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Why Trump Lashed Out at OPEC: DealBook Briefing

Saudi Arabia’s energy minister, Khaled al-Faleh, left, and Russia’s energy minister, Alexander Novak, at an OPEC meeting on Friday.Credit...Amer Hilabi/Agence France-Presse — Getty Images

Good Friday morning. Here’s what we’re watching:

• Wells Fargo takes another hit.

• What AT&T’s Randall Stephenson said on the stand.

• What Takeda has to weigh in its pursuit of Shire.

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President Trump took the unusual step of taking on oil prices on his favorite venue on Friday, tweeting his ire at OPEC. Oil prices fell soon after the tweet, with Brent crude posting its biggest intraday drop in weeks.

But why has President Trump made the international oil cartel his latest bête noire? One potential reason: It makes life more difficult for many Americans, weighing on the benefits of the Republican tax cuts.

The context: OPEC and Russia agreed two years ago to cut — and maintain — oil production caps to bring prices back up in the wake of U.S. shale boom. So far, that strategy has worked:

With oil above $73 now, even after Mr. Trump’s tweet, fuel prices are at reaching two-year highs as the U.S. gets into the summer driving season. More importantly, Americans are preparing to spend more on fuel, eating into whatever savings they are expected to receive on average from the tax cuts.

From Ed Crooks of the FT from earlier this week:

Americans are expected to spend an average of $400 per household more on fuel this year than in 2016, as the rebound in crude prices is reflected in the cost of petrol at the pump. By contrast, middle-income US households will on average gain $930 each from the tax cut bill passed at the end of last year, according to the Urban-Brookings Tax Policy Center.

But as Mr. Crooks also notes, higher fuel prices are less of a burden than they used to be. And OPEC members appear to be taking Mr. Trump’s tweet in stride. Khalid Al-Falih, Saudi Arabia’s energy minister, told Bloomberg, “We have seen prices significantly higher in the past, twice as much as where we are today,” and that the global economy has done fine.

And Michael Lynch of Strategic Energy & Economic Research had this to say to Bloomberg:

“Ninety-eight percent of what politicians say about oil should just be disregarded immediately and this falls in there.”

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The investigation may also include major American carriers other than AT&T and Verizon, a person with knowledge of the inquiry said.Credit...Brandon Thibodeaux for The New York Times

The Justice Department has opened an antitrust investigation into potential coordination by AT&T, Verizon and a telecommunications standards organization to hinder consumers from easily switching wireless carriers, according to six people with knowledge of the inquiry.

In February, the Justice Department issued demands to AT&T, Verizon and the G.S.M.A., a mobile industry standards-setting group, for information on potential collusion to thwart a technology known as eSIM, said two of the people, who spoke on the condition of anonymity because the details are confidential.

The technology lets people remotely switch wireless providers without having to insert a new SIM card into a device. AT&T and Verizon face accusations that they colluded with the G.S.M.A. to try to establish standards that would allow them to lock a device to their network even if it had eSIM technology.

The investigation was opened about five months ago after at least one device maker and one wireless carrier filed formal complaints with the Justice Department, two of the people said.

Representatives for the Justice Department, AT&T, Verizon and the G.S.M.A. declined to comment.

— Cecilia Kang

Shares of General Electric jumped nearly 4 percent Friday after the company reported better-than-expected earnings and reaffirmed its guidance for the year.

Though G.E. reported a first-quarter loss on Friday, there were also signs that the struggling industrial giant is beginning to stabilize its business.

G.E.’s big power-generator division continues to drag down the company’s overall performance, and it is still burdened with financial liabilities that linger from the conglomerate’s pared-back finance arm, GE Capital.

But G.E.’s other major industrial divisions, led by aviation and health care, delivered solid results in the quarter. That should provide some assurance to investors as the company charts a future dependent on its industrial lines.

Especially heartening for investors, G.E. reaffirmed its profit outlook for the year, predicting earnings per share of $1 to $1.07, though likely at the lower end of that range. Analysts had been skeptical that G.E. could do that well. The average analysts’ forecast for the year was 95 cents a share, as compiled by Thomson Reuters.

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Credit...Justin Sullivan/Getty Images

With Wells Fargo about to face a $1 billion fine over misdeeds like forcing customers to buy unnecessary auto insurance, Jim Stewart raises a provocative question: Is this too much punishment?

