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Stocks week ahead: CEOs stepped up in Trump era. They are not off the hook

Filling a perceived moral vacuum in Washington, CEOs warned of threats to democracy and announced commitments aimed at addressing racial inequality. Many made it clear publicly where they stood on Trump’s approach to the climate crisis and immigration.

There is a new administration in the White House, and on a number of political fronts, President Joe Biden and Corporate America are closer to each other. But when it comes to the role their companies play in society, business executives should not go back to their old ways.

“[This] becomes an opportunity to continue that self-reflection, ”said Deepak Malhotra, Professor of Business Administration at Harvard Business School.

Why it matters: The public increasingly trusts companies to make the right calls on political and social issues. According to the Edelman Trust Barometer from 2021

, released earlier this month, the business has replaced the government as the most trusted institution during the Covid-19 pandemic.

Following the uprising of Trump supporters storming the U.S. Capitol, a survey of 40 executives by Jeffrey Sonnenfeld of the Yale School of Management found that 96% of respondents believed Trump should be charged and removed from office.

These same leaders now have a role to play as the prosecution process unfolds, Sonnenfeld told me. The trial in the Senate is scheduled to begin on February 9.

“I think they should formally and informally continue to push for accountability,” Sonnenfeld said. “Our system of government is very much the reason for their business success – and they know it.”

Then there are the looming debates on topics such as climate. Over the past four years, companies have become accustomed to asserting the mantle of leadership as the Trump administration is liberated.

“The business suddenly surpassed the government by a large margin,” Malhotra said.

That may no longer be the case under the Biden administration, which took steps to accede to the Paris climate agreement last week. But it does not change the importance of individual commitments or the need for companies to work with the government to achieve important goals.
And in some debates, the business still has the chance to set standards. While Biden’s call to raise the national minimum wage to $ 15 an hour will face opposition from Republicans in Congress, Unilever promised last week that any worker who supplies it with goods and services will earn a wage by 2030.

A given: Businesses will be forced to continue to actively engage in social issues simply because of changing consumer tastes. As was made clear after the police assassination of George Floyd last summer, which led millions of protesters out, younger customers are increasingly demanding that the brands they support back, like Black Lives Matter; workers ask the same about their employers.

“Companies were forced to reckon with these issues, not specifically because of President Trump, but because of what was happening on the streets and in communities and in their own workforce,” Malhotra said.

See this space: Normally, the role of companies in society will be discussed over the next week in the Swiss Alps when leaders gather at the World Economic Forum in Davos. This year, not surprisingly, the January issue of WEF is a completely digital affair, although the group hopes to hold a personal event in Singapore this summer.

Talks on the subject with executives such as BlackRock CEO Larry Fink, Bank of America CEO Brian Moynihan and Salesforce CEO Marc Benioff continue. Keep an eye on Before the Bell for highlights.

Is Apple’s 5G iPhone Selling? We’re figuring it out

Wall Street has been counting on the speed of iPhone 12 sales to overload Apple’s earnings. This week, investors are learning whether such predictions will come true.

What happens: The release of each iPhone is accompanied by a significant degree of hype. But there is an extra unknown this time, as the iPhone 12 is the first Apple (AAPL) device with 5G connection. Some analysts believe it will have led to a huge wave of upgrades. Others are not sure that the 5G rollout is far enough to inspire such enthusiasm, especially in the midst of an economic downturn.

Apple reports earnings after U.S. markets closed Wednesday. Given the company’s 75% share price increase over the past year – partly due to expectations of wild iPhone 12 sales – it will be a major market event.

Much depends on demand from China, according to Wedbush Securities analyst Daniel Ives, who puts any comments on the country’s economic comeback in focus.

“China remains a key ingredient in Apple’s recipe for success, as we estimate that approximately 20% of iPhone upgrades will come from this region in the coming year,” Ives said in a recent note to clients.

On the radar: Microsoft (MSFT), Facebook (FB) and Tesla (TSLA) – all contributors to the recent market rally – must also report earnings this week.


Monday: Kimberly-Clark (KMB) earnings
Tuesday: American consumer confidence 3M (MMM), American Express (AXP), GIVE (GIVE), Johnson & Johnson (JNJ), Lockheed Martin (LMT), UBS (UBS), Verizon (VZ), Microsoft (MSFT), Starbucks (SBUX) and Texas Instruments (TXN) earnings
Wednesday: Federal Reserve meeting; United States data on durable goods; AT&T (T), Boeing (BA), Apple, Facebook, Tesla and Spa bath (WHR) earnings
Thursday: US fourth quarter GDP and initial unemployment requirements; American Airlines (EEL), Comcast (CMCSA), Dow (DOW), Mastercard (MUST), McDonald’s (MCD), Mondelez (MDLZ) and Visa (V) earnings
Friday: U.S. personal income and expenses; Larva (CAT), Chevron (CVX), Eli Lilly (LLY) and Honeywell (SHE) earnings

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