Good morning. The U.S. government shutdown continues. While shutdowns aren’t new, the timing of this one may prove to be another test of resilience during uncertain times.
“The government shutdown is a symptom, not the story,” said Bridget Gainer, chief public affairs officer at Aon. “While Aon’s data shows that disruption is now a constant—from geopolitical tensions to regulatory paralysis—most businesses are still managing it like a one-off event.”
Shutdowns can delay contracts, squeeze liquidity, and reveal how unprepared many companies are to absorb shocks, Gainer said. “What we’re telling clients is that planning for resilience isn’t a reaction—it’s a strategy for survival.”
Due to the government shutdown, key economic data—such as the September jobs numbers scheduled for release on Friday by the Bureau of Labor Statistics—will be halted. U.S. employers added just 22,000 jobs in August, as the labor market continued to cool. Last month, the Labor Department said hiring decelerated from 79,000 in July. The unemployment rate ticked up to 4.3%, the highest level since 2021.
I asked Gregory Daco, EY-Parthenon’s chief economist, about the impact of the BLS not publishing the job numbers on Friday. “The absence of key data like the jobs report would temporarily blind business leaders, policymakers, and investors, heightening volatility and reinforcing the Fed’s data-dependency dilemma,” Daco said. It would also amplify economic uncertainty at a time when the economy is showing mixed signals, he added.
Regarding the impact on companies, Daco said that businesses rely on official data to inform hiring, investment, and pricing decisions. “A shutdown-induced data blackout undermines confidence and increases planning risk. It adds friction at a time when many companies are already navigating a noisy policy and economic environment.”
In August, employers announced 85,979 job cuts, the highest August total since 2020, according to Challenger, Gray & Christmas, an outplacement firm. Through August, cuts reached 892,362, up 66% from the same time last year, already surpassing the full-year 2024 total of 761,358, per the firm.
If the shutdown continues, CFOs should prioritize agility in scenario planning, Daco said. With potential delays in economic data and government operations, finance chiefs should prepare for market volatility and disruptions to federal contracts, permits, or tax processing, he said.
“Uncertainty breeds caution, but it can also be a strategic advantage—firms that stay nimble will be better positioned to act once clarity returns,” Daco said.
Daniel Sullivan was appointed CFO of Five Below, Inc. (Nasdaq: FIVE), a retail chain. Sullivan has 35 years of experience. He most recently served as EVP and chief operating officer at Edgewell Personal Care. Sullivan joined Edgewell as CFO. He previously served as CFO of Party City and CFO of Ahold USA, as well as CFO and COO of Heineken USA and Heineken International.
Steve Rai was appointed EVP and CFO of Open Text Corporation (Nasdaq: OTEX), a cloud and AI company, effective Oct. 6. Rai brings over 30 years of experience. He most recently served as CFO of BlackBerry Limited. Before that. Rai held senior finance positions at PMC-Sierra and PricewaterhouseCoopers LLP.
Big Deal
E*TRADE from Morgan Stanley has released its monthly analysis. “In the U.S. stock market’s strongest September since 2010, E*TRADE from Morgan Stanley clients were net buyers in all 11 S&P 500 sectors,” according to Chris Larkin, managing director of trading and investing.
Although the tech sector was September’s biggest gainer, the top three sectors for net buying activity were consumer staples (+12.66%), utilities (+12.14%), and consumer discretionary (+11.33%).
However, that activity wasn’t necessarily as defensive as it may appear, Larkin noted. His assessment: “While utility stocks are a classic defensive play, a significant portion of last month’s buying occurred in nuclear power stocks, some of which were among September’s biggest gainers. Also, activity in the consumer discretionary sector revolved largely around megacap stocks—both those that pulled back in September, and those that posted strong rallies.”
Courtesy of E*TRADE from Morgan Stanley
Going deeper
Aon plc has released the 2025 edition of its Global Risk Management Survey, now in its 19th year. The survey reveals a sharp rise in risks associated with geopolitical volatility, which climbed 12 places since 2023 to enter the top 10 global risks for the first time. The current top three risks are cyber attacks, business interruption, and economic slowdown or recovery.
The growth of trade and geopolitical challenges reflects instability across global regions, affecting supply chains, regulations, and financial performance. However, only 14% of organizations track their exposure to the top 10 risks, and just 19% use analytics to evaluate their insurance programs.
The report also offers a forward-looking view: by 2028, cyber risk is expected to remain the most critical, while artificial intelligence and climate change join the top 10 concerns, reinforcing the impact of technology and extreme weather on business.
Findings are based on nearly 3,000 responses from risk managers and executives in 63 countries.
Overheard
“Every company wants to make breakthroughs with AI. But if your data is bad, your AI initiatives are doomed from the start.”
— Brian Moore, co-founder and CEO of AI startup Voxel51, writes in a Fortune opinion piece.
