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   DealBook: A reckoning for climate activists, markets cheer a debt-ceiling deal
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             May 30, 2023
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              Good morning. In today’s DealBook: Climate activists are forced to rethink their approach; the markets are gaining on debt-ceiling optimism; the allure of “private” music gigs for the super-wealthy; and what to watch for in the week ahead. (Was this newsletter forwarded to you?
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                  The climate activism conundrum was on full display at Shell’s shareholder meeting last week.
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                  Toby Melville/Reuters
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             Has oil activism peaked?
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             The annual shareholder meetings of Exxon Mobil and Chevron, scheduled for tomorrow, are set to be largely sedate, as they will be held virtually. But their European rivals had raucous meetings last week, with environmental protesters storming the stage at Shell’s gathering and clashing with tear-gas-wielding police outside Total’s.
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             Despite the drama, however, climate-focused shareholder activists are being forced to rethink their approach, two years after the tiny hedge fund
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              Engine No. 1
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             won a stunning victory over Exxon, Vivienne Walt writes for DealBook.
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              Activists have failed to win more than 50 percent in many key proxy votes since then.
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             That string of disappointing results is forcing a reckoning at some of the sector’s biggest players: “In June, we’re going to revisit our strategy, and think about what’s next for the coming years,” Mark van Baal, the founder of the shareholder activist group Follow This, told DealBook.
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             And it comes despite major investors backing shareholder activists’ efforts: Norway’s $1.4 trillion sovereign wealth fund, for instance, has
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              pledged to side with them
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             on climate issues on the ballot at Exxon and Chevron.
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              The conundrum:
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             how to convince investors to prioritize long-term climate risks over booming oil profits. Last year was “the year the empire struck back,” according to van Baal, as oil giants successfully argued that energy crises during a time of inflation, war and a post-pandemic travel boom trumped the climate crisis.
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             So far, many demands from climate groups for the industry to decarbonize have only garnered about 20 percent approval from shareholders.
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              Activists are weighing changes to their playbook.
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             Van Baal outlined the following strategy:
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               Stay invested in the oil giants, to keep voting for climate resolutions.
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               Widen impact by putting pressure on investment banks and insurers that enable oil and gas projects.
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               Take more legal actions, building on
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                a landmark 2021 ruling
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               in the Netherlands, where a judge instructed Shell to accelerate its energy transition, and include tougher emissions standards in its targets. (That has drawbacks: The strategy is expensive and could take years to play out in the courts. It’s also less likely to succeed in the United States, where conservatives are pushing back against so-called environmental, social and corporate governance measures.)
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Frustrations are boiling over in the activist camp,
             </span>
             and many say change is needed. “I’ve been in the climate movement for 15 years, and I get a sense of desperation,” said Mark Raven of 350.org, an international climate activist group, some of whose members participated in last week’s protests. In particular, he added, “Younger activists are unhappy with things that have gone before.”
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             Tomorrow, DealBook will examine why activists have felt so dejected since Engine No. 1’s victory.
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             HERE’S WHAT’S HAPPENING
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              Elizabeth Holmes is expected to report to prison today.
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             The disgraced founder of the blood-testing start-up Theranos is scheduled to
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              begin a 135-month sentence
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             for defrauding investors. She is expected to report to a
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              minimum-security prison in Texas
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             that accommodates family visits.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Tech leaders plan to warn of artificial intelligence’s “existential” threat to humanity.
             </span>
             More than 350 executives, researchers and engineers working in A.I. signed onto a
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              one-sentence statement
             </a>
             set for release today calling for mitigating the risks of A.I., which they say are on par with nuclear war and pandemics. Signatories include Sam Altman of OpenAI and Demis Hassabis of Google DeepMind.
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              Turkey’s currency falls after Recep Tayyip Erdogan wins re-election.
             </span>
             The lira
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              hit a record low
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             after the incumbent president prevailed in a runoff, extending his rule into a third decade. Among investors’ worries is that Turkey will maintain a monetary policy that focuses on growth and exports instead of reducing inflation, with Erdogan arguing that raising interest rates increases inflation.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              British grocery chains reportedly weigh capping prices.
             </span>
             Retailers are in talks with government ministers on
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              voluntary limits for staple items
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             , according to The Guardian, in response to the
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              soaring inflation in food prices
             </a>
             that has plagued Europe. Meanwhile, here’s an argument for why a
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              lack of competition
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             in the grocery industry is behind
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              rising prices
             </a>
             in the United States.
