Big in business: the market shrugs at Trump - Axios

Big in business: the market shrugs at Trump

Jim Lo Scalzo / AP

Market reaction to Trump speech: A big shrug, as Trump didn't touch details on issues like tax reform that are of most concern to investors.

Target's loss is America's gain: Target stock fell more than 12% on Tuesday. Plans for turning the company around include a $7 billion investment in store renovation and opening new small-format stores in dense urban areas. Investors are skeptical that Target's investments can lure customers back into the stores, given the secular trend toward online shopping. But for the broader economy, Target's decision to invest capital rather than returning it to shareholders is a great sign.

Higher interest rates: Futures traders are now betting that the Fed will raise interest rates at its next meeting in two weeks, but former Fed economist and Chief Market Strategist and Macro Insight Group Shehriyar Antia says the market is getting ahead of itself. He suggests watching today's release of personal consumption expenditures statistics at 8:30 this morning. Economists expect inflation to rise to 1.7%, below the the Fed's 2% target. A big beat could move up the date of the next increase, but otherwise May or June is a better bet.


Coats: I can't comment on my discussions with Trump

Jacquelyn Martin / AP

Director of National Intelligence Dan Coats told the Senate Armed Services Committee this morning that he doesn't "feel it's appropriate to characterize [his] discussions with the president" after being asked about yesterday's reports that President Trump had asked him to publicly refute the possibility of the Trump campaign's collusion with Russia.

What he did say: Coats stated that he "made clear" to the White House that any "political shaping" of his position would be inappropriate. Additionally, he stated that he was unaware of the Trump administration reaching out to any other intel officials.

The real purpose of the hearing was for Coats to provide an update on worldwide threats to the United States.

  • Manchester: "ISIS has claimed responsibility for the attack in Manchester…we have not verified, yet, the connection." Coats also referred to yesterday's bombing as a "suicide attack."
  • North Korea: The nation is nuclear but has "demonstrated capabilities short of an ICBM at this point in time."
  • Iran: The nuclear deal has "extended" its development time for a nuclear bomb "from a few months to about a year."
  • Russia and the U.S.: It will be "more unpredictable in its approach to the United States" as it continues to attempt to undermine democratic institutions around the world.
  • Russia and the Middle East: It wants to use its presence in Syria and the worldwide fear of ISIS to expand its influence across the Middle East.

Private equity firms love to fire CEOs

Private equity firms typically fire the CEOs of companies they acquire, according to a survey conducted by turnaround consultant Alix Partners and executive recruiter Vardis.

The big numbers:

  • 58% of PE firms expect to fire inherited CEOs within two years.
  • 73% of PE firms expect to fire inherited CEOs over the lifecycle of their investment.

The most common explanation given was "a lack of fit with the portfolio company's new strategic direction." In terms of exceptions to the rule, respondents said that one key success factor is having had prior CEO experience under private equity ownership.

Caveat: The exact survey question was: "Upon acquiring a new portfolio company, when do you typically replace the CEO?" ― so there might have been a bit of leading the witness here. It's also too bad that respondents weren't asked about retention rates for non-legacy CEOs (i.e., the new ones PE firms bring in).


Trump's foreign trip, day 4: Highlights and schedule

Evan Vucci / AP

It's day four of President Trump's first foreign trip. He kicked it off with a short trip to Bethlehem, where he met with Palestinian Authority President Mahmoud Abbas to discuss the Israeli-Palestinian peace process, a key foreign policy objective of his administration. He then returned to Jerusalem, and will end his day in Rome, where he's set to visit the Vatican and meet with Pope Francis tomorrow.

The latest: After events at Yad Vashem and the Israel Museum in Jerusalem, Trump has departed Israel en route to Rome.

2:40am ET/ 9:40am GMT+3: President Trump and Melania departed King David hotel in Israel en route to Bethlehem. Several signs dotted the streets just past the border into Palestine with Trump and Abbas' faces that read "The City of Peace Welcomes the Man of Peace."

