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Connecticut has enacted a groundbreaking law signed by Gov. Ned Lamont on July 8 to curb the soaring costs of weight-loss drugs like GLP-1s (e.g., Novo Nordisk’s Ozempic and Eli Lilly’s Mounjaro), which cost the state $140 million in 2024 for its HUSKY Health program. The legislation directs the Commissioner of Social Services to petition HHS Secretary Robert F. Kennedy Jr. to invoke federal patent rights under 28 US 1498, allowing generic production of these drugs with royalties paid to original manufacturers at reduced rates. This approach, likened to eminent domain, could involve a consortium of states to contract manufacturers, with other states already showing interest. While some states have limited or cut coverage, Connecticut expanded it in 2023 and now seeks a sustainable solution. However, Gov. Lamont and legal experts caution about potential overreach of federal law, and the response from HHS remains uncertain. Past uses of this patent law, such as for Hepatitis C drugs in Louisiana and anthrax medication post-9/11, show mixed results, often leading to negotiated deals. Amid easing drug prices, a growing compounding market, and upcoming generic competition in Canada, Connecticut’s strategy arrives at a critical juncture, though political will and legal challenges could impact its success. Experts and advocates are keenly observing whether this could set a precedent for addressing high drug costs nationwide.
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Big food companies are grappling with an uncertain future as consumer preferences shift, growth stagnates, and regulatory pressures mount. Industry giants like Kraft Heinz, PepsiCo, and Coca-Cola are reevaluating their US portfolios amid declining performance, with PepsiCo reporting a 2% volume drop in its North America beverage business. Strategic moves include acquisitions of smaller, high-growth brands like Poppi and Siete Foods by PepsiCo, and Hershey’s purchase of Lesser Evil. Meanwhile, breakups are on the table, with Kraft Heinz potentially splitting its condiments and grocery segments, and Kellogg’s recent division into WK Kellogg and Kellanova resulting in acquisitions by Ferrero and Mars Candy, respectively. Analysts note a reactive approach as core businesses falter, prompting companies to buy growth or restructure. Investor pressure for better returns is also driving change, with Kellogg’s breakup yielding significant gains. This period of flux, described as unusual for a typically stable sector, reflects a broader industry trend of adaptation and transformation.
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Chicago Federal Reserve President Austan Goolsbee recently defended central bank independence and Federal Reserve Chair Jerome Powell amid political pressure from President Trump and his allies. In a Yahoo Finance interview, Goolsbee stressed that independence from political interference is vital for economic stability, citing higher inflation and worse growth in countries lacking it. He praised Powell as honorable and highly capable, despite Trump’s frustration with Powell’s cautious approach to interest rates and concerns over potential inflation from tariffs. Goolsbee mirrored Powell’s “wait and see” stance on rate cuts, noting that while tariffs are raising goods prices, the impact hasn’t extended to services. He highlighted the uncertainty caused by staggered tariff implementations and geopolitical factors, suggesting that rate cuts depend on clearer inflation data. Meanwhile, internal Fed divisions persist, with Governor Christopher Waller advocating for a rate cut in July, contrasting with market expectations of a hold until September. Goolsbee refrained from predicting specific rate cut timelines, emphasizing the need to monitor inflation trends closely.
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Chevron (CVX) is poised to complete a $53 billion acquisition of Hess (HES) after nearly two years of contention, securing a 30% stake in Guyana’s Stabroek offshore block, estimated to contain over 11 billion barrels of oil. An arbitration panel in Paris ruled in Chevron’s favor, sidelining ExxonMobil (XOM), which holds a 45% stake and contested the deal citing preemptive rights. Despite initial stock gains, Chevron’s shares fell 1.5% post-ruling. The merger, one of the largest in the energy sector recently, is expected to bolster Chevron’s growth, free cash flow, and global diversification, especially as it lags behind Exxon in earnings and stock performance. Chevron’s leadership views the deal as a strategic enhancement for long-term shareholder value. Meanwhile, Exxon, partnered with Hess since 2014, expressed disagreement but respected the arbitration process. The deal’s significance extends beyond Chevron, contributing to Guyana’s economic boom and potentially triggering further industry mergers, as noted by experts. This follows Exxon’s $60 billion acquisition of Pioneer Natural Resources, highlighting a trend of major consolidation in the oil and gas sector amidst evolving energy demands.
