Good morning.
Salesforce stock soared a stunning 27% yesterday—its biggest jump ever—on the day after it was announced that it would be added to the Dow Jones index. Amgen and Honeywell, which are also being added to the Dow, rose modestly as well, while the stocks being bumped—Exxon, Pfizer, and Raytheon—all fell. That makes sense, since being in the index assures companies an extra influx of money from index funds.
But here’s an interesting fact: In recent years, those added to the Dow have actually performed worse than those that are dumped. Looking at the last decade, companies added to the Dow gained only 0.3%, while those removed grew 10.37%. Starting from 1999, those added lost 10.1% and those booted lost only 2%. So maybe being added to the index isn’t such a good thing after all?
Salesforce investors seem confident their stock will buck the historical trend—and that confidence was fed by the company’s strong earnings report on Tuesday. Meanwhile, Tesla’s ever confident investors sent the electric car maker’s market value over $400 billion yesterday. That makes it more valuable than Walmart— the world’s biggest company.
Separately, 84% of the CFOs surveyed by Deloitte for their quarterly survey, coming out later today, say the stock market is overvalued…the second highest reading in the survey’s history. Only 2% believe it is undervalued.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Laura makes landfall
Hurricane Laura barreled ashore in Louisiana early Thursday as a Category 4 storm. The storm is bringing a wall of water that is predicted to reach 20 feet in height, a surge the National Hurricane Center called "unsurvivable". That water could reach as far as 40 miles inland, effectively annexing low-lying regions into the Gulf of Mexico. More than 1.5 million people in coastal Texas and Louisiana are under an evacuation order. New York Times
TikTok CEO Quits
TikTok CEO Kevin Mayer has resigned after just four months on the job, days after the video sharing app, owned by China's ByteDance, asked a federal judge to block the Trump administration from banning it in the U.S. A spokeswoman said: "We appreciate that the political dynamics of the last few months have significantly changed what the scope of Kevin’s role would be going forward." Fortune
"GolfGate" resignation
The EU's trade chief, Phil Hogan, a key bridge between the bloc and the Trump administration, has stepped down over criticism he broke health and safety rules in an incident now known as "GolfGate", when Hogan attended a dinner at a golf club in his native Ireland that flouted COVID-19 social-distancing mandates. The dinner has already claimed an Irish minister's career. Bloomberg
HSBC in the middle
Secretary of State Mike Pompeo alleged on Wednesday that HSBC had continued to keep accounts for people on the U.S. government's sanctions list, while closing accounts linked to people in Hong Kong's pro-democracy movement. Pompeo blamed "the Chinese Communist Party's coercive bullying tactics against our friends in the United Kingdom." HSBC is headquartered in London, but was founded in Hong Kong in 1865. Fortune
AROUND THE WATER COOLER
Kenosha shooting
The Justice Department will open an investigation into the police shooting of Jacob Blake in Kenosha, Wisconsin, as protests spread and a teenager who shot and killed two people in the aftermath of the attack was arrested. Protestors have poured into the city's streets in recent days, sometimes met by counter protestors. President Trump tweeted on Wednesday that he would send the National Guard to the city. New York Times
Covid Gag Rules
This Businessweek story covers a "silencing spree" across American businesses, with hundreds of employees across a broad range of companies allegedly told not to share information about COVID-19 cases, or even raise their concerns about the virus—lest management retaliate against them. One complaint alleges that a trailer manufacturer set its policy as "Don't ask, don't tell." Businessweek
Labor Day 2021
Oliver Kharraz, the CEO and founder of Zocdoc, a medical-care appointment booking service, and a doctor, writes for Fortune that he won't bring his employees back into the office for at least another year. "Safeguarding our employees’ health is paramount," he writes. "Companies should not require their teams to return until an effective vaccine or treatment is broadly available." Fortune
North Korean heists
U.S. government agencies warned Wednesday that North Korea was running a vast campaign to steal money to fund its nuclear weapons programs, from draining ATMs to spearphishing attacks. The heists have been underway since February and represent a resurgence, officials said. U.S. and UN officials say the efforts reap billions of dollars. WSJ
This edition of CEO Daily was edited by Katherine Dunn
