ExxonMobil CEO Expected to be Named Secretary of State

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ExxonMobil Corporation 's XOM Chief Executive, Rex Tillerson, is expected to be named as the secretary of state by President-elect Donald Trump.

Trump's selection would be outside the traditional foreign policy establishment to promote a global business deal-maker. Though no final decision has yet been made, Trump was reported to have said that, "He's more than a business executive; he's a world-class player.'' The President-elect is also reported to have said, "He's in charge of I guess the largest company in the world" when referring to Tillerson.

Several people with knowledge regarding the matter believe that Tillerson's relations with Russia has put him advantageously for the post. This has once again brought Trump's plans regarding Russia in the limelight with controversy escalating over reports that the Central Intelligence Agency has established that a Russia-led hacking effort of U.S. email accounts was intended to increase Trump's chances in the Presidential elections.

Among those considered for the post, Tillerson has possibly the closest ties to Russian President, Vladimir Putin. Notably, Tillerson had negotiated a 2011 energy partnership deal with Russia that Putin said could be worth about $500 billion in due course. In 2012, the Kremlin conferred the country's Order of Friendship honour on Tillerson. The possible selection of a secretary of state with pre-existing relationship with Putin further emphasizes Trump's drive to advance U.S.-Russia ties.

Since Trump began screening candidates for the aforesaid administrative position, Tillerson has been a frontrunner. He moved ahead of better-known contenders with well-known political credentials,including 2012 Republican presidential nominee Mitt Romney, who had numerous conversations with Trump about the post. Tillerson is regarded by some of Trump's advisers as an ice-breaker, who would bring an executive's experience to the diplomatic role.

A formal announcement about Trump's State Department pick is expected in the coming days. No details were disclosed by ExxonMobil.

Trump had issued a statement last week mentioning that the former New York Mayor, Rudy Giuliani, withdrew his nomination for the diplomatic job and other administrative posts late last month.

As Trump has not made any formal decision, other competitors in the running, apart from Romney, are former Central Intelligence Agency director David Petraeus, former U.S. Ambassador to the United Nations John Bolton, and Senator Bob Corker

If Trump picks Tillerson, it would add a veteran business executive to a team that already comprises three retired generals. As ExxonMobil's CEO since 2006, Tillerson could influence existing relationships with numerous world leaders.

ExxonMobil explores for oil and gas on six of the world's continents and has operations in over 50 countries. Tillerson, who is scheduled to retire next year, has retirement funds worth tens of millions of dollars - a value that could possibly be impacted by State Department activities. For instance, he could gain from such potential department actions as the lifting of sanctions on Russia. There could also be conflicts of interest on his selection as the secretary of state.

As ExxonMobil's CEO, Tillerson does not favour the sanctions on Russia. We note that Tillerson's work in the country dates to when Putin rose to power after Boris Yeltsin's resignation.

Tillerson grew up in Texas and joined ExxonMobil in 1975 and has been with the company ever since. He has long been closely linked with Republican politicians and the Boy Scouts of America, but he has never worked in the government.

Though unusual, the choice of a corporate leader as secretary of state would not be exceptional. George Shultz was the executive vice president of engineering giant Bechtel before he became secretary of state under President Ronald Reagan. Shultz, however, