Twitter and Alphabet Bat Away Fears Over Apple’s Privacy Setting

Ruth Porat, the chief financial officer at

Alphabet
,
used the same word to describe the impact on the Google parent’s earnings. “In terms of the iOS 14 changes specifically, they had a modest impact on YouTube revenues,” she said. Even so, YouTube advertising revenue jumped 43%, and revenue from Google search—which is five times as large as YouTube—surged 44%.

So it turns out the Apple privacy setting changes were a drag on

Facebook

and

Snap
,
but not to Twitter and Alphabet.

Besides Apple, Snap had flagged another worry, that the supply-chain disruptions U.S. corporations are facing were depressing advertising spend. Again, Alphabet had another view. Philipp Schindler, the chief business officer at Alphabet, said performance was strong nearly everywhere. Even as auto makers reduced their advertising with fewer cars and trucks available to sell, increased demand was seen for auto parts, accessories and repairs, he said.

—Steve Goldstein

*** Join MarketWatch and Barron’s journalists for Investing in Crypto today at 1 p.m. Speakers include CFTC Commissioner Dawn DeBerry Stump and FTX CEO Sam Bankman-Fried. Make sense of the crypto market and identify opportunities and risks that lie ahead. Sign up here.

***

Democrats Scramble for Ways to Fund Social Spending and Climate Bill

Senate Democrats have revived an idea to fund President Joe Biden’s social and climate spending plan, announcing a 15% minimum tax on large companies, which could affect 200 companies and raise hundreds of billions of dollars, the sponsors said.

• Opposition to corporate tax hikes by Sen. Kyrsten Sinema (D., Ariz.) necessitated the scramble for new ideas, though on Tuesday Sinema said the 15% minimum proposal was a “common-sense step,” The Wall Street Journal reported.

• The plan seeks to raise tax money without hiking the 21% corporate income-tax rate, which was set in the 2017 tax cuts. Earlier, Democrats thought they could raise that to at least 25%, but hit opposition.

• Democrats also want to tax the unrealized investment gains of billionaires, but that idea could face legal challenges and has come up against resistance by some Democrats. The measure would affect fewer than 1,000 taxpayers.

• Lawmakers are also considering repealing the $10,000 cap on the state and local tax deduction for 2022 and 2023, paid for by extending the cap two years beyond its scheduled expiration after 2025, trading tax relief now for future taxes.

What’s Next: Biden told House Democrats that provisions that are left out of the final version of the bill will remain a priority for the remainder of his administration, the Journal reported.

—Janet H. Cho

***

FDA Advisors Recommend Covid-19 Vaccines for Children 5 to 11

The Food and Drug Administration’s vaccine advisors on Tuesday voted overwhelmingly to recommend the

Pfizer

–

BioNTech

Covid-19 vaccine for emergency use among children aged five to 11, bringing the U.S. one step closer to inoculating its elementary school-aged population.

• Dr. Cody Meissner, an FDA advisor, said after the vote that he hoped the vaccine advisors to the Centers for Disease Control and Prevention, who will consider the question next week, would limit their recommendation to children with additional risk factors.

• Although Pfizer said the vaccine was 90.7% effective in preventing symptomatic coronavirus disease in trials of more than 2,200 children, the study wasn’t large enough to measure the risk of myocarditis, a heart inflammation that has been linked to mRNA vaccines, particularly in younger men.

• Although an FDA briefing document said the Covid-19 illnesses prevented by the vaccines “would clearly outweigh” vaccine-associated cases of myocarditis, Dr. Eric Rubin, editor in chief of the New England Journal of Medicine, called the decision “a much tougher one, I think, than we had expected.”

• Some committee members said they would prefer authorizing the vaccine only for high-risk children. Dr. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, warned that doing that could limit its access to children from more privileged socioeconomic backgrounds.

What’s Next: The Biden administration said it has enough vaccines to inoculate all 28 million children aged five to 11, starting with 15 million doses at pediatricians’ offices, children’s hospitals, and community health centers available within days of approval by regulators and public health officials.

—Janet H. Cho

***

China Telecom Banned From U.S. Market

The U.S. Federal Communications Commission voted Monday to “revoke and terminate” a unit of

China Telecom
,
removing its authorization to operate in the U.S., citing “potential security threats.”

• China Telecom (Americas) “is subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests,” the FCC noted.

• Beijing’s control presents “significant national security and law enforcement risks,” the FCC added, and could allow China to “access, store, disrupt, and/or misroute U.S. communications.”

• China Telecom didn’t immediately reply to an emailed request for comment.

• The FCC warned last year that it might ban the three state-controlled Chinese telcos from operating in the U.S.

  
  
  
  China Unicom Americas
  
  and Pacific Networks Corp are the two other groups in the regulator’s crosshairs.

What’s Next: The FCC’s decision to ban China Telecom comes shortly after Biden and his Chinese counterpart Xi Jinping vowed to rebuild communication channels after years of rising tensions, by meeting virtually later this year.

—Pierre Briançon

***

Robinhood Accounts Are Down—Is Meme-Stock Frenzy Cooling?

