China’s lockdowns have dimmed demand prospects, and Russia has kept supplies flowing despite Western sanctions.
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Crude oil prices plunged more than 7 percent on Tuesday as the American and world benchmarks fell below $100 a barrel.
The Chinese economic outlook, dimmed by lockdowns to contain Covid-19 outbreaks, appeared to be the major cause of the decline, along with increasing signs of a global economic slowdown. China is the world’s leading oil importer, and the second-largest consumer after the United States.
In addition, while demand may be weakening, supplies have withstood the strains spurred by Western sanctions against Russia, which has found new markets for its oil and petroleum products in China, India and South America.
“We’re past the point where the market was tightest, and I think from here we’re going to see oil inventories rising and prices moderate,” said Michael Lynch, president of Strategic Energy and Economic Research, an analytics firm. “China is a big part of it. They have been carrying oil demand for 10 years.”
The price of West Texas Intermediate, the U.S. benchmark, dropped 7.9 percent to $95.84 a barrel, while Brent crude, the international standard, declined 7.1 percent to $99.49. Brent briefly fell below $100 last week before rebounding. Oil prices surpassed $120 a barrel last winter after Russia invaded Ukraine.
Gasoline prices are also falling, though it takes a week or more for motorists to benefit from drops in the oil price. This is because petroleum travels through several stages of processing and marketing before it is sold at retail outlets.
The national average for regular gasoline dropped to $4.66 a gallon on Tuesday, nearly 2 cents below Monday’s price, according to the AAA motor club. Prices have fallen 14 cents over the last week and 35 cents over the last month, but are roughly $1.50 higher than a year ago.
As of 8:42 a.m. Eastern time Wednesday
Source: FactSet
By The New York Times
For the first time in nearly 20 years, one euro is almost worth the same as one U.S. dollar. The euro, which is shared by 19 European countries, has recently come under pressure, like many other currencies against the dollar, losing more than 10 percent of its value this year.
The war in Ukraine, restricted energy supplies from Russia, high inflation and the rising risk of recession in the eurozone have dragged the euro down to within a whisker of parity, or a one-to-one exchange rate with the dollar. This week, fears that a crucial natural gas pipeline from Russia to Germany, which went offline on Monday for 10 days of scheduled maintenance, but could remain shut down for longer, have hit the euro hard.
A big fall for the euro on Monday was followed by a smaller slide on Tuesday, at one point pulling it within a fraction of a cent above parity with the dollar, without tipping over the threshold.
The last time the euro was worth the same as the dollar was in December 2002, not long after the currency was introduced in 1999.
In other markets on Tuesday, Europe’s Stoxx 600 is up 0.5 percent, while Tokyo’s Nikkei 225 and Hong Kong’s Hang Seng closed with losses of over 1 percent each. All three major U.S. indexes were down. The U.S. 10-year treasury, a benchmark for borrowing costs, fell, as did oil prices, reflecting worries about economic growth.
In a 62-page lawsuit filed on Tuesday, Twitter accused Elon Musk of breaching an agreement to buy the social media company for $44 billion. Mr. Musk, the world’s richest man, has tried to back out of the acquisition, citing Twitter’s number of fake accounts and accusing the company of not giving him enough information about the issue and misrepresenting itself.
In its lawsuit, Twitter sought to demonstrate that it has the right to sue him to close the deal and show that Mr. Musk’s claims against it had no merit. Instead, it was Mr. Musk who was violating the agreement, the company said. Twitter was unsparing, calling his escape strategy a “model of hypocrisy” and a “model of bad faith.” It backed up its argument with numerous tweets from the billionaire.
Here are the main points that Twitter made to try to show that it was not in breach of the deal and that Mr. Musk was.
Contrary to Mr. Musk’s claims that Twitter stonewalled his efforts for information on spam accounts, the company said in its lawsuit that it had provided him with data. When Mr. Musk asked for the information, the company honored some of his requests, like handing over its so-called fire hose, or vast stream of tweets.
But even as it did so, Twitter said in its suit, Mr. Musk’s demands for information became progressively irrational.
