• In today’s CEO Daily: Diane Brady talks to Accenture CEO Julie Sweet and Delta Air Lines CEO Ed Bastian.
• The big story: The US and China have begun trade talks—but there is a long way to go.
• The markets: Very happy.
• Analyst notes from Wedbush on Elon Musk, Macquarie on the dollar, and Goldman Sachs on equities.
• Plus: All the news and watercooler chat from Fortune.
Good morning. I remember asking a man in Helsinki why his country is often ranked as the happiest on earth, at which point he leaned in and said, “it depends on how you define ‘happy.’” Good point. What makes for a happy employee at a hedge fund may be different than what motivates workers at a hospital or a hotel company. There are standard good practices like respect, fair pay, interesting work, and a sense of community, of course. But I long ago concluded that the most important factor in fostering happiness on the job is leadership. Inspiring leaders create inspiring places to work, as we’ve seen in the annual Fortune 100 Best Companies to Work For list.
I had a chance to speak earlier this week with two leaders whose companies repeatedly appear on our list: Accenture Chair and CEO Julie Sweet and Delta Air Lines CEO Ed Bastian. They joined me for a webinar alongside Great Place to Work CEO Michael C. Bush, our partner in putting together the ranking, which is culled from 1.3 million employee responses.
Our conversation focused on how they are leading and managing change in these volatile times. “I was joking with a colleague that I redefined what R and R is to be resilience and results, because that’s what I feel like I’m focusing on,” said Sweet, whose transparency about dealing with cancer has personally inspired me. “We can only control what we can control.” Among other things, she is now using her daily walks as a time to connect with people in her life. She’s also doubling down on the learning culture she’s fostered at the top, from reading Hope, an autobiography by the late Pope Francis, to regular check-ins with Accenture’s AI-enabled database on tariffs. “Being able to invest in being fast really matters to your employees as they’re going through these difficult times.”
Bastian, meanwhile, is drawing lessons from the pandemic. “Rather than R and R. I’ve called it D and D: differentiated and durable.” What that means in practice is focusing first on employees, most of whom just got a 4% raise despite the economic uncertainty ahead. “The most important people to listen to are your own, to understand what they need to be able to take care of the hundreds of millions of people that we serve,” he said, adding that “At times like this is when we need leadership to stand up like never before.” (If you haven’t read Shawn Tully’s cover profile of Bastian in our current issue, you should.)
Bush agreed, arguing that there “is more fear and uncertainty in the workplace than any time since we’ve been in business at Great Place to Work.” One bright spot: The leaders he talks to are investing more in their communities, not just their companies. “The same people who want to have a great place to work want a great place to live.” Click here to see a video of our conversation and thanks to all of you who joined us.
More news below.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
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China says the U.S. has been in touch to negotiate tariffs. Beijing is considering how to proceed.
But President Trump threatened a whole new set of sanctions targeting any country that buys Iranian oil—and China is a big buyer of that fuel.
Trump also eliminated the “de minimis” rule that allowed small businesses to buy products from China without tariffs if the bill was under $800.
The EU made Washington an offer of €50 billion if Trump agrees to remove the 10% tariff barrier.
McDonald’s says consumers are cutting back. The burger chain reported a Q1 decline in same-store sales of 3.6% in the U.S. Starbucks and Domino’s Pizza reported similar trends. Some demographics have cut their visits to fast-food restaurants by "nearly double digits", McDonald's CEO Christopher Kempczinski said.
Tariffs will cost Apple $900 million in the next quarter, CEO Tim Cook says.
GM: Tariffs will cost $4-5 billion. GM CEO Mary Barra told analysts on Thursday that the automaker expects new tariffs to cost the company between $4 billion and $5 billion in 2025. The company stated that they plan on boosting their U.S. supply chain but didn’t give specifics.
Kohl’s ousts CEO. Kohl’s fired CEO Ashley Buchanan on Thursday after an internal investigation revealed a relationship between Buchanan and a vendor that carried conflicts of interest. Buchanan only led the struggling retailer for three and a half months.
Dan Ives on Tesla board and Musk. Tesla Bull Dan Ives told Fortune that the board of the EV company has taken the reins and made it clear that CEO Elon Musk must refocus on Tesla. Ives believes that the board “likely played a bigger role … than originally thought” in a conference call last week where Musk announced his gradual retreat from the Department of Government Efficiency.
Trump proposed deep cuts in federal spending. See the details here. Among those cuts: Defunding PBS and NPR.
The Markets
• The S&P 500 rose 0.6% yesterday to 5,604.14, its eighth straight day of gains. The index remains down 4.7% YTD. The Nasdaq Composite was up 1.5%. Meta stock rose 4.23% the day after it reported strong earnings. S&P futures were up 0.52% this morning, pre-open. The Asian markets were all broadly up this morning, with the Hong Kong Hang Seng leading the way with a gain of 1.74%. There was one exception: In China, both main indexes declined with the SSE Composite Index down 0.2%. Early trading in Europe was robust: The Stoxx Europe 600 rose 0.9% before lunchtime.
From the analysts
• Wedbush on Elon Musk: “[The] Wall Street Journal reported that the Tesla Board of Directors began to look for a new CEO to replace Elon Musk in March as tensions were reaching a boiling point over Musk joining the Trump Administration as brand damage was getting to the point of no return. … we believe Musk will remain CEO for at least five years at Tesla … We continue to believe Musk's days at the White House are now ending after this "warning shot" from the Tesla Board,” per Daniel Ives et al.
• Macquarie on the dollar: “The USD has rallied a bit on the prospect that the next 100 days of the US administration could be markedly different than the first 100 days. That view has been triggered by the spate of news around pending trade 'deals' to be made between the US and its allies [but] the weakening of the USD from February to April won't be fully reversed, barring a significant political turn in the US, and even if the US walks back all the tariffs,” per Thierry Wizman and Gareth Barry.
• Goldman Sachs on equities: “Following the sharp decline in risk sentiment, with a VIX spike above 50, US retail investors have bought the dip. Elevated VIX levels (above 30) since the 1990s have been followed by positive returns over the subsequent 12 months, including after major spikes during the GFC and Covid crisis. US retail investors followed that historical template and bought the dip … with lots of 'dry powder' currently held in money market funds (~$10tn), there could be further rotation into equities in the event of better macro newsflow,” per Christian Mueller-Glissmann et al.
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