Tag Archives: contracts

Sports

Chicago Bears Free Agent Targets’ Projected Contracts

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The Chicago Bears will have more salary cap space than any team in the NFL next year by a wide margin. GM Ryan Poles has stated his goal is to build through the draft. That might be true, but it doesn’t change the fact he can’t plug every hole on this roster with the number of picks he currently has. He will have to do some spending on the veteran market. There is no shortage of options that could help the Bears improve in several key areas. It always comes down to how much it will cost.

Spotrac, one of the most popular salary cap websites out there, released an article detailing their projected valuations for major free agents next spring. Several names stood out as possible targets for the Bears. Here is a short list of the ones that make the most sense and what it might cost to get them.

The Chicago Bears now have an idea of the market.

DT Da’Ron Payne – 5 years, $71M

Payne has really come into his own this year. Most labeled him as a solid run defender during most of his time in Washington. He finally shed that with 8.5 sacks in 13 games this season. He is a complete player at defensive tackle and somebody that can disrupt with interior pass rush consistently.

DT Dre’Mont Jones – 3 years, $21M

It’s surprising how overlooked Jones is. He plays on one of the best defenses in the NFL but is constantly overshadowed by more celebrated teammates. All the while, he has been a steady sack producer on the interior, with 5.5 sacks in 12 games this season.

EDGE Yannick Ngakoue – 4 years, $60M

As former 5th round picks go, Ngakoue has vastly outplayed his draft slot for years. If you’re a team looking for somebody to give you 8-10 sacks per year, then he’s your guy. He isn’t much more than a good pass rusher, which is fine. The Chicago Bears coaches can work around that.

CB Jamel Dean – 3 years, $27M

Kindle Vildor’s comeback story was short-lived. The Bears are thin at cornerback. They might feel the need to pair somebody with Jaylon Johnson. Dean is allowed a 68.7 passer rating this season. He’s one of the best young corners in the game and doesn’t get nearly enough love.

OT Orlando Brown – 5 years, $112M

This might be problematic. Brown wants to be a left tackle. Chicago seems happy with Braxton Jones in that spot. They do, however, need a right tackle. Could they convince Brown to switch if they offer him the money he wants? If so, they’d put two nasty powerhouses together on the right side with Teven Jenkins.

OT Jack Conklin – 2 years, $22M

This is a case of either or. Would the Bears prefer the younger option that will command a huge contract or the older veteran that is cheaper? Conklin is still really good and not yet 30 years old. He should be able to plug the right tackle spot for at least two or three years as Poles fixes other areas.

OG Elgton Jenkins – 3 years, $21M

Luke Getsy has already targeted former Packers before. If by some chance, Jenkins hits the market, he will absolutely be pounding the table for the Pro Bowl guard. It is an easy decision with Cody Whitehair getting older. The Bears could even consider plugging him into the right tackle spot if necessary.

RB Saquon Barkley – 4 years, $48M

The speculation is already out there. Barkley is an undeniable star at running back. The Chicago Bears are a run-first team. Pairing him with Justin Fields seems like a no-brainer. They have more than enough money to afford it. Would Poles risk it? That is difficult to say at this point.

WR Jacobi Meyers – 4 years, $50M

It’s obvious the Bears still need more options at wide receiver. Meyers has been productive in New England despite quarterback issues. He’s quick, fast, and a sharp route runner. He’d be a nice threat in the slot, which is something this team needs. That price is an interesting discussion, though.



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World

Chevron Gets U.S. License to Pump Oil in Venezuela Again

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WASHINGTON—The U.S. said it would allow

Chevron Corp.

CVX -0.29%

to resume pumping oil from its Venezuelan oil fields after President Nicolás Maduro’s government and an opposition coalition agreed to implement an estimated $3 billion humanitarian relief program and continue dialogue in Mexico City on efforts to hold free and fair elections.

Following the Norwegian-brokered agreement signed in Mexico City, the Biden administration granted a license to Chevron that allows the California-based oil company to return to its oil fields in joint ventures with the Venezuela national oil company, Petróleos de Venezuela SA. The new license, granted by the Treasury Department, permits Chevron to pump Venezuelan oil for the first time in years.

Biden administration officials said the license prohibits PdVSA from receiving profits from Chevron’s oil sales. The officials said the U.S. is prepared to revoke or amend the license, which will be in effect for six months, at any time if Venezuela doesn’t negotiate in good faith.

Venezuela produces some 700,000 barrels of oil a day, compared with more than 3 million in the 1990s.



Photo:

Isaac Urrutia/Reuters

“If Maduro again tries to use these negotiations to buy time to further consolidate his criminal dictatorship, the United States and our international partners must snap back the full force of our sanctions,” said Sen.

Robert Menendez

(D., N.J.), the chairman of the Senate Foreign Relations Committee.

