Consumer spending makes a notable gain in May, Nike reports huge sale and profit numbers, and California passes a vaccination law. Here are the top stories for June 26, 2015.
May Consumer Spending Posts Largest Gain Since 2009
U.S. consumer spending, which accounts for 70 percent of the economy, surged in May with the biggest monthly increase in nearly six years, the Associated Press reports. The Commerce Department said Thursday that consumer spending rose 0.9 percent last month, up from a revised 0.1 percent increase in April. May spending registered the biggest gain since August 2009, when auto-buying got a boost from the government's "Cash for Clunkers" program. The spending increase is being attributed to lower gasoline prices and a stronger labor market. Personal income increased a solid 0.5 percent. The savings rate for after-tax income fell slightly to 5.1 percent from 5.4 percent.
Supreme Court Obamacare Decision Just What the Doctor Ordered for Investors
The Supreme Court decision to uphold a key portion of President Barack Obama's health care overhaul sent shares of big hospital operators surging on Thursday. Shares of HCA Holdings Inc., Humana Inc. and Tenet Healthcare Corp. jumped after the high court announced a decision that maintained in several states tax credits that play a key role in helping millions of Americans pay for health insurance. Health insurance stocks climbed to a lesser degree after the ruling gave some clarity to a small but growing part of their business, the Associated Press reports. About 6.4 million people were at risk of losing their subsidy aid and investors were worried that many patients would drop their insurance if they no longer had the subsidies to help them pay for the coverage.
Greek Debt Talks Head into Last(?) Weekend
With a crucial debt deadline looming, the standoff between Greece and its international creditors was extended into the weekend. A meeting of Eurozone finance ministers broke up without agreement on Greece's rescue package on Thursday, intensifying doubts about whether Athens can pay the International Monetary Fund a debt worth 1.6 billion euros ($1.8 billion) on Tuesday. An agreement on a drastic Greek tax and austerity reform package is necessary for creditors to unfreeze 7.2 billion euros (8.1 billion dollars) in bailout money that would get Prime Minister Alexis Tsipras off the hook, the Associated Press reports. A new meeting of Eurozone finance ministers is tentatively scheduled for Saturday. In Washington, the IMF said Greece wouldn't get any extra time to make the debt repayment.
Aetna Buying Humana
Bloomberg is reporting that Health insurer Aetna is buying Humana Inc and the deal could close this weekend. Aetna made a formal bid to buy Humana this week in the form of cash and stock. Humana has also receive an offer from Cigna Corp but Bloomberg says its sources report the board prefers the offer from Aetna.
It’s The Shoes
Nike Inc reported a better-than-expected profit for the eighth quarter in a row, selling more high-margin basketball shoes and apparel at higher prices to reach that mark. Nike, the world’s largest footwear maker, reported higher sales in Jordan, LeBron, Kobe and KD basketball shoe brands in the United States, driving the profit. The company has also been selling higher-than-expected numbers of running shoes, such as Lunar, Free and Flyknit. The company’s DTC business, which includes owned stores and the internet division, grew 25 percent in the financial year. Nike said Thurdsay orders for its branded shoes and clothing scheduled for delivery from June through November rose 13 percent in the quarter. The company’s net income rose 24 percent to $865 million year over year, while revenue rose 4.8 percent to $7.78 billion.
No More Vaccination Choice in California
The California state assembly approved a measure to end state immunization exemptions based on religious or personal beliefs, and if it becomes law it will be one of the strictest vaccination laws in the United States. The Los Angeles times reports the measure passed 46-36 and will be sent to Governor Jerry Brown’s office for his signature. The move came after a measles outbreak at Disneyland led to more than 150 people being infected. The law would require children within the state attending day care and grade school be vaccinated against diseases such as the measles. While most medical professionals hail the decision, some people believe its overreach could be unconstitutional.