Business Highlights: Inflation trends, EV credits
US inflation will likely stay high even as gas prices fall
WASHINGTON (AP) — Americans may finally be catching a break from relentlessly surging prices — if just a slight one — even as inflation is expected to remain painfully high for months. Thanks largely to falling gas prices, the government’s inflation report for July, to be released Wednesday morning, is expected to show that prices jumped 8.7% from a year earlier — still a sizzling pace but a slowdown from the 9.1% year-over-year figure in June, which was the highest in four decades. The forecast by economists, if it proves correct, would raise hopes that inflation might have peaked and that the run of punishingly higher prices is beginning to ease.
Most electric vehicles won’t qualify for federal tax credit
DETROIT (AP) — A tax credit of up to $7,500 could be used to defray the cost of an electric vehicle under the Inflation Reduction Act now moving toward final approval in Congress. But the auto industry warns that the vast majority of EV purchases won’t qualify for a tax credit that large. That’s mainly because of the bill’s requirement that, to qualify for the credit, an electric vehicle must contain a battery built in North America with minerals mined or recycled on the continent. And those rules become more stringent over time — to the point where, in a few years, it’s possible that no EVs would qualify for the tax credit.
‘The Sacrifice Zone’: Myanmar bears cost of green energy
The birds no longer sing. The cows die. And if the people in this northern Myanmar forest complain, they too face the threat of death from militias. This forest is the source of key metallic elements known as rare earths, often called the vitamins of the modern world. Rare earths turn up in everything from hard drives to elevators, and are vital to the fast-growing field of green energy. But an AP investigation found their cost is environmental destruction, the theft of land and the funneling of money to brutal militias. The AP tied rare earths from Myanmar to the supply chains of 78 companies. Nearly all who responded said they took environmental protection and human rights seriously.
Billions pour into bioplastics as markets begin ramping up
CLEVELAND (AP) — Billions of dollars in investments are pouring into companies changing the recipe for plastic. Plastics are typically made with natural gas or crude oil as its basic carbon building block. Making these plastics out of hydrocarbons in petrochemical plants release millions of tons of carbon dioxide annually. Bioplastics plants using renewable materials such as corn, sugar and cooking oil have been built around the world to produce a more environmentally safe plastic. Some bioplastic can dissolve in water or soil under correct conditions while other types can be biodegraded in large industrial composters. Market share for bioplastics is expected to nearly triple by 2028.
Biden signs $280B CHIPS act in bid to boost US over China
WASHINGTON (AP) — President Joe Biden has signed a $280 billion bipartisan bill to boost domestic high-tech manufacturing. The measure is part of his administration’s push to boost U.S. competitiveness over China. The Tuesday morning signing ceremony in the Rose Garden ceremony comes as Biden looks to highlight a new law that will incentivize investments in the American semiconductor industry. The aim is to ease U.S. reliance on overseas supply chains for critical, cutting-edge goods. The White House says Micron is announcing a $40 billion plan to boost domestic manufacturing of memory chips. Qualcomm and GlobalFoundries are announcing a $4.2 billion expansion of an upstate New York chip plant.
Wall Street slips as weak earnings hit tech, travel stocks
NEW YORK (AP) — Stocks are closing lower on Wall Street as disappointing earnings reports weighed on technology and travel companies. The S&P 500 fell 0.4%, while the Dow Jones Industrial Average and the Nasdaq also slipped Tuesday afternoon. Chipmaker Micron Technology fell after warning investors that revenue could fall short of forecasts because of weakening demand. Norwegian Cruise Line plunged after reporting disappointing financial results and giving investors a weak revenue forecast. Two reports on prices due later this week could signal to investors whether the Federal Reserve’s aggressive rate hikes this year have brought inflation under control.
Warren Buffett’s company has bet $47B on the oil sector
OMAHA, Neb. (AP) — Warren Buffett’s company has now bought up more than $11 billion worth of Occidental Petroleum stock this year to give Berkshire Hathaway control of more than 20% of the oil producer. Occidental’s stock jumped nearly 5% Tuesday to trade for $62.89 after Buffett revealed his latest purchases of nearly 6.7 million Occidental shares worth more than $400 million over the past week. Berkshire also dropped more than $20 billion on Chevron stock in the first quarter of this year and took advantage of the surge in oil prices after Russia invaded Ukraine. That means Berkshire has nearly $47 billion invested in the oil sector because Berkshire also holds $10 billion worth of preferred Occidental shares.
Chipotle to pay NYC workers $20M for violating labor laws
NEW YORK (AP) — The fast-food chain Chipotle Mexican Grill will pay $20 million to current and former workers at its New York City restaurants for violating city labor laws. The settlement between the city and Chipotle was announced Tuesday. It covers about 13,000 employees who worked at the chain’s New York City outlets between 2017 and this year. The $20 million deal is the largest worker protection settlement in New York City history. Scott Boatwright, Chipotle’s chief restaurant officer, said the restaurant chain is pleased to be able to resolve the issues. He said Chipotle has taken steps to improve compliance.
The S&P 500 dropped 17.59 points, or 0.4%, to 4,122.47. The Dow Jones Industrial Average lost 58.13 points, or 0.2%, to 32,774.41. The Nasdaq fell 150.53 points, or 1.2%, to 12,493.93. The Russell 2000 index of smaller companies shed 28.31 points, or 1.5%, to 1,912.89.