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Update on the latest business

January 11, 2019

FINANCIAL MARKETS

Stocks slip

NEW YORK (AP) — Stock indexes are slipping in midday trading on Wall Street as falling oil prices drag down energy companies, but the S&P 500 remains on track to close out its third straight winning week following a brutal stretch in December.

Activision Blizzard plunged 9 percent for the largest loss in the S&P 500 after it announced its eight-year partnership with game-developer Bungie is ending. Bungie will assume full publishing rights for the popular Destiny game franchise.

General Motors jumped to the biggest gain in the S&P 500 after it gave a profit forecast for 2019 that topped analysts’ expectations. It also gave a better-than-expected forecast for 2018 profits, and shares jumped 8.4 percent.

CONSUMER PRICES

Cheaper gas sends US consumer prices down 0.1 pct

WASHINGTON (AP) — Consumer prices slipped 0.1 percent last month, pulled down by sharply lower gas prices and cheaper air fares, used cars, and mobile phone plans.

The Labor Department said the consumer price index rose just 1.9 percent in December from a year earlier, the first time it has fallen below 2 percent since August 2017.

Excluding the volatile energy and food categories, core prices rose 0.2 percent for the third month in a row. They rose 2.2 percent from a year ago for the second straight month.

The figures suggest that the healthy economy is not yet creating widespread inflation pressures. That gives the Federal Reserve more leeway in deciding whether to raise interest rates. Fed Chair Jerome Powell has said the Fed can be “patient” regarding rate hikes this year.

GENERAL MOTORS-FORECAST

GM raises 2018 forecast, predicts stronger 2019 earnings

DETROIT (AP) — General Motors strengthened its pretax profit estimate for 2018 and predicted even stronger performance for 2019 as it executives made a presentation to investors on Friday.

CEO Mary Barra also says the company doesn’t foresee any further job cuts through 2020. Last year GM announced plans to close five North American factories and lay off 14,000 salaried and blue-collar workers.

The company predicts 2018 pretax profits will be higher than the $5.80 to $6.20 range it forecast in the third quarter. For 2019, it expects that to increase to $6.50 to $7.

The rosy profit forecast comes despite declining sales for the company in the U.S. and slowing sales in China. GM also plans to exit several car lines in the U.S. in the coming year.

TRUMP-VISAS

Trump says changes coming on high-tech visas

WASHINGTON (AP) — President Donald Trump says changes are coming in the way that the U.S. handles temporary H1-B visas, which allow American companies to bring high-tech and other skilled workers into the U.S. from abroad.

Trump tweeted Friday that those who hold the temporary H1-B visas can “rest assured” because changes are coming that will bring “both simplicity and certainty to your stay, including a potential path to citizenship.”

Trump says the U.S. wants to encourage talented and highly skilled people to pursue careers in the U.S. As a candidate, he promised to stop H-1B visas from being used as a “cheap labor program.”

A draft proposal circulated in January to review regulations, find ways to allocate visas more efficiently and ensure that beneficiaries are “the best and the brightest.”

MARRIOTT DATA BREACH-LAWSUIT

Class-action lawsuit filed over Marriott data breach

(Information in the following story is from: The Daily Record of Baltimore, http://www.thedailyrecord.com)

GREENBELT, Md. (AP) — A group of class-action law firms has filed the largest-to-date lawsuit related to hotel chain Marriott’s data breach.

The Daily Record reports that Marriott International Inc. is being sued by 176 plaintiffs from all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands in federal court. The world’s largest hotel chain confirmed late last year that hackers compiled stolen data from reservation systems used by Starwood Hotels and Resorts Worldwide Inc. for four years.

Marriott said last week that around 383 million guests were affected.

The plaintiffs assert Starwood and Marriott failed to identify the breach and notify those affected in a timely manner. Plaintiffs’ attorneys say Marriott should have discovered the breach during its acquisition of Starwood in 2016.

The report didn’t include a response from Marriott.

GOOGLE DATA CENTER-MINNESOTA

Google considers building $600M data center in Minnesota

MINNEAPOLIS (AP) — Google is looking into building a $600 million data center in central Minnesota that would be powered by two wind farms.

Minneapolis-based Xcel Energy disclosed the data center project Thursday in a regulatory filing. The Google facility proposed in Becker would mark one of the largest private construction projects in recent state history and create about 50 full-time tech jobs.

Becker Mayor Tracy Bertram says the city is among several sites under consideration. Bertram says the plan calls for most of the facility’s electricity to come from renewable sources.

Under the proposed agreement, Xcel would sell Google land for the facility and provide electricity service.

Xcel says the project would help the utility and the area transition from its reliance on the Sherco plant, the state’s largest coal-fired power plant.

