CEO Daily: Tuesday, February 16

Democrats tried to argue that Senate failure to confirm a nominee this year would be an historic abdication of its constitutional responsibility, and inflame independents. But nearly all Republicans – including those who need the support of independents for re-election this year, like Rob Portman of Ohio – say the choice of a new justice should wait until after the election.

This was to be expected. Before Scalia’s death, the court was divided 5-4 on a host of hot button political issues, and it was always highly unlikely that the Republican-run Senate would approve a lifetime appointment who would tilt the balance toward Democrats on the eve of an election. Anyone who thinks Democrats would act differently if the tables were turned should read the comments of Senator Chuck Schumer in 2007, here.

What does an eight-person court over the next year mean for business? That’s not entirely clear, since a 4-4 split essentially puts the decision power in the hands of the lower courts. But as Fortune’s Jeff John Roberts reports this morning, Scalia’s absence could effect key decisions on union organizing, class action lawsuits, environmental regulations, immigration, and intellectual property – so no small thing.

Meanwhile, a delay in the appointment until next year will have big implications for the next president. Even in normal times, Supreme Court confirmations are bruising battles that consume huge amounts of political energy. For a new president, that’s unfortunate. The opportunity to enact major legislation – be it a Republican tax reform or a Democratic infrastructure initiative – is greatest in the early days. Those days now may be consumed by a confirmation fight.

In short, Scalia’s death unfortunately feeds the dysfunction in Washington. The need for a President who can lead through the morass is that much greater.

More below.

Top News

• Saudi Arabia, Russia cut a deal to freeze output

The world's two largest oil producers struck a tentative deal to freeze their oil output at current levels in what may be the start of coordinated action to end the global crude glut. The news is a ray of hope for a U.S. oil industry battered by low prices. A report out Tuesday by consulting firm Deloittes said that one-third of the world's publicly-traded oil companies face a high risk of bankruptcy at current price levels. After a meeting in Doha, Qatar, the oil ministers of Saudi Arabia and Russia said they had agreed to hold output at January levels, providing other major producers also agree to do likewise. That puts the spotlight squarely on Iran, which has said it wants to raise its oil output by 500,000 barrels a day this year now that U.N. sanctions on it have been lifted. Fortune

• Oil firms face bankruptcy risk in '16

About a third of the world's publicly-traded oil companies are at high risk of going bankrupt this year, warned consulting and audit firm Deloitte, as the sector faces a huge threat from crude prices that are hovering near 10-year lows. The weak prices have already prompted energy companies to cut their staff and slash their spending plans to preserve cash. Deloitte warned that the 175 or so companies most at risk have more than $150 billion in debt and they're having trouble generating cash given the decreased value of asset sales and secondary stock offerings. Fortune

• Google's Internet balloons take flight

Google's Project Loon is entering the testing phase in Sri Lanka, as the search giant aims to bring connectivity to all of the island's people. The Sri Lankan government on Tuesday said the first of the three Loon balloons to be used in the trial arrived at the start of the week. Google's balloons are essentially a network of solar-powered, airborne cell towers floating at a height of around 12 miles, or roughly twice as high as planes fly. People can connect to the balloon using a phone or other devices. The project is a way that Google hopes to bring an Internet connection to the people of the world that lack it. Fortune

Around the Water Cooler

• 'Deadpool' kills at the box office

Deadpool scored a very impressive $135 million box office haul this weekend, becoming the first R-rated movie ever to break $100 million in its opening weekend. The Ryan Reynolds-starring superhero flick greatly exceeded expectations and was also a hit with reviewers, scoring an A CinemaScore. It also surpassed the openings of notable PG-13-rated superhero movies like Man of Steel and Captain America: The Winter Soldier. Entertainment Weekly

• Buffett loses ground on his bet

The end of 2015 marks the eighth year of a 10-year Million-Dollar Bet between Berkshire Hathaway CEO Warren Buffett and a money management firm, Protégé Partners, as the "Oracle of Omaha" has bet his own money that the stock market performance of a big index fund can beat the performance of five funds of hedge funds selected by Protégé. The five funds of the funds won in 2015, but that marks only the second win out of the past eight years. And while Buffett's side lost some ground last year, it still has a commanding lead, with the index fund he's backing up 65.67% vs. 21.87%, on the average, for the five funds of funds. Fortune

• SI's Swimsuit issues goes VR

Sports Illustrated, sister to Fortune, has created a standalone Apple iOS and Google Android application for all things related to its swimsuit franchise. It contains the latest photos, the past few years of galleries, daily updates that track the models in the news, as well as premium content that unlocks at two paid tiers. And for the first time ever, the magazine's swimsuit issue is in virtual reality. Virtual and augmented reality devices are enjoying a ton of media interest these days, as the technology promises to bring more immersive, lifelike experiences to audiences. Fortune

• Millennials love their wine

Millennials reportedly drank 42% of all wine consumed in the U.S. last year, more than any other generation at an average of two cases per person. High frequency millennials drank 3.1 glasses of wine per sitting, according to research from the industry nonprofit Wine Market Council, also more than other generations. No region is winning out, as wine preferences for young people were across the board and varied as Oregon, Chile and Greece. USA Today