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Tuesday, January 24, 2023
Today’s newsletter is from Julie Hyman, anchor and correspondent at Yahoo Finance. Follow Julie on Twitter @juleshyman. Read this and more market news on the go with the Yahoo Finance app.
One of the regular accusations leveled at World Economic Forum attendees in Davos is that they talk a big game about climate change… then fly to Zurich on private jets.
The WEF said it offsets all that travel by buying carbon credits. Some CEOs have responded by flying in commercial jets, which have a lower carbon footprint.
But the executives and world leaders we spoke to last week seem increasingly aware of how they are perceived outside their bubble in the Swiss Alps, and are making some attempts to address those perceptions.
As my colleague Brian Sozzi wrote in yesterday’s Morning Brief , attendees at the World Economic Forum didn’t pay much attention to Elon Musk, though Musk once again posed for photos at the annual gathering.
Ignoring the hostile billionaire, however, doesn’t mean the Davos process hasn’t taken on a new kind of self-awareness for this annual gathering of the world’s elite.
“It’s something that people are very aware of now, and it’s becoming clearer,” S&P Global CEO Doug Peterson told us in Davos. Peterson said he flies commercials for international travel. The Yahoo Finance team shared a commercial flight with another top US executive on their way back to the States this weekend.
A view of Zurich Kloten Airport as the private and VIP jets of participants arrive at the World Economic Forum (WEF) annual meeting held in Davos, in Zurich, Switzerland, on January 17, 2023. (Photo: Michele Crameri/Anadolu Agency via Getty Images)
But not just internet trolls or climate activists like Greta Thunberg, whose voices have risen to the altitude where CEOs live. Executives told Yahoo Finance that they are hearing from local communities and employees that they expect corporations to be good partners.
“Today, we live in a world where our employees want to know us as people,” said Cisco CEO Chuck Robbins. “Our employees really care about culture. They are interested in your goal. In fact, if you look at some of the recent surveys, employees will tell you that salary is no longer number one.”
The story continues
Tech executives, in particular, are aware of the optics of throwing lavish parties in Davos while cutting costs at home. Cloudflare CEO Matthew Prince decided to tone it down this year, opting not to throw the company’s typical hot-ticket party. (Cloudflare still sponsors a popular piano bar.)
“It just didn’t seem like the right year to celebrate,” Prince said. “When we’re seeing a lot of companies laying people off, when we’re seeing people in the tech industry really struggling, the idea of bringing in a big artist, spending a lot of money on a lavish party, didn’t make any sense.”
Prince appeared to throw shade at Microsoft, which reportedly hosted Sting and 50 attendees at a party earlier in the week before news broke that the company was laying off 10,000 people.
Salesforce also threw a party whose coveted invites were hard to come by and which featured a performance by The Pretenders frontwoman Chrissie Hynde.
But that party was squeezed between news of layoffs earlier this month and Monday’s revelation that activist Elliott Management and Jeff Ubben’s Inclusive Capital had taken stakes in the software giant. Investors also noticed the lack of connection. And maybe feel an opening.
These kinds of parties – some of them with supposed themes like sustainability – are meant to illustrate that Davos is not a sinister meeting of a dark cabal of global executives, political leaders and NGOs, but a chance for high-profile people to get a lot of face time with partners. you are in a concentrated period.
This year’s conference also showed, to sometimes uncomfortable effect, that CEOs are trying to navigate the tricky line between business and philanthropy, one of the challenges of so-called stakeholder capitalism.
BlackRock CEO Larry Fink, who has pushed his massive money management firm even further into ESG investing, has been attacked by activists on both sides of the aisle for going too far and not going far enough.
“Attacks are now personal,” Fink said during a panel last week.
What does all this Davos self-awareness and sensitivity mean for investors?
Probably more caution and prudence on the part of companies and their executives.
With the global economy slowing—and there was lively debate among Davos CEOs just how much—expect a little more tact from Corporate America 2023. And not just in terms of their balance sheets, but in managing their public images.
What to watch today
Economy
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8:30am ET: Philadelphia Federal Reserve January non-manufacturing activity (-17 in previous month, revised to -12.8)
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9:45am ET: US S&P Global Manufacturing PMI, preliminary January (46.0 expected, 46.2 last month)
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9:45 a.m. ET: S&P Global US Services PMI, preliminary January (45.3 expected, 44.7 last month)
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9:45 a.m. ET: S&P Global US Composite PMI, preliminary January (46.4 expected, 45.0 last month)
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10:00 a.m. ET: Richmond Fed manufacturing index, January (expected -5.1 in previous month)
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10:00 AM ET: Richmond Fed Business Conditions January (-14 in previous month)
Profits
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Microsoft Corporation (MSFT), 3M (MMM), Johnson & Johnson (JNJ), Hasbro (HAS), Halliburton (HAL), Lockheed Martin (LMT), Verizon Communications (VZ), Lockheed Martin (LMT), General Electric (GE ), The Travelers Companies (TRV), Capital One Financial (COF), Texas Instruments (TXN)
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