What’s Up? (Sept. 4-10)
Trump Media Flails
The social media venture of former President Donald J. Trump, who has long trumpeted his deal-making skills, has an uncertain future after a twist in its planned merger with Digital World Acquisition Corporation, a special purpose acquisition company, or SPAC. Trump Media & Technology Group was supposed to have merged with the company by Thursday. But federal investigations and scrutiny from securities regulators have bogged down the merger, and when Thursday came, Digital World scrambled to get the shareholder votes for a one-year extension of the deadline. When it failed to get the necessary support for the extension, the company unexpectedly adjourned and postponed the vote, then said it would pay nearly $3 million to buy itself three more months to carry out the merger, leaving Trump Media in limbo. On Friday, Trump Media blamed the Securities and Exchange Commission for its troubles, saying the agency “needlessly delayed its review” of the proposed merger.
A Big Rate Increase in Europe
Compared with other central banks around the world, Europe’s has been slower to use interest rate increases as a tool to curb inflation, but it is beginning to act more aggressively. Last week, policymakers at the European Central Bank lifted its three key rates three-quarters of a percentage point, the biggest increase in more than two decades. This large move was more or less expected, since new data released the week before showed the annual inflation rate for the eurozone rising to a record 9.1 percent in August, up from 8.9 percent in July, the previous record. (Estonia is the eurozone country with the highest rate of inflation: 25.2 percent.) But the central bank also warned that there would probably be a “substantial slowdown” in the economies of countries that use the euro because of rising energy prices and the looming prospect of steep cutbacks and even rationing of gas this winter.
One of the ‘Big Four’ Plans to Split in Two
EY, commonly known as Ernst & Young, one of the four largest accounting firms in the country, announced on Thursday that it would break into two companies, one dedicated mostly to auditing work and another to consulting and advisory services. The split is hardly straightforward: It must first be approved by more than 10,000 EY partners in 140 countries, and the firm will probably need regulatory approval from some of those countries. So why go to the trouble? The move is intended to help EY avoid the conflicts of interest that the firm can run into when it does both auditing and consulting for corporate clients, which sends up red flags for Securities and Exchange Commission regulators.
What’s Next? (Sept. 11-17)
Will Workers Return or Resist?
Since almost the beginning of the pandemic, employers have set return-to-office dates. And postponed them. And set new ones. And postponed those. This time, many of them say, those dates are set in stone. Some workers, particularly in small and midsize cities, have long been working in the office and say they enjoy seeing their co-workers in person, participating in office chitchat again and having a clear boundary between work and home life. But others are chafing against their companies’ policies, many of which were poised to take effect after Labor Day. (“Back to school is coming,” the chief people officer at Credit Karma told managers at her company.) They argue that remote work fits into their lives more easily and that the office can be distracting.
The Latest Inflation Numbers
Both the United States and Britain will release new inflation data this week that are expected to show the countries on somewhat diverging paths. The most recent report in the United States, the Consumer Price Index, showed inflation moderating, leading some analysts to conclude that soaring prices had peaked and giving investors a jolt of optimism. But with inflation still high, the Federal Reserve is holding fast to its plans to raise interest rates. It’s a different story across the pond. Consumer prices in Britain rose 10.1 percent from a year earlier in July, running much faster than in the United States and countries like Germany, Italy and France, the eurozone’s largest economies. August’s inflation numbers are not likely to look much better.
Twitter Moves Musk Deal Forward
As an October date in Delaware Chancery Court approaches, Twitter will hold a shareholder vote on Tuesday on the $44 billion deal that Elon Musk struck to buy the company. The vote is happening as Mr. Musk tries to back out of the agreement, accusing Twitter of misleading him about the number of spam accounts on its platform — and as the two parties litigate whether Mr. Musk will have to go through with it. The vote is a necessary step to closing the deal, and it would have taken place regardless of the legal battle. Still, it is another sign that Twitter remains committed to moving forward with the deal, and the company has long urged shareholders to take the same view. The same day, Peiter Zatko, the Twitter whistle-blower, will testify in Congress. Mr. Musk’s lawyers have subpoenaed him and invoked his name during court hearings.
Several mass labor strikes in Britain have paused because of the death of Queen Elizabeth II. Regal Cinemas’s parent company, Cineworld, has filed for bankruptcy. President Biden will attend the annual Detroit auto show this week to talk up the economy ahead of the midterm elections.