The daily business briefing: July 25, 2019

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1.

The Federal Trade Commission on Wednesday struck Facebook using a record $5 billion nice and ordered the social media giant to step up supervision of its own handling of consumer information. The movements were part of a settlement on allegations that Facebook tricked users about their control over the privacy of their personal info. Hours after the statement, Facebook revealed it was beneath an antitrust investigation by the FTC. Facebook said it heard of the inquiry in June. On Tuesday, the Department of Justice announced an antitrust review involving big tech companies. It didn’t specify which ones it was targeting, but Apple, Amazon, Facebook, and Google all have faced questions about whether their clinics squelched competition.
[The Associated Press, The New York Times]

2.

Tesla stocks dropped by 10% in after-hours trading on Wednesday after the electric vehicle manufacturer reported that a larger-than-expected quarterly loss. The company stated after trading closed it dropped $1.12 per share, considerably worse than the 39-cent-per-share loss analysts had anticipated. Earnings came in at $6.35 billion, short of their $6.47 billion consensus estimate. Tesla did reaffirm its guidance about full-year deliveries, stating it still sees sales of 360,000 to 400,000 vehicles for all of 2019. The majority of the deliveries would soon be new mass-market Model 3 sedans. Tesla delivered 158,200 cars in the first half of the year, therefore it might need to exceed 200,000 in the remaining part of the year to reach its mark.
[Barron’s, CNBC]

3.

The acceptance deal procured by Zion Williamson, the New Orleans Pelicans’ No. 1 overall pick in the NBA draft, is the richest shoe deal ever for an NBA rookie, ESPN reported Wednesday. Williamson announced Tuesday that he had struck a five-year agreement with Jordan Brand, but he didn’t immediately provide details. Jordan Brand battled numerous other shoe companies to sign Williamson, who played one-year at Duke and was named the nation’s top men’s college basketball player and its top freshman. Williamson reportedly had several offers of more than $10 million per year. Before Williamson signed with Jordan Brands, LeBron James had the richest rookie shoe contract in NBA history.
[ESPN]

4.

Treasury Secretary Steven Mnuchin said Wednesday that Amazon has”destroyed the retail sector throughout the United States.” Mnuchin said he was eagerly awaiting the conclusions of a newly announced Department of Justice investigation into whether big technology firms unfairly stifle competition. “It’s perfectly right that the attorney general is looking into these problems and I look forward to listening to his recommendations to the president,” Mnuchin said. The Trump administration hasn’t identified the companies it is targeting. Amazon, the leading online retailer, defended itself by noting that 90 percent of sales take place in brick-and-mortar stores. “Today, independent vendors make up more than 58 percent of physical gross product sales on Amazon, and their sales have risen twice as fast as our very own,” an Amazon spokesman stated.
[Reuters]

5.

U.S. stock index futures struggled for footing early Thursday before the next pile of corporate earnings reports. The main U.S. indicators were combined. Stocks to the Dow Jones Industrial Average climbed by 0.2 percent as 3M and Facebook stocks gained after the companies reported better-than-expected quarterly earnings. Futures of those S&P 500 and the Nasdaq were down by less than 0.1 percent and 0.4 percent, respectively. Also on Thursday, investors will likely be reacting to the European Central Bank’s conclusion to keep interest rates unchanged when signaling future rate cuts. Even the S&P 500 and Nasdaq Composite hit record highs on Wednesday as chip stocks climbed, while the Dow dropped by 0.3 per cent, weighed down with disappointing earnings from Boeing and Caterpillar.
[CNBC, MarketWatch]

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