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   DealBook: Jassy’s imprint on Amazon
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             July 18, 2022
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              Good morning. The last of the nation’s biggest banks reported their second-quarter earnings this morning. Goldman Sachs beat expectations, as the firm’s traders were able to capitalize on volatile markets. Bank of America’s bottom line was in line with expectations, but its earnings still fell by a third from the same quarter a year ago. (Was this newsletter forwarded to you?
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                  Andy Jassy is breaking from the Bezos way at Amazon.
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            <h2 class="css-12n1aic el2acgh0" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             Mr. Jassy goes to Washington (a lot)
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             When Jeff Bezos led Amazon, he
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              kept his distance
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             from Washington. He rarely lobbied lawmakers and testified before Congress
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              only once, under threat of subpoena
             </a>
             . Andy Jassy, though, has visited Washington at least three times in the year since he took over the top job from Amazon’s founder. It’s just one of the ways Jassy is changing how the retailing giant and technology juggernaut operates, report The Times’s David McCabe and Karen Weise in
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              a profile of the Amazon C.E.O.
             </a>
             out this morning.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Jassy is quickly putting his imprint on the company
             </span>
             . The longtime Bezos lieutenant has made more changes than many expected.
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             <li class="css-11scvta e1y8brq21" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               He’s delved deep into logistics and other parts of the business that his predecessor left to deputies.
              </span>
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              <span style="font-size:17px;line-height:25px">
               He’s cut costs, admitted Amazon overbuilt, and overseen
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                tumultuous
               </a>
               leadership changes.
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              <span style="font-size:17px;line-height:25px">
               He’s struck a conciliatory tone with employees while maintaining Amazon’s long-held and often aggressive opposition to unions.
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             </li>
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              The biggest difference between Jassy and Bezos may be their engagement with Washington.
             </span>
             Jassy has called Senator Chuck Schumer, the Democratic majority leader, on antitrust reforms. He’s talked with Senator Tim Kaine, Democrat of Virginia, about Amazon’s new corporate campus in the state. He’s also met twice with Virginia’s other Democratic senator, Mark Warner, a co-sponsor of a bill that would limit Amazon’s ability to prioritize its own products over others’ on its website. “He’s very inquisitive,” said Ron Klain, President Biden’s chief of staff, who met with Jassy in Washington in September.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              A more direct approach in Washington may be borne of necessity.
             </span>
             Amazon is facing regulatory scrutiny on several fronts.
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                Antitrust:
               </span>
               In addition to the bill that would limit how Amazon can feature products in its marketplace, the F.T.C. chair,
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                Lina Khan
               </a>
               , is investigating whether Amazon’s market dominance is limiting rivals’ ability to compete.
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              <span style="font-size:17px;line-height:25px">
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                Unions:
               </span>
               Last year,
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                Biden threw his support
               </a>
               behind Amazon workers who were trying to unionize and hosted a union organizer in the Oval Office.
              </span>
             </li>
             <li class="css-11scvta e1y8brq21" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
                Amazon has responded by expanding its lobbying.
               </span>
               It spent $19.3 million on federal lobbying in 2021, up from $2.2 million a decade earlier,
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                according to OpenSecrets
               </a>
               , which tracks influence in Washington.
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              And Jassy’s more direct approach appears to be paying off.
             </span>
             “Not many lobbyists would be able to sit down with — or even get a call with — most of the members of congressional leadership at all,” said Daniel Auble, a senior researcher at OpenSecrets. “But of course the C.E.O. of Amazon can get them all on the phone.”
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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">
              Central banks intensify efforts to curb inflation.
             </span>
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              At least 75 central banks have raised interest rates
             </a>
             , many from historically low levels, and the European Central Bank is expected to make
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              its first rate increase since 2011
             </a>
             at a meeting this week. Officials have signaled that a rise of only a quarter percentage point is likely, probably followed by a larger move in September.
            </p>
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              A report on the Uvalde shooting finds “systemic failures” in the police response.
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             The decision to finally confront the gunman was made by a small group of officers and could have come much earlier,
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              the report said
             </a>
             . The findings were the most complete outside account of what took place during the 77 minutes between when a gunman began firing inside the classrooms of a Texas school, eventually killing 21 people, and when the police stormed in.
