Good morning.
President Trump’s decision to pull out of the Iranian nuclear deal drove oil prices to 3 1/2 year highs in global markets. While the decision is likely to have only a modest effect on oil flows, that effect is happening at a time when the economy is already running tight. As a result, higher oil prices are raising fears of higher inflation which could lead to higher interest rates. The dollar also rose, while stock markets were largely unfazed.
Airplane makers Boeing and Airbus stand to lose out on potentially $40 billion in orders because of the reimposition of sanctions. The European plane maker is subject to U.S. restrictions because more than 10% of its parts come from U.S. manufacturers.
The President’s move was strongly opposed by European and other global leaders. Whatever the flaws in the agreement, without support from other countries it is hard to see how U.S. withdrawal will lead to an improvement in Iranian behavior. The main effect seems to be to enable the President to keep a campaign promise.
On a related note, Fortune is in the field this week with our annual Fortune 500 CEO-only poll (if you are a Fortune 500 CEO, please check your email box and respond by Friday). We’ll be publishing the full results later this month, but an early finding is that a majority of CEOs favor President Trump’s tough trade negotiating stance with China, believing the U.S. has “allowed the Chinese to violate global trade norms for too long.” And roughly half of those responding believe the President’s policies overall have been better for business than they expected a year ago, while less than a quarter think they have been worse than expected.
More news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
SoftBank Boo-Boo
SoftBank's CEO has pre-empted Walmart in announcing the latter's official takeover of Indian e-commerce giant Flipkart. Softbank is a big Flipkart investor. "I think we announced it last night," SoftBank CEO Masayoshi Son said in an earnings call." Then he read a note left for him. "Oh, I see here that the Flipkart-Walmart deal isn’t fully confirmed at this point in time," he said. "Oops." Fortune
Vodafone and Liberty
John Malone's Liberty Global is selling its German and Eastern European telecoms businesses to Vodafone for $22 billion. The deal gives Vodafone Europe's second-largest cable network, Unitymedia, and helps the firm in its battle against German incumbent Deutsche Telekom. Vodafone and Liberty have been in talks for years, but had been disagreeing over valuations and debts. Bloomberg
Net Neutrality
Can the Senate save net neutrality in the U.S.? The Democrats think so—they will reportedly file a petition to force a vote on the FCC's rollback today, with a vote likely to take place by the end of next week. Of course, the House would probably then sink the measure, or President Trump could veto it. The FCC still hasn't said when its new, net-neutrality-free rules for Internet service providers will become effective. Fortune
Glassdoor Takeover
Japan's Recruit Holdings is to buy the U.S. jobs website Glassdoor for $1.2 billion. The deal will boost Recruit's presence in the U.S.—it's already there, thanks to its 2012 purchase of Indeed. Glassdoor CEO Robert Hohman will stay on. Glassdoor's last valuation, in 2016, was $1 billion. Investors in the round announced at that time included Google Capital, T. Rowe Price and Tiger Global Management. Reuters
Around the Water Cooler
Trump and Xi
Presidents Trump and Xi had a phone call yesterday in which the U.S. leader said trade talks must end up benefitting American businesses and workers. Xi called for a "mutually beneficial" outcome, rather than a trade war. A U.S. delegation visited China last week but came to no agreement with Chinese trade negotiators. Vice-Premier Liu He will visit Washington next week for further talks. South China Morning Post
Audi Emissions
The stink around Volkswagen's dodgy diesel emissions software just won't go away. Audi, part of the Volkswagen Group, has now admitted that another 60,000 of its cars have software problems—that's on top of 850,000 cars it already recalled last year. The affected cars are A6 and A7 models. Audi will be contacting customers and offering a software update. BBC
Cohen Payments
Trump lawyer Michael Cohen received payments not only from a U.S.-based affiliate of a Russian oligarch—while the Russia investigation was already underway—but also AT&T. The latter revelation initially came via Stormy Daniels lawyer Michael Avenatti, but the telco confirmed it, saying it paid Cohen in 2017 for "insights into understanding the new administration." Avenatti said the AT&T figure was $200,000; CNN's sources say it was more. CNN
Facebook Payments
What if you paid to use Facebook? That's the question pondered by author Alex Salkever, who writes for Fortune that such a scheme might help fix the social network's privacy problems. Salkever suggests that Facebook's newly-announced dating service would provide a good starting point, and paid-for videos might sensibly follow. Fortune
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.