Wage against the machine

MARKETS

• U.S. markets: Stocks (especially tech) hope to rebound after a lackluster week. The Nasdaq had its worst start to September since 2008.
• Swedish election: The moderates received the most votes, but a far-right party (with white supremacist roots) made gains. The country now faces a hung parliament.

#METOO

Moonves Is Out at CBS

CBS Chief Executive Les Moonves is leaving the company immediately following new claims of sexual misconduct.

How'd Moonves get here?

Last month, Moonves was accused of sexual misconduct in a Ronan Farrow-penned exposé in The New Yorker (he's the same journalist who helped that publication win the Pulitzer Prize for his reporting on Harvey Weinstein).

Moonves managed to keep his job since those initial claims. But over the weekend, six more women came forward, and CBS accelerated the exit. Which, for some, still dragged on way too long...

• Farrow told CNN these women spoke up because "they have been extraordinarily frustrated by what they perceive to be inaction on the part of CBS and its board. And that really is integral to what prompted this follow-up story."

Some of the allegations in the follow-up? There were claims Moonves forced women into sexual acts, exposed himself to them without consent, and used physical violence and intimidation against them.

Moonves, who’s been at CBS for more than 20 years, acknowledged three encounters Farrow documented, but he claimed they were consensual. CBS has since launched its own investigation.

The exit details

It's about more than just Moonves's alleged behavior.

• The deal also put a stop to what's turned into a monthslong saga of litigation between Moonves and Shari Redstone (the controlling shareholder of CBS).
• CBS also announced that Redstone's National Amusements won’t continue to pursue a CBS/Viacom merger, and will hold off on suggesting a deal again for two years. Oh, and CBS announced six new board members.

Wondering about Moonves's exit compensation? CBS announced Moonves will not receive any severance benefits right away. Any future payout is pending the results of CBS’s investigation into Moonves’s behavior, the company said.

Plus, CBS said it and Moonves will donate $20 million (from what would have been Moonves's severance package) to one or more organizations “that support the #MeToo movement and equality for women in the workplace.”

Who's taking the reins: CBS has tapped current COO Joe Ianniello as interim CEO.

ECONOMY

Thanks to the August Jobs Report, We’re OK Saying Goodbye to Summer

The U.S. economy added 201,000 jobs in the last full month of summer '18 to continue a more than seven-year streak of growth. And unemployment stayed firm at 3.9%, a nearly generational low.

But that's not even the kicker: You've probably noticed your neighborhood economist watching wage growth stats very carefully. In a strong job market with record-high corporate profits, many think wages should be higher.

• Well, that wish was (mostly) granted. Hourly wages grew 2.9% in August...the largest monthly increase since April 2009. The exact number? Average hourly earnings climbed 10 cents to $27.16 last month.

Remember, wage growth is often tracked as an inflation gauge. That means Jerome Powell and his Fed pals are watching the measure closely heading into their last three meetings of the year.

The takeaway? "If we continue to see wage growth move higher, it puts the Fed in play for a fourth rate hike, absent tariff concerns," said Quincy Krosby from Prudential Financial to CNBC.

You don't have to go far for tariff concerns. Just keep reading...

TRADE

Trump's Poison Apple?

You might've been sleeping in, but President Trump spent his Saturday morning musing on the future of trillion-dollar tech titan Apple.

You bet there's a backstory: A day earlier, Apple told the U.S. Trade Representative that proposed tariffs on $200 billion of Chinese goods would make products like AirPods and Apple Watch more expensive.

• Remember, most of Apple's products are assembled in China (if you don't believe us, just check the back of your iPhone...).
• Apple argued that tariffs could mean higher "consumer prices, lower overall U.S. economic growth, and other unintended economic consequences." This comes right when Trump said he's got $267 billion in more tariffs "ready to go on short notice."

Bottom line: Trump's had a soft spot for Apple ("Exciting!") for some time, but it doesn't look like the company's warnings will make a difference. Gear up for the next round in the trade war.