The U.S. policy shift could signal an opening for other oil companies to resume their business in Venezuela two years after the Trump administration clamped down on Chevron and other companies’ activities there as part of a maximum-pressure campaign meant to oust the government led by Mr. Maduro. The Treasury Department action didn’t say how non-U.S. oil companies might re-engage with Venezuela.

Venezuela produces some 700,000 barrels of oil a day, compared with more than 3 million barrels a day in the 1990s. Some analysts said Venezuela could hit 1 million barrels a day in the medium term, a modest increment reflecting the dilapidated state of the country’s state-led oil industry.

Some Republican lawmakers criticized the Biden administration’s decision to clear the way for Chevron to pump more oil in Venezuela. “The Biden administration should allow American energy producers to unleash DOMESTIC production instead of begging dictators for oil,” Rep. Claudia Tenney (R., N.Y.) wrote on Twitter.

Biden administration officials said the decision to issue the license wasn’t a response to oil prices, which have been a major concern for President Biden and his top advisers in recent months as they seek to tackle inflation. “This is about the regime taking the steps needed to support the restoration of democracy in Venezuela,” one of the officials said.

The Wall Street Journal reported in October that the Biden administration was preparing to scale down sanctions on Venezuela’s regime to allow Chevron to resume pumping oil there.

Jorge Rodriguez led the Venezuelan delegation to the talks in Mexico City, where an agreement was signed.



Photo:

Henry Romero/Reuters

Under the new license, profits from the sale of oil will go toward repaying hundreds of millions of dollars in debt owed to Chevron by PdVSA, administration officials said. The U.S. will require that Chevron report details of its financial operations to ensure transparency, they said.

Chevron spokesman Ray Fohr said the new license allows the company to commercialize the oil currently being produced at its joint-venture assets. He said the company will conduct its business in compliance within the current framework.

The license prohibits Chevron from paying taxes and royalties to the Venezuelan government, which surprised some experts. They had been expecting that direct revenue would encourage PdVSA to reroute oil cargoes away from obscure export channels, mostly to Chinese buyers at a steep discount, which Venezuela has relied on for years to skirt sanctions.

“If this is the case, Maduro doesn’t have significant incentives to allow that many cargoes of Chevron to go out,” said

Francisco Monaldi,

director of the Latin America Energy Program at Rice University’s Baker Institute for Public Policy. Sending oil to China, even at a heavy discount, would be better for Caracas than only paying debt to Chevron, he said.

The limited scope of the Chevron license is seen as a way to ensure that Mr. Maduro stays the course on negotiations. “Rather than fully opening the door for Venezuelan oil to flow to the U.S. market immediately, what the license proposes is a normalization path that is likely contingent on concessions from the Maduro regime on the political and human-rights front,” said

Luisa Palacios,

senior research scholar at the Columbia University Center on Global Energy Policy.

The license allows Venezuelan oil back into the U.S., historically its largest market, but only if the oil from the PdVSA-Chevron joint ventures is first sold to Chevron and doesn’t authorize exports from the ventures “to any jurisdiction other than the United States,” which appears to restrict PdVSA’s own share of the sales to the U.S. market, said Mr. Monaldi.

The license prohibits transactions involving goods and services from Iran, a U.S.-sanctioned oil producer that has helped Venezuela overcome sanctions in recent years. It blocks dealings with Venezuelan entities owned or controlled by Western-sanctioned Russia, which has played a role in Venezuela’s oil industry.

Jorge Rodriguez,

the head of Venezuela’s Congress as well as the government’s delegation to the Mexico City talks, declined to comment on the issuance of the Chevron license.

Freddy Guevara,

a member of the opposition coalition’s delegation, said the estimated $3 billion in frozen funds intended for humanitarian relief and infrastructure projects in Venezuela would be administered by the United Nations. He cautioned that it would take time to implement the program fully. “It begins now, but the time period is up to three years,” he said.

The Venezuelan state funds frozen in overseas banks by sanctions are expected to be used to alleviate the country’s health, food and electric-power crises in part by building infrastructure for electricity and water-treatment needs. “Not one dollar will go to the vaults of the regime,” Mr. Guevara said.

Chevron plans to restore lost output as it performs maintenance and other essential work, but it won’t attempt major work that would require new investments in the country’s oil fields until debts of $4.2 billion are repaid. That could take about two to three years depending on oil-market conditions, according to people familiar with the matter.

PdVSA owes Chevron and other joint-venture partners their shares of more than two years of revenue from oil sales, after the 2020 U.S. sanctions barred the Venezuelan company from paying its partners, one of the people said. The license would allow Chevron to collect its share of dividends from its joint ventures such as Petropiar, in which Chevron is a 30% partner.

Analysts said the new agreement raises expectations that will take time and work to fulfill. “Ensuring the success of talks won’t be easy, but it’s clear that offering gradual sanctions relief like this in order to incentivize agreements is the only way forward. It’s a Champagne-popping moment for the negotiators, but much more work remains to be done,” said Geoff Ramsey, Venezuela director at the Washington Office on Latin America.

