Economy

(Reuters) – Bayer (OTC:BAYRY) won a legal victory in its fight to limit liability from claims that its Roundup weed killer causes cancer, as a U.S. appeals court on Thursday said federal law shields the German company from a lawsuit by a Pennsylvania landscaper.The 3rd U.S. Circuit Court of Appeals in Philadelphia rejected plaintiff David Schaffner’s claim that Bayer’s Monsanto (NYSE:MON) unit violated state law by failing to put a cancer warning on the label for Roundup.Schaffner was diagnosed in 2006 with a kind of cancer called non-Hodgkins lymphoma, a common claim for Roundup plaintiffs.He and his wife Theresa sued Bayer in 2019, in part over how his illness affected their relationship.Chief Judge Michael Chagares wrote for a unanimous three-judge panel that the Federal Insecticide, Fungicide, and Rodenticide Act requires nationwide uniformity in pesticide labels, and prevented Pennsylvania from adding a cancer warning.Bayer said the decision conflicts with rulings from federal appeals courts in San Francisco and Atlanta in similar cases.That may increase the prospect that the U.S. Supreme Court could step in to resolve the split, and potentially reduce Bayer’s liabilities.Chip Becker, a lawyer for the Schaffners, said he was disappointed with the decision, and that federal law should not preempt his clients’ failure-to-warn claim. He said the Schaffners are reviewing their legal options.Bayer said it was pleased with the decision, and the Supreme Court should “settle this important issue of law.”It has maintained that Roundup and its active ingredient glyphosate are safe, and said it “continues to stand fully behind” the brand.Bayer has faced extensive litigation over Roundup, and has seen its share price fall more than 73% since buying Monsanto for $63 billion in June 2018.The company settled much of the Roundup litigation for $10.9 billion in 2020, but still faces about 58,000 claims. Another 114,000 claims have been settled or deemed ineligible.Though Bayer won 14 of 23 Roundup trials through July 23, one victory was overturned on appeal, and the losses saddled it with billions of dollars of damages awards.The Schaffners settled with Bayer in September 2022, conditioned on Bayer being unable to convince courts that federal law preempted Pennsylvania from requiring a cancer warning.Chagares said it did, and that this approach “best achieves Congress’s stated aim of uniformity in pesticide labeling.”Roundup is among the most widely used weed killers in the United States. Bayer phased out sales for home use last year.The case is Schaffner et al v Monsanto Corp, 3rd U.S. Circuit Court of Appeals, No. 22-3075. More

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The proposals, passed on Wednesday, will be taken up for discussion by the full lower house after lawmakers return to session in September.The changes would also prevent the exploitation of water in areas with water scarcity, with the exception of extraction in populated areas for domestic use, according to a statement released Wednesday night.The changes are part of a package of constitutional reforms presented in February by President Andres Manuel Lopez Obrador, which contains other proposals, including one to restructure the judiciary.In Mexico, constitutional changes must be approved by a two-thirds vote in the plenary session of the both the lower house and the Senate, and by the majority of local congresses. In the June elections, Lopez Obrador’s ruling Morena party and its allies achieved a qualified majority in the lower house and were just two seats short in the Senate.Lopez Obrador has criticized the mining contracts with private companies signed by his predecessors and says that his administration has not granted any new private concessions in the sector.The Mexican Mining Chamber (Camimex) opposes the ban on open-pit mining, saying such a prohibition would cause a 1% contraction in the country’s GDP and threaten some 200,000 jobs.Regarding the genetically modified corn, the proposal comes as Mexico and the United States have an ongoing dispute at a panel of the U.S.-Mexico-Canada Agreement. The lower house committee’s reform would allow for the entry of genetically modified corn into Mexico only for non-human consumption and only if the grain dos not have the capacity to germinate. More

