DealBook Briefing: The Biggest Ever I.P.O. Is on HoldGood Thursday morning. (Was this email forwarded to you? Sign up here.)
Keep waiting for that killer Aramco I.P.O.
Saudi Aramco’s public market debut, which would have been the biggest ever, is being postponed. Instead, the Middle Eastern oil giant is focused on buying a stake in Sabic, a huge publicly traded chemical maker controlled by the kingdom’s sovereign wealth fund.
Why pause? Arranging such a huge I.P.O. is complex, and oil prices have rebounded, which made the offering less attractive. But the decision hurts several groups:
• The Saudi government misses out on a multibillion-dollar windfall that it said would finance a transformation of its economy.
• Bankers won’t be getting millions in advisory fees.
• Stock exchanges lose the prospect of a monster listing.
• Start-ups might find the Saudi investment fund stops being so generous.
Aramco officials insisted that the I.P.O. would still happen someday. They wouldn’t say when, though.
A Sabic deal could put billions in the Saudi sovereign fund’s coffers. But it probably won’t be enough to pay for that $500 billion robot-run city.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
Retail is back, baby
Target reported its best quarterly results in 13 years yesterday. Last week, Walmart posted its best results in a decade. Nordstrom, Kohl’s and others are doing better than expected. Wasn’t e-commerce supposed to be decimating retail?
Bloomberg lists what retailers did right: “sprucing up stores, adding more e-commerce delivery options and improving service with better-trained, higher-paid employees.”
But the gains look mostly cyclical, not structural. Low unemployment, rising wages and expanding credit have created what Target’s C.E.O., Brian Cornell, has called a “very strong consumer environment — perhaps the strongest I’ve seen in my career.”
The rising tide hasn’t lifted the likes of J.C. Penney’s and Sears; they don’t have the cash to invest in keeping up.
Fixing China’s slowing economy — and winning from it
Today, the U.S. imposed tariffs on a further $16 billion worth of Chinese-made goods, and China retaliated. The country’s economy has already been slowing, with at least some effect on ordinary people. Li Yuan of the NYT describes a “consumption downgrade”:
Order a medium-size milk tea instead of a large. Give up the gym, and take up dancing in public squares like a grandmother. Some people joke about eating meat instead of tofu, as American tariffs have made imported soybeans more expensive.
Beijing’s economic chiefs are looking for a stimulus, and fast, says Keith Bradsher of the NYT:
Officials are pushing banks to lend more and allowing indebted local governments to spend money on big projects again. They have moved to shore up the value of the country’s currency. They have also helped out the stock market, say financial analysts, as the government works to avert a stock market collapse.
The Trump administration reckons these signs of weakness will help it during trade negotiations this week, the WSJ reports.
Welcome to the longest-ever* bull market
So how much longer can the run continue? The Federal Reserve signaled further rate rises — but is monitoring at least two threats: a slowdown in home building and the effect of President Trump’s tariff war.
*Yes, we know it depends how you round it.
How the National Enquirer protected Trump
Michael Cohen’s guilty plea did more than implicate President Trump in a potential crime. It also illustrated how deeply the publisher of the National Enquirer was invested in the Trump campaign — including essentially paying hush money, with Mr. Trump’s apparent knowledge, to women who claimed affairs with him.
More from Jim Rutenberg and Rebecca Ruiz of the NYT:
As early as August 2015, prosecutors revealed, Mr. Cohen communicated with the chairman of American Media, David J. Pecker, who agreed to turn the organization’s tip line into a trip wire that could detect potential trouble for Mr. Trump. Mr. Pecker agreed to “help deal with negative stories,” about Mr. Trump’s “relationships with women by, among other things, assisting the campaign in identifying such stories so they could be purchased and their publication avoided.”
Mr. Pecker has told prosecutors about the payments that Mr. Cohen arranged, as well as what Mr. Trump knew.
But can prosecutors prove that Mr. Trump authorized hush money to protect his campaign, not just his reputation? As the WaPo notes, similar charges have failed before.
Facebook’s Cambridge Analytica cleanup suspended 400 apps
The social network has been investigating suspicious apps on its platform in the wake of the Cambridge Analytica scandal. So far it has suspended 400 “due to concerns around the developers who built them or how the information people chose to share with the app may have been used.”
One, myPersonality, was banned for not cooperating, “and because it’s clear that they shared information with researchers as well as companies with only limited protections in place.”
More Facebook news: The company pulled its VPN app from Apple’s App Store over privacy concerns. It’s developing a new way to spread Wi-Fi in the developing world. And online manipulation scares Europe, too.
Could a tech tax prop up the BBC?
Jeremy Corbyn, the leader of Britain’s Labour Party, is expected to make sweeping media proposals today. The Guardian mentions a particularly controversial one: a tax on big tech businesses and broadband providers that would fund the public broadcaster, the BBC.
The idea is to free the broadcaster from regular funding negotiations with the government. Mr. Corbyn is expected to argue that otherwise, “a few tech giants and unaccountable billionaires will control huge swaths of our public space and debate.”
The media industry and other businesses are likely to balk. The prospect of a Corbyn-led government troubles them almost as much as Brexit.
Dan Rose, who oversaw Facebook’s news efforts as its vice president of partnerships, plans to leave early next year.
Jon Faust, who advised Ben Bernanke and Janet Yellen, will return to the Fed full-time.
Tim Kentley-Klay was suddenly dismissed as C.E.O. of the autonomous driving start-up Zoox.
JPMorgan Chase is laying off about 100 asset-management employees.
The speed read
• Linde’s $45 billion takeover of Praxair is in danger after antitrust regulators demanded the sale of more operations. (Bloomberg)
• Moody’s sounded an alarm about the nearly $1.4 trillion leveraged-loan market. (Bloomberg Opinion)
• KKR is reportedly in talks to buy Fiat Chrysler’s Magneti Marelli parts unit. (WSJ)
• Goldman Sachs sold, and leased back, its London headquarters. (FT)
Politics and policy
• The Justice Department stepped up efforts to combat opioid addiction, announcing lawsuits against doctors and a Chinese drug-trafficker. (NYT)
• Yale’s endowment will stop investing in retailers that sell assault-style rifles. (Bloomberg)
• Trade fights with President Trump are making European leaders warm to Vladimir Putin. (Bloomberg)
• Auto tariffs are hindering Nafta talks. (Bloomberg)
• Australia banned China’s Huawei from 5G work. (NYT)
• Can Snapchat capitalize on distrust in Facebook and Twitter? (Bloomberg)
• The S.E.C. has quashed more applications for Bitcoin E.T.F.s. (Bloomberg)
• How Europe’s data privacy rules are changing online advertising. (Reuters)
Best of the rest
• “The Big Bang Theory,” one of broadcast TV’s biggest hits, is ending next year. (NYT)
• The world might not be ready for another financial crisis. (Axios)
• Wells Fargo says it isn’t anti-weed; it’s just following the law. (Bloomberg)
• France is tackling insider trading, sometimes with wiretaps. (Bloomberg)
• Aretha Franklin left no will. (Fortune)
You can find live updates throughout the day at nytimes.com/dealbook.
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