Newsletter: California Inc.: A rising threat of trade wars
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.
The prospect of trade wars with America’s commercial partners looms over markets. President Trump’s economic saber rattling caused stocks to plunge last week amid fears that tariffs on steel and aluminum — and Trump’s strange insistence that trade wars are “good” and “easy to win” — will have a devastating effect on businesses.
LOOKING AHEAD
State job market: The California Employment Development Department will release January jobs figures on Wednesday. The report will provide insight into the direction of the state’s economy and whether strong jobs gains will continue. In December, employers boosted payrolls by 52,700 and the state unemployment rate dropped to 4.3% from 4.6%.
Color me beige: The latest Beige Book from the Federal Reserve will be released Wednesday. This snapshot of the U.S. economy will be closely watched for signs of inflation and hence the prospect of higher interest rates. The last such report showed that the economy continued to expand from late November through the end of the year.
The national scene: On Friday, the Labor Department’s February jobs report is expected to show the economy added 200,000 jobs, the same as the previous month, and the unemployment rate will tick down to 4%. Wall Street will be paying particular attention to wage data, expected to show average hourly earnings up the same 2.9% over the previous 12 months that triggered inflation fears in the last jobs report.
It’s Mickey’s world: We just live in it. After three weeks of dominance at cinemas, Disney and Marvel’s “Black Panther” will probably cede the box-office throne to — wait for it — another Disney movie: Ava DuVernay’s “A Wrinkle In Time.” The adaptation of the Madeleine L’Engle 1962 children’s fantasy is expected to open with a decent $35 million in the U.S. and Canada.
THE AGENDA
Monday’s Business section fastens its seat belt and zooms into the coming era of hypersonics, or sending missiles aloft at speeds topping Mach 5. Tens of billions of dollars could be spent on hypersonics contracts between 2020 and 2035 if the research “comes to fruition in real weapons programs,” one expert said. That could be a boon for Southern California, home to key research centers for industry and the U.S. government, which could make it the center for hypersonics research.
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:
Heavy metal: President Trump unveiled plans to slap hefty tariffs on global imports of steel and aluminum, catching much of his administration by surprise, sending stocks plunging and sparking widespread fears that he was leading the United States into an ugly trade war with China as well as key American allies. Trump said he would sign an order this week to impose 25% tariffs on steel imports and 10% duties on aluminum.
Gun control: Three major U.S. retailers voluntarily restricted gun sales to make a policy statement and manage their image with consumers in the aftermath of the Florida school massacre. Walmart, the nation’s largest retailer, followed the lead of Dick’s Sporting Goods and tightened restrictions on gun sales, including banning sales to customers under 21. Kroger Co. followed suit.
Studio sale: The saga over the future of Harvey Weinstein’s once-influential studio took a new and surprising turn when an investor group said it had reached an agreement to buy the struggling company’s assets, nearly five months after sexual abuse allegations against Weinstein sent the company into a death spiral and a looming bankruptcy filing.
Fewer ads: NBCUniversal is cutting the number of commercials it will run across its broadcast and cable networks next season in the hope that advertisers will pay more for them. The move is an apparent response to the changing habits of viewers who are spending more time streaming video content online from Netflix, Amazon and other services that can be watched commercial-free.
The first screener: John Boorman’s wonderful 1985 film “The Emerald Forest” didn’t get any Oscar nominations — but it left a legacy. Boorman effectively invented the movie screener, now an integral part of Hollywood’s awards season apparatus. Screeners ensure that influential entertainment business players who vote for the Oscars and other awards shows can easily watch contending films.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Firepower fizzle: Bloomberg delves into why deadly defective guns are the only product that can’t be recalled. “The simple answer is that no government entity has the power to police defective firearms or ammunition in America — or even force gunmakers to warn consumers.”
Drawing a line: The New York Times wonders why Facebook will allow ads to show a man’s bare chest but not a woman’s bare back. “Facebook, which counts more than 2 billion users worldwide, has frequently been accused of taking a conservative, and at times haphazard, approach to what types of nudity it finds acceptable.”
Flying solo: The New Yorker runs down a key challenge faced by new Federal Reserve Chairman Jerome H. Powell. “With no reliable partner in the White House or on Capitol Hill, he has to finish the job that [Janet L.] Yellen started: rolling back the extraordinary measures the Fed took in the wake of the Great Recession without causing a relapse.”
Nix clicks: Procter & Gamble Co. is finding online advertising is less effective than it thought, says the Wall Street Journal. “The consumer products giant says that its push for more transparency over the past year revealed such spending had been largely wasteful and that eliminating it helped the company reach more consumers in more effective ways.”
SPARE CHANGE
With so much craziness in the world, you’re probably hankering for some good news. Try this on for size: The good people at Crocs say they’ve come up with a new material called LiteRide. As Fast Company tells it, LiteRide is 25% lighter and 40% softer than the company’s original Croslite material, “while still providing shock absorption and support.” A test wearer says, “it makes you feel like you are bouncing a little with every step.”
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.
