DealBook Briefing: Can Merkel Win Anything on Trade From Trump?

Good Friday morning. On the earnings calendar: Exxon Mobil and Chevron. Some links require subscriptions.

Can Angela Merkel change Trump’s mind on trade?

The German chancellor is meeting with President Trump today, in an 11th-hour attempt to avoid a U.S.-Europe trade battle. European leaders are feeling pessimistic about that. (After all, President Emmanuel Macron of France didn’t seem to manage it, and he’s a Trump favorite.)

More on her challenge, from the NYT:

Or as a former State Department official told the NYT, “Merkel is going to Washington and it looks like the U.S. just doesn’t care.” But a foreign relations expert said, “Never underestimate Merkel.”

In related news: Oleg Deripaska hopes European governments can convince the U.S. to ease sanctions on his aluminum producer, Rusal.


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


What kept Deutsche Bank from cutting (until now)

Yesterday’s announcement by the German lender that it was retrenching was a long time coming — too long, for many critics. Peter Eavis has some potential reasons it decided to retreat so late in the game:

• Hubris: Unlike rivals, Deutsche Bank didn’t raise capital after the financial crisis, ultimately leaving it significantly weaker. By the end of last year, its tangible equity capital ratio was still below JPMorgan Chase in 2011. (Perhaps Germany’s banking regulator should have applied more pressure, as Switzerland’s did.)

• Fear: Did Deutsche Bank’s leaders worry about scaling back the investment bank because of its huge importance for revenue? (Last year, it provided 54 percent.) And about the cost of unwinding some trades?

Who could benefit from Deutsche’s pullback? JPMorgan, Bank of America and Citigroup on the debt side, and Goldman Sachs, Morgan Stanley and JPMorgan on the equity side, according to analysts at Keefe, Bruyette & Woods.

Did NBC News do enough on harassment allegations?

The news organization asserted that the complaints that led to Matt Lauer being ousted from the “Today” show were the first of their kind. Others disagree:

• Ann Curry told the WaPo that she had approached NBC News’s management team after a female staff member said Mr. Lauer had sexually harassed her. A company spokesman disputed this.

• Linda Vester, a former correspondent, told Variety that she had been sexually harassed by Tom Brokaw. He denied the accusation.

What NBC News has done: Brought in a consultant for in-person sexual harassment prevention seminars and pledged to share the results of an internal review.

Elsewhere in sexual harassment: Women who have sued Uber saying its drivers sexually assaulted them have asked the company’s board to release them from arbitration agreements.

The political flyaround

• Under questioning on Capitol Hill, Scott Pruitt deflected questions about E.P.A. scandals, leaving many observers to think he may keep his job. (NYT)

• Budget deficits could prompt the Treasury Department to increase U.S. government borrowing, further pushing up yields. (Bloomberg)

• A former federal judge, Barbara Jones, was appointed as special master to oversee the review of materials seized from Michael Cohen. Mr. Trump distanced himself from Mr. Cohen’s legal troubles, while conceding it was him being represented in the Stormy Daniels matter . The Senate Judiciary Committee advanced a bill to protect Robert Mueller. The federal prosecutor leading the Cohen investigation is Thomas McKay, 32.

• The leading candidate in Mexico’s presidential race wants to cut ties between the U.S. and Mexican energy industries. (NYT)

• The Senate confirmed the White House’s nominee for head of the F.T.C., Joseph Simons, as well as four commissioners. (Bloomberg)

YouTube’s path away from scandal

The online video giant has largely avoided the political heat that has burned Facebook, but it has still lurched from crisis to crisis, particularly over upsetting videos.

Bloomberg Businessweek took a visit to its complex in San Bruno, Calif., to discuss its plans for avoiding a turn in the public stocks. It’s hiring many more moderators, but with a longer-term goal:

Today at Facebook: The chief technology officer, Mike Schroepfer, faced hours of questioning from British lawmakers yesterday — and they still want to talk to Mark Zuckerberg. Facebook’s annual developer conference looks less festive this year. Roger McNamee, an early investor in Facebook, thinks the company needs the sort of regulation that kept AT&T in one piece in the 1950s.

Elsewhere in tech: Tesla shareholders will vote on whether to hire an independent chairman. The European Commission has proposed transparency rules for search rankings.

Tech earnings corner

• Amazon’s doubled its profit in the first quarter, and said it would raise the price of Prime membership to $119 a year from $99. It’s growing into something harder to manage, says Jennifer Saba of Breakingviews — and something fundamentally more profitable, says Shira Ovide of Gadfly.

• Microsoft’s profit jumped 35 percent. Its secret was “dullness and durability,” says Rob Cyran of Breakingviews.

• Intel’s profit surged 50 percent, helped by sales of server chips and other data center equipment.

Why is Shari Redstone so keen to merge CBS and Viacom?

Sure, there’s logic to it, in the face of the threat from Netflix and Amazon. But as the two companies continue to bicker over price and executive chairs, is there another reason Shari Redstone is pushing the idea so hard, when other CBS shareholders seem uninterested?

According to Bill Cohan of Vanity Fair, she’s getting back at her father, Sumner:

The deals flyaround

• A Walmart deal for a majority stake in Flipkart, at a roughly $20 billion valuation, is expected soon. (NYT)

• Could Sprint and T-Mobile announce a merger as early as next week? (Reuters)

• Stacey Snider, the chairwoman of 20th Century Fox, struck an elegiac tone for her movie studio as its parent company works to sell it and other assets to Disney. (NYT)

• AT&T and Time Warner have spent $1.4 billion in fees on their proposed deal. (WSJ)

• WeWork is selling $702 million worth of junk bonds. The deal was a sign of resilience in the high-yield debt markets. Axios dove into the company’s new financial metric, “community adjusted Ebitda.”

• Sequoia Capital has raised $6 billion for what’s now the biggest U.S.-based venture fund. (WSJ)

• K.K.R. is reportedly setting up a social impact investment fund. (Reuters)

• Dosh, a start-up that helps companies offer consumers cashback deals, raised $44 million from investors like PayPal. (VentureBeat)

Revolving door

• Michael Zeisser, Alibaba’s top deal maker in Silicon Valley, has left, reportedly over disagreements with the vice chairman, Joe Tsai. (Recode)

• Britain’s takeover panel has appointed Simon Lindsay, Citigroup’s head of British M.&A., as its next director-general. (FT)

The speed read

• The owner of the Jacksonville Jaguars, Shahid Khan, offered to buy the English national soccer stadium, Wembley. (NYT)

• MoviePass says everything is fine now. Some of its customers don’t believe that. (NYT)

• The S.E.C. penalized the private equity firm Welsh, Carson, Anderson & Stowe for failing to disclose a conflict of interest. (WSJ)

• The law world is buzzing over the departure of another senior partner at Cravath, Swaine & Moore for the disruptive Kirkland & Ellis: He’s getting $11 million a year, plus a signing bonus. (NYT)

• The gallery owner David Zwirner said he would pay more to be at art fairs if it helped smaller galleries take part. (NYT)

• Fannie Mae and Freddie Mac have been supporting the market for rental housing, raising questions about competition. (FT)

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