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In Elon Musk’s saga with Twitter, the end of one chapter is just the start of another. Shortly after signaling that he was backing out of his deal to buy the social media company, Mr. Musk was sued by Twitter. The company accused him of “knowingly, intentionally, willfully and materially” breaching their agreement. Mr. Musk’s lawyers said on Friday that Twitter’s request in the suit for an expedited trial in September was unreasonable and asked to delay it. When, and if, the case goes to trial, a judge in Delaware’s Court of Chancery will decide whether Mr. Musk’s claims that Twitter withheld information about spam accounts on the site are valid. The two parties could also settle, with Mr. Musk paying damages. Or, if his financing falls through, he could get out of the deal by paying a $1 billion breakup fee. Another possibility still is that Mr. Musk’s threat to walk away spooks Twitter into renegotiating with him, which could result in his buying the company at a discount. Worried shareholders will hear about how much damage Mr. Musk may have done when Twitter releases its second-quarter earnings this week.
Already fast-rising prices picked up again last month, according to the latest Consumer Price Index report. The fresh inflation data showed prices surging 9.1 percent in June from a year ago. Record gas prices were the main driver of the high inflation figure. They have since dropped sharply — a factor that could lead to signs of moderation in July’s report. President Biden focused on this possibility in his response to the new numbers, calling them “out of date.” But even so-called core inflation, which strips out volatile food and energy costs, was higher than expected, at 5.9 percent. And overall there was little to be upbeat about in last week’s report, with experts saying it presented a significant challenge for the Federal Reserve as well as U.S. consumers.
For the first time in 20 years, €1 equaled $1, after the euro reached parity with the dollar last week. The currency has been slipping since the beginning of the year because of disruptions to trade, sanctions on Russian energy after the country’s invasion of Ukraine and soaring prices for food and commodities in the eurozone. And as the euro waned, the dollar grew stronger, buoyed by investors who have turned to the American currency as a safe haven amid global economic upheaval. It appears that this dynamic will persist, even as the United States deals with its own economic strains.
With the euro’s fall making the continent’s economic situation appear that much more dire, the European Central Bank is expected to announce an interest-rate increase on Thursday. The move would be the first time that the E.C.B. has raised rates in more than a decade and set it on a more aggressive path similar to that of many other central banks around the world. Last week, the Bank of Canada raised its rates by a big 1 percentage point. The Federal Reserve is also heading for a steep rate increase as inflation continues to run at a troubling pace. Christopher Waller, a Fed governor, said he was in favor of another three-quarter-point change this month, but an even larger increase, perhaps of 1 point, is possible.
Netflix has already prepared shareholders for its second-quarter financial statement this week. But that doesn’t mean the news will be any easier to swallow. In April, after announcing that it had lost 200,000 subscribers, Netflix warned that it was likely to lose two million more in the next three months as it struggled to stay competitive among a bevy of streaming options. Since then, the company has done multiple rounds of layoffs while its share price has plunged. As the streaming giant tries to recover, it is planning to create a cheaper, ad-supported subscription tier, with Microsoft as its partner. But the move is no guarantee of calmer waters for the company.
The likelihood of an imminent recession depends on whom you ask. Talk to the chief economist at Wells Fargo, and he’ll tell you a recession in 2023 “seems more likely than not.” Ask S&P Global Ratings, and it will say the chance of a deep downturn is basically a tossup. Last week, despite what some would consider clear warning signs, JPMorgan Chase and Morgan Stanley said there was no recession in view yet. Despite the range of outlooks, the fact is that most people — analysts, economists and laypeople alike — are thinking about it and looking for clues in indicators like yield curves, inflation data, quarterly earnings and investor attitudes. And as the Fed tries to pump the brakes on the economy, anxiety that it could tip the country into a serious slowdown will continue to mount.
Bank of America was fined $225 million by federal regulators for mishandling pandemic unemployment benefits. Amid travel chaos, Delta Air Lines flew an empty plane to Heathrow Airport in London to pick up stranded luggage and bring it back to the United States. And Heathrow said it would limit the number of passengers until the end of the summer as it faces staffing shortages.