Nasser Shiyoukhi / AP

2:58am ET/ 9:58am GMT+3: Trump's motorcade arrived at the Palestinian Presidential Palace, where he met with Abbas for an hour of talks before the two made their way to a set of two podiums to deliver a joint statement.

Fadi Arouri / Xinhua Pool via AP

Fadi Arouri / Xinhua Pool via AP

3:40am ET/ 10:40am GMT+3: Trump delivered remarks on the Manchester, U.K. terrorist attack that killed 22 people place last night. He condemned the terrorists as "evil losers," and stated that "This wicked ideology must be obliterated, and I mean completely obliterated. Life must be protected."

Evan Vucci / AP

3:50am ET / 10:50am GMT+3: Trump and Abbas gave a joint statement addressing peace in the Middle East. They did not take any questions. "President Abbas assures me he is ready to work towards that goal in good faith, and Prime Minister Netanyahu has promised the same. I look forward to working with these leaders towards a lasting peace," said Trump.

Abbas stated, "I would like to reiterate our commitment to cooperate with you in order to make peace and forge an historic peace deal with the Israelis."

Evan Vucci / AP

4:22am ET / 11:22am GMT+3: The presidential motorcade departed the West Bank en route back to Jerusalem.

4:41am ET / 11:41am GMT +3: The president is back in Jerusalem before his next events at Yad Vashem, Israel's official memorial to the victims of the Holocaust, and the Israel Museum, Israel's national museum.

6:00am ET / 1:00pm GMT+3: President Trump and the First Lady laid a wreath at Yad Vashem.

Evan Vucci / AP

6:27am ET / 1:27pm GMT +3: Trump gave an address at Yad Vashem, saying, "The State of Israel is a strong and soaring monument to the solemn pledge we repeat and affirm: Never again." He and the First Lady also signed the guestbook:

Raoul Wootliff / Twitter

7:28am ET / 2:28pm GMT +3: Trump also gave an address at the Israel Museum, which focused on Jerusalem's unique position as a center for three major religions and called for a coalition between Israel and Arab nations to build lasting peace in the Middle East.

Sebastian Scheiner / AP

8:32am ET / 3:32pm GMT +3: Marine One is wheels up from Jerusalem for the flight back to Air Force One in Tel Aviv.

9:20am ET / 4:20pm GMT +3: After a departure ceremony and farewell from Netanyahu, POTUS and FLOTUS board Air Force One en route to Rome.


New Orleans mayor addresses removal of Confederate monuments

Alex Brandon / AP

New Orleans Mayor Mitch Landrieu addressed the removal of four Confederate monuments across the city last week with a stirring speech that's making the rounds on social media. The whole thing is worth a watch, but here's the centerpiece:

"Another friend asked me to consider these four monuments from the perspective of an African-American mother or father trying to explain to their fifth-grade daughter who Robert E. Lee is and why he stands atop of our beautiful city. Can you do it?
Can you look into that young girl's eyes and convince her that Robert E. Lee is there to encourage her? Do you think she will feel inspired and hopeful by that story? Do these monuments help her see a future with limitless potential? Have you ever thought that if her potential is limited, yours and mine are too?"

Sen. Inhofe: Russia drama won't deter infrastructure


Axios' Jim Vandehei and NBC "Meet the Press" host Chuck Todd sat down with Senator Jim Inhofe (R-OK) and Atlanta Mayor Kasim Reed at Axios' Infrastructure in 2017 event. Inhofe (R-OK), a pilot and "infrastructure junkie", said he doesn't think that the drama with Russia will deter the Trump Administration from passing a successful infrastructure bill:

"A lot of people out there hate Trump, and a lot of you guys in the media keep fanning the flames, you're gonna keep doing it," said Inhofe. "But we're going to get it done... let the media have their heyday."

