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CEO Daily: Tuesday, January 5

Somebody must have forgotten to eat their black-eyed peas on Friday, because the year is off to a very inauspicious start. Global markets got pummeled on Monday, and massive intervention by the Chinese government slowed – but didn’t stop – the rout this morning.

 

It’s wasn’t just the old economy that suffered. Amazon shares fell 6%, despite reports the company had a stellar holiday selling season. Tesla shares plummeted, too. And all those venture capital types hoping to exit unicorn investments this year have to be discouraged as well. Dan Primack looks at the troubled outlook for IPOs here.

 

But Steve Gandel says don’t panic yet. The first trading day of the year isn’t a particularly reliable indicator for the coming year.

 

Geopolitics is also off to a bad start in 2016. The confrontation between Saudi Arabia and Iran threatens to undermine efforts to cool the conflicts in Syria and Iraq. And China further heralded the New Year by landing an airplane on one of the island runways it built in a disputed section of the South China sea.

 

One subject of hot dispute is what all this means for the price of oil in 2016. Oil prices rose on Monday, but then fell back this morning, shrugging off tension in the Middle East. Predictions for which way oil prices will move this year continue to gush in all directions. But it’s worth noting that BP CEO Bob Dudley, who has been a bear on oil prices since last summer, told the BBC this weekend that prices may bottom out in the first quarter of the year.

 

I’m dealing with the year’s lousy launch by leaving this morning for the land of dreams – Las Vegas – where 175,000 people have gathered for the annual tech fest at the Consumer Electronics Show. Auto makers grabbed the first day’s headlines at the event, with news from GM and Ford (including GM’s decision to give Mary Barra the chairman’s title.)

 

More below.

 

 

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

China intervenes to slow sell-off

China managed to pump the brakes on its market sell-off on Tuesday, as state-owned financial institutions threw their support behind equities and the country’s central bank injected nearly $20 billion into the market. The China Securities Regulatory Commission (CSRC) also got involved by saying it may extend a selling ban on the heavy investors that had been set to expire at the end of the week.  Financial Times (subscription required)

GM names Mary Barra chairman

General Motors’ CEO can now add another word to her title: chairman. The auto giant’s board of directors bestowed that title upon Mary Barra on Monday afternoon. The move follows a year in which Barra battled to soothe shareholders and help move the company past the massive recall scandal of 2014. Barra, who also managed to steer GM to a strong year financially, takes over the chairman role from former Cummins CEO Theodore Solso, who will stay on as lead independent director.   Reuters

Ford’s CEO talks self-driving cars

Ford revealed at CES in Las Vegas on Monday night that the iconic automaker wants more than just to make and sell cars. CEO Mark Fields told Fortune that Ford is eyeing the $5.4 trillion market for car-sharing and ride-hailing services by continuing to develop its self-driving car technology. Ford plans to grow its fleet of autonomous vehicles and continue to develop its virtual driver software with an eye toward eventually introducing a transportation service business that could rival companies like Uber. There has been speculation that Ford could partner with another company, like Google, on self-driving cars, but Fields kept mum about any potential partnerships.  Fortune

• Dalian Wanda taking majority stake in Legendary Entertainment

Chinese property giant Dalian Wanda Group is reportedly buying a majority stake in Legendary Entertainment in deal valuing the Hollywood film studio, which co-produced 2015 blockbuster Jurassic World, as high as $4 billion. Controlled by China’s richest man, Wang Jianlin (a 2013 Fortune profile subject), Dalian Wanda has been expanding its presence abroad, particularly in the U.S. entertainment industry. In 2012, Dalian Wanda bought movie theater chain AMC Entertainment and, last year, the company fully financed the U.S.-produced boxing film Southpaw. Fortune

Around the Water Cooler

Digital magazines won’t save Yahoo

Yahoo confirmed on Monday that it has shut down Yahoo Screen, the online video business that failed to find a foothold in the ever-expanding market for streaming content. Instead, Yahoo’s video content, which includes original series and acquired content like the former NBC series Community, will be available through the company’s “digital magazines.” But, Fortune‘s Erin Griffith notes that Yahoo is only combining its unsuccessful video venture with another that has also failed to generate excitement among advertisers. Regardless, the move is another sign of trouble for the company as it continues to explore either a spin-off or sale of its core business.  Fortune

Too soon to panic about stocks

U.S. stocks started off 2016 on a sour note, with the Dow Jones Industrial Average dropping more than 275 points on the year’s first day of trading as investors showed concern over China’s struggling economy. It may have been the worst first day of trading since 2001, but Fortune’s Stephen Gandel writes that the first day of the year is rarely a good indicator of market performance over the rest of the year. In fact, results from the first day of trading in any given year only accurately predict performance the rest of the way roughly 51% of the time.  Fortune

Is Apple headed for a rough patch?

Apple’s stock is down nearly 17% over the past six months as investors have worried about sluggish growth in China—the tech giant’s biggest market—as well as declining iPad sales. There’s also concern that demand for the newest iPhones is lower than expected, which could lead to a dip in smartphone shipments in the current quarter. If the Chinese market continues to disappoint, Apple’s share price could have trouble rebounding. However, analysts expect the company to report fairly strong holiday sales, while the expected release of an iPhone 7 later this year would also provide a major boost.  Fortune

5 things to know today

China stocks and December auto sales—5 things to know today. Today’s story can be found here.