Newsletter: California Inc.: Is the Fed going to hike interest rates once again?
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.
Once again, investors are hoping sentiment improves after yet another topsy-turvy week on Wall Street. The Dow plunged Friday by almost 500 points amid ongoing concerns over trade tension, interest rates and a slowing economy, plus news that Johnson & Johnson allegedly knew for decades that its baby powder contained asbestos.
Rate hike expected: The Federal Reserve is expected to nudge up its key interest rate again Wednesday. But the real news could come when Fed Chairman Jerome H. Powell holds a news conference and responds to questions about the volatile financial markets and President Trump’s continued criticism of the central bank’s rate hikes.
Merger questions: Rite Aid, the drugstore chain with about 570 stores in California, reports its fiscal third-quarter results Wednesday and holds a conference call with analysts amid questions about whether the company will again try to find a merger partner after two failed attempts in the last two years.
Consumer spending: The latest snapshot of consumer spending comes out Friday from the Commerce Department. In October, spending rose 0.6% — the biggest increase since a similar gain in March and three times faster than the 0.2% logged in September.
Movie time: Lots of movies open wide Friday. One that has me intrigued is “Welcome to Marwen” from director Robert Zemeckis and starring Steve Carell. Others worthy of consideration include “Bird Box” with Sandra Bullock, “Vox Lux” with Natalie Portman and “Between Worlds” with Nicolas Cage (because, of course, Nicolas Cage).
Monday’s Business section looks at the havoc rocket launches cause for the airline industry. As a growing number of commercial rocket companies ultimately plan to fly on a weekly basis, and from more places, airlines are concerned that they will significantly affect the already congested airspace, which handles more than 15 million airline flights annually.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Legal ruling: U.S. District Judge Reed O’Connor of Texas declared the Affordable Care Act unconstitutional, threatening health coverage for millions of patients nationwide. The ruling hands a victory to 20 Republican governors and state attorneys general who sued to wipe out the 2010 healthcare law, widely known as Obamacare. However, the ruling is expected to be appealed and a leading conservative legal scholar doubts it will be upheld.
Tech testimony: Google Chief Executive Sundar Pichai told members of the House Judiciary Committee that his company’s search engine had no bias against conservatives. He also said the tech giant has no plans to introduce a censored search engine in China. The hearing was the latest in a series called by Republicans to investigate whether Google, Facebook and Twitter suppress conservative voices online.
Space tourists: Virgin Galactic reached suborbital space for the first time in a test flight, bringing Richard Branson’s company closer to flying its customers beyond Earth’s atmosphere. The space plane Unity took off from the Mojave Air and Space Port and reached an altitude of 271,268 feet, or 51.4 miles, above Earth, and a speed of Mach 2.9. The company is charging as much as $250,000 per ticket and said it has signed up nearly 700 customers.
Peak streaming: The entertainment industry this year produced a record 495 original scripted TV shows, fueled by a surge in programming from Netflix and other streaming services that for the first time made up the largest category of programming, according to an industry report. There were 160 original scripted adult programs produced for digital services, including Netflix, Hulu and Amazon Prime, which exceeded the 146 shows for the broadcast networks.
Another breach: Facebook revealed that a major software bug may have allowed third-party apps to wrongly access the photos of up to 6.8 million users, including images that didn’t post publicly. The mishap over a 12-day period in September adds to Facebook’s mounting privacy headaches after a series of incidents earlier this year in which it failed to fully safeguard the personal data of its users.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Thirsty for change: From the Wall Street Journal, a look at how plastic bottles went from enabling a drinks boom to creating an environmental crisis. “Plastic drink bottles are the third most common type of item found washed up on shorelines — behind cigarette butts and food wrappers — according to the Ocean Conservancy, a nonprofit.”
Rising debt: Bloomberg Businessweek says Trump’s tax cuts have made a big difference, just not the one he intended. “As a share of gross domestic product, the deficit rose to 4% in October, up from 3.4% in October 2017 and 2.6% in October 2016.”
Facing the future: Computerized facial recognition is becoming more common. However, asks the New Yorker, is that a good thing? “Faces, unlike fingerprints or iris patterns, can easily be recorded without the knowledge of the people they belong to, and that means that facial recognition can be used for remote surveillance.”
The gift of love: Although the U.S. economy depends on consumer spending, the Atlantic visits with people who advocate a no-gift Christmas. “They want to resist consumerism, restore the religious focus of the holidays, and/or avoid harming the environment. Above all, they want to spend less money on things and more time with one another.”
‘Tariff Man’: The New York Times brilliantly examines Trump’s fascination with tariffs through a superhero origin story, complete with comic-book pictures. “While Thor had his thunderbolt, Mr. Trump had his tariffs.”
A shocking video from the Journal illuminates how people with diabetes are improvising to accommodate soaring insulin prices. Many are dangerously cutting back on doses. Some people are even trying to sidestep drug industry greed by coming up with their own insulin formula.
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.