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              Britain braces for perhaps its hottest day.
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             Temperatures in some areas there may top 100 degrees Fahrenheit,
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              a rarity that has prompted a national emergency
             </a>
             . Spain, Italy and France were also preparing for scorching temperatures, with
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              wildfires in the South of France expected to sweep into the north
             </a>
             . Italy was experiencing its worst drought in years.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Climate stalls as a political issue in the U.S.
             </span>
             Senator Joe Manchin’s rejection of a compromise climate bill tells a familiar story: Voters and politicians
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              put a higher premium on immediate issues
             </a>
             , such as inflation and the economy.
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              Just 1 percent of voters
             </a>
             in a recent New York Times/Siena College poll named climate change as the most important issue facing the country.
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             A matter of timing
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             Elon Musk’s lawyers formally responded on Friday to Twitter’s request to fast track its lawsuit demanding that he complete his $44 billion acquisition. The social media company has requested a four-day trial in September, arguing that the longer the dispute goes on, the more it harms the company and its shareholders. Musk is proposing February, so he has time to dive into how Twitter counts bots.
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             The judge overseeing the case, Kathaleen McCormick, will hold a hearing tomorrow to decide how quickly to proceed. Her decision is a preview of the most important issue of the case: What, exactly, would Musk be entitled to prove at a trial?
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Musk wants to drill into Twitter’s bot count.
             </span>
             That was the focus of his court filing on Friday, and his main reason, according to the filing, to seek a prolonged process in which he would call in third-party experts, consultants and Twitter executives. “The core dispute over false and spam accounts is fundamental to Twitter’s value,” Musk’s lawyers write. “It is also extremely fact and expert intensive, requiring substantial time for discovery.”
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              Twitter wants to keep the focus on the merger agreement.
             </span>
             The contract Musk signed does not give him a simple out if Twitter has more bots than he thought. Twitter may contend that the actual bot number is irrelevant: It had already told investors (and Musk) in filings that the numbers it gave for spam and fake accounts on its platform were estimates. Twitter also warns that third parties may struggle to calculate the figures, so it may try to push back against the value of any outside testimony.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              This decision will reveal a lot about the case.
             </span>
             Judge McCormick will be indicating just how relevant she considers Twitter’s bot count to be — and how deep in the drudgery of bot counting she is willing to go. She most likely knows that if she draws out the process, as Musk’s team has requested, a wide watching public may take it as a sign that she sees something in his claims. But she may also want to ensure she appears thorough and scrupulous.
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Judge McCormick has been here before.
             </span>
             In a case over the private equity firm Kohlberg’s
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              attempt to walk away
             </a>
             from its acquisition of the cake decoration maker DecoPac during the height of the pandemic, she did not grant an expedited trial. But DecoPac was a private company, not subject to the whipsaw of daily trading, the pressures of public shareholders or the drama generated by Musk. And she did ultimately force Kohlberg to complete the deal.
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            <h2 class="css-12n1aic el2acgh0" style="color:#000;font:700 25px/32px arial,sans-serif;margin:0 0 10px">
             “The five biggest semiconductor companies that will likely receive the lion’s share of this taxpayer handout — Intel, Texas Instruments, Micron Technology, Global Foundries and Samsung — made $70 billion in profits last year. Does it sound like these companies really need corporate welfare?”
            </h2>
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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">
              — Senator Bernie Sanders of Vermont on why he opposes a measure that would provide
             </span>
             <span style="font-style:italic;font-size:inherit">
              <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
               more than $52 billion for companies that build semiconductor factories
              </a>
             </span>
             <span style="font-style:italic;font-size:inherit">
              in the U.S.
             </span>
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             The dollar hits a 20-year high
            </h2>
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             The dollar is up 10 percent this year and is now at a 20-year high. Often called the world’s reserve currency, it typically climbs during times of global turmoil. But U.S. inflation, rising interest rates and worries over growth coming out of the pandemic have sent it soaring.
            </p>
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            <p style="color:#000;font:normal 17px/25px georgia,serif;margin:0 0 15px">
             That’s good news for Americans traveling abroad. But a soaring dollar can have a destabilizing effect on the global economy — disrupting the demand for imports and exports, influencing the profits of multinational corporations and raising borrowing costs for poorer countries that tend to borrow in dollars,
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              report The Times’s Karl Russell, Joe Rennison and Jason Karaian
             </a>
             .
