The daily business briefing: March 27, 2019

1.

Purdue Pharma on Tuesday reached a $270 million dollar settlement with the state of Oklahoma over allegations that the drugmaker’s aggressive marketing of OxyContin and other prescription painkillers helped fuel the opioid crisis. The settlement came two months before the scheduled start of the trial. The Sackler family, which owns Purdue Pharma but was not named in the lawsuit, will contribute $75 million to the settlement over five years. Other companies involved in the lawsuit, such as Johnson & Johnson, have not settled, meaning the trial could go forward on May 28 as scheduled. Purdue still faces more than 1,600 opioid lawsuits from 37 states, as well as numerous cities, counties, and tribes across the United States. [The New York Times, The Wall Street Journal]

2.

The crew of a Southwest Airlines Boeing 737 Max plane made an emergency return to Orlando’s main airport Tuesday after reporting engine trouble, the Federal Aviation Administration said. Boeing 737 Max planes have been barred from carrying passengers in the U.S. and dozens of other countries since the second deadly crash involving one of the aircraft in five months. The Southwest plane was being shuttled to California, where the airline is storing the planes. The FAA said it was investigating the Southwest incident, but the issue was not related to inquiries into a flight control system suspected of playing a role in the crashes. Separately, Southwest cut its first quarter revenue outlook due to costs related to weather and the government shutdown, sending its stock dropping by 2.6 percent in pre-market trading. [CNBC, MarketWatch]

3.

U.S. stocks rose on Tuesday as Treasury bond yields stabilized after a sharp fall that fueled fears of recession. The Dow Jones Industrial Average rose by nearly 0.6 percent, while the S&P 500 and the Nasdaq Composite gained 0.7 percent. The benchmark 10-year U.S. yield recently touched its lowest level since December 2017, falling below the rate of the three-month Treasury bill and creating a yield-curve inversion that often signals a looming recession. The yield-curve inversion came as weak economic data fueled concerns about slowing global economic growth. U.S. stock index futures edged down early Wednesday as recession fears persisted. Futures for the Dow were down by 0.2 percent, while those of the S&P 500 dropped by 0.1 percent and Nasdaq futures were flat. [CNBC]

4.

British Prime Minister Theresa May on Wednesday is expected to offer to step aside on a specific date in exchange for lawmakers’ approval of her Brexit deal, which Parliament has rejected twice. May reportedly will indicate when she would be willing to leave at a meeting with fellow Conservative Party lawmakers. Lawmakers are preparing to vote Wednesday on whether to approve the deal or choose one of 16 alternatives, including a “no-deal” departure from the European Union; a “Norway-Plus” option that would be a softer Brexit than May proposed; and holding a new referendum on whether to leave the trading bloc at all. Uncertainty surrounding Brexit has rattled financial markets for months. [Reuters, MarketWatch]

5.

The Federal Aviation Administration plans to revamp its oversight of airplane construction this summer in the wake of two deadly Boeing 737 Max 8 crashes that have raised questions about the agency’s inspection and certification process, according to testimony prepared for a Wednesday Senate aviation subcommittee hearing. “While revamping FAA’s oversight process will be an important step, continued management attention will be key to ensure the agency identifies and monitors the highest-risk areas of aircraft certification,” Transportation Department Inspector General Calvin Scovel III wrote in prepared remarks obtained by The Associated Press. Acting FAA Administrator Daniel Elwell also is scheduled to testify at the hearing on the FAA’s oversight of Boeing before and after the two crashes of its best-selling airliner. [The Associated Press]

Advertisements