DealBook Briefing: Saudi Arabia Plans to Cut Its Oil Production

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After rising strongly this year on concerns about future supply shortages, oil prices have been sliding of late, recently hitting $70 a barrel. That has prompted Saudi Arabia and other major producers to weigh measures to prop up prices.

Saudi Arabia said on Sunday that it would unilaterally begin “tapering off” production by as much as half a million barrels a day starting next month. Other OPEC members said they would discuss a broader curb next month. Oil prices jumped on the news.

But production cuts aren’t a done deal. Russia said it would cut production only if there’s broader consensus. “We need to wait some time, to see how the market develops,” Alexander Novak, the Russian energy minister, told reporters.

And Julian Lee of Bloomberg Opinion warns that rising prices would motivate U.S. shale producers — who have already driven up global supplies — to pump more petroleum. “OPEC members are facing a long, slow grind with no end in sight,” he writes.

More oil news: U.S. sanctions on Iran have lifted the profits of tanker operators.

The software maker SAP agreed on Sunday to buy Qualtrics for $8 billion, days before the market-analytics company was set to go public. One of SAP’s biggest takeovers, the deal shows that the tech industry remains interested in pricey M.&A.

Qualtrics has an unusual story. It’s a family-run business based in Utah that resisted venture capitalists for more than a decade. Its last fund-raising round was at a $2.5 billion valuation, and its I.P.O., scheduled for Thursday, had been expected to double that. But SAP, eager to catch up with Salesforce, pursued Qualtrics for months.

Qualtrics joins Red Hat, GitHub and a handful of other companies acquired this year by established tech giants. That trend could become more pronounced in the coming months if the markets sour on tech I.P.O.s.

Judging by the numbers, Hollywood should be feeling buoyant right now: The summer movie season was strong, and theaters had their busiest fall on record. October ticket sales were up 45 percent compared with last year, according to Comscore.

But Brooks Barnes of the NYT explains that behind that success, all is not well in Hollywood:

Euphoria is almost nonexistent in studio hallways. The movie capital is instead mired in a profound malaise. The reason involves fallout from the #MeToo earthquake, both the positive changes it forced, and, lately, the pushback it has incurred. Contributing are the mega-mergers that have left Warner Bros. and 20th Century Fox with new owners and may find Sony Pictures, Lionsgate and Metro-Goldwyn-Mayer sold or reconfigured before long. The steady march of Big Tech into entertainment also plays a role.

As Amy Baer, a Hollywood veteran who is now president of Women in Film, told the NYT, “Established protocols — decades worth — are changing at lightning speed. For people like me, who believe change is desperately needed in Hollywood, that is exciting. But a lot of people are lost in anxiety.”

Mike Pence heads to Asia. The vice president will attend the Asia-Pacific Economic Cooperation meeting in Papua New Guinea, joining officials from 20 other nations. Top of the agenda: trade and climate change.

E.U. leaders discuss Brexit. Senior officials will meet in Brussels today to talk about Britain’s withdrawal from the European Union, and in particular the contentious issue that is the Irish border. Meanwhile, Prime Minister Theresa May of Britain faces more pressure from Parliament to abandon her current proposal.

Walgreens. McDonald’s. Procter & Gamble. Those aren’t the kinds of names that have excited Wall Street in recent years. But after tech stocks dragged the markets down in October, more traditional companies are enjoying newfound interest. Michael Wursthorn of the WSJ explains what’s happening:

Investors have shifted from seeking out the companies with the highest profit growth rates to those that are expected to generate more stable earnings and issue large dividends, and tend to hold up better during turbulent economic conditions. Walgreens has also added 12 percent over the past month, while restaurant chain McDonald’s Corp. has risen 9.5 percent and retail powerhouse Walmart Inc. is up 8.7 percent. The gains have come at the expense of technology companies and other fast-growing stocks that have seen their values erode since late September.

More in markets: What investors can worry about now that the midterm elections are out of the way.

The Chinese ecommerce giant set a new sales record for Singles Day, the Nov. 11 shopping festival it created. But there’s reason to think that next year will be less frenzied.

Merchants sold $30.6 billion worth of goods on Alibaba’s platforms, beating last year’s high mark. (For comparison, Amazon customers spent an estimated $4.2 billion during the 36-hour Prime Day sale in July.)

