Good morning.
Markets are breathing a sigh of relief this morning that war with North Korea does not appear imminent and that worst-case fears from Hurricane Irma have been avoided. That leaves everyone free to focus on less chilling news—like today’s release of a new iPhone.
Asian shares hit their highest levels since before the financial crisis, and European shares started off strong as well. Not surprisingly, insurance stocks helped lead the way.
Meanwhile, all eyes are on the world’s most profitable company, Apple, which is staging its first event at the Steve Jobs Theater at its new headquarters building to announce a number of new products. Top of the list is a phone, reportedly called the iPhone X, that is expected to cost in the neighborhood of $1,000, come with an upgraded OLED screen, wireless charging, and a facial recognition feature for unlocking the phone.
Apple shares rose 1.8% Monday in anticipation of the big event.
Also out this morning is Erika Fry’s story on DSM, the former chemical company that has turned the battle against climate change into a successful business strategy, and earned the number 2 spot on Fortune’s Change the World list.
More news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
• Florida Prepares for a Long Clean-Up
Florida began a long, hard, and expensive clean-up after a much diminished Hurricane Irma moved inland. Over 60% of the state’s residents were without power last night and Florida Power & Light says it will take weeks to restore full service. A last-minute deviation by the storm spared Miami, but the Keys were devastated and Jacksonville suffered extensive flooding. Two nuclear power plants thought vulnerable to damage appear to have emerged unharmed and should return to normal operation within a day or two, according to the Nuclear Regulatory Commission. The death toll from the hurricane hit 42, of which 8 were in the continental U.S. Fortune
• Cagney Takes the Road Increasingly Often Travelled
Mike Cagney, the co-founder and CEO of online lender Social Finance, or SoFi, said he would step down by year-end, amid lawsuits alleging improper loan processing and institutional sexual harassment. Cagney said in a memo to staff that the combination of litigation and negative press had become a “distraction.” Cagney is stepping down immediately as chairman, and will be succeeded by Tom Hutton, an early investor in the company. As with Travis Kalanick at Uber, the increasing number of culture-related scandals has gone hand-in-hand with signs of a loss of business momentum. Fortune
• Macron’s Ordeal by Street Protest Begins
The hardline CGT labor union is launching strikes and demonstrations across France Tuesday in what is the stiffest challenge yet to President Emmanuel Macron’s labor market reforms. Macron’s campaign had got off to a good start when two of the country’s biggest unions said they wouldn’t join the protests, which are set to disrupt rail, road, and air travel among other things. The chance of the reforms sticking will increase if the turnout for today’s strikes is low. Bloomberg
• Western Digital Set to Gain as Toshiba Bows to Tokyo’s Pressure
Toshiba is set to sell its prized memory chip business to consortium led by Western Digital for some $18.3 billion, according to Japanese media reports. That’s the solution favored by the Japanese government, which wants a quick end to distractions from Toshiba’s clean-up of the Fukushima nuclear site. Western Digital’s pre-emptive rights over the business’s main operations mean that a sale to either of the other bidders, Foxconn and Bain Capital, would be harder to execute. Toshiba’s board is due to meet Wednesday to take a formal decision. Fortune
Around the Water Cooler
• The Strange, Belated Rediscovery of Personal Responsibility
The U.S. filed suit against Paul Mangione, Deutsche Bank’s former head of subprime mortgage trading, accusing him of misleading investors over $1 billion worth of securitizations prior to 2008. The suit seeks only a monetary penalty from Mangione, but is a rare instance of the government going after individuals for their role in causing the crash and subsequent recession. As such, it could pave the way for many more similar lawsuits if successful. The DoJ had settled with Deutsche over its fraudulent mortgage business earlier this year for $7.2 billion. FT, metered access
• Meg Whitman Joins Dropbox Board
Meg Whitman took a board seat at Dropbox, reviving speculation over a possible IPO for the online storage provider, but at least ending speculation over her own future. Whitman had been linked with the CEO vacancy at Uber, and had also stepped down from the board at HPE’s sister company HP in July, raising questions about how she would allocate her time in the future. HPE’s shares, which have lost nearly half their value this year, rose 1.8%. Fortune
• Dow Management Yields (a bit) to Investor Pressure
DowDuPont's management is ready to compromise with investors who have been challenging its plans to split the freshly-merged company into three new entities, according to The Wall Street Journal. The WSJ said the company will move parts of the former Dow Corning's silicone technology business into the unit that will house specialty chemicals, reducing the size of the biggest of the three future companies (which houses packaging infrastructure and consumer care). Investors such as Trian, Third Point and Jana Partners had argued the silicone business would command a higher valuation in the specialty chemicals company, and had accused management of 'empire-building'. WSJ, subscription required
• May Advances Brexit But Can't Stop Boeing
Prime Minister Theresa May survived a first challenge to key legislation underpinning the U.K.’s exit from the EU. In a first reading, none of her Conservative MPs voted against the “EU Withdrawal Bill”, despite grumbles that it represents a power grab by government at the expense of parliament. Elsewhere, May interceded personally with President Trump to get Boeing to relent on an anti-dumping action against Bombardier, which threatens the existence of one of the biggest employers in Northern Ireland. May’s government is dependent on the Northern Irish DUP party for a majority in the House of Commons. Fortune
Summaries by Geoffrey Smith; geoffrey.smith@fortune.com
@geoffreytsmith
