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Facebook hit by a barrage of reports from consortium of news outlets

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With an image of himself on a screen in the background, Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC.

Chip Somodevilla | Getty Images

Facebook on Friday was hit with multiple reports stemming from documents provided to news outlets by Frances Haugen, a former employee turned whistleblower.

The reports cite internal company research and documents that show the company is aware of many of the harms its apps and services cause but either doesn’t rectify the issues or struggles to address them.

According to a report from NBC, Facebook ran an experiment that showed how a new profile for a conservative mother from North Carolina began, within two days, to receive recommendations to join groups related to the far-right conspiracy group QAnon.

By the summer of 2020, , the documents show, Facebook was hosting thousands of private QAnon groups and pages with millions of followers, NBC reported. Facebook has since banned QAnon groups.

Bloomberg reported on documents that showed employees at Facebook expressed shock and outrage after the Jan. 6 insurrection at the U.S. Capitol.

“I’m struggling to match my value to my employment here,” one employee wrote, according to the Bloomberg story. “I came here hoping to affect change and improve society, but all I’ve seen is atrophy and abdication of responsibility.”

Internal Facebook analysis of the Jan. 6 insurrection found that the policies and procedures put in place by the company were not enough to prevent the growth of groups related to “Stop the Steal,” according to a CNN report. The company treated each piece of “Stop the Steal” content individually, rather than as part of a greater whole, the report notes.

The New York Times reported on Friday, based on documents from Haugen, that a Facebook data scientist wrote to his colleagues to say that 10% of all U.S. views of political content on the site were of posts alleging that the 2020 U.S. presidential was fraudulent.

The reports follow a series of stories from the Wall Street Journal titled “The Facebook Files,” from documents provided by Haugen. Most notably, the series found internal documents that showed Facebook was aware of the harm caused by its Instagram service to teenagers’ mental health.

Earlier this month, Haugen testified before a Senate panel about the reports. Facebook attempted to discredit Haugen at the time and continues to push back against the stories stemming from the documents she’s released.

“At the heart of these stories is a premise which is false,” Facebook wrote in a statement to CNBC. “Yes, we’re a business and we make profit, but the idea that we do so at the expense of people’s safety or wellbeing misunderstands where our own commercial interests lie. The truth is we’ve invested $13 billion and have over 40,000 people to do one job: keep people safe on Facebook.”

WATCH: Facebook needs to be bullish on its own stock, says Wedgewood Partners’ CIO

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Elon Musk emails at Tesla in October 2021: Music, direct orders

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SpaceX founder and Tesla CEO Elon Musk looks on as he visits the construction site of Tesla’s gigafactory in Gruenheide, near Berlin, Germany, May 17, 2021.

Michele Tantussi | Reuters

Tesla CEO Elon Musk is known for his spontaneous mass communication, from rants on Twitter to “everybody” e-mails he sends to all employees at his electric vehicle company.

CNBC has obtained a pair of e-mails Musk sent to Tesla employees in the first week of October. The first one said listening to music at work with one earbud out to listen for safety-related issues was OK. The second, harsher email reminded employees there are only three options when Musk sends directions: explain why he’s wrong, request further clarification, or execute.

At the time, Tesla had just announced record third-quarter deliveries despite supply chain pressures, most notably a chip shortage. It had finally released the long-awaited “Full Self-Driving Beta” button, allowing Tesla vehicle owners to sign up for pre-release driver assistance software to test it on public roads.

And on Oct. 4, the company lost a big case in a San Francisco federal court when a jury decided Tesla must pay a former worker, Owen Diaz, about $137 million after he endured a racially hostile work environment during his time at Tesla’s car plant in Fremont, California.

CNBC has also reviewed other emails Musk sent in recent months, including words of encouragement for employees working on the company’s new factory near Berlin, and agreeing with a bullish analyst call in September suggesting that Tesla stock can go to $3,000 per share — if the company executes well.

Here’s what Musk told employees on Oct. 3 and Oct. 4.

The first one was about music at work.

To: Everybody

From: Elon Musk

Date: Sunday October 3 [time redacted]

Subj. Music in the Factory

Just wanted to say that I very much support music in the factory, as well as any little touches that make work more enjoyable.

An associate just sent me a note asking if we could have one ear bud for music so the other ear can listen for safety-related issues. That sounds fine to me.

Also, ambient music from speakers is also totally cool so long as there is reasonable agreement among your colleagues as to the music choices.

If there are other things that you think would improve your day, please let me know. I care very much that you look forward to coming to work every day!

The second one reminded everybody who the boss is.

