Newsletter: California Inc.: Can the U.S. economy stomach the stock market’s tumult?
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
We go into the week with a nice tail wind after a jump in oil prices pushed the stock market higher Friday. The price of crude — oil that is, black gold, Texas tea — had plunged to its lowest level in about a dozen years before rebounding to the highest level in two weeks. Now we can expect investors to go back to obsessing over Chinese economic growth.
LOOKING AHEAD
Apple financials: The Cupertino, Calif., tech giant will report its holiday-quarter earnings Tuesday, having already teased investors with reports of surging sales at Christmas. The company, the world’s biggest by market value, announced a record $1.1 billion in App Store sales in the two weeks that ended Jan. 3. Still, like other tech companies, Apple has been jolted by news of instability in China, one of its biggest growth drivers, and its share price has dropped more than 11% since Dec. 29.
Fed meeting: The Federal Reserve’s policymaking committee concludes a two-day meeting Wednesday. Analysts do not expect another interest rate hike given recent market volatility and the Fed’s promise to move slowly in raising the benchmark federal funds rate. But Fed officials could indicate if they’re concerned about the U.S. economy and signal if another rate hike is coming after their next meeting in March.
Solar panels: The California Public Utilities Commission is expected to vote Thursday on new pricing rules for homes and businesses with solar panels. Under the plan, new solar customers would face a one-time fee for connection to the electric grid that might range from $75 to $150. Rooftop solar customers also would pay a fee of 2 cents to 3 cents per kilowatt-hour for electricity drawn from the grid, no matter how much power their solar systems generate. The state’s major utilities oppose the plan and are backing a counterproposal that would cost rooftop customers more.
Shutting down: Walmart stores in Long Beach and San Jose, and Walmart Neighborhood Market locations in Altadena, Bell Gardens, Hawaiian Gardens and San Bernardino will close for good Thursday. The stores are among 269 that Walmart slated for closure on Jan. 15. Three other Walmart locations in California already have been shuttered. About 1,780 California employees will be affected, including 1,040 in Los Angeles County. Some will be able to transfer to nearby stores.
Acting awards: Voting for the Screen Actors Guild awards closes Friday and the winners will be announced Saturday night at the Shrine Exposition Center. A total of 234 actors have been nominated for this year’s awards in 15 categories involving motion pictures, television and stunts. Carol Burnett will receive a lifetime achievement award at the event. In the film categories, the SAG awards are considered a leading indicator of who will get an Oscar.
THE AGENDA
It looks like the schematic for a new theme park ride: plummet from a lofty height through a series of stomach-churning twists. Unfortunately for investors and possibly the U.S. economy, it’s a chart of the Dow Jones industrial average this month. Monday’s Business section checks in with experts to see how all this tumult could affect U.S. industries, from technology, to retail, to real estate.
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Diversity questions: The absence of nonwhite acting Oscar nominees for a second straight year has led many to criticize the Academy of Motion Picture Arts and Sciences for its lack of diversity. The academy reacted quickly to the criticism, moving last week to adopt new rules that will double the number of women and minority members by 2020. But a growing chorus of movie business figures are instead pointing the finger at another culprit: the executive ranks of the major film studios. Film business insiders and analysts say the academy needs a more diverse crop of movies to choose from, and that depends on the decision-making power of high-level executives.
A sharing mood: General Motors has launched a car-sharing service that lets users reserve and unlock vehicles with their smartphones. The service, called Maven, has debuted in Ann Arbor, Mich., but will expand to other cities this year. Users can rent a car through a free smartphone app that doubles as an electronic key. GM and other major car manufacturers have been exploring new ways to move toward an automotive future in which substantial numbers of drivers will not own cars.
American Apparel: Dov Charney, the ousted founder of American Apparel, testified in Bankruptcy Court that his attempts to turn the company around were thwarted by an “impossible” board. “There’s no chance I can ever have a fair shot,” he said. “I don’t want to hand over my company. This is coercion.” Both he and American Apparel execs are trying to convince the Delaware court that their plans are in the best interest of the Los Angeles firm and its creditors. Judge Brendan Shannon said he would rule today.
Facebook buzz: Anyone who’s logged on to social media during a presidential debate, big football game or TV premier knows the flurry of posts can be just as captivating as the event on screen. With that in mind, Nielsen said it would begin measuring Facebook posts to determine how much buzz a television show is receiving. The ratings research firm already monitors Twitter for the same reason and plans to include Instagram later this year. The moves highlight the changing nature of TV consumption with mobile devices.
Unfriendly skies: Airport security screeners in the U.S. found a record high number of firearms in carry-on bags last year, and most of them were loaded, officials said. The Transportation Security Administration said it discovered 2,653 firearms, 20% more than in 2014, and that 83% of them contained ammunition. The agency suggested that the increase may be the result of better search techniques by airport screeners, although a moderate uptick in the number of travelers also may have contributed.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
TechSoWhite: A timely question from Bloomberg: Why doesn’t Silicon Valley hire black coders? African Americans, about 13% of the U.S. population, make up no more than 1% of technical employees at Google, Facebook and other prominent Silicon Valley companies.
Glory days: Are our best days behind us? The New York Times ponders this question and observes that, compared with the “momentous changes” during the first half of the 20th century, progress is more modest nowadays. It asks: “Has technological progress slowed for good?”
Digital muscle: Who’s got the most political juice in Silicon Valley? Wired is out with its list of “the 20 tech insiders defining the 2016 campaign.” It says Valley power players “are beginning to confidently wield their tremendous economic resources and social influence” in presidential politics.
Labor unrest: The Atlantic says labor unrest is spreading south of the border in Juarez, Mexico, where workers say they should make more than $6 a day in factories producing goods for major international companies. Some observers are calling the level of labor discontent in the Mexican maquiladoras “historic.”
Changing times: Uber CEO Travis Kalanick tells the Times of India that societies change and transit regulations have to change with them. “Cities and states and countries that can allow rules to move forward are going to see progress happen more quickly,” he says.
SPARE CHANGE
Speaking of #OscarsSoWhite, it seemed like a new era had begun when Hattie McDaniel won the Oscar for best supporting actress for her work in “Gone With the Wind.” Here’s what was said at the time.
Apparently we’re still waiting for that new era.
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