Consumer spending is a crucial driver of economic growth, and a new report showing a rise in sales allayed recession fears.Retail sales in July came in above expectations, the government reported on Thursday, painting an optimistic picture of consumer spending that could ease concerns about the strength of the economy.The better-than-expected results, pointing to continued economic sturdiness, drove stocks higher. The S&P 500 jumped 1.6 percent, its sixth daily gain in a row. The tech-heavy Nasdaq rose even more.Retail sales increased 1 percent in July from the previous month, the Commerce Department said, well above the 0.4 percent rise that economists were expecting. A bounce-back in auto sales as cyberattack-related disruptions faded probably intensified the jump in overall retail sales, analysts said. But sales excluding autos and gasoline, a calculation that can be more indicative of spending trends, also beat expectations, rising 0.4 percent.Consumer spending is a key driver of the U.S. economy, accounting for roughly two-thirds of gross domestic product. The retail sales report, which is not adjusted for inflation, pointed to resilience in consumer spending and provided reassurance after recession fears, tied to weaker-than-expected employment numbers, catalyzed a market sell-off early this month.Based on the “solid” retail sales data, consumer spending is on track for 3.5 percent growth in the third quarter, according to Kathy Bostjancic, the chief economist of Nationwide. That would propel overall economic growth to a healthy rate of more than 2 percent for the quarter, she wrote in a research note.Many forecasters have been warning of an economic downturn since the Federal Reserve started raising interest rates two years ago to combat surging inflation. But the U.S. economy has consistently defied those expectations, with robust consumer spending powering a rapid and forceful recovery from the shock of the coronavirus pandemic.The retail sales numbers are the latest in a string of data points this week that have allayed economic worries.Walmart reported on Thursday that sales in the latest quarter rose more than analysts’ estimates. The company, which is the largest retailer in the United States, also raised its forecast for sales and profit for the year. Walmart’s shares rose more than 6 percent on Thursday, a big move for a company its size, with a market value approaching $600 billion.Another reassuring data point on Thursday: Unemployment claims last week fell from the week before, indicating resilience in the job market.Overall inflation was 2.9 percent in July on a yearly basis, the Bureau of Labor Statistics reported on Wednesday, the first time inflation has dropped below 3 percent since 2021. Cooling inflation has solidified investors’ predictions that the Fed will start lowering interest rates next month.“More data like this could ease concerns that the economy is tilting toward recession, and take pressure off the Fed to cut rates more aggressively than they’d like to,” said Chris Larkin, head of trading and investing at E-Trade.It all adds up to “an extremely positive environment for the stock market,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. More

Price increases when demand exceeds supply are textbook economics. The question is whether, and how much, the pandemic yielded an excess take.In detailing her presidential campaign’s economic agenda, Vice President Kamala Harris will highlight an argument that blames corporate price gouging for high grocery prices.That message polls well with swing voters. It has been embraced by progressive groups, which regularly point to price gouging as a driver of rapid inflation, or at least something that contributes to rapid price increases. Those groups cheered the announcement late Wednesday that Ms. Harris will call for a federal ban on corporate price gouging on groceries in an economic policy speech on Friday.But the economic argument over the issue is complicated.Economists have cited a range of forces for pushing up prices in the recovery from the pandemic recession, including snarled supply chains, a sudden shift in consumer buying patterns, and the increased customer demand fueled by stimulus from the government and low rates from the Federal Reserve. Most economists say those forces are far more responsible than corporate behavior for the rise in prices in that period.Biden administration economists have found that corporate behavior has played a role in pushing up grocery costs in recent years — but that other factors have played a much larger one.The Harris campaign announcement cited meat industry consolidation as a driver of excessive grocery prices, but officials did not immediately respond on Thursday to questions about the evidence Ms. Harris would cite or how her proposal would work.There are examples of companies telling investors in recent years that they have been able to raise prices to increase profits. But even the term “price gouging” means different things to different people.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