FEDERAL RESERVE-TRANSCRIPTS

Fed officials feared adverse market reaction in 2013

WASHINGTON (AP) — Federal Reserve officials were worried about an adverse market reaction when they made their first tentative moves in 2013 to pull back on the massive support they had been providing to help the economy recover from the Great Recession.

Transcripts of their discussions released Friday show that then-Federal Reserve Chairman Ben Bernanke and his colleagues devoted considerable time debating the wording of the statement. The Fed ended up approving a proposal to trim its $85 billion per month in bond purchases by a small $10 billion.

Both of Bernanke’s successors as Fed leader, Janet Yellen and Jerome Powell, backed Bernanke’s proposal with Yellen saying “existential angst” over the decision was unavoidable.

The markets had reacted badly six months earlier when Bernanke had first raised the idea of cutting bond purchases.

US-MEXICO-TUNA

US hails WTO rulings in ‘dolphin-safe’ tuna tiff with Mexico

GENEVA (AP) — The U.S. ambassador to the World Trade Organization has welcomed two rulings that backed the United States in a long-running dispute with Mexico over U.S. “dolphin safe” tuna labeling.

The Trump administration has repeatedly criticized the WTO appellate body that delivered the rulings, and has thwarted efforts to appoint new members to it.

A WTO panel formally adopted Friday the rulings last month that found U.S. tuna-labeling measures in line with Washington’s commitments to the trade organization.

While welcoming the decision, Ambassador Dennis Shea voiced disappointment that it had taken “more than a decade to resolve.”

Alluding to Mexico’s concerns, Shea lamented that the U.S. “was forced to expend considerable resources over nearly a decade trying to defend successfully what was always an environmental measure with no element of protectionism.”

MEXICO-FUEL THEFT

Mexico deploys 4,000 troops, choppers against pipeline theft

MEXICO CITY (AP) — Mexican President Andres Manuel Lopez Obrador has ordered helicopters and 4,000 troops to guard the nation’s pipelines and fuel depots in an offensive against massive fuel theft.

The helicopters are watching for organized gangs that drill illegal taps into underground ducts carrying gasoline and diesel.

Long lines continued at gas stations in Mexico City and outlying states Friday as tanker trucks struggled to supply fuel normally delivered through pipelines.

Most Mexicans understood the need to crack down on $3 billion per year in fuel thefts, but patience was wearing thin.

The head of Mexico’s employers’ federation said economic losses from fuel shortages now amount to over $60 million due to transportation delays for goods and workers.

Gustavo de Hoyos says the emergency measure “cannot continue much longer.”

POLAND-HUAWEI-CHINA-ESPIONAGE

Poland spying suspect held top cyber jobs

WARSAW, Poland (AP) — The Polish state news agency says a Polish man who has been charged with spying for China had held top cybersecurity positions at different state agencies and had been involved in projects co-financed by the European Union.

PAP reported Friday that the suspect had worked at three key agencies in Poland. Those included the Interior Ministry, the Office of Electronic Communications, a regulatory body that oversees cyber and other telecommunications issues, and the International Security Agency, Poland’s counterespionage agency.

He and a Chinese citizen who is a manager for the Chinese tech firm Huawei in Poland were arrested Tuesday and have been charged with spying for China.

PAP reported that, when the Polish suspect was at the Internal Security Agency, he was involved in building a mobile communications system for top Polish officials. He was fired in 2011 amid a major corruption scandal.

IRIDIUM LAUNCH

10 new Iridium satellites delivered to orbit

LOS ANGELES (AP) — Ten new satellites for Iridium Communications’ global network have been successfully deployed in orbit after launch from California.

The satellites were individually released from the upper stage of a Falcon 9 rocket that blasted off from Vandenberg Air Force Base on Friday morning.

Iridium now has 75 new satellites in orbit, including nine spares. The McLean, Virginia-based company’s $3 billion Iridium NEXT project replaces its entire original fleet.

The Falcon’s first stage successfully landed on a so-called droneship in the Pacific Ocean, marking its second launch and recovery.

BEER-NUTRITION LABELS

Bud Light debuts bigger nutrition labels

DETROIT (AP) — Nutrition labels are coming to the beer aisle.

Starting next month, packages of Bud Light will have prominent labels showing the beer’s ingredients, calories and the amount of fat, carbohydrates and protein in a serving.

The labels aren’t legally required, but major beer makers agreed to disclose ingredients and nutrition facts on their products by 2020.

Many brands, including Corona Light and Coors Light, already have nutrition information on bottles or packages. But it’s in small type and ingredients aren’t listed.

Bud Light went with a big, black-and-white label like the ones required by the government on packaged foods.

Whether the labels will make a difference in the choices consumers make is up for debate. At least one study suggests they won’t.

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