Business braces for R.F.K. Jr.
As corporate America increasingly reckons with the possibility of Donald Trump returning to the White House, it’s grappling with the policies that key advisers might push for.
Much of the focus has been on Elon Musk and the former Trump trade chief Bob Lighthizer. But several industries are keeping eyes on Robert F. Kennedy Jr., a noted skeptic of vaccines and the current agricultural system.
“I’m gonna let him go wild on health,” Trump said of Kennedy at a rally at Madison Square Garden in New York City on Sunday. “I’m gonna let him go wild on the food. I’m gonna let him go wild on medicines.”
In a sign of Kennedy’s rising influence, Howard Lutnick, the financier who co-chairs the Trump transition team, told CNN that he had come to doubt the efficacy of vaccines after spending time with the longtime vaccine skeptic.
Kennedy says he has ambitious plans. He told Trump supporters on Monday that he was promised “control of the public health agencies,” including H.H.S. “The president has asked me to clean up corruption and conflicts at the agencies and to end the chronic disease epidemic,” he told The Washington Post. He has also told Food and Drug Administration officials on social media to “preserve your records” and “pack your bags.”
Kennedy could become a sort of health czar who would have some Cabinet officials and federal regulators reporting to him, according to The Post. Putting him in such a role would also mean he wouldn’t have to be confirmed by the Senate, a potentially dicey process given concerns about his policy positions and his private life.
That said, the Trump administration has said formal discussions about staffing haven’t begun.
Business leaders and health experts are wary. Kennedy has drawn criticism for a wide variety of questionable claims he has made over the years, including the dangers of pesticides, food additives and vaccines.
Politico reports that farming trade groups have pushed the Trump campaign on Kennedy’s comments about agriculture and defended the “existing risk- and science-based regulatory frameworks” for pesticides and genetically modified foods.
Meanwhile, many public health officials have questioned how giving Kennedy power could affect the nation’s response to future pandemics and more. “I don’t think he understands the American health system,” Zeke Emanuel, a bioethicist and former Obama administration official, told The Post.
In other political news: Musk is seeking to move to federal court a lawsuit by Philadelphia’s district attorney over his super PAC’s $1 million voter giveaways.
HERE’S WHAT’S HAPPENING
Crude oil prices rise on concerns of further Iranian retaliation against Israel. Brent crude, the international benchmark, was up more than 2.5 percent on Friday following a report by Axios that Iran planned another attack in response to Israeli airstrikes, potentially before Election Day in the United States. It’s a sign of worries that the Middle East conflict could escalate, though analysts said the prospect of all-out war remained remote.
Inflation cooled in September, according to the Fed’s preferred yardstick. The Personal Consumption Expenditures Price Index rose 2.1 percent, down from the previous reading, though stripping out food and fuel costs showed a more stubborn streak in “core” prices. Markets — and the presidential campaigns — will watch for Friday’s jobs report as another measure of the economy, though it’s may be skewed by the effects of hurricanes and major labor strikes.
Boeing pushes employees to ratify a new labor agreement. Striking workers are set to vote Monday on a revised contract that was negotiated by company and union leaders, with help from Biden administration officials. The terms are slightly improved from a previous deal that employees rejected. Separately, the plane maker said it was dismantling a team focused on diversity, equity and inclusion initiatives.
Reading the Comcast M.&A. tea leaves
Comcast ignited speculation across the media industry when it announced that it may spin off its cable network business from the rest of the company.
The broadband giant’s deliberations, announced during the company’s earnings call on Thursday, are in early stages and might not lead to a deal. But their existence says a lot about the state of the media industry, DealBook’s Lauren Hirsch writes.
What the deal could be: Comcast said a spinoff would include cable networks like Bravo, Syfy and USA. Broadcast assets including NBC would stay with Comcast. (Some cable assets, such as MSNBC and CNBC, would be tricky to divest, according to The Wall Street Journal.)
The aim is to separate good business from bad. The key metric that Comcast is focusing on is unlevered free cash flow, John Malone, the telecom billionaire who controls Liberty Media, told CNBC.
Malone added that his competitor had been studying this plan at least since Allen & Company’s annual tech and media conference in July, when his team had talked about it with Comcast executives.
But an independent cable-networks company could struggle, especially if it doesn’t have sports programming. For instance, consumers who want Bravo would be able to get it on Peacock, meaning they wouldn’t have to pay more to watch it on cable, Rich Greenfield, an analyst at LightShed Partners, told DealBook.
Comcast would also consider buying up additional discarded cable channels, The Journal reported.
Could this be a for-sale sign? Not necessarily, since selling the cable networks outright would probably create a big tax hit for Comcast. But the company might be open to something like a complicated lower-tax deal, such as a so-called reverse merger with the likes of Starz, whose C.E.O. has reportedly expressed interest in cable consolidation.
