Good Friday morning. Breaking: Howard Schultz, the former Starbucks C.E.O., called off his presidential bid. And don’t forget: I’m going to be in conversation with Blackstone’s Stephen Schwarzman about his new book, “What It Takes: Lessons in the Pursuit of Excellence,” at a DealBook TimesTalk in New York on Sept. 16. Get your tickets here. (Was this email forwarded to you? Sign up here.)
WeWork’s I.P.O. dreams may be on the rocks
The co-working giant had ambitions to stage an outsize public stock offering that would give it a rich valuation and the opportunity to raise money from a new set of investors. It may have to put those plans aside for now.
WeWork is considering valuing itself in an I.P.O. at around $20 billion, Michael de la Merced and Peter Eavis of the NYT report, citing unnamed sources. That would be less than half a $47 billion valuation from January.
The company has also discussed taking more money from SoftBank, one of its largest investors, which could either help bolster its I.P.O. or allow it to delay the offering. (Nothing has been decided yet.)
It’s a bad sign for WeWork. The company, which offers work spaces for freelancers as well as Fortune 500 companies, had been counting on being able to raise money from public investors to finance its global expansion. Delaying an I.P.O. or selling fewer shares than expected could hurt its ability to borrow from banks.
It’s also a headache for SoftBank. The Japanese tech giant has already invested $10.5 billion in WeWork, and some of its executives have been leery of pouring more money into the company. And it’s in the middle of raising money for its next $100 billion-ish Vision Fund.
And it could be a turning point for huge, unprofitable companies backed by billions in venture capital. As investors have grown wary of businesses like Uber that are racking up losses — with no end in sight — the public markets may be turning inhospitable. That’s bad news for start-ups hoping to raise more money.
More: Palantir, the data consultancy that was last valued at $20 billion, is reportedly in talks to raise money in the private markets and put off its I.P.O.
Today’s DealBook Briefing was written by Andrew Ross Sorkin and Stephen Grocer in New York, and Michael J. de la Merced in London.
Will the jobs report show signs of a slowdown?
The Labor Department is scheduled to release August jobs data this morning, and it’s expected to show relatively strong performance by the U.S. economy. But any slip could point to a gloomier outlook.
Economists predict that 160,000 jobs were created in August. That’s just below July’s numbers, but enough to maintain an unemployment rate of 3.7 percent.
If that’s the case, the U.S. would keep enjoying its best jobs picture in 50 years. Ben Casselman of the NYT notes that the labor market is so tight that companies are looking outside the traditional work force to fill positions, including by hiring stay-at-home parents and people with disabilities.
There’s reason for hope. ADP’s payroll data yesterday showed a better-than-expected growth of 195,000 private-sector jobs last month. President Trump, for one, was elated by those results — even if there’s little historical correlation between the ADP numbers and the government’s.
And for concern. Bloomberg warns that the Labor Department’s numbers may be inflated by a surge in hiring of temporary workers for the 2020 census. A manufacturing survey this week showed a contraction in factory production, a potential harbinger of economic slowdown.
The Labor Department report is released at 8:30 a.m. Eastern.
The markets are feeling slightly better about trade
U.S. markets are poised to open higher today, after they soared yesterday on the news of rescheduled U.S.-China trade talks. But there’s no reason to get carried away by hopes of an imminent solution.
The S&P 500 gained 1 percent yesterday after Washington and Beijing said they would resume discussions next month. It’s a sign of how investors are clinging to any sign that the trade fight could ease.
But few are optimistic that will happen. Both President Trump and President Xi Jinping of China are under pressure from domestic audiences to stay firm and not give up too much. There’s little harm to either side in favoring talks over action, so expect more words than deals for the time being.
The uncertainty will be a drag on U.S. economic output, which could slow by 1 percent through early next year, according to new research by the Fed. It’s the first study by a central bank to try to quantify the effects of the Trump administration’s trade battle, Nick Timiraos of the WSJ writes.
That’s a big reason the Fed is now expected cut interest rates later this month. The WSJ reports that the reduction is likely to be another quarter of a percentage point.
More: Target has told its suppliers it won’t accept any increased costs related to Mr. Trump’s tariffs.
The latest effort to take Fannie and Freddie private again has begun
More than a decade after a government takeover of the mortgage giants, the Trump administration will try to do what others have failed to do: set them on the path to becoming privately run companies.
Fannie Mae and Freddie Mac were bailed out during the 2008 financial crisis as the burst of the housing bubble strained their balance sheets. President Obama and members of Congress had proposed returning them to private control, but never did.
The Trump administration has laid out recommendations to restart the process, starting with a recapitalization. Other proposals include letting the two companies keep more of their profits and, eventually, reduce their role in the American mortgage industry.
Officials said the plan wouldn’t endanger the 30-year fixed-rate mortgage, the cornerstone of the American housing market. One way to preserve that type of loan, according to the proposals, is by supporting a congressional effort to provide an explicit, but limited, federal guarantee for the mortgage-backed securities that underpin home loans.
But there are political hurdles. Parts of the plan don’t require congressional approval, but others do — and lawmakers are unlikely to take up the issue so close to an election year.
Walgreens and CVS wade into the gun control debate
The pharmacy chains were among the latest companies to adopt new restrictions on guns, as corporate America continues to speak up about firearms after a wave of mass shootings, Reuters reports.