—José de Córdoba and Ginette Gonzalez contributed to this article.

Write to Collin Eaton at collin.eaton@wsj.com and Andrew Restuccia at andrew.restuccia@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

UK on the brink of recession after economy contracts by 0.2% in the third quarter

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The Bank of England has warned that the U.K. is facing its longest recession since records began a century ago.

Huw Fairclough | Getty Images News | Getty Images

LONDON — The U.K. economy contracted by 0.2% in the third quarter of 2022, signaling what could be the start of a long recession.

The preliminary estimate indicates that the economy performed better than expected in the third quarter, despite the downturn. Economists had projected a contraction of 0.5%, according to Refinitiv.

The contraction does not yet represent a technical recession — characterized by two straight quarters of negative growth — after the second quarter’s 0.1% contraction was revised up to a 0.2% increase.

“In output terms, there was a slowing on the quarter for the services, production and construction industries; the services sector slowed to flat output on the quarter driven by a fall in consumer-facing services, while the production sector fell by 1.5% in Quarter 3 2022, including falls in all 13 sub-sectors of the manufacturing sector,” the Office for National Statistics said in its report Friday.

The Bank of England last week forecast the country’s longest recession since records began, suggesting the downturn that began in the third quarter will likely last deep into 2024 and send unemployment to 6.5% over the next two years.

The country faces a historic cost of living crisis, fueled by a squeeze on real incomes from surging energy and tradable goods prices. The central bank recently imposed its largest hike to interest rates since 1989 as policymakers attempt to tame double-digit inflation.

The ONS said the level of quarterly GDP in the third quarter was 0.4% below its pre-Covid level in the final quarter of 2019. Meanwhile, the figures for September, during which U.K. GDP fell by 0.6%, were affected by the public holiday for the state funeral of Queen Elizabeth II.

U.K. Finance Minister Jeremy Hunt will next week announce a new fiscal policy agenda, which is expected to include substantial tax rises and spending cuts. Prime Minister Rishi Sunak has warned that “difficult decisions” will need to be made in order to stabilize the country’s economy.

“While some headline inflation numbers may begin to look better from here on, we expect prices to remain elevated for some time, adding more pressures on demand,” said George Lagarias, chief economist at Mazars.

“Should next week’s budget prove indeed ‘difficult’ for taxpayers, as expected, consumption will probably be further suppressed, and the Bank of England should begin to ponder the impact of a demand shock on the economy.”

This is a breaking news story and will be updated shortly

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Business

Home buyers are backing out of contracts in the Sun Belt, especially in Las Vegas, Phoenix, Tampa and Texas

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The tide has turned, and buyers are now backing out of deals in the Sun Belt as rates rise and home prices remain unaffordable.

Once pandemic boomtowns, 15.2% of homes in cities in the Sun Belt that went under contract in August fell through, or roughly 64,000 homes nationwide saw deals dropped, a new report from real-estate brokerage Redfin Corp.
RDFN,
-5.33%
said.

A year ago, only 12.1% of home buyers were backing out of deals. Typically 12% of deals fell through prior to the pandemic, Redfin said. But the last time this number spiked — prior to this fall — was at the onset of the coronavirus pandemic in March/April 2020.

Buyers were most likely to back out of deals in the Sun Belt, the company added, in cities such as Phoenix, Tampa, and Las Vegas. Buyers were least likely to back out of purchases in big cities, including San Francisco and New York.

“A slowing housing market is allowing buyers to renege on deals because it often means they don’t need to waive important contract contingencies in order to compete like they did during last year’s home-buying frenzy,” Redfin noted.

Contingencies can include inspections to see if there’s any issues with the home, or whether they can get the mortgage required, or whether the appraisal is different from the agreed-upon amount.

“‘A slowing housing market is allowing buyers to renege on deals.’”


— Redfin

And “some buyers may also be backing out of deals because they’re waiting to see if home prices fall,” the company added.

More than a quarter of buyers looking to buy a home in Jacksonville, Fla. backed off in August, Redfin said, which is the highest percentage among the major 50 metro areas in the U.S. Las Vegas, Atlanta, and Orlando followed. (Top 10 list below)

These destinations were hotspots during the pandemic for buyers as they were affordable and in the era of remote-work.

But that’s changed.

“Sun Belt cities including Phoenix, Tampa and Las Vegas attracted scores of house hunters during the pandemic, driving up home prices,” Redfin said.

“Now their housing markets are among the fastest-cooling in the nation, giving buyers the flexibility to bow out,” they added.

Redfin analyzed Multiple Listing Services data going back to 2017 to analyze the drop-outs.

The share of buyers backing out of deals was the lowest in Newark, N.J., at 2.7%, followed by San Francisco, Nassau County, N.Y., New York City, and Montgomery County, Pa.