“From the outset, defendants’ information requests were designed to try to tank the deal,” according to the lawsuit. “Musk’s increasingly outlandish requests reflect not a genuine examination of Twitter’s processes but a litigation-driven campaign to try to create a record of noncooperation on Twitter’s part.”
Mr. Musk has argued that Twitter’s public disclosures that about 5 percent of its users are bots are materially misleading, which would constitute a “material adverse effect” under the terms of the deal. Mr. Musk’s contract with Twitter requires that its regulatory disclosures since January be accurate.
But Twitter noted that its regulatory filings had warned that the figures were estimates. (Twitter’s chief executive, Parag Agrawal, has outlined how the company detects and fights spam bots.) Twitter also said the existence of bots was part of the reason that Mr. Musk wanted to buy Twitter.
Mr. Musk has said another reason he wanted to pull out of the deal was that Twitter did not operate its business as he expected it would while the acquisition was closing. Among other things, Mr. Musk said, Twitter slowed its hiring and did not give him a heads up before recently firing two executives, which he said breached the terms of the deal contract.
But Twitter said in its lawsuit that its slowdown in hiring aligned with what Mr. Musk had told the company he wanted. The company added that it had notified Mr. Musk’s lawyers of its decision to let go of the two executives and that the lawyers had “raised no objection.” The suit did not say when Mr. Musk’s lawyers were notified of those decisions.
Under the terms of the agreement, Mr. Musk must use “reasonable best efforts” to close the deal, including securing debt financing for the $44 billion purchase.
But Twitter said in its lawsuit that Mr. Musk had appeared to abandon efforts to complete his debt financing, contravening the agreement. Furthermore, the company said, he disappeared when Twitter’s executives, including Ned Segal, its chief financial officer, reached out to discuss the figures about spam accounts that Mr. Musk had professed to be concerned about.
Mr. Musk also appeared to get rid of executives who were working to help him close the deal, such as Bob Swan, a former chief executive of Intel, according to the lawsuit. On June 23, Mr. Musk told Twitter that “he had asked Swan ‘to depart the deal proceedings, as we are not on the same wavelength,’” the suit said.
The deal contract also said Mr. Musk could not disparage Twitter or its employees in tweets. Yet he did so multiple times, Twitter contended, violating the agreement.
The lawsuit included screenshots of a number of Mr. Musk’s tweets, including one that said a lawyer from Twitter had informed him he had violated a nondisclosure agreement. In another, Mr. Musk used a poop emoji in response to a tweet from Mr. Agrawal. In addition, Twitter pointed to Mr. Musk’s comments, on Twitter and at conferences, that publicly doubted the veracity of Twitter’s disclosures of its spam accounts.
Any sensible random sampling process is fine. If many people independently get similar results for % of fake/spam/duplicate accounts, that will be telling.
I picked 100 as the sample size number, because that is what Twitter uses to calculate <5% fake/spam/duplicate.
Twitter legal just called to complain that I violated their NDA by revealing the bot check sample size is 100!
This actually happened.
?
PepsiCo defied some expectations for an inflation-induced slowdown, raising its revenue forecast for the year for a second time, citing the “resilience” of consumer spending. But in its quarterly earnings report on Tuesday, PepsiCo left its profit forecast unchanged, suggesting that shoppers may cut back as prices continue to rise at an uncomfortably high rate.
The company, which makes Pepsi, Mountain Dew and Doritos, did not raise its profit outlook in line with its revenue forecast because of uncertainties about “consumer elasticity,” Hugh F. Johnston, the company’s chief financial officer, said on a call with investors. In other words, shoppers may eventually buy less if prices keep rising. The company now expects revenue to grow 10 percent this year, up from an 8 percent expectation last quarter, and for-profit to gain 8 percent, the same as it expected before.
Notably, PepsiCo’s second-quarter revenue and profit, which both beat analyst expectations, grew faster than sales volumes, implying that the company was able to charge more for each can of soda and bag of potato chips.
Can it keep that up for the rest of the year? “We still have six months to go,” Mr. Johnston said, and there are “plenty of unknowns in terms of what’s going to happen with consumer behavior.”