President Donald Trump and his administration insist that costs are coming down, but voters are skeptical, including those who put him back in the White House.
Despite Republicans getting hammered on affordability in off-year elections last month, Trump continues to downplay the issue, contrasting with his message while campaigning last year.
“The word affordability is a con job by the Democrats,” Trump said during a Cabinet meeting on Tuesday. “The word affordability is a Democrat scam.”
But a new Politico poll found that 37% of Americans who voted for him in 2024 believe the cost of living is the worst they can ever remember, and 34% say it’s bad but can think of other times when it was worse.
The White House has said Trump inherited an inflationary economy from President Joe Biden and point to certain essentials that have come down since Trump began his second term, such as gasoline prices.
The poll shows that 57% of Trump voters say Biden still bears full or almost full responsibility for today’s economy. But 25% blame Trump completely or almost completely.
That’s as the annual rate of consumer inflation has steadily picked up since Trump launched his global trade war in April, and grocery prices have gained 1.4% between January and September.
Meanwhile, Vice President JD Vance pleaded for “patience” on the economy last month as Americans want to see prices decline, not just grow at a slower pace.
Even a marginal erosion in Trump’s electoral coalition could tip the scales in next year’s midterm elections, when the president will not be on the ballot to draw supporters.
A soft spot could be Republicans who don’t identify as “MAGA.” Among those particular voters, 29% said Trump has had a chance to change things in the economy but hasn’t taken it versus 11% of MAGA voters who said that.
Across all voters, 45% named groceries as the most challenging things to afford, followed by housing (38%) and health care (34%), according to the Politico poll.
“If the crisis threshold—the floor below which families cannot function—is honestly updated to current spending patterns, it lands at $140,000,” he wrote. “What does that tell you about the $31,200 line we still use? It tells you we are measuring starvation.”
Apple is currently undergoing the most extensive executive overhaul in recent history, with a wave of senior leadership departures that marks the company’s most significant management realignment since its visionary co-founder and CEO Steve Jobs died in 2011. The leadership exodus spans critical divisions from artificial intelligence to design, legal affairs, environmental policy, and operations, which will have major repercussions for Apple’s direction for the foreseeable future.
On Thursday, Apple announced Lisa Jackson, its VP of environment, policy, and social initiatives, as well as Kate Adams, the company’s general counsel, will both retire in 2026. Adams has been Apple’s chief legal officer since 2017, and Jackson joined Apple in 2013. Adams will step down late next year, while Jackson will leave next month.
The scope of the turnover is unprecedented in the Tim Cook era. In July, Jeff Williams, Apple’s COO who was long thought to succeed Cook as CEO, decided to retire after 27 years with the company. One month later, Apple’s CFO Luca Maestri also decided to step back from his role. And the design division, which just lost Dye, also lost Billy Sorrentino, a senior design director, who left for Meta with Dye. Things have been particularly turbulent for Apple’s AI team, though: Ruoming Pang, who headed its AI Foundation Models Team, left for Meta in July and took about 100 engineers with him. Ke Yang, who led AI-driven web search for Siri, and Jian Zhang, Apple’s AI robotics lead, also both left for Meta.
Succession talks heat up
While all of these departures are a big deal for Apple, the timing may not be a coincidence. Both Bloomberg and the Financial Times have reported on Apple ramping up its succession plan efforts in preparation for Cook, who has led the company since 2011, to retire in 2026. Cook turned 65 in November and has grown Apple’s market cap from about $350 billion to a whopping $4 trillion under his tenure. Bloomberg reports John Ternus has emerged as the leading internal candidate to replace him.
Apple choosing Ternus would be a pretty major departure from what’s worked for Apple during the past decade, which has been letting someone with an operational background and a strong grasp of the global supply chain lead the company. Ternus, meanwhile, is focused on hardware development, specifically for the iPhone, iPad, Mac, and Apple Watch. But it’s that technical expertise that’s made him an attractive candidate, especially as much of the recent criticism about Apple has revolved around the company entering new product categories (Vision Pro, but also the ill-fated Apple Car), as well as its struggling AI efforts.
Now, of course, with so many executives leaving Apple, succession plans extend beyond the CEO role. Apple this week announced it’s bringing in Jennifer Newstead, who currently works as Meta’s chief legal officer, to replace Adams as the company’s general counsel starting March 1, 2026. Newstead is expected to handle both legal and government affairs, which is essentially a consolidation of responsibilities among Apple’s leadership team, merging Adams’ and Jacksons’ roles into one.
Alan Dye, meanwhile, will be replaced by Stephen Lemay, a move that’s reportedly being celebrated within Apple and its design team in particular. John Gruber, who’s reported on Apple for decades and has deep ties within the company, wrote a pretty scathing critique about Dye, but in that same breath said employees are borderline “giddy” about Lemay—who has worked on every major Apple interface design since 1999, including the very first iPhone—taking over.