            </p>
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Companies outside the U.S. have seen their sales rise.
             </span>
             Burberry, the British luxury goods maker, said on Friday that it would add more than $200 million to its revenue this year because of currency movements — helping to offset a decline in sales in China, where the economy is slowing.
            </p>
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              But it’s more bad news for American companies and U.S. investors.
             </span>
             Ben Laidler, a global markets strategist at eToro, estimates that the rise in the dollar will shave 5 percent off the earnings growth of S&amp;P 500 companies this year, or roughly $100 billion. Reflecting the drag, companies that generate most of their revenue in the U.S. have performed better than rivals with more foreign sales.
            </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 financial stability of poorer nations could be at risk.
             </span>
             Paying interest to creditors in dollars has become particularly difficult for countries with rapidly depreciating currencies, such as Argentina and Turkey, especially as interest rates on any new debt will also go up. In some cases, like in
             <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
              Sri Lanka
             </a>
             , it has become seemingly impossible.
            </p>
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             <span style="font-weight:700;font-size:inherit;font-family:arial,sans-serif">
              Can the buck be stopped?
             </span>
             The U.S. economy is looking shakier, but as Europe faces an energy crisis, Japan resists raising interest rates, China’s Covid-19 lockdown policies snarl its supply chains and other countries struggle with high inflation, demand for the dollar looks robust. “For now, we still expect the dollar to trade on the front foot,” said Kamakshya Trivedi, the co-head of a market research group at Goldman Sachs. “There might be a bit more to go, but probably the largest part of the dollar move may well be behind us.”
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              Subscribe Today
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             We hope you’ve enjoyed this newsletter, which is made possible through subscriber support.
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             THE SPEED READ
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              Deals
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               The retailer Esprit is turning away from fast fashion, and
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                focusing on more expensive items
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               , as it expands in Asia. (Bloomberg)
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               The U.K. wireless operator Virgin Media O2
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                is in discussions to acquire TalkTalk
               </a>
               , a competitor. (Bloomberg)
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               Paul Pelosi, the husband of the House speaker, Nancy Pelosi,
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                purchased up to $5 million
               </a>
               in stock options in the semiconductor company Nvidia. (Business Insider)
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               Delta will buy
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                100 Boeing 737 Max planes
               </a>
               , its first major order with the manufacturer in more than a decade. (CNBC)
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              Policy
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               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                About half of medium-size and large companies
               </a>
               say they plan to offer some assistance to employees in states that restrict or prohibit abortion. (WSJ)
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                President Volodymyr Zelensky of Ukraine
               </a>
               fired two top law enforcement officials. (NYT)
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               Since the Taliban takeover,
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                Afghanistan’s economy has limped
               </a>
               . (WSJ)
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              Best of the rest
             </span>
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         </tbody>
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       <div style="margin:0 auto;max-width:600px;width:100%">
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              <span style="font-size:17px;line-height:25px">
               Netflix is betting big on “
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                The Gray Man
               </a>
               .” (NYT)
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             <li class="css-11scvta e1y8brq21" style="line-height:27.5px;margin:0 0 10px 0">
              <span style="font-size:17px;line-height:25px">
               How the P.R. firm Edelman
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                proposed to help Saudi Arabia
               </a>
               revamp its image. (Politico)
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              <span style="font-size:17px;line-height:25px">
               “FedEx Bot Apologizes for ‘
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                Pending Delivery
               </a>
               ’ of Missing Human Remains” (WaPo)
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                Jennifer Lopez and Ben Affleck
               </a>
               were married in Las Vegas. (NYT)
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               How a little-known lawyer, William Olson,
               <a class="css-5nb5nb et1n85g0" style="color:#286ed0;-webkit-text-decoration:underline;text-decoration:underline;font-family:inherit;font-size:inherit">
                pitched Donald Trump on a 2020 election plot
               </a>
               . (NYT)
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              Correction: Friday’s newsletter misstated the investment firm where Marty Chávez is a partner. It is Sixth Street, not Sixth Sense.
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