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Tuesday, January 24, 2023
Today’s newsletter by Julie Heyman, Anchor and Correspondent for Yahoo Finance. Follow Julie on Twitter @tweet. Read this and more market news on the go with Yahoo finance app.
One of the regular fees charged to participants World Economic Forum In Davos they talk about a big match on climate change…then they fly to Zurich on private jets.
The WEF said it makes up for all of that travel by purchasing carbon credits. Some CEOs have responded by flying commercially, which has a lower carbon footprint.
But the CEOs and world leaders we spoke to last week seem increasingly aware of how they are viewed outside their bubble in the Swiss Alps, and are making some attempts to address these perceptions.
As my colleague Brian Suzy wrote in yesterday’s morning briefing, those who attend the World Economic Forum Elon Musk didn’t pay much attentiondespite of Musk took the shots again at the annual gathering.
Yet the billionaire’s belligerent snubbing doesn’t mean the proceedings in Davos haven’t taken on a new air of self-awareness around this annual gathering of the global elite.
“It’s something that people are well aware of now and it’s becoming more important,” S&P Global CEO said Doug Peterson told us in Davos. Peterson said he takes commercial flights for international travel. The Yahoo Finance team shared a business trip with another top US CEO on the way back to the US this weekend.
But it’s not just Internet trolls or climate activists like Greta Thunberg whose voices rose to the heights where CEOs reside. Yahoo Finance executives said they listen to their local communities and employees, who expect the companies to be good partners.
“We live in today’s world where our employees want to get to know us as human beings,” Cisco CEO Chuck Robbins said. “Our people really care about the culture. They care about your goal. In fact, if you look at some of the recent surveys, employees will tell you that salary isn’t number one anymore.”
Tech executives, especially, are well aware of the optics of throwing lavish Davos parties while cutting spending at home. Cloudflare CEO Matthew Prince decided to tone down this year, opting not to throw the company’s typical hot-ticket party. (Cloudflare still sponsors a popular piano bar.)
“It doesn’t seem like the right year to celebrate,” said the prince. “When we see a lot of companies laying people off, when we see people in the tech industry really struggling, the idea of flying high performance, spending a lot of money on a lavish party just didn’t make sense.”
Prince appeared to be throwing shade at Microsoft, which hosted Sting and 50 attendees at a party early in the week before the news broke. The company was laying off 10,000 people.
Salesforce also threw a party whose coveted invites were hard to come by, which included a performance by Chrissie Hynde, frontman of The Pretenders.
But this gig was sandwiched between news of the layoff earlier this month and Monday’s revelations about it activists Elliott Management and Jeff Ubben’s Inclusive Capital have taken stakes in the software giant. Investors also noticed the outage. You may feel an opening.
These kinds of parties—some with supposed themes like sustainability—are designed to make it clear that Davos is not a sinister meeting of a dark cabal of global CEOs, political leaders, and NGOs, but an opportunity for VIPs. To get a lot of Facetime with counterparts in a focused period.
This year’s conference also showed, to sometimes embarrassing effect, that CEOs are trying to bridge a difficult line between business and philanthropy, one of the challenges facing so-called stakeholder capitalism.
BlackRock CEO Larry Fink, who pushed his massive money management company into more investment in ESG, has been attacked by activists on both sides for going too far and not going far enough.
“The attacks are now personal,” Fink said during last week’s session.
What does all this self-awareness and sensitivity at Davos mean for investors?
More caution and caution is likely from companies and their leaders.
With the global economy slowing – and there was a heated debate among executives in Davos about that just how much – Expect more tact from Corporate America 2023. And not just in their balance sheets, but also in managing their public image.
What are you watching today
8:30 a.m. ET: Non-manufacturing activity of the Federal Reserve Bank of PhiladelphiaJan (-17 over the previous month, revised to -12.8)
9:45 a.m. ET: Standard & Poor’s Global Manufacturing in the United Statesearly January (46.0 expected, 46.2 over the previous month)
9:45 a.m. ET: S&P Global US Services PMIJanuary primary (45.3 expected, 44.7 over the previous month)
9:45 a.m. ET: S&P Global US Composite PMIJanuary primary (46.4 expected, 45.0 over the previous month)
10:00 a.m. ET: Richmond Fed Manufacturing IndexJanuary (-5 expected, 1 over the previous month)
10:00 a.m. ET: Business Terms Richmond Federal ReserveJanuary (-14 during the previous month)
Microsoft Corporation (MSFT)And 15:00 (mmm), Johnson & Johnson (JNJ), Hasbro (she has), Halliburton (Hal), Lockheed Martin (LMT), Verizon connections (VZ), Lockheed Martin (LMT), General Electric (GE), travel companies (TRV), Capital One Financial (COF), Texas Instruments Inc (TXN)
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