Lutnick’s big new portfolio
As one of Donald Trump’s transition chiefs, Howard Lutnick had a big say in shaping the next administration. Now he has been picked for a post of his own: commerce secretary.
The role puts the Wall Street billionaire in charge of defending American business interests worldwide and overseeing increasingly critical technology export restrictions — duties that matter for an America First-minded president-elect promising a barrage of more tariffs.
Commerce secretary has become an increasingly important policy role. The current office holder, Gina Raimondo, has overseen a remaking of American industrial policy via her oversight of the CHIPS and Science Act, which has doled out billions in funding to chipmakers to bolster domestic manufacturing, and artificial intelligence regulations.
And in announcing that he had picked Lutnick for the role, Trump said that the commerce secretary would have “additional direct responsibility for the Office of the United States Trade Representative.” Washington insiders are speculating that the phrase means that Trump may try to fold the latter position within the Commerce Department, a move that has been tried before to combine government trade work.
Lutnick has been a Trump loyalist, having been a prolific donor and supporter of the Republican’s agenda, especially for more and bigger tariffs. He has also become close to Elon Musk, one of Trump’s closest advisers — and, given the Commerce Department’s role in expanding broadband internet access — could provide the tech mogul’s Starlink with a significant boost.
But Lutnick has faced questions about conflicts of interest. His business interests, including the Wall Street brokerage Cantor Fitzgerald, touch on many sectors ranging from commercial real estate to crypto, which could be affected by a wide area of government regulations.
Rivals in Trump’s orbit have accused Lutnick of mixing his personal interests with the transition’s, and the president-elect himself has complained about him recently.
The pick gives some more clarity on the contest for Treasury secretary. Lutnick had been in the running to lead the Treasury Department, the biggest as-yet unfilled cabinet role. It’s still a fairly crowded field, with candidates including Kevin Warsh, the former Fed governor; Marc Rowan, the C.E.O. of Apollo Global Management; and Scott Bessent a financier and Trump economic adviser.
Various reports suggest that one candidate or another holds an edge. It’s worth remembering that the president-elect often makes snap decisions on such matters.
In other transition news: Trump picked Dr. Mehmet Oz to run Medicare, Medicaid and Obamacare, and Linda McMahon for education secretary. And a hacker is said to have gained access to a computer file containing damaging testimony about Matt Gaetz, Trump’s choice for attorney general.
HERE’S WHAT’S HAPPENING
Vladimir Putin is reportedly ready to talk peace in Ukraine. Russia’s president is open to negotiating a cease-fire arrangement through President-elect Donald Trump, Reuters reports. But the Kremlin is said to be insisting that it won’t concede major territorial gains in Ukraine and wants to forbid Kyiv from joining NATO. While Trump has pledged a speedy end to the war, fighting has intensified.
Trump’s pick for F.C.C. chair threatens to rattle Skydance’s deal for Paramount Global. Brendan Carr has warned that the agency would want to review transcripts of last month’s “60 Minutes” interview with Vice President Kamala Harris, which the president-elect accused of being edited to bolster her candidacy. That Carr linked the incident to the F.C.C.’s ruling on Skydance’s proposed combination with Paramount, which owns CBS, is another sign that Trump could use his presidency to go after perceived enemies.
Alex Jones seeks to block the proposed sale of Infowars. The right-wing media personality sued the parent of The Onion in bankruptcy court, challenging the company’s winning bid for the conspiracy theory website. (The Onion plans to turn Infowars into a parody of itself.) A hearing is set for next week to review the sale, potentially delaying an outcome for the closely watched case.
The earnings event of the season is here
Nvidia is on a run for the ages, having blown past Wall Street estimates in eight consecutive quarters. Wall Street is holding its breath to see whether the chipmaker at the heart of the intelligence boom can make it nine on Wednesday, when it’s set to report fiscal third-quarter earnings.
Investors have high hopes. Shares in Nvidia rose 4.9 percent on Tuesday, despite growing geopolitical tensions — Ukraine’s missile strikes inside Russia and the Kremlin lowered Russia’s threshold for the use of nuclear weapons briefly rocked overseas markets — and fears that a Trump trade war could again stoke inflation and hobble global growth.
Some analysts have also questioned whether the billions flowing into A.I.-related companies are inflating a speculative bubble.
A lot is riding on Nvidia’s continued success. Its stock surge has helped push the company past Apple to become the world’s most valuable public company. It has huge market heft, accounting for around 7 percent of the total weighted value of the S&P 500. (That said, investors sold off their holdings in August after executives released a sales outlook that fell short of sky-high expectations.)
Nvidia has grown so fast that analysts have had to reach for new measures to put its recent run into perspective. Jonathan Stubbs, an equity strategist at the German investment bank Berenberg, says he tells investors, “Nvidia is now about 150 percent larger than the Dax 40,” the index of the largest listed companies in Germany. He joked to DealBook that “an M.&A. banker could make the case for Nvidia buying Germany.”
