Los Angeles Times - 21.09.2019

C4 LATIMES.COM/BUSINESS

Wall Street closed out a
volatile week with losses Fri-
day as investors worried
that upcoming trade talks
aimed at resolving the U.S.-
China trade war could be in
trouble.
The selling, which erased
modest early gains, ended
the Standard & Poor’s 500
index’s three-week win
streak. The benchmark in-
dex is still up 2.2% for Sep-
tember.
The market slide came as
investors reacted to reports
indicating Chinese officials
canceled a planned trip to
farms in Montana and Ne-
braska and would return to
China. Representatives
from the U.S. and China
were engaging in prelimi-
nary discussions to lay the
groundwork for more formal
negotiations next month.
The reports about the
Chinese delegation came af-
ter President Trump said at
a news conference that he
wants a complete deal with
China and won’t accept one
that addresses only some of
the differences between the
two nations. Trump also
said he doesn’t feel he needs
to secure an agreement be-
fore next year’s election.
“This is why China has
been reluctant to continue
to negotiate with the Trump
administration, because as
soon as it looks like we’re
moving toward some sort of
constructive talks, there is a
change in direction and it
seems like a lot of head
fakes,” said Ben Phillips,
chief investment officer at
EventShares.
Markets rallied this
month after the United
States and China took steps
to ease tensions in advance
of their next round of talks.
That had fueled speculation
among investors that the
two countries may at least
reach an interim deal on
trade.
The S&P 500 fell 14.72
points, or 0.5%, to 2,992.07.
The Dow Jones industrial
average fell 159.72 points, or
0.6%, to 26,935.07.
The Nasdaq lost 65.20
points, or 0.8%, to 8,117.67,
weighed down by technol-
ogy-sector stocks. The Rus-
sell 2000 index of smaller-
company stocks slipped 1.71

points, or 0.1%, to 1,559.76.

Despite Friday’s selling,

the S&P 500 remains rela-

tively close to its all-time

high. The benchmark index

largely held steady this week

despite volatility caused by a

swing in oil prices and the

Federal Reserve’s latest in-

terest rate cut.

On Monday, oil prices

soared more than 14% after a

key Saudi Arabian oil proc-

essing facility was attacked.

Oil prices retreated after the

Saudi government said pro-

duction could be restored by

the end of the month, al-

though the prices are still up

nearly 6% for the week.

The Federal Reserve cut

interest rates for the second

time this year as it tries to

shore up economic growth

amid the U.S.-China trade

war and weak economic

growth overseas. The cen-

tral bank left open the pos-

sibility of additional rate

cuts if the U.S. economy

weakens.

“The market is at a pretty

fragile point right now,”

Phillips said. “It’s at all-time

highs and there are risks, it

seems like, building every-

where globally, with trade

being the biggest one.”

Technology stocks ac-

counted for the biggest

share of the losses. The sec-

tor is particularly sensitive

to swings on the trade con-

flict because many compa-

nies manufacture products

in China. Apple declined

1.5%. Microsoft slid 1.2%.

Retailers and other com-

panies that benefit from

consumer spending also de-

clined broadly.

Financial stocks stum-

bled as bond yields declined.

The yield on the 10-year

Treasury fell to 1.72% from

1.77%. Bond yields, which

can affect interest rates on

mortgages and other con-

sumer loans, slid steadily all

week.

Netflix slid 5.5%, leading

communications services

companies downward. In an

interview with Variety pub-

lished Friday, Netflix CEO

Reed Hastings acknowl-

edged that the company

faces tough competition

from Disney, Apple and

other companies rolling out

streaming services in No-

vember. Netflix shares are

down nearly 26% this quar-

ter.

Interest rates

T-bill: 1 year 1.83 -0.03 -0.63 -0.73

T-note: 5 year 1.63 -0.11 -0.70 -1.33

T-note: 10 years 1.75 -0.15 -0.78 -1.31

T-bond: 30 years 2.20 -0.17 -0.77 -1.00

Weekly 6 month 1 year

Treasuries Yield change change change

Major stock indexes

Dow industrials 26,935.07 -159.72 -0.59 +15.47

S&P 500 2,992.07 -14.72 -0.49 +19.36

Nasdaq composite 8,117.67 -65.21 -0.80 +22.34

S&P 400 1,944.64 -5.02 -0.26 +16.93

Russell 2000 1,559.76 -1.71 -0.11 +15.66

EuroStoxx 50 3,238.02 +17.11 +0.53 +17.32

Nikkei (Japan) 22,079.09 +34.64 +0.16 +10.31

Hang Seng (Hong Kong) 26,435.67 -33.28 -0.13 +2.39

Daily Daily % YTD %

Index Close change change change

6 Month CD 0.94 0.95 0.85 0.79

1 Year CD 1.35 1.37 1.41 1.41

2 Year CD 1.34 1.33 1.43 1.57

30 Year Fixed 3.75 3.79 3.75 4.17

15 Year Fixed 3.21 3.25 3.12 3.47

30 Year Jumbo 4.35 4.47 4.30 4.29

Week 6 months 1 year

Bank & mortgage rates Rate ago ago ago

Commodities

Oil: Barrel Oct 19

Gold Ounce Sep 19

Silver Ounce Sep 19

Delivery Close Weekly 1 year

Commodity: Unit date in $ change change

58.09 +3.24 -12.69

1,507.30 +16.40 +311.10

17.74 +0.30 +3.47

Source: The Associated Press (Bank and mortgage rate figures from Bankrate.com)

