CEO Daily: Friday, August 5th
A new poll shows Hillary Clinton jumping to a 15-point lead over Donald Trump in the presidential race. That’s not an insurmountable lead, as Michael Dukakis reminds us. (Dukakis enjoyed a 17-point lead over George Bush following the 1988 convention.) But Republican strategists worry their candidate isn’t making moves to close the gap. His premature fretting that the November election may be rigged brought scorn yesterday from President Obama.
Meanwhile, Fortune columnist Minxin Pei writes this morning that the Chinese market is rigged against U.S. tech firms. The professor of government at Claremont McKenna College says Uber’s deal to merge with its rival Didi Chuxing was “the right thing, at least for investors” given Beijing’s near perfect record in preventing U.S. technology firms from winning in China.
What U.S. tech firms “have failed to grasp,” he writes, “is that the Chinese government has made it a national policy not to allow any foreign tech firm to dominate China’s information industry in an effort to build up Chinese companies.” While other countries also have adopted mercantilistic policies, “no other country has the advantages of market size, the political will of the government, and the dynamism of private sector tech entrepreneurs to thwart the titans of Silicon Valley.” That leaves only three options: the Facebook and Twitter approach, to keep fighting a losing battle; the Google approach, to exit the market altogether; and the Uber approach, to merge rather than fight. Pei sides with Uber. You can read the full column here.
More news below.
• What to expect for Friday's jobs report
Economists estimate the Labor Department will report the U.S. added 180,000 new jobs in July, slightly above the pace set in the first half of 2016 when monthly job growth averaged 171,000. But it trails June's stellar 287,000 job gains and also is below the 251,000 pace of 2014 and 229,000 last year. The report could be pivotal because it will be among the most significant economic data the Federal Reserve reviews before deciding whether to raise interest rates in September. The Fed raised the benchmark rate late last year for the first time in nearly a decade. But it has held it steady since. USA Today
• SeaWorld facing a "Florida problem"
SeaWorld Entertainment blamed a 7.6% drop in attendance on a sharp decline in Brazilian guests and Orlando's softening tourism industry. "We have a Florida problem, not a SeaWorld Orlando problem," said President and CEO Joel Manby. The company's stock tumbled on the news. SeaWorld executives said there's been a steep drop in visits from guests from Latin America, mainly from Brazil, due to political and economical turmoil. Manby also lamented conditions in the Orlando market, where frequent discounts or other offers from rival parks including Walt Disney World and Legoland were occurring in response to the Central Florida market's decreased traffic. Orlando Sentinel
• Apple offers hackers security bug bounty
Apple said it plans to offer rewards of up to $200,000 to researchers who find critical security bugs in its products, joining dozens of firms that already offer payments for help uncovering flaws in their products. The maker of iPhones and iPads says the program will initially be limited to about two dozen researchers who Apple will invite to help identify hard-to-uncover security bugs in five specific categories. Those researchers have been chosen from the group of experts who have previously helped Apple identify bugs, but have not been compensated for that work, the company said. Apple said it decided to limit the scope of the program at the advice of other companies that have previously launched bounty programs. Reuters
• Chinese investor buys soccer club (again)
The West Bromwich Albion Football Club has sold itself to Guochuan Lai, who leads the Chinese investment group Yunyi Guokai (Shanghai) Sports. It marks the second time this summer a relatively unknown Chinese investor has purchased a Premier League club. Chinese businesspeople haven’t been shy about following President Xi Jinping’s demand to make China relevant in global soccer over the coming decades. In 2014, he said making China a “world football powerhouse” was a political priority. Since then, a flood of Chinese money has flowed into the sport. Fortune
Around the Water Cooler
• Hampton Creek's controversial 'project'
Bloomberg has reported a bombshell sure to rattle the food startup world. The news organization has reported Hampton Creek entrepreneur Josh Tetrick and his team undertook a large-scale operation to buy back its own eggless Just Mayo product, which made it appear more popular than it really was. At least eight months before scoring a $90 million funding round, Hampton Creek executives launched the campaign to buy mass quantities of Just Mayo from stores, according to five former workers and more than 250 receipts, expense reports, cash advances and e-mails reviewed by Bloomberg. Tetrick, Hampton Creek’s CEO, says the primary purpose of the purchases was to check the quality of the mayonnaise. Bloomberg
• Amazon Prime Air isn't what people expected
While observers have been looking forward to Amazon's heavily-previewed Prime Air drone delivery service, the e-commerce giant finally debuted Prime Air—but it doesn't involve drones just yet. Instead, Amazon has unveiled the first of 40 Prime Air cargo planes that it has agreed to lease from Atlas Air and ATSG. These planes will only be for use by Amazon and, so far, it has 11 of them in service. Having its own dedicated planes means less reliance on delivery partners such as UPS and FedEx and, in theory, lower costs for Amazon. Fortune
• Walmart aims to address scheduling problems
The world's largest retailer is trying out a scheduling system in hundreds of stores to give employees more control over their hours, as it aims to address worker discontent around unpredictable scheduling without boosting labor costs. The retailer, which has 1.5 million U.S. employees, has put the new system into about 650 of its Neighborhood Market stores in the past month and could eventually use it in all of its approximately 4,600 U.S. locations. The new system is an upgraded version of the company’s employee scheduling software that allows Wal-Mart to better predict staffing demands to give store managers and employees real-time information on open shifts and staffing changes. The Wall Street Journal (subscription required)
• At Home's IPO gets tepid response
Home décor retailer At Home's shares debuted on Thursday to a muted response, with shares roughly ending the day essentially flat with the issue price. The ho-hum response could be because investors are focusing on the bottom line. At Home is unprofitable despite the fact that revenue is growing steadily, reaching nearly $500 million in the latest fiscal year. Store growth represents an opportunity—the chain operates 115 stores in the U.S. but says the concept could expand to 600 locations. E-commerce is a missing puzzle piece: At Home doesn't operate a digital sales operation and has a minimal social media presence. Fortune