The daily business briefing: January 30, 2019
Apple shares jump, U.S. and China negotiators start trade talks, and more


1. Apple shares soar after earnings report
Apple shares jumped by 6 percent in after-hours trading Tuesday after the iPhone maker reported quarterly earnings mostly in line with expectations, although iPhone revenue came in just below projections. "Our customers are holding on to their older iPhones a bit longer than in the past. When you paired this with the macroeconomic factors particularly in emerging markets, it resulted in iPhone revenue that was down 15 percent from last year," CEO Tim Cook said on the company's earnings call. On the plus side, revenue from services totaled $10.9 billion, compared to $10.87 billion forecast by Refinitiv consensus estimates.
2. U.S., China start two days of trade talks
U.S. and Chinese negotiators start two days of high-level talks Wednesday in an ongoing effort to resolve a six-month trade war that has weakened both of the world's two biggest economies. Major obstacles stand in the way of a deal. The U.S. is essentially demanding significant changes that would effectively force China to scale back its economic goals of world leadership in such areas as robotics and electric cars. "A comprehensive deal that fundamentally changes their system — I don't think that's possible," said former U.S. trade official Christopher Adams, now a senior adviser at the law firm Covington. Also, some observers think President Trump will be less likely to make concessions after being forced to cave to Democrats on ending the partial federal government shutdown.
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3. PG&E shares soar after bankruptcy filing
PG&E shares shot up by 17 percent on Tuesday after the nation's largest power utility filed for bankruptcy protection as it faces huge liabilities over catastrophic California wildfires in 2017 and 2018. PG&E's equipment is suspected of starting the Camp Fire in Northern California last year, although the investigation has not been completed yet. PG&E is estimated to have lost $16.5 billion in connection with that fire, which killed 88 people and cost insurers more than $11.4 billion in losses, making it the deadliest and most destructive fire in the state's history. The company's shares dropped sharply earlier this month when it announced plans to file for bankruptcy protection. The stock is down 71 percent from its 52-week high in early November.
4. Stocks set to rise as investors await Fed news
U.S. stock index futures were set to jump early Wednesday, boosted by earnings reports from Apple and Boeing, and ahead of new guidance from the Federal Reserve. The U.S. central bank is expected to leave its benchmark short-term interest rate unchanged and indicate that it will be cautious this year about continuing its slow, steady series of rate hikes. After the close of the Fed's two-day policy meeting, Chairman Jerome Powell is expected to hold a news conference to discuss the Fed's plans for future rate increases and other policy changes. Investors, who have been concerned about the effect of rising borrowing costs, will watch Powell's statement closely.
5. May forced to reopen negotiations on Brexit deal
British Prime Minister Theresa May on Tuesday narrowly survived a vote in Parliament that could have delayed the U.K.'s scheduled exit from the European Union on March 29. Lawmakers had proposed an amendment that would have called for May to delay Brexit if no deal on the terms is approved. Still, May then lost a vote on a nonbinding amendment that said Britain should not leave the European trading bloc if there's no deal in place, a sign that May's troubles are far from over. She also had to bow to pressure from lawmakers demanding she renegotiate Brexit terms on the Irish border. In a reversal, she agreed to return to Brussels to reopen talks, something both she and the EU had ruled out.
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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
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