Good morning.
The words flew last evening in Hempstead, New York—sometimes two and three at a time—as the two major-party nominees for president made their cases to the American people in their first debate. The candidates tossed out the familiar bogeymen—missing emails, unreleased tax returns, old trade pacts, and trickle-down economics. Donald blamed Hillary for (somehow) starting the “birther” campaign against President Obama and a failure to single-handedly stop ISIS. Hillary blamed Donald for stiffing workers, serial bankruptcies, and weakening our military alliances.
But it wasn’t until nearly 90 minutes into the rumble that the most revealing exchange took place. Moderator Lester Holt asked Trump to clarify what he meant when he said, earlier in the month, that Clinton didn’t have “a presidential look.” Trump answered: “She doesn’t have the look. She doesn’t have the stamina, I said she doesn’t have the stamina, and I don’t believe she does have the stamina.”
In fairness to Trump, asking who has the stamina to be President of the United States is a legitimate—even essential—question for voters. Being the Night Watchman of the World, after all, is an unforgiving job. There is no snooze button for crisis, no pause for the force of global entropy. The testing of a great nation is dawn-to-dusk and dusk-to-dawn—and the person who leads it must be ready and able at all hours.
That said, there was only one person on stage in Hempstead last night who never looked haggard or unsure. She was wearing a red pantsuit.
| Clifton Leaf | |
| @CliftonLeaf | |
| clifton.leaf@fortune.com |
Alan Murray is on vacation this week. Fortune’s Deputy Editor Clifton Leaf is filling in.
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Top News
• Mr. Market Says Hillary Shaded It
Global stock markets have opened mixed in the aftermath of the election debate, but if you want a clear view on who the markets thought won, look no further than the Mexican peso. It rose over 2% in relief at the perception that Hillary Clinton bested the country’s nemesis, Donald Trump. But that 2% is only one-fifth of the 10% that it lost against the dollar in the previous two weeks, when a series of polls showed the GOP nominee narrowing Clinton’s lead. Had Hillary landed a real knock-out blow last night, the bounce-back would have been much stronger. The peso has hit a series of record lows against the dollar this year as its advantages through NAFTA have come under an increasingly harsh spotlight, and as the price for crude oil, a key export, has stayed in the doldrums. Crude futures are down 1.5% this morning as comments from the Saudi and Iranian oil ministers dash any remaining hopes for a deal on OPEC output restraint this week. Reuters
• Pfizer Rejects Split
Pfizer said it had decided against spinning off its generic drug business into a separate company, saying that the costs ultimately outweighed what appear to be dwindling benefits. Staying an integrated concern allows it to use the reliable cash flow of generic drugs to finance research into new, higher-margin innovations. On the positive side, the decision brings to an end a long-running internal review process that has occupied substantial management resources (and hard cash). But it also leaves the company larger and more complex than either its managers or its investors would ideally like it to be. Pfizer has spent big money on acquisitions of both branded drugmakers (Medivation) and generics companies (Hospira) in the last 18 months: it will be interesting to see which side of the business it spends more on in the next 18. Fortune
• A Good Day in the Cloud for Microsoft
Microsoft won a contract to provide the cloud services that will power the Renault-Nissan Alliance's connected cars. The companies said Microsoft’s Azure would be used for their navigation and software updates as well as for remote monitoring and predictive maintenance services. The Franco-Japanese alliance wants to have 10 autonomous models on the road by 2020, and these vehicles will likely make much use of the cloud. It cited compliance commitments and security as key reasons for choosing the Redmond-based company’s platform. Azure’s good day didn’t stop there. In another boost, Microsoft also signed up Adobe as a customer for cloud hosting services. Fortune
• Wells Fargo Employees File Class Action Suit
Two former Wells Fargo employees filed a class action in California seeking $2.6 billion or more for workers who tried to meet aggressive sales quotas without engaging in fraud and were later penalized for not meeting sales targets. “Wells Fargo fired or demoted employees who failed to meet unrealistic quotas while at the same time providing promotions to employees who met these quotas by opening fraudulent accounts,” the lawsuit said. The accusation stands in stark contrast to CEO John Stumpf’s assertions that the bank’s culture and management had nothing to do with the scandal. Separately, analysts at consulting firm Equilar calculated that Stumpf would walk from the bank with $123.6 million in cash and share equivalents if he retired from the bank. Fortune
Around the Water Cooler
• Marchionni Pays the Price for Grating Cheeseheads
The cynics always said that helicopter-dropping the exotic and ultra-stylish Federica Marchionni into Dodgeville, Wis., wouldn’t work. It didn’t. The former Ferrari and Dolce & Gabbana executive was forced out of Lands’ End Monday, after a frustrating 19 months spent trying to put more zing into the Middle American catalog retailer’s offerings. Marchionni’s efforts appear to have succeeded only in antagonizing the company’s traditional customer base without penetrating new market segments. But the market reaction suggested that investors still had more faith in Marchionni than in her opponents: having fallen already by one-third so far this year, the company’s shares fell by another 14% on the news. Fortune
• Wanda Group in Talks to Buy Dick Clark
Wanda Group’s Pac Man-like rampage through Hollywood continues: the property-to-entertainment conglomerate is in now in talks to buy a controlling stake in Dick Clark Productions, the company that runs the Golden Globe awards and Miss America pageants, from Eldridge Industries. A Reuters source said Wanda was looking to bid $1 billion for the TV production company, but cautioned the deal was not yet certain. Eldridge confirmed the talks but not the valuation. Where will it stop? Well, Wanda’s owner Wang Jianlin has already said he has eyes on the ‘big six’ Hollywood studios, without which he says he won’t consider his portfolio a “real movie empire.” Fortune
• Palantir Sued for Anti-Asian Hiring Bias
The Department of Labor filed an administrative lawsuit against Palantir Technologies, the secretive data analytics company backed by, among others, the CIA’s venture capital arm In-Q-Tel. Regulators alleged the data company systematically discriminated against Asian job applicants, the implication being that it was afraid of infiltration by Chinese and North Korean agents. Palantir helps government agencies track down terrorists and uncover financial fraud. It raised $880 million in funding last year at a valuation of some $20 billion, one of the highest valuations of all Silicon Valley startups. The lawsuit alleges Palantir routinely eliminated Asian applicants in the resume screening and telephone interview phases, even when they were as qualified as white applicants. Palantir said it intends to “vigorously defend” itself against the allegations. Fortune
• Down and Out in Berlin and Frankfurt
Shares in Germany’s two biggest banks continued to slide badly Tuesday morning. Deutsche Bank and Commerzbank both fell by 3%, adding to sharp falls Monday. Deutsche is facing, at best, a heavily dilutive share issue if the Department of Justice doesn’t reduce its $14 billion bill for mis-selling mortgage-backed securities. Chancellor Angela Merkel, meanwhile, is in no hurry to throw taxpayers’ money at a bank with an increasingly toxic reputation at home. The more domestically-focused Commerzbank is more reflective of the current structural problems facing German and, more generally, European banks: overcapacity, high cost bases and virtually non-existent interest margins. Commerzbank hasn’t confirmed a report Monday that claimed it is planning to cut 9,000 jobs and suspend its dividend. Fortune