Online updates

For current market coverage plus stock prices and

company data, go to latimes.com/business

22000

23000

24000

25000

26000

27000

28000

22000

23000

24000

25000

26000

27000

28000

MA M J J A S

Friday:26,935.07

Down 159.72

Dow: six months

MARKET ROUNDUP

Trade worries

erase earlier

modest gains

associated press

cacy group that provides in-

formation and health-re-

lated assistance to Latino

communities nationwide.

“These products prey on the

desperation of people who

can’t afford to see a doctor or

go to a legitimate phar-

macy.”

The political climate in

the U.S. is also pushing some

immigrants to the black

market, doctors and re-

searchers say.

“Many patients are afraid

they’ll be deported if they

come into our clinics, so they

buy from the street,” said Dr.

Anjali Mahoney, the Orange

County regional medical di-

rector for AltaMed Health

Services, a large chain of fed-

erally funded community

clinics whose patients are

primarily Latino.

“People are paying for

something that doesn’t

work and could even harm

them, when they could have

just as easily come to a clinic

and get safe care with a doc-

tor,” Mahoney said.

Each of AltaMed’s 23 clin-

ics in Southern California

has reported problems with

off-the-street medications,

she said. One Latina was

hospitalized after taking an

opiate advertised as blood

pressure medicine, she said.

These dubious products

targeted by law enforcement

are different from the legiti-

mate prescription pharma-

ceuticals imported for per-

sonal use every year by mil-

lions of U.S. residents who

cross the border into Cana-

da and Mexico or use li-

censed online pharmacies

abroad to buy their medica-

tions at a fraction of the

price they would pay in this

country.

Although those imports

are also technically illegal,

guidelines from the Food

and Drug Administration al-

low federal agents to take a

hands-off approach.

That’s not the case with

wares peddled on the streets

by often unscrupulous op-

erators.

“Counterfeit medicines

may contain the wrong in-

gredients, contain too little,

too much or no active ingre-

dient at all — or contain

other, potentially life-threat-

ening hidden ingredients,”

said Jeremy Kahn, an FDA

spokesman.

Drug companies and

pharmacies also have an in-

terest in disrupting the dis-

tribution of such medica-

tions. The nationwide value

of this pharmaceutical black

market is difficult to gauge,

but it may displace billions

of dollars’ worth of legally

approved medicine, said

Roger Bate, an economist at

the American Enterprise In-

stitute and author of the

book “Phake: The Deadly

World of Falsified and Sub-

standard Medicines.”

From October 2017 to July

2018, FDA officials confis-

cated nearly 22,000 pack-

ages containing illegal phar-

maceuticals from interna-

tional mail facilities, Kahn

said. He said authorities

routinely impound opioids

as well as dietary supple-

ments laced with erectile

dysfunction drugs and other

dubious products. They

come from India, China and

across Europe — “just about

everywhere,” Kahn said.

The medications seized

by the FDA are just the tip of

the iceberg. The agency esti-

mates it is able to inspect

fewer than 0.2% of the

packages sent via interna-

tional mail that are believed

to contain drugs. And many

illicit products arrive not

through the mail but in suit-

cases, cars, trucks or cargo

ships, authorities say.

The purveyors of these

“dodgy medicines” are “myr-

iad and global,” including

Chinese and Indian manu-

facturers, Russian mob-

sters, Mexican gangs and

domestic U.S. groups, Bate

said. “There are charlatans

and odious actors who don’t

mind if their product kills

children, adults or bread-

winners of entire families.”

Nationwide, many police

departments lack the re-

sources or mandate to inves-

tigate sales of illicit pharma-

ceuticals; otherwise, the

number of arrests would

probably be much higher,

public and industry officials

say.

“Not enough attention is

paid to this issue,” said Jon

Roth, chief executive of the

California Pharmacists

Assn. “It’s probably largely

operating in the dark shad-

ows of every community. If

we put the resources there,

we’d see how wide it is.”

L.A. County is one juris-

diction paying attention. In

1999, it formed the Health

Authority Law Enforcement

Task Force, or HALT, after

two Latino infants died after

taking illegal medications.

HALT is the group that

made the August arrests.

So far this year, the task

force has arrested 34 people

in 54 cases, 48 of them involv-

ing illegal pharmaceuticals

sold to immigrants, said Er-

ick Aguilar, one of the inves-

tigators.

Illegal pharmaceuticals

are being sold to immigrants

in “every rural swap meet

you can find,” and the sellers

are becoming more sophis-

ticated, Aguilar said.

“They’re better at hiding it,”

and “they’re more careful

who they sell to.”

