Globescan: Slow And Steady
Johnson & Johnson was ordered by a US jury to pay $55 million to a woman, who said that using the company’s talc-powder products for feminine hygiene caused her to develop ovarian cancer
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The US economy is on track to grow at a 1.8 per cent annualised rate in the second quarter, the Atlanta Federal Reserve said, unchanged from its estimate. Commerce Department data showing a 0.3 per cent increase in construction spending to an 8-1/2 year high in March raised the Atlanta Fed’s GDPNow forecast model’s projections on second-quarter residential investment growth and non-residential structures investment growth, the Atlanta Fed said. But an unexpectedly bigger drop in the Institute for Supply Management’s US manufacturing index in April led to downgrades in the model’s forecasts on equipment investment growth and consumer spending growth, the Atlanta Fed said.
A US judge partly dismissed a lawsuit filed by Twitter in which the social media company argued it should be allowed to publicly disclose more details about requests for information it receives from the US government. US District Judge Yvonne Gonzalez Rogers in Oakland, California also gave Twitter the opportunity to re-file its lawsuit to include more details about government decision-making, in order to try to move its claims forward.
Fine & Fair
Johnson & Johnson was ordered by a US jury to pay $55 million to a woman, who said that using the company’s talc-powder products for feminine hygiene caused her to develop ovarian cancer. The verdict, which J&J plans to appeal, was the second straight trial loss for the company, which is facing about 1,200 lawsuits accusing it of not adequately warning consumers about its talc-based products’ cancer risks. Following a three-week trial, jurors deliberated for about a day before returning a verdict for Gloria Ristesund. She was awarded $5 million in compensatory damages and $50 million in punitive damages. J&J spokeswoman Carol Goodrich said the verdict contradicted 30 years of research supporting the safety of cosmetic talc. The company intends to appeal and will keep defending its products’ safety, she said. Ristesund said, she used J&J’s talc-based powder products, which include the well-known Baby Powder and Shower to Shower Powder, on her genitals for decades.
Bagful Of Losses
Japan’s Takata is booking an additional special loss of $156.07 million for the year that ended in March due to mounting recall costs for its potentially lethal air bags. The company also said it expects to book a loss of around YEN3.5 billion for the same year to settle product liability claims related to its faulty air bag inflators, which has resulted in a recall of more than 50 million air bags worldwide. The special losses show Takata’s ballooning recall costs, the prospect of which has prompted the company to look for a financial backer with plans to draw up a list of candidates by August.
Oil prices rose as the dollar slipped to an 18-month low against the yen, potentially spurring fuel demand, but gains were restricted by rising the Middle East output that renewed concerns of a global supply overhang. Higher oil came on the back of a slumping dollar, which makes purchases of dollar-traded fuel cheaper for countries using other currencies, potentially spurring demand, as well as strong investor interest in oil. Energy Aspects’ oil analyst said the weak US dollar was a factor in rising oil prices, but also pointed to a “sentiment shift”, with significant passive and commodity trading advisor money flows back into energy after two years out.
Germany’s IG Metall warned Volkswagen that it could face protests from workers if it sought to delay talks about wage rises for 120,000 staff, who work for the carmaker in western Germany. VW did not make a firm pay offer in a second round of talks. It said both sides first need to agree the scope of structural reforms such as changes to early retirement rules before VW is able to make a proposal on specific pay percentages. IG, which is Germany’s biggest trade union, is calling for a 5 per cent pay hike for workers as well as for about 3.8 million engineering and metalworking staff across German industry.
Royal Philips is planning to list its historic lighting division after the Dutch manufacturer of medical scanners and shavers failed to find a buyer after searching for at least half a year. Philips plans to sell at least 25 per cent of the shares in the business in Amsterdam, it said in a statement. It aims to sell the remaining stake “over the next several years.” The listing could value the unit at as much as $6.4 billion, people familiar with the process have said. Philips CEO Frans Van Houten is shifting the company away from its lighting heritage, which dates to 1891 when Frederik Philips and his son started selling incandescent lamps. Van Houten is focusing on the global healthcare market with equipment that allows hospitals to analyze clinical data, and patients to monitor health and nutrition on smartphones.
More expensive iPhones, fewer foreign home buyers and a whole lot of unknowns — that’s what some UK corporate bosses say the country can expect if it votes to leave the European Union. In February, nearly 200 CEOs signed a letter calling for Britain to stay. Others say the country should leave, though many have declined to take sides. When grilled on a so-called Brexit during quarterly earnings presentations, however, CEOs have tended to speak only in general terms about the ramifications for the UK. Few have quantified the effects on their own companies. “There may be opportunities, there might be cost — we just don’t know,” George Weston, CEO of Associated British Foods, said of the company’s sugar business.