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Sep 25, 2018

The Wall Street Journal: What's News

The Wall Street Journal.
What’s News

Despite a new allegation, Republicans vow to back Kavanaugh. The judge spoke in a Fox News interview to defend his integrity as GOP lawmakers rallied around the Supreme Court nominee, despite a new allegation that Mr. Kavanaugh exposed himself to a fellow student while at Yale.
  • The controversy is adding to the public's crisis of confidence. The Journal's Gerald F. Seib writes that the fierce debate over Judge Kavanaugh's nomination may add the high court itself to the growing list of institutions in which Americans are losing faith.
Rod Rosenstein will meet with President Trump this week. After initial conflicting reports on whether the No. 2 Justice Department official would be fired or resign, the deputy attorney general and the president will meet to discuss whether he keeps his job.
Trump turns to allies in Asia and Europe for trade deals. Amid deteriorating relations with China, the president has signed a revised free-trade pact with South Korea while aides planned meetings with their EU counterparts in an effort to show Mr. Trump isn't antagonistic to trade
Shoppers love rewards credit cards. Retailers hate them. Even as they remain immensely popular among consumers for their perks like cash back, airfare and hotel stays, merchants say they're cutting into their profits.  
As bike-share programs have taken off, so has the danger for cyclists. Nationwide, the number of cyclists killed in motor-vehicle crashes hit 840 in 2016, a 35% jump from 2010. In Florida where the rates are highest, experts point to a densely packed and aging population with a steady influx of tourists unfamiliar with local roads. 
Instagram's co-founders plan to step down from Facebook. Kevin Systrom and Mike Krieger had clashed with Facebook executives over the extent of Instagram’s autonomy in recent months.

What's Trending

Models present creations at the Versace show during Milan Fashion Week earlier this month. PHOTO: STEFANO RELLANDINI/REUTERS

Michael Kors is closing in on a deal to buy Versace. The acquisition—for about $2.35 billion—would give Michael Kors a sought-after foothold in European fashion. Michael Kors is reportedly paying roughly three times sales for Versace, which is barely profitable.

Sears CEO is rallying around a rescue plan to save the company. Edward Lampert wants creditors to restructure about $1.1 billion of debt due in the coming years, part of a proposal that also calls for the board to sell another $1.5 billion in real estate and divest some $1.75 billion of assets.

The EU plans a "special vehicle" to maintain companies ties to Iran. The special payment channel would allow legal financial transactions with Iran while avoiding exposure to U.S. sanctions. Separately, Brent crude topped $80 a barrel after OPEC members left oil production steady over the weekend, fueling fresh bets that sanctions against Iran and outages in Venezuela will lead to a supply shortage.

In Disneyland's hometown, once warm relations have frozen. Anaheim officials are questioning the wisdom of granting Disney hundreds of millions of dollars in tax breaks to support expansion.

For golf, there is no replacement plan. There’s only one Tiger Woods. The Journal's Jason Gay advocates savoring the legendary golfer's first win in five years, and to appreciate his comeback as a fragile resource—because it probably is.

Sirius XM is buying Pandora. Placing a $3 billion bet on streaming music, the satellite-radio company is buying the online-music firm as competition for listeners continues to grow.

Airlines are trying to make better meals for coach fliers. Onboard menus are changing as airlines try to keep up with improved dining options at many airport terminals, with more people gravitating towards healthier fare.

Trade Watch

Highlights from our economic coverage
The White House didn't hit Apple iPhones and other gadgets in the latest round of tariffs. But they weren't the only exceptions—there were 297 dispensations sparing importers a new 10% levy. The products, ranging from chemicals used to make electrolytes for electric-car batteries to ibuprofen, show where the U.S. has become particularly reliant on China as a supplier.
U.S. tariffs have an unintended consequence: They're forcing Chinese companies to make higher-quality products. Tariffs make selling low-cost goods to American consumers less profitable, so Beijing is moving faster to build an economy that uses advanced manufacturing techniques to produce high-value goods.
Apple could avoid the threat of tariffs by moving production to the U.S. from China. But assembly is the least valuable link in the electronics supply chain. The real contest is over more valuable production steps like research, design and the manufacture of more sophisticated components where the U.S. is dominant but China is closing the gap.
Economic fallout from the U.S.-China trade spat is limited so far. But Oxford Economics estimates that U.S. gross domestic product growth could drop by a full percentage point next year if the U.S. tops off the current $250 billion with another $267 billion in tariffs. With the economy expected to grow at a 2.4% to 2.8% pace (according to Federal Reserve and Congressional Budget Office estimates), that's a significant drag.
Want more on trade? Sign up to get our daily Real Time Economics newsletter delivered to your inbox for the latest insight and analysis.

Chart of the Day

Investors remain cautious of gold mining firms. Shares of North American-listed gold miners have tumbled this year to discounts rarely seen outside significant market downturns, underscoring challenges despite a recent megamerger between Barrick Gold and Randgold.

News From Other Sources

Starbucks plans "significant changes" to the company's structureThe coffee chain is planning an organizational shake-up, including corporate layoffs that will start at top levels, as the company tries to reverse stagnant sales and rekindle investors’ interest.

via Bloomberg
A "tough year" after hurricanes tore through the British Virgin Islands. A sense of normalcy remains elusive for many after the smaller territories and island-states in the region were thrashed by Hurricane Irma, the most powerful storm on record to cross the Atlantic Ocean, and then Hurricane Maria just weeks later.

via the New York Times
Tech giants spend $80 billion to make sure no one else can compete. Thanks to this surge in spending, they’ve joined the ranks of automakers, telephone companies, and oil drillers as the country’s biggest spenders on capital goods, items including factories, heavy equipment, and real estate.

via Businessweek

This Day in History

Sept. 25, 1992
Court Rules 12-Year-Old Boy Can Divorce Parents
A court in Orlando, Fla., ruled in favor of 12-year-old Gregory Kingsley to allow him to divorce his biological mother and allow his foster parents to adopt him. The ruling was believed to be the first time family rights were ended based on a legal action brought by a child.
On Sept. 28, 1992, the Journal reported on the implications of the ruling: 
The case of the 12-year-old Florida boy who was granted a divorce from his parents last week represents a natural evolution of the law, according to legal scholars, one that warns society that children can no longer be considered parents' property to be abused and abandoned.
—Compiled and edited by Phil Nobile in New York and Cicely K. Dyson in London. 

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