Good morning.
U.S. executives are bailing out of the Saudi Investor conference scheduled for next week in Riyadh. JP Morgan CEO Jamie Dimon and Ford Chairman Bill Ford have both cancelled plans to attend. Neither company elaborated on the change in plans, but the cancellations come after the disappearance of Saudi journalist Jamal Khashoggi, who entered the Saudi consulate in Istanbul and never exited. Turkish officials believe he was murdered and dismembered.
Major news organizations including CNN, the Financial Times, the New York Times, CNBC and Bloomberg have all pulled out of the event. Uber CEO Dara Khosrowshahi, Viacom CEO Bob Bakish, and AOL founder Steve Case also pulled out. The Khashoggi affair seems to have brought Crown Prince Mohammed Bin Salman’s romance with U.S. business and media to a crashing halt.
I’m in Toronto this morning, where the Fortune Global Forum gets underway today. I’ll be interviewing Prime Minister Trudeau on his post-USMCA view of the global economy. Also on the program tomorrow: Johnson & Johnson CEO Alex Gorsky, Cisco CEO Chuck Robbins, RBC CEO Dave McKay, MasterCard President Michael Froman and new Nobel Prize winner Donna Strickland. Stay tuned here for more.
News below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
SoftBank Tumble
It seems SoftBank is taking a hit from the Khashoggi scandal. Its share price fell by over 7% this morning, and analysts claim there are two reasons: the general pullback from tech, and SoftBank's close ties with the Saudis. Forty-five percent of SoftBank's big vision fund comes from the Saudi sovereign wealth fund. Fortune
Sears Bankruptcy
Sears has finally filed for bankruptcy protection. Edward Lampert, the iconic retail chain's controlling shareholder, has stepped down as CEO but not as chairman. Sears will shutter 142 stores toward the end of the year, on top of the 46 that are already closing next month. Sears apparently has $1.875 billion in bankruptcy financing ready to pay off some of its debts—$134 million in which needs to be paid off this afternoon—and keep its remaining stores open for now. All in all, Sears's debts top $10 billion. Wall Street Journal
Brexit Stalemate
The likelihood of a "no deal" Brexit has just increased, with yesterday's failure of negotiations between the U.K. and the EU on the issue of the border between Ireland and Northern Ireland. Prime Minister Theresa May has limited room to move—pro-Brexit ministers in her government demand a firm end-date to any arrangement that keeps the U.K. inside the EU's customs union in order to avoid a hard customs border, because the arrangement would stop the U.K. striking new trade deals. Bloomberg
Markets Drop
China's stock markets have hit a four-year low, leading the country's securities regulator to meet with hedge fund managers and retail investors to try to calm nerves. Meanwhile, thanks to Brexit and trade war fears, among other things, European shares hit a 22-month low this morning. Reuters
Around the Water Cooler
Climate Action
The U.K. is becoming the first of the G7 countries to formally look into setting a date for a "net zero" emissions target, as recommended by the Intergovernmental Panel on Climate Change (IPCC). Prime Minister Theresa May: "On the global stage, the U.K. is driving forward action on climate change through our work at the U.N. and with our Commonwealth partners. To ensure that we continue to lead from the front, we are asking the experts to advise on targets for net zero emissions." BBC
European Batteries
The EU is going to put billions of euros into electric battery research and production buildout, in order to avoid the electric car industry there becoming over-reliant on batteries from Asia. European Commission Vice President Maroš Šefčovič: "You cannot develop new models or high-quality cars if you do not master the skills, the innovation, and research link with batteries." Financial Times
Walmart Suit
Walmart may pay out $65 million over its failure to provide seating for cashiers, if a judge approves the terms of a settlement to end a nine-year Californian class action suit. The claimants say Walmart broke the terms of a wage order that says employees must get "suitable seats when the nature of the work reasonably permits," but Walmart argues that cashiers need to move around as part of their job. Fortune
Mockery Defense
President Trump said in a 60 Minutes interview that his mockery of Christine Blasey Ford, one of the women who accused Brett Kavanaugh of sexual assault, helped Kavanaugh get confirmed as a Supreme Court justice. "If I had not make that speech, we would not have won," said Trump. Asked if he had been disrespectful of Ford, Trump added: "You know what? I'm not going to get into it, because we won. It doesn't matter. We won." NBC
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
