DealBook Briefing: Where Do We Go After Dow 25,000?

Good Friday morning. What are the odds of the markets continuing to rise after the Dow surpassed 25,000? The White House is grappling with revelations from the Robert Mueller investigation and with the fallout from Michael Wolff’s book. And what’s next for the marijuana industry?

David Tepper of Appaloosa Management thinks so, telling CNBC:

A dissenting voice: The market historian James Stack told Jim Stewart of the NYT: “A correction would be healthy. The longer we go without one, the greater the risk this will end badly. A lot of people will get hurt.”

The next thing to look out for: It’s Jobs Friday today. A Reuters survey of economists expects the nonfarm payroll report to show a gain of 190,000 for December.


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


Legal experts are poring over the question, after a report by Mike Schmidt of the NYT that President Trump told the White House’s top lawyer to stop Jeff Sessions recusing himself from the Russia investigation.

From Mr. Schmidt’s story:

About that Michael Wolff book: “Fire and Fury” is to go on sale today, ahead of schedule — and despite legal threats from Mr. Trump.

So a steady drip of excerpts — from Steve Bannon calling a meeting between Donald Trump Jr. and Russians “treasonous” to the former adviser suggesting that money laundering charges were in the offing — is about to become a flood.

The most damaging may be the book’s descriptions of Mr. Trump’s erratic behavior and of aides’ private contempt for their boss. Many Washington reads are underway (you start in the index, looking for your name).

The firestorm has also propelled Mr. Wolff from local media gadfly into national newsmaker.

The fallout for Mr. Bannon: Rebekah Mercer, the adviser’s longtime benefactor, disavowed him in a rare public statement. And Breitbart’s board members have debated whether to oust him as the media organization’s chairman, according to the WSJ, citing unnamed sources.

About that money-laundering accusation: Tim O’Brien of Bloomberg View says that Mr. Bannon’s allegation is as serious as any claim of “treason.”

The Washington flyaround

• Mr. Trump may have dismantled his voter fraud commission, but he wasn’t happy about it. (NYT)

• Bipartisan talks on protecting the young immigrants known as Dreamers are starting to fray amid disagreements on a border wall and other immigration policies. (Politico)

• Ajit Pai, the chairman of the F.C.C., canceled his speaking appearance at the Consumer Electronics Show, citing death threats, according to unnamed sources. (Recode)

Already, its decision to let prosecutors more freely enforce federal law against the drug has taken its toll on publicly traded pot-related companies.

• Shares in Scotts Miracle-Gro, whose C.E.O. has courted marijuana growers, dropped as much as 5 percent yesterday.

• Those in Cannabis Sativa Inc., which produces edibles and other pot-related products, plunged 24 percent.

• And shares in GrowGeneration, a cannabis farming company, fell 21 percent.

It’s a shocking turnaround, too. Cannabis-related shares had rallied this week as California began recreational marijuana sales.

The response

• Senator Cory Gardner, Republican of Colorado, threatened to hold up Justice Department appointments.

• The head of California’s Bureau of Cannabis Control, Lori Ajax, said the state was legalizing as planned.

Weekend pot reading: If you’re a budding cannabis entrepreneur and need financing, you’ll probably have to turn to a small credit union outside Denver.

Yes, corporations like Apple will have to repatriate overseas earnings under the new code. And the tax analyst David Zion estimates that they will pay some $235 billion.

But he also reckons that the new repatriation treatment alone is worth $500 billion more compared with the old law. And analysts in general think the overhaul will help corporate America.

As J. Richard Harvey, a Villanova law professor, told Jesse Drucker of the NYT, multinationals have sought a change like this for over a decade:

Energy companies, obviously. And the president of the National Ocean Industries Association, Randall Luthi, called the offshore leasing proposal “bold and broad.”

But investor reaction yesterday was fairly muted: American depositary receipts in Royal Dutch Shell and BP, for instance, each rose less than 1 percent.

What the proposal will do

From Lisa Friedman of the NYT:

Interior Department Secretary Ryan Zinke had a simpler explanation: “We’re going to become the strongest energy superpower.”

