Good morning. Charles Schwab said it would acquire TD Ameritrade for $26 billion — a deal that brings together two of the largest online brokerage firms totaling roughly $5 trillion in assets. (Was this email forwarded to you? Sign up here.)
Michael Bloomberg announced yesterday that he would run for the 2020 Democratic presidential nomination, bringing his huge personal fortune and moderate views to an already crowded race, the NYT’s Alexander Burns writes.
He is presenting himself as a multibillion-dollar threat to President Trump. The current president “represents an existential threat to our country and our values,” Mr. Bloomberg said in a statement.
• “Defeating Donald Trump — and rebuilding America — is the most urgent and important fight of our lives,” Mr. Bloomberg said.
Mr. Bloomberg, 77, faces immense obstacles to winning the Democratic nomination, Mr. Burns writes, including
• Political baggage that includes a complex array of business entanglements
• A history of making demeaning comments about women
• A record of championing law enforcement policies that disproportionately targeted black and Latino men
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His delayed start will leave him scrambling to catch up with other candidates. “As a result, he plans to mount an unconventional primary campaign, bypassing the earliest primary and caucus states, like Iowa and New Hampshire in February, and focusing instead on the delegate-rich March primaries in states such as California and Texas,” Mr. Burns writes.
And critics of the wealthy are already lining up. “We do not believe that billionaires have the right to buy elections,” Senator Bernie Sanders, himself a Democratic
yespornplease candidate, said at a rally yesterday, adding: “Multibillionaires like Mr. Bloomberg are not going to get very far in this election.”
More: News outlets for Bloomberg L.P., the financial data company owned in large part by Mr. Bloomberg, will not do in-depth investigations of him or any of his Democratic rivals
Today’s DealBook Briefing was written by Andrew Ross Sorkin, Jamie Condliffe and Gregory Schmidt.
Transportation authorities in London announced today that they would not extend Uber’s taxi operating license, Megan Specia of the NYT reports.
• Uber originally lost its London license in 2017 because of safety concerns, but was granted a 15-month extension and then a further two-month extension to improve.
• But Transport for London said that the company was not “fit and proper” as a license holder, despite the changes made by Uber.
The decision does not immediately remove Uber from the streets. The company has 21 days to appeal — which it says it will do, calling the decision “extraordinary and wrong” — and can continue to operate throughout the process.
But it does throw into question Uber’s future in London, which is the company’s biggest European market.
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The French luxury giant LVMH will buy Tiffany
LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury goods company, announced today that it would buy Tiffany & Company for $16.2 billion. It is the largest deal ever in the luxury sector.
The agreement comes after weeks of tense discussions between the two companies, which saw LVMH increase its offer to $135 from $120 per share.
LVMH gets a prominent American brand from the deal. It already owns names like Dior, Givenchy, Fendi, Château d’Yquem and Dom Pérignon.
It signifies LVMH’s increasing interest beyond traditional luxury softgoods like clothing and leather products, Vanessa Friedman, Elizabeth Paton and Andrew write in the NYT, following its purchase of Bulgari in 2011. And it solidifies the reputation of Bernard Arnault, who controls LVMH, as the most aggressive and acquisitive deal-maker in luxury.
• It also ends Tiffany’s 182-year history as a stand-alone brand, and reflects the difficulty of remaining independent in an age of increasing consolidation.
The deal will also bolster the efforts of both companies in China, where they are competing to tap into the spending power of newly wealthy Chinese consumers.
Is a ‘Phase 2’ trade deal with China wishful thinking?
President Trump’s stated aim for his administration’s trade negotiations with China is to reach a “Phase 1” agreement that solves some of the biggest issues between the two nations, before diving into talks for a “Phase 2” deal that addresses other disagreements. But according to Reuters, the second part could be a long way off.
• “The difficulties in getting the first stage done, combined with the White House’s reluctance to work with other countries to pressure Beijing, are dimming hopes for anything more ambitious in the near future,” Reuters writes, citing unnamed sources.
• “Officials in Beijing say they don’t anticipate sitting down to discuss a Phase 2 deal before the U.S. election, in part because they want to wait to see if Trump wins a second term.”
The first part of the deal is “easy stuff,” according to Representative Jim Costa, Democrat of California. It’s focused on Chinese commitments to buy agricultural products and roll back tariffs. But the second part includes more complicated issues like industrial espionage, forced transfer of technology and checks to ensure those commitments are upheld.
It’s “technically possible, but hard to imagine” a “Phase 2” deal being negotiated in the next year, Josh Kallmer, a former official with the U.S. Trade Representative’s office, told Reuters.
More: Mr. Trump said that the Hong Kong protests were a “complicating factor” in trade negotiations. And China said that it would raise penalties on violations of intellectual property rights.
U.S. businesses pull back on investment
In an uncertain business environment, many companies are pulling back on capital investment spending, which could put a damper on economic growth, write Theo Francis and Thomas Gryta in the WSJ.
The withdrawal began last fall, when trade tensions created unease among businesses, and continued this year as the global economy showed signs of slowing growth.
• “Some companies have warned it could continue into next year, when the presidential and congressional election is expected to add even more uncertainty to business decision-making,” the reporters write.
Twelve percent of businesses cut or delayed capital spending in the first half of 2019 because of trade tensions, double the rate in the first half of 2018, the Atlanta Fed found. And spending by S&P 500 companies rose less than 1 percent in the third quarter from the second quarter, according to data from S&P Dow Jones Indices.
Some projects have been merely delayed, but others are permanently lost, said Nicholas Bloom, an economist at Stanford University. “I think there is a real long-run cost to U.S. growth,” he said.