New UWES articles, CPI data, and more!
Written By: Benjamin Pipicelli, Noel Tom Paul, and Gordon Huynh
Economics Newsletter – March 3, 2023
Canada’s Economy at a Glance
Economics Society News, Events, and Articles
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* All closing prices are based of Thursday, March 2, 2023
News and Noteworthy
Goldman Sachs decides to switch gears
On Tuesday, CEO David Solomon said the bank is looking at “strategic alternatives” for their consumer banking business Marcus. However, it was not explicitly stated in what way caused shares to drop 3.8%. Despite its credit partnerships with reputable businesses Apple and General Motors, Marcus has largely failed against more well-established consumer banks and lost billions to credit provisioning. However, Goldman Sachs still wants to achieve its goal of breaking into the consumer banking market and continues to push to diversify its revenue. “We presented our path to reach pre-tax breakeven by 2025 at our Investor Day and we look forward to providing regular updates on our progress” said in an email by Goldman Sachs. Read more
Eli Lilly to cut insulin list prices by 70%
Eli Lilly has announced its branded Insulin will be capped at $35 at participating retail pharmacies, also applicable to consumers who do not have insurance as long as they sign up for Eli Lilly’s copay assistance program. The move was made in response to the rising cost of inflation (along with the possible influence of a certain fake tweet) and has been praised by the American Diabetes Association. The decision also follows a trend of lowering costs as nonprofit company Civica Rx aims to sell generic insulin at less than $30, and California plans to produce low-cost insulin. “Eli Lilly definitely sees the writing on the wall,” said Levitt, the executive vice president for health policy at the Kaiser Family Foundation. Read more
PBO expects Bank of Canada done hiking rates, forecasts economic growth of 1% in 2023
The Parliamentary Budget Office has trimmed its forecast for Canada’s economic growth this year. The PBO’s latest economic and fiscal outlook predicts the economy will grow by 1.0 percent this year followed by 1.6 percent in 2024. The outlook compares with the agency’s October forecast for growth of 1.2 percent for 2023 and 2.3 percent in 2024. It expects a decline in residential investment and weakness in consumer spending in the first half of the year, while businesses reduce their inventory investment over the course of 2023 as the growth in sales slows. Read more
US labour market continues to be strong
The number of Americans filing new claims for unemployment fell again last week, pointing to sustained labour market strength and adding to financial market fears that the United States Federal Reserve could keep hiking interest rates for longer. Those worries were further heightened by another report from the US Department of Labor on Thursday showing labour costs grew much faster than previously estimated in the fourth quarter. The labour market remains tight despite the rising risks of a recession, contributing to keeping inflation elevated via solid wage gains. Read more
Supreme Court conservatives take skeptical view of Biden student debt forgiveness
The Supreme Court of the United States appears skeptical of a proposed law that would allow individuals to sue foreign companies for human rights abuses that occurred overseas. The case involves Nestle and Cargill, who are being sued by six individuals from Mali for alleged trafficking and using child labour in their cocoa supply chains. The plaintiffs argue that the companies were complicit in the human rights abuses and should be held accountable in the US. However, some Supreme Court Justices expressed concerns about the potential impact of the law on US companies operating abroad and whether foreign policy considerations should play a role in such cases. Read More.
Adani’s Scandal: Huge Stock Loss For Shareholders
The Adani Group, one of India’s largest conglomerates, has been rocked by a scandal involving bribery, money laundering, and environmental violation allegations. The company, which operates in industries ranging from ports to power, has been accused of paying bribes to officials to obtain permits and approvals for its projects. In addition, the Adani Group has been accused of violating environmental regulations and damaging the ecosystem in areas where it operates. The scandal has led to protests, legal action, and calls for greater corporate accountability in India. The Adani Group has denied the allegations and maintains that it has acted in accordance with the law. Read more.