Good morning.
The biggest story of the weekend was President Trump’s first foreign trip, highlighted by his much-anticipated speech on Islam in front of Muslim leaders in Saudi Arabia. The president dialed down the intense rhetoric of his campaign with regard to “radical Islamic terrorism” (a phrase he avoided on Sunday) while calling on Muslim leaders around the world to cooperate in battling terrorism.
The speech earned Trump relatively positive headlines and it came amid news of a $110 billion U.S.-Saudi Arabia arms deal as well as further Saudi deals and investments involving U.S. companies such as Boeing, Exxon Mobil, General Electric, and Lockheed Martin. The deals spanned multiple industries—with energy and defense in the spotlight—and they are worth hundreds of billions of dollars in total, with the potential to create jobs in both countries.
Meanwhile, the White House will continue to push its agenda this week as it rolls out a budget proposal for 2018 aimed at increasing spending on the military and border security while cutting funds for social programs like Medicaid. Treasury Secretary Steve Mnuchin will testify about the budget plan this week in front of Congress, while lawmakers will also be holding a hearing to look further at a the Trump tax reform plan that would make big cuts to business tax rates.
Also, the nonpartisan Congressional Budget Office is expected to release its score this week for the health care bill that passed the House a few weeks ago.
More news below.
| Tom Huddleston, Jr. | |
| @tjhuddle | |
| tom.huddleston@fortune.com |
Top News
• Ford Moves to Replace CEO Fields
Ford Motor is reportedly set to announce the removal of CEO Mark Fields, following a three-year run that saw the auto giant's share price drop by roughly 40%. Ford is expected to announce on Monday morning that Fields is being replaced by Jim Hackett, the chairman of Ford Smart Mobility, the company's subsidiary that is working on developing autonomous vehicles. The move comes shortly after shareholders expressed their disappointment over poor financial results at the company's latest annual shareholders meeting. Just last week, Ford said it would cut nearly 10% of its workforce in North America and Asia as the company looks to cut costs by roughly $3 billion. By turning to Hackett, who was brought on to head up the newly-created Ford Smart Mobility only a year ago, Ford appears to be doubling down on its push into self-driving technology. The company has promised to put a fully autonomous vehicle on the road by 2021. The New York Times, subscription required
• Huntsman, Clariant Talk Giant Chemicals Merger
American chemicals manufacturer Huntsman Corp. is reportedly in talks with Switzerland's Clariant on a potential merger that would create a $14 billion chemicals giant. No agreement has been announced yet, but the two companies are reportedly discussing a deal that would leave Clariant with roughly 52% of the combined company, which would be called HuntsmanClariant. The combination, which would give Clariant more access to the North American and Chinese markets, is the latest example of consolidation in a global chemicals industry where companies are looking to acquisitions to prop up unimpressive revenue growth. Bloomberg
• Nextdoor CEO Predicts 'Tens of Millions' in 2017 Revenue
It's only been two years since neighborhood social network Nextdoor became a "unicorn" (aka a startup with a $1 billion valuation) without earning any revenue. Now, the company's CEO tells Fortune that he expects Nextdoor to earn "tens of millions" of dollars in advertising revenue in 2017 after settling on ad sales as a business model. The free social network, which looks to connect community members in more than 150,000 U.S. neighborhoods, sells ads to companies like AT&T and State Farm Insurance that want to target specific neighborhoods with their marketing campaigns. Fortune
• AT&T Adds Security Apps for Business Customers
AT&T wants to make it easier for the company's corporate customers to upgrade the security features on their networks. The telecommunications giant's corporate division is introducing security apps that allow businesses to download software with updated security features rather than having to buy proprietary networking hardware from outside companies. As part of its new Flexware line, AT&T will sell its own, cheaper hardware that can be upgraded by downloading software. The move is part of a larger corporate trend to cut down on equipment costs by focusing more on cloud services and software. Fortune
Around the Water Cooler
• Twitter's Co-Founder Is Sorry About Trump
Evan Williams, a co-founder and former CEO of Twitter, offered up something of a mea culpa in an interview over the weekend in which he was asked about Twitter's role in paving the way for Donald Trump's political ascent. Williams, who is now CEO of Medium, told The New York Times that he regrets the fact that Trump's Twitter use helped to coalesce the movement of followers who propelled him to the White House. Trump himself has said that he might never have become president if not for Twitter. "It's a very bad thing, Twitter's role in that," Williams said. "If it's true that he wouldn't be president if it weren't for Twitter, then yeah, I'm sorry." The New York Times, subscription required
• Leaked Documents Reveal Facebook's Content Screening Guidelines
Leaked documents obtained by The Guardian seem to reveal the internal guidelines for how Facebook employees moderate posts on the massive social network. The leaked documents, which include thousands of pages of examples, show that content moderators at Facebook who discover violent images or videos posted on the site are instructed to either take no action, label the posts as "disturbing," or remove the content entirely, depending on the nature of the posts. For the most part, the company wants its employees to label violent imagery as "disturbing," but to leave it online as a matter of public awareness. However, should the violent imagery appear to be celebratory or sadistic, then it should be removed, the guidelines indicate. The Guardian
• Wall Street Wins with Cloud Computing, Techies Rejoice
Hedge fund billionaire Seth Klarman scored a major victory over the weekend when the horse that he co-owns won the 142nd Preakness Stakes in Baltimore. Named Cloud Computing, the horse's win inspired plenty of celebratory jokes from within the tech industry, including in the form of tweets from the CEO of the cloud services company Box and Amazon's chief technology officer. Cloud Computing's Preakness win meant that horse racing will have no Triple Crown winner this year after a horse named Always Dreaming won the Kentucky Derby earlier this month. Always Dreaming also has Wall Street ties, being co-owned by the founder of trading firm Virtu Financial. Fortune
Summaries by Tom Huddleston, Jr.; tom.huddleston@fortune.com @tjhuddle