Meanwhile, on the AI team, John Giannandrea will be replaced by Amar Subramanya, who led AI strategy and development efforts at Google for about 16 years before a brief stint at Microsoft.
Hitting the reset button
All of the above departures cover critical functions for Apple: AI competitiveness, design innovation, regulatory navigation, and operational efficiency. Each replacement brings specialized expertise that aligns with the challenges Cook’s successor will inherit.
The real test will be execution across multiple fronts simultaneously. Can Subramanya accelerate Apple’s AI development to match competitive threats? Will Lemay’s design leadership maintain Apple’s interface advantages as AI reshapes user interaction? Can Newstead navigate regulatory challenges while preserving Apple’s privacy-first approach?
What’s certain is the company will look fundamentally different in 2026—and the executive team that grew Apple into a $4 trillion behemoth is departing. The transformation could be as profound as any since Jobs handed the reins to his COO at the time, Tim Cook, 14 years ago.
Elon Musk has given the thumbs up to some Tesla drivers texting behind the wheel.
The EV maker recently introduced a 30-day free trial of its Full Self-Driving (Supervised) (FSD) features on its North American cars, which has traffic-aware cruise control, autosteer, and autopark. To the Tesla CEO, the automated features in place are enough to condone texting while driving. According to safety experts, Musk’s suggestion is actually plain illegal.
In response to an X user’s question on Thursday about being able to text and drive while a Tesla is operating FSD v14.2.1, its latest full self-driving capabilities, Musk responded: “Depending on context of surrounding traffic, yes.”
Musk’s response mirrors his comments at Tesla’s annual shareholder meeting last month, where he said the company would soon feel comfortable with a multitasking driver.
“We’re actually getting to the point where we almost feel comfortable allowing people to text and drive, which is kind of the killer [application] because that’s really what people want to do,” Musk said. “Actually right now, the car is a little strict about keeping eyes on the road, but I’m confident that in the next month or two—we’re going to look closely at the safety statistics—but we will allow you to text and drive essentially.”
With a $1 trillion pay package on the line, Musk has worked to jumpstart Tesla after continued lagging sales. His lofty automation goals tied to the compensation plan include delivering 20 million vehicles and having 10 million active FSD subscriptions, as well as 1 million robotaxis on the commercially operational.
FSD roadbumps
Tesla’s FSD rollout, much like its other automated technologies, has hit snags. In October, the U.S. Department of Transportation-run National Highway Traffic Safety Administration (NHTSA) opened an investigation into the EV maker, alleging its FSD software violated traffic laws and led to six crashes, four of which resulted in injuries. It cited data from 18 complaints from Tesla users claiming the FSD-equipped cars ran red lights or swerved into other lanes, including into oncoming traffic.
There is another complication for Musk’s vision of a Tesla owner typing away behind the wheel: Texting and driving is illegal in nearly the entire country, barring Montana, according to the U.S. Bureau of Transportation Statistics. According to the NHTSA, distracted driving resulted in 3,275 deaths in 2023.
Even Tesla has warned owners against texting while driving, even with some automated features in place: Tesla’s Model Y Owner’s Manual asks drivers not to use their phones while driving with Autopilot software enabled. (Autopilot refers to Tesla’s basic driver assistance features requiring hands on the steering wheel, while FSD is a paid subscription package with enhanced automated features and does not require a driver to have hands on the steering wheel.)
“Do not use handheld devices while using Autopilot features,” the manual said. “If the cabin camera detects a handheld device while Autopilot is engaged, the touchscreen displays a message reminding you to pay attention.”
Tesla did not respond to Fortune’s request for comment.
What experts are saying
Alexandra Mueller, senior research scientist for Insurance Institute for Highway Safety, told Fortune condoning texting while behind the wheel completely undermines the purpose of Tesla’s current automated features Tesla, which are a level 2 on the five-point automation scale, meaning the models require the driver to still be fully in control of the vehicle.
“Having partial automation support doesn’t mean that you suddenly can kick back and text and not worry about driving,” Mueller said, “because that’s just not how these systems are designed to be used—and that’s also not the responsibility that the driver has when using these systems, and that’s by design.”
She said automated systems like Tesla’s are not designed to replace the driver and work because they are “human-in-the-loop” and were designed to support the driver’s discretion behind the wheel. Beeps and notifications from the vehicle if a driver changes lanes without signalling can help shape good behaviors, Mueller noted. Encouraging multitasking behind the wheel turns these features into convenience factors, rather than the safety precautions they were intended to be.
“Suddenly all your safety assessments on the technology don’t apply anymore, because you’ve changed the very nature of how the technology is supporting human-in-the-loop behavior,” Mueller concluded.
Politics8 years ago