Good morning. Andrew here. I am in Davos, Switzerland, at the annual meeting of the World Economic Forum. President Trump is expected to speak here tomorrow. The mood: trepidation, for those who are being honest. I attended several events last night, where some C.E.O.s openly questioned the president, using words like “wild” and “bizarre.” Yet many of them are planning to attend a reception in his honor, with some even joking about the best way to praise him in person. “Tread lightly,” one C.E.O. said. Contrast that with a number of international politicians wringing their hands over the growing tensions about Greenland. Also on attendees’ minds: The Supreme Court could finally rule on the legality of some of Trump’s biggest tariffs as soon as today. (More on that later.) And then there was Larry Fink’s speech at the gathering’s opening event last night. In it, the BlackRock chief and interim W.E.F. co-chair said that the forum was no longer trusted, acknowledging a longtime worry that wasn’t usually said out loud. He said he wanted to make changes, like bringing in new voices — and perhaps bringing the event to more cities. We’ve got all of the details below. (Was this newsletter forwarded to you? Sign up here.)
Greenland, A.I. and more at DavosThe World Economic Forum is in full swing in Davos, Switzerland. Already, the U.S. delegation has made clear that it’s not particularly interested in the event’s longtime goal of improving the world through international cooperation and commerce. President Trump said he would hold a meeting to discuss what many see as his increasingly bellicose efforts to take Greenland from Denmark — but has reiterated that he still wants the semiautonomous territory. And Treasury Secretary Scott Bessent brushed aside potential European responses to Trump’s possible trade war over the island. Here’s the on-the-ground picture. The U.S. show: At a news briefing yesterday at USA House, the U.S. delegation’s official hub in Davos, Bessent spoke about America’s economic strength and desire for global partners, Lauren Hirsch reports. (“America First does not mean America alone,” he said.) But Bessent has also derided reports of E.U. leaders weighing 93 billion euros’ (about $109 billion) worth of tariffs on U.S. goods in response to Trump’s saber-rattling over Greenland. (“I imagine they will form the dreaded European working group first,” he quipped.) And he said today that any European dumping of Treasury bonds “defies any logic.” USA House itself has become a symbol of this year’s forum, Hirsch adds. It’s prominent — it sports a giant painting of a bald eagle and is across from the Congress Center, the official hub for forum events — and has been packed with executives seeking to pitch the U.S. delegation. Its agenda for the week includes a live taping of the “All-In” podcast and a talk entitled, “Boardroom to Battlefield: Winning the A.I. Tempo War for Economic and National Security.” Tension on the streets and behind the scenes: The front page of the German newspaper Süddeutsche Zeitung, seen on the Davos Promenade by The Times’s Jordyn Holman, featured a hat bearing the phrase “Make America Go Away.” Over dinner, executives who last year cheered an expected surge in deal making in Trump’s second term have been debating rising geopolitical unrest. Many bankers still argue, however, that M.&A. will go up this year, and that the gloomy talk is a distraction, not a threat. Questions about the future of artificial intelligence: Last year’s forum saw the escalation of an A.I. race, especially with the sudden rise of China’s DeepSeek. This year, attendees acknowledged that the sprint to embrace the technology could have serious consequences. Satya Nadella, Microsoft’s C.E.O., said that the A.I. boom’s benefits needed to be “much more evenly spread” to avoid becoming a bubble. But he added that he believed that the technology would deliver on societal benefits like helping develop new drugs.
