An important voice leaves SoftBank
Happy Friday. A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.
SoftBank said in a statement Friday that Tadashi Yanai, the billionaire founder of Fast Retailing, would step down from its board at the end of the year.
Why it matters: Yanai has been on the company’s board for 18 years, and is reported to be one of SoftBank CEO Masayoshi Son’s closest advisers.
Yanai was also able to question some of the investment decisions made by Son, who has come under fire in recent months after his huge bet on WeWork went south.
During SoftBank’s most recent earnings call in November, Son said that Yanai was a “challenging guy” who “always gives me a hard time.”
The context: Son and SoftBank pumped millions of dollars into WeWork, only to see it scrap a highly anticipated initial public offering after investors questioned the office-sharing startup’s sky-high valuation and management practices.
SoftBank ended up bailing out WeWork with a $9.5 billion rescue plan that valued the company at $8 billion, far lower than its peak of $47 billion.
The worry: Yanai’s departure leaves SoftBank with only two independent directors: Masami Iijima, chairman of the conglomerate Mitsui, and University of Tokyo professor Yutaka Matsuo.
Investors will now ask whether Son has the right mix of personnel on his board.
Even more records
There’s no doubt: US stocks are ending the year on a high note.
The three main US stock indexes closed at new records on Thursday on continued optimism over a US-China trade deal and positive reports on holiday shopping.
The Nasdaq gained 0.8% to finish above 9,000 points for the first time ever. The tech-heavy index has gained 36% in 2019, putting it on track for its best year since 2013.
Many analysts think the bull market has more room to run. Capital Economics, for example, predicts the S&P 500 will end next year at 3,300 points and 2021 at 3,500.
There are, of course, significant risks. According to my CNN Business colleague Anneken Tappe, one of the biggest fears on Wall Street is trade. She writes:
China and the United States are inching closer to signing a preliminary deal, but many investors remain skeptical following the carrot-and-stick approach on the trade this year.
Washington and Beijing have only agreed to a “phase one” deal so far. Even once this agreement is signed, a full-blown deal still needs to be negotiated. And with more trade talks come a prolonged risk of negative headlines and renewed tariff threats.
An escalation of the trade war could lead to significant economic harm, particularly hurting business spending and employment, economists at Morgan Stanley wrote in a recent analyst note.
Other potential stumbling blocks: America has just threatened more import tariffs on its European partners. The question of auto tariffs on Germany, for example, will continue to loom next year.
President Donald Trump also renewed the threat of steel and aluminum tariffs on Brazil and Argentina at the start of December.
Up next
The EIA will report crude oil inventories data at 11:00 a.m. ET.
Other than that, enjoy your weekend.
