The daily business briefing: February 5, 2018
Samsung heir Lee Jae-yong is freed after an appeals court reduces his sentence, U.S. stock futures add to last week's losses, and more
Samsung heir freed after appeals court reduces jail sentence
A South Korean appeals court on Monday reduced the sentence of Samsung heir Lee Jae-yong to two and a half years from five and suspended the remaining sentence, allowing Lee to walk free after a year in jail on bribery, embezzlement, perjury, and other corruption-related charges. Prosecutors had sought a 12-year sentence for Lee, arguing that he bribed foundations operated by Choi Soon-sil, a friend of then-President Park Geun-hye, for political favors. Park was later impeached and removed from office in a broader corruption scandal. Lee's case will likely be appealed to the Supreme Court. Samsung shares reversed earlier losses on the news of Lee's release, closing up by 0.5 percent.
U.S. stock futures lose more ground after last week's big decline
U.S. stock futures fell on Monday morning, pointing to a lower open after last week's big losses. The turmoil came as a stronger-than-expected January jobs report fueled inflation fears and concerns that the Federal Reserve might raise interest rates faster than previously forecast to keep the economy from overheating. The Dow Jones Industrial Average, which plunged by 665 points or 2.5 percent on Friday, dropped by as much as 250 points before regaining some of the lost ground, but remained down by about 100 points. The S&P 500 and Nasdaq-100 edged down, too. The main U.S. stock indexes had their worst week in two years last week, with the Dow pulling back by 4.1 percent, and the S&P 500 by 3.9 percent.
Tesla strikes deal with South Australia for 50,000-home 'virtual power plant'
Tesla will install as many as 50,000 solar-power systems on homes in South Australia, the state government announced on Sunday. Under the deal, Tesla will put its solar panels and Tesla Powerwall batteries in the homes at no cost to residents. The energy generated will not belong to the residents. Instead, it will provide electricity to a decentralized grid. The first systems will be installed in about 24,000 government-owned housing units, then opened to more South Australians with a goal of a 50,000-home "virtual power plant" within four years. The fate of the plan could depend on the outcome of a March vote in which the current governor, Jay Weatherill, is being challenged by a conservative rival who calls the power deal a "reckless experiment."
Yellen expresses confidence in new Fed Chairman Jerome Powell
Janet Yellen said Sunday that she was disappointed that President Trump didn't give her a second term as Federal Reserve chair, but that she had complete confidence in her replacement Jerome Powell, who takes over on Monday. She described Powell, who was already a Fed board member, as "thoughtful, balanced, dedicated to public service." "I've found him to be a very thoughtful policymaker," Yellen told CBS's Sunday Morning. She also said U.S. stocks and commercial real estate prices were "high," although she stopped short of saying they were in a bubble. "Price-earnings ratios are near the high end of their historical ranges," she said. U.S. stocks plunged on Friday, with the Dow Jones Industrial average falling by 665 points. With her four-year term ending last Friday, Yellen is joining the Brookings Institution think tank.
Google fight with Uber gets started in court
The high-stakes trial in Google spin-off Waymo's lawsuit against Uber gets underway on Monday. Waymo filed the lawsuit last year, accusing beleaguered Uber of stealing key elements of its self-driving vehicle technology in 2016. Uber bought a startup run by former Google engineer Anthony Levandowski for $680 million, and Waymo says Levandowski took its trade secrets with him and conspired with former Uber CEO Travis Kalanick to use them in Uber's effort to develop a fleet of autonomous vehicles for its ride-hailing service. Uber denies the allegations. The dispute has unraveled what was left of the relationship between Uber and Google, an early Uber investor.