The daily business briefing: December 30, 2019

Harold Maass

1.

Tesla on Monday delivered the first Model 3 electric cars built at its Shanghai factory. The company got the $2 billion plant up and running in just 357 days. The Shanghai factory is part of Tesla's effort to build a bigger presence in the world's biggest automobile market. Producing cars in China also allows Tesla to reduce its exposure to tariffs under the U.S.-China trade war. The China-made Model 3 sedans, which sell for about $50,000 before subsidies, were delivered to 15 Tesla employees who had placed advance orders. The company plans to speed up the pace of deliveries of the vehicles next month. [Reuters]

2.

Regulators in Egypt approved Uber's plan to buy regional rival Careem in a deal worth $3.1 billion, Reuters reported Sunday. Egyptian authorities signed off after Uber agreed to a set of restrictions to limit harm to competitors. The acquisition was announced in March, giving the ride-hailing company a win after several overseas setbacks. Careem will become a wholly owned Uber subsidiary with its own brand and management. "We welcome the decision by the Egyptian Competition Authority to approve Uber's pending acquisition of Careem," an Uber spokesman said. "Uber and Careem joining forces will deliver exceptional outcomes for riders, drivers, and cities across Egypt." [Reuters]

3.

President Trump's tariffs targeting China and other partners have resulted in short-term job losses and higher prices for consumers, according to a newly released study by Federal Reserve economists. "We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices," write Fed economists Aaron Flaaen and Justin Pierce. The tariffs did boost the competitiveness of some U.S.-made goods inside the U.S., they found, but that was "completely offset in the short-run by reduced competitiveness from retaliation and higher costs in downstream industries," and protectionist policies are now intrinsically "complicated by the presence of globally interconnnected supply chains." Industries hit especially hard by "tit-for-tat retaliation" from China and other trading partners include automobiles, iron and steel, appliances, and electronics. [MarketWatch, Federal Reserve]

4.

U.S. stock index futures inched higher early Monday ahead of the final trading days of the year. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq all were up by less than 0.1 percent two hours before the opening bell. U.S. stocks have rallied in December, with the three main indexes posting a series of record highs last week after the U.S. and China reached a "phase one" deal aimed at ending their trade war. The S&P 500 has risen in five consecutive weeks to bring its 2019 gains to 29.2 percent, leaving the benchmark less than a half-percentage point of its best year since 1997. Since 1950, so-called Santa Claus rallies have lifted the S&P 500 by an average of 1.3 percentage points in the last five trading days of the year. [CNBC]

5.

Star Wars: The Rise of Skywalker continued to dominate the domestic box office over the last weekend of 2019, bringing in $72 million in North America. The film's total North American haul rose to $361.8 million, falling just short of its predecessor, 2017's Star Wars: The Last Jedi, but keeping it on track to become Disney's seventh billion-dollar blockbuster release this year. Sony's Jumanji: The Next Level finished its third weekend in second place with $35.3 million. Director Greta Gerwig's take on the American literary classic Little Women posted $16.5 million in weekend ticket sales and $29 million since its Christmas debut, a strong showing for a film aimed at smaller audiences. [Wall Street Journal]

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