DealBook Briefing: A Shutdown Looms, but Markets Aren’t Shaken (Yet)

Good Friday morning. We’re warily waiting to see if the government shuts down. How Goldman Sachs alumni churned through the Trump administration. And how bad did things at Uber get under Travis Kalanick?

So far, the markets don’t seem bothered. S. & P. 500 futures were up this morning.

Will that change as the Senate looks deadlocked over the House’s stopgap funding bill? Democrats so far appear united on wanting a permanent shield for the young immigrants known as Dreamers (something C.E.O.s like Tim Cook and Steve Schwarzman support), and Senate Republicans need 60 votes to pass the funding bill.

What’s in the House measure: Money to keep the government open for a month, six years’ funding for the Children’s Health Insurance Program, and the delay or suspension of several taxes tied to the Affordable Care Act.

Democrats’ reaction: House Minority Leader Nancy Pelosi said, “This is like giving you a bowl of doggy doo, put a cherry on top and call it a chocolate sundae.”

Why businesses should care: If Democrats force a shutdown and win the escalating political battle, they could have more clout to push back against President Trump’s agenda, including further deregulation of industries. If Republicans win, they could add to legislative momentum from their tax overhaul victory.

The Washington gossip: How Mr. Trump butted heads with his chief of staff, John Kelly.


Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.


Dina Powell is gone. So is Steve Bannon. Anthony Scaramucci was barely there. And soon, Gary Cohn is expected to leave. What was expected to be a big contingent of Goldman Sachs alumni in the Trump administration is down to, primarily, Steven Mnuchin.

Here’s what Newt Gingrich told Jim Stewart of the NYT:

The Washington flyaround

• The Senate is weighing whether to clamp down on Chinese acquisitions of U.S. tech companies. (Axios)

• The White House is considering appointing John Williams, the head of the San Francisco Fed, as vice chairman of the Federal Reserve, according to unnamed sources. Meanwhile, a vacancy at the New York Fed has given critics of Mr. Trump hope of being able to partially counter the president’s economic agenda (WSJ, NYT)

• Mick Mulvaney, the interim head of the Consumer Financial Protection Bureau, sought precisely $0 for the agency’s budget this quarter. (NYT)

• Could the tax law — and companies like Apple that are repatriating cash — boost the dollar? (CNBC)

Pretty rough, according to Bloomberg Businessweek’s latest cover story. Here’s a detail about Mr. Kalanick’s apology to Fawzi Kamel, an Uber driver with whom he had had a heated, and videotaped, argument:

Still, Mr. Kalanick is doing OK in some respects. He’s officially a billionaire after a consortium led by the SoftBank closed its $9.3 billion investment in Uber yesterday.

SoftBank is already questioning Uber’s direction

A senior executive at the Japanese tech giant, who is set to become an Uber director, is already challenging the ride-hailing giant’s strategy of worldwide domination. It should focus on its core markets in the U.S., Europe, Latin America and Australia, Rajeev Misra told the FT.

Mr. Misra insisted that his suggestion wasn’t about cutting losses but about focusing on promising areas for growth. On Twitter, our colleague Mike Isaac had, shall we say, a toughly worded assessment.

Carl Icahn

He wants Xerox, of which he owns a 9.7 percent, to renegotiate a joint venture with Fujifilm. And if the board won’t do it, he wants them replaced. Also, he encouraged Xerox’s talks with Fujifilm about potential transactions.

Bill Ackman

Lex writes of the hedge fund mogul’s plan to more than double the management stake in his firm’s publicly traded investment vehicle:

Twenty cities got a rose from Amazon and are advancing to the next stage of the competition for its second headquarters.

What New York City, Atlanta, Toronto, Denver and the others can expect, according to Nick Wingfield of the NYT:

Some observations

It’s notable that three contenders are in the D.C. area. And would Amazon dare annoy Mr. Trump by picking Toronto?

