Bank of America’s investment banking arm lost a thirst for riskBank of America quietly announced this week that its investment-banking chief, Christian Meissner, would step down by the end of the year. Now we may know why: He questioned the firm’s commitment to being a top-ranked investment bank, according to the FT.
After buying Merrill Lynch a decade ago, it appeared eager. But in recent years its appetite for risk seems to have diminished: It avoided some plum work, like advising on Saudi Aramco’s I.P.O., and has slid down the rankings of M.&A. advisers.
When Mr. Meissner leaves, other senior bankers may soon follow. But the C.E.O., Brian Moynihan, probably won’t lose much sleep: Investment banking is just a sliver of overall revenue; it’s still winning top mandates; and the bank’s shares are up 27 percent year-over-year.
Amazon’s Alexa plan? Put it everywhere, A.S.A.P.The e-commerce giant announced a glut of new products yesterday, all powered by its voice assistant, Alexa. Microwaves, clocks, smart plugs, in-car navigation devices — the technology has now moved well beyond humble smart speakers (though they got an update too). Even for a big tech company, that is an impressive number of products to unveil at once.
But that’s necessary. Amazon enjoyed an early lead in the voice assistant market, beating Google to the smart speaker market by almost two years and Apple by three. But Google has been catching up, and a recent report by Strategy Analytics said that the Home Mini was the best-selling smart speaker in the second quarter.
Amazon also lacks deep smartphone integration for Alexa, because it doesn’t have its own phone ecosystem like Apple and Google do. So its plan is to put Alexa everywhere else.
Everything is great (on the markets)The S.&P. 500 rose 0.8 percent yesterday to set an all-time high. The Dow Jones industrial average also set a record. That puts them on track to exceed Wall Street’s expectations for 2018.
The performance is buoyed by a U.S. economy that continues to improve. The Fed is expected to raise interest rates next week. And even with unemployment at its lowest level in almost two decades, initial jobless claims — a measure of layoffs — fell this week to their lowest level since 1969.
There’s plenty going on that could upset things, including trade disputes and economic jitters. But BlackRock thinks there’s not that much for investors to worry about. Those markets look set to keep climbing.
The days aheadFarfetch will begin trading today. The online luxury goods site priced its I.P.O. at $20 a share, above its expected range, and raised $885 million. Investors are likely to clamor for its shares this morning.
Sky will be sold off in an auction. Comcast and 21st Century Fox will compete for the British broadcaster over as many as three rounds of bidding, beginning Friday evening. A winner in the monthslong takeover battle is set to be announced this weekend.
Les Moonves may still get his millionsMr. Moonves was forced out as the CBS chairman and C.E.O. amid sexual misconduct accusations. But Jim Stewart of the NYT points out that he may still collect $120 million in severance if the broadcaster can’t prove that he was fired for cause:
Mere allegations of sexual misconduct, which now have been made publicly against Mr. Moonves by 12 women, do not constitute cause. Nor is it likely that behavior that occurred before he joined CBS could be considered a violation of any company policy. Mr. Moonves has denied any improper behavior. He says that any sexual activity was consensual and, for the most part, occurred before he came to CBS.CBS’s board knows that it’s in a bind. Paying Mr. Moonves anything would create a P.R. headache, but refusing to pay could kick-start a messy legal fight. Those may be its only options.
Google workers considered tech tweaks to counter the travel banAfter President Trump announced his travel ban in January 2017, Google employees wondered if the company’s search engine could be modified in order to direct people to pro-immigration groups, or show them ways to campaign against the policy. Here’s more from John McKinnon and Douglas MacMillan of the WSJ:
Email traffic, reviewed by The Wall Street Journal, shows that employees proposed ways to “leverage” search functions and take steps to counter what they considered to be “islamophobic, algorithmically biased results from search terms ‘Islam’, ‘Muslim’, ‘Iran’, etc.” and “prejudiced, algorithmically biased search results from search terms ‘Mexico’, ‘Hispanic’, ‘Latino’, etc.”A Google spokesperson told the newspaper that they were ideas that were never implemented.
