, 2.7% and 4.0%. Among peers, JD.com Inc. was down 4.7% and Meituan shed 5.5%.

Baby-Formula Production Has Restarted at Abbott's Michigan Plant

Abbott Laboratories has reopened its biggest factory after a shutdown last month that dealt another blow to efforts to replenish the country's short supply of baby formula.

Abbott on July 1 reopened its plant in Sturgis, Mich., following a nearly three-week closure that stemmed from severe thunderstorms that blew through southwest Michigan, a spokesman confirmed on Sunday. The company has restarted production of its EleCare formula, a formula for babies with digestive issues, and will begin shipping in the next few weeks, said spokesman John Koval.

Elon Musk's Starlink Satellite-Internet Service Battles Dish Over Airwaves

Elon Musk's rocket company recently won regulatory approval to provide satellite-internet service to planes, boats and recreational vehicles. But the company's battles in Washington are just getting started.

Space Exploration Technologies Corp., better known as SpaceX, is urging the Federal Communications Commission to avoid making new rules that it says would hobble its Starlink internet service, which depends on a swarm of low-flying satellites. That has put the company and satellite operators like OneWeb and Kepler Communications Inc. at odds with Dish Network Corp. and others that want the FCC to open more room on the spectrum for fifth-generation wireless service.

Strike at Machinery Maker CNH Industrial Grinds On as Talks Stall

Negotiations between CNH Industrial NV and the equipment maker's striking workers have hit a stalemate, deepening supply-chain problems with farm and construction equipment.

Bargaining sessions between the United Auto Workers union and London-based CNH broke down in the middle of June, and there are no additional meetings scheduled in the near term, union leaders and the company said.

Canada's Rogers Communications Restores Wireless, Internet Service

OTTAWA-Canada's Rogers Communications Inc. said it had restored internet and wireless services and that its networks and systems are close to fully operational, following a roughly daylong outage starting early Friday morning that hit over 10 million customers and hampered electronic-banking and debit-card transactions across the country.

The company said the outage was the result of an equipment-maintenance update that went awry.

The Stock Market Faces Next Test as Inflation Looms Over Earnings Season

Investors expect concerns about hot inflation and strapped consumers to dominate the corporate-earnings season that kicks off this week, creating winners and losers in the battered stock market.

Stocks have come under pressure this year with inflation hovering at a four-decade high and the Federal Reserve in the midst of an aggressive campaign to raise interest rates to rein it in. The S&P 500 has fallen 18% in 2022, even after rallying 3% to start July.

China Inflation Rises on Gains in Food and Fuel Prices

SINGAPORE-Inflation in China accelerated more than expected in June as prices for food and fuel picked up, but cost pressures remain muted compared with blistering gains in Europe and the U.S.

Consumer prices rose at a 2.5% annual pace in June, China's National Bureau of Statistics said Saturday, picking up from a 2.1% increase recorded in May. Economists polled by The Wall Street Journal had expected year-over-year inflation of 2.4%.

Global Tax Talks Hit Another Delay

Efforts to deliver the most significant changes to global tax rules in a century will face fresh delays after negotiators Monday said it would take longer than planned to reach a formal agreement on how countries with large consumer markets collect more corporate tax revenue.

The new rules, initially promised by mid-2022 as part of a multilateral deal negotiated under the auspices of the Organization for Economic Cooperation and Development, won't be completed until next year. After that, countries will need to vote to approve them. The delay increases the risk that some governments will lose patience with the process and press ahead with their own national taxes on the big U.S.-based technology companies that are the prime targets of the effort.

Sri Lanka Crisis Flashes Warning for Other Indebted Economies

Uncertainty over Sri Lanka's leadership set in on Sunday as protesters continued to occupy the president's residence a day after they stormed it, and President Gotabaya Rajapaksa's whereabouts remained unknown.

The president hasn't yet directly addressed an announcement by the speaker of the parliament that Mr. Rajapaksa would resign on Wednesday. His only communication since massive protests overran his official residence was a statement from his office ordering officials to expedite the distribution of a shipment of natural gas due to arrive Sunday.

For the Fed, Easing Too Soon Risks Repeat of Stop-and-Go 1970s

Federal Reserve Chairman Jerome Powell is raising interest rates at the fastest pace since the 1980s. That has been easy so far because rates are low and the economy has been strong.

The hardest part lies ahead. Just as it proved difficult for the Fed last year to tell when to start raising rates, it is tough to know when to stop. What happens, for example, if the economy begins slowing sharply but inflation stays too high?

For Crypto Survivors, There Are Deals to Be Had

In the rubble-strewn land of virtual currencies, cash is king.

A blowout in the cryptocurrency market sparked a wave of layoffs, punished valuations and drove some companies to bankruptcy. Now firms that still have capital are gearing up for a shopping spree.

Freight Rates Are Starting to Fall as Shipping Demand Wavers

High-price freight contracts that were written when carrier capacity was tight and a rush to restock inventories was in full force are losing their shine as slowing demand and a wavering U.S. economy send shipping rates sliding.

Some companies now are renegotiating shipping agreements they struck at the height of the pandemic-driven surge in freight demand or are dipping into the spot market to take advantage of lower rates.

Treasury Outlines International Engagement on Digital Asset Regulations

The U.S. intends to continue working with international partners as it develops its regulatory standards for digital assets, the Treasury Department said.

In a fact sheet published Thursday, the Treasury Department laid out how it would work with its overseas counterparts and in international forums as the U.S. studies cryptocurrencies to set up a possible regulatory regime.

Congress Juggles China Bill, Democrats' Climate and Drug-Pricing Ambitions

WASHINGTON-Congress returns on Monday with Democrats aiming to revive central pieces of President Biden's stalled economic agenda while trying to keep on track a separate, bipartisan bill targeted at boosting competitiveness with China that top Republicans are threatening to block.

House Democrats also are set to roll out legislation responding to the Supreme Court ruling ending federal abortion protections. The push could include legislation to write into law the right to an abortion before fetal viability, as well as a bill intended to block any state attempts to criminalize travel for the purpose of getting an abortion. The bills wouldn't have enough support to pass the Senate.

Election Officials Confront Cyber Threats, False Claims Ahead of Midterms

BATON ROUGE, La.-Election officials on the front lines of defending voting systems say they are preparing for a range of challenges ahead of the fall midterms, as they seek to ward off cyber threats and restore voter confidence after a flood of unsubstantiated election-fraud claims.

On the cybersecurity front, Russia, China, Iran and North Korea pose persistent threats along with other concerns including ransomware, said Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency-the U.S. government's top cyber unit.

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Australian tech-solutions firm Link Administration Holdings rejected an improved takeover proposal from Dye & Durham but says it is continuing to negotiate with the Canadian cloud software company.

Link on Monday said that its board was unable to recommend Dye & Durham's offer of A$4.57 ($3.14) a share. The companies last year agreed to a A$5.50-a-share proposal and entered into a takeover scheme before Dye & Durham argued that Link's reduced share price and financial-market turbulence warranted renegotiation.