Robinhood Markets

’ third-quarter earnings could be a sign that the meme-stock frenzy that gripped retail investors earlier this year, sending stocks like

GameStop

soaring, has lost momentum, with funded accounts dipping from the end of the second quarter.

• Total funded accounts dropped to 22.4 million from 22.5 million, while analysts expected accounts to rise above 24 million. The mobile app added 10 million accounts in the first two quarters of this year, a record pace for a U.S. brokerage.

• Monthly active users fell to 18.9 million from 21.3 million in the previous quarter, and while the first six months of the year were dominated by meme-stock trading, and Dogecoin, those trends have faded.

• Revenue from cryptocurrency trading was $51 million, down from $233 million in the second quarter. Robinhood said lower trading activity in the fourth quarter and other factors “may result in quarterly revenues no greater than $325 million,” versus analysts’ forecast for $497 million.

What’s Next: Robinhood is also facing increased regulatory scrutiny over the way it makes most of its money—getting paid by trading firms to execute its customer orders. In the third quarter, payment for order flow was 73% of revenue, down from 80% in the prior quarter.

—Avi Salzman and Liz Moyer

***

Retailers Buying Warehouses to Boost E-Commerce

Large retailers such as

Amazon.com

and

Costco Wholesale

are snapping up warehouses, reasoning they will save money long-term by owning the buildings where they store and distribute their goods to online buyers, The Wall Street Journal reported.

• The 25 largest U.S. retailers bought about 38 million square feet in new industrial space last year—the highest total in at least 10 years. Collectively, they own five times more than they did a decade ago, according to CoStar Group.

• Some companies are buying the space to store as much inventory as they can get as they cope with supply-chain bottlenecks and delivery delays. Retailers are eager to invest their cash in industrial real estate, which has risen 39% in value over the past year, the Journal reported.

• Amazon owns the most U.S. industrial space, with 78 buildings totaling 83.6 million square feet, according to data research firm Real Capital Analytics.

  
  
  
  Walmart
  ,

  
  
  
  Target
  ,

  
  
  
  Kroger
  ,
  and

  
  
  
  Dollar General
  
  have also bought more warehouse space in the past year, the Journal said.

• Inside the typically one million-square-foot warehouse where retailers house their e-commerce inventory, companies tend to invest more in equipment and robotics automation than they did acquiring the property, said Kris Bjorson, head of the retail industrial task force at real estate services provider Jones Lang LaSalle.

What’s Next: Costco has doubled its U.S. industrial space to 12 million square feet in the last five years, The Journal reported. It recently bought a 1.6 million square foot facility in Ontario, Calif., which will be used to expand its West Coast distribution and handle its Asian imports.

—Janet H. Cho

***

Roman Villa With Caravaggio Mural Aims for $546 Million at Auction

A Roman villa with the only known ceiling mural by Baroque painter Michelangelo Merisi da Caravaggio is set to be auctioned with an estimate of €471 million ($545.8 million) early next year, Mansion Global reported.

• The Villa Aurora or Casino dell’Aurora, the last existing building of a 16th-century country retreat, is more than 30,000 square feet and located in Rome.

• The sale, due Jan. 18, 2022, is being listed by the Italian government.

• The Caravaggio mural, which depicts the gods Jupiter, Neptune, and Pluto, was painted in about 1597 or 1598. It had been painted over during a past renovation of the home, and was rediscovered in 1968, according to a 2010 New York Times article.

What’s Next: If the villa sells close to its asking price, it would be one of the most expensive publicly recorded real estate sales ever. The record is held by a 51,000-square-foot Hong Kong residence that sold for the equivalent of $361 million in 2017, according to Christie’s International Real Estate.

—V.L. Hendrickson

***

Dear Quentin,

My former mother-in-law has a life-insurance policy on my 27-year-old daughter, her oldest granddaughter. Is that valid and legal? We all live in Georgia and have for years. I divorced my ex-husband 26 years ago. My current husband, of 24 years, took my oldest daughter in and accepted her 100% as his own from the beginning.

My ex-husband has a very controlling and manipulative mother, and my ex-husband is an alcoholic. He is on probation currently and not allowed to drive after five DUIs. My ex-husband is a momma’s boy. His mother is a dishonest and conniving individual that will beg, borrow, cheat and steal for her “baby boy” or herself, because she feels the world owes her.

We still continued to battle over ridiculous things throughout the years. Not once did my ex-husband or his parents help with anything financially other than what was required by the court, which was nearly nothing. They didn’t help with anything school related unless required, they didn’t help with the purchase of the first car, college tuition and fees.

They never have given or even offered financial help throughout the years for anything for my daughter, so why does she think it’s OK to have a life insurance policy on my child? How can I cancel this policy? I can assure you she plans on pocketing the money instead of helping to bury my child if—God forbid—my daughter passes away.

She is a monster-in-law! Any information or advice would be greatly appreciated.

—Former Daughter-in-Law

Read The Moneyist’s response here.

—Quentin Fottrell

***

—Newsletter edited by Liz Moyer, Camilla Imperiali, Rupert Steiner