Whether your escape of choice is football, J. Lo or Buffalo chicken dip, today is your day — it’s been quite a week. But first, here’s what you need to know in business and tech news before heading into Monday.
What’s Up? (Jan. 26-Feb. 1)
As the death toll of China’s coronavirus outbreak kept climbing, Commerce Secretary Wilbur Ross said on Thursday that he believed the disease “will help to accelerate the return of jobs to North America.” It was an insensitive comment at the very least, and possibly also wrong: The global health emergency could hurt the world’s economy much more than it ever helps the United States. American companies like Apple and Starbucks could also suffer significant losses in their Chinese business. Starbucks has closed more than half of its stores in the country, its second-biggest market. And Apple’s chief executive, Tim Cook, said the outbreak was already affecting its financial forecasts. By the end of the week, several airlines began canceling flights to China, disrupting business travel as well as the transport of goods.
The chair of Harvard’s chemistry department and one of its most respected scientists, Charles Lieber, was arrested last week and charged with making false statements about his relationship to the Chinese government. Namely, that he wasn’t forthcoming about how much money that Chinese funders were paying him, particularly for his participation in a program to attract foreign-educated scientists to China. His case comes as the Justice Department is making an aggressive push to hunt down and prosecute scientists who it says are stealing research and intellectual property from American laboratories, particularly those who are working closely with China.
Lost Its Elastic
It’s been a rough year for the mall stalwart Victoria’s Secret. Shares of its parent company, L Brands, fell almost 30 percent in 2019 as consumer tastes trended toward more inclusive, body-positive brands with slicker online marketing. It didn’t help that its owner, Leslie H. Wexner, got mixed up in the Jeffrey Epstein sex-trafficking scandal, or that there’s a new report about its culture of sexual harassment against models and employees. Mr. Wexner has been in talks to step down and sell the company, which is currently worth more than $6 billion — a fraction of its $29 billion peak in 2015. Speaking of struggling retailers, a former Victoria’s Secret executive, Jan Singer, became the new head of another embattled brand, J. Crew, last week.
What’s Next? (Feb. 2-8)
Phoning In the Votes
Let the voting begin! The Iowa caucuses for the Democratic presidential nominee will be held this Monday. And for the first time, party officials will use a new smartphone app to tally up and report votes. Advocates of the technology say that it’s a more efficient, reliable method of calculating the results of some 1,700 caucus sites and that the platform is secure. But critics are worried that glitches or hackers could disrupt the process and taint the outcome. (Votes will still be recorded on paper, just in case.) Party officials won’t say who developed the app because they don’t want to provide a target for hackers. But some voters argue that naming the developer would boost public confidence.
How’re We Doing?
As Democrats gear up to vote on who will run against him later this year, President Trump will be preparing to deliver his State of the Union address on Tuesday. Expect him to boast about the health of the economy, the preliminary trade deal with China and the new trade agreement with Mexico and Canada, which he signed into law this past Wednesday. But the Commerce Department’s latest numbers showed that the country’s economy grew at its slowest rate since 2016, which could shade Mr. Trump’s rosy picture. The culprits: Boeing’s troubles, ongoing tariff battles with China and the six-week strike at General Motors at the end of 2019.
The $1 Trillion Club
It’s simple math: When the government cuts taxes and keeps spending money, it builds up debt. And the United States has become a textbook example. The federal budget deficit will exceed $1 trillion this year and continue to do so for the foreseeable future, according to new projections from the Congressional Budget Office. Blame low interest rates (the Fed decided not to raise them when it met last week, as expected), as well as Mr. Trump’s 2017 tax cuts and increased government spending. By 2030, the C.B.O. projected, federal debt held by the public will surpass $31 trillion — about 98 percent of the forecast size of the nation’s economy.
As of Friday, Britain has formally left the European Union, but not much will change until the details of their new relationship are hammered out, supposedly by the end of the year. Also coming to an end: The era of Ginni Rometty’s leadership at IBM. During her eight-year tenure as chief executive, she has been one of the country’s most prominent female business leaders, but the company also struggled to grow. She’ll be replaced in April by Arvind Krishna, who currently runs the company’s cloud computing business. And finally, those annoying robocalls could actually be illegal: the United States government has sued five companies and three people whose fraudulent robocalls tricked elderly Americans and others into “massive financial losses.”