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The daily business briefing: January 14, 2019

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Harold Maass
A sign for the LA Unified School District
FREDERIC J. BROWN/AFP/Getty Images
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1.

Stock futures fall on concerns over shutdown, China slowdown

U.S. stock-index futures fell early Monday on concerns over the partial federal government shutdown, and fresh signs that China's economy is slowing, potentially dragging down the global economy. Dow Jones Industrial Average futures pointed to a drop of nearly 1 percent at the open. S&P 500 and Nasdaq futures also fell. The moves came after China unexpectedly reported a fall in exports to the U.S. in December, reflecting a reversal after the front-loading of orders before new tariffs took effect in the U.S.-China trade war. China's overall trade surplus with the U.S. hit a record $323 billion in 2018 as its exports to the U.S. rose by 11.3 percent to $478.4 billion for the year, while its imports of U.S. goods rose just 0.7 percent over 2017. [CNBC, Business Insider]

2.

Los Angeles Unified School District teachers set to strike Monday

More than 25,000 teachers plan to go on strike Monday in Los Angeles for the first time in 30 years. Class sizes, hiring of more nurses and counselors, and pay are among the sticking points. The district on Friday offered a 6 percent raise spread over two years; the union wants 6.5 percent to take effect all at once. The district is the nation's second largest, with 694,000 students. District officials said schools would remain open, staffed by substitutes and administrators. The showdown in blue-state California follows walkouts that hit the red states of West Virginia, Kentucky, Oklahoma, and Arizona last year. United Teachers Los Angeles secretary and negotiations team co-chair Ilene Inouye said the strike "is a last resort." [Politico, NBC Los Angeles]

3.

Gymboree expected to declare bankruptcy, close stores

Gymboree is expected to file for bankruptcy protection this week, The Wall Street Journal reported Sunday, citing people familiar with the company's discussions. The children's clothing retailer reportedly also plans to close all 900 of its stores. Gymboree closed some stores after its first round of bankruptcy proceedings less than two years ago. The company announced in December that it was starting a strategic review of its three retail brands, Gymboree, Janie and Jack, and Crazy 8. The company now is looking for a loan to get it through the bankruptcy process. Gymboree is expected to liquidate, but the fate of the other two brands was not immediately clear. [The Wall Street Journal, MarketWatch]

4.

PG&E CEO resigns as California utility prepares for wildfire-related bankruptcy

Pacific Gas and Electric CEO Geisha Williams resigned Sunday under pressure over the possibility that the utility could face insolvency due to billions of dollars in potential liabilities over recent California wildfires. The board chose general counsel John Simon as interim CEO. PG&E faces lawsuits and investigations into whether its equipment caused the November Camp Fire that devastated the California mountain community of Paradise and killed at least 86 people. It was the deadliest, most destructive blaze in state history. The management shake-up comes as PG&E unveiled plans Monday to file for Chapter 11 bankruptcy protection. The company has been negotiating with banks for a multibillion-dollar bankruptcy financing package to allow it keep operating during bankruptcy proceedings. [The Associated Press, Reuters]

5.

The Upside bumps Aquaman out of top spot at box office

STXFilms' The Upside knocked Aquaman out of the top spot in the domestic box office, making a better-than-expected $19.6 million in its debut weekend. The remake of the popular French film The Intouchables originally was rated R, but STX worked with the producers and director Neil Burger to recut it to get a PG-13 rating after acquiring the film in the Weinstein Co. bankruptcy aftermath. That gave it access to a wider audience. Aquaman dropped to No. 2 after spending three weekends at No. 1. It added $17.3 million domestically and another $27.9 million overseas. The weekend haul brought Aquaman's global total to just over $1 billion. It is now the second-highest-grossing DC Comics movie adaptation, behind only The Dark Knight Rises, which made just under $1.1 billion. [Box Office Mojo]