—— G-7 Sells $50bn Loan to Support Ukraine; Tesla Shareholders Approve of Elon’s Pay; US PPI Posts Surprise Drop in May; US Jobless Claims Jumps to 9 Month High; Google to Partner with Geothermal Startup; Tyson Foods CFO Arrested Again; Mortgage Rates Fell for 2 Weeks
1. G-7 Sells $50bn Loan to Support Ukraine
The Group of Seven (G-7) nations have agreed on a loan structure based on the size of their economies to provide Ukraine with approximately $50 billion in fresh aid, which is expected to start flowing by the end of the year, according to sources familiar with the matter.
Following months of discussions on how to utilize the profits generated from frozen Russian sovereign assets, the plan is set to receive approval from leaders at a summit in Italy this week. G-7 nations will issue loans to Ukraine that will be repaid using profits from the roughly $280 billion of blocked funds, most of which are immobilized in Europe.
This agreement aims to generate essential support for Ukraine in the medium term and help cover its financing needs through 2025 and beyond.
According to the plan to be finalized in Italy, the US, European Union, and other participants will each provide a loan to Ukraine, with the proceeds generated by the assets over time used to repay these loans, said the sources, who spoke on condition of anonymity.
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2. Tesla Shareholders Approve of Elon’s Pay
Tesla Inc. shares surged in early trading after Elon Musk announced that shareholders had voted “by wide margins” to re-approve his compensation package and to move the company’s state of incorporation to Texas.
The CEO posted the voting results on X, the social media platform he owns, hours before the shareholder voting concluded and ahead of Tesla’s annual meeting on Thursday in Austin. He shared two charts indicating that the proposals had been approved. As a result, Tesla shares jumped as much as 7.2% before the start of regular trading.
Musk and Tesla’s board have spent the last two months rallying support for these measures, particularly emphasizing the compensation package that could grant Musk up to $55.8 billion in stock options, contingent on the company achieving specific milestones.
Earlier this year, a Delaware judge voided the award, citing conflicts of interest among Tesla directors and failures in disclosure.
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3. US PPI Posts Surprise Drop in May
US producer prices unexpectedly declined in May by the most in seven months, reinforcing the Federal Reserve’s confidence in moderating inflation. The producer price index (PPI) for final demand fell by 0.2% from the previous month, a result lower than all estimates in a Bloomberg survey of economists. On a year-over-year basis, the PPI increased by 2.2%, according to data from the Bureau of Labor Statistics released on Thursday.
This PPI report follows May consumer price data, which also indicated a broad cooling of inflation. Since July, Fed officials have maintained their benchmark interest rate at the highest level in over two decades.
On Wednesday, they projected just one interest rate cut for this year as they continue to monitor inflation progress.
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4. US Jobless Claims Jumps to 9 Month High
Initial applications for US unemployment benefits surged to the highest level in nine months, driven by a significant increase in California. This period is typically volatile due to holidays and the end of the school year.
According to Labor Department data released Thursday, initial claims rose by 13,000 to 242,000 in the week ending June 8, surpassing all forecasts in a Bloomberg survey of economists.
Last month, the US unemployment rate climbed to 4% for the first time in over two years. This increase primarily reflects more people returning to the workforce and not immediately finding jobs, rather than a rise in layoffs, which have remained relatively low.
New claims for unemployment benefits before seasonal adjustments increased by 38,530 to 234,707 last week. In addition to California, Pennsylvania and Minnesota also experienced significant increases for the second consecutive week.
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5. Google to Partner with Geothermal Startup
Startup Fervo Energy will develop a geothermal power plant to supply 115 megawatts of electricity to NV Energy Inc., a subsidiary of Warren Buffett’s Berkshire Hathaway Energy, according to a statement from Google. NV Energy will then sell the electricity to Google under an agreement that still needs state regulator approval.
Geothermal plants, unlike solar and wind facilities, can operate continuously by using water heated by underground rocks to generate electricity without carbon emissions. Fervo employs horizontal drilling within geothermal reservoirs to enhance output.
Data centers are consuming increasing amounts of electricity, posing a challenge for tech companies aiming to reduce their carbon emissions. The electricity that Google has agreed to purchase from NV Energy and Fervo could power about 86,000 homes.
Hyperscalers—major data center owners like Google, Microsoft, and Amazon—have all set ambitious climate goals and face pressure to achieve them. These targets include decarbonizing their operations, particularly data centers. For instance, Google aims to run entirely on carbon-free energy around the clock by 2030, according to its website.
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6. Tyson Foods CFO Arrested Again
One of the top meatpackers in the US, Tyson Foods, has suspended its chief financial officer, John Randal Tyson, after he was arrested again for intoxication.
John Randal Tyson, son of board chair John H. Tyson, was arrested for driving while intoxicated in the early hours of Thursday morning by the Washington County police department in Arkansas. He was released nine hours later after posting a bond of $1,105.
On Thursday afternoon, Tyson Foods announced that the younger Tyson had been suspended, and that senior finance executive Curt Calaway would serve as interim CFO.
This follows a 2022 incident where Tyson was arrested for public intoxication and trespassing after a woman found him asleep in her bed, just weeks after his promotion to CFO.
Shares of Tyson Foods fell 1.5 percent on Thursday afternoon.
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7. Mortgage Rates Fell for 2 Weeks
Mortgage rates in the US fell for the second consecutive week, providing some relief for home shoppers as the Federal Reserve keeps an eye on inflation data.
According to Freddie Mac’s statement on Thursday, the average rate for a 30-year fixed loan dropped to 6.95% from 6.99% the previous week. Data released this week showed that a key measure of consumer prices cooled in May to the slowest pace in more than three years. However, housing inflation remains high, continuing to pressure renters and buyers and casting doubt on the likelihood of imminent Fed rate cuts.
“From a higher-level perspective, as the housing market goes, so does the country,” said Ralph McLaughlin, senior economist at Realtor.com. “Since shelter makes up a large portion of our primary measures of inflation, a slowdown in the growth of both prices and rents may be what the broader economy needs to get the Fed to cut rates.”
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本文内容来自《Financial Times》、《Bloomberg》，以及《The Real Deal》等多家财经新闻媒体。