10/19/2018
Treasury Secretary Steven Mnuchin.
CreditCreditCarlos Barria/ReutersGood Friday. Want this by email? Sign up here.
What changes after all the Saudi conference walkouts?
More prominent figures dropped out of the Future Investment Initiative conference yesterday, including Treasury Secretary Steven Mnuchin. But don’t expect huge changes in the world’s relationship with the Saudis in the wake of the disappearance and suspected killing of a prominent Saudi journalist.
President Trump appears to be taking a tougher stance on reports that Saudi officials authorized the alleged assassination of the journalist, Jamal Khashoggi, and has come close to acknowledging Saudi royals’ role in the matter. Goldman Sachs, which also dropped out of the conference yesterday, took a particularly strong line: “This incident is unacceptable and clearly they have to answer questions,†David Solomon, the bank’s C.E.O., told CNBC.
But many others are trying to find ways to preserve ties with the Saudis and their wealth. Some Republicans allied with Mr. Trump have begun disparaging Mr. Khashoggi to support the president’s reluctance to take a hard line, according to the WaPo:
In recent days, a cadre of conservative House Republicans allied with Trump has been privately exchanging articles from right-wing outlets that fuel suspicion of Khashoggi, highlighting his association with the Muslim Brotherhood in his youth and raising conspiratorial questions about his work decades ago as an embedded reporter covering Osama bin Laden, according to four G.O.P. officials involved in the discussions who were not authorized to speak publicly.
Meanwhile, Jared Kushner, Mr. Trump’s son-in-law, urged the president to stand by the Saudi crown prince, Mohammed bin Salman, arguing that the outrage would fade. Defense contractors like Boeing and Lockheed Martin are also expected to keep close ties to Saudi Arabia, one of their biggest customers.
So expect much existing business with the Saudis to continue — albeit more quietly.
More Saudi news: Twitter suspended a network of bots that was pushing pro-Saudi messages. The Metropolitan Museum of Art and the Brooklyn Museum won’t use Saudi money for planned exhibitions on the Middle East.
Eddie Lampert
CreditPeter Morgan/ReutersEddie Lampert defends his management of Sears
Before he bought Sears in 2005, Eddie Lampert was considered an investing wunderkind. But now that the retailer has filed for bankruptcy protection, the financier is reckoning with his legacy — and tells the NYT that he, too, has suffered. More from Jim Stewart’s interview with Mr. Lampert:
“I’ve taken a huge personal hit,†Mr. Lampert told me this week in a wide-ranging interview, his first since the bankruptcy filing. “Not just in money, but time. There’s been an enormous opportunity cost.â€
Mr. Lampert said that he had seen an opportunity to reinvent Sears, but had underestimated how tough it would be. For instance, a plan to convert parts of Sears stores into internet cafes failed in part because he didn’t have the right store leaders or C.E.O. (It’s worth noting that Mr. Lampert has been criticized for neglecting Sears stores, which gained a reputation for looking shabby.)
Ultimately, Mr. Lampert absolved himself, telling Mr. Stewart: “I’ve never worked harder or stretched further beyond my limits.â€
But as Julie Creswell and Michael Corkery of the NYT note, Mr. Lampert has profited from the retailer despite its plummeting stock. He owns big stakes in Lands’ End, which was spun off from the company, and in Sears’s real estate — both of which are successful, and neither of which can be touched by the bankruptcy proceedings.
How Hwee Young/EPA-EFE/REX
China’s economy is slowing down
The Chinese economy grew 6.5 percent in the three months that ended in September, compared with a year earlier. That may sound healthy, but it’s the slowest growth China has experienced since 2009. Alexandra Stevenson of the NYT describes the scene on the ground:
Wages are stagnant. Investment in splashy infrastructure projects has dropped sharply. China’s stock market is firmly in the red — it has fallen by 30 percent since a peak in January — making it one of the world’s worst performing. The currency has weakened and is hovering near a 10-year low against the American dollar. Companies are complaining that they cannot get money from lenders, and a handful are defaulting on their loans.
Beijing officials blamed “an extremely complicated and severe international situation.†This is the first growth report since the country’s trade war with the U.S. began to escalate in July. A round of tariffs introduced by the Trump administration in late September could make the next report even worse.
Returning to higher growth won’t be straightforward. China is trying to balance investment and debt to keep its economy ticking, and officials have been forced to shore up confidence among investors to help ensure markets don’t continue to fall.
The bigger picture: How geopolitical tensions could slow growth around the globe.
Coming up
Europe and Asia may move forward on trade. The E.U. is expected to sign a bilateral trade pact with Singapore and to continue negotiating one with Japan during meetings in Brussels.
A snapshot of the U.S. housing market’s health. The National Association of Realtors will publish data on existing home sales, which will show whether high prices are tempting owners to put their homes on the market. Economists expect continued slowness.
Another days of earnings reports. Honeywell International is expected to post strong results as commercial jet orders boom. Procter & Gamble may disclose weak demand for some of its product lines.
The markets are down again
Just when things were looking up, stocks slid again yesterday. The S.&P. 500 fell 1.4 percent, leaving the index down nearly 5 percent so far this month. Tech firms led the drop: The Nasdaq fell more than 2 percent.
