Executives are under pressure to find a response to the Israel-Hamas war that doesn’t offend employees and business partners.Credit…Tamir Kalifa for The New York Times
A new front emerges in the corporate world
As the Israel-Hamas war stretches on — with Israeli airstrikes hitting more targets in Gaza amid calls by the U.S. and others to delay a potential ground invasion — companies are finding themselves increasingly tangled in the conflict’s complex politics.
Businesses across the corporate world are seeking to find a balance in their responses to the war that don’t offend users, partners and their own employees. As universities dealing with irate donors have found, that isn’t easy.
Social media giants are dealing with a debate over online expression. LinkedIn issued a warning to a pro-Israel website that accused thousands of people of publishing pro-terrorism content that was apparently scraped off the social network. Critics of the site said it featured people who didn’t explicitly support Hamas or who sought to draw attention to the humanitarian crisis in Gaza.
Meanwhile, Meta has struggled with applying its content policies fairly across its platforms, including Facebook and Instagram, according to The Wall Street Journal. The company has already apologized for a glitch that translated some language in user profiles from Arabic as “Palestinian terrorists.”
Employers are also facing pressure to take a stand. Corporate leaders have had to weigh how far to go in any statements they make, as they search for a balance between denouncing the Hamas attacks and antisemitism, and decrying Islamophobia and calling for a cease-fire.
Experts say companies often find themselves out of their depth in talking about the knotty topic and that sometimes there’s little benefit to rushing out a statement. Still, leaders of groups have been criticized for not commenting publicly, especially since organizations had spoken out on issues including abortion rights and Black Lives Matter.
Some companies, especially those without operations in the Middle East, have chosen not to speak. The C.O.O. of the software company Asana, for example, said it was guided by a major principle: “What problem are we trying to solve?”
High-ranking officials have already faced blowback. The C.E.O. of Web Summit, one of Europe’s biggest tech conferences, resigned this past weekend as major sponsors and speakers pulled out of the event following criticism of his public remarks on Israel.
And a top agent at Creative Artists Agency resigned her leadership roles at the firm after apologizing for content critical of Israel that she had posted on her Instagram account.
In related news: How diplomats from the U.S., Qatar and elsewhere helped free two Americans taken hostage by Hamas. These are the American weapons that Israel and Ukraine both want. And the comedian Dave Chappelle sparred with an audience member last week over pro-Palestinian comments he made onstage.
HERE’S WHAT’S HAPPENING
Chevron agrees to buy a rival driller, Hess, for $53 billion. The all-stock deal is the second takeover announced this month by an energy giant doubling down on its core business, despite concerns about climate change. Buying Hess will fortify Chevron’s holdings in oil-rich Guyana, just as Exxon Mobil’s $59.5 billion bid for Pioneer Natural Resources consolidates ownership of the Permian Basin in Texas and New Mexico.
House Republicans plan a forum for speaker candidates. The event, scheduled for later ton Monday will give the nine lawmakers angling for the leadership position to state their case to colleagues ahead of a vote Tuesday on a new nominee. But the crowded field is likely to complicate that effort. The House remains unable to function without a presiding speaker.
Hollywood actors and studios will restart contract negotiations. The SAG-AFTRA union and the alliance representing media giants will meet on Tuesday, as figures on both sides press to restart American movie and television productions. The two were far apart earlier this month on issues including streaming payouts and the use of artificial intelligence.
A new report calls for a global minimum tax on billionaires. Researchers writing for the E.U. Tax Observatory found that a 2 percent levy on the world’s 2,756 wealthiest people could raise close to $250 billion a year for cash-strapped governments. It’s the latest demand for higher taxation of the wealthy amid criticism about their low overall tax bills, but given opposition among lawmakers, including in Congress, such a move is unlikely in the near term.
Big focus on Big Tech
Four of the world’s biggest publicly traded companies — Alphabet, Amazon, Microsoft and Meta — report earnings this week, with investors anxiously awaiting signs that Big Tech’s bet on artificial intelligence is beginning to pay off.
Microsoft and Google’s parent Alphabet will report on Tuesday. Meta is set to go on Wednesday, and Amazon on Thursday. Further out are Apple on Nov. 2 and Nvidia, the chip-maker, on Nov. 21.
Here’s what to watch: Consumer and business takeup of A.I. will be a big focus. Analysts will also be zeroing in on updates about the digital advertising and e-commerce markets, ahead of the crucial holiday sales period.
They will also want to know if the worst has passed after the tech giants laid off thousands of workers and slowed their corporate spending earlier this year amid an uncertain economic outlook.
A tech rally earlier this year has evaporated. The tech-heavy Nasdaq Composite sank to a near five-month low on Friday, as investors fretted about growing geopolitical tensions in the Middle East and the prospect of higher-for-longer interest rates. The Nasdaq has fallen roughly 3.3 percent since Hamas attacked Israel on Oct. 7, raising fears of a wider war in the region that could hurt an already fragile global economy.