PepsiCo is one of the first big companies to report earnings for the second quarter of the year, and the tone it has set is of cautious optimism. Analysts and investors are watching bellwether companies like PepsiCo for signs about the state of consumer spending and the risk of a recession, as the economy appears increasingly fragile.
PepsiCo’s stock finished lower on Tuesday. Since the start of the year, it has handily beat the market, with company shares down about 2 percent, compared with the S&P 500, which is down about 20 percent over that time.
PepsiCo’s report suggests that consumers are still able to absorb some price increases, which do not appear to be abating. Further out, however, the company appears more cautious about how potential consumer cutbacks and its own rising costs could eat into profit margins. Forecasts for the quarters to come will be closely scrutinized in other earnings reports due in the coming weeks, as market watchers try to get a feel for how the economy might shape up in the rest of the year.
“As inflation keeps going up,” Ramon L. Laguarta, PepsiCo’s chief executive, said on the call, “we’re going to have to be superagile and very precise on the choices we make with the consumer.”
Peloton will stop making bikes and treadmills at its factories and outsource all of its manufacturing to an overseas company in a move to cut costs as it continues to stabilize after a pronounced comedown from its pandemic success.
Rexon Industrial, a Taiwanese company that already produces some of Peloton’s bikes and treadmills, will now become the company’s primary manufacturer, Peloton said on Tuesday.
The company achieved enormous success when people were stuck at home during the height of the pandemic, but has been upended as gyms have reopened across the country.
In February, Peloton’s chief executive, John Foley, stepped down and the company laid off 20 percent of its corporate work force. Its shares have plummeted nearly 75 percent since January. Even an episode of “Sex and the City,” which featured Chris Noth’s character having a heart attack after riding his Peloton bike, caused Peloton’s stock to drop.
Barry McCarthy, who was appointed chief executive in February, said he wanted to save Peloton $800 million annually as part of a turnaround effort.
In May, the company’s first earnings report since Mr. McCarthy took over, included over $200 million in write-downs and a 24 percent drop in revenue from last year. Membership was up only 5 percent from the previous quarter. “Turnarounds are hard work,” he wrote in a letter to shareholders in May.
Evan Williams, the serial tech entrepreneur who co-founded Twitter, said in a post on Tuesday that he was stepping down as the chief executive of Medium, the company he founded that sought to reinvent publishing on the internet.
Mr. Williams — known as “Ev” in tech circles — said in the post that he was planning to form a company that would allow him to “spend the next few months (or years) learning as much as I can about things I don’t know a lot about.”
Medium declined to make Mr. Williams available for an interview. He said in his post that he was leaving Medium because “change and renewal are healthy,” noting that August will be his 10th anniversary as chief executive.
“To be clear, Medium’s story is far from over,” Mr. Williams wrote.
Medium said that Mr. Williams would be stepping down as chief executive effective July 20 and that he would be replaced by Tony Stubblebine, the chief executive of the online coaching company Coach.me. Mr. Williams will become chairman of Medium’s board, a new position.
Mr. Williams had big ambitions for Medium when he founded it. In a 2014 interview with The New York Times, he said he hoped to create a company that rewarded writers for producing quality content, a counterbalance to the internet’s tendency toward speed and quantity.
While Medium succeeded in creating a sleek online canvas for independent publishing, it never achieved the breakout popularity of Mr. Williams’s biggest hit, Twitter. Medium has taken different strategic paths, sometimes aggrieving writers with its sudden shifts in focus.
In 2017, for example, Medium was among the first online publishing companies to shift away from advertising, a move that resulted in about 50 layoffs and shocked publishers who relied on guaranteed funding from the company. That same year, the company focused more on subscriptions, starting a program that gave writers compensation determined by an algorithm that factored in the number of “claps” they received from readers. Read time, not claps, is now the primary factor that determines compensation.
Other upstarts, such as Substack and Ghost, have been luring online writers as independent digital publishing have shifted from blogging to email newsletters. (Medium also offers an email newsletter tool.)
A spokeswoman for Medium, which is privately held, declined to provide detailed financial information for the company.
