DealBook Briefing: The Trouble With a $1 Trillion Apple

DealBook Briefing: The Trouble With a $1 Trillion Apple

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Good Friday morning. (Was this email forwarded to you? Sign up here.) The Labor Department releases its monthly jobs report today. Predictions suggest that 190,000 jobs were added in July — here’s what to watch for.

Apple is worth $1 trillion. It’s not all good news.

In 1997, Apple was on the verge of bankruptcy. On Thursday, it became the first publicly traded American company to be worth more than $1 trillion. (Here’s animated context for the number.)

Jack Niclas of the NYT explains how the ascent was driven by “rapid innovation, a series of smash-hit products and the creation of a sophisticated, globe-spanning supply chain that keeps costs down while producing enormous volumes of cutting-edge devices.” Tim Cook, the company’s C.E.O., called it “a significant milestone,” but “not the most important measure” of success.

But Shira Ovide of Bloomberg Opinion argues that slowing iPhone sales growth and shrinking margins could mean Apple’s value is overblown. “Changes are giving Apple a fundamentally different financial look,” she writes, “and investors haven’t yet been forced to confront how much this altered Apple should be worth.”

More generally, Matt Phillips of the NYT says the milestone should give pause for reflection on powerful megacompanies and consolidated profits. The effects aren’t entirely benign:

Economists, for example, are starting to look into whether the rise of so-called superstar firms is contributing to the lackluster wage growth, shrinking middle class and rising income inequality in the United States. The vast social and political influence wielded by these megacompanies has prompted some lawmakers to demand more regulation to rein them in.


Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Jamie Condliffe and Amie Tsang in London.


Moonves speaks, but not about harassment allegations

The chief executive of CBS Corporation, Leslie Moonves, spoke to Wall Street analysts on Thursday about the company’s financial results. “We’re as confident as ever,” he said. “We feel very good about the future.” But analysts were allowed to ask questions only about financial results, so discussion of sexual harassment accusations against Mr. Moonves were off-limits.

Tara Lachapelle of Bloomberg Opinion argues that shareholders should be worried. “Two of the biggest hallmarks of good corporate governance are transparency and accountability,” she writes. “CBS’s board has failed at both.”

Charlie Gasparino of Fox Business has a more straightforward take: “If you listened to the call, you would think Moonves is about to be named C.E.O. of the year, rather than possibly lose his job.”

(The company beat expectations for the second quarter, reporting $3.47 billion in revenue and adjusted profit of $427 million.)

Trump officials warn of ‘pervasive’ Russian meddling

The threat from Russia is real, say top national security officials. “Our democracy itself is in the cross hairs,” Kirstjen Nielsen, the Homeland Security secretary, said, describing a “pervasive” campaign to influence the 2018 elections.

Earlier this week, Facebook said it had identified a political influence campaign targeting the midterm elections, though it didn’t link the campaign to Russia. A Senate Intelligence Committee hearing on Wednesday suggested that the U.S. had not done enough to protect itself.

The Trump officials were vague about how the government was responding to what they called Russia’s interference campaign. But Ms. Nielsen said that “real” progress had been made, and that President Trump had directed them to aggressively confront the threats.

More tech threats: In an Op-Ed for the NYT, Kara Swisher says Silicon Valley “weaponized social media, and we are all paying the price.”

Hedge funds go Silicon Valley to win talent

These days, making savvy trades requires computer science talent. But many tech companies now offer salaries that rival those at hedge funds — plus a distinctive lifestyle.

So hedge funds are starting to offer perks inspired by Silicon Valley, like more casual workplaces and free food. They’re also pushing the line that the work’s not bad, either. Matthew Granade, the chief market intelligence officer at Point72, tells the FT that “the markets are one of the hardest problems in the world.”

Some hedge fund managers may need to keep their snobbishness in check. One unnamed executive said going to Google or Facebook “just means doing advertising more efficiently.”

Support for tariffs, but not trade wars

A UBS poll of 300 business owners shows that 88 percent believe that China engages in unfair trade practices, and 71 percent approve of additional tariffs being imposed on the nation. But 49 percent think that a full-blown trade war with China will hurt America’s economy.

Another UBS poll of 501 high net worth investors shows that 92 percent think that China engages in unfair trade practice and that 59 percent approve of further tariffs, but 74 percent think a trade war would hurt the U.S. economy.

One way to parse those results: Business owners and investors think that President Trump’s policies are justified, but require delicacy.

More trade: Mr. Trump’s truce with Europe means he can double down on China, but Beijing says that pressure won’t work. And Sonos’s I.P.O. reveals thetrade war is a new risk to going public.

How Bureau of Labor Statistics staff reacted to that Trump tweet

When President Trump tweeted about national employment figures a full hour before their official release on June 1, staff at the U.S. Bureau of Labor Statistics were not pleased. Quartz reviewed around 200 emails with complaints from those workers. Here are some anonymized quotes from the correspondence:

■ “I don’t know why anyone tells Trump anything.”

■ “I’m guessing there won’t be any repercussions for him.”

■ “There’s probably some way in which this incident could be incorporated into our annual confidentiality training.”

Big Tech’s push to stop you staring at screens

Yusuf Mehdi, the corporate vice president of Microsoft’s Modern Life and Devices team, tells the Washington Post that tech companies have a “responsibility” to help people unplug. That thought, he says, is behind new features in Microsoft devices.

He’s not alone. Facebook and Instagram are rolling out features that cut screen time — by tracking app use, snoozing notifications for up to eight hours, and even setting time limits for the apps.

It sounds counterintuitive to dissuade people from using your products. But Big Tech has come under intense scrutiny over so-called smartphone addiction. And there’s a hope that less time equals better time, which could get users to stick with social networks and products in the longer term.

Revolving door

John Studzinski, vice chairman of investor relations and business development at Blackstone, is leaving. (Bloomberg)

Charlie Kindel, who was head of Alexa Smart Home at Amazon, is joining Control4, which specializes in home automation. (The Verge)

The speed read


■ Didi Chuxing and Ant Financial are reportedly in talks to make a joint offer for Ofo, the bike sharing start-up, which could be worth $2 billion. (Reuters)

■ Cisco will buy Duo Security for $2.35 billion. (WSJ)

■ Heineken has struck a $3.1 billion deal to partner with China Resources Beer, China’s largest brewer. (Reuters)

■ Peloton, the maker of exercise bikes, is raising $550 million, for a reported valuation of $4.15 billion. (WSJ)

Politics and policy

■ A major donor to President Trump reportedly agreed to pay $10 million to Michael Cohen if he successfully helped obtain funding for a nuclear power project. (WSJ)

■ The Trump administration unveiled its plans to relax car pollution rules. (NYT)

■ The F.C.C. approved rules that could let Google Fiber and other internet service providers gain faster access to utility poles. (Ars Technica)


■ Amazon is removing products that feature Nazi symbols, and slashing its U.K. tax bills.

■ How Elon Musk uses Twitter to fend off Tesla short sellers. (Plus: The automaker is producing its own AI chips.)

■ Health officials will start tracking electric scooter injuries. (NYT)

Best of the rest

■ How one man fought the I.R.S. to avoid paying tax on $500,000 embezzled by his wife. (WSJ)

■The Bank of England raised benchmark interest rates. (NYT)

■ Three ways the next recession could come about. (NYT)

■ Japan regains title of second-largest stock market from China. (FT)

■ Saudi Arabia’s best-known investor, Prince Alwaleed bin Talal, is back in the game. (NYT)

You can find live updates throughout the day at

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