1/ QUICK HITS

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Euro zone business boom roared on in August -PMI (Reuters)

2/ CHART OF THE DAY

Slowing Down

Chart courtesy IHS Markit

The impacts of COVID-19 have led to a significant slowdown in the growth of the U.S. economy, according to a new survey.

The IHS Markit Flash U.S. Composite Purchasing Managers’ Index (PMI) fell to an eight-month low in August. The index came in at 55.4, a sharp decline from July’s 59.9. Any reading above 50 indicates expansion.

The report noted the spread of the delta variant of COVID-19 has weakened demand growth. It also pointed to capacity pressures and material shortages that have plagued businesses as the economy comes out of its post-pandemic slump. In addition, purchasing managers for both the services and manufacturing sectors said they continue to face a shortage of qualified workers.

Higher Prices

Chris Williamson, Chief Business Economist at IHS Markit, warned prices are expected to rise sharply as costs increase because of a lack of materials and labor. However, he added inflation could slow if demand declines.

Along with the Composite Index, the group’s Services Business Activity Index also dropped to an eight-month low. The Manufacturing PMI was the lowest in four months.

3/ STOCK OF THE DAY

DoorDash (DASH)

Photo courtesy Getty Images / Smith Collection / Gado / Contributor

Shares of DoorDash (DASH) are lower today after a judge threw out a California law identifying gig economy workers as independent contractors, not employees.

Alameda County Superior Court Judge Frank Roesch ruled Proposition 22 is unconstitutional because it infringes on the state legislature’s ability to set labor law, and is unenforceable.

Proposition 22 exempted companies such as DoorDash, Uber, and Lyft from California Assembly Bill 5, which required their drivers to be reclassified as employees and entitled to benefits.

Gig Economy Workers

Voters approved Proposition 22 in 2020 after a bitter fight between gig economy firms and labor unions. The campaign was the most expensive for any ballot initiative in California history, costing more than $200 million.

The companies said they will appeal the judge’s decision.

DoorDash shares fell as much as 5% today, while shares of Uber (UBER) and Lyft (LYFT) are now rising after opening the session lower.

[Editor's Note: Our stock of the day is by no means a recommendation to buy, sell, or hold a particular security or asset. We will never do that. It's simply a vehicle for us to present a security with interesting price movement and try to analyze what's driving it.]