In February 2019, three

men — two in Southern Cali-

fornia and one from Salem,

Ore. — pleaded guilty to the

illegal importation and sale

of $11 million worth of phar-

maceutical-grade erectile

dysfunction drugs falsely

marketed across the U.S. as

herbal remedies for men.

One of the perpetrators im-

ported from China pow-

dered tadalafil, the active in-

gredient in Cialis, and used

it to make 5.5 million pills

with up to 14 times the level

contained in Cialis, accord-

ing to the FDA.

In 2017 and 2018, the

Phoenix Police Depart-

ment’s organized-crime

commercial unit raided 30

pharmacies in Latino neigh-

borhoods, confiscating “mil-

lions of dosages of illegal

medicines, some of them

outdated by 15 years,” said

Det. Sgt. David Lake, who

led the unit.

But not all the sellers

were members of organized

crime. Lake recalled one

woman who genuinely be-

lieved she was doing some-

thing positive for her com-

munity by distributing

black-market birth control

pills.

“She said local girls were

having too many babies, and

she wanted to help them, but

the babies kept being born,”

Lake recalled. “When I told

her the drugs were counter-

feit, she cried for a half-hour

straight.”

Glionna is a correspondent

for Kaiser Health News, an

editorially independent

publication of the Kaiser

Family Foundation.

ALEGALtransaction between pharmacist Alaria Kiraz, left, and Lucia Jimenez at a clinic in East Los Ange-

les in 2015. Immigrants are purchasing a wide array of illegal medications in black markets across the country.

Allen J. SchabenLos Angeles Times

Bootleg drugs pose dangers

[Medications,from C1]

shrunk. If the trend contin-

ues, labor force will limit job

growth in the future.”

The Golden State’s labor

force shrank by 7,800 in Au-

gust, after dropping by

34,000 in July. Over the last

year, it has declined by 0.2%

even as the nation’s labor

force expanded by 1.3%.

“The strength of the la-

bor market should be at-

tracting more job seekers,”

said Lynn Reaser, an econo-

mist at Point Loma Naza-

rene University. “The de-

cline may reflect the impact

of prime wage seekers leav-

ing California for lower hous-

ing costs, as well as a slowing

of immigration from other

countries.”

She added that the

state’s overall jobs report

shows “California’s resil-

ience in the face of slowing

global growth, tariffs, trade

wars and policy threats

towards the state’s tech

companies. Lower interest

rates have buffered some of

these constraints.”

Lenny Mendonca, Gov.

Gavin Newsom’s chief econ-

omic and business advisor,

also alluded to workforce

challenges in a statement on

the jobs report. “We should

celebrate sustained job

growth,” he said. “But it’s the

story behind the number

that counts, and the head-

line belies the reality. There

is a dramatic diversion

across the state in terms of

economic opportunity — too

many Californians are work-

ing hard but still falling be-

hind.”

The payroll jobs in the

state’s monthly report, mea-

sured by a survey of Califor-

nia businesses, do not reflect

the millions of Californians

who are classified as inde-

pendent contractors. This

week, the governor signed

into law a sweeping mea-

sure, AB 5, to curb misclassi-

fication of workers who

should be entitled to be

treated as employees with

labor protections such as

minimum wage, overtime

and unemployment insur-

ance.

Hundreds of thousands

of contingent workers across

the California economy —

from construction to truck-

ing to app-based technology

companies — could be af-

fected, moving into part-

time or full-time payroll jobs.

“The big story regarding

California employment over

the past few weeks is the

passage of AB 5,” said

Michael Bernick, former

head of the state’s Employ-

ment Development Depart-

ment. “A significant inde-

pendent contractor pres-

ence will continue. But some

companies now using inde-

pendent contractors will

convert them to employee

status. Others will cut back

on the number of workers.

As yet, we don’t know how

many.”

Professional and busi-

ness services, some of which

include tech jobs, along with

education and health, and

leisure and hospitality, ac-

counted for 67% of Califor-

nia’s new jobs in August.

The monthly report re-

flected the effect of the

Trump administration’s

trade war with China. Cali-

fornia is more trade-de-

pendent than most other

states. The trade and trans-

portation sector, which in-

cludes warehousing, lost

4,000 jobs in August.

“The trade war with

China has cast shadow over

California’s economy,” Sohn

said. “The slowdown could

worsen if the trade dispute

lingers on and intensifies.”

But he noted that despite

the tit-for-tat tariffs, Silicon

Valley’s workforce seems lit-

tle affected so far. The infor-

mation sector added 2,900

jobs in such fields as web

hosting, data storage, audio

and video streaming, inter-

net publishing and search

portals.

Boosted by the tech econ-

omy, the lowest county job-

less rates were in San Mateo

(2.1%), San Francisco

(2.3%), Marin (2.4%) and

Santa Clara (2.6%).

Unemployment stood at

3% in Orange County, 3.4% in

San Diego County, 3.9% in

Ventura County, 4.1% in San

Bernardino County, 4.6% in

Riverside County and 4.7%

in Los Angeles County.

State unemployment stays low

TOURISM helped to boost California’s job growth in

August. Government hiring was also strong.

Kent NishimuraLos Angeles Times

[Jobs,from C1]