NEW YORK (Reuters) -U.S. Treasury yields surged on Thursday after strong economic data all but eliminated fears about a hard economic landing and curtailed expectations that an aggressive Federal Reserve easing was coming next month.The Commerce Department said retail sales rose 1.0% last month after a downwardly revised 0.2% drop in June. Economists polled by Reuters had forecast retail sales advancing 0.3% after they were initially reported as unchanged in the previous month. Also out was news that 227,000 Americans filed for unemployment benefits last week, fewer than the 235,000 expected and the upwardly revised 233,000 claims the prior week.The data restored confidence that was jolted by a surprisingly weak employment report a couple of weeks ago, and reinforced a picture of improving inflation from July Producer Price Index and Consumer Price Index releases this week. “This will take 50 basis points in September off the table. (I) still think that 25 basis points make sense, just because inflation continues to ease and we got a couple of good reports, PPI and CPI adding to that,” said Steve Wyett, chief investment strategist at Bok Financial (NASDAQ:BOKF) in Tulsa, Oklahoma.”We have the all-important employment data before the next Fed meeting, but this should reduce the feelings that the economy is imminently going into a recession.”Thursday’s rise in the two-year note yield looked set to be the biggest daily jump in about four months. The 10-year yield initially was tracking to its biggest basis point gain in weeks before paring slightly. “While it’s pretty large for a one-day move, in the context of the move lower in yields over the most recent period here, it’s really just a little bit of a giveback, and to us makes sense,” said Scott Pike, senior portfolio manager at Income Research & Management in Boston.Subsequent news that July U.S. industrial production fell 0.6%, more than the 0.3% fall expected, barely affected the yield trajectories, since manufacturing is a smaller part of the economy than the 70% made up by the consumer.Divided sentiment since the Aug. 2 jump in July’s unemployment rate to 4.3% between traders betting on a 50 basis point cut out of the Sept. 17-18 Federal Open Market Committee meeting and a more cautious 25 bps cut has resolved for now, favoring the latter.Fed funds futures indicate traders see the odds of a 25 bps cut in the 5.25%-5.5% policy rate at about 76%, up from 65% late Wednesday, according to LSEG calculations. Meanwhile St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bostic on Thursday lined up behind the possibility of an interest rate cut at the U.S. central bank’s policy meeting next month, reversing their previous skepticism about lowering borrowing costs too soon.”Now that inflation is coming into range, we have to look at the other side of the mandate, and there, we’ve seen the unemployment rate rise considerably off of its lows,” Bostic said in an interview with the Financial Times. “But it does have me thinking about what the appropriate timing is, and so I’m open to something happening in terms of us moving before the fourth quarter.”The yield on the benchmark U.S. 10-year note rose 10.6 basis points to 3.928%, wrapping up with the biggest absolute gain in a week. The 2-year note yield, which typically moves in step with interest rate expectations, reached its highest since Aug. 2, and was last up 15.9 basis points at 4.1055%, which would be the biggest since a 22.2 bp surge on April 10.The 30-year bond yield rose 7.7 basis points from late Wednesday to 4.1856%.The closely watched gap between yields on two- and 10-year Treasury notes, considered a gauge of growth expectations, was at negative 18 bps, deepening an inversion from its late Wednesday reading of negative 12.8 bps. An inverted yield curve is generally seen as pointing to a recession. Last week, hopes of an aggressive 50 bps Fed easing in September to counter a slowdown briefly shifted the gap between 2- and 10-year yields to a positive 1.5 bps, the first time the curve had a more normal upward slope since July 2022. More

(Reuters) – U.S. corporate bond spreads, the premium over Treasuries that companies pay for debt, are starting to recoup some lost ground after recent strong economic data increased hopes for interest rate cuts and calmed recession fears.Investment-grade corporate bond spreads on Wednesday tightened by 3 basis points to 105 basis points (bps), according to the ICE BofA Corporate U.S. Corporate Index. Junk bond spreads finished Wednesday at 346 bps, also 3 bps tighter this week, according to the ICE BofA High Yield Index.Both high-grade and junk bond spreads retraced much of early August’s dramatic widening, after surprisingly weak July jobs and productivity reports prompted concerns of a sharp economic downturn and potential recession.Economic data this week appears to have calmed recession fears. U.S. consumer prices in July rose at their slowest pace in nearly 3-1/2 years, while the cost of services fell by the most in nearly 1-1/2 years.Other data this week pointed to economic growth, including July retail sales that rose more than expected. “The primary driver of tighter credit spreads this week is the Goldilocks narrative of growth without inflation,” said Nelson Jantzen, a strategist who covers high-yield bonds, leveraged loans and distressed leveraged credit at JPMorgan.The data has further assured credit investors that the Federal Reserve has finished hiking interest rates and will begin cutting rates as soon as September. Forecasts now see a 76.5% probability of a 25 bp Fed rate cut in September, according to CME’s FedWatch Tool, up from 64% on Wednesday. “Recent data has given the market more comfort around the likelihood of more accommodative policy at the next FOMC meeting, and this has given investors increased confidence that a substantial rise in rates is less likely,” said Blair Shwedo, head of fixed-income sales and trading at U.S. Bank.Renewed optimism was helped by an overall lack of negative surprises in borrowers’ second-quarter earnings disclosures, market participants said.”Financials aside, consumer discretionary and industrial companies were among the next strongest performers during Q2 earnings season, likely providing some support for services and basic material sectors during the widening” of credit spreads in early August, said Dan Krieter, director of fixed income strategy at BMO Capital Markets Almost $25 billion in new high-grade debt has sold this week, versus forecasts of a weekly total of $30 billion heading into the week, said Krieter.Junk debt issuance has also recovered this week following its lightest showing of 2024 last week, albeit at a slower pace than high-grade deals, said Jantzen. More

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