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            <h2 class="css-12n1aic" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             Markets cheer a debt deal
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             The debt-ceiling deal reached over the holiday weekend must still survive a gauntlet of congressional votes. But investors are already declaring “mission accomplished” as S&amp;P 500 futures and Treasury bills advance today.
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             Continue reading the main story
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             The House could vote on the agreement as soon as tomorrow, though it must first get through the chamber’s powerful Rules Committee.
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              Here’s what’s in the deal,
             </span>
             which economists gave
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              a decent grade
             </a>
             :
            </p>
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            <ul class="css-27qc8p" style="color:#000;font:20px georgia,serif;text-align:left;padding-left:50px;list-style-type:square;margin-bottom:10px">
             <li class="css-11scvta" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                Two years of federal spending limits
               </a>
               in exchange for pushing future debt-ceiling discussions beyond the 2024 elections.
              </span>
             </li>
             <li class="css-11scvta" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               An end to the Biden administration’s freeze on student loan payments.
              </span>
             </li>
             <li class="css-11scvta" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               Stricter work requirements for public assistance programs, including food stamps, though Medicaid won’t be affected. (
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                The requirements drew opposition
               </a>
               from both sides of the aisle.)
              </span>
             </li>
             <li class="css-11scvta" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               A streamlined approval process for energy projects — known as permitting — through the creation of a single agency to oversee the matter. The deal also includes approval for a multibillion-dollar natural gas pipeline through West Virginia, a win for Senator Joe Manchin.
              </span>
             </li>
            </ul>
           </td>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-style:italic;font-size:inherit">
              Not
             </span>
             included in the bill are any major commitments to reduce the $31.4 trillion national debt. But The Times calculates that nondiscretionary spending cuts could save $860 billion over the next decade, and the reductions
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              aren’t expected to inflict much pain
             </a>
             on the economy.
            </p>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The House could vote on the deal as soon as tomorrow.
             </span>
             But some Republican members of the Rules Committee have already come out
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              against the bill
             </a>
             . (One, Representative Chip Roy of Texas, has argued that all nine of the committee’s Republicans must
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              sign off on all legislation
             </a>
             before the panel.)
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             There are hurdles in the Senate as well, with Republicans including Lindsey Graham of South Carolina and Mike Lee of Utah objecting to the bill and threatening delays.
            </p>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The clock is ticking.
             </span>
             As of last Thursday, the Treasury Department’s cash balance was at a
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              six-year low
             </a>
             of less than $39 billion. Treasury Secretary Janet Yellen now reckons that the government will
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              run out of money
             </a>
             on June 5.
            </p>
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            <h2 class="css-12n1aic" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             Why music stars can’t say no to the “private”
            </h2>
           </td>
          </tr>
         </tbody>
        </table>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             Private gigs — “privates,” in music industry lingo — are seemingly popping up everywhere, from charity galas in Manhattan to luxury hotel openings in the Persian Gulf. Bankrolled by the ultrarich and companies, these intimate star-studded performances are off-limits to the general public.
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             The private has become a reliable moneymaker for both chart-toppers and performers well past their prime, Evan Osnos writes in an entertaining,
             <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              f-bomb-filled article
             </a>
             in The New Yorker that opens with Flo Rida, the rapper, playing a bar mitzvah in Lincolnshire, an affluent Chicago suburb.
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
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            <p class="css-2pb6aj" style="text-align:left;font:17px/25px georgia,serif;margin:0 50px 15px;color:#000">
             For years, the world of privates was dominated by aging crooners, a category known delicately as “nostalgia performers.” Jacqueline Sabec, an entertainment lawyer in San Francisco, who has negotiated many private-gig contracts, told me, “Artists used to say no to these all the time, because they just weren’t cool.”
            </p>
            <p class="css-2pb6aj" style="text-align:left;font:17px/25px georgia,serif;margin:0 50px 15px;color:#000">
             But misgivings have receded dramatically. In January, Beyoncé did her first show in more than four years — not in a stadium of screaming fans but at a new hotel in Dubai, earning a reported $24 million for an hourlong set.