Other key quotes from Sen. Inhofe:

  • Does the core message of fiscal conservatives make your job harder? "There are two things I don't think people should be fiscally conservative toward, defending America, and infrastructure."
  • U.S. infrastructure compared to other countries: "We are 11th in line with infrastructure, when you talk about China and other countries... we just need to focus on it more and I'm going to use the fact that other countries are ahead of us as an advantage."
  • GOP health care bill: "The Freedom Caucus, or whatever it's called... they shouldn't have done that, because what passed last week was the same thing they had before... so I think they realize now that they made a mistake."
  • Gas tax: "It's the most popular tax that's out there."
Mayor Reed:
  • Focus on cities: ‪"The federal government aren't going to lead on this, it's going to be the cities." ‬
    Cities will drive investment and business, which will change the transit culture, said Reed.
  • Culture of sunbelt cities: Businesses are changing the culture, more than Republicans or Democrats, when it comes to modern transportation. ‬
  • Faith in Democratic Party: "Democrats have to understand that for a while we might lose, but we've seen the other side... I think we have to condition our mind, Chuck, to fight every fight and not have our heart taken by these losses in districts."
Chuck Todd:
  • Trump's foreign trip: "I'd be curious to see if this foreign trip kicked some people out of [Trump's] foreign circle... if this trip is successful, will it be seen as Jared's success since he really drove Middle East policy?"
  • Why special elections matter: "I don't believe the party will ever turn on Trump until Trump voters turn on the party."
  • Trump's emotions: "If he cant learn to compartmentalize his problems, it will be worse than Clinton and Nixon."
  • Democratic rise: "Democrats just need one win, and [Jon] Ossoff will be enough... but coming close doesn't cut it."

Joanna Coles: The new revolution of feminism

Joanna Coles, Hearst Magazine's Chief Content Officer and former editor-in-chief of both Marie Claire and Cosmopolitan, discusses the rebirth of feminism in the Trump era.

WATCH: More from Smarter Faster


Marc Andreessen voices car industry's fear: becoming Nokia

Eric Risberg / AP

The biggest concern among many carmakers isn't that they will lose ground to an auto industry rival. It's that all the companies that build cars will become like the companies that manufacture cell phones: hollowed-out shells that cede most of the value to software makers like Apple and Google.

"Car CEOs, the new generation, they're all working on this," venture capitalist Marc Andreessen told Bloomberg View. "They're spending a lot of time out here and they're spending a lot of time with us. But literally, the way they frame that question is, 'We, existing car company, do not want to be the Nokia of cars.'"

It's definitely an outcome that worried just-ousted Ford CEO Mark Fields. In a 2015 interview Fields told me he worried about ceding too much room in the car to Apple and Google. "At the end of the day we don't want to end up as the handset business," he said.

Andreessen is an investor in and DeepMap, both of whom make self-driving car software.

"Obviously there's a lot more software in cars than there was 10 or 20 years ago," Andreessen said. "Everybody knows that. It's a step further to say that in 10 years, the winning car company will be the car company that makes the best software." even has this quote at the bottom of its Web site.

We didn't do anything wrong, but somehow, we lost. -nokia, or car companies in 5 years

Google parent Alphabet and Apple, meanwhile, are plowing ahead with car strategies. Apple's of course, remains largely secretive, while Google is plain about its strategy, which includes both its Waymo self-driving car unit and its effort to have Android power in-car entertainment systems.


Everything we know about Manchester terror attack

Rui Vieira / AP

British Prime Minister Theresa May has called the Manchester terror bombing, which targeted the venue of an Ariana Grande concert last night, the "worst attack the city has experienced, and the worst ever to hit the north of England."

May said police believe they know the suicide bomber who detonated the explosive inside the concert venue, and they arrested a 23-year-old man early this morning. The Islamic State has also claimed that one of their members carried out the attack, which killed at least 22 people.

Russian President Vladimir Putin said Russia is ready to increase anti-terrorism cooperation with Britain following the latest attack. And France's interior minister said early Tuesday morning that the government will work with event organizers on how to better secure public spaces moving forward — especially after the November 15 attacks at a concert venue, cafes and bars.

Why it matters: The concert venue attack is an attack on one of Britain's cultural hubs, as Manchester has long served as a primary cultural influence on Britain with bands like The Smiths and Oasis, as well as soccer rivalry between Manchester United and Manchester City teams.

