DealBook Briefing: Why Some of Wall Street’s Smartest Are Still Worried

Good Monday morning. Wall Street machers are still worried about the markets. Unilever wants Facebook and Google to clean up their acts, or else. Why Washington isn’t paying much heed to the White House’s infrastructure and budget plans. Just in: The former White House adviser Dina Powell has joined Harvard’s Kennedy School as a senior fellow.

Was Friday too volatile for you? Let’s see how today goes. S. & P. 500 futures were up this morning, suggesting a rise today. But some savvy market players warn that more pain may be in store.

The head of Goldman Sachs’s equities trading sent a pessimistic note to clients on Friday, according to Robin Wigglesworth of the FT. The message: We haven’t hit a market bottom yet, and the era of “buy the dip” is over.

And Bob Prince, a co-chief investment officer at Bridgewater Associates, told the FT, “There had been a lot of complacency built up in markets over a long time, so we don’t think this shakeout will be over in a matter of days.”

From Andrew: Something to think about. How much of the economy’s recent success has been a function of the wealth effect in the stock market? If even some of it is, how would more volatility affect consumer spending — and cycle back through the markets?

The markets flyaround

• Peter Eavis breaks down potential debt problems. (NYT)

• Did insurers trigger the market volatility? (FT)

• The clash between bonds and stocks is heating up. (Bloomberg)


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


One of the biggest advertisers around says it will stop buying ads on their platforms if they don’t do more to combat hate speech, fake news and other divisive content.

For context: Unilever spent more than $9 billion on marketing last year, for products from Dove soap to Lipton iced tea.

What Keith Weed, its chief marketing officer, plans to say at the Interactive Advertising Bureau conference today:

Remember: Unilever was already outspoken about the need to clean up the digital ad industry. And shareholders like BlackRock have called upon public companies to do more social good, or risk a backlash.

That’s what Axios reckons, since neither White House proposal is likely to go anywhere.

On infrastructure

Don’t look for more specifics from the Trump administration, including on how its initiative will be funded. Republican lawmakers are wary of more spending: The government funding bill that Mr. Trump signed last week will push the budget deficit toward $1 trillion.

Representative Daniel Lipinski, Democrat of Illinois, told the WaPo of the plan, “I think it’s just dead on arrival.” And the National Resource Defense Council attacked it as an “unacceptable corporate giveaway.”

Politico points out that the proposal would shift many project decisions to state governments.

On the budget proposal

Last week’s bill made it irrelevant. Still, Mick Mulvaney of the Office of Management and Budget warned yesterday that the growing budget deficit could lead to a “spike” in interest rates. (His caveat: sustained economic growth could make up for that.)

Meanwhile, the White House wants $23 billion for more immigration enforcement, including for Mr. Trump’s border wall.

• The fallout from the resignation of Rob Porter, the former White House staff secretary, continues. The White House doesn’t have its story straight, and is having to deny reports that the fate of John Kelly is in question.

• Companies that “inverted” — moved their financial headquarters to cut their U.S. tax bill by buying a foreign company — face higher rates under the recent overhaul. (WSJ)

• Conservative lawmakers delivered the fiscal stimulus that liberal economists wanted. (NYT)

• Companies have won plaudits for paying onetime bonuses. But they aren’t raising workers’ salaries. (NYT)

• Scott Gottlieb, the head of the F.D.A., is being praised for trying to balance protecting consumers’ health with rewarding the drug industry. (NYT)

• The businessman Andrew Yang is planning a long-shot bid for the White House on an anti-robot-apocalypse platform. (NYT)

• The White House wants NASA to send astronauts back to the moon — using the private sector, after Mr. Trump leaves office. (NYT)

The state’s attorney general, Eric Schneiderman, sued the movie studio and its founders, alleging violations of sexual discrimination and harassment laws. The net effect: The $500 million bid by Maria Contreras-Sweet, Ron Burkle’s Yucaipa Companies and Lantern Asset Management may be dead.

More on the lawsuit by Brooks Barnes and Willie Neuman of the NYT:

Harvey Weinstein said of the lawsuit in a statement that if it was designed to scapegoat him, “he will vigorously defend himself.”

