Newsletter: California Inc.: Nearly $20 billion in spending expected for Valentine’s Day
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.
Investors will take their Dramamine on Monday and hope the worst is behind them. The Dow marked its nastiest week in nine years last week, including two days of unprecedented 1,000-plus point drops. Most analysts say the current correction is a sign of market health. But that doesn’t make it any easier to stomach.
LOOKING AHEAD
Inflation check: The consumer price index for January will be released Wednesday. Investors will be watching closely for any signs of inflation, which could add to market volatility. Prices are expected to be up by about 0.3% after a 0.1% gain the previous month.
Affair of the heart: Wednesday is Valentine’s Day. The National Retail Federation estimates the average American will spend $143.56 on flowers, jewelry, candy, clothes and other gifts, up from $136.57 last year. Total spending is expected to reach $19.6 billion, near 2016’s all-time high.
Eye on CBS: CBS releases its latest earnings data Thursday. Analysts will be paying close attention to the company’s plans for online streaming, which is seen by most media companies as a key growth area. The report comes as the Redstone family, which controls both Viacom and CBS, has been pushing for a merger of the two companies.
Welcome to Wakanda: Walt Disney Co.’s Marvel Studios releases its new superhero movie “Black Panther” on Friday. The film, directed by Ryan Coogler (“Creed”), is expected to open with $150 million in the U.S. and Canada, which would be a record for a movie made by an African American filmmaker.
Hot wheels: Starting Friday, the country’s largest motor-vehicle auction firm will bring more than 600 classic cars and trucks to the Fairplex in Pomona for the annual Mecum Los Angeles auction. Featured lots include Depression-era roadsters, 1940s hot rods and a host of English, American, Italian and German sports cars.
THE AGENDA
With new options and conveniences, there’s never been a better time for shoppers. As for workers — well, not always. The retail industry is being radically reshaped by technology, disrupting the jobs of some 16 million Americans who stock shelves, operate cash registers and sell merchandise, among other tasks. But as more shoppers move online and mundane functions like check-out are automated, employees are finding their best chance to fight back is in delivering the kind of customer service a computer can’t match.
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:
Roller coaster: The Dow closed up 330 points on Friday but not before many investors experienced the ride of their lives. The stock market swung wildly for days because of fears of rising interest rates stemming from rising wages and the GOP tax cuts. But some longtime observers said a correction was long overdue after a lengthy bull market, with one Fed official calling the losses “small potatoes.”
Rocket man: With a showman’s flair, Elon Musk launched his Falcon Heavy rocket carrying an unusual payload: a midnight cherry Tesla Roadster driven by a dummy “Starman.” By nailing the giant rocket’s first flight and landing its two boosters on the ground, Musk’s Hawthorne company SpaceX set the stage for faster and cheaper launches of large satellites.
White flag: After four days of blistering testimony detailing the alleged theft of driverless-technology trade secrets owned by Waymo, Uber threw in the towel. The ride-hailing firm agreed to pay $245 million in Uber equity to Waymo’s parent, Google’s Alphabet. Waymo had sued Uber in federal court in San Francisco, alleging its trade secrets were stolen by a former Google engineer who started a driverless truck company acquired by Uber.
Newspaper deal: The Los Angeles Times’ corporate parent, Tronc, announced that it had reached a deal to sell The Times, the San Diego Union-Tribune, Spanish-language Hoy Los Angeles and community newspapers to L.A. biotech billionaire Dr. Patrick Soon-Shiong. His investment firm, Nant Capital, agreed to pay $500 million for the Southern California papers and will assume $90 million in pension liabilities.
Earnings hits: Snap Inc.’s shares skyrocketed 47% after the Venice company reported fourth-quarter revenue of $286 million, a 72% increase from a year earlier, driven by strong user and ad growth. Later in the week, Twitter Inc. stock soared the most since its 2013 market debut after the company posted its first sales growth in four quarters. The company said additional video content was attracting more ad spending.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
High stakes: The New York Times examines the Wynn casino empire without scandal-tainted Steve Wynn at the helm. As one Wall Street analyst put it: “Mr. Wynn’s value to the company is unarguably profound as its chief visionary and diplomat. As such, we do not believe the company can grow at the same trajectory nor can it maintain its cutting edge position.”
Life bundle: The Atlantic examines Amazon’s reinvention of Whole Foods, which is now experimenting with free two-hour deliveries to Prime members. “This is the logical next step in turning Prime into the ultimate ‘life bundle,’ a single membership program to bind consumers to every possible commercial need.”
Old school: From Wired, a look at how outdated auto safety rules could put the brakes on self-driving cars. “There are 73 federal vehicle safety regulations that incorporate 257 standards, with half of them dating back before 1980. Nearly all federal auto safety regulations codify technical standards that are years, if not decades, out of date.”
Marketing opportunity: The Wall Street Journal gets up close and personal with the South Korean corporate giant behind the Winter Olympics. “Never before have an Olympics, a host country and a major company been so closely intertwined. South Korea got the Olympics it wanted, and Samsung stands to reap dividends from its heavy involvement in the Games.”
Kim’s Angels: Speaking of the Olympics, an intriguing take from the New Yorker on North Korea’s “army of beauties” cheerleading squad. “The cheerleaders are chosen on the basis of appearance and ideology — they undergo background checks to insure that there are no defectors or enemy sympathizers in their families, and they must be pretty (and at least five feet three).”
SPARE CHANGE
If you need a break from the market turbulence and political news of recent days, Bloomberg is here with some suggestions. The normally business-focused news service runs down some far-flung locales for anyone really, really needing to get away from it all. My particular favorite, a pleasant 13-night trek through Iran’s Lut Desert, featuring “terrain so hostile it’s incapable of sustaining flora or fauna.” Don’t forget the sun screen.
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento and Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