Elon Musk muses about buying Ryanair, the discount European airline. The Tesla C.E.O. polled his followers on X about such a move, shortly after demanding that the airline fire its longtime chief, Michael O’Leary. The feud began last week after O’Leary said he wouldn’t install Starlink satellite internet equipment on his airlines’ planes because of increased fuel costs. (The clash isn’t pretty.) Links between Epstein and Goldman Sachs’s general counsel reportedly worry some executives. Years of revelations about work that Kathy Ruemmler did for the disgraced financier Jeffrey Epstein and communications between the two, as well as her having once been named as a backup executor for his will, have become concerns for unnamed figures at the bank, The Wall Street Journal reports. John Rogers, Goldman’s executive vice president, denied that he had drafted plans for Ruemmler to leave this year. Inflation, earnings and the future of the Fed are in focus this week. The Commerce Department is set to publish the Personal Consumption Expenditures readouts for October and November on Thursday. An earnings report to watch is Capital One’s on Thursday, with investors eager to hear about its response to President Trump’s proposed caps on credit card interest rates. Jay Powell is expected to appear at Supreme Court oral arguments tomorrow, according to The Times, over Trump’s effort to fire the Fed governor Lisa Cook. Doubling downGlobal markets have been rocked this morning by a wide sell-off in stocks, bonds, the U.S. dollar and cryptocurrencies as global trade tensions take center stage. The latest: S&P 500 futures are down before the first U.S. trading session since President Trump threatened on Saturday new tariffs on several European countries if they impede his efforts to acquire Greenland. Trump’s latest threats continued overnight. They have stunned many U.S. trading partners, and have revived fears of tit-for-tat retaliation — including that Brussels would prep its ominous sounding “bazooka” anti-coercion instrument — that could sock global trade. Several companies have been caught in the crossfire. LVMH, the French luxury goods maker, is down more than 2 percent this morning after Trump threatened to impose a 200 percent tariff on French wine, including Champagne. Why? Trump said he wanted President Emmanuel Macron of France to join his proposed “Board of Peace” for Gaza — or else. The biggest damage is in the Treasury market as the “sell America” narrative regains momentum. The yield on a 10-year note has spiked to 4.28 percent. (Jitters in the Japanese bond market aren’t helping; the Japanese are major holders of American debt.) Tariffs are again stalking the markets. The Supreme Court is expected to rule (possibly as soon as today) on the legality of Trump’s most bruising levies, which he justified under the International Emergency Economic Powers Act of 1977. Would a legal setback, which is expected by a majority of bettors on the predication market Kalshi, force Trump to hold fire? Don’t bet on it. If it were to lose in court, the administration would turn to a Plan B “the next day” to reinstate tariffs, Jamieson Greer, the U.S. Trade Representative, told The Times. Tough-talk on tariffs is spooking the markets. Many Wall Street veterans figured that the worst of the tariff fight was over. The levies risk re-accelerating inflation, an economic condition the administration is keen to avoid as it puts affordability atop its agenda.
Fink’s prescription for Davos: changeLarry Fink was for years the very definition of a “Davos Man.” A longtime habitué of the World Economic Forum, Fink, the BlackRock C.E.O., publicly championed Davos-friendly topics like stakeholder capitalism. In his first speech as an interim co-chair of the W.E.F. yesterday, however, Fink took aim at the very institution he has taken the reins of. Let’s dive into what he said. The forum isn’t trusted outside the Davos bubble. “If we’re being honest, for many people this meeting feels out of step with the moment,” Fink said, “elites in an age of populism, an established institution in an era of deep institutional distrust.” It’s an acknowledgment that for years Davos had been seen — by both the left and the right — as a place where business and political leaders talk to one another in isolation and deliver pronouncements that critics saw as simply enshrining the status quo. “This forum can’t remain an echo chamber,” Fink added. (That’s a topic highlighted in the latest Trust Barometer report by Edelman, the big P.R. firm.) The forum shouldn’t just be about the abstract. The organization’s mission is to “improve the state of the world through public-private cooperation.” And previous forum topics have had grandiose themes like “the Fourth Industrial Revolution.” But, Fink suggested, it was important for participants to work on tangible accomplishments. Take, for instance, the promises and perils of artificial intelligence: If A.I. does to white-collar work what globalization did to blue-collar, we need to confront that directly. Not with abstractions about “the jobs of tomorrow,” but with a credible plan for broad participation in the gains. This is the test: Whether capitalism can evolve to turn more people into owners of growth — instead of spectators watching it happen. “Davos” shouldn’t just be in Davos. W.E.F. participants shouldn’t only trek to the Swiss Alps to figure out solutions to the world’s problems, Fink said. They should also go to “places where the modern world is actually built,” in locations “like Detroit and Dublin — and cities like Jakarta and Buenos Aires.”
Netflix cashes inNetflix fired its latest volley in the battle for control of Warner Bros. Discovery this morning, converting its $72 billion cash-and-stock takeover bid for large parts of the media company into an all-cash offer. The move is an effort to take away one of the most compelling aspects of Paramount’s competing bid for Warner Bros. Discovery — though the question now is whether shareholders will agree. The latest: Netflix, which reports its quarterly earnings later today, is still offering $27.75 a share to buy Warner Bros. Discovery’s studio and streaming businesses, but that’s now all in cash. Warner Bros. Discovery will also reduce, by $260 million, the debt that will be borne by the cable business that it plans to spin off into a separate publicly traded company, to be known as Discovery Global. Why it matters: Paramount has argued that its all-cash bid offers more certainty than Netflix’s previous cash-and-stock offer, which would have left Warner Bros. Discovery shareholders subject to the fluctuations of the streaming giant’s stock price. (Netflix shares have fallen by about a quarter since its pursuit of Warner Bros. Discovery emerged publicly.) Today’s move eliminates that discrepancy. There’s still the matter of how the bids stack up financially. Paramount is offering $30 a share for all of Warner Bros. Discovery. Netflix is buying just part of the media company, but it and Warner Bros. Discovery have contended that shareholders would also gain more from the cable spinoff. Paramount has argued that the spinoff is worth nothing. But today, Warner Bros. Discovery laid out calculations for valuing the cable business, which it estimates could be worth $1.33 to $6.86 a share. Questions to keep in mind now:
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