The misconduct flyaround

• Mr. Trump appeared to dismiss the #MeToo campaign, making Republicans uneasy. (NYT)

• Wynn Resorts risks long-term effects from the allegations against Steve Wynn. (NYT)

• The story of Mary Cunningham Agee, who was at the center of an early corporate sex scandal and is now feuding with her stepchildren over a will. (NYT)

The city’s fate is closely tied to Qualcomm, which has 13,000 local employees and generates almost 4 percent of the region’s economic output. So the prospect of a sale is jarring there, especially as Broadcom (nee Avago) is known for cutting cost at the companies it takes over.

More from Conor Dougherty of the NYT:

And Mr. Hughes added, “It’s almost like they’re our flag.”

Other news on the potential deal: K.K.R. and C.V.C. have joined the $100 billion financing package for the bid. And Broadcom and Qualcomm plan to meet on Valentine’s Day.

The deals flyaround

• Whether Comcast revives its bid for 21st Century Fox will depend in part what Fox says in its proxy statement, according to unnamed sources. (WSJ)

• Could Blackstone buy back the Waldorf Astoria from Anbang? (Bloomberg)

• Apollo has teamed up with a big Dutch pension fund to bid for Akzo Nobel’s specialty chemicals unit, unnamed sources say. (FT)

• Meet the “220 demand,” the latest tool for shareholders to wring a higher price from the sale of a Delaware-based company. (FT)

• Patrick Soon-Shiong’s purchase of the L.A. Times has put the spotlight on his health company, NantHealth, which has been dogged by financial woes and other turmoil. (WSJ)

• When Amazon paid $90 million for Blink, which makes home security cameras, its real prize was more energy-efficient chips for Echos and other devices, unnamed sources say. (Reuters)

• Axel Springer of Germany has taken an undisclosed stake in Magic Leap, an augmented reality start-up. (TechCrunch)

Friday’s surprise settlement between Uber and Alphabet removes yet another potential headache for the ride-hailing giant as it prepares to go public next year.

Chalk it up to the peacemaking Mr. Khosrowshahi, who in his statement said:

Uber ended a legal fight with a $245 million stock payout to Alphabet, less than it originally offered as a settlement. And its latest valuation is $72 billion. And Alphabet got pledges that its competitor would not wrongfully use its autonomous driving tech.

The other big question: Can Alphabet’s Waymo find a profitable business plan as self-driving rivals catch up technologically?

The tech flyaround

• Read the NYT’s special section on how the internet is changing. (NYT)

• Snap is offering credits to lure advertisers from Instagram. (Recode)

• How China is winning control of the world’s battery supply chain. (WSJ)

Why? Because a) they’re expected to use more energy in the country this year than homes are, and b) the global financial crisis has left citizens and lawmakers there critical of speculative financial ventures.

Meanwhile, the rural town of Wenatchee, Wash. has become a haven for Bitcoin miners, thanks to its hydroelectric dams. But utilities are still figuring out how to handle their power needs without wild price swings.

Where Bitcoin is trading today: About $8,800, according to CoinMarketCap, up 8.5 percent over the last 24 hours.

• Harvard has named Lawrence Bacow as its next president, a diplomatic figure at a time when higher education is under fire. (NYT)

• Amazon hired NBC’s Jennifer Salke as its new studio head, replacing Roy Price, who was ousted amid allegations of sexual harassment. (NYT)

• Lars Dalgaard is quitting Andreessen Horowitz to start his own venture fund. He’s only the second general partner ever to leave. (Recode)

• UBS has hired Gabriel Aractingi, formerly of Investcorp and Morgan Stanley, to run its ultrahigh net worth business in Saudi Arabia, unnamed sources say. (Bloomberg)

• Most British politicians have treated the country’s withdrawal from the European Union as inviolable, but there are signs that support for a second referendum is growing. (NYT)

• The operating unit Barclays Plc has been accused of “unlawful financial assistance” in relation to a $3 billion loan it secured from Qatar a decade ago. The British charge could affect its ability to do business globally. (Bloomberg)

• Wells Fargo is fumbling its efforts to repay customers it has wronged, notifying some of incorrect refund amounts and sometimes sending refunds to people who weren’t customers. (WSJ)

• The Saudi authorities expect to raise $13.3 billion by the end of the year as they complete settlements with princes and tycoons rounded up as part of a corruption crackdown, according to a senior official. (FT)

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