Good morning.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
With September upon us, the press is filled with stories on the 10-year anniversary of the financial crisis. We’ll continue to share the best of them with you, since the crisis was the defining economic event of our time. This weekend’s smartest comes from The Wall Street Journal’s Greg Ip, which you can read here.
A companion piece looks at what will trigger the next crisis. Top on the list: a spike in interest rates. But the big surprise from the economy this year is that despite 4% growth, unemployment below 4%, wage inflation of 2.9%, and the Fed’s unwinding of its balance sheet, rates on 10-year Treasury bills remain below 3%. No one would have predicted that even a year ago. If interest rates are going to be the downfall of the current economic run, there is certainly no sign of it now.
I continue to believe it’s geopolitics, not economics, that will more likely trigger the next downturn. While the economy continues to hum along with few signs of trouble, the world political order hasn’t looked so disorderly in decades. If you doubt that, read Robert Kagan’s essay in Saturday’s Journal which is excerpted from his coming book: The Jungle Grows Back: America and Our Imperiled World.
I’m heading to Toronto this morning, where Fortune tonight is cohosting a dinner with Prime Minister Trudeau for business leaders attending the Toronto Film Festival. Hoping to hear more about a successful resolution of the U.S.-Mexico-Canada trade treaty. On Friday, President Trump tried to ratchet up pressure on Canada, accusing the one-time ally of taking advantage of the U.S. for “decades,” and saying: “If I tax cars coming in from Canada, it would be devastating.”
News below.
Top News
Moonves Out
Les Moonves has stepped down as CEO and chairman of CBS, a few hours after a New Yorker piece detailed sexual misconduct allegations from six more women. This time Moonves stands accused of forcing women to perform oral sex on him, exposing himself to them, and using physical violence against them. Now he's out without any exit compensation, pending the results of an independent investigation, and CBS will donate $20 million of what would have been his severance to organizations supporting the #MeToo movement and workplace equality. New Yorker
Ma Going
Alibaba founder Jack Ma will hand over the executive chairmanship of his company in a year's time, with the recipient being CEO Daniel Zhang. At that point, Alibaba will be 20 years old. Ma told shareholders and customers: "I have put a lot of thought and preparation into this succession plan for ten years. This transition demonstrates that Alibaba has stepped up to the next level of corporate governance." CNBC
Trump Focus
President Trump tweeted triumphantly that Ford's decision not to import its smaller Focus Active cars to the U.S. from China—due to Trump's 25% tariffs against Chinese auto imports—meant Ford could make them in the U.S. instead. Except Ford won't be doing that because smaller cars are out of fashion in the U.S. and it only made sense to sell them there if they could be manufactured more cheaply than is possible in the U.S. Fortune
Apple Suppliers
The president also tweeted about how Apple should move production to the U.S. in order to avoid being hit by his anti-China tariffs—and the tweet knocked the share prices of several Apple suppliers in China, including Luxshare Precision, Shenzhen Sunway Communication and Suzhou Dongshan, all of which saw their value plummet by as much as 10%. Apple says Trump's next threatened tariffs will make products such as the Apple Watch more expensive. Reuters
Around the Water Cooler
Richemont CEO
Jerome Lambert is the new CEO of Richemont, the luxury goods group behind the Cartier and Piaget brands. Richemont actually hasn't had a CEO for the last year and a half—it scrapped the role after Richard Lepeu's retirement, giving the reins to a senior executive committee instead. Sales are up now, though, so Lambert's elevation from the COO role is apparently a sign of chairman Johann Rupert's confidence in how things are going. Reuters
Hurricane Florence
Hurricane Florence, which is headed toward the Southeast coast of the U.S., is getting stronger and is still likely to be extremely dangerous when it hits, most likely Thursday. South Carolina Gov. Henry McMaster warned that Florence may strike with winds in the 130-150 miles-per-hour range. The Carolinas and Virginia have declared states of emergency. NBC
Chinese Inflation
Chinese consumer inflation is at a six-month high. Why? Not Trump's trade war—instead, analysts say, the culprits are swine flu (affecting food prices) and bad weather (also affecting food prices, plus causing floods.) Rising oil prices also aren't helping, either. South China Morning Post
Australian Gold
Australian miners have made a "once-in-a-lifetime" discovery of gold, bringing up more than $10 million worth in just four days. The largest specimen of gold-encrusted rock weighed more than 90 kilograms (198 lbs,) and the cluster as a whole has so far yielded more than 9,000 ounces of the yellow stuff. Fortune
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
