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April 28, 2017

Good morning.

I spent last night surrounded by 200 of the capital’s most interesting women at Fortune’s Most Powerful Women annual dinner in Washington, D.C., which was hosted this year at the State Department. The speaker for the evening was Dina Powell, who partnered with Fortune when she was at the State Department a decade ago to create a mentoring program for female entrepreneurs in developing countries. She then went on to start the 10,000 Women program at Goldman Sachs, and now is Deputy National Security adviser to President Trump. Last night she gave us her first interview since taking that position.

Powell got her new job thanks to Ivanka Trump, who was impressed with the work she had done empowering women around the world. She has since been involved in the President’s decision to send tomahawk missiles to Syria, and also worked with the President to secure the release of Egyptian-American aid worker Aya Hijazi, who had been imprisoned in Egypt for the last three years. Hijazi attended last night’s dinner.

My colleague Pattie Sellers interviewed Powell, and ended the interview by asking what she had learned from each of her four bosses—President George W. Bush, Secretary of State Condoleezza Rice, Goldman Sachs CEO Lloyd Blankfein, and President Trump. Her answer:

Bush: “How to make your staff proud.”

Rice: “You can do anything you put your mind to.”

Blankfein: “Women are the best investment you can make.”

Trump: “There is a way to have an enormous amount of compassion and an enormous amount of strength.”

More news below. And enjoy the weekend.

Alan Murray
@alansmurray
alan.murray@fortune.com

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Top News

GDP in Hibernation

Data out this morning will show the U.S. economy got off to its usual sluggish start in 2017. Analysts expect gross domestic product to have expanded at an annual rate of 1.2%, well down from the 2.1% rate at the end of last year. Consumer spending has been weak (especially as regards cars) and inflation has ticked up due to effects from the 2016 oil price slump. The latter effect also weighed on French and British GDP reports earlier today. Keep an eye on the business investment component, which will show how much substance there is behind the post-election ballyhoo. Reuters

Alphabet Shrugs Off Ad Boycott

Alphabet blew off concerns about an advertiser boycott with a 24% rise in revenue in the first quarter (after adjusting for foreign exchange fluctuations). CEO Sundar Pichai said advertisers had "clearly noticed" improvements to its technology in weeding out extremist content on its YouTube video platform. Losses at its Waymo (autonomous driving) and Verily (biotech) units widened to $855 million, but the stock market didn't much mind, pushing the stock up 4% and driving Alphabet's market value to over $635 billion.  Fortune

While Azure Plays Catch-Up With AWS

Google's results were received more warmly than those of two of the other companies pulling the stock market higher. Amazon's biggest cash generator, the cloud-hosting Amazon Web Services, showed further signs of maturing, as revenue rose "only" 42% to $3.66 billion. Microsoft's Azure clocked a 93% rise in revenue but the company's shares fell 1.9% after a weak performance in other divisions (notably PCs) led it to miss analysts' profit forecasts. Fortune

Ghosts of 2011 Haunt the ECB

Mario Draghi insisted the European Central Bank won't be rushed into exiting its quantitative easing or raising interest rates. That keeps an important prop to global financial market liquidity intact and mitigates the Federal Reserve's gradual tightening policy. Draghi's arguments were shot through with the fear of repeating the ECB's mistake of premature rate hikes in 2011, which precipitated the most acute phase of the Eurozone crisis. While he justifiably noted that inflation is still not a threat (core inflation rose to 1.2% in April from 0.7% in March), and risks from issues like Brexit still persist, he still gave the unsettling impression that the ECB is  fighting the last battle. Fortune

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Around the Water Cooler

Boeing Jumps on the Protectionist Bandwagon

Boeing asked the Commerce Department to investigate alleged subsidies to Bombardier's new CSeries of regional jet, adding to trade tensions with Canada. The CSeries received hundreds of millions in dollars in launch aid from Canadian and U.K. governments. Fortune carried two interesting contributions yesterday on the latest lumber dispute with Canada, this one by Alan Wolff, a former trade negotiator under both Republican and Democrat administrations, and this one by Granger MacDonald, head of the National Association of Home Builders. MacDonald estimates that it will add $3,600 to the cost of an average family home. Fortune

Weak Trading Adds to Pressure on Barclays CEO Staley

The last thing Jes Staley needs just now is a badly-received set of earnings. But that's what he's got: a surprise drop in fixed-income trading revenue left Barclays well behind both U.S. and European rivals in the first quarter. The embarrassment is all the greater because the investment bank is the focus of Staley's strategy for Barclays; this quarter's earnings contained a large write-down related to the disposal of its African operations, which are being sold to fund that strategy. ISS, the U.K.'s largest proxy advisory service, is already urging shareholders to vote for Staley's removal for attempted persecution of a whistleblower last year. It may find a more receptive audience after the shares fell 4.3% in early trading. Bloomberg

Cloudera's Downround IPO

Software company Cloudera raised $225 million at its initial public offering, at a valuation of $1.9 billion. That's less than half of the $4.1 billion valuation it once enjoyed in its venture capital-backed heyday. Intel, which backed the company through more than one funding round, will hold a 19.4% stake after the IPO. The valuation is a sober reminder of public markets investors' old-fashioned need to see profits. Cloudera lost $187 million in the fiscal year to Jan. 31, on $261 million in revenue. Competition has forced it to discount sharply and spend more than it wanted on marketing. Fortune

Facebook Admits Being Manipulated

Facebook released a report effectively admitting that its network had been used in orchestrated attempts to manipulate public opinion about political issues, including the U.S. election. It blamed both governments and non-state actors. The admission is encouraging, if belated, evidence of its ability to fix itself. But the mere fact that it shut down over 30,000 fake accounts engaged in similar manipulation ahead of the French elections shows just how big a problem it has on its hands. Fortune

Summaries by Geoffrey Smith; Geoffrey.smith@fortune.com @geoffreytsmith

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