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| Hello Insiders! Today's business newsletter covers: - Facebook and Instagram block news sources for users in Canada.
- U.S. beats job growth estimations.
- JP Morgan CEO Jamie Dimon downplays Fitch Rating's downgrade of the U.S. long-term credit rating.
Also, tell us how businesses can adapt to changing consumer behaviors and preferences here! If you find this newsletter helpful, please share it with your friends and colleagues. Arbër
p/Arber | |
| 1 | | Meta has started blocking news links for Instagram and Facebook users in Canada in response to the country's recently passed Online News Act. The law obliges companies such as Facebook to pay media outlets for the content they distribute from them. More: - The bill, which became law in Jun. 2023, forces social media platforms to negotiate with publishers until they agree on a price that both sides believe is fair. If negotiations fail, then social media platforms are obliged to pay a mandatory fee.
- Meta has strongly opposed this law and had previously vowed to take similar actions it took when a law of the same nature was passed in 2021 in Australia.
- According to Facebook, "the Online News Act" is based on a flawed premise and does not rightfully represent the value that the platform gets from outlets.
- Google has also opposed the law and warned that it will take measures on its platform.
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| 2 | | What the numbers say: The U.S. economy added 324,000 jobs in July, beating previous estimations. This growth is likely to help keep the unemployment rate in the 3% range, a significant improvement from June 2021, when the unemployment rate hit 5.9%. Relevance: Due to COVID-19, rising inflation, and interest rates, there have been concerns about whether the U.S. labor market can withstand unfavorable macroeconomic conditions. More data: After leisure and hospitality, mining had the second-highest job growth, with 48,000 jobs added. Information, with 36,000, and Trade, with 30,000, were third and fourth, respectively. The positive trend was mostly concreted in companies with 250 employees or less, while companies with up to 500 employees cut jobs for the third consecutive month. While the number of jobs grew, wage growth has slowed down to the lowest level since Nov. 2021. Those that stayed in their jobs had a 6.2% increase, while those that changed jobs saw a 10.2% wage growth, the lowest in the last two years. 
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| 3 | | JP Morgan CEO Jamie Dimon has stated that Fitch Rating's downgrade of the U.S. long-term credit rating is "ridiculous," considering that the U.S. is the world's most prosperous nation. Dimon added that while he believes the rating is inaccurate, it does not affect the overall borrowing cost. More: - Fitch Rating made headlines after downgrading U.S.'s long-term credit rating from AAA to AA+.
- The firm highlighted a high government debt, fiscal deterioration over the next three years, Medicare costs, and social security costs as the main reasons behind the downgrade.
- The company expects the general government deficit to rise to 6.3% of GDP in 2023, up from 3.7% in 2022.
- Dimon said that the fact the U.S. doesn't have a triple-A rating but other countries do doesn't make sense and doesn't take into account its economy and military, which make the U.S. the most prosperous and secure country in the world.
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| 4 | | Foxconn is set to invest $600M in chip manufacturing plants in India. The company claims that the investment will create 13,000 jobs in Karnataka state. More: - One of the world's largest tech companies, Foxconn is best known for being a supplier of Apple.
- The $600M investment will be deployed into two parts, $350M will be invested in launching a plant for iPhone manufacturing, while $250M will be invested in semiconductor manufacturing equipment.
- Both of these plants will be located in Karnataka, now the third region in India where Foxconn has invested.
- Founded in 1974, the Taiwanese company had $175B in revenue in 2022.
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| 5 | | CVS Health has posted a better-than-expected revenue and earnings report, beating Wall Street estimations. The company had $88.9B in revenue, over $2B more than estimated. More: - The company posted a net income of $1.91B in Q2, a 37% YoY decline compared to 2022.
- Wall Street revenue estimations stood at $86.5B, while the company's $88.8B revenue figure represents a 10% YoY increase.
- The positive earnings report comes as the company announced yesterday that it is going to slash 5000 jobs in order to cut costs and focus on offering healthcare services.
- CVS Health made two major acquisitions in this space, Signify Health and Oak Street Health, which cost the company a combined $18.6B.
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| 6 | | Massachusetts-based Tisento Therapeutics has raised an $81M Series A funding round to develop therapies for rare genetic diseases. Invus, Peter Hecht, Polaris, Sanofi Ventures, Venrock, and J. Wood Capital led the funding. More: - Tisento aims to deploy the funds to boost the development of its therapies for Melas syndrome, a rare condition that affects the brain and the skeletal muscle.
- This condition can be fatal, with symptoms that can currently only be managed but not cured.
- According to the company, Tisento is in the process of trials for Zagociguat, a therapy that has been clinically tested on patients and has shown potential.
- The company also announced the finalization of its asset purchase agreement with Cyclerion Therapeutics. The deal will see Tisento acquire a 10% stake in Cyclerion with an anti-dilution clause that is valid through a $100M valuation.
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- The Bank of England is likely to raise interest rates again, but the hike may be less significant compared to recent ones.
- Hollywood producers have reportedly requested a meeting with The Writers Guild of America.
- Apple Card's high-yield Savings account has reached over $10B in deposits, according to Apple.
- SK Capital Partners has raised $800M for its SKCP Catalyst Fund II.
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INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Writer | | Arbër is an Inside writer who also has experience in entrepreneurship. He has experience covering Consumer Tech, Venture Capital, NFTs, Crypto, etc. Arbër holds a Bachelor's degree in Business from XAMK University in Finland. When he is not reading(and writing) business news, he chooses to watch sports or anime...and then read news about sports or anime. | | This newsletter was edited by Vibha Chapparike | |
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