Here is what you need to know.
Aetna is ditching 70% of its Obamacare business. The company says its nearly $200 million pretax loss as a result of its public health-exchange business simply isn’t worth sustaining. Going forward, Aetna’s public exchange options will mainly be available in Delaware, Iowa, Nebraska, and Virginia after serving 15 states in 2016. “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool. Fifty-five per cent of our individual on-exchange membership is new in 2016, and in the second quarter we saw individuals in need of high-cost care represent an even larger share of our on-exchange population,” Aetna CEO Mark Bertolini said in the statement.
BHP Billiton posted a record loss. The mining giant lost $6.385 billion for the full year to June as revenue tumbled 31% to $30.91 billion thanks to falling commodity prices. Additionally, BHP slashed its dividend for the full year to $0.30 per share, down 76% from a year ago. “While commodity prices are expected to remain low and volatile in the short to medium term, we are confident in the long-term outlook for our commodities, particularly oil and copper,” CEO Andrew Mackenzie said.
Volkswagen could face civil and criminal penalties because of its emissions scandal. The German automaker has been found liable for criminal wrongdoing by the US Department of Justice, CNBC reports. Volkswagen may be forced to pay damages that exceed Toyota’s $1.2 billion settlement, the largest on record, for intentionally concealing acceleration problems. “As we have said previously, Volkswagen is cooperating with federal and state regulators in the United States, including the Department of Justice, and our discussions are continuing toward a resolution of remaining issues,” a Volkswagen spokesperson told Business Insider.
Warren Buffett’s Q2 trades are out. According to a 13-F filing, Berkshire Hathaway bought 5.42 million shares of Apple in the second quarter, upping its stake to 15.2 million, or about $1.46 billion. On the other hand, Berkshire cut its stake in Walmart by 27%, dumping 15 million shares worth $2.94 billion.
German economic sentiment recovered. German investor confidence rose to 0.5 in August, up from the -6.8 print that was recorded shortly after the UK’s Brexit vote. “Political risks within and outside the European Union, however, continue to inhibit a more optimistic economic outlook for Germany. Furthermore, uncertainty about the resilience of the EU banking sector persists,” said ZEW-President Professor Achim Wambach. The euro is higher by 0.8% at 1.1272.
UK inflation rose faster than expected. According to the Office for National Statistics, consumer prices in Britain rose 0.6% year-over-year in July, beating out the 0.5% gain that economists had forecast. Stripping out the volatility from food and energy, prices were up 1.3% YoY, but that was down slightly from June’s print of up 1.4%. The British pound is up 0.7% at 1.2967.
The Japanese yen is surging. Heavy buying has the yen higher by 1.2% at 100.07 per dollar. Tuesday’s bid comes amid broad-based US dollar weakness and has the yen on track for its best close since November 2013.
Stock markets around the world are lower. Japan’s Nikkei (-1.6%) led the losses in Asia and Spain’s IBEX (-0.5%) paces the decline in Europe. S&P 500 futures are down 3.25 points at 2,182.75 per dollar.
Earnings reporting is light. Home Depot, Dick’s Sporting Goods, and TJX Companies will report ahead of the opening bell while Popeye’s Louisiana Kitchen and Urban Outfitters will release their quarterly results after markets close.
US economic data is heavy. Housing starts, building permits, and CPI will all be released at 8:30 a.m. ET before industrial production and capacity utilization cross the wires at 9:15 a.m. ET. The US 10-year yield is down 3 basis points at 1.52%