TPG plans a sequel for its social impact fundThe investment giant caused surprise two years ago when it unveiled its $2 billion Rise fund, dedicated to investing in companies that help society. Now the firm is preparing to raise its second such fund, Michael de la Merced reports in DealBook.
Rise is the biggest example of Wall Street’s push into social impact investing. It is based on what TPG says is a complex model to measure a company’s success on that front. Interest in the fund is said to be high. But TPG executives told Michael that they want other private equity titans to move into the space, which would give impact investing more clout.
Tesla’s biggest problem might not be Elon MuskWith a federal investigation, a long line of departing senior executives, and fears about an unpredictable C.E.O., it’s easy to forget about Tesla’s dire financial situation. But Bill Cohan explains in an NYT Op-Ed just how bad things are:
Tesla’s finances are fragile. It has around $11 billion in long-term debt and no profits. “That is not a sustainable business model,” Jim Collins, a longtime auto industry research analyst, wrote in Forbes in April. “Not even close.” From January to June of this year, Tesla generated revenues of $7.4 billion, but it had an operating loss of $1.7 billion, burning through its cash on hand. It has $2.2 billion left, most of which will be needed to cover operating losses. Romit Shah, a research analyst at Nomura Instinet and once one of Tesla’s biggest boosters, reversed course last week, calling the company “no longer investable.”
Revolving doorTesla’s vice president of global supply management, Liam O’Connor, has reportedly resigned.
Thomas Rothman will stay on as chairman of Sony Pictures Entertainment.
Qatalyst Partners hired Ethan Zweig, a tech investment banker at JPMorgan Chase, as a managing director.
Wells Fargo plans to lay off up to 10 percent of its employees over the next three years.
The speed readDeals
• Emirates is reportedly considering a takeover of its unprofitable rival, Etihad, to create the world’s biggest airline by passenger traffic. (Bloomberg)
• AT&T defended the court ruling that let it buy Time Warner, arguing the Justice Department’s appeal had no merit. (WSJ)
• Uber is said to be in talks to buy Deliveroo, the European food-delivery service. (Bloomberg)
• Adobe agreed to buy the online marketing company Marketo for $4.75 billion. (WSJ)
• Aurora Cannabis, the marijuana producer, plans to go public in the U.S. this fall. (Financial Post)
Politics and policy
• Michael Cohen has spoken repeatedly with Robert Mueller’s team over the past month. (NYT)
• E.U. leaders rejected Britain’s proposal for Brexit. Prime Minister Theresa May of Britain promised to find a solution.
• Foreign hackers have targeted senators’ personal Gmail accounts. (CNN)
• Najib Razak, the former Malaysian prime minister, pleaded not guilty to 25 criminal charges, including money laundering. (WSJ)
• South Korea’s finance minister expressed hope for a U.S. trade deal, but lawmakers are wary of American tariffs on Korean cars. (WSJ)
• China is trying to get products into the U.S. before new tariffs kick in on Monday. (Bloomberg)
• Caterpillar’s response to the trade war is a two-year-old cost-cutting strategy. (Reuters)
• The Trump administration has a new national cybersecurity strategy. Details will be made public soon. (Axios)
• YouTube and Google are under renewed pressure to change how they track children’s data. (NYT)
• How Qualcomm tried — and failed — to beat Intel at building chips for servers. (Bloomberg)
Best of the rest
• Minneapolis prosecutors are reviewing the rape allegations against JD.com’s C.E.O., Richard Liu. (WSJ)
• Beyoncé and the hedge fund titan Ken Griffin have mortgages, too — but they pay hundreds of thousands of dollars a month. (WSJ)
• Why America should embrace market surveillance in sports betting before it’s too late. (DealBook)
• Airlines are increasing fees for checked baggage. (NYT)
• Mark Bertolini, the C.E.O. of Aetna, explains his love for yoga and meditation. (NYT)
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