CEOs discuss how recession fears line up with what they’re seeing on the ground

Peggy Johnson, Magic Leap, on Centre Stage during day one of Web Summit 2021 at the Altice Arena in Lisbon, Portugal.
Peggy Johnson, Magic Leap, on Centre Stage during day one of Web Summit 2021 at the Altice Arena in Lisbon, Portugal.
Harry Murphy—Sportsfile/Web Summit/Getty Images

Good morning.

I wrote Friday about the conundrum revealed by our June CEO survey, done in collaboration with Deloitte: the vast majority of CEOs (67%) see a global recession coming. But many (50%) still believe the prospects for their own companies continues to be strong or even very strong. Why the disconnect?

In a search for answers, Fortune gathered members of its CEO Initiative yesterday. Some excerpts from the conversation below:

“We’re not seeing any softness at all. We have a recession readiness plan, and we track a bunch of external and internal KPIs… But we’re not seeing any reason to react.”
—Kevin McCarty, CEO, West Monroe Partners

“People are still spending hugely. They have savings from government programs. And that’s why people are travelling tremendously… You can’t take anything from what we currently see to tell you what’s going to happen in the fourth quarter. It’s too early.”
—Glenn Fogel, CEO, Booking Holdings

“We work with very small businesses, your dry cleaners to your accountants, and their receipts are not going down… However, their costs are going up.”
—Elizabeth Gore, CEO, Hello Alice

“Everyone is doubling down on technology investments. There is no slowdown.”
—Suresh Muthuswami, chairman, North America, Tata Consultancy Services

“Enterprises are looking for ways to be more efficient. People are looking for tools that can help them in their remote or their hybrid environments. I’m cautiously optimistic.”
—Peggy Johnson, CEO, Magic Leap

“You may be seeing a belief that the economic headwinds are still a ways off and more of a calendar 2023 issue than the immediate future. There’s also this attitude coming out of the pandemic, that with all the challenges that got thrown at everyone, we’ve gotten pretty good at being able to navigate these kinds of things.”
—Joe Ucuzoglu, CEO, Deloitte U.S.

“You have these supply shocks. You have this war in Ukraine that is obviously impacting energy and food costs. You have China locked down. You have this deglobalization. These are all factors that the Fed cannot control. When the Fed raises rates, that doesn’t necessarily mean it’s improving these other factors.” 
—Jenny Johnson, CEO, Franklin Templeton

“Markets do have short memories. Most market participants haven’t been through lots of different cycles where we haven’t had the Fed to bail us out.”
—Michelle Seitz, CEO, Russell Investments

“None of us in the spring of 2020 understood the dramatic effect of the amount of capital that was pumped into the market by governments around the world.”
—Henry Nassau, CEO, Dechert

“If the interests rate end up at three or four percent, that’s not going to damage the balance sheets of corporate America. If you get to six or seven percent, that’s gonna hurt a lot.”
—Rohit Kapoor, CEO, EXL

“Right now, when I look at the first quarter and into the second quarter for Genworth, we still seem to be fine. But…while I think there is a chance we have a relatively soft landing, my own view, looking at history, is that it’s likely to be bumpy.”
—Tom Mcinerney, CEO, Genworth

“What we are focused on, instead of point forecasting, is really running scenarios and looking at much broader ranges. The days of planning your budgets by a single point of what you think’s going to happen are over. There’s too much uncertainty.”
—Kristin Peck, CEO, Zoetis

“I’m worried a recession, soft or hard, will force companies to lose their focus on diversity, equity and inclusion initiatives.”
—Rob Lake, CEO, The FIVE Network

“We are not seeing that yet.  There is still a very large commitment to DEI, and a lot of intentionality.”
—Lorraine Hariton, CEO, Catalyst

“The demand for the transformative learning experiences that we offer our customers…is still very strong. We are seeing a little bit of softness in the transactional side of the learning businessthe one-off classes.”
—Jeff Tarr, CEO, Skillsoft

“People are investing a tremendous amount in their internal workforces.”
—Frida Polli. CEO, pymetrics

“In the tech space, the labor shortage is still acute… Even if we go through a recession, I think the labor shortage will continue.”
—Aiman Ezzat, CEO, Capgemini

“The truth is, nobody knows what’s going to happen. What we know is…there are going to be things that are completely unforeseen and unpredictable. Our reality is that things change all the time and the pace and the degree to which it impacts us is unprecedented, and it’s not going away.”
—Janeen Gelbart, CEO, Indiggo

Ditto to the last point. More news below.

Alan Murray


European cars

From 2035 onward, the European Union will only allow the sale of new cars and vans that can boast zero CO2 emissions. The agreement follows mammoth negotiations. Germany’s coalition had been riven over the issue, and it eventually pushed for a compromise that keeps the door open for potential synthetic fuels that don’t emit CO2. That also brought Italy on board. Fortune

Meta and abortion

Following the Supreme Court’s striking-down of Roe v. Wade last week, Instagram has started hiding posts that mention abortion, or requiring users to verify their age before viewing posts that give information about abortion. The Meta property is, along with stablemate Facebook, also deleting posts that offer mail-order abortion pills in states that don’t allow their use. Associated Press

TikTok trouble

FCC Commissioner Brendan Carr has written to Apple CEO Tim Cook and Alphabet CEO Sundar Pichai, asking them to take TikTok out of their app stores because it sends data to Beijing. Carr: “TikTok is not what it appears to be on the surface. It is not just an app for sharing funny videos or meme. That’s the sheep’s clothing… At its core, TikTok functions as a sophisticated surveillance tool that harvests extensive amounts of personal and sensitive data.” Fortune

Turkey wins

Turkey has relented in its opposition to Finland and Sweden joining NATO, meaning the alliance’s expansion can now go ahead. Ankara got the Nordic nations to agree not to support Kurdish rebels in Syria (where Turkey is now likely to launch an attack) and to tighten their anti-terror laws. Sweden and Finland are also dropping their arms embargoes on Turkey, which were instituted the last time it violently waded into Syria. Fortune


Chinese propaganda

A China-linked online propaganda outfit has been caught running fake-Texan Twitter and Facebook accounts that it used to publicly criticize a new Texan plant that’s going to be built by the Australian rare earths giant Lynas. The sector is dominated by China and strategically important to pretty much everyone. The Dragonbridge group’s fake accounts attacked Lynas over supposed environmental and health concerns associated with the planned plant. The group also targeted other North American firms. Washington Post

Back to… oh

Remember when Elon Musk ordered all Tesla workers to get back the office? They tried! But it turns out there aren’t enough desks or parking spaces, so managers told some employees to go back to working from home some days. (Bonus read: Tesla has laid off almost 200 employees in its Autopilot team—mostly relatively low-paid data-labelers.) Fortune

Chip challenge

Chipmakers continue to throw their weight around as countries clamor for onshored manufacturing. Intel CEO Pat Gelsinger has now warned Congress that, if they don’t unlock the $52 billion in government subsidies that have been promised under the CHIPS Act, Intel will “end up investing a lot more in Europe as a result.” Fortune

Trump, Jan. 6

Then-President Donald Trump was so keen to join the Jan. 6, 2021 march on the Capitol that he tried to grab his limo’s steering wheel and assaulted the head of his Secret Service detail, according to House committee testimony from former White House aide Cassidy Hutchinson. White House Counsel Pat Cipollone had warned her that, if Trump were to march on the Capitol, “we’re going to be charged with every crime imaginable,” Hutchinson testified. Fortune

This edition of CEO Daily was edited by David Meyer.

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