A big reason for the cancellations is high rates. The 30-year is at 6.29% as of Sept. 15. That’s up from 2.88% a year ago.

Homes are also still expensive. While existing-home prices are coming down, the median price of an existing home in the U.S. is still $389,500 in August, up 7.7% from a year earlier, the National Association of Realtors said.

“‘I advise sellers to price their homes competitively based on the current market.’”


— Sam Chute, a Miami-based real-estate agent at Redfin

With this tough backdrop of nervous buyers, “I advise sellers to price their homes competitively based on the current market,” Sam Chute, a Miami-based real-estate agent at Redfin said, “because deals are falling through and buyers are no longer willing to pay pie-in-the-sky prices.”

To be clear, the indigestion in the real-estate market was deliberately constructed: Home prices coming down as a result of higher rates and sellers reacting to lower demand is a “good thing,” Federal Reserve Chairman Jerome Powell said during a Wednesday press conference when they announced the rate hikes. 

“Housing prices were going up at an unsustainably fast level,” Powell said. 

“For the longer term, what we need is supply and demand to get better aligned, so that housing prices go up at a reasonable level …and that people can afford houses again,” he added. “The housing market may have to go through a correction to get back to that place.”

These are the top 10 cities where deals are falling through:

City Percentage of pending sales that fell out of contract
Jacksonville, Fla. 26.1%
Las Vegas, Nev. 23%
Atlanta, Ga. 22.6%
Orlando, Fla. 21.9%
Fort Lauderdale, Fla. 21.7%
Phoenix, Ariz. 21.6%
Tampa, Fla. 21.5%
Fort Worth, Tex. 21.5%
San Antonio, Tex. 21.1%
Houston, Tex. 20.6%

Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com

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US

California Fast Food Wages Would Be Set by Government Under Bill Passed by State Legislature

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California’s Legislature passed a bill Monday to create a government panel that would set wages for an estimated half-million fast food workers in the state, a first-in-the-U.S. approach to workplace regulation that labor union backers hope will spread nationally.

The bill, known as the Fast Act, would establish a panel with members appointed by the governor and legislative leaders composed of workers, union representatives, employers and business advocates. They would set hourly wages of up to $22 for fast food workers starting next year and can increase them annually by the same rate as the consumer-price index, up to a maximum of 3.5%.

A previous version of the bill passed by the state Assembly in January also allowed the council to oversee workplace conditions such as scheduling and made restaurant chains joint employers of their franchise’s employers, potentially opening them to liability for labor violations.

Representatives for companies including

McDonald’s Corp.

,

Yum Brands Inc.

and

Chipotle Mexican Grill Inc.

succeeded in having those provisions removed in the state Senate via amendments over the past week, though they still oppose the bill.

“This is the biggest lobbying fight that the franchise sector has ever been in,” said

Matthew Haller,

president of the International Franchise Association, a trade group whose members own many fast food restaurants.

A University of California, Riverside School of Business study commissioned by the franchisee association found that setting minimum wages between $22 and $43 would generate a 60% increase in labor costs and raise fast-food prices by about 20%.

California’s current minimum wage is $15 and is set to increase by 50 cents on Jan. 1.

The final version of the Fast Act passed both houses of the Democratic-controlled state Legislature on Monday. In both the Assembly and the Senate, all of the “yes” votes came from Democrats and every Republican who voted opposed the bill.

Democratic Gov.

Gavin Newsom

now has until Sept. 30 to decide whether to sign or veto the bill.

Mr. Newsom hasn’t taken a public stance on the current version of the bill, but his Department of Finance opposed the original version.

Labor unions backing the measure have long struggled to organize fast food workers, in part because the industry’s franchise model means there are so many different employers.

California lawmakers first floated the bill last year, with proponents arguing that tighter regulations were needed to protect fast food workers, who are overwhelmingly Black or Latino and who they say experience unpaid overtime and other labor violations.

The average U.S. home earned more last year than the average American worker. Prices for homes, groceries and gas are rising faster than Americans’ wages and that may be why sentiment and confidence have been so low recently. WSJ’s Dion Rabouin explains. Photo: Joe Raedle/Getty Images

Despite the recent changes, proponents said the bill is still a significant step forward. Lorena Gonzalez Fletcher, a former Democratic legislator who introduced the bill when she was in the Assembly, said it moves California closer to a labor model used in Europe where unions negotiate for wages and work conditions in an entire sector, rather than company-by-company.

“It’s still a big bold idea. And just the notion of giving workers a voice at the table will be fundamentally different for those workers,” said Ms. Gonzalez Fletcher, who now leads the California Labor Federation, the state’s largest union umbrella group.

The recent amendments call for the council to shut down in 2028 unless it is renewed, though inflation-adjusted wage increases for workers would continue.

