Newsletter: California Inc.: SoCal gas prices are once again nearing $4 a gallon
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.
Heads up, drivers: SoCal gas prices are climbing toward $4 a gallon, boosted in large part by a rise in worldwide crude oil prices. The average pump price for regular gas in the Los Angeles-Long Beach area stood at $3.736 a gallon last week, up nearly 60 cents, or 19%, from a year earlier. Prices for midgrade and premium blends have climbed to $4 or more a gallon at certain stations in the area.
Tesla sales: Tesla reveals third-quarter auto sales on Monday or Tuesday. With Chief Executive Elon Musk stepping down as chairman as part of his weekend fraud settlement with the Security and Exchange Commission (see below), the numbers will be scrutinized more than usual. Production and deliveries are expected to be well above second-quarter levels. The money-losing company will release its third-quarter financial results in early November.
Vehicle sales: The latest stats on motor vehicle sales will be released Tuesday. Consumers have been shifting away from traditional passenger cars for larger, more comfortable SUVs and pickup trucks, which are also more profitable for automakers. Last year, U.S. auto sales dropped 2% from a record high of 17.55 million in 2016.
Jobless claims: Weekly jobless claims come out Thursday. It was reported last week that the number of Americans filing for unemployment benefits increased more than expected as Hurricane Florence temporarily displaced some workers. The underlying trend continued to point to a tightening labor market.
Consumer credit: On Friday, the Federal Reserve will provide an updated snapshot of how much consumers are borrowing. Consumer debt rose in July more than forecast as non-revolving credit grew by the most since November and outstanding credit-card debt surged.
Star turn: The latest iteration of “A Star is Born” (collect them all) bows Friday. This one features the fabulous Lady Gaga — she can belt it, she really can — and Bradley Cooper, who also directed. Here’s the trailer.
Monday’s Business section checks out Instagram’s drug problem. “Instagram is known for its celebrity posts and photos of enviable vacations. But it has also become a sizable open marketplace for advertising illegal drugs. The company has pledged a crackdown in recent weeks, but it is struggling to keep pace with its own algorithms and systems.”
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Musk blowup: After being accused by the Securities and Exchange Commission of making “false and misleading tweets” about an aborted plan to take Tesla private, Elon Musk and the Palo Alto-based electric-car maker settled with the SEC over the weekend. In addition to paying $20 million in fines — with Tesla paying another $20 million — Musk will remain as CEO but step down as chairman, and Tesla will appoint an independent chairman and two new directors. The quick deal ends what could have been an ugly court battle amid the company’s production struggles.
Trade deal: In an eleventh-hour breakthrough that may have saved the North American Free Trade Agreement, the Trump administration and Canada came to terms late Sunday on a deal — opening the way for the United States, Canada and Mexico to sign a renewed trade pact at the end of November. The revisions include notable changes on auto-sourcing rules and labor rights, as well as new or updated provisions on digital trade, financial services and other areas of commerce.
Uber victory: A federal appeals court ruled that Uber can force its drivers into individual arbitration over pay and benefit disputes, voiding an effort by thousands of drivers to join in a class-action suit against the ride-hailing company. The unanimous decision by a 9th Circuit Court of Appeals panel overturned a lower-court order that had certified the drivers’ class-action effort.
Asserting independence: Despite President Trump’s unusual public criticism of their monetary policy, Federal Reserve officials inched up their key interest rate a quarter percentage point — and indicated they are prepared to so again in the face of strong economic growth. The latest increase brings the target of the central bank’s benchmark federal funds rate to between 2% and 2.25%.
Housing slowdown?: The median sales price of a Southern California home rose to $535,000 in June, up 7% from a year earlier, according to research firm CoreLogic. Sales, however, fell 8% since August 2017, an indication that sky-high prices and rising mortgage rates are crimping demand in the six-county region.
Harassment probe: CBS Corp. said that it was subpoenaed by the New York County district attorney’s office and the New York City Commission on Human Rights, which are investigating allegations of sexual misconduct by former Chief Executive Leslie Moonves. The media executive resigned last month after multiple women came forward and accused him of sexual misconduct, mostly decades ago.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Laundry day: The Wall Street Journal examines how dirty money vanishes down the hole of cryptocurrency. “The Journal’s analysis — which encompassed only a narrow slice of suspected criminal behavior involving cryptocurrencies — identified $88.6 million laundered through 46 exchanges.”
Hot start-up: Bloomberg profiles Zhang Yiming, 35, whose company, ByteDance, is on its way to a more than $75 billion valuation — a price tag that surpasses Uber Technologies. “Much of its lofty valuation stems from the creation of an internet experience that’s a cross between Google and Facebook.”
Holesale change: The New Yorker weighs in on Dunkin’ Donuts dropping “donuts” from its name. “The company joins a list of brands with global reach whose names have been whittled down to complete meaninglessness. Weight Watchers just rebranded itself as WW. Jo-Ann Fabrics is now Joann.”
Long march: The New York Times says KFC’s ads in China serve up plenty of patriotism along with nuggets. One seasonal meal deal features “a bucket proclaiming ‘40 years of reform and opening up’ that contains three chicken nuggets, three drinks, two wings, two meat pastries, two burgers and a box of popcorn chicken. Price: about $14.80.”
Led Zeppelin is headed back to court. A federal appeals court in San Francisco overturned a 2016 jury verdict that Jimmy Page and Robert Plant’s 1971 “Stairway to Heaven” didn’t use anything that was unique and original in “Taurus,” a track written by late Spirit guitarist Randy Wolfe, whose trust brought the lawsuit. Here’s a great live version of Led Zep’s monumental classic. Here’s that instrumental number from Wolfe. You decide.
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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