AP Business Summary | March 15, 2023
US futures fall as bank anxiety hits global markets
U.S. futures tumbled and bank stocks around the world were falling again as anxiety over the health of the global banking system re-emerged after a broad market rebound the day before. Futures for the benchmark S&P 500 slid 1.7% early Wednesday and futures for the Dow were off 1.6%. Large and mid-size banks were also sinking before markets opened, with most shares falling between 5% and 10%, though Switzerland’s Credit Suisse skidded nearly 25% to all-time lows. Confidence in the banking system has eroded in just a matter of days following the failures of Silicon Valley Bank and Signature Bank.
US wholesale inflation fell last month on lower food costs
WASHINGTON (AP) — Wholesale price increases in the United States slowed sharply last month as food costs declined, a sign that inflationary pressures may be easing. From January to February, the government’s producer price index fell 0.1%, after a 0.3% rise from December to January, which was revised sharply lower. Compared with a year ago, wholesale prices rose 4.6%, a big drop from the 5.7% annual increase in January.
Retail sales slip 0.4% in February after buying burst in Jan
NEW YORK (AP) — America’s consumers trimmed their spending in February after a buying burst in January, underscoring the volatility of the economic environment. The government said Wednesday that retail sales slipped 0.4% after jumping a revised 3.2 % in January, helped by an increase in auto sales. Retail sales were down in November and December, the critical holiday period. Excluding gas and autos, retail sales were unchanged from January, according to the Commerce Department. Sales at furniture sores fell 2.5%, while business at restaurants slipped 2.2%. Sales at department stores declined 4%.
Fed criticized for missing red flags before bank collapse
WASHINGTON (AP) — The Federal Reserve is facing stinging criticism for missing what observers say were clear signs that Silicon Valley Bank was at high risk of collapsing into what became the second-largest bank failure in U.S. history. The Fed was the primary federal supervisor of the bank, based in Santa Clara, California, though the bank was also overseen by the California Department of Financial Protection and Innovation. Critics point to many red flags that had surrounded Silicon Valley Bank, including its rapid growth since the pandemic, its unusually high level of uninsured deposits and its over-investment in long-term government bonds and mortgage-backed securities, which tumbled in value as interest rates rose.
Despite market slump, high rates dim homebuyer affordability
LOS ANGELES (AP) — Homeownership is likely to remain a pipe dream for many Americans this spring homebuying season. The nation’s worst housing slump in nearly a decade stoked hope among prospective buyers that homes could be scooped up more easily and prices would come back to earth. But while home prices appear to have peaked last summer, they still ended 2022 higher than they were at the end of 2021 and buyers face sharply higher borrowing costs than a year ago. Still, it’s not all bad news. Nationally, there are more homes for sale now than a year ago and data shows sellers are more willing to lower their asking price.
EU closer to ending US trade spat, moves on Green Deal funds
BRUSSELS (AP) — The European Union moved closer to ending a trade dispute with U.S. President Joe Biden following months of wrangling over the billions of America-first incentives in his clean technology plans. Now the EU said it would ramp up a similar subsidy-laden effort at home. European Commission President Ursula von der Leyen said Wednesday that in its attempt to produce at least 40 % of the clean tech needed by 2030 in the 27-nation bloc it would allow for the “tax breaks and the flexible use of EU funds” on top of simplifying and speeding up industrial approvals. She spoke of a “striking symmetry” between the U.S. efforts and the European Green Deal plans.
Not magic: Opaque AI tool may flag parents with disabilities
PITTSBURGH (AP) — As part of a yearlong investigation, The Associated Press obtained the data points underpinning several algorithms deployed by child welfare agencies to understand how they predict which children could be at risk of harm. They offer rare insight into the mechanics driving these emerging technologies. Among the factors they use to measure a family’s risk, whether outright or by proxy: race, poverty rates, disability status and family size. The tool’s developers say their work is transparent and that they make their models public. The AP has learned that the U.S. Justice Department is investigating one Pennsylvania county’s child welfare system to determine whether its use of an algorithm discriminates against people with disabilities or other protected groups.
Regulators to announce decision in $31B freight rail merger
OMAHA, Neb. (AP) — The first major railroad merger since the 1990s could be approved Wednesday when federal regulators announce their decision on Canadian Pacific’s $31 billion acquisition of Kansas City Southern railroad. The U.S. Surface Transportation Board has been reviewing the deal since it was agreed to back in 2021. The deal was nearly derailed in 2021 when Canadian National offered $33.6 billion and Kansas City Southern agreed to that offer. But that competing deal fell apart after the Surface Transportation Board rejected part of Canadian National’s acquisition plan. Regulators said in a report earlier this year the only major impact of the deal would more noise in places where train traffic is expected to increase significantly.
Erdogan hints Turkey may ratify Finland’s NATO membership
ANKARA, Turkey (AP) — Turkish President Recep Tayyip Erdogan has suggested that his country could soon ratify Finland’s application to join NATO. The could allow the possibility of Finland joining the military alliance separately from Sweden. Finland and Sweden abandoned decades of nonalignment and applied to join the alliance last year. All 30 NATO members need to ratify their accession. Turkey’s government accuses Sweden of being too soft on groups it deems to be terror organizations. But Ankara has said that it has fewer problems with Finland’s membership. Erdorgan was asked by reporters Wednesday whether Turkey could ratify Finland’s membership following a visit by the Finnish president later in the week. Erdogan responded: “God willing if it is for the best.”
UK Treasury chief predicts no recession in Britain this year
LONDON (AP) — U.K. Treasury chief Jeremy Hunt has predicted the country will not enter technical recession this year. Hunt on Wednesday summed up the state of the British economy by saying authorities remain vigilant and “take whatever steps are necessary for economic stability.’’ He says the Office for Budget Responsibility predicted that “because of changing international factors and the measures I take, the U.K. will not now enter a technical recession this year.” He added that Britain’s independent budget watchdog “forecast we will meet the Prime Minister’s priorities to halve inflation, reduce debt and get the economy growing.”