Comcast may also want to strike a deal with private equity. But while those investors like cash-generating businesses, they also like steady operations — and it’s hard to predict how fast those assets will continue to decline. (Comcast probably recalls that Disney drew few takers when it floated the potential sale of its cable assets last year.)
Investors still seem hopeful that something will happen. Shares of Comcast were up 3.4 percent on Thursday, while those of Warner Bros. Discovery, a perpetual subject of deal speculation, were up 4.63 percent. “Once you start to see this, everyone starts getting excited about the larger M.&A. conversation,” Greenfield said.
But there is one question that will weigh on any M.&A. efforts: What would a future Harris or Trump administration allow?
Big Tech splits on A.I.
Tech stocks have driven markets to record highs this year on the back of investor excitement about artificial intelligence. But they dragged down the S&P 500 and Nasdaq on Thursday over growing concerns about A.I. costs and how long it would take to roll out services for consumers.
Tech giants continue to paint a mixed picture on A.I.:
Shares in Amazon are up in premarket trading after the company reported a 19-percent year-on-year rise in sales at its cloud business. Andy Jassy, Amazon’s C.E.O., said the company’s A.I. cloud business was growing three times faster than the wider cloud division.
Shares in Apple were down, despite an increase in iPhone sales for the most recent quarter, after the company forecast lukewarm holiday sales and continued soft demand in China. Investors had hoped that new A.I. features would drive iPhone sales, but most of them won’t be available for months.
Those results followed sharp drops on Thursday in the stocks of Microsoft and Meta, which warned of more heavy spending on A.I., as well as a post-earnings rise in shares of Alphabet, which saw strong growth in its cloud division.
A.I. infrastructure is an increasingly important factor for investors. Much of Microsoft’s warnings about demand for its A.I. offerings was tied to a lack of data centers to meet demand, underscoring how crucial a computing backbone has become in the technology race.
It also explains the jump in the stock prices of utilities, profiting from increased power demands by such facilities.
One thing to watch: A.I. disrupting cash-cow businesses. OpenAI on Thursday introduced a search-engine function for ChatGPT, a feature that could challenge Google’s core business. The Information reported this week that Meta was also working on a search engine for its chatbot.
Exclusive: Gopuff starts accepting federal food-assistance payments
Gopuff, the rapid-delivery service, survived the post-lockdown reckoning that wiped out many of its competitors.
Now the company is laying claim to another distinction: becoming the first such service to be approved to accept federal food stamps, DealBook’s Michael de la Merced is first to report.
Gopuff will accept SNAP payments for eligible orders nationwide, the Philadelphia-based company plans to announce on Friday. But unlike delivery services such as Uber or Instacart that source food for Supplemental Nutrition Assistance Program orders from qualified grocers, Gopuff was certified by the Food and Nutrition Service to complete orders from its own fulfillment centers.
The new service expands low-income families’ options for online grocery shopping, while offering them lower fees than its rivals, according to the company. (In testing, SNAP-eligible Gopuff customers bought items including baby formula, water, bananas and milk.)
“This change would significantly help people living in food deserts access healthy and nutritious food, and modernize the delivery of SNAP to the current day,” Senator John Fetterman, Democrat of Pennsylvania, said in a statement.
The move is part of Gopuff’s commitment to fight food insecurity. In February, the company joined the White House Challenge to End Hunger and Build Healthy Communities, which included pledges to donate 10 million pounds of groceries to local food banks and charities by 2027 and to accept SNAP payments by the end of the year.
It’s the latest effort by Gopuff to differentiate itself in the delivery space. The company was founded in 2013 by Yakir Gola and Rafael Ilishayev when they were students at Drexel University. Its investors include Guggenheim Partners, Fidelity, Accel, SoftBank’s Vision Fund and Bob Iger, Disney’s C.E.O.
While the company has outlasted other quick-delivery rivals, questions persist about its outlook. Gopuff delayed going public in 2022, and it has since done several rounds of layoffs. By some unofficial measures, its valuation has fallen below the $15 billion it attained in 2021. (That said, a representative for the company said that it had significantly improved profitability over the past two years.)
It’s also competing against DoorDash’s DashMart, Instacart and Uber Eats (though Gopuff also sells products through that service, in exchange for giving its rival a cut).
THE SPEED READ
Deals
Investors who bet on the outcome of corporate takeovers are hoping that their business is lifted when deal activity picks up after the U.S. election. (Bloomberg)
“Why Germany’s Resistance to an Italian Bank Takeover Is Raising Eyebrows” (NYT)
Elections, politics and policy
A Trump-appointed judge in Texas is siding with the Biden administration against an effort to have litigation over credit card late fees take place in the state, instead of in Washington. (NYT)
China is resisting growing pressure to lay out global emissions targets and commit to helping developing nations hit by climate change, ahead of an annual U.N. conference on the matter. (WaPo)
Best of the rest
Why residents of Memphis are pushing back against Elon Musk’s plans to build a supercomputer near their city. (NYT)
“What if A.I. Is Actually Good for Hollywood?” (NYT)
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