President Trump will meet with another group of business leaders today to discuss his plans for investing in U.S. infrastructure. The meeting will include people from real estate, consulting and private equity, and likely shed some light on how he plans to use public-private partnerships to fund $1 billion in new infrastructure spending.
The prospect for new infrastructure spending is one of the things that has been lifting spirits in the stock market. But like the tax bill, the infrastructure effort will have to wait until Congress deals with health care. That one is not going to be easy, as the president and congressional leaders face not only unified Democratic opposition, but also a rebellion among a few Republicans. House Speaker Paul Ryan says he is confident he can get enough votes to move the bill through the House. But in the Senate, it is under heavy fire from a handful of conservatives, among them Senator Rand Paul, who has tagged it "Obamacare lite." President Trump responded on Twitter, saying he was sure Senator Paul will " come along with the new and great healthcare program because he knows Obamacare is a disaster!"
Tomorrow, Fortune releases its annual list of the 100 Best Companies to Work For. Look for it here, or if you are in New York, join us at our offices at 6 p.m. to hear from top executives of three companies on the list—Accenture, Kimpton Hotels, and Edward Jones—and celebrate with us. You can RSVP here.
More news below.
• Wikileaks Dumps on the Public
Wikileaks published a dump of purported CIA documents detailing the Agency’s hacking techniques. Although obviously unverifiable, cyber security experts said they looked authentic. The documents contain details of various exploitable security flaws in key operating systems such as Apple’s iOS and Alphabet’s Android. They don’t appear to prove that the CIA has cracked encrypted apps such as Whatsapp and Signal, but they do suggest that messages can be intercepted before being encrypted. For Wikileaks, the main point is that the government is still snooping on you. For everyone else, the point is probably that Wikileaks has now put all those backdoors in the public domain for anyone to exploit. Fortune
• ZTE Pays $900 Million for Sanctions-Busting
Chinese telecoms equipment maker ZTE pleaded guilty to violating U.S. sanctions on Iran and agreed to pay nearly $900 million to settle the Justice Department’s claims. ZTE had bought components from the U.S., incorporated them into its own equipment and sold them on to Teheran. It engaged in similar business with North Korea. ZTE agreed to a seven-year suspended denial of export privileges, which could be activated if there are further violations, as well as three years of probation, a compliance and ethics program, and a corporate monitor. Beijing’s muted response appeared to accept it was either a fair deal, or a battle it had already written off as lost. Fortune
• SWM Seeks Partner for Joint Pursuit of Global Domination
Uber publicly announced that it is looking for a chief operating officer, with CEO Travis Kalanick saying in a brief blog post that he wants “a peer who can partner with me to write the next chapter in our journey.” The news comes after a rough couple of weeks of publicity for the company, which led Kalanick to admit he needed “leadership help.” One of the issues that the new COO may need to face, according to recent reports, is staff retention: headhunters have anecdotally reported a big rise in the number of unsolicited resumes from Uber employees. That suggests a weakening of confidence internally in the company’s direction and outlook. Fortune
• Facebook Dodges One Bullet, Takes Another
Facebook was condemned by U.K. lawmakers for failing to remove content appearing to promote child pornography from its network, after an investigation into a BBC report last year. The story flared up again Tuesday after it emerged that Facebook had not only left over 80% of the offensive content on its site initially, but reported to the police the BBC journalists who flagged it, two details that again expose the shortcomings of its internal processes. In better news for the company Tuesday, a German court threw out a lawsuit that tried to hold it responsible for hate speech published on its network. Fortune
Around the Water Cooler
• Rorsted Raises Adidas’ Game
Kasper Rorsted stamped his authority on Adidas, raising its long-term targets to something closer to those of its biggest rival, Nike. Rorsted, who took over from long-serving CEO Herbert Hainer in October, is now aiming for annual sales increases of 10%-12% and annual profit growth of 20%-22%. Rorsted said Adidas was still under-represented in the U.S., the most profitable market for sportswear, and would allocate a disproportionate share of future investment to the country. He also outlined plans to grow online sales faster, and put the underperforming hockey brand CCM up for sale. Adidas’ shares rose over 7% in Frankfurt in response. Fortune
• Stomach-Churning at Sprint
Shares in Sprint fell over 5% after chief financial officer Tarek Rabbiati admitted that the new wave of price wars, driven by an expansion of unlimited data plans, had cost it more subscribers than it expected. Sprint had expected its “churn rate” to come down from 1.67% in the last three months of 2016, but Robbiati said that wouldn’t happen in the current quarter. Robbiati admitted to being surprised, in particular, by Verizon’s embrace of unlimited data plans. Fortune
• Springtime for Uncontracted Quarterbacks
The new season of nation’s favorite sport—talking about how much sports stars earn—got under way Tuesday as NFL teams opened negotiations with unrestricted free agents. With live sport commanding a premium like never before among broadcasters and streaming services, NFL revenue is likely to hit $14 billion this year. But while deals for prized quarterbacks still make for good headlines, the truth is that players’ pay—especially in positions such as running backs—has failed to keep pace with revenue growth, thanks largely to the 2011 labor dispute that ended with a sweet deal for franchise owners. The salary cap, set this year at $167 million, has risen “only” 135% since 2002, while NFL revenue is up 204%. NFL Commissioner Roger Goodell, meanwhile, continues to out-earn even the highest-paid quarterbacks, taking home $32 million in 2015. Fortune
• Brexit—a Star Wars Story
Watching the Brexit process feels a bit like watching the first two reels of a Star Wars movie. Even the headlines sound like it, with their talk of ‘Rebel Lords’ and ‘Empire 2.0’ (the latter a particularly vacuous social media storm stoked by Europhile scaremongers). But the reluctant Empress of Brexit, Theresa May, is still firmly in command and set to squash two amendments to a bill that would limit her freedom of maneuver in negotiating an exit deal with the EU. Whether that’s wise is another question. As such, the formal two-year exit talks are likely to start later this month, as May planned. The U.K. economy, meanwhile, is starting to slow noticeably. BBC
Summaries by Geoffrey Smith Geoffrey.firstname.lastname@example.org;