Good morning.
Canada and the U.S. struck an agreement late last night on a replacement for NAFTA, giving the U.S. greater access to the Canadian dairy market and maintaining NAFTA’s dispute resolution mechanism–a win for each side. I’ll be asking Canadian Prime Minister Trudeau about the new deal on opening day of the Fortune Global Forum in Toronto Oct. 15. The Forum is our annual gathering of the CEOs of Fortune Global 500 companies. If you aren’t planning to go, perhaps you should be. Details here.
Also over the weekend, Elon Musk agreed to accept adult supervision, as part of a $20 million settlement with the SEC. Musk will step down as chairman of Tesla but retain the CEO role. The charges stemmed from his August tweet saying he had “secured financing” for a $420-a-share buyout, when in fact he had not.
Finally, anyone who spent the weekend in the U.S can’t possibly have escaped the endless analysis, or perhaps the SNL/Matt Damon parody, of the Brett Kavanaugh hearings. I won’t add to the hubbub, other than to say that Sen. Jeff Flake was right when he said Friday that this is “tearing the country apart.” The irony is that the vast majority of Senators on both sides know how they intend to vote regardless of what the FBI finds—and, indeed, knew before they had ever heard of Christine Blasey Ford. No more than five have indicated they are open to being persuaded by the facts. The “world’s greatest deliberative body” no longer does much deliberating.
More news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
Net Neutrality
Californian Governor Jerry Brown yesterday signed the state's tough new net neutrality law, and the Justice Department is already suing. The DoJ claims California is trying to "subvert the Federal Government's deregulatory approach" to internet regulation. Internet service providers such as AT&T and Comcast might also sue over the new law, which forbids the blocking or slowing of online content and applications, along with the charging of fees for faster internet access. CNN
Female Directors
Brown also signed a Californian law that makes the state the first to require publicly traded companies to have at least one woman on their boards—if they're based in California, of course. The new law will ramp that up to three women by the end of 2021, depending on the board size. A quarter of California-based publicly held corporations have no women on their boards. NBC
Danske CEO
The money-laundering saga at Denmark's biggest bank continues, with the appointment of banking head Jesper Nielsen as interim CEO. Nielsen replaces Thomas Borgen, who had to go due to a scandal that has now attracted multiple investigations. Danske's Estonian unit was used to launder vast amounts of money, much of it Russian. Bloomberg
Tencent Restructuring
The Chinese tech giant Tencent is restructuring after a poor year, creating a new unit that targets the business and industrial customers that are being wooed by rival Alibaba and its cloud services. The conglomerate is historically consumer-focused. Under the revamp, social platforms and content will be grouped together. The Chinese startup sector is worried that Tencent will invest less in other companies now. Nikkei
Around the Water Cooler
Bank Attack
The U.K.'s Financial Conduct Authority has issued its first ever fine over a cyberattack. The lucky recipient is Tesco Bank, which was attacked two years ago thanks to shoddy defences. The attackers scored £2.26 million ($2.95 million) and the bank has now been fined £16.4 million (though, by settling and cooperating with the regulator, it avoided a £33.6 million penalty.) Financial Times
Facebook Antitrust
The head of Germany's federal antitrust authority, Andreas Mundt, said he is "very optimistic" that the watchdog will take action of some kind against Facebook this year. The Federal Cartel Office has found Facebook abused its market dominance to gather data on people without consent. Reuters
China Tariffs
JPMorgan Chase now expects President Trump to slap 25% tariffs on all Chinese imports next year. The investment bank sees the predicted move sinking the yuan to its lowest point in the last decade. There's certainly nothing to suggest that the Sino-American spat is going away soon—Defense Secretary Jim Mattis has just cancelled talks with his Chinese counterpart. Fortune
BlackRock Optimism
BlackRock co-founder Rob Kapito thinks the U.S. stock market rally will keep going beyond 2019, due to stock buybacks and fewer IPOs shrinking the numbers of shares that are out there. "Recently, given the economic backdrop and tax reform, companies have maintained a lot of cash on their balance sheets. And they have used that cash to buy back their stocks and raise dividends." Kapito said. Reuters
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