Rejects’ reactions

• Detroit: “This is the N.F.L. Economic development at this level, it ain’t beanbag,” said Sandy Baruah of the Detroit Regional Chamber, who said that the city fell short on developing and attracting talent.

• San Diego: Cindy Gompper-Graves of the South County Economic Development Council said that the city might have done better if California had been clearer about potential incentives.

Critics’ corner

• Tom Buerkle writes, “Hundreds of cities hoped Amazon would think outside the box, but a desire for talent and a welcoming environment led it to the usual hot spots.” (Breakingviews)

• Brian Alexander worries about how cities court big companies: “The way most cities pursue that goal — by offering to forfeit enormous amounts of tax revenues — produces outcomes that have worried many economists for years.” (Atlantic)

The S.E.C. questioned how the virtual currency’s volatility and potential illiquidity could be squared with exchange-traded funds, which must calculate a fair market price for their portfolio at the end of every trading day and let investors cash out easily.

And Europe’s Securities and Markets Authority said that it may restrict retail investors from buying into derivatives that let investors bet on the price of virtual currencies without owning them outright (so-called contracts for difference).

A public service announcement: If Santa left you Bitcoin under your virtual tree, or if you just bought some, you need to report it to the I.R.S. The tax collector regards virtual currencies as property, not money.

In the restaurant industry, it’s involved women stepping up. Here’s what Shannon White, the C.O.O. of John Besh’s restaurant group in New Orleans, said of taking over after the eponymous restaurateur left amid scandal:

Meanwhile, a study by McKinsey & Company found that companies with more diverse executive teams tended to be more profitable than their peers.

The creator of the Shitty Media Men list speaks: Moira Donegan said that the conversation about harassment will continue. “I think that every time we get a little louder, and we get a little closer to making the changes that actually need to be made,” she told the NYT in a video interview.

From a LinkedIn post by Glenn Kelman, the online real estate brokerage’s C.E.O.:

Read the whole thing. Mr. Kelman also reflects on flying commercial to save money (which left him with delays and Sbarro’s pizza) and nerves about whether the I.P.O. would take off.

• Tom Hill, the veteran Wall Street deal maker who has long led the Blackstone Group’s alternative-asset business, is stepping down as the division’s C.E.O.; he’ll remain chairman. John McCormick will take over as C.E.O.

• Bank of America Merrill Lynch’s global head of tech, media and telecom investment banking, Anwar Zakkour, is stepping down, according to CNBC.

• Snap laid off two dozen workers in New York and London, half of them content producers, consolidating its content work in Los Angeles. (CNBC)

• Investment banks often say that underwriting debt and equity issues for companies brings in trading activity and vice versa, but big banks’ latest results don’t always back that up. (NYT)

• IBM’s revenue grew for the first time in five-and-a-half years, but not enough to erase industry analysts’ doubts. (NYT)

• Researchers at the Electronic Frontier Foundation and Lookout said they had evidence that Lebanon’s intelligence agency had spied on thousands of people via their computers and cellphones, primarily via decoy apps. (NYT)

• Wyndham Worldwide will buy La Quinta’s hotel operations for $1.95 billion. (Reuters)

• Dogus Holding is working with advisers to spin off some of its restaurants into a separate unit for a potential initial public offering. That would include the Nusr-Et steakhouse, founded by Nusret Gokce, or Salt Bae. (Bloomberg)

• Hackers who attacked a petrochemical plant in Saudi Arabia last year gained control over a safety shut-off system that is critical in defending against catastrophic events, according to security researchers. (WSJ)

• H.S.B.C. agreed to pay a $101.5 million penalty over attempts to manipulate foreign exchange markets, in a settlement with the Department of Justice that lets the bank avoid pleading guilty to criminal charges. (FT)

• ADT, the security company owned by Apollo Global Management, said on Thursday that its initial public offering was priced well below its expected range. (Reuters)

• The U.S. government will not approve any investment by HNA Group until the Chinese conglomerate provides adequate information on its shareholders, according to a person familiar with the situation. (Reuters)

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