The bill covers fast food restaurants that are part of a chain, that have limited or no table service and where customers order their food and pay before eating. The chain must have 100 or more locations nationally, up from 30 in a previous bill version.

California accounts for around 14% of total U.S. restaurant sales, and policy in the state tends to affect the rest of the sector, Citigroup Global Markets Inc. analysts wrote in a client note earlier this month.

Service Employees International Union President

Mary Kay Henry

said she hoped the bill would be a catalyst for similar movements across the country.

Investors have begun to ask about the act’s potential implications for restaurant chains at a time when companies are struggling with high food and labor costs, Wall Street analysts said.

“Obviously, we think it’s problematic on many, many fronts,” said

Paul Brown,

chief executive of Dunkin’ and Arby’s owner Inspire Brands Inc., in an interview. “I think it’s actually trying to solve a problem that doesn’t exist.”

Chipotle, Yum Brands, Chick-fil-A Inc., In-N-Out Burgers,

Jack in the Box Inc.,

and Burger King parent

Restaurant Brands International Inc.

have together spent more than $1 million to lobby lawmakers between 2021 and June 30 of this year, primarily on the Fast Act, state records show.

The International Franchise Association, which represents some 1,200 franchise brands, has spent $615,000 lobbying against the Fast Act and other legislation in that time.

Disclosures for lobbying spending since July 1 aren’t due until later this year, but industry advocacy against the bill has ramped up considerably during that time, people familiar with the effort said.

Labor unions have collectively spent more than $5 million to lobby the Legislature since the beginning of 2021, mostly on the Fast Act, state records show.

McDonald’s has encouraged franchisees around the country to email California lawmakers urging them to vote against the bill, according to a message viewed by The Wall Street Journal.

State Sen. Shannon Grove, a Republican, said on the Senate floor Monday that McDonald’s representatives told her that if the Fast Act becomes law, the company could stop expanding in California or leave altogether.

“Could we really survive without the golden arches?” Ms. Grove said.

Write to Heather Haddon at heather.haddon@wsj.com and Christine Mai-Duc at christine.maiduc@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Walmart Reaches Video-Streaming Deal to Offer Paramount+ to Members

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Walmart Inc.

WMT 0.29%

said it has agreed to a deal with

Paramount Global

PARA 1.41%

to offer the entertainment company’s Paramount+ streaming service to subscribers of Walmart’s membership program.

Walmart has been exploring a subscription video-streaming deal to draw more people to Walmart+ as it seeks to challenge

Amazon.com Inc.,

which has grown its own Prime membership program to about 200 million global members.

The companies agreed to a 12-month exclusivity agreement and a two-year deal that would give Walmart+ members access to Paramount’s ad-supported streaming service, according to people familiar with the deal. The perk will be available starting in September, Walmart said.

Walmart’s announcement on Monday came after The Wall Street Journal reported the two companies had reached an agreement. Walmart is scheduled to announce quarterly earnings on Tuesday.

The deal is the latest tie-up in the fast-changing streaming industry, where a growing group of companies are looking to bundle content to draw viewers or customers. YouTube is planning to launch an online store for streaming video services and has renewed talks with entertainment companies about participating in the platform. YouTube, which is owned by

Alphabet Inc.,

would join

Apple Inc.,

Roku Inc.

and Amazon, which all have hubs to sell streaming video services.

Walmart executives have held talks in recent weeks to discuss a streaming deal with executives at

Walt Disney Co.

,

Comcast Corp.

and Paramount Global, according to people familiar with the matter.

While this partnership is new, Paramount and Walmart have worked together for years. Paramount has had an office in Bentonville, Ark., dedicated to Walmart, which historically has been a big seller of its consumer products and home entertainment.

Paramount Global runs the Paramount+ service, which has shows such as “Halo,” the “Star Trek” series and “Paw Patrol.” The company said this month that Paramount+ had more than 43 million subscribers at the end of its latest quarter.

Walmart introduced Walmart+ in 2020 and aims to use the service to add new streams of revenue beyond selling goods, as well rival the success Amazon has had with its Prime membership services. A subscription to Walmart+ costs $12.95 a month or $98 a year and includes free shipping on online orders and discounts on gasoline. The retailer has added perks to build interest, such as six months of the

Spotify

music-streaming service.

Walmart said Monday that Walmart+ has had positive membership growth every month since its launch, without specifying membership numbers. A Morgan Stanley survey in May said the service has about 16 million members, compared with about 15 million the previous November.

Amazon has invested heavily to ramp up its own Prime Video service, adding original programming and live sports. Prime Video is included along with free shipping and other perks in its Prime membership, which costs $14.99 a month or $139 a year in the U.S. Amazon also recently added a year of Grubhub’s restaurant delivery services for Prime subscribers.

The deal would give Paramount+ a new avenue for growth in an increasingly competitive streaming market now that all of the major entertainment companies have streaming offerings and growth in the U.S. among many services, such as

Netflix Inc.,

has started to slow.

