From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
CONFLICTING ECONOMIC DATA
The October jobs report came in better than expected to start the month off November off on a strong footing. Nonfarm payrolls rose by 128,000, which was well above the estimates of 75,000 to 90,000. Economists had expected the monthly number to be artificially low because of the 40-day GM strike, which took as many as 50,000 jobs off the market for the month. That strike is now settled and those workers back on the assembly lines. The unemployment rate ticked up to 3.6 percent, still near a 50-year low. The employment data comes amid continuing worries that the U.S. economy is cooling, buffeted by the ongoing trade war. Monthly manufacturing data came out shortly after the jobs report, showing that the sector contracted for the third straight month. The number was better than September, but still below the level that signals contraction, in a sign that even if employment is robust and consumer spending remains strong, trade turmoil is rocking the manufacturing economy. President Trump and President Xi of China were expected to sign a "phase one" trade negotiation agreement later this month at the APEC summit in Chile, though it is currently up in the air where that gathering will be after mass protests in Santiago forced officials to scrap it.
GOOGLE BUYS FITBIT
Google is buying Fitbit, valuing the popular wearables maker at $7.35 per share ー or $2.1 billion total. Shares of Fitbit were halted on the NYSE early Friday morning just before the news broke. Earlier this week, Reuters reported Google had been considering the buy to better compete with the Apple Watch ー but just as critical is Fitbit's massive trove of user health data and an already trusted name in medical technology. For those still slinging Google's competing Wear OS devices, watch out ー while Google said in its press release it would remain committed to investing in WearOS, details remain sparse on how the two product lines will fit into Google's portfolio.
FCA ❤️ PSA
This week was all about automakers around the country ー and across the globe. The big headline: Fiat Chrysler’s announced merger with PSA Group, the French company best known for its Peugeot brand. The mega-merger will create the world’s fourth-largest automaker by volume, an entity worth a whopping $50 billion, and will bring together brands like Chrysler, Dodge, Jeep, and Maserati with the likes of DS, Opel, Citroën, and Vauxhall. But going beyond the glitz of the deal lies an auto industry grappling with a torrent of changes, from a push to sustainable fuel (and electric vehicles in particular), autonomous driving, and stricter emissions standards. It’s a formidable array of forces that the late Fiat Chrysler CEO Sergio Marchionne once said could be headed-off through consolidation, an idea that culminated in their tie-up with PSA. Still, these deals tend to be rocky at best ー the Renault-Nissan-Mitsubishi alliance remains imperiled following the arrest and ouster of its architect, Carlos Ghosn. And Daimler famously tried ー and failed ー to combine with Chrysler.
BOEING CEO ON THE HOT SEAT
A year to the day from when an Indonesian airline crashed into the Java Sea ー sparking an all-encompassing corporate crisis for the manufacturer of that jet ー the CEO of Boeing appeared in front of lawmakers to answer questions about how and why two Boeing planes crashed in the span of five months, killing nearly 350 people on two continents. Over two days of testimony, Dennis Muilenburg took an apologetic tone both to members of Congress and the family members of victims of the two 737 Max crashes who attended the hearings holding photos of their loved ones. However, Boeing maintains that it is not at fault for why a software update on a flight-control system appears to have confused the pilots of those two doomed jetliners, despite mounting evidence that the company was aware of concerns over the so-called MCAS system. Muilenburg told Congress that he was aware in at least one instance of a test pilot's worries about MCAS ー before the second crash that led to the worldwide grounding of the Max jet. That grounding remains in place.
TWITTER DARES FACEBOOK
Twitter CEO Jack Dorsey practically dared Facebook to follow suit when he announced that the platform would ban all political advertising worldwide. Dorsey tweeted his decision and the reason behind it just as Facebook released its quarterly earnings report. Mark Zuckerberg has been under immense pressure over the position he publicly outlined in recent weeks that Facebook, which is used by a third of the global population, would not censor or ban advertising from politicians even if those ads contained outright lies. Taking the exact opposite approach, Dorsey said that political influence should be "earned, not bought." Dorsey's announcement isn't likely to cause a major dent in Twitter's revenues. When it comes to political advertising, Twitter is a drop in the bucket; the company said this week it received less than $3 million during the 2018 midterm election cycle. Conversely, the Trump campaign alone spent more than $21 million on Facebook ads in the last 18 months.
