Good morning. It's Courtenay — Dion left me the keys while he enjoys a much-deserved vacation.
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Illustration: Eniola Odetunde/Axios
California is being sued over its unprecedented law requiring all public companies headquartered there to have at least one female board member by 2020.
Why it matters: Pressure to diversify corporate boards has historically come from shareholders and special interest groups, not the government.
Driving the news: The California law, signed last year by then-governor Jerry Brown, sets a penalty of $100,000 for public companies that don't have at least one woman on their board by yearend 2019. The looming deadline has drawn two lawsuits.
Opponents are hoping to block the law before it gets stricter: By 2021, companies with five-person boards will have to have at least two women, while boards of six or more will have to have three.
Corporate stragglers in California are racing to expand or switch up their boards.
What they’re saying: The latest lawsuit strikes "at one of the principal areas of vulnerability that was identified when the law was passed,” Teresa Johnson, a partner at law firm Arnold Porter, tells Axios.
Louder calls from big investors and other Wall Street heavyweights have also helped push the percentage of women joining boards to a record high.
For instance, proxy advisers — who wield a lot of influence in how shareholders vote on issues — say they plan to take board diversity more seriously.
Mega-shareholder State Street told Vox earlier this year that it voted against board directors over 1,000 times "for lack of board gender diversity." (Its voting record on other gender-related issues, though, is dubious.)
Nuveen, the investment arm of pension fund TIAA, has also pushed companies to put women on boards — though not at all costs.
"The appointment of a director with an inherent penchant to support management can limit diversity of thought in board discussions and further concentrate the authority of insiders."— Nuveen's 2019 proxy season review
HP said Xerox's $33 billion takeover offer significantly undervalued the company, though it's "open to exploring a potential combination with Xerox.” (Wall Street Journal)
Saudi Aramco's IPO will give the company a valuation as high as $1.7 trillion — though it falls short of Saudi Crown Prince Mohammed bin Salman's hopes of a $2 trillion valuation. It will seek to raise up to $25.6 billion, "a fraction of the $100bn it had once hoped for," per the FT.
Economists pared down estimates for Q4 GDP — prompted by worse-than-expected economic data on Friday.
Between the lines: The downgrades would have been worse, if not for upbeat retail sales figures.
The big picture: President Trump's tax cut jolted business investment initially, but it "quickly dwindled," as the New York Times reports. Now spending by corporations on factories and other investments is contributing less to GDP than before Trump took office.
The bottom line: "Consumer spending has largely propelled GDP over the past two quarters, countering business spending’s noticeable drag on growth," analysts at LPL Financial write.
P.S.: FedEx's CEO Fred Smith, whose company is the subject of the NYT story cited above, is challenging A.G. Sulzberger and the paper's business editor to a public debate on tax policy.
Riot police and protesters clash in the Hung Hom district of Hong Kong on Monday.
(Photo: Ye Aung Thu/AFP via Getty Images)
The unemployment rate ticked up to 3.1% in Hong Kong last month from 2.9%, according to new data released by the government today.
Why it matters: It adds to a spate of worsening economic indicators in Hong Kong, which is in the midst of its first recession in 10 years.
The backdrop: The standoff between pro-democracy protestors and police isn’t letting up — capping a stretch of the bloodiest clashes between police and protesters since the protests began in June.
Photo: Spencer Platt via Getty Images
It took 90 trading days for the Dow to hit a new thousand-point milestone. With the record came the traditional baseball caps sported by traders on the floor of the New York Stock Exchange.
The backstory: Longtime floor trader Peter Tuchman, who's commandeered the tradition since the Dow hit 15K in 2013, ordered the hats two weeks ago in anticipation of the Dow hitting 28K.
See you tomorrow!