— U.S. Hiring Cost Inflation Significantly Eases; Biogen Makes Largest-Ever Acquisition; ExxonMobil Profit Falls for Third Straight Quarter; Ship Carrying 3,000 Vehicles Catches Fire; Egypt Secures $616M Loan Support; Sequoia Halves Two Major Funds; FDIC Selling Signature Bank Loans
1. U.S. Hiring Cost Inflation Significantly Eases
The U.S. Bureau of Labor Statistics reported today that the Employment Cost Index rose by 1% in Q2, marking the smallest increase since 2021—an indication that labor cost inflation is cooling and the U.S. economy is more likely to avoid a recession.
Compared to a year ago, hiring costs rose 4.5%, also the slowest pace since Q1 2022.
Currently, wage growth is outpacing inflation, which suggests American consumers may see improved purchasing power.
If upcoming economic data continues to show strength, the Fed may decide to pause rate hikes.
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2. Biogen Makes Largest-Ever Acquisition
This week, Cambridge-based Biogen Inc. announced a $7.3 billion acquisition of Reata Pharmaceuticals Inc., its largest deal to date.
In February, Reata’s drug Skyclarys was approved by the FDA—it’s the first treatment for Friedreich’s ataxia.
Barclays estimates Skyclarys could generate up to $1.5 billion annually.
Biogen CEO Christopher Viehbacher said the company’s platform will help accelerate Skyclarys’ global rollout and support short-term growth goals.
The $172.50 per-share acquisition price is 59% above Reata’s Thursday closing price.
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3. Exxon Profit Falls for Third Straight Quarter
Exxon Mobil reported Q2 net profit of $7.9 billion—less than half of the previous year’s result.
It’s the third consecutive quarterly profit decline, the longest such stretch since the 2014–2016 oil market collapse.
Adjusted EPS was $1.94, missing expectations, though Exxon said it would proceed with its $4.9 billion acquisition of Denbury and ongoing stock buybacks.
Declines in natural gas prices and refining margins hit profits across the industry, including at Shell.
In Q2, Exxon returned $8 billion to shareholders—exceeding its free cash flow for the quarter.
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4. Ship Carrying 3,000 Vehicles Catches Fire
A cargo ship carrying thousands of vehicles caught fire near Ameland Island, with the cause still unknown, according to the Dutch Coast Guard.
The vessel, chartered by Kawasaki Kisen Kaisha, carried 3,783 vehicles—including 498 electric cars. Hundreds of BMWs and around 300 Mercedes-Benz vehicles were reportedly on board.
EVs may have caused or worsened the fire; their lithium-ion batteries burn hotter and longer than gasoline.
Firefighting has been delayed due to the risk of ship instability from excessive water on the deck.
Ship owner Shoei Kisen Kaisha said the vessel was en route to Singapore.
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5. Egypt Secures $616M Loan Support
The Arab Monetary Fund announced today it will provide Egypt with a $616 million loan to boost the stability and efficiency of the country’s financial and banking sector amid a liquidity crisis.
AMF aims to enhance financial stability and regulatory frameworks across member states.
The IMF also plans to provide a $3 billion, 46-month support program to Egypt—currently under review.
The Russia-Ukraine war has worsened Egypt’s economic woes, leading to severe inflation and currency devaluation.
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6. Sequoia Halves Two Major Funds
Silicon Valley VC firm Sequoia Capital has significantly downsized two investment funds, including a crypto-focused fund launched last year.
The crypto fund will shrink from $585 million to $200 million, and a venture ecosystem fund will be cut from $900 million to $450 million.
LPs were informed back in March, citing falling private tech valuations and liquidity concerns among some investors.
Sequoia said the downsizing allows more focus on seed-stage investing and enhances capital flexibility for LPs.
Over the past three years, Sequoia has returned $15 billion to investors.
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7. FDIC Selling Signature Bank Loans
On July 25, the FDIC began seeking buyers for $18.5 billion in Signature Bank loan portfolios. Bids will close in September, with transfers expected in early October.
The portfolio includes 201 loans tied to private equity giants such as Blackstone, Carlyle, Starwood, Thoma Bravo, and Brookfield.
The FDIC took over the assets during this year’s regional bank crisis and hired Newmark Group to manage the sale of Signature’s $60 billion loan book.
Newmark is also preparing to sell Signature’s commercial real estate loan portfolio.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.