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This Week in Business: Amazon’s Latest Acquisition

    It’s theoretically possible to spend a day with just Amazon-owned companies: you can shop for groceries at Whole Foods, listen to a book about Audible on your commute, check your Goodreads account, and then, of course, visit Amazon.com. Now the e-commerce giant is making another push in healthcare. Amazon announced Thursday that it had reached a $3.9 billion deal to buy One Medical, a network of primary care clinics, as part of its quest to become a major player in the industry. The deal is the first acquisition under Andy Jassy, ​​who became chief executive a year ago after Jeff Bezos stepped down. mr. Jassy’s approach to the role was very different from that of his predecessor, but he didn’t deviate too drastically from Mr. Bezos. One Medical isn’t the first healthcare-related company Amazon has bought. In 2018, it acquired PillPack, an online pharmacy.

    To the surprise of many, the European Central Bank raised its three interest rates by half a percentage point, not the quarter point initially forecast, in a decisive step to bring rapid inflation under control. Bank officials said they planned to “prepay” the rate hikes in the face of the deteriorating economic outlook and the escalating energy crisis fueled by fears of cutting natural gas from Russia in response to Western sanctions. The ECB has been raising interest rates more slowly than some other central banks because factors driving inflation in Europe, such as snags in the global supply chain and rising energy prices due to the war in Ukraine, are largely beyond the control of policymakers. Those problems also contributed to the weakening of the euro, exacerbating inflation. Some observers say officials are still moving too slowly, while others fear the central bank could become too aggressive, causing the European economy to stagnate.

    It was another bleak quarter for Netflix, but the streaming giant reassures its shareholders that the numbers weren’t as bad as they could have been. The company lost about one million subscribers from April through June, far less than the two million it forecast in April in its first quarter earnings report. “Fewer bad results,” in the words of Reed Hastings, co-chief executive of Netflix. Sales grew 9 percent to $7.9 billion, but Mr. Hastings said it was “hard to lose a million subscribers and call it a success.” Netflix says it believes it can add those subscribers in the current quarter, and remains optimistic about the future of streaming and the company’s new business strategy of rolling out a cheaper ad tier in 2023.

    The largest tech companies – Meta, Apple, Amazon, Alphabet and Microsoft – will report their second quarter results this week. Financial reports from Snap and Twitter at the end of last week didn’t bode well for the couple, with slower revenue growth and quarterly losses deterring investors. This earnings season is of particular significance as the economy is slowing and investors look for signs about the nature of an impending downturn in corporate earnings reports. Those reports can be particularly bleak for the tech sector, especially for businesses that rely on online advertising. It’s already been a tough year for technology, with the Nasdaq index still languishing in a bear market.

    The Federal Reserve had proposed two options for its July meeting: a sharp rate hike or an even bigger one. Officials spoke of a three-quarter-point increase, while also saying they could take a bigger step if certain indicators pointed to a still hot economy. The signals have been mixed in recent weeks. A key measure of longer-term inflation expectations moderated – a good sign for the Fed – but retail sales came in surprisingly strong – a bad sign for the Fed. Then data on Friday showed slowing business activity in the United States. The mixed results make it less clear which path policymakers will take, although some central bankers have been wary of raising interest rates by more than three-quarters of a point, as last month’s 0.75 percentage point increase was already the largest in nearly three years. decades.

    Conventional wisdom says that two consecutive quarters of negative growth in the US economy means we are in a recession. And that could be the outcome of this week’s data on gross domestic product in the second quarter. The economy shrank 0.4 percent, or 1.4 percent year-on-year, in the first quarter — the weakest quarter since the start of the pandemic. Growth was held back by a widening trade deficit and slower stock growth. But consumer spending remained buoyant in the quarter, as did business investment, pointing to a strong economy. Despite the somewhat conflicting signals, if GDP fell again, some could declare a recession. But most economists argue that the United States has not yet met the criteria, and the economics’ semi-official arbitrators — officials of the National Bureau of Economic Research’s Business Cycle Dating Committee — usually wait months to make their final decision. to take.

    Meta has revamped the Facebook app to be more like TikTok. YouTube said it would regulate abortion content more strictly. Rivian, a fledgling electric vehicle manufacturer, is trying to meet Amazon’s request for 100,000 electric vans by 2025.