What it won’t

Immediately green-light drilling.

Who’s opposed

Environmental activists, obviously. But also nearly a dozen governors, including the Republicans Chris Christie of New Jersey and Rick Scott of Florida.

That is, if he follows through on his plan to sell about 29 percent of his stake in Uber to a group led by SoftBank, as Bloomberg reports. (We hear that the report is accurate.)

What he stands to make: about $1.4 billion.

More from Eric Newcomer of Bloomberg:

The tech flyaround

• Intel struggled for months to address Meltdown, one of two computer chip security flaws that came to light this week. Apple said that nearly all of its computing devices, including iPhones, were vulnerable and that it was issuing updates. (WSJ)

• What you can do to protect your devices against the flaws. Briefly: Update! (NYT)

• A close look at Iran’s hackers, who have begun cyberespionage campaigns against the U.S. and others. (NYT)

• China’s internet users increasingly want privacy. Their government wants more data and more control. (NYT)

• Mark Zuckerberg’s 2018 personal goal: “fix” Facebook. He’s also looking closely at encryption and digital currencies. (Reuters)

• Don’t rush to regulate A.I., Andrew Burt, the chief privacy officer of the data management company Inmuta, writes in an NYT Op-Ed. (NYT)

A deal is reportedly close, according to the WSJ, citing unnamed people. But the eventual buyer is expected to pay less than $500 million, and shareholders like the Weinsteins, the advertising giant WPP and SoftBank could be wiped out. (Remember that Tom Barrack’s Colony Capital had agreed to buy the embattled studio, but backed out.)

Who’s in the running, according to Ben Fritz and Keach Hagey of the WSJ:

The media flyaround

• Disney’s proposed acquisition of Fox assets has raised questions about the future for Fox’s television properties, including, “Am I going to have to put Mickey Mouse in ‘American Horror Story’?” (NYT)

• Newsroom employees at the L.A. Times began voting on unionization yesterday. (NYT)

• H. Brandt Ayers, the former publisher of The Anniston Star in Alabama, resigned on Thursday as chairman of the newspaper’s parent company after admitting to spanking a reporter in the 1970s. (NYT)

• Jimmy Iovine will leave Apple in August, roughly four years after he and Dr. Dre sold Beats to the tech giant. (Hits)

• Neiman Marcus’s C.E.O., Karen Katz, plans to step aside, according to unnamed people, as the luxury retailer struggles with weak sales growth and heavy debts. (WSJ)

• Hassim Dhoda, a senior money manager at Moore Capital Management, will leave Louis Bacon’s hedge fund to start his own firm. His old boss is investing. (Bloomberg)

• Sprint named Michel Combes, the C.E.O. of Altice until two months ago, as its new chief financial officer. (FT)

— The analyst Ryan Selkis on the digital currency craze that briefly made the C.E.O. of Ripple richer than Mark Zuckerberg.

• Brookfield bet $4.6 billion on Westinghouse, which faces few major competitors while building nuclear reactors is out of fashion. (Bloomberg)

• Insurers are set to pay out a record $135 billion on losses from natural disasters in 2017, according to Munich Re, the world’s largest reinsurer. (NYT)

• Brendan Byrne, who as governor of New Jersey governor brought in the state’s first income tax, died on Thursday. (NYT)

• HNA has walked away from late-stage negotiations for a stake in Value Partners Group, a Hong Kong fund house, according to people with knowledge of the matter. (Bloomberg)

• Google led a $120 million investment to help the Chinese online gaming platform Chushou reach more overseas viewers. (Reuters)

• Aurora, a self-driving car start-up, agreed to supply technology to the Volkswagen Group and Hyundai. (NYT)

• The owner of Quiksilver surfwear has agreed to buy Billabong for $315 million, according to a person familiar with the situation. (WSJ)

• The private equity firm Silver Lake has agreed to buy a majority stake in the online education company Weld North Education from K.K.R. (WSJ)

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