Climate change and a uniquely litigious environment have made Florida a costly state for insurers to do business in. So costly that this summer, Farmers Insurance, one of the U.S.’s biggest property and casualty insurers, said it was pulling out.

State lawmakers passed legislation in December to curb the number of lawsuits. But with a backlog of thousands of cases, it may take 18 months or more before benefits are apparent, analysts say. In the meantime, risks including climate change are looming. Florida waters have broken temperature records. Some meteorologists have revised forecasts to predict above-average hurricane activity this year. Another bad storm year could send rates higher, prompt more carriers to exit, and push small carriers into insolvency.

Last Week

Markets

Consumer confidence neared prepandemic levels, home prices rose, and UPS appeared to dodge a strike. Expectations were high that the Federal Reserve would raise again—and it did, another quarter point. Chair Powell said the Fed staff was no longer forecasting recession, which sent stocks up, including the Dow industrials for a 13th straight session. The kicker: Second-quarter GDP rose to 2.4%, rattling investors and killing the win streak. On the week, the

Dow Jones Industrial Average
rose 0.66%, the

S&P 500
1%, and the

Nasdaq Composite
2%.

Companies

Alphabet

and

Microsoft

beat expectations, and both forecast more spending on artificial intelligence. Snap got crushed by a sales slump;

Meta Platforms

beat on revived ad sales.

General Electric

and

Coca-Cola

both beat.

Deals

Elon Musk replaced Twitter’s blue bird logo with an X. Now he has to provide services beyond just tweets…Banc of California agreed to buy

PacWest Bancorp

for just over $1 billion. Warburg Pincus and Centerbridge will invest $400 million into the deal…The Financial Times reported that the Committee on Foreign Investment in the U.S. is reviewing the UAE’s sovereign-wealth fund Mubadala’s $3 billion takeover of Fortress Investment Group. The concern: Mubadala’s China ties…Biogen said it was buying

Reata Pharmaceuticals

for $7.3 billion, a 59% premium.

Next Week

Tuesday 8/1

Merck and

Pfizer

headline a bevy of large-cap pharmaceutical and healthcare companies reporting results.

Vertex Pharmaceuticals

also reports on Tuesday, with

CVS Health

and

Humana

on deck for Wednesday.

Amgen
,

Gilead Sciences
,
and

Regeneron Pharmaceuticals

round out the week on Thursday.

The BLS releases the Job Openings and Labor Turnover Survey. Consensus estimate is for 9.7 million job openings on the last business day of June, slightly less than in May. Fed Chairman Jerome Powell reiterated this past week that “labor demand still substantially exceeds the supply of available workers.”

Thursday 8/3

Amazon.com

and

Apple

release earnings after the market close. Shares of both companies are up more than 50% this year, with Apple recently hitting a record high.

Friday 8/4

The BLS releases the jobs report for July. Economists forecast a gain of 200,000 for nonfarm payrolls, 9,000 less than in June. The unemployment rate is expected to remain unchanged at a historically low 3.6%.

Write to Andrew Welsch at andrew.welsch@barrons.com