Strong tech sector results in the first half of 2023 lifted the wider markets. Investors poured money into tech stocks as enthusiasm for companies at the forefront of A.I. soared on the buzz around Google’s Bard and ChatGPT, developed by the Microsoft-backed OpenAI.
That surge fueled Big Tech’s power in the markets. The five biggest tech firms account for roughly one-quarter of the S&P 500’s market capitalization, and for an outsize share of its profit.
The bottom line: Investors hope that if strong results by the sector can ignite a new rally, it could lift the benchmark S&P 500 higher, too.
But Tesla may hold a warning. Elon Musk’s electric vehicle maker is often lumped in with the giants of tech, and its stock is a constituent of the N.Y.S.E. FANG+ index. Tesla shares fell nearly 16 percent last week on disappointing earnings. That helped push the mega-cap index back into correction territory.
China fires a shot at Foxconn
Shares in Foxconn tumbled on Monday, after the Taiwanese manufacturer confirmed it was being investigated by the Chinese authorities. It’s the latest warning to foreign companies doing business in China, and came days after reports of a raid on the Shanghai offices of GroupM, a WPP-owned media agency, and the detention of one of its executives.
Apple shares are also down in premarket trading. Foxconn is the tech giant’s biggest manufacturing partner and has been a symbol of China’s industrial prowess. But Foxconn now faces a tax audit and officials are examining how it uses its land in the provinces of Hubei and Henan, home to the world’s biggest iPhone factory.
The Foxconn founder Terry Gou’s presidential bid may be one reason for the inquiry, analysts say. Gou stepped down from the board last month to run in Taiwanese elections in January. (He still holds a 12.5 percent stake in the company.) China has previously targeted Taiwanese companies at sensitive moments in relations between Beijing and Taipei.
Apple was already navigating an increasingly complicated relationship in China. Tim Cook, Apple’s C.E.O., met with senior officials in Beijing last week, his second visit to the country since pandemic restrictions were lifted last year. In recent months, the Chinese authorities have reportedly moved to bar some staff at government agencies and state-owned entities from using iPhones — a move that wiped billions off Apple’s stock market value — and sales of the new iPhone 15 have had a slow start there.
China is WPP’s fourth-biggest market. GroupM has forecast that China’s ad revenue will top $150.6 billion this year. But corruption is common in the industry, according to The Financial Times, which first reported the office raid. Clear Channel Outdoor agreed to a $26 million settlement with the S.E.C. last month after its Chinese unit was found to have bribed government officials in return for advertising contracts.
One bit of good trade news for China: Its relationship with Australia may be thawing. Anthony Albanese, Australia’s prime minister, said the two countries were a step closer to a deal to rescind Chinese tariffs on Australian wine. Beijing has imposed a range of restrictions on Australian goods in recent years following disputes over Huawei, the Chinese telecoms group, spying and the origins of Covid-19.
— The term that computer science experts use to explain the moment when super-powerful quantum computers will emerge in the marketplace and potentially render today’s encryption and privacy protocols powerless, leaving government and corporate secrets vulnerable.
The week ahead
Even aside from tech giants, it will be a busy week of earnings reports from automakers, Big Oil, defense contractors and others. That, and plenty of fresh economic data, are on the calendar this week.
Tuesday: Coca-Cola, General Motors, Halliburton and Puma will report quarterly earnings.
Wednesday: New home sales data will be a focus as housing prices surge. Boeing, Porsche and Hilton also report.
Thursday: It’s decision day for the European Central Bank, with economists forecasting that policymakers will leave the eurozone’s prime lending rate unchanged. In the U.S., the Commerce Department is set to release third-quarter G.D.P. data. Mastercard and Ford announce their results.
Friday: The Fed’s preferred inflation gauge, on “core” personal consumption expenditures, is scheduled for release. The oil giants Exxon Mobil, Chevron and Eni also report.
THE SPEED READ
Shari Redstone, the controlling shareholder of Paramount Global, is reportedly open to a sale — but wary antitrust regulators make further media industry consolidation unlikely. (CNBC)
The Swiss health care company Roche agreed to buy Telavant Holdings, a maker of immunology treatments, for $7.1 billion. (CNBC)
Stonepeak, an investor in infrastructure businesses, struck a $2.1 billion deal to acquire the shipping container company Textainer. (WSJ)
U.S. prosecutors have questioned Anthony Pratt, an Australian billionaire and member of Donald Trump’s Mar-a-Lago club, about his ties to the former president. (NYT)
“George Santos Swore He’d Never Talk to Me. Then the Phone Rang.” (NYT)
Best of the rest
The other peak oil: Why olive oil is so expensive right now. (NYT)
In the race for tech workers, Seattle is beating San Francisco. (WSJ)
America’s “pharmacy desert” problem is getting worse, disproportionately affecting Black, Latino and lower-income communities. (WaPo)
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