The Week Ahead: Europe Weighs Taxing Tech Companies and the Fed Meets
Here’s what to expect in the week ahead:
Europe takes aim at a piece of tech company profits.
The European Commission is expected to publish on Monday a list of options for taxing technology companies like Google and Amazon. These companies have been in the cross hairs of European officials because of their efforts to minimize the taxes they pay by recording profits in lower tax jurisdictions, like Luxembourg and Ireland. Last year, the European Commission ordered Ireland to collect $14.5 billion in unpaid taxes from Apple in a record penalty, saying that the company’s deals with the Irish government had allowed it to pay virtually nothing on its European business in some years. Amie Tsang
A late bid could change the media landscape in Australia.
An Australian court will decide on Monday if CBS will be allowed to take over the country’s Ten Network. The Australian broadcaster has struggled with falling advertising revenue and went into administrative control earlier this year. CBS agreed to buy a majority stake in the network in August, and the deal was expected to be approved on Tuesday by Ten’s creditors and staff. The bid has already been accepted by its administrators.
But late last week the Australian government lifted a ban on ownership of multiple types of media assets. That opened the door for Lachlan Murdoch — whose family owns News Corporation and is already a major player in the Australian media market — to make a bid. He did so in partnership with the Australian billionaire Bruce Gordon. The court will examine the legality of the bid, which was submitted after the Aug. 25 deadline for offers. Zach Wichter
Housing numbers get a baseline as uncertainty looms.
The housing market has been caught between two counteracting forces this year: a run of strong job growth that has lifted demand among home buyers, and a dearth of inventory that has kept many prospective home buyers finding nothing to buy. That has lead to seesaw numbers for a slew of housing data. Soon, the figures will get even harder to interpret, as the aftermath of Hurricane Harvey, which pummeled the nation’s largest new-housing market, affects the data. Housing starts, which come out on Tuesday, and existing home sales, which come out on Wednesday, shouldn’t be affected by the storm just yet. So consider those numbers a baseline before volatility sets in over the next few months as rebuilding efforts get underway. Conor Dougherty
A sell-off seems certain, but the Fed will move slowly.
The Federal Reserve is widely expected to announce that it will begin to reduce its vast holdings of Treasuries and mortgage-backed securities, an important step toward concluding its post-crisis economic stimulus campaign. The Fed’s policy-making committee, which meets on Tuesday and Wednesday in Washington, is struggling to understand why inflation remains weak despite steady job growth and low unemployment. It is no longer clear whether the Fed will raise its benchmark interest rate again this year. But officials are sufficiently confident in the health of the economy to start whittling away at the $4 trillion bond portfolio, which was accumulated during the crisis to help hold down borrowing costs. The Fed plans to move slowly — minimizing the impact on economic conditions — initially reducing its holdings by just $10 billion a month. Binyamin Appelbaum
Nafta talks resume, with perhaps a sneak preview first.
United States trade negotiators travel to Ottawa next Saturday to begin the third round of negotiations with Canada and Mexico on the North American Free Trade Agreement. President Trump has said that he would like the deal to be finalized by the end of the year, but analysts say that may be a challenge. Some proposals by the United States, including one that would allow the agreement to expire after five years unless the three countries vote to continue it, have rankled Mexican and Canadian counterparts. The United States trade representative, Robert Lighthizer, who is the country’s lead negotiator, may give some insight into the process as he outlines the administration’s trade priorities in a speech on Monday. Ana Swanson
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