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 stock market closed Friday on a high note, but last week was an ugly one for Wall Street. The Dow Jones Industrial Average plunged over two days by nearly 1,400 points, with investors rattled by the prospect of higher interest rates and growing trade tension with China. The expectation is that volatility is the new normal.
Meanwhile, Sears Holdings Corp. filed for Chapter 11 reorganization under the U.S. bankruptcy laws late Sunday night, culminating a long, slow decline for the 125-year-old Sears.
Retail sales: The latest snapshot of retail sales will be released Monday by the Commerce Department. In August, retail sales recorded their smallest gain in six months as consumers cut back on purchases of motor vehicles and clothing. July’s numbers were revised higher to show sales rising 0.7% instead of the previously reported 0.5% gain.
Airport upgrade: American Airlines is expected to release details on Wednesday of a planned $1.6 billion upgrade to its LAX terminal over the next 10 years. Rival Delta Air Lines is spending $1.9 billion to upgrade its own facilities at the increasingly crowded and busy airport.
New homes: Housing starts in September will be revealed Wednesday by the Commerce Department. Homebuilding increased more than expected in August, with new projects up 9.2% to a seasonally adjusted annual rate of 1.282 million units. But a shortage of new homes is helping drive up prices.
Trick or treat: Forty years after its debut, the “Halloween” franchise lumbers back into our lives as homicidal maniac Michael Myers escapes from captivity and, to no one’s surprise, goes on a bloody killing spree. On the plus side, there’s Jamie Lee Curtis and Judy Greer. Here’s the fun-filled trailer.
Monday’s Business section looks at little-noticed fallout from President Trump’s decision to scuttle the Trans-Pacific Partnership, known as the TPP, quickly forgotten in the U.S. as Trump launched his high-stakes trade battles. But the abrupt policy change has had far-reaching ripple effects in Vietnam. “As soon as America withdrew from the TPP, you saw a radical change in the way [the Vietnamese] government treated workers, labor activists and unions,” one activist says.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Blame game: Last week’s market turbulence whipped investors into a frenzy as the major indices swung wildly. President Trump thought he found a culprit: the Federal Reserve, which has been steadily raising interest rates. But experts say the commander-in-chief’s choice of a whipping boy was wildly off base.
Scuttled plans: Walt Disney Co. will no longer build a 700-room luxury hotel near its Anaheim resort, citing the city’s elimination of a tax rebate agreement that would have saved the media giant $267 million over 20 years. The cancellation highlights growing tensions between the company and the city, once considered a reliable business partner for Disney.
Leadership team: As Disney prepares to acquire most of 21st Century Fox Inc., the Burbank company identified the key executives who will be tasked with transforming the company’s television businesses to better compete in the digital era. Peter Rice, who climbed the ladder at Fox, was put in charge of remaking Disney’s TV business amid big spending by rivals such as Netflix, Amazon and Google’s YouTube.
Costly housing: It’s getting a lot more expensive to buy a home following a surge in the average rate on a 30-year fixed mortgage. The increase to 4.9% this week, from 4.71% last week and 3.91% a year ago, stems from the same rise in the overall cost of borrowing that sent stocks tumbling last week.
Video shorts: Snap Inc. began offering original scripted offerings on its Snapchat image-message app in five-minute segments designed to get viewers hooked. The content is being produced by major names such as Mark and Jay Duplass and “Riverdale” writer Tessa Leigh Williams. But the real cliffhanger is whether the shows can help turn around the fortunes of Snap, which has struggled to reach profitability.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Questionable components: Some impressive work from Bloomberg on the possibility of hacked Chinese components making their way into U.S. tech companies’ systems. In the latest development, “a major U.S. telecommunications company discovered manipulated hardware from Super Micro Computer Inc. in its network and removed it in August, according to a security expert working for the telecom company.”
Let’s do lunch: Walmart — yes, Walmart — wants to be a Hollywood player, the New York Times reports. “We are not trying to become a studio,” says one company exec. “It is our hope that we will work with studios to reimagine what new content looks like.” Original content on Aisle 3.
Rubbed wrong: The Atlantic spotlights Sen. Mark R. Warner (D-Va.), who is none too pleased with what he sees as Silicon Valley’s too-smug attitude. “I still believe myself to be a very tech-friendly policymaker,” he says. “But I was rubbed the wrong way by the arrogance of the technology companies and the presumption that they knew what was best for everyone. There was this whole idea: You policy guys just shouldn’t worry. We’re a lot smarter. We’ll take care of things.”
Working the system: The New Yorker looks at how carbon trading became a way of life for California’s Yurok tribe. “For each metric ton of carbon that the tribe can prove its forests have sequestered from the atmosphere, the California Air Resources Board, the state agency that regulates air quality and emissions, issues the tribe one offset credit. Polluting industries can then buy the Yurok’s offsets in order to comply with the state’s greenhouse-gas-emissions cap.”
Unhealthy hoopties: Self-driving cars may be the future, but Wired says they may not make us any healthier. Some experts worry that “once the stress of traffic and overt dangers of car travel are gone, people will spend more time in their rolling Barcaloungers. And just because cars drive themselves doesn’t mean they’ll all be battery-powered or that they’ll somehow inspire their occupants to get active.”
Think you know how to tailgate? You know nothing, Jon Snow. The Wall Street Journal takes us on a video visit to a top-of-the-line, 45-foot-long Tiffin Zephyr RV, which offers, literally, all the comforts of home as you chill before the big game. (Well, you won’t be too chill — the thing even has a fireplace.)
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento for helping put this thing together.