To: Everybody

From: Elon Musk

Date: Monday October 4 [time redacted]

Subj. Please Note

If an email is sent from me with explicit directions, there are only three actions allowed by managers.

1. Email me back to explain why what I said was incorrect. Sometimes, I’m just plain wrong!

2. Request further clarification if what I said was ambiguous.

3. Execute the directions.

If none of the above are done, that manager will be asked to resign immediately.

Thank you,

Elon

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What happens next in the Senate

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After months of starts and stops, the House passed President Joe Biden’s $1.7 trillion social safety net and climate bill on Friday.

The process will not get any easier for Democrats as the bill heads to the Senate.

Senate Majority Leader Chuck Schumer wants to pass the Build Back Better Act by Christmas. To do so, he will have to get all 50 members of his caucus — from conservative Sen. Joe Manchin of West Virginia to democratic socialist Sen. Bernie Sanders of Vermont — to back the same sweeping plan.

Multiple senators will push for changes to the bill’s provisions including paid leave and taxes along the way. Any tweaks will require another vote in the House, where House Speaker Nancy Pelosi can afford three defections (only one Democrat, Rep. Jared Golden of Maine, voted against the bill Friday).

Speaker of the House Nancy Pelosi (C), D-CA, speaks during a news conference with Democratic leaders after the passage of the Build Back Better Act at the US Capitol in Washington, DC, on November 19, 2021.

Jim Watson | AFP | Getty Images

Congress will leave Washington for Thanksgiving week, setting up a December rush to approve the bill before the capital’s attention turns to the 2022 midterm elections. In a statement after Friday’s House vote, Schumer said the Senate will take up the package after the Senate parliamentarian completes the “necessary technical and procedural work” to make sure it complies with budget reconciliation rules. The special process allows Democrats to approve the plan with a simple majority without GOP votes.

“We will act as quickly as possible to get this bill to President Biden’s desk and deliver help for middle-class families,” he said.

The House bill includes child-care subsidies, a one-year extension of the enhanced child tax credit and universal pre-K. It would expand Medicare to cover hearing aids and boost options for low-income Americans to buy insurance through Medicaid.

The plan would also put roughly $550 billion into programs designed to curb climate change.

Changes are coming in the Senate

The Senate will likely make changes before it passes the bill. Manchin, who has not publicly endorsed the package as he expresses concerns about spending and inflation, will seek at least one overhaul.

He has signaled he will push to scrap a House provision offering four weeks of paid leave to most Americans.

Sen. Kyrsten Sinema, D-Ariz., is another Democrats who could seek to influence the bill in the Senate. She already shot down her party’s efforts to hike tax rates on the biggest businesses and wealthiest individuals, forcing lawmakers to opt for more complicated policies such as a minimum tax on corporations.

CNBC Politics

Read more of CNBC’s politics coverage:

Tax policy could become one of the biggest sticking points in the Senate. Sanders and Sen. Bob Menendez, D-N.J., have taken issue with a House proposal to lift the cap on state and local tax deductions to $80,000 from $10,000 through 2030.

The policy — which Pelosi has defended — would disproportionately help wealthy Americans as part of a bill Democrats have sold as a boon to working families. It would also cost the Treasury revenue.

“You can’t be a political party that talks about demanding the wealthy pay their fair share of taxes, and then end up with a bill that gives large tax breaks to millionaires. You can’t do that,” Sanders, the Senate Budget Committee chair, said in a tweeted statement Thursday. “The hypocrisy is too strong. It’s bad policy, it’s bad politics.”

In a separate statement Friday, Sanders cited tax policy, drug prices, Medicare expansion and climate policy as he pledged to “strengthen the Build Back Better Act” in the Senate.

Democrats will likely have to forge a compromise around the tax deductions. A handful of House Democrats from high-tax states such as New York and New Jersey made lifting the cap a condition for supporting the bill.

Another tax plan that could surface in the Senate is a proposal from Sen. Ron Wyden, D-Ore., to tax billionaires’ assets. Golden said Friday that inclusion of the Senate Finance Committee chair’s levy on billionaires or tweaks to the cap on state and local deductions could get him to support the legislation when it comes back to the House.

In other possible changes, the Senate parliamentarian will likely strike a House proposal to establish limited legal protections for millions of undocumented immigrants.

After the House passed its version of the bill Friday, Pelosi acknowledged she will likely have to resolve differences with the Senate.

“This bill will now be reshaped to their committees and at that point we’ll see where we need to, shall we say, reconcile our differences. But at the end of the day, we’ll have a great bill,” she said.

