Abbott Labs Strikes Deal with FDA to Resume Baby Formula Production in U.S.

Financial Daily Dose 5.17.2022

May 17, 2022

Abbott Laboratories, the maker of Similac baby formula and the company at the heart of America’s current formula shortage, has reportedly “reached an agreement with U.S. health officials to restart production at its largest domestic factory, a key step toward easing the nationwide shortage tied to the plant’s shutdown earlier this year” over “safety problems” there. Abbott has said “it will take at least eight weeks to begin shipping new product to stores” after the factory resumes production - Bloomberg and ABCNews and NYTimes

JetBlue kicked off the week in a fighting mood, announcing yesterday that it was going hostile and “taking its offer to acquire Spirit Airlines directly to that carrier’s shareholders” following the Spirit Board’s rejection of JetBlue’s takeover proposal. JetBlue’s tender offer comes in lower than its original offer to buy Spirit (somewhere in the $30/share range rather than the $33/share price it floated last month), and Spirit has asked its shareholders to take “no action on JetBlue’s tender offer” until its Board reviews the overture and shares its position - NYTimes and WSJ and Law360

McDonald’s grand Russian experiment—a 32-year effort to bring American “lifestyle and capitalism” (with a side of fries) to the former communist nation—is officially over, with news that the company “has put its Russian business up for sale as it works to leave the country completely” in the aftermath of Russia’s invasion of Ukraine - NYTimes and WSJ

Renault, too, is taking new action to leave the country, though it will do so as part of a “deal negotiated with the Russian government that would allow Renault the option of resuming business in the country at a future date” - NYTimes

Recent Covid-prompted lockdowns are helping steer China’s economy into the “doldrums,” with the country’s headline jobless rate hitting “a two-year high of 6.1%” in April, “further evidence of the economic damage unleashed by the country’s strictest pandemic containment measures in more than two years”—damage that is now “rippling through the economy and lingering.” Domestic retail spending, for example, saw its biggest contraction since March 2020, and all eyes are now on Beijing to see whether its “planned stimulus measures can prevent a prolonged downturn” - WSJ and Marketplace

In today’s Musk/Twitter watch: Elon really ups the level of discourse, doesn’t he? - WSJ and Bloomberg and TechCrunch

And yes, of course he has ulterior motives - Bloomberg and MarketWatch and NYTimes and WSJ

Former Fed Chair Ben Bernanke dared to utter the economic “S word”—stagflation—as he makes the rounds promoting a new book on 21st century monetary policy out today. For the record, Bernanke is “ hopeful” that current Fed Chair Powell can “help tame inflation without having to put in place the extreme measures” that Paul Volcker used in the 1970s, but he sees a definite risk of “a period in the next year or two where growth is low, unemployment is at least up a little bit and inflation is still high” - NYTimes and Bloomberg

With that delightful though in mind, stocks mostly closed lower in Monday, with the Dow a rare winner, while the S&P 500 and Nasdaq saw their recent trend of declines continue - WSJ and Bloomberg

A week after cryptos tanked and wiped out trillions in value, SEC Chair Gary Gensler confirmed that his agency is working with the CFTC to divvy up regulation of digital currencies based on their resemblance to securities vs. commodities in an effort to better protect investors – Law360

California state judge Maureen Duffy-Lewis has struck down as unconstitutional a 2018 state law “requiring companies in the state to put female directors on their boards, the second setback in as many months for efforts to mandate board diversity.” Judge Duffy-Lewis found that the law “violated the equal protection clause of the state’s constitution,” noting that the state had not met its burden “to prove that the law meets a compelling public interest, is necessary and is narrowly tailored” - WSJ and MarketWatch

On the war between economists and progressives (that really isn’t the fight they think it is) - NewYorker

Stay safe,

MDR

 

The Robins Kaplan Financial Daily Dose features top stories and latest news headlines in financial markets, banking, securities and technology topics.