The daily business briefing: June 13, 2017
The Fed starts two-day meeting expected to end with rate hike, Megyn Kelly loses advertiser over controversial show, and more
Fed starts two-day meeting expected to end with rate hike
Federal Reserve policy makers start a two-day meeting on Tuesday that is expected to end with revelations on the central bank's plan to gradually reduce its $4.5 trillion portfolio of Treasuries and mortgage-backed securities it bought to stimulate the economy after the financial crisis. Recent economic data has shown job growth to be steady and inflation to be nearing the Fed's 2 percent target rate, so economists expect the Fed to announce Wednesday that it is raising its benchmark interest rate by a quarter point. Markets have been steady in the run up to the meeting, with signs of economic strength overshadowing any uneasiness over the possibility of a rate hike.
J.P. Morgan Chase pulls ads from Megyn Kelly show featuring Alex Jones
J.P. Morgan Chase is pulling its ads from Megyn Kelly's NBC show on Sunday over an interview with notorious conspiracy theorist Alex Jones. J.P. Morgan Chase's chief marketing officer tweeted Monday night that she was "repulsed" by the news that Kelly would feature the Infowars host on her Father's Day show. Kelly defended the show, noting that President Trump watches and has appeared on Jones' show, and tweeting, "Our job is 2 shine a light." Relatives of victims of the 2012 mass shooting at Sandy Hook Elementary School have protested due to Jones' promotion of the claim the massacre was a hoax, and Jones called for Kelly to cancel the show because he claimed she misrepresented his views on Sandy Hook.
Apple sinks, leading tech stock decline
Technology stocks dropped for a second straight trading day on Monday, with Apple shares falling by 2.4 percent and dragging down the rest of the sector. Apple's dive came after Mizuho Securities cut the stock's rating to "neutral" from "buy," saying Apple had become overpriced with a 26 percent rise so far this year. The S&P technology sector lost another 0.8 percent after falling by 2.7 percent on Friday, combining for the sector's biggest two-day drop in nearly a year. Despite the setback, Brian Jacobsen, a chief portfolio strategist at Wells Fargo Funds Management, said the market probably isn't headed for a broader selloff.
Gymboree becomes latest retailer to file for bankruptcy protection
Children's clothing chain Gymboree said Monday that it had filed for Chapter 11 bankruptcy protection, making it the latest troubled retailer to crumble due to declining mall traffic and online competition. Gymboree said it had lined up $35 million in financing to stay in business while it restructures. The company has nearly 1,300 stores, including 750 Gymboree outlets and others under the Crazy 8 and Janie and Jack brands. A consultant hired this spring advised the company to close 375 stores to trim costs.
Report: Uber's Kalanick likely to take leave of absence
Uber CEO Travis Kalanick is likely to take a leave of absence as part of a management shakeup that started at a Sunday meeting of the troubled ride-hailing company's board, Reuters reported on Monday, citing a source familiar with the meeting's outcome. Emil Michael, a senior vice president and a close Kalanick ally, left the company after the meeting, where the board adopted a list of recommendations from the law firm of former Attorney General Eric Holder, which conducted a months-long investigation of Uber's corporate culture. The investigation was prompted by a high-profile sexual harassment allegation. Uber is expected to inform employees about the changes on Tuesday. The company also is adding Nestle executive and Alibaba board member Wan Ling Martello as a new independent director.