Business Highlights: Bear market, Bitcoin plunge
Bear market hits Wall Street as stocks, bonds, crypto dive
NEW YORK (AP) — Wall Street tumbled into a bear market Monday after fears about a fragile economy sent the S&P 500 more than 20% below its record set early this year. The index sank 3.9% in the first chance for investors to trade after getting the weekend to reflect on the stunning news that inflation is getting worse. The Dow was briefly down more than 1,000 points. At the center of the sell-off again was the Federal Reserve. Investors expect it to get more aggressive about raising rates, even if it risks a recession. Treasury yields shot to the highest levels in more than a decade.
Hot inflation dims likelihood Fed can achieve ‘soft landing’
WASHINGTON (AP) — For months, Chair Jerome Powell has held out hope that the Federal Reserve will be able to raise interest rates high enough to throttle rampant inflation without tipping the economy into recession. Yet with the Fed set to announce another sharp interest rate hike after it meets this week, days after the government issued a scorching inflation report, the likelihood that the central bank can engineer a so-called “soft landing” appears to be dimming. With inflation at a four-decade high of 8.6%, Fed officials are likely this year to boost borrowing rates even higher than was expected just weeks ago.
Bitcoin plunges as major crypto lender halts operations
NEW YORK (AP) — The price of bitcoin and other cryptocurrencies are falling Monday, after the major crypto lender Celsius halted all withdrawals citing “extreme market conditions.” It is the second collapse of a part of the crypto world in the last two months. The stablecoin Terra imploded in early May, erasing tens of billions of dollars worth of value in a matter of hours. Bitcoin was trading at roughly $23,400 Monday afternoon, down more than 16% in the past day. Ethereum, another widely-followed cryptocurrency, was down more than 20%.
India, China growing markets for shunned Russian oil
NEW DELHI (AP) — India and other Asian nations are becoming an increasingly vital source of oil revenues for Moscow as the U.S. and other Western countries cut their energy imports from Russia in line with sanctions over its war on Ukraine. Such sales are boosting Russian export revenues at a time when Washington and allies are trying to limit Moscow’s cash flows. Commodity data firm Kpler reports that India, an oil-hungry country of 1.4 billion people, has guzzled nearly 60 million barrels of Russian oil in 2022 so far — up from 12 million in all of 2021. Shipments to other Asian countries, like China, have also increased in recent months but to a lesser extent.
Germany eyes new cartel law as fuel tax cut falls short
BERLIN (AP) — Germany’s vice chancellor is proposing new powers for the country’s antitrust agency to clamp down on oil companies amid disappointment over the limited effect of a cut in fuel taxes. A three-month cut took effect on June 1 as part of a wider package of measures aimed at blunting the financial fallout from Russia’s invasion of Ukraine. But there have been widespread complaints that prices at the pump have crept back up substantially after initially falling. Industry representatives insist that the tax reduction is being passed on to consumers but that they face pressure from rising prices. Many politicians accuse oil companies of using the tax cut to line their pockets.
UK moves to rewrite Brexit rules; EU threatens legal action
LONDON (AP) — Britain’s government has unveiled legislation that would unilaterally change post-Brexit trade rules for Northern Ireland. That move will face opposition from lawmakers — including some in Prime Minister Boris Johnson’s own Conservative Party — who believe it violates international law. The law would let the government bypass the Northern Ireland Protocol, which requires the inspection of some goods shipped to Northern Ireland from other parts of the U.K. It’s part of the broader trade deal that Johnson negotiated with the European Union when Britain left the 27-nation bloc. Britain’s government says it’s acting within international law, but the European Commission said it could take legal action against the U.K.
No bartender required: premixed Jack and Coke going on sale
ATLANTA (AP) — Coca-Cola Co. said Monday it’s partnering with Brown-Forman Corp., the maker of Jack Daniel’s Tennessee Whiskey, to sell premixed cocktails. Canned Jack and Coke will be sold globally after a launch in Mexico late this year. The move comes amid strong global sales of of ready-to-drink alcohol blends, including hard seltzers like White Claw. Global consumption of ready-to-drink beverages jumped 26% in 2020 and 14% last year, according to IWSR Drinks Market Analysis, an alcohol market research firm. Coke has been slowly adding more alcoholic drinks to its portfolio since 2018, when it launched Lemon-Dou in Japan.
Automakers ask Congress to lift electric vehicle tax cap
DETROIT (AP) — Major automakers are asking Congress to lift the cap on how many people can receive tax credits for buying a hybrid or fully electric vehicle. Currently the number of tax credits allowed is capped at 200,000 per company. General Motors and Tesla have already reached the cap and Toyota is close to it. In a letter to leaders of the Senate and House of Representatives on Monday, the chief executives of Ford, Toyota, GM and Stellantis asked that tax credits be extended to anyone who seeks to buy a qualified vehicle. General Motors and Tesla have already reached the cap and Toyota is close to it. Automakers say they want the cap lifted until “the EV market is more mature,” without giving a time frame.
The S&P 500 tumbled 151.23 points, or 3.9%, to 3,749.63. The Dow Jones Industrial Average lost 876.05 points, or 2.8%, to 30,516.74. The Nasdaq shed 530.80 points, or 4.7%, to 10,809.23. The Russell 2000 index of smaller companies fell 85.69 points, or 4.8%, to 1,714.59.