At $3.6 trillion, Nvidia’s market capitalization dwarfs the entire size of stock markets across Europe:
Here are three things to watch for in Nvidia’s earnings:
The chipmaker is expected to report a roughly 80 percent year-on-year jump in revenue, to about $33 billion. Analysts will be focused on updates on the company’s new Blackwell chip and whether it poses an overheating issue.
Analysts forecast Nvidia’s profits for the past 12 months will top $61 billion. That would be a nearly 15-fold increase since early 2023, according to Jim Reid, a Deutsche Bank strategist.
The United States has barred Nvidia from selling its highest-end chips in its fast-growing market. Geopolitical tensions are likely to weigh on the company under the Trump administration, too.
Comcast’s shrink-to-grow plan
Brian Roberts, who built Comcast into a cable and media juggernaut, now appears ready to dismantle his empire: His company is expected to confirm on Wednesday that it will spin out its declining but profitable cable channels, after foreshadowing the plan a few weeks ago.
The move, details of which emerged in The Wall Street Journal last night, could reshape a media industry already poised for a flurry of deal making and consolidation, especially in the Trump era, DealBook’s Lauren Hirsch writes.
What’s coming: Comcast is expected to spin out channels including MSNBC, CNBC, USA, Oxygen, E!, Syfy and the Golf Channel into a stand-alone business. It will hold onto some TV assets, including the NBC broadcast network, Bravo and the Peacock streaming service.
Mark Lazarus, the chairman of NBCUniversal Media Group, will become C.E.O. of the new company, while Anand Kini, NBCUniversal’s C.F.O., will hold that same title at the spinoff. Roberts will own a one-third voting stake, but won’t be on the board.
Other companies had considered similar steps — but didn’t follow suit. Among them is Disney, which had floated parting with its cable channels but decided against doing so.
It’s also a bet that deal-making can revive Comcast and its spinoff. The cable channels generate about $7 billion in revenue, but aren’t growing. Roberts and his team are betting that putting those assets into their own business will free up Comcast for greater growth — and that Comcast’s financial health is strong enough to lose those money-generating channels.
Comcast executives also say that the new company will be strong enough to buy up other channels, as other media giants consider their own M.&A. options. The Trump administration could help with that: “It may offer a pace of change and an opportunity for consolidation,” David Zaslav, the C.E.O. of Warner Bros. Discovery, said this month.
Investors seemed cautiously optimistic: Shares of Comcast rose about 2.4 percent in aftermarket trading.
But there are plenty of issues to figure out. One is whether MSNBC and CNBC will continue to work with NBC News; CNBC reported, citing unnamed sources, that formal conversations between the three haven’t yet taken place.
An Arnault scion takes on pro soccer
Bernard Arnault’s LVMH has emerged as a new force in the business of sports even as global demand has faltered for its pricey handbags and watches.
The luxury juggernaut signed a big sponsorship deal with Formula One and paid about $160 million, making it a top sponsor of this summer’s Paris Olympics and Paralympic Games. Now it’s pushing deeper into soccer, Vivienne Walt reports for DealBook.
Antoine Arnault, Bernard Arnault’s eldest son will be named majority owner of Paris F.C., the French soccer club. Antoine Arnault is already involved in LVMH’s sports initiatives, having led the conglomerate’s Olympics drive.
The deal will also see Red Bull, the sports drink company, acquire a 15 percent stake. The acquisition was engineered by Agache, the Arnault family’s holding company, which becomes the official club owner.
It’s a small club, but a potentially big deal for Paris. By pouring some of his family’s gargantuan wealth into the second-tier team, Antoine Arnault could help lift Paris’s status as a global center of the sport (it’s a rare European capital with just one major soccer team).
The deal is also the latest sign of how luxury and sports are increasingly intertwining. The industry has long been associated with elite sports. But ties to mainstream sports and their star players are growing, as athletes have increasingly become multibrand marketing stars, including for Louis Vuitton and Dior, LVMH brands.
The soccer deal could create an intriguing rivalry in the years ahead. Paris Saint-Germain, the city’s premier club, is backed by Qatar’s $526-billion sovereign wealth fund. The club has plowed about $1.5 billion into recruiting superstars like Lionel Messi and Kylian Mbappé — both of whom have since decamped to other teams.
Who is Antoine Arnault? The 47-year-old is the second of five children of the world’s fifth-richest man. (The succession question has swirled over the company for years, with the elder Arnault tight-lipped about his future.) He is the head of image and sustainability for the luxury group.
THE SPEED READ
Deals
Ray Schrock, a top corporate restructuring lawyer at Weil Gotshal & Manges, is expected to leave for a rival firm, Latham & Watkins. (WSJ)
Oura, the maker of smart rings, secured a $75 million investment from the medical device company Dexcom, at a $5 billion valuation. (Bloomberg)
Politics and policy
Manhattan prosecutors signaled that they were willing to freeze sentencing discussions for President-elect Donald Trump in his criminal fraud case while he is in office. (NYT)
Trump promised sweeping economic changes. Can Republicans turn them into law? (NYT)
Best of the rest
“China’s Soaring Emissions Are Upending Climate Politics” (NYT)
How the junk food industry is fighting back against the rise of Ozempic. (NYT Magazine)
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