More statements from officials:

  • "This attack stands out for its appalling, sickening cowardice," said May.
  • "This is horrific, this is criminal. May the perpetrators face the full weight of justice both in this life and the next," said Harun Khan, the secretary general of the Muslim Council of Britain.
  • Britain's Finance Minister Philip Hammond was scheduled to speak at a panel in Brussels, but is returning to London.
  • Paris mayor's office said that all concerts and shows they have scheduled will continue as planned. Grande is set to perform there on June 7.
President Trump tweets:

More on the developments that we knew last night, here.

Trump on Manchester attack: terrorists are "evil losers"

Evan Vucci / AP

President Trump has commented on the terror attack on Manchester, which left at least 22 dead and around 50 injured. From his remarks at a pool spray in Bethlehem, where he's meeting and speaking with Palestinian Authority President Mahmoud Abbas:

"As President of the United States, on behalf of the people of the United States, I would like to begin by offering my prayers to the people of Manchester in the United Kingdom. I extend my deepest condolences to those so terribly injured in this terrorist attacks, and to the many killed and the families, so many families, of the victims. We stand in absolute solidarity with the people of the United Kingdom.
So many young, beautiful innocent people living and enjoying their lives murdered by evil losers in life. I won't call them monsters because they would like that term. They would think that's a great name. I will call them from now on losers, because that's what they are. They're losers. And we'll have more of them. But they're losers. Just remember that.
This is what I've spent these last few days talking about during my trip overseas. Our society can have no tolerance for this continuation of bloodshed. We cannot stand a moment longer for the slaughter of innocent people. And in today's attack, it was mostly innocent children. The terrorists and extremists, and those who give them aid and comfort, must be driven out of our society forever. This wicked ideology must be obliterated, and I mean completely obliterated. Life must be protected.
All civilized nations must join to protect human life and the sacred right of our citizens."

Revolution's Steve Murray on impact of Snap's IPO, Softbank's VisionFund

Daniel Swartz

Steve Murray spent 20 years at Softbank before joining Revolution as a partner last year. He chatted with Axios before 1776's Challenge Cup competition kick-off event in D.C. Here are a few highlights:

On the impact of Snap's IPO:

"From what I hear from folks in the investment banking community, it has led to a pipeline that is moving through the system (and) they expect the second half of this year to have a lot more activity on the tech IPO front. As companies mature and get bigger, to the extent there are not a lot of chances to go public because of market conditions, it changes the dynamic with respect to buyers. If you have a credible threat to take a company public, it gives more balanced leverage to the company when they're having discussions about being acquired by someone else or going public."

On Softbank's new $93 billion VisionFund:

"You can't talk about anything with respect to Softbank without Masayoshi Son. If you think about what he's trying to do, he's trying to find the next Alibabas, if you will…. Masa is a huge believer in technology. He sees huge opportunities going forward. He's created this fund to have patient capital that doesn't have quite the same demands (for quick) return...They're going to have to find certain companies that can take the kind of capital they can deploy — $250 million will be a small check for them. I think it will be a challenge to deploy that. If it was being managed by someone other than Masa, I'd bet against it perhaps, but I wouldn't bet against him."

On the status of the FTC's review of the proposed DraftKings/FanDuel merger:

"I don't have an update, but it's supposed to be decided over next several weeks. Then we can get to the business of combining the businesses and getting to work." (He noted that timing is uncertain since the FTC currently has only two out of its five commissioners.)

On how entrepreneurs view Washington these days:

"There's intrigue, but ultimately, the ethos of these folks—they're so focused on building their companies and the markets they're in. Outside of the (D.C.) region, it's more of a sideshow that people talk about like a sporting event as opposed to something they really concern themselves with."

On which cities are the next innovation hotbeds:

  • Chicago, Denver, Boulder, Atlanta, Salt Lake City
  • What these cities have in common: Good universities, young workforce, the beginning of a startup ecosystem.