The daily business briefing: August 3, 2020
1.
Microsoft confirmed Sunday it was negotiating to buy the U.S. operations of popular social app TikTok from Chinese technology company ByteDance. Microsoft said it hoped to reach a deal by Sept. 15. The talks were first reported two days earlier. President Trump said he was against a TikTok acquisition by Microsoft, and that he would try to ban the app, which the Trump administration has accused of feeding data to the Chinese Communist Party. Microsoft said CEO Satya Nadella had spoken with Trump, who reportedly has given ByteDance 45 days to make a deal. Microsoft said the new structure “would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections.” [CNBC]
2.
Lord & Taylor, the oldest department store in the U.S., filed for bankruptcy on Sunday. The store’s owner, Le Tote Inc., also filed for Chapter 11. Le Tote, a subscription service that rents out women’s clothing and accessories, bought Lord & Taylor from Hudson’s Bay Co., the parent of Saks Fifth Avenue, in 2019. Tailored Brands, which owns Men’s Wearhouse, also filed for Chapter 11 protection Sunday. The company, which also owns Jos. A. Bank, Moores Clothing for Men, and K&G Fashion Superstore, said it will continue to serve customers. COVID-19 has ravaged bricks-and-mortar retailers, and Neiman Marcus Group Ltd., J.C. Penney Co., and J.Crew Group Inc., are among the other companies that have filed for bankruptcy during the pandemic. [The Wall Street Journal, Reuters]
3.
House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin doubled down on their clashing coronavirus relief packages ahead of fresh Monday talks. Pelosi repeated Democrats’ calls to renew the $600 per week in extra jobless benefits that expired Friday, although she said the sum could be reduced as unemployment falls. Pelosi said Democrats were “unified” behind the $600 figure, but that Republicans are in “disarray.” Senate Republicans have proposed lowering the figure to $200 per week. Mnuchin said in an interview on ABC’s This Week that Republicans had suggested a one-week extension of the $600 during negotiations, but ultimately payments “should be tied to some percentage of wages, the fact that we had a flat number was only an issue of an emergency.” [CNN]
4.
U.S. stock index futures were mixed early Monday ahead of another round of corporate earnings reports and fresh talks on a new coronavirus relief package. Futures for the Dow Jones Industrial Average were flat several hours ahead of the opening bell after spending much of the morning down slightly. The S&P 500 climbed back from early losses and was up by about 0.2 percent. The tech-heavy Nasdaq was up by about 0.7 percent. Wall Street had a mostly positive week last week, with a boost from blowout earnings reports by tech giants Apple, Amazon, and Facebook. The season’s most important earnings reports are in, so much of the attention this week will focus on negotiations on the COVID-19 relief proposals, including the renewal of expired extra unemployment assistance, and the July jobs report at the end of the week. [CNBC]
5.
Marathon Petroleum has agreed to sell its U.S. Speedway gas stations to the Japanese retail group Seven & i Holdings for $21 billion, the two companies said. The sale to Seven & i, which owns the 7-Eleven convenience store chain, had been on hold for five months because of the coronavirus pandemic. Marathon said last year it planned to restructure, including spinning off Speedway, as it faced pressure from activist investor Elliott Management. The purchase will help Seven & i expand its operations outside the saturated Japanese market by adding to the U.S. gas stations and stores it picked up in 2017 with a $3.3 billion deal with Sunoco. 7-Eleven said that acquiring the Speedway outlets would give it about 14,000 stores in the United States and Canada. [Reuters]
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