big oil gets bigger
For oil analysts and investors, Chevron’s $53 billion acquisition of Hess confirmed that there is a New round of consolidation in the industryThis comes less than two weeks after Exxon Mobil’s $59.5 billion bid for Pioneer Natural Resources.
Even though fossil-fuel producers are facing pressure from climate-minded policymakers, investors, and activists to embrace green energy—more on that below—they’re instead focused on getting bigger. Are concentrating. This can create a huge gap in the industry between those who have the ability and freedom to buy out competitors, and those who do not because of politics or finances.
Chevron and Exxon are operating from a position of strength, They are making deals because of rising oil prices while they are sitting on billions in cash. This is also reflected in their share prices, which are climbing, making it attractive to use as a deal currency.
Being able to offer stock helped persuade their targets – whose shares were also rising – to sell. “We are not only locking in and preserving the value that has been created over the last several years, but we are still participating in the boom that you’re talking about,” Hess CEO John Hess told investors on Monday. are doing.”
Many in the industry think consolidation is overdue. Investors are unwilling to support dozens of drillers engaged in increasingly unprofitable exploration projects. “I think we have too many CEOs,” Chevron Chief Executive Mike Wirth told analysts on Monday.
Who’s next? News reports have revealed that medium-sized US shale producers are looking Devon Energy Looking at Marathon Oil and CrownRock Chesapeake Southwestern Energy is studying bids. Analysts say ConocoPhillips, Diamondback and Occidental are also looking for a deal.
A big question is what European oil giants like BP, Shell and Total will do. Until recently, all had emphasized their efforts to reduce carbon emissions, unlike their American rivals. Investors are not happy about this: BP, for example, has a market capitalization of £180 billion, or about $220 billion, about half that of Exxon.
Analysts say Europeans risk being left behind if they don’t double fossil-fuel production. But Europeans also face greater pressure from their own governments to transition to clean energy. (And antitrust regulators will probably be angry at the merger that investors want: the union of BP and Shell.)
A reminder: the DealBook Summit will take place on November 29th. Guests include FTC’s Lina Khan, Nvidia’s Jensen Huang and television producer Shonda Rhimes. you can Apply to attend here,
What’s going on over here
GM reported a 7 percent year-over-year decline in third-quarter earnings. The carmaker cited the UAW strike as the primary reason for its low profits and said it was continuing negotiations with the union. Meanwhile, the UAW ordered 6,800 union members to walk off the job at a Stellantis factory in Michigan, which produces Ram pickup trucks, one of the automaker’s most popular models.
US Treasury yields fall. The yield on the 10-year Treasury fell to 4.86 percent on Tuesday, after rising to a 16-year high on Monday in the bond market. (Yields fall as prices rise.) The rebound came when billionaire investors Bill Ackman and Bill Gross announced they were Abandoning your bearish bets on bonds, Second rally to lure investors: Bitcoin briefly rises above $35,000 on hopes of regulators will be approved soon The first spot exchange-traded fund for digital currency.
The Justice Department expanded its investigation into Tesla’s business practices. Prosecutors are now investigating how far the electric car maker’s vehicles can travel when fully charged and whether some executives were given “personal benefits”, the company revealed in a regulatory filing. It’s the latest headache for Tesla: Its share price plunged after its third-quarter profit fell.
Money is flowing from ESG
Money managers closed their ESG funds at a record clip last quarter, as Wall Street continues to pressure the sector amid a broader market slowdown, slower economic growth and higher interest rates.
The move away from funds taking environmental, social and governance factors into account coincides with a regulatory crackdown on greenwashing and other misleading claims by investment funds. Several Republican-led states are also stepping up boycotts against asset managers.
Business leaders are increasingly feeling pressure on ESG Some people just want the big debate to disappear.
ESG investing isn’t going away…it’s shrinking. Investors pulled $2.7 billion from ESG funds last quarter, the fourth consecutive quarter of withdrawals from such funds, according to Morningstar data. Most of the withdrawals came from two funds: BlackRock’s iShares ESG Aware MSCI USA ETF, and the Parnassus Core Equity Fund run by San Francisco-based Parnassus Investments.
For the first time, US money managers closed more ESG funds than they opened. This may be part of a long-awaited shakeout: After a three-year boom in ESG fund creation, there were 661 in operation at the end of September, up 11 percent since the beginning of the year.
ESG funds have increased A trillion-dollar investment power In recent years. This is driven in part by investors who are motivated by causes they believe in. Chasing Strong ReturnsAlyssa Stankiewicz, Morningstar’s sustainability research director, told DealBook.
He said the decline in ESG investing could potentially be explained by “performance expectations” rather than sustainability-investing proponents having a “change of heart about topics like climate change or diversity.”
