Newsletter: California Inc.: Trump’s tariffs could take toll on holiday-season sales
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.
A milestone to note on the media front: For the first time, advertisers are spending more money on online sites such as Google and Facebook, with digital ads this year expected to total $106 billion and account for more than half of U.S. ad sales for the first time, according to a new report.
Escalating fight: New tariffs on some $200 billion in Chinese imports are scheduled to take effect Monday. The tariffs on some 5,000 items, including household goods, are set at 10% but will climb to 25% on Jan. 1. Beijing has retaliated by hiking tariffs on $60 billion in U.S. imports, raising rates 5% and 10% on 5,207 types of goods, including coffee, honey and industrial chemicals.
How we’re feeling: The latest snapshot of consumer confidence will be released by the Conference Board on Tuesday. The consumer confidence index climbed to 133.4 in August as consumers reported better feelings toward the economy.
Another rate hike: Federal Reserve officials are expected to inch up their benchmark interest rate again Wednesday as they seek to head off inflation amid the continuing strong growth of the economy. Fed Chairman Jerome H. Powell will hold a news conference.
New home sales: The Commerce Department on Wednesday will release the latest figures on new home sales. In July, sales of new single-family homes fell to a nine-month low in a sign the housing market was cooling amid the rise in interest rates.
Bye-bye, Bob? “The Old Man & the Gun,” which may or may not be Robert Redford’s final film, opens Friday. It tells the true story of Forrest Tucker, who escaped from San Quentin at the age of 70 and, as one does, went on a string of heists. Here’s the trailer.
Monday’s Business section is all about tariffs. Small businesses around the country are bracing for the latest round of levies, which could cut into already thin profits and leave them with little choice but to pass additional costs along to customers this holiday season. Meanwhile, some Chinese companies are finding it’s a good time to work in the fake-handbag business.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Winning bid: Comcast Corp. triumphed over 21st Century Fox and the Walt Disney Co. in a hard-fought battle for Sky television by offering nearly $40 billion, or about $22.75 a share, for the satellite-TV service that boasts 23 million customers in five European countries.The Philadelphia cable company captured the prize during a rare auction conducted Saturday by British regulators.
Booming economy: California employers added 44,800 net jobs and the unemployment rate held at a record low of 4.2% in August. All in all, the data released by the Employment Development Department reveals a resilient state economy despite high housing costs and rising trade tensions. One big caveat: wages grew, but barely enough to keep up with inflation.
Reefer madness?: Tilray, a Canadian maker of medicinal cannabis extracts, saw its share price nearly double for a short time after receiving Drug Enforcement Administration approval to import cannabis into the United States for medical research. The run-up in Tilray and other pot shares is being compared to last year’s cryptocurrency rage — with investors fearing it’s a bubble that will burst.
Caruso redux: Shopping-center mogul Rick Caruso opened his latest project in Pacific Palisades, replacing the seaside enclave’s fading downtown with a new shopping district. But unlike his ornate complexes the Grove and Americana at Brand, the $200-million Palisades Village features a smaller footprint and boutique restaurants and stores.
Hedged bets: Electric car start-up Lucid Motors has been struggling to raise money. Now, Saudi Arabia’s sovereign wealth fund has agreed to invest more than $1 billion in the company, which said the deal will give it enough cash to finish engineering its high-end Lucid Air sedan and begin manufacturing in 2020. The Saudis also are backing rival electric-car maker Tesla.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Circling the wagons: From Bloomberg, a look at how the Federal Reserve is trying to protect itself from a mercurial president. “Trump’s relentless attacks could erode the Fed’s support in Congress and spur legislative efforts to hem it in by hardcore conservatives and populist liberals already suspicious of its power.”
Carnivores: The New York Times says the Wall Street power lunch is back in vogue after falling by the wayside amid the financial crisis. “Everything became the same again, because these people have money,” commented Julian Niccolini, the maitre d’hôtel and a co-owner of the Four Seasons restaurant. “Don’t forget that part. They have money. They want to spend money.”
New world order: A take from the Atlantic on how trade tension between the United States and China is “forging a new, uncharted gray area — not quite the economic bifurcation that characterized the U.S.-Soviet relationship at the height of the Cold War, but far from the high degree of interdependence seen in the early-21st century.”
Pedal power: The O.C. Register checks out how some SoCal electric-bike companies are weathering the trade storm. One such firm, Fountain Valley’s Pedego Electric Bikes, isn’t moving jobs back to the United States from China. It “plans to open a new factory in tariff-free Vietnam. And it expects to raise the average price of its e-bikes by $300 — about 8% — to absorb the cost of adjusting its supply chain.”
Tricks of the trade: The Wall Street Journal delves into how computer hackers perform their dark arts, thanks to a practice known as social engineering. “Social engineering is a bit of a catchall phrase, but it is happening anytime hackers trick employees into sharing intelligence that helps the hackers find vulnerabilities in company systems and carry out attacks.”
A crazy video from Wired on Denise Mueller-Korenek, who set the women’s paced bicycle speed record in 2016, pedaling to 147 mph. Now she’s ready to attempt to break the overall record of 167 mph and take the title of fastest cyclist ever — woman or man. Don’t try this at home, kids.
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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