Really? New England won? I checked out after the third quarter, in order to get some sleep before writing this newsletter, and missed the most remarkable comeback in Super Bowl history. All for you, dear reader.
The business controversy over President Trump’s travel ban has not ended. Apple, Google and Microsoft joined forces to file a legal brief Sunday opposing the ban, arguing it “inflicts significant harm on American business,” and noting that “immigrants and their children founded more than 200 of the companies on the Fortune 500 list.”
Meanwhile, even members of the President’s own party objected to his attack on the “so-called judge” who made the “ridiculous” ruling against the ban. “We don’t have so-called judges. We don’t have so-called senators. We don’t have so-called presidents,” said Republican Senator Ben Sasse of Nebraska. “We have people from three different branches of government who take an oath to uphold and defend the constitution.”
“It’s best not to single out judges,” said Senate Majority Leader Mitch McConnell. “We all get disappointed from time to time. I think it’s best to avoid criticizing them individually.” The judge in question, U.S. District Court Judge James Robart, was appointed by George W. Bush.
Meanwhile, a Budweiser ad during last night’s game, which celebrated the immigrant roots of the company’s founder, stirred up the ire of Trump’s social media followers who saw it as an attack on the ban. Budweiser says the ad was “in the works” before the ban happened.
The only person to stay out of the political fray, for the most part, was Lady Gaga. It’s a landmark moment when she’s one of the more diplomatic presences around.
More news below.
• Another Sequel for Disney’s Iger?
Walt Disney’s board is set to extend the contract of CEO Bob Iger for a third time, according to The Wall Street Journal’s sources. Iger still has 16 months to run on his current contract, but the company has made no apparent progress in its search for an heir apparent since the departure of chief operating officer Tom Staggs last spring. The WSJ said it would take a considerable time for Iger to train a replacement—time in which streaming and other tech sector competitors could make ever deeper inroads into the dominant position Disney enjoys today. The WSJ touted Facebook COO (and Disney board member) Sheryl Sandberg as one possible successor.
WSJ, subscription required
• Toyota’s Embarrassingly Good Forecast
This might be a bad time to mention it, but Toyota raised its profit forecast for the coming year by just under 10% due not least to, ahem, a weakening yen. At least PM Shinzo Abe has four days to think of other topics of conversation before his trip to see President Trump in Washington. He might want to lean on the arguments of former Bank of Japan Governor Eisuke Sakakibara, who told Reuters the yen could strengthen below 100 to the dollar by year-end due to the Trump administration’s jawboning. In other foreign exchange news, the smoldering currency war between the West’s biggest economies was stoked further at the weekend, with German finance minister Wolfgang Schaeuble deflecting the blame for Germany’s ballooning trade surplus to the European Central Bank.
• Apple Loses Ground in China
Apple’s tenuous grip on the world’s largest smartphone market is slipping. The latest report by research firm IDC showed Apple’s shipments to China fell 23% in 2016, its first-ever annual fall, as local brands Oppo, Huawei and Vivo all outstripped it. That left it with a market share of only 9.6%, a two-year low. Samsung fared even worse at the newcomers’ hands, falling out of the top 5 entirely (behind Xiaomi). The development means that more than ever will be riding on Apple’s ability to deliver an iPhone 8 with more significant incremental improvements.
• Kowalski Back at the Helm of Tiffany’s
Tiffany’s CEO Frederic Cumenal paid the price for a prolonged sales slump. The company said at the weekend he’ll step down immediately, to be replaced by chairman (and former CEO) Michael Kowalski. The luxury jeweler had a famously rough quarter at the end of 2016, due to disruptions at its flagship store on 5th Avenue, as security fenced off much of the area around the HQ of President Trump’s transition team. One of Kowalski’s main tasks will be to oversee the launch of a new line of accessories later this year, the first under lead designer Reed Krakoff, whom Tiffany’s hired from Coach a couple of weeks back.
Around the Water Cooler
• Boards Still Struggle With Diversity
Companies are still falling short in their efforts to make their boardrooms look more like America. A new survey by Deloitte and the Alliance for Board Diversity showed white men still occupying nearly 70% of all board seats at Fortune 500 companies. ABD head Ronald C. Parker said that at the current rate, it will take until 2026 for minority and female representation to reach 40%. Slow turnover rates and a desire for prior experience at top level appear to contribute largely to the inertia phenomenon.
• Le Pen Rattles Euro Markets
Marine Le Pen launched her campaign for the French presidency, pledging to take France out of the Eurozone, retake full control of its borders and generally fight the “twin totalitarianisms of globalization and Islamic fundamentalism”—a startling equivalence even on a weekend which threw up more than its fair share of them. Most polls suggest that Le Pen will win the first round of the election at the end of April, but lose the run-off to a more centrist candidate. But the seemingly terminal collapse of Francois Fillon’s campaign (he’s not quite giving up yet) has raised her chances significantly, leaving Le Pen as the only hard-line anti-Islamist candidate. Tellingly, the premium on French government bonds over their German counterparts has risen to the most in over two years.
• Refiners Face Cloudy Outlook
U.S. refiners are facing the prospect of the first drop in demand for gasoline in five years, on a combination of ride-sharing, fuel efficiency, population ageing and, at least in the short-term, higher prices for crude feedstock. Marathon, Phillips 66, and Valero all noted weaker-than-expected short-term demand in their earnings reports last week, although Valero noted that higher exports of gasoline are offsetting the drop somewhat. Gasoline stocks are still close to historic highs, and may take longer than expected to be whittled down, given that U.S. shale companies are increasing output to respond to the OPEC-led cut in global supply. Crude futures are rising slightly Monday, due to concern about the reintroduction of U.S. sanctions on Iran.
• Samsung Retreats Before Prosecutors
It’s not quite destroying the evidence, but nor does it send the most convincing statement of innocence. Samsung said it will disband the corporate strategy office that is at the heart of a special prosecutor’s probe into alleged corrupt dealings with the inner circle of impeached president Park Geun-hye. The probe is due to end by Feb. 28 but prosecutors are considering a request for a 30-day extension. They’ve already failed once to secure an arrest warrant for Lee Jae-yong, the heir apparent to the Korean conglomerate’s smartphone and electronics business.
Summaries by Geoffrey Smith Geoffrey.email@example.com;