War is a big topic in Riyadh (marginalized)
Saudi Arabia’s Global Investment Summit opened on Tuesday to a packed house of business leaders.
The question of who will attend the Future Investment Initiative event in Riyadh as the Israel-Hamas war intensifies has been resolved: almost all the big names invited were present. But, as The Times’s Kate Kelly writes for DealBook from Riyadh, many attendees chose their words carefully when asked about the geopolitics of the region.
Jamie Dimon urges Saudi Arabia to push for peace, “Despite what happened in Israel,” the JPMorgan Chase CEO said on a panel featuring other top financiers, “I urge all of you to continue that effort.”
Others avoided speaking in detail about the war. Blackstone’s billionaire co-founder Steve Schwarzman briefly mentioned the 1973 Yom Kippur War on stage and noted that it was followed by a recession.
On the sidelines of the event, an aide cut off FIFA President Gianni Infantino as he attempted to answer a reporter’s question about the Israel-Hamas war. “Can he comment on what?” Asked the colleague. “This is not really the moment,” he said, stepping in front of Infantino, who resumed posing for selfies with fans.
Some viewers expressed concern about civilian casualties in Gaza – but declined to discuss them on the record.
BlackRock’s Larry Fink may have been the most vocal. “War, fear and instability have consequences, and I think there will be less hope, there will be more fear and there will be a lot of contraction if we don’t handle this as a world,” he said. The investment panel is talking about the economic impact of the conflict. “And that’s why I think we all have a responsibility to talk about this.”
Top donors to future House speakers
After weeks of chaos without a leader speaker of the House, the number of Republican candidates for the role of speaker has now grown to eight and the party’s infighting shows no signs of subsiding any time soon. Here’s a look at the pre-political careers of the unidentified people vying to become speaker, based on Federal Election Commission data, and a list of their top donors. reveal the secret,
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Tom Emmer, Minnesota -The Majority Whip ran his own law firm before running for office. He is a member of the Financial Services Committee and its biggest donor AIPAC, a pro-Israel lobbying group, and private equity firms Bluff Point Associates and Apollo Global Management.
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Austin Scott, Georgia – Scott owned an insurance brokerage company. He is on the Intelligence, Armed Services and Agriculture committees, and his top donors are in the insurance and agriculture sectors, including WSR Insurance and the National Cattlemen’s Beef Association.
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Byron Donalds, Florida Donalds worked in finance and insurance, and is on the Financial Services Committee and the Oversight and Accountability Committee. Their top donor is retail trading app Robinhood Markets.
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Kevin Hearn, Oklahoma – Before owning a McDonald’s franchise, Hearn was an aerospace engineer. He is on the Ways and Means Committee and his top donors include asset manager Blackstone, insurer Cigna and Marathon Petroleum.
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Gary Palmer, Alabama – Palmer worked in engineering construction before turning to policy. He serves on the Energy and Commerce Committee and the Oversight and Accountability Committee. His biggest funders There are local industrial and manufacturing companies.
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Jack Bergman, Michigan – A retired Marine Corps lieutenant general, Bergman serves on the Armed Services and Veterans Affairs committees. Their biggest donor is the company that helps veterans claim their benefits, followed by financial services firm Atlanticus and tech giant Oracle.
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Mike Johnson, Louisiana Johnson, a longtime lawyer, serves on the Judiciary and Armed Services committees. His biggest donors are pharmaceutical distributor Morris & Dixon and software developer Pressus.
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Pete Sessions, Texas -Sessions worked at Southwestern Bell Telephone and is on the Financial Services and Oversight and Reform committees. Among his top donors are Bankers Life, an insurance company, and Deason Capital, an investment firm.
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Bonus Candidate: Patrick McHenry, North Carolina -The interim speaker is not officially running for the top role, but there is talk about giving him powers to conduct legislative business. He is chairman of the Financial Services Committee and often sides with the Chamber of Commerce in fights with Democratic regulators. His top donors are Apollo, Truist Financial and AIPAC.
read speed
deal
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pharmaceutical manufacturer Novo Nordisk and Eli Lilly There is a rush to buy out manufacturers of weight loss treatments. (FT)
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aluminum giant Rusal It agreed to buy a 30 percent stake in a Chinese aluminum oxide plant, the first major deal by a major Russian company since the invasion of Ukraine. (Bloomberg)
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northvoltEurope’s biggest battery maker is reportedly looking to go public with an IPO in Sweden that could value the company at $20 billion. (FT)
Policy
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The Biden administration chose 31 regions as potential federally funded tech hubs to help boost innovation beyond Silicon Valley. (NYT)
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California Governor Gavin Newsom is launching a campaign to export his state’s climate laws around the world. (NYT)
best among the rest
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