To recap: Wells Fargo has already paid $185 million over its fake accounts scandal and set aside $4.25 billion for liabilities tied to other infractions. And the Fed has prevented the bank from expanding its balance sheet.

Yes, the upcoming $1 billion fine is the most stringent bank penalty imposed by the Trump administration to date. (The C.F.P.B., under pressure from Mick Mulvaney to go easier on financial firms, is involved here.)

But Mr. Stewart writes, “At this point it’s hard to imagine what more Wells Fargo can do (or how much more it can spend) to make amends.”

Elsewhere in banking: British financial regulators fined Barclays’s C.E.O., Jes Staley, over his efforts to identify a whistle-blower. Deutsche Bank mistakenly paid $35 billion to Deutsche Börse. (It got the money back.)

That’s the contention of the reporter Jonathan Greenberg, who, as a Forbes reporter in 1984, spoke with “John Barron” about Donald Trump’s net worth. Mr. Barron — a now well-known alter ego of the real estate executive — contended that Mr. Trump had bought out most of his father’s stake in their business.

From Mr. Greenberg’s op-ed in the WaPo:

Over time I have learned that he should not have been on the first three Forbes 400 lists at all. In our first-ever list, in 1982, we included him at $100 million, but Trump was actually worth roughly $5 million — a paltry sum by the standards of his super-monied peers — as a spate of government reports and books showed only much later.

Mr. Greenberg writes that the White House and the Trump Organization declined to comment.

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Credit...Carlos Barria/Reuters

On the stand yesterday, Randall Stephenson argued that his company’s planned takeover of Time Warner would create a business no different from the Silicon Valley giants AT&T sees as its rivals. “The FAANG are all focused on premium video,” Mr. Stephenson said. “All of them are vertically integrated.”

The Justice Department, which wants to block the deal, argued that AT&T is different because it’s also a broadband internet provider, and that relations with Silicon Valley are chummier than Mr. Stephenson asserts.

Andrew says: If you read one smart thing today, make it this thread by Matthew Ball, the former head of strategy at Amazon Studios. This point is especially insightful:

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Elsewhere in big media: CBS investors can continue their lawsuit over whether Sumner Redstone was improperly enriched through compensation the board gave him after his health issues made it difficult to function.

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Credit...Suzanne Plunkett/Reuters

After what briefly looked like a potential bidding war between Takeda and Allergan — until Allergan dropped out — the question now, Michael writes, is what price will Shire fetch? (Takeda has informally offered over $60 billion.)

A big takeover would give Takeda more scale — the combined company would have some $30 billion in annual sales — and a bigger international footprint. But it would also be the company’s biggest takeover by far, and perhaps too expensive.

The Japanese drug maker said it intended to maintain its credit rating, which could be difficult if it bids too high — or is pressured to do so by yet another suitor.

Critics’ corner: Neil Unmack and Robert Cyran of Breakingviews say Takeda needs a deal, but risks overpaying. Chris Hughes and Max Nisen of Gadfly aren’t sure a bidding war for Shire is warranted.

Elsewhere in deals: WPP pushed back against calls to break itself up. Qualcomm needs a better Plan B if its NXP takeover fails. Connecticut Water has rejected a $748 million takeover bid by Eversource. Saudi Arabia’s solar project deal with SoftBank exposed infighting between the kingdom’s energy ministry and its sovereign wealth fund.

With its $16 trillion economy and reputation for tough negotiating, the E.U. could have been the immovable object in President Trump’s trade fight. But that is looking less likely, Peter Eavis writes.

Why? The WSJ reports that the E.U. is prepared to offer concessions to avoid Mr. Trump’s threatened tariffs on imported steel and aluminum that Mr. Trump has threatened — perhaps reducing tariffs on American cars and industrial parts, and joining the U.S. in pressuring China on trade and investment rules.

Among the lessons if the E.U. concedes: The U.S.’s large trade deficits can give it leverage.

Beijing appears keenly aware of the risks here and is sure to press its case at a China-E.U. summit in July.

Elsewhere in trade: Global policymakers in Washington for I.M.F. and World Bank meetings appear worried about a trade war. The Export-Import Bank has been sidelined despite its potential usefulness in trade fights. And how a Chinese boycott of U.S. goods could backfire.

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Credit...Carolyn Kaster/Associated Press

Rudy Giuliani and two other former federal prosecutors have joined President Trump’s legal team to “quickly” resolve Robert Mueller’s investigation. Rod Rosenstein reportedly told Mr. Trump that he’s not a target in either the Mueller investigation or the case involving Michael Cohen.

