I’ve written here before that, for the first time since World War II, there is no candidate of business in the U.S. election. So what’s a voting businessperson to do?
Michael Bloomberg took to the Democratic Convention stage last night to give his answer. Interestingly, the one-time Republican got a prime-time speaking spot – 9:20 p.m. – while his liberal Democratic successor, Bill DiBlasio, was stuck in a dead zone – 4:30 p.m.. Bloomberg made it clear that he’s not endorsing the Democratic platform, and he earned boos from the crowd for briefly suggesting Democrats err in opposing education reform and deficit reduction, and in blaming “the private sector for our problems.”
But he then gave a full-throated takedown of Donald Trump – “we New Yorkers know a con when we see one” – and an equally enthusiastic endorsement of Hillary Clinton – whom he called “a problem-solver, not a bomb thrower.”
It’s worth comparing Bloomberg’s speech – which you can watch in full here – to that given by in Cleveland by investor Peter Thiel – which you can watch here. Neither is very long. The news coverage of Thiel focused on his sexual orientation – he was apparently the first openly gay person ever to speak in prime time at a Republican convention. But his real message was that the Democrats’ obsession with inequality and political correctness was destroying innovation and growth. “Fake culture wars only distract us from our economic decline, and nobody in this race is being honest about it except Donald Trump.”
Which billionaire has it right? As Roger Ailes used to say: We report, you decide.
And if you care to write about your decision, consider doing so for the Fortune Insiders Network, which we relaunched yesterday on Medium. We are eager to hear from business leaders on how they are navigating this year’s election conundrum.
More news below.
• The Fed Eyes September Rate Move
An interest rate hike is back on the table in September if—and in the light of 2016 to date that’s quite a big if—nothing happens to scare the Federal Reserve out of it in the next month. The key phrase from the Fed’s statement after its Federal Open Market Committee meeting was that “near-term risks to the economic outlook have diminished.” The sentence is important because it hasn’t been in the Fed statement for months. And the Fed’s statement is all about signaling, rather than an explicit description of its plans. That said, a rate hike still isn’t nailed on: yesterday’s durable goods numbers still spoke of soft corporate investment, the jobs market is still not quite as vibrant as it was—and central bankers the world over are leery of raising rates just before elections. The markets are betting on a December hike this morning, selling the dollar against the yen and euro. Fortune
• Facebook’s Victory March
To paraphrase George Orwell, if you want a picture of the future, imagine Mark Zuckerberg’s sneaker stamping on a middle-aged newspaper editor, forever. The social network’s conquest of the globe continues to outpace even the most aggressive expectations. The company reported a 63% year-on-year rise in advertizing revenue for the second quarter, beating consensus forecasts by over 7%. Earnings per share rose by an even stronger 18%. Monthly average users hit 1.71 billion, up from 1.49 billion. The dominance of mobile technology in the ad market was again underlined, as the share of mobile in total ad revenue rose to 84% from 76% a year earlier. And in Facebook Live, the company also has a clearly identifiable new source of revenue, in contrast to some other big tech companies. Fortune
• Trump Calls on Russia to Hack Hillary
Republican presidential nominee Donald Trump called on Russia, one of the biggest threats to U.S. interests in the world, led by a clique that wishes the U.S. nothing but harm, to hack and publish the e-mails of his Democratic opponent, explicitly in order to help his election chances. “If he is talking about the State Department emails on her server, he is inviting a foreign intelligence service to steal sensitive American government information,” Michael Hayden, who headed the CIA under President George W. Bush, told The Wall Street Journal. Trump also said he’d look at recognizing Russia’s annexation of Crimea in 2014, the grossest violation of international law in Europe since the end of the Cold War. The statements come less than two weeks after Trump signaled that, if elected, he may choose to ignore security guarantees to democratic allies in Europe, enshrined in the NATO treaty. Fortune, WSJ, subscription required
• Trump, Schmump: This is Putin’s Actual New BFF
Turkey’s President Recep Tayyip Erdogan is fast-tracking the creation of a dictatorship in the wake of this month’s coup. Erdogan has also revived talks with Russia about a new gas pipeline and is set to visit Vladimir Putin in two weeks’ time, probably to confirm the end of Russian sanctions on Turkish food imports and other tokens of rapprochement. There is no longer any semblance of proportionality in Erdogan’s response to the coup attempt: on Wednesday, he shut down 130 media outlets including 45 newspapers, 16 television stations, 23 radio stations, 3 news agencies and 15 magazines. That follows the suspension or dismissal of 60,000 people in the military, security services and judiciary, and 16,000 arrests (half of those detained are facing trial, including those responsible for shooting down that Russian jet last year). Meanwhile, tourism arrivals, a key source of foreign exchange, are down 41% year-on-year, the worst drop on record. Other than that, NATO’s key ally in the Near East and its only point of leverage in the Syrian conflict is doing just fine. The Moscow Times
Around the Water Cooler
• Miners Drag Themselves out of Holes
The much-battered global mining sector continues to drag themselves out of the literal and financial holes they dug for themselves during the pre-crisis boom. Anglo American’s shares hit a 12-month high after it confirmed it’s on course to meet its target of cutting debt by at least $10 billion this year, while BHP Billiton removed some uncertainty from its outlook by capping expected liabilities from the Samarco dam disaster in Brazil at $1.3 billion. It’s still on course for its worst-ever annual loss, though. The charge accounts for BHP‘s share of a settlement that the company and its Brazilian partner-cum-rival Vale reached with the Brazilian government to cover clean-up costs and damages for the dam burst that killed 19 people, left hundreds homeless and polluted a major river. A Brazilian court recently decided to reinstate a $6 billion public civil claim over the disaster, but BHP and Vale have said they will appeal that decision. Reuters
• Adidas Can’t Put a Foot Wrong
Nike’s Mark Parker is going to have to work harder to justify his $46 million pay package. Nike’s biggest rival Adidas raised its profit guidance for the fourth time this year after another blowout quarter, with the icing on the cake coming in the form of a fat early contract termination fee from soccer club Chelsea. Strong sales of running gear and lifestyle products were complemented by the predicted bump from the Euro 2016 soccer championships (even though both teams in the final were wearing Nike). With Nike having missed analysts’ expectations this quarter, shareholders will be raising an eyebrow.
• Samsung Is Humming
Nike isn’t the only U.S. champion that’s suddenly under pressure from its foreign rivals. Samsung Electronics posted a 18% rise in net profit to some $7.2 billion in the second quarter, its best result in over two years. The Korean giant said strong demand for components offset margin pressure in the smartphone segment. It’s still to see a real reward for the pivot to chipmaking that has been quietly going on for the last 18 months—operating profit for the chips division fell 22% due to weak prices. It said it expected the component business to stay strong in the second half, but said the mobile business will weaken (despite the launch of a new Galaxy Note phone next week). Fortune
• Goodbye, Jumbo
Boeing said it would consider ending production of the 747, the plane that shrunk the world like no other, 48 years after the prototype rolled off the production line at Everett, Wa. Passenger airlines have switched increasingly to smaller, more flexible aircraft that can run on fuller loads, confounding the logic behind both Boeing's 747-8 and the A380 Airbus. The iconic ‘Jumbo Jet’ is now only made for cargo services and the head of state, and demand from the former isn’t what it used to be before 2008: production will slow to six a year for now. Boeing posted its first quarterly loss in nearly seven years Wednesday, confirming previously flagged charges related to three separate aircraft programs. Its shares rose over 1%, after the statement clarified the company’s outlook. WSJ, subscription required