CEO Daily: Friday 2nd December

I’m in Rome this morning for the Coins2Day+Time Global Forum, which is taking on an exceptionally broad but important topic: What can business do to address global economic and social problems, create a more inclusive economic system, and restore the public’s trust in it? The audience of roughly 100 people is mostly made up of Coins2Day Global 500 CEOs – but also includes other private-sector thought leaders.

Cardinal Peter Turkson, who has been tasked by Pope Francis to take on a broad portfolio of issues related to human development, was one of the first to address the group. Asked by interviewer Charlie Rose how he thinks about the tension between shareholders and stakeholders, Cardinal Turkson said “the character of business depends on more than the people who bring the money. We encourage a holistic view of business and its activity. Everything that happens should serve the well being of the human person.”

This afternoon, the CEOs will break into working groups to discuss specific actions the private sector can take to address a number of pressing global problems, including job creation, global health, food and water scarcity, financial inclusion and environmental issues. The actions they agree on will be presented tomorrow to Pope Francis, who will address the group.

We’ll be reporting on this important event all day on coins2day.com, and I’ll do my best to summarize the results in Monday’s CEO Daily.

More news below, and enjoy your weekend.

Top News

• Trump Fires a Warning to Job Exporters

President-elect Donald Trump warned that companies that try to move jobs out of the U.S. Would face “consequences” after his inauguration in January. Trump again waved the incentive of a lighter tax burden to reassure businesses, in a speech delivered at the Carrier furnace plant in Indiana. Under pressure from the PEOTUS, Carrier’s parent United Technologies has dropped plans to move production and some 800 factory jobs to Mexico. The company will get $7 million in state tax breaks for its good behavior. Coins2Day

• Starbucks CEO To Go

Howard Schultz is stepping down as CEO of Starbucks in April, to be replaced by president and COO Kevin Johnson. Schultz said he’ll stay on as executive chairman, and focus on the company’s plan to expand its Roasteries and its portfolio of Reserve stores, a new premium retail format that it hopes will deliver twice the revenues of the typical Starbucks store (albeit from a higher cost base). Tech veteran Johnson (ex-Microsoft and Juniper Networks), meanwhile, is expected to help Starbucks adapt to a world where even the mundane task of getting a caffeine shot is being digitized. Coins2Day

• Bond Rout Resumes Ahead of Payrolls

It’s Payrolls Day, and financial markets are prepared for a labor report that will cement expectations of a Fed rate hike later this month. Non-farm employment is expected to have risen by 175,000 last month, picking up after a Hurricane Matthew-depressed 160,000 in October. Weekly jobless claims hit a 43-year low last month. The dollar’s anticipatory rally appears to have run its course, but money continues to flood out of bonds: the 10-year Treasury note yield hit an 11-month high of 2.47% Thursday, while the 30-year yield hit 3.15%. Reuters

• J&J Ordered To Pay $1 Billion Over Hip Joints

A federal jury in Dallas ordered Johnson & Johnson to pay over $1 billion in (overwhelmingly punitive) damages over its Pinnacle hip implants. The six plaintiffs are only getting $32 million between them, but the company still faces over 8,000 lawsuits over its products. Pinnacle implants have metallic sockets that can corrode over time, in contrast to ceramic or plastic products. The company said it will appeal the ruling. Precedent suggests it can expect a sizeable reduction in the fine. Reuters

Around the Water Cooler

• Hollande Bows to the Inevitable

French President Francois Hollande said he wouldn’t run for a second term in May, clearing the way for his Prime Minister, Manuel Valls, to lead the Socialist ticket. Hollande’s chances of re-election had effectively disappeared with the terrorist attacks in France over the last two years, but he had also failed on his key economic promised of cutting unemployment, which is still around 10% of the workforce. Valls’s chances of winning look equally slim at present: the left and center-left are likely to field at least three candidates in the first round, making a run-off between the Front National’s Marine Le Pen and the center-right’s Francois Fillon the likeliest outcome. Time

• A Softer Brexit After All?

The pound had its best day in a month after David Davis, one of the most senior ministers involved in the negotiations on the U.K.’s post-Brexit settlement with the EU, admitted that the country may pay for full access to the Single Market, and may also accept continued immigration to avoid skills shortages. Hardline Brexiteers are already grumbling about 'betrayal', but the government is under pressure from both sides: later Thursday, the ruling Conservatives suffered a stunning by-election defeat in the wealthy London electoral district of Richmond, which voted in droves for the pro-Remain Liberal Democrats (who were also helped by anger at the government's decision to expand the nearby Heathrow airport). BBC

• Dollar General Squeezed by Competition

Discount retailer Dollar General reported a surprise drop in quarterly comparable sales and cut its full-year profit forecast due to lower grocery prices and reduced food stamp coverage in several states. Aggressive competition from Wal-Mart and others, facilitated by low commodity prices (especially for grains), has cut DG’s traditional competitive advantage on price. Net income fell 7% on the year to $235 million, around 10% short of Wall Street forecasts. The company’s shares fell nearly 5%. Coins2Day

• Maersk Forces Shipping Consolidation

More consolidation in the hard-pressed global shipping industry–thankfully in a way that won’t wreak havoc with the loading and unloading of shipments. Denmark’s Maersk Line, which is in the process of being spun from the energy business it has traditionally been tied to, is buying Germany’s Hamburg Süd for a sum in the region of $4 billion, according to The Wall Street Journal. The move will cement its position as the world’s largest container operator and make it the undisputed no. 1 on routes into and out of Latin America. WSJ, subscription required

Summaries by Geoffrey Smith [email protected];

@geoffreytsmith