But Raymond Zhong of the NYT points out why Alibaba should be worried about 2019:

Economic growth is slowing, and the country’s hundreds of millions of middle-class shoppers seem to be holding on more tightly to their pocketbooks. Tech companies are antsy about the government’s more interventionist attitude toward big business. The tariff fight with the United States is casting a pall not simply over trade, but over China’s future writ large. This month, Alibaba cut its sales forecast for the year ending in March by around 5 percent, citing the wobbly economy and the trade war.

The fever pitch of name-dropping blockchain technology appears to be behind us, according to Axios. The world “blockchain” was mentioned 173 times in transcripts of earnings calls and investor presentations made by S&P 500 executives in the second quarter of 2018, according to the site. So far this quarter, the number stands at 35.

Companies haven’t given up trying to do interesting things with the technology. But they may have realized that investors have wised up to the boost of the buzzword, and taken the frequent criticism of cryptocurrencies to heart.

Ian Potter, a private equity investor and former Morgan Stanley banker, is reportedly the front-runner to become chairman of the commodities trader Noble Group.

Wells Fargo is said to have fired two employees as part of its investigation into the bank’s procurement of low-income housing tax credits.

Deals

• Veritas Capital and Elliott Management are reportedly set to buy Athenahealth for $5.5 billion. (FT)

• Moderna Therapeutics, one of America’s biggest biotechnology start-ups, has filed to go public. (Bloomberg)

• It’s hard to keep track of SoftBank’s many investments. The company’s Vision Fund is said to be seeking a $4 billion loan to help it strike deals more quickly.

• The proxy advisory firms Institutional Shareholder Services and Glass Lewis face more scrutiny from the S.E.C. and Congress. (FT)

• A Thai businessman, Chatchaval Jiaravanon, agreed to buy Fortune Magazine for $150 million. (NYT)

• Meet the intelligence expert who became an unlikely guru for Wall Street. (NYT)

Politics and policy

• A program to forgive the student loans of defrauded borrowers has all but stopped functioning. (NYT)

• President Trump is said to have played a central role in suppressing allegations of sexual encounters with two women, contradicting his denials. (WSJ)

• Mr. Trump reportedly wants to replace Wilbur Ross as commerce secretary by the end of the year. (CNBC)

• Neither a booming economy nor tax cuts helped the Republican Party in the midterms. (NYT)

• Political campaigns and groups spent at least $3.2 million at Trump properties during the midterms. (CNN)

• The acting attorney general, Matt Whitaker, reportedly told associates that he would not cut Robert Mueller’s budget. (Bloomberg)

Trade

• The White House trade adviser Peter Navarro said that a trade deal with China would not be made on Wall Street’s terms. (CNBC)

• China says it signed $58 billion worth of deals at its trade fair last week. (Bloomberg)

• Sanctions on Russia don’t seem to be working. (FT)

• But Eastern European nations are worried. (Bloomberg)

• How Democrats could upend Mr. Trump’s Nafta replacement. (NYT)

Tech

• Facebook joined Google in ending forced arbitration for sexual harassment claims. (Related: The efforts to shake up Silicon Valley’s “bro culture.”)

• To what extent was Palmer Luckey forced out of Facebook because of his support for President Trump? (WSJ)

• Rocket Lab launched a clutch of tiny satellites into space this weekend, a harbinger of a major transformation to the space business. (NYT)

• Fintech companies are behaving more like banks — and it’s paying off. (FT)

• The philosopher Yuval Noah Harari thinks Silicon Valley is an engine of dystopian ruin. So why do the digital elite adore him? (NYT)

Best of the rest

• A former Goldman Sachs banker who pleaded guilty to money laundering told a federal judge that others at the firm were also involved in the 1MDB scandal. (NYT)

• The authority of Crown Prince Mohammed bin Salman of Saudi Arabia may be reined in after the killing of the dissident Jamal Khashoggi. (Saudis close to the crown prince discussed killing other enemies a year before Mr. Khashoggi’s death.) Prince Alwaleed bin Talal appears to have stepped back into the role of the kingdom’s unofficial business ambassador.

• As the Fed promises to soften banking regulations, Democrats are preparing to step up scrutiny of the industry when they take control of the House. (NYT)

• The U.S. is set to spend more on debt payments than it does on defense. (WSJ)

• Consumer spending looks set to increase in the holiday shopping season. (WSJ)

• Venture-capital trading cards, anyone? (Business Insider)

Thanks for reading! We’ll see you tomorrow.

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