The Week in Business: Steve Bannon Charged With Fraud
Good morning! I’ve been craving a real office lately — for the free air conditioning, mostly, but also the sense of purpose it offers. You may not agree, but Amazon is betting that I’m not alone, and expanding its office spaces in several cities. Here’s what else you need to know in business and tech for the week ahead.
What’s Up? (Aug. 16–22)
Stocks Just Don’t Care
The equities market hit a record high, even as new unemployment claims from the previous week jumped unexpectedly to 1.1 million and Federal Reserve officials offered more grim warnings of a slow economic recovery. The disconnect between Wall Street and the rest of the world is nothing new, but what’s going on here? The market’s freakish rise isn’t universal — many big companies are suffering badly, but soaring tech stocks are more than compensating. And investors typically make decisions based on where they think the economy is going — say, 12 to 18 months ahead — not where it is today.
Apple’s $2 Trillion Day
Apple outperformed even the rosiest predictions and became the first American company to be worth more than $2 trillion. How did it happen in the midst of an economy-crushing pandemic, especially when Apple hasn’t done much of anything new lately? Many investors are rushing to larger, “safer” companies right now, analysts say. And tech giants are benefiting from the coronavirus-related lockdowns, because more people are moving their lives and work online and need the tools to do so.
Not for the Wall, After All
Stephen K. Bannon, a former top adviser to President Trump, was charged with fraud, accused of lining his pockets with donations that were supposed to go toward building a wall on the Mexican border. According to a federal indictment, Mr. Bannon and three other men solicited money from private donors for We Build the Wall, which pledged to put the funds exclusively toward constructing the barrier that Mr. Trump promised during his 2016 campaign but didn’t deliver. The organization raised more than $25 million, but court documents say that Mr. Bannon used more than $1 million of it for himself.
What’s Next? (Aug. 23–29)
Your Ride Is (Still) Here
Uber and Lyft got a temporary break in their battle against a California law that requires them to treat their drivers as employees and give them benefits like sick days and unemployment insurance. The two companies had said the law would make their operating costs too high and threatened to shut down service in California as a result. An appeals court gave them a temporary reprieve at the last minute, and their case will be heard (again) in mid-October. Until then, their drivers will keep their classification as independent contractors. And the companies are mulling a way to sidestep the law by restructuring their drivers under a franchise model.
The Office Isn’t Dead
All those “we’ll never go into an office again” converts have clearly never tried to work in a Brooklyn apartment with broken air conditioning for the month of August (I would know). If they did, they’d understand why Amazon is moving forward with plans to expand its offices in several cities, including New York. The company is also growing its office-going work force, hiring 3,500 white-collar employees across the country. Some of them will someday be based in the former Lord & Taylor flagship in Midtown Manhattan, which Amazon bought from WeWork (remember co-working?) in early March.
About That Trade Deal
China and the United States were expected to chat last weekend about the progress of their six-month-old trade agreement. But the call was postponed and a new date has not been announced. It may be just as well: China is lagging far behind its targets to buy farm and energy products from the United States, and its ability to make good on those promises is questionable (the deal was made before the pandemic plundered the global economy). Tensions between Beijing and Washington are also running high over Hong Kong. The United States cut off more special trade relations with the territory this week as China continued to stifle political dissent and assert dominance there.