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Stocks may be entering an optimal period in the Thanksgiving holiday week

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 20, 2021.

Brendan McDermid | Reuters

If history is a guide, the market should do well in the upcoming Thanksgiving holiday week.

The S&P 500 was slightly higher in the past week, buoyed by positive economic reports, particularly the unexpectedly strong 1.7% jump in October’s retail sales. There are a number of economic reports in the week ahead. The most important release is Wednesday’s personal consumption expenditures, which includes the inflation measure most watched by the Federal Reserve.

“The last five trading days of November are traditionally positive, since 1950,” said Sam Stovall, chief investment strategist at CFRA. “There’s a two-thirds likelihood the market is up on the day before Thanksgiving and a 57% likelihood the day after Thanksgiving, and a 71% likelihood that it’s up on Monday.”

This year that holiday rally could depend on whether Federal Reserve Chairman Jerome Powell continues in his role after his term expires in February. Biden has also interviewed Fed Governor Lael Brainard, who is supported by progressive Democrats.

Strategists expect market volatility around the appointment, particularly if it is Brainard. She is viewed as more dovish than Powell, meaning she may be slower to raise interest rates. Elevated levels of inflation have been a concern in the market, and the worry is Brainard would not be as aggressive fighting it with rate hikes if necessary.

“Barring a change at the helm of the Fed, I think the market trajectory is going to continue to be higher, as we move toward 2022,” said Jeff Schulze, investment strategist with ClearBridge Investments. “Given that Brainard is even more dovish than Powell, I think markets would recover very quickly… the markets are unsure whether the new Fed chairman could command consensus within the FOMC to effectively deliver policy,” he added.

Schulze said the economic momentum is improving, and he expects that fourth-quarter gross domestic product could be in the double digits after the disappointing 2% pace of the third quarter. The second reading for the third-quarter GDP is released Wednesday.

In the past week, the Philadelphia Fed manufacturing index also showed solid, better-than-expected activity in the mid-Atlantic region. “It really confirms the view that despite supply side constraints, the recovery is on track after the Covid-related slowdown in Q3,” Schulze said. “I think the markets are going to price in better earnings as we move into fourth-quarter earnings and 2022.”

But Stovall said the market may take a pause before it moves higher, and he expects a choppy period. The S&P 500 gains on average 7.2% between its October low and the end of the year. But by early November, the S&P 500 was up more than 9% from its low, and was overbought, he said.

Stovall also said the market could become concerned again about the spread of Covid in Europe and beyond. Due to a high rate of new cases, the government of Austria announced a three-week lockdown and a vaccine mandate.

Stocks reacted negatively to the Austrian news Friday, though the tech-heavy Nasdaq gained. Stocks were mixed for the week, with the Dow down 1.4% and the Nasdaq up 1.2%, lifted by tech stock gains. The S&P 500 was up 0.3% for the week, ending at 4,697.

“There is still upside potential. The worry about inflation and now Covid are reasons for the overbought condition to work itself through,” he said. Stovall added the market could move sideways to lower for awhile, but it should end the year higher. “But right now, there’s a bit of choppiness because of Covid, because of the Fed chair possibly being replaced the worry about inflation and now and a whole variety of things,” he said.

For investors who watch the benchmark 10-year Treasury yield, Wells Fargo bond strategists point out that long-term Treasury yields generally move lower on the Monday and Tuesday before Thanksgiving.

“Our take is straightforward, and is essentially the same rationale as for moves around Labor Day: risk appetite is low on both the buy and sell sides,” they said. But later in the week, starting Wednesday, the yield tends to rise.

Week ahead calendar

Monday

Earnings: Zoom Video, Jack in the Box, Agilent, Urban Outfitters

10:00 a.m. Existing home sales

Tuesday

Earnings: HP, Dell Technologies, Abercrombie & Fitch, Best Buy, Nordstrom, Gap, VMWare, Cracker Barrel, American Eagle Outfitters, Dick’s Sporting Goods, Pure Storage, AutoDesk, Dollar Tree, JM Smucker

9:45 a.m. Manufacturing PMI

9:45 a.m. Services PMI

Wednesday

Earnings: Deere

8:30 a.m. Initial jobless claims

8:30 a.m. Durable goods

8:30 a.m. Real GDP

8:30 a.m. Advance economic indicators

10:00 a.m. Consumer sentiment

10:00 a.m. Personal income and spending, PCE deflator

10:00 a.m. New home sales

2:00 p.m. FOMC meeting minutes

Thursday

Thanksgiving holiday

U.S. markets closed

Friday

Stock market closes at 1 p.m.

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