Customers will be asked not to openly carry firearms at their stores unless they are authorized law-enforcement officers, a policy that has been adopted by Walmart and the supermarket chains Kroger and Wegmans.
The move suggests that more businesses are willing to engage in a debate they have historically shied away from. Walmart made waves this week when it adopted the anti-open-carry policy, along with plans to stop selling ammunition for military-style rifles. It also called on Congress to debate a new ban on assault weapons.
The moves may increase pressure on Washington. The founder of the gun-control advocacy group Moms Demand Action, Shannon Watts, tweeted, “We hope Senate leaders are watching this sea change.”
More: President Trump is preparing to introduce his latest proposals to curb gun violence, but they appear to be political nonstarters. And in case you missed it, Andrew spoke with Michael Barbaro of “The Daily” about Walmart’s move on guns.
The cost of Amazon’s fast, free delivery
The company has dominated e-commerce with its fast shipping. But an investigation by Patricia Callahan for ProPublica and the NYT shows that speedy delivery has a price: injury, and even death.
• Ms. Callahan identified more than 60 accidents since June 2015 involving Amazon delivery contractors that had resulted in serious injuries, including 10 deaths.
• “That tally is most likely a fraction of the accidents that have occurred,” she writes. “Many people don’t sue, and those who do can’t always tell when Amazon is involved, court records, police reports and news accounts show.”
• “Amazon software tracks drivers’ progress, and a dispatcher in an Amazon warehouse can call them if they fall behind schedule. Amazon requires that 999 out of 1,000 deliveries arrive on time, according to work orders obtained from contractors with drivers in eight states.”
• But “Amazon has repeatedly said in court that it is not responsible for the actions of its contractors, citing agreements that require them, as one puts it, to ‘defend, indemnify and hold harmless Amazon.’”
Dominic Barton, the former global managing partner of McKinsey & Company, was appointed Canada’s ambassador to China.
NPR hired John Lansing, the head of the U.S. agency that oversees Voice of America, as its next C.E.O.
Barclays has reportedly raised requirements for new employees so high that it has effectively instituted a hiring freeze.
Deutsche Bank is said to be cutting dozens of jobs in its fixed-income trading unit.
The speed read
• Changes atop Saudi Aramco show the Middle Eastern oil giant is back on its way toward an I.P.O. (NYT)
• The C.E.O. of the cloud storage provider Box said he would work with the activist hedge fund Starboard Value, which owns a 7.5 percent stake in his company. (CNBC)
• Exxon Mobil has reportedly agreed to sell its Norwegian oil and gas assets to Var Energi for up to $4 billion. (Reuters)
• Alibaba agreed to buy Kaola, a Chinese e-commerce site, for $2 billion. (CNBC)
• Silver Lake invested an additional $1 billion into Motorola Solutions. (MarketWatch)
• Revenues at the world’s top investment banks plunged to a 13-year low in the first half of the year. (FT)
Politics and policy
• The Trump administration has spent less than one-third of the $107 billion that Congress has set aside for disaster relief after hurricanes and wildfires of 2017 and 2018. (NYT)
• Jason Greenblatt will step down as the Trump administration’s special envoy for Middle East peace. (NYT)
• Iran said it would breach limits on nuclear research set by the 2015 nuclear accord, setting back European efforts to salvage that pact. (NYT)
• Parliament continues to battle with Prime Minister Boris Johnson over when to hold a general election: before Britain is scheduled to depart the E.U. on Oct. 31, or afterward. (NYT)
• Mr. Johnson’s brother Jo resigned his ministerial post and his seat in Parliament over disagreements on Brexit. (NYT)
• The E.U. warned that Britain’s plans to diverge from the bloc’s rules on environmental and social standards could hinder efforts to strike a trade deal after Brexit. (FT)
• A co-founder of M.I.T.’s Media Lab, the research center that attracted unwanted attention after revelations it accepted donations from the disgraced financier, defended taking the money. (NYT)
• Hackers seized control of Jack Dorsey’s Twitter account last week using a so-called SIM swap. (NYT)
• Facebook is bringing its dating service to the U.S. Shares in the Match Group, the owner of Tinder, fell nearly 5 percent. But here’s why you shouldn’t turn to the tech giant for help in your love life. (WSJ, CNBC, NYT Opinion)
• How tech is transforming farming. (NYT)
• Here’s a deep dive inside the NSO Group, the Israeli spyware maker accused of helping Saudi Arabia and Mexico crack down on dissidents. (Business Insider)
• Koch Industries has been playing down its right-leaning politics to help its venture fund make gains in Silicon Valley. (Bloomberg)
• “The Silicon Valley heavyweights who want to settle the moon.” (Bloomberg)
Best of the rest
• Robert Mugabe, the former longtime strongman of Zimbabwe, has died. (NYT)
• The hedge fund Autonomy Capital lost about $1 billion last month in large part because of bets on Argentina. (WSJ)
• PG&E, the California utility, mislead regulators, withheld data and hindered investigations over 25 years, according to a new investigation. (WSJ)
• What happened when the Nobel-winning economist Paul Romer went to Burning Man. (Upshot)
• N.F.L. teams have become so expensive that the league is reportedly considering ways to ease the financial requirements to buy one. (Bloomberg)
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