Write to Sarah Nassauer at sarah.nassauer@wsj.com

The line between Amazon and Walmart is becoming increasingly blurred, as the two companies seek to maintain their slice of the estimated $5 trillion retail market while chipping away at the other’s share, often by borrowing the other’s ideas. Photos: Amazon/Walmart

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Health

Dog reportedly contracts monkeypox from owners

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A dog belonging to a gay French couple has contracted monkeypox after sharing their bed — the first confirmed case of human-to-pet infection, according to reports.

The Parisian men, ages 44 and 27, are believed to have contracted the virus after having sexual contact with other guys during their non-monogamous relationship.

The couple said they then noticed that their Italian greyhound had developed pustules on its stomach.

A PCR test on the animal later confirmed that it had the virus.

The Lancet medical journal said the dog shared a bed with the two men and perhaps licked one or both of them before licking itself.

Both men have suffered from extensive ulcers and rashes since confirming their cases in June.

The dog began showing signs of infection 12 days later.

“The men reported co-sleeping with their dog,” the outlet said. “They had been careful to prevent their dog from contact with other pets or humans from the onset of their own symptoms.”

The World Health Organization has called the recent monkeypox outbreak a growing and global emergency.
NIAID via AP
The couple said they then noticed that their Italian greyhound had developed pustules on its stomach.
Getty Images/iStockphoto

Officials have urged at-risk or infected parties to quarantine away from their pets to reduce the chance of transmission.

The World Health Organization has called the recent monkeypox outbreak a growing and global emergency.

Almost 100 countries have now reported cases of the virus so far this year, including a dozen fatalities.

The vast majority of infections stem from gay sex, officials said.

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World

Russia’s Economy Contracts Sharply as War and Sanctions Take Hold

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The Russian economy contracted steeply in the second quarter as the country felt the brunt of the economic consequences of its war in Ukraine, in what experts believe to be the start of a yearslong downturn.

The economy shrank 4 percent from April through June compared with a year earlier, the Russian statistics agency said on Friday. It is the first quarterly gross domestic product report to fully capture the change in the economy since the invasion of Ukraine in February. It was a sharp reversal from the first quarter, when the economy grew 3.5 percent.

Western sanctions, which cut off Russia from about half of its $600 billion emergency stash of foreign currency and gold reserves, imposed steep restrictions on dealings with Russian banks and cut access to American technology, prompting hundreds of major Western corporations to pull out of the country.

But even as imports to Russia dried up and financial transactions were blocked, forcing the country to default on its foreign debt, the Russian economy proved more resilient than some economists had initially expected, and the fall in G.D.P. reported on Friday was not as severe as some had expected in part because the country’s coffers were flush with energy revenue as global prices rose.

Analysts, though, say the economic toll will grow heavier as Western nations increasingly turn away from Russian oil and gas, critical sources of export revenue.

“We thought it would be a deep dive this year and then even out,” Laura Solanko, a senior adviser at the Bank of Finland Institute for Economies in Transition, said of the Russian economy. Instead, there has been a milder economic decline, but it will continue into next year, putting the economy in a shallower recession for two years, she said.

Russia, a $1.5 trillion economy before the war started, moved quickly in the days after the invasion to mitigate the impact of sanctions. The central bank more than doubled the interest rate to 20 percent, severely restricted the flow of money out of the country, shut down stock trading on the Moscow Exchange and loosened regulations on banks so lending didn’t seize up. The government also increased social spending to support households and loans for businesses hurt by sanctions.

The measures blunted some of the sanctions’ impact. And as the ruble rebounded, Russia’s finances benefited from high oil prices.

“Russia withstood the initial sanction shock” and “has been relatively resilient so far,” said Dmitry Dolgin, the chief economist covering Russia at the Dutch bank ING. But, he noted, unless Russia manages to diversify its trade and finances, the economy will be weaker in the long term.

Retail trade declined about 10 percent, the statistics agency said, while wholesale business activity fell 15 percent.

Michael S. Bernstam, a research fellow at the Hoover Institution at Stanford University, said the data released on Friday were in line with other reports from Russia. He, too, expects the economy to deteriorate in the second half of this year, and then again in 2023.

As the war drags on, many countries and companies will look to permanently end relationships with Russia and its domestic companies. Businesses will have trouble getting replacement parts for Western-made machines, and software will need updates. Russian companies will need to rearrange their supply chains as imports seize up.

The prospects for Russia’s energy industry, central to the country’s economy, are deteriorating. The United States and Britain have already banned Russian oil imports, and the country’s oil output will fall further early next year when the full impact of a European Union ban on imports comes into effect. Russia would need to find customers for roughly 2.3 million barrels of crude and oil products a day, which is about 20 percent of its average output in 2022, according to the International Energy Agency.