• The F.B.I. has released James Comey’s memos about his interactions with Mr. Trump, one of which recorded the president expressing frustration with Michael Flynn. The Justice Department’s internal watchdog referred its findings about Andrew McCabe to prosecutors.

• The Republican fund-raiser Elliott Broidy pushed for Mr. Trump to meet with the Malaysian prime minister, who was under investigation from U.S. prosecutors — and had business dealings with Mr. Broidy. (NYT)

• The Kushner Companies has been subpoenaed in an investigation into its treatment of rent-regulated tenants. (WSJ)

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Credit...Bloomberg Businessweek

The sometimes controversial data consultant cut its teeth working for the Pentagon and the C.I.A. Now it’s hoping that its latest product will attract more commercial clients.

But here’s the company's biggest problem, according to Bloomberg’s Peter Waldman, Lizette Chapman and Jordan Robertson:

The company needs to figure out how to be rewarded on Wall Street without creeping out Main Street. It might not be possible. For all of Palantir’s professed concern for individuals’ privacy, the single most important safeguard against abuse is the one it’s trying desperately to reduce through automation: human judgment.

Now might not seem the ideal time to start a venture capital firm that aims to help U.S. start-ups break into the Russian market. But Fort Ross Ventures, which has opened for business in the U.S. with a $200 million fund, is making a go of it.

Victor Orlovski, Fort Ross’s founder and managing partner, told Michael that the current state of U.S.-Russian political relations should not affect his firm’s ability to operate. “The nature of start-ups is all about risk,” he said. “There is a political tension, but not when you’re talking to start-ups.”

The tech flyaround

• A PWC audit of Facebook last year found sufficient data privacy protections, despite the Cambridge Analytica incident. New European privacy rules could eliminate the book-length user agreements that most people don’t read.

• G.E. is scaling back its digital ambitions. (NYT)

• A.I. salaries are skyrocketing, even at nonprofit organizations. (NYT)

• Venture capitalists and entrepreneurs have lobbied regulators not to classify virtual currencies as securities. (NYT)

• Iceland’s cool climate and geothermal steam have made it a home for data centers, but its environment is under stress. (WSJ)

• Disappointing sales forecasts from TSMC, one of Apple’s main chip suppliers, weighed on Asian tech stocks. (Bloomberg)

• Vitalik Buterin, Ethereum’s creator, on recently minted cryptocurrency millionaires: “It’s the luck of the draw, where everyone who won the draw seems to feel like they deserved it for being smarter.” (FT)

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Credit...Drew Angerer/Getty Images

The girl statue is set to move to a new spot facing the N.Y.S.E., out of concerns for the safety of crowds that gather around her. And if N.Y.C. has its way, the totemic bull statue she faces could move as well.

The only potential obstacle: Arturo Di Modica, the artist who made the bull, doesn’t want it moved.

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Credit...Andy Kropa/Invision, via Andy Kropa/Invision/Ap

Warren Buffett will step down from the board of Kraft Heinz next week, citing a desire to travel less. (FT)

• Mattel named Ynon Kreiz, the former head of Maker Studios, as its C.E.O., replacing Margo Georgiadis. (WSJ)

• Macerich’s chairman and C.E.O., Arthur Coppola, plans to step down at year end. (Bloomberg)

• The F.A.A. had been considering rules that might have affected the Southwest Airlines flight in which engine failure led to a passenger’s death. And there are fears that increasingly powerful and complex engines may be becoming more vulnerable to faults.

• The F.D.A. has recommended the approval of a cannabis-based drug for epilepsy. (NYT)

• Opioid prescriptions are declining. Prescriptions to tread opioid addiction are increasing. (NYT)

• Lance Armstrong will pay $5 million to settle claims that he defrauded the federal government by doping when the United States Postal Service sponsored his cycling team. (NYT)

• Donte Robinson and Rashon Nelson, the two black men whose arrests at a Starbucks prompted protests and bias training at the company, have spoken about what happened. (NYT)

• The E.U. is set to reject a U.K. idea about how to handle the Irish border after Brexit. (Bloomberg)

We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.

A correction was made on 
April 20, 2018

An earlier version of this article, relying on information in a Bloomberg report, misstated the amount of Sumner Redstone’s compensation that a court ruled CBS shareholders could challenge. It is less than $4 million, not more than $13 million.

How we handle corrections

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