AUTO

The Picture That Launched a Thousand Memes

Via YouTube
Elon Musk appeared to smoke pot on Joe Rogan's podcast Friday. Then, the internet went berserk and Tesla shares finished down 6.3%.

But...that's just half the story:

• Chief Accounting Officer Dave Morton, who only recently identified all the good lunch spots around Tesla HQ (he came on board Aug. 6), resigned. "The level of public attention placed on the company, as well as the pace of the company, have exceeded my expectations," he wrote. He also added he believes strongly in Tesla's mission.
• Gabrielle Toledano, the HR chief who'd been on a leave of absence, told Bloomberg she's not coming back to Tesla.

Zoom out: Tesla's Friday mayhem didn't do much to calm fears that a) its CEO has a screw loose or b) it has solved its problem of high turnover among execs.

E-COMMERCE

The Man, the Myth, the Ma...Will Be Moving On

Jack Ma gave a timetable for passing the torch at Alibaba, the e-commerce giant he co-founded with 17 others back in 1999. The plan? Alibaba CEO Daniel Zhang will succeed him as chairman of the board a year from today.

Here's our question: Ma's also turning 54 today. Does birthday + retirement plans = double the cake?

Double the cake or not, it's been quite a tenure...

• Alibaba is China's e-commerce leader, commanding a market cap of ~$420 billion. Not to mention, it's diversified into entertainment, mobile payments, and cloud computing (remind you of someone?).
• Ma himself has vaulted his net worth past $40 billion, making him one of the richest men in China.

So what'll be next? Ma said he'll focus his efforts on education and philanthropy. In fact, he's created a foundation he plans to model after Bill Gates's. "There's a lot of things I can learn from Bill Gates. I can never be as rich, but one thing I can do better is to retire earlier," he said to Bloomberg.

Bottom line: "Jack overseas and at home is the most recognizable symbol of the China internet explosion and more broadly the China consumer boom," Alibaba expert Duncan Clark told the WSJ.

+ See the bottom of the newsletter for a "Ma"ntage of Jack's greatest hits

CALENDAR

The Week Ahead

A few major events highlight an otherwise pretty unremarkable week. It's a good time to plan out goals for the fall.

Monday: First day of Rosh Hashanah; World Suicide Prevention Day; earnings (Sonos)

Tuesday: 17th anniversary of the 9/11 terrorist attacks; JOLTS

Wednesday: Apple's annual event; Global Climate Action Summit; Fed's beige book released

Thursday: CPI; jobless claims; Turkey's central bank is expected to hike interest rates; earnings (Kroger)

Friday: Retail sales; consumer sentiment

WHAT ELSE IS BREWING

• Apple has pulled Alex Jones's Infowars app from its App Store.
• Horror film The Nun debuted at No. 1 in North America with $53.5 million in ticket sales, dethroning Crazy Rich Asians from its first place position.
• Former Treasury Secretary Larry Summers called the most recent results of the Fed's big bank stress tests "comically absurd."
• Florence has strengthened into a hurricane and is expected to hit between South Carolina and Virginia this week.
• Amazon poached Project Runway stars Heidi Klum and Tim Gunn to star in its own fashion design show.
• Naomi Osaka and Novak Djokovic won the women's and men's U.S. Open tennis championship, respectively. Djokovic has now earned more prize money than Roger Federer.

BREAKROOM

A "MA"NTAGE OF JACK'S GREATEST HITS
He's not your average corporate exec...

• Here's Jack Ma dancing to Michael Jackson at Alibaba's "Annual Party."
• In this clip, he's singing "The Lion King" to employees.
• Andrew Sorkin interviews Jack Ma about the future of online trade and globalization.

TRIVIA
We mentioned that most of Apple's products are assembled in China, and its main manufacturing partner there is Taiwanese firm Hon Hai Precision Industry. Hon Hai is better known by which name?

(Answer located at bottom of newsletter)

Breakroom Answers