So far countries including India, China and Turkey have absorbed some of the lost trade from Europe and the United States, but it’s unclear how many new buyers can be found.

Reliance on Russian natural gas is also being reduced. In the final week of June, total European Union gas imports from Russia were down 65 percent from a year earlier, according to a report by the European Central Bank. Some of these declines were forced on Europe because Russia has been cutting its supplies of gas. But European countries have ramped up efforts to find alternative sources and are, for example, quickly developing infrastructure for additional imports of liquefied natural gas.

The economy will suffer as the “exhaustion of inventories of investment imports, enforcement of the E.U. oil embargo, higher financial pressure on households and their higher dependence on the state” take their toll, while the ability of the central bank and government to provide monetary and fiscal support is limited, Mr. Dolgin of ING wrote.

Shortly after the invasion of Ukraine, inflation in Russia soared as households scrambled for goods they expected to become scarce. In July, inflation was running more than 15 percent, according to the Russian central bank. Already, though, there are signs inflation is slowing down, and as a result the central bank has slashed interest rates to 8 percent, lower than they were before the war.

Last month, the bank said that business activity had not slowed as much as expected, but that the economic environment “remains challenging and continues to significantly constrain economic activity.”

The bank forecast that the economy will shrink 4 percent to 6 percent this year, much less than it originally expected right after the start of the war. That 6 percent figure also matches the latest update from the International Monetary Fund.

The economy will have a deeper contraction next year and not return to growth until 2025, the central bank said on Friday. The bank forecast that inflation would be 12 percent to 15 percent by the end of the year.

In coming months, supply chain issues will present challenges, as businesses constrained by sanctions try to alter their supply chains to replenish stockpiles of finished and raw goods.

“I don’t think the Russian economy is doing well at the moment,” Ms. Solanko said. But the idea that sanctions and the departure of companies from Russia would cause the economy to rapidly collapse was never realistic. “Economies just don’t vanish,” she said.

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Business

Economy contracts by 0.1% in second quarter

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Shoppers walk through the rain on Oxford Street in London.

Tolga Akmen/AFP/Getty Images

The U.K. economy contracted in the second quarter of 2022, as the country’s cost-of-living crisis hit home.

Official figures published Thursday showed that gross domestic product (GDP) shrank by 0.1% quarter on quarter in the second three months of the year, less than the 0.3% contraction expected by analysts.

It comes after GDP expanded by 0.8% in the first quarter of the year.

Last week, the Bank of England warned that it expects the U.K. economy to enter its longest recession since the global financial crisis in the fourth quarter. Inflation, meanwhile, is projected to peak above 13% in October.

Monthly estimates showed that GDP fell 0.6% in June, less than the 1.3% consensus forecast, but down from a revised 0.4% expansion in May.

“U.K. growth is stagnating as the economy faces challenges from a severe real income squeeze amid elevated inflation and higher interest rates,” said Hussain Mehdi, macro and investment strategist at HSBC Asset Management.

“In this backdrop, it will be difficult to dodge recession, especially with upside risks to energy prices heading into the winter.”

Despite the macroeconomic headwinds, however, HSBC backs large-cap U.K. equities to continue to outperform this year given “exposure to commodity, value and defensive names.”

The Office for National Statistics, which publishes the growth figures, said the contraction was largely driven by a fall in services output, with the largest drag coming from health and social work activities, reflecting a decline in Covid-19 activities.

It noted that there was a 0.2% fall in household consumption in the second quarter, offset by a positive contribution from net trade.

This is a developing news story and will be updated shortly.

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World

Hong Kong Cuts Covid-19 Quarantine to 3 Days

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HONG KONG—The city’s government cut the Covid-19 quarantine period for inbound travelers to three days from seven, easing a restriction many saw as excessive but falling short of what businesses say is needed to restore the connectivity vital to its role as Asia’s leading global financial center.

From Friday, travelers arriving in Hong Kong will be allowed to leave their quarantine hotels after three days, officials said at a briefing Monday. Over the following four days, they won’t be allowed into places now requiring a vaccine pass, such as gyms, bars and restaurants, but they will be able to go to work, shop at supermarkets and use public transport, provided they test negative for the coronavirus.

The city has been caught between sticking to stringent antivirus controls in line with Beijing’s zero-Covid policy and trying to retain its appeal as an open and globally connected base for business. As most of the world returns to normal, Hong Kong’s border controls and the perceived risk that it may resort to mainland-style lockdowns and other measures have led to public frustration and prompted many skilled workers to leave.

About 80,000 tourists are stranded on the Chinese island of Hainan, which local authorities call “the Hawaii of China,” after a surge in Covid-19 cases triggered a lockdown. All flights leaving the city of Sanya have been canceled since Saturday. Photo: CCTV

While business groups welcomed any cut to quarantine time, they say the restrictions are eating into Hong Kong’s competitive edge as a global financial center and regional base for multinational companies.