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
        <table cellpadding="0" width="100%">
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           <td align="left">
            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Few turn down the money from doing a private nowadays,
             </span>
             with Jennifer Lopez, Maroon 5 and Eric Clapton all agreeing to them. Even younger artists don’t fear any stigma from what one agent said is ultimately a situation where “it’s a convention or a party, and you just happen to be making noise at one end of it.”
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             But some continue to resist, Osnos writes, including Bruce Springsteen, Taylor Swift and, “for reasons that nobody can quite clarify,” AC/DC.
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
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           <td style="padding-bottom:15px">
           </td>
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           <td style="padding-bottom:15px;border-top:1px solid #dcdcdc">
           </td>
          </tr>
         </tbody>
        </table>
       </div>
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           <td align="left">
            <h2 class="css-12n1aic" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             $8.3 billion
            </h2>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
        <table cellpadding="0" width="100%">
         <tbody>
          <tr>
           <td align="left">
            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-style:italic;font-size:inherit">
              — The record amount of gambling revenues racked up by
             </span>
             <span style="font-style:italic;font-size:inherit">
              <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
               Las Vegas casinos
              </a>
             </span>
             <span style="font-style:italic;font-size:inherit">
              last year. Pricier hotel rooms and concert tickets, and smaller winnings at the blackjack table, are part of the new economics of the Las Vegas Strip.
             </span>
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
        <table cellpadding="0" width="100%">
         <tbody>
          <tr>
           <td style="padding-bottom:15px">
           </td>
          </tr>
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           <td style="padding-bottom:15px;border-top:1px solid #dcdcdc">
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
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          <tr>
           <td align="left">
            <h2 class="css-12n1aic" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             The week ahead
            </h2>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
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           <td align="left">
            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             It isn’t just about the debt-ceiling deal: Markets will be looking at jobs, inflation data and corporate earnings. Here’s what to watch.
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Tomorrow:
             </span>
             Consumer price index data for Germany, Italy and France, important gauges for inflation in the European Union, is scheduled for release. Salesforce, Crowdstrike and C3.ai report quarterly results.
            </p>
           </td>
          </tr>
         </tbody>
        </table>
       </div>
       <div style="margin:0 auto;max-width:600px;width:100%">
        <table cellpadding="0" width="100%">
         <tbody>
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           <td align="left">
            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Thursday:
             </span>
             Earnings from Dollar General, Macy’s and Lululemon will provide a snapshot of consumer buying power.
            </p>
           </td>
          </tr>
         </tbody>
        </table>
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             THE SPEED READ
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              Deals
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               The investment firms Francisco Partners and TPG have reportedly
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                ended talks
               </a>
               to buy New Relic, a business software company. (Reuters)
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               Richard Branson and the Nikola founder Trevor Milton were among the company insiders and early investors in SPACs who
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                profited from well-timed sales
               </a>
               before their companies’ stock prices tumbled. (WSJ)
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             </li>
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              <span style="font-size:17px;line-height:25px">
               Inside the legal fight
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                roiling Centerview Partners
               </a>
               , one of Wall Street’s most successful independent investment banks. (FT)
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              <span style="font-size:17px;line-height:25px">
               “Why Are Markets So Calm? It’s
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                Revenge of the Quant Funds
               </a>
               .” (WSJ)
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              Policy
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               It’s not just gamers: Antitrust regulators considering Microsoft’s merger with Activision are also
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                obsessed with Call of Duty
               </a>
               . (WSJ)
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               The U.S. reached
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                a supply chain agreement
               </a>
               with 13 other countries in the Indo-Pacific region in an effort to limit their dependence on China. (NYT)
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               Pandemic-era policies helped
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                shrink the income gap
               </a>
               , but that reduction in inequality now appears in danger as the threat from the coronavirus recedes. (Politico)
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               “Business leaders
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                search for alternatives
               </a>
               to Donald Trump and Ron DeSantis” (FT)
              </span>
             </li>
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              Best of the rest
             </span>
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             <li class="css-11scvta" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               How to navigate the
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                evolving tipping culture
               </a>
               . (WSJ)
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             </li>
             <li class="css-11scvta" style="line-height:27.5px;margin:0 0 10px 0">
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               The advertising giant WPP has teamed with Nvidia to
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                use generative artificial intelligence
               </a>
               to speed up the creation of ad campaigns for its clients. (FT)
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               Speaking of Nvidia: The chip maker is on the verge of
               <a class="css-5nb5nb" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                joining the trillion-dollar-valuation club
               </a>
               . (Reuters)
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