In Mr. Stubblebine, Medium has a chief executive who is familiar with the company and its founder. Mr. Williams met Mr. Stubblebine at Odeo, the podcasting service that hatched Twitter and where Mr. Stubblebine ran engineering. Mr. Stubblebine is also the publisher of Better Humans, a self-improvement publication that is among Medium’s most popular.
In his post, Mr. Williams said he was proud of the company’s decisions to “pioneer a healthier model for content that doesn’t hijack or sell people’s attention or data.” He added that he was still bullish on Medium, noting that he would continue to be involved with the company as an investor.
Now that he is no longer running the day to day, Mr. Williams said he also planned to do some writing on (where else?) Medium.
“As would be appropriate for Medium, I do plan to write more about my learnings when I have some time to reflect,” he wrote.
LONDON — Heathrow Airport said on Tuesday that it would limit the number of passengers until mid-September, citing staff shortages that have led to long lines, delays, lost luggage and last-minute flight cancellations.
In an open letter to passengers, Heathrow’s chief executive, John Holland-Kaye, called on airlines to stop selling new tickets as critical functions in the airport have been significantly constrained.
“We recognize that this will mean some summer journeys will either be moved to another day, another airport or be canceled, and we apologize to those whose travel plans are affected,” he said. In recent weeks, there have been periods when service had dropped to a level that was “not acceptable,” he said.
Mr. Holland-Kaye said the airport could handle no more than 100,000 departing passengers each day, slightly fewer than the 104,000 he estimated it would be expected to serve on average. He asked airlines to limit the number of tickets they sold to bring numbers back under 100,000.
When asked how Heathrow would enforce the capacity limit, a spokeswoman for the airport, Hannah Smith, said this would be overseen by an independent coordinator, Airport Coordination Limited.
The airport coordinator said in a statement that compliance with Heathrow’s request was voluntary, because there was no mechanism in Britain that allowed it to remove allocated runway slots from airlines. The company said it would calculate the required reduction in passengers for each airline, and airlines could decide which flights to cancel or whether to comply with the request at all.
Virgin Atlantic, one of Britain’s largest carriers, said in a statement that it stood ready to deliver its full schedule this summer.
“However, we support proactive measures being taken by Heathrow to reduce disruption, as long as action proposed does not disproportionately impact home carriers at the airport,” the airline said. “Action should be based on thorough analysis showing the most effective measures to improve the situation and keep customers moving.”
Summer travel in Europe has been marred by chaos at airports as airlines have struggled with staffing shortages amid a surge of passengers eager to travel after pandemic lockdowns. Last week, the Scandinavian airline SAS filed for bankruptcy protection after its pilots went on strike. There have also been walkouts by airport and airline staff across Europe, amid frustration with long hours and low pay that has not kept up with rising inflation.
Other airports have introduced similar measures. Last month, Schiphol Airport in Amsterdam introduced a capacity cap, citing a shortage of security employees and demand for air travel far exceeding expectations, and Gatwick Airport in London also said last month that it would reduce flights for July and August. British Airways said it would operate on a reduced schedule by 11 percent through October.
Mr. Holland-Kaye said that Heathrow had started recruiting in November, in anticipation of high demand for summer travel, but that some key roles were still understaffed, including ground handlers, whom airlines contract to load and unload bags, turn around aircraft and provide check-in services to passengers.
With inflation at a 40-year high in the United States, our reporters want to know: What goods and services are getting more expensive for you in a way that has made you stop and take note? We’re interested in specifics: Are prices up for cereal? Exterminators? Paper towels? Haircuts? Shoes? Is there one item in particular whose cost has jumped more than you expected, or that particularly shapes your perception of how fast inflation is right now?
Tell us about where you’re seeing notable price increases in your life, and whether or not you expect those prices to continue rising. If you have pictures of bills showing the contrast between the present and recent past, we would love to see those, too.
A Times reporter may contact you for more information. We won’t publish any part of your submission without contacting you first.
Today in the On Tech newsletter, Shira Ovide writes that even Amazon’s Prime Day, the yearly summer shopping holiday that starts on Tuesday, might not be immune to our tendency to grow bored with online buying fads that once felt fresh.