CEO Daily

By Alan Murray
November 22, 2016

Now it’s really dead.

Donald Trump released a video yesterday describing actions he will take on his first day in office, and top of the list was withdrawing from the Trans-Pacific Partnership. Japanese Prime Minister Abe, who is at the APEC meetings in Peru, said the trade deal is “meaningless” without U.S. participation. So that’s the end of that.

Having killed the economic centerpiece of President Obama’s China strategy, President-elect Trump now has to come up with his own. Until he does, as Andrew Browne writes in this morning’s Wall Street Journal, other Asian nations will be tempted to follow the example of the Philippines and Malaysia and join the Beijing bandwagon. Not an auspicious first act.

Meanwhile, prospects for an AT&T-Time Warner deal may be looking up. The President-elect blasted the merger during his campaign, saying it was “an example of the power structure I’m fighting.” Given that AT&T and Time Warner don’t compete with each other, the main antitrust objection was likely to come from the FCC, based on concerns that AT&T would give Time Warner videos preferred treatment – or “zero rating” – on its mobile devices, violating the spirit of “net neutrality” rules. But the President-elect yesterday announced a transition team for the FCC that includes two staunch opponents of net neutrality, both of whom have worked for telecom companies. Expect legions of lobbyists to earn their 2017 salaries off of this one.

Finally, the President-elect sent another signal to business leaders who dare to cross him. After JP Morgan CEO Jamie Dimon indicated he had no interest in serving as Trump’s Treasury Secretary, a campaign source told NBC that the banker “was never under consideration” for the job, and that Trump “doesn’t respect” Dimon anyway. So there.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

The Stock Market Still Doesn’t Care

Global stocks have marched higher overnight, pulled by the first ‘quadrifecta’ on Wall Street in 17 years Monday. The S&P 500, DJIA, Nasdaq and Russell 2000 all hit record highs on anticipation of faster U.S. growth under the Trump administration, undeterred by the risk of growth-sapping protectionism. The morning rally is being led by mining and oil stocks, which have been more sensitive in the last decade to the growth outlook in the emerging markets that the Trump administration seems intent on punishing and abandoning. The bond market rout, meanwhile, is looking very last week, with the 30-year Treasury yield back below 3%. Reuters

OPEC Deal to Be Sealed Today?

Crude oil futures hit their highest levels in a month after a drip-drip of comments leaking out of OPEC officials encouraged expectations that the cartel would informally agree the main points of its much-touted deal to cut output later today. While it now seems likely that something will be ‘agreed’ at next week’s ministerial meeting, the risk of the global glut extending well into 2017, is high: non-member Russia is pumping at post-Soviet record highs, and four of OPEC’s own members (Iran, Iraq, Nigeria and Libya) are all producing far below potential due to various, but all essentially temporary, political issues. By 0600 ET, futures were just off their overnight high of $48.91 a barrel. Reuters

Tyson CEO Goes Out on a Low Note

Tyson Foods predicted a miserable year ahead after missing Wall Street’s expectations for profit and revenue. It also said its long-serving CEO Donnie Smith will step down at the end of the year. A weak pricing environment was largely responsible. Smith is handing over at a time when the company is fighting allegations that it responded to such challenges by forming a cartel to keep chicken prices high. The company’s shares fell 14.5%. Fortune

Wells Fargo Hit By OCC

Hold the bonfire of the regulations for a second. The Office of the Comptroller of the Currency moved yesterday to ensure Wells Fargo doesn’t get off the hook too easily for its bogus accounts scandal under a new, lighter-touch administration. The OCC said Wells will no longer enjoy “expedited treatment” in getting approval for major business decisions such as executive appointments or branch openings. The new ruling may make it easier for the bank to claw back some bonuses from managers deemed responsible for the scandal. Outgoing comptroller Thomas Curry is due to be replaced in March. His successor will be nominated by the president will need approval from the Senate. Fortune



Around the Water Cooler

Kellogg’s Fake Independent Experts

In a world suddenly obsessed by more momentous fake news, this may lose some of its shock value, but is still a damaging blow for company under increasing pressure from the trend towards healthier eating. Kellogg’s admitted that it had paid its now-defunct “Breakfast Council” of purportedly “independent” experts to talk up its products, even to the point of editing their academic research. It also suppressed the financial aspects of their relationship when featuring the experts and their comments in Kellogg’s TV ads. It should be an interesting study for the company’s internal focus groups trying to work out why Big Food is struggling to retain the public’s trust. Fortune

Fidelity Keeps it in the Family

Abigail Johnson will take over the chair of Fidelity Investments from her father Edward C. Johnson III. That’s no surprise in itself, given that she has run the company as CEO since 2014, and that he is 86. The big challenge for Abigail is keeping Fidelity relevant at a time when passively-managed funds–an area dominated by Vanguard–are bleeding its traditional asset base (AUM at Fidelity’s actively-managed funds were down $41 billion in the year to September). Fortune

Boeing Hires GE Veteran to Head Commercial Division

Boeing has hired General Electric’s Kevin McAllister as chief executive of its commercial airplanes business, effective immediately. McAllister, 53, will succeed Ray Conner, who will continue to serve as Boeing vice-chairman through 2017. McAllister has been with GE’s aviation unit for nearly three decades and was most recently chief executive of the conglomerate’s $8 billion aviation services business. Fortune

Brexit – the Good, the Bad and the Ugly

IBM said it will triple the number of cloud data centers it has in Britain. That’s the third major investment by a U.S. tech company in the last week after big job creation pledges by Facebook and Google. Meanwhile, Credit Suisse’s global wealth report reminds Brits that the foreign exchange markets have slashed their household wealth by $1.5 trillion since June. In other news, Donald Trump publicly recommended former UKIP leader and Brexiteer Nigel Farage, who failed to win election to parliament seven times, as the U.K.’s next ambassador to the U.S., in an outlandish breach of protocol that will barely get a mention given the competition for space and airtime on domestic U.S. media from other elements of the presidential transition. FT, metered access

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