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| | December 4, 2015 | |
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| | Here are three mega/meta stories to watch this morning:
1) Central bankers are in the spotlight. Mario Draghi had a rare misstep yesterday, delivering less stimulus than the markets thought he had promised, prompting a global sell off. Meanwhile, unless this morning's employment report is disastrously worse than expected, Fed Chief Janet Yellen will finally raise interest rates this month.
2) U.S. healthcare is headed for (another) crisis. The Senate last night voted to repeal President Obama's signature accomplishment - the Affordable Care Act - while House Speaker Paul Ryan said Republicans planned to "replace every word of Obamacare." This is election year posturing. But even more sober observers see a reckoning coming. "I think there is a perfect storm building," says Sir Andrew Witty, CEO of GlaxoSmithKline, who visited Fortune's offices yesterday as we were packing for our move today to downtown Manhattan. Witty believes a combination of high health care costs, excess regulation, and election-year jockeying, are going to force a rethink of U.S. healthcare policy in the next few years. I think he's right - which is one reason why I think Pfizer's decision to move to Ireland is so badly timed. (You can read my editor's note on this topic in the upcoming issue of Fortune magazine here.)
3) As climate talks continue, clean energy is struggling in the U.S. Yesterday, David Crane, the farsighted CEO of NRG Energy who pursued an aggressive clean energy investment plan at the utility, stepped down under pressure from investors over the poor performance of those investments. Meanwhile, we have a story in the new issue of Fortune magazine on investor Vinod Khosla's troubles with a Mississippi biofuels plant, which is well worth reading here. Elon Musk said yesterday a carbon tax will be needed to move the world off fossil fuels.
If you are interested in the future of energy - and if you aren't, you should be - sign up for our Brainstorm E conference, which will bring together the smartest people we know in this field May 16-17 in Carlsbad, California. Register here.
More news below.
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| | Top News | |
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| | • Friday jobs report is last peak for Fed The Friday jobs report is being viewed as the final major data point that Federal Reserve policy makers will have in hand when they decide whether to raise interest rates later in December - the first such increase in more than nine years. While economists are forecasting a 200,000 increase in payrolls for the month of November, there have been big month-to-month swings throughout 2015. Anything over 100,000 is expected to satisfy the Fed that the economy remains on track. Many observers that watch the Fed say they expect a rate increase to occur. New York Times (subscription required) • Avon investors threaten proxy war Reports have swirled that Avon Products is nearing a deal to sell the beauty products company's ailing North American business to private equity. That potential deal is being challenged by a group of activist investors with their own ideas of how to turn around the direct-seller's business. An activist investor group, led by Barington Capital, says Avon can still fix its business and does not need private equity. Fortune • 2015 biggest M&A year ever A series of 112 deals announced on Wednesday this week officially made 2015 the biggest year ever for mergers and acquisitions, pushing global M&A volume to $4.304 trillion data provider Dealogic reported on Thursday. The prior record was achieved in 2007. At the current pace, $4.7 trillion of mergers would be signed in 2015. Why has M&A been so hot? Wall Street Journal points to increased boardroom confidence, cheap debt, and a pressure to become more efficient in a slow-growth economy as big factors. Wall Street Journal (subscription required) • Ex-Massey CEO convicted A jury convicted former Massey Energy CEO Don Blankenship of conspiring to violate mine safety rules in connection with the explosion that killed 29 mining employees at the company's mine in Montcoal, W.Va. in 2010. It was the nation's deadliest mining accident in 40 years. His conviction of the misdemeanor charge of conspiring to break mine safety regulations carries a maximum prison sentence of one year - he was acquitted of two felony charges. Fortune | |
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| | Around the Water Cooler | |
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| | • Zuckerberg defends family foundation Just two days after announcing his plans to donate $45 billion over time to a family foundation, Facebook CEO Mark Zuckerberg responded to criticisms about his philanthropic ambitions. He pushed back against accusations that the foundation was built as a vehicle for evading taxes and making financially motivated investments. Zuckerberg explained the foundation was structured as an LLC so it could fund non-profit organizations and make private investments - with the net profits from those investments also used to advance the Chan Zuckerberg Initiative's mission. Fortune • Digital wallet Alipay's next frontier China-based Alipay is gaining traction beyond its geographic roots, as a record number of Chinese are now using the service to shop with U.S. merchants - with the number of users that shopped from U.S. retail sites over Thanksgiving, Black Friday and Cyber Monday increasing 700% from last year. Alipay has 400 million registered customers, virtually all Chinese, who use the service to buy products online through their phones. The closest U.S. equivalent is PayPal, though Alipay is almost triple in size. Fortune • Lyft expands global alliance Ride-hailing app Lyft has expanded a global alliance to now include four companies - working with Ola in India, GrabTaxi in Southeast Asia, and Didi Kuaidi in China. The pact allows passengers to book cabs through each other's services when traveling, a way for users of all four companies to get rides overseas without having to download a new app. This group of companies, which also share some common investors, are angling to work together to better combat Uber - the market leader in the U.S. that has sought to expand aggressively abroad. Fortune | |
| | 5 things to know today | |
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| | OPEC Meeting and November jobs — 5 Things to Know Today. Today's story can be found here. | |
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