Newsletter: California Inc.: Will Comcast raise stakes in battle for Fox?
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.
Bank stocks set the pace Friday after the Federal Reserve approved banks’ plans to increase their dividends and buy back more stock. Wells Fargo posted strong gains after it said it will repurchase $24.5 billion in stock. In February, the Fed ordered Wells to throttle back on growth until it could fix a bunch of problems, not least a corporate environment that led to creation of unauthorized accounts. Markets are closed Wednesday for the Independence Day holiday.
Higher bid?: Investors will be watching this week to see whether Comcast can muster a bid to trump the Walt Disney Co.’s $71.3-billion offer for much of 21st Century Fox, which unexpectedly received speedy U.S. Justice Department approval. Rupert Murdoch’s company has set a July 27 shareholder vote, adding pressure on Comcast to come up with considerably more money or abandon its effort.
Tesla target: Tesla is expected to reveal whether it has reached its 5,000-a-week production number for its highly desired but problem-plagued Model 3 electric sedan. Falling far short of that target would probably sink Tesla’s high-priced stock, but meeting the milestone, or even coming close, would probably drive it higher.
Trade dispute: The tit-for-tat trade fight between the U.S. and China is expected to escalate dramatically on July 6 when President Trump’s 25% tariffs on $34 billion worth of Chinese machinery, medical instruments, aircraft parts and other goods go into effect. Beijing has vowed to retaliate by targeting mostly U.S. farm products and seafood, also valued at $34 billion, on the same day.
Unemployment: The latest stats on unemployment and average hourly earnings will be released Friday. Economists are expecting a solid 190,000 jobs to have been added in June. In May, job growth accelerated and the unemployment rate dropped to an 18-year low of 3.8%. This raised concerns about tightening labor market conditions and higher inflation.
Small hit: Another big weekend at the box office looms as Disney prepares to release “Ant-Man and the Wasp,” the third Marvel Studios superhero movie this year. The sequel, starring Paul Rudd, is expected to take off with roughly $70 million at the domestic box office, which would top the opening for the first “Ant-Man” in 2015.
Monday’s Business section delves into moves by conservative billionaires to cripple labor unions after the Supreme Court said workers can’t be compelled to pay dues. The conservative Freedom Foundation has launched a campaign in a trio of West Coast union bastions — California, Oregon and its home state of Washington — aimed at shrinking union ranks by 127,000 members. The group wants the campaign to serve as an example for similar efforts around the country.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Court blow: The Supreme Court dealt labor unions a sharp defeat, ruling that teachers, police officers and other public employees cannot be forced to pay dues or fees to support their unions. By a 5-4 vote, the justices overturned a 41-year-old precedent and ruled that the 1st Amendment protects these employees from being required to support a private group whose views may differ from theirs.
Tariff backlash: Harley-Davidson Inc. warned that it planned to move some production out of the U.S. to avoid European Union tariffs levied in response to a growing dispute between the two trading blocks. The announcement drew a swiftly tweeted rebuke from President Trump who threatened the iconic motorcycle manufacturer — previously one of his favorites — with taxes “like never before.”
Backlash Part 2: GM surprised analysts and issued a stern warning that if the Trump administration applies tariffs to imported vehicles and parts, it would lead to the automaker’s shrinkage in the U.S. President Trump has ordered an investigation of whether auto imports pose national security risks, with the administration said to be considering auto tariffs of as much as 25%.
Speedy scooter: Electric scooter start-up Bird closed a $300-million funding round that values the 10-month-old Venice company at $2 billion, making it one of the country’s fastest-growing tech firms. The company’s ubiquitous scooters are available through an app for a $1 unlocking fee and 15 cents per mile. Users can hop onto any scooter they find and abandon them wherever they choose.
Festival grounds: The Coachella Valley Music and Arts Festival and sister country music festival Stagecoach bring hundreds of thousands of revelers to Palm Springs and the surrounding area. Now, a developer is building a 35-acre “casita-style” resort that will cater to the events and serve as a recreation attraction in its own right — highlighting the economic impact the popular festivals are having in the desert valley.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Getting tough: The Wall Street Journal gets up close and personal with “an unlikely triumvirate of Silicon Valley insiders that for more than a year has been cajoling executives and buttonholing lawmakers about the tech industry’s at times reckless approach to privacy and its seeming indifference toward its broader impact on society.”
Your digital self: A funny but troubling take in the New Yorker on how algorithms know more about us than we know ourselves. “I know you have your college girlfriend’s name stored in your contacts as ‘Steve.’ I know that you’ve never texted her, but I know you think about doing so every night around midnight.”
Wiping the slate: The Atlantic looks at the rise of so-called grade forgiveness in universities. “The use of this little-known practice has accelerated in recent years, as colleges continue to do their utmost to keep students in school (and paying tuition) and improve their graduation rates.”
Hot times: The New York Times explores how tech-industry elites are recreating the thrills of Burning Man in their living rooms. “Like a modern version of a medieval minstrel, a singer named Jess Magic is helping A-list entrepreneurs get in touch with their inner child in private ‘songversations.’ ”
Tangled up in blue: Having trouble sleeping? Fast Company says it may be due to the soft blue light emanating from most of your gadgets. “Blue light inhibits the production of melatonin, the hormone that regulates our sleep cycles. Blue light before bedtime can wreak havoc on our ability to fall asleep.”
The NYT tackles the hot topic of soggy French fries in compelling words and pictures. Potatoes with less water make for crispier fries. Too much water can make them limp. “Water is really the enemy,” says Deb Dihel, vice president of innovation for Lamb Weston, the country’s biggest manufacturer of these potato delicacies.
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento for helping put this thing together.
Until next time, I’ll see you in the Business section.
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