“Although a move in the right direction, further reduction of quarantine will accelerate connectivity, reduce business costs for companies, and attract international investment into the city,” said Joseph Armas, chairman of the American Chamber of Commerce in Hong Kong. “Ultimately, our members are hopeful for a zero quarantine or home quarantine direction as Hong Kong must reopen immediately and reconnect with other major cities.”

The shortened quarantine offers welcome relief to residents but is unlikely to benefit business travel or tourism, said

David Graham,

executive director of the British Chamber of Commerce in Hong Kong, a business lobby. A full lifting of quarantine controls is critical for Hong Kong’s economic and business outlook, he said.

Hong Kong’s recently appointed leader, John Lee, said the decision to shorten the quarantine was based on an assessment of the risk to public health, as well as lifestyle and economic considerations.

“It is a balance of factors,” Mr. Lee said. “While we can control the threat to public health, we also want to ensure society can have the maximum degree of economic and social activities so people can go about as normally as possible, and the competitiveness of Hong Kong can be maintained.”

Chief Executive John Lee, flanked by other officials at a briefing Monday, spoke of the need to maintain Hong Kong’s competitiveness.



Photo:

Lam Yik/Bloomberg News

The changes reflect the government’s reading of data showing that after three days people leaving quarantine pose no greater transmission threat than do others in the community. In contrast to the mainland’s no-tolerance policy on Covid cases, daily life has largely returned to normal in Hong Kong, with gyms and bars open—albeit with some restrictions, such as size of gatherings—even with thousands of new daily Covid cases.

While stringent isolation requirements—at one point last year, arrivals had to spend 21 days in hotel quarantine—had more support when the city had zero or very few cases, recent waves that resulted in tens of thousands of new infections every day made quarantine even more exasperating to people wanting to travel in and out of the city.

Mr. Lee and his team didn’t spell out a pathway to further reducing quarantine in the coming months. A crucial milestone comes in November, when Hong Kong plans to host a financial forum and its first Sevens in more than three years—a popular three-day rugby tournament that previously drew thousands of visitors each spring and coincided with conferences and other networking events. Even a truncated quarantine would likely be too much for these types of whirlwind trips to a city once famed for the ease and efficiency of its connections to the rest of the world.

More residents have flown out of Hong Kong’s airport than have arrived every month for the past year to July, with net departures of almost 120,000 in the first quarter of 2022, according to government data compiled by

David Webb,

a retired investment banker and longtime Hong Kong resident.

In a July 1 speech in Hong Kong, Chinese President

Xi Jinping

said that the city must retain its status as an international hub for the country. “The central government fully supports Hong Kong in its effort to maintain its distinctive status and edge, to improve its presence as an international financial, shipping and trading center, to keep its business environment free, open and regulated, and to maintain the common law, so as to expand and facilitate its exchanges with the world,” he said.

Pro-Beijing figures and government officials have since invoked Mr. Xi when pushing plans to open up to the rest of the world, ahead of any relaxation of border controls with the mainland—a goal of the previous administration. Mr. Lee said Monday that his team was still working to resume travel with the mainland.

After the Omicron variant of the coronavirus began to spread globally late last year, Singapore—Hong Kong’s perennial rival as the leading global financial center in Asia—laid out a clear road map from the Covid crisis and gradually removed all travel restrictions.

Singapore has been one of the biggest beneficiaries of Hong Kong’s isolation, with more executives and their families relocating to the city along with some of the marquee events that were another pillar of Hong Kong’s appeal. While many of those moves may prove temporary, the question facing Hong Kong’s leaders now is how to lure people back before the shift becomes permanent.

The shortened quarantine follows earlier easing measures, including the scrapping of a policy to suspend airline routes if a flight carried a certain number of Covid-positive passengers to the city. Visitors and returning residents must still provide proof of a negative PCR test result 48 hours before they board, along with vaccination proof. Unvaccinated visitors face a longer quarantine period.

They must also conduct a rapid test every day until the tenth day of their arrival in the city, along with five PCR tests during that period, according to details published late Monday. Passengers who are allowed to fly without being vaccinated, previously subject to a longer quarantine in Hong Kong, will also follow the “3+4” model, the government said.

Unpredictable availability of quarantine hotels, and a rule barring anyone who is confirmed as a Covid-19 case within two weeks of their flight, have added complexity to travel plans. After Monday’s announcement, many businesses and lobby groups called for the government to urgently provide a road map to zero quarantine.

“Only by jettisoning the word ‘quarantine’ altogether can we really rebuild HK Inc.’s brand,” said Sally Wong, chief executive of the Hong Kong Investment Funds Association. “Many activities such as conferences and meetings are planned months ahead and if the government can throw light on the next step, it would be extremely helpful.”

Write to Natasha Khan at natasha.khan@wsj.com

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