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In his second term, President Donald Trump has unprecedentedly used his office for personal financial gain, with Trump family businesses earning hundreds of millions from cryptocurrencies, overseas deals, and merchandise like bibles and shoes. Ventures such as a crypto coin worth $320 million and a $2 billion foreign investment highlight the scale of these profits, often from entities with federal interests, raising ethical concerns. Critics, including academics and Democrats, decry this as corruption, contrasting it with past presidents’ use of blind trusts to avoid conflicts. Despite his earlier "drain the swamp" promise, Trump faces little oversight due to a supportive Congress, loyal administration, and Supreme Court immunity rulings. His direct promotion of family businesses, including crypto initiatives he once called a scam, underscores a policy-profit overlap, with plans to deregulate the industry further. While the White House insists Trump’s actions aim to position the U.S. as a crypto leader, the intertwining of personal and presidential interests remains a central controversy of his tenure.
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Meta Platforms Inc. is intensifying its pursuit of AI dominance by hiring key researchers Mark Lee and Tom Gunter from Apple Inc. for its Superintelligence Labs team, shortly after recruiting their former boss, Ruoming Pang, with a compensation package exceeding $200 million. This reflects a broader tech industry race for AI talent, with Meta, under CEO Mark Zuckerberg, prioritizing artificial intelligence through massive investments in personnel and infrastructure to rival companies like OpenAI and Google. Meanwhile, Apple’s AI division, the Apple Foundation Models team, faces uncertainty as it considers integrating external models such as ChatGPT or Claude for features like Siri, while struggling to retain staff against Meta’s lucrative offers. Despite Apple’s efforts to offer raises, the disparity in compensation—Meta’s packages often multiples higher—continues to drive talent away. Zuckerberg’s vision includes investing hundreds of billions in computing power to achieve superintelligence, with top hires working closely with him at Meta’s headquarters, underscoring his commitment to building an elite AI team.
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China's Commerce Minister Wang Wentao expressed a strong desire to stabilize trade relations with the United States, emphasizing the economic interdependence between the two nations despite recent tensions. Speaking to reporters, Wang urged the U.S. to act as a responsible superpower and highlighted the importance of dialogue, citing productive talks in Geneva and London as evidence that a tariff war is avoidable. With an August 12 deadline looming for a durable tariff agreement, failure to reach a deal could disrupt global supply chains with duties exceeding 100%. Wang also met with Nvidia CEO Jensen Huang, who confirmed the resumption of H20 AI chip sales to China, a move tied to negotiations on rare earths, which saw a 32% export increase in June. Despite high U.S. tariffs on China at 53.6%, Wang stressed that forced decoupling is unfeasible due to the irreplaceable nature of traded goods and services. China remains committed to avoiding a trade war but is prepared to defend its interests if necessary, seeking a path toward healthy and sustainable economic ties with the U.S. through continued communication and cooperation.
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Federal Reserve governor Christopher Waller has made a compelling case for a rate cut at the July 29-30 meeting, proposing a target rate of 3%, well below the current 4.25%-4.5%. Speaking in New York, Waller emphasized that inflation from tariffs is temporary and urged the Fed to prioritize employment, noting slowing private job growth and rising labor market risks. His position, supported by colleague Michelle Bowman and aligning with President Trump’s calls for lower rates, contrasts with other Fed officials like Adriana Kugler and John Williams, who caution against cuts due to potential inflation from tariffs, predicting increases through 2026. Fed Chair Jerome Powell also favors waiting for clearer inflation data, highlighting a deepening divide within the central bank. This debate underscores differing views on balancing inflation control with employment goals amid external pressures and tariff impacts.
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Uber has teamed up with electric vehicle manufacturer Lucid and autonomous tech firm Nuro to introduce a premium global robotaxi program exclusively for the Uber platform. Announced recently, the initiative will integrate Nuro’s Level 4 autonomous software into Lucid’s Gravity SUV, with plans to deploy over 20,000 vehicles in the next six years, starting in a major US city in 2025. Uber will invest $300 million in Lucid and a comparable sum in Nuro, while the vehicles will be managed by Uber or third-party fleet partners. Lucid’s stock jumped nearly 30% on the news, bolstered by the company’s strong Q2 deliveries and ambitious 2025 production goals for its Air sedans and Gravity SUVs. This partnership signifies Uber’s re-entry into the robotaxi market after a hiatus following a 2018 accident, positioning it against competitors like Waymo and Tesla, who are also advancing in autonomous driving. The collaboration is further contextualized by Saudi Arabia’s Public Investment Fund’s significant stakes in both Uber and Lucid, potentially influencing the strategic alliance. A prototype is already under testing at Nuro’s Las Vegas facility, marking a significant step toward realizing the vision of accessible, safe autonomous transport.
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Coca-Cola (KO) is poised to switch from high fructose corn syrup (HFCS) to real cane sugar in its U.S. products, following President Trump’s social media announcement and subsequent confirmation from the company. This move aligns with a broader trend among food and beverage companies like Kraft Heinz and General Mills making ingredient changes under the Trump administration. The shift has impacted markets, with sugar futures (Sugar No. 11) rising over 1.3%, while HFCS suppliers Archer-Daniels-Midland (ADM) and Ingredion (INGR) saw significant stock declines. Meanwhile, PepsiCo (PEP) reported strong earnings, with its stock up 5%, and outlined plans to remove artificial additives from beverages. The announcement coincides with ongoing tariff negotiations, including a 50% tariff on Brazilian goods, which could affect sugar supply chains given Brazil’s status as the world’s top sugar cane producer. Coca-Cola’s stock remained relatively stable, with quarterly earnings expected on July 22. This ingredient change reflects both consumer health trends and political influences, potentially reshaping the competitive landscape for beverage giants and their suppliers.
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Retail sales in June showed a robust rebound, rising 0.6% month-over-month, exceeding economists’ predictions of a 0.1% increase and recovering from a 0.9% drop in May, according to revised Census Bureau data. This growth, particularly a 0.5% rise in the control group impacting GDP and a 0.6% increase in sales excluding auto and gas, suggests that President Trump’s tariffs have not yet significantly altered consumer spending patterns. Economists like Thomas Ryan from Capital Economics note that these figures dispel fears of faltering consumer spending due to tariffs, while Nationwide’s Ben Ayers highlights that delayed tariff price impacts and steady income growth continue to drive spending despite household concerns. Key sectors like miscellaneous store retailers and motor vehicle sales led the gains. Meanwhile, jobless claims fell to a three-month low of 221,000, indicating labor market resilience. However, tariff uncertainty looms over the economic outlook for the second half of the year, with expectations for weaker activity despite a projected solid GDP rebound in Q2. Investor sentiment on Federal Reserve rate cuts has also cooled, with the likelihood of a September cut dropping to 54% from 70%, amid signs of persistent inflation. This retail sales report offers critical insight as markets assess the broader impact of trade policies on economic behavior.
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Federal Reserve Chair Jerome Powell is receiving unexpected support from some GOP senators amid President Donald Trump’s threats to fire him. Republicans like Thom Tillis and Mike Rounds caution that dismissing Powell would jeopardize the Fed’s independence, potentially destabilizing the U.S. economy and eroding market confidence. Trump’s indecision on the matter has sparked debate, with some far-right House members urging action, while others, including House Speaker Mike Johnson, question the legal authority to remove Powell. Established over a century ago, the Fed is insulated from political interference, with dismissal requiring a justified “cause,” a threshold some argue is unmet by criticisms like a $2.5 billion renovation project. While certain Republicans, like Ohio Sen. Bernie Moreno, criticize Powell’s leadership and support his removal, others warn of the economic fallout for ordinary Americans and the risk of lengthy legal battles. As Powell’s term nears its end next year, Trump may soon have the chance to appoint a new chair, but the current controversy underscores the delicate balance between political influence and central bank autonomy.
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A Bloomberg article highlights escalating trade tensions between the EU and the US as Donald Trump threatens 30% tariffs on EU exports by August 1, alongside existing duties on cars, steel, and aluminum. In response, a French-led coalition of over half a dozen EU member states advocates for deploying the anti-coercion instrument (ACI), a powerful trade tool that could impose retaliatory measures like taxes on US tech giants or restrictions on investments and market access. While negotiations continue, with EU trade chief Maros Sefcovic traveling to Washington, the European Commission deems ACI use premature, favoring dialogue and proportional countermeasures. French Minister Benjamin Haddad stresses the need for strength and unity in negotiations, warning of a potential transatlantic trade war if the ACI is activated. Despite Trump's escalating rhetoric, including threats on pharmaceuticals, EU officials remain focused on reaching a deal, previously hoping for a framework with a reduced 10% levy on most exports. The ACI, designed as a deterrent against coercive trade actions, reflects the EU's bolstered trade defenses post previous US tariffs and actions like China’s restrictions on Lithuania.
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The article explores the conflicting interpretations of the stock market's muted response to President Trump's aggressive tariff threats. The White House sees this resilience as evidence of market support for rebalancing global trade, potentially emboldening Trump to stick to his Aug. 1 deadline for new tariffs. Conversely, many market analysts argue that traders remain opposed to tariffs but are skeptical of Trump’s threats materializing, a sentiment dubbed the "Trump always chickens out" (TACO) trade. Despite record-high stock prices, warnings from figures like JPMorgan Chase CEO Jamie Dimon highlight potential underestimation of economic risks, including inflation and growth slowdowns. Recent data showing a 2.7% annual CPI increase in June, alongside upcoming earnings reports, will provide further insight into tariffs’ impact. Trade developments, such as a deal with Indonesia reducing tariffs from 32% to 19%, add to the uncertainty, while Trump’s indifference to outcomes with regions like the EU raises the specter of higher tariffs. Critics argue the administration dismisses economic expertise, while Trump claims tariffs are fueling US economic strength, citing record stock highs and billions in tariff revenue. The coming weeks will be critical in determining whether markets are truly prepared for potential tariff-driven economic headwinds.
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Major Wall Street banks, including JPMorgan Chase and Citigroup, are pivoting toward digital assets as CEOs Jamie Dimon and Jane Fraser announced plans to issue stablecoins, reflecting a broader industry shift. This comes amid ongoing legislative debates in Congress, where efforts to pass comprehensive crypto regulation, including a federal framework for stablecoins, hit obstacles during "Crypto Week" due to GOP opposition to separate bill votes. Despite Dimon's historical skepticism, JPMorgan is developing a deposit token, while Bank of America and others explore collaborative stablecoin networks. The proposed legislation, already passed by the Senate, imposes strict oversight by federal and state regulators, mandates reserves in cash or Treasurys, and requires transparency. Stablecoins are touted for their stability and potential in cross-border payments, though concerns about risks like investor runs remain. Fraser noted that most stablecoin transactions currently settle crypto trades, with minimal use in payments. As banks prepare for potential federal approval, stablecoins could challenge traditional payment systems like Visa and Mastercard, reshaping financial landscapes if legislation advances.
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Inflation rose in June, with the Consumer Price Index (CPI) increasing 2.7% annually, up from 2.4% in May, driven by rebounding gas prices, according to the Bureau of Labor Statistics. Core CPI, excluding volatile food and energy, climbed 2.9% year-over-year. Monthly price increases matched or slightly exceeded expectations, with apparel, footwear, and furniture showing gains, hinting at the early effects of President Trump’s newly imposed tariffs ranging from 15% to 50% on imports from over 20 countries, including Canada, Mexico, and the EU. These trade tensions have sparked concerns about persistent inflation, though experts like Seema Shah and Greg Daco suggest tariff impacts may be temporary but could accelerate if staggered over time. Shelter costs, a key inflation driver, moderated slightly, while food prices remained sticky, except for a notable drop in egg prices. Amidst this, the Federal Reserve faces uncertainty, with markets anticipating steady rates in the near term and a reduced likelihood of a September cut. The interplay of tariffs and inflation continues to shape economic outlooks, with potential cost pass-throughs to consumers still unfolding.