Matt Phillips of the NYT explains that China is proving to be a drag:
Growing concerns about the health of its economy, along with rising interest rates that could slow the American economy, have made investors jumpy and worried that a near-perfect investing environment — low inflation, strong growth and relatively low interest rates — is becoming tougher to navigate.
What’s next is unclear. We are in the middle of earnings season, and a spate of positive results could invigorate the markets: Mr. Phillips notes that Apple’s quarterly report could be particularly important, given its manufacturing and sales presence in China.
Top C.E.O. donors still overwhelmingly favor Republicans
This year’s midterms have seen a huge increase in small donations, particularly to Democrats. But America’s chief executives still give almost three times as much to Republicans as to Democrats.
MarketWatch compiled graphics on how business leaders are donating their personal money. Some of the results:
• C.E.O.s who clashed with the Trump administration, including Hock Tan of Broadcom and Randall Stephenson of AT&T, still donated entirely to Republican causes.
• Top Silicon Valley executives, like Marc Benioff of Salesforce and Reed Hastings of Netflix, tended to give to Democrats.
• The most generous C.E.O. donor was Jeff Bezos of Amazon, who donated equally to Democrats and Republicans.
The robot Sophia at a news conference last week.
CreditSergey Dolzhenko/EPA, via ShutterstockEverything you need to know about A.I.
Artificial intelligence is lauded as a technology that will transform almost every aspect of our lives in the coming years. But it can be hard to see past the breathless enthusiasm to understand how it works and what its true impact will be. Don’t fear: The NYT has published its first special section dedicated to A.I. to demystify the technology. Some highlights:
• Feeling confused about what A.I. actually means? This glossary can help.
• Here are the countries leading the A.I. race.
• The author and academic Yuval Noah Harari explains why no industry is safe from automation.
• How computers are getting better at driving cars.
• What might happen to killer robots.
Revolving door
CBS named David Nevins, the C.E.O. of Showtime, as its chief content officer.
Coca-Cola named Brian Smith, the president of its Europe, Middle East and Africa unit, as chief operating officer. John Murphy, the president of its Asia division, will take over as C.F.O. from Kathy Waller, who is retiring.
David Marchick, the director of external affairs at the Carlyle Group, is stepping down.
Munich Re named Nikolaus von Bomhard, its former C.E.O., as its board chairman.
The speed read
Deals
• The investment management firm Invesco agreed to buy a rival, OppenheimerFunds, for $5.7 billion. (WSJ)
• Tech giants like Uber, Lyft and Palantir are poised to buoy the I.P.O. market. (WSJ)
• New York State regulators may seek to block parts of CVS’s takeover of Aetna. (Bloomberg)
• Dan Loeb turned up the heat on his current activism target, Campbell Soup, in a new video. (USA Today)
• M.&A. within the cryptocurrency industry is soaring. (CNBC)
Politics and policy
• Investors are comforted by steady hands at the Treasury Department and the Fed. (Breakingviews)
• The Treasury Department is set to unveil new tax rules for setting up investment opportunity zones. (NYT)
• Senator Kamala Harris, a possible 2020 Democratic presidential candidate, proposed a $6,000 tax credit for middle-class families. (Politico)
• Gary Cohn, the former Trump economic adviser, said the president shouldn’t comment on Fed policy. Alan Greenspan offered some advice for the current Fed chairman, Jay Powell: use earmuffs.
• The Consumer Financial Protection Bureau asked an inspector general to investigate racial remarks by its top enforcement official, Eric Blankenstein. (WSJ)
Trade
• American businesses are split on the Trump administration’s planned withdrawal from an international postal treaty. (WSJ)
• The U.S.-China trade war hasn’t affected American companies’ investment plans so far. (Bloomberg)
• But it is hurting American pork farmers. (WSJ)
• Secretary of State Mike Pompeo warned Panama against doing business with Beijing. (NYT)
• This week’s Economist cover story takes a step back to ask: How did China and the U.S. become archrivals? (Economist)
Tech
• Human fact-checkers are struggling to keep up in Facebook’s effort to fight fake news, but the company is assuring Washington that it’s doing all it can to protect the midterms. (Also: Here’s a look inside its election war room.)
• The effort to bring the whole world online has slowed. (Guardian)
• The current favorite for Amazon’s HQ2 appears to be Northern Virginia. (NYT)
• Uber’s latest side hustle: providing on-demand temporary workers. (FT)
• SuperMicro told senators it had found no evidence of the hackings Bloomberg reported had afflicted its hardware. (Bloomberg)
• Netflix is bracing for an exposé of its workplace culture. (NBC News)
Best of the rest
• StarKist faces a $100 million fine over its role in the price-fixing of canned tuna. (NYT)
• Increasing oil supplies in the U.S. could push prices down further. (WSJ)
• Surprise! Relatives of Harvard donors appear to have an easier time getting in. (Bloomberg)
• AIG could face catastrophe losses of $1.7 billion for the third quarter. (FT)
• Why wasn’t that Banksy painting completely destroyed? The shredder malfunctioned. (NYT)
Thanks for reading! We’ll see you next week.
We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.
RSS Feed
Bagikan Berita Ini
0 Response to "DealBook Briefing: It May Be Business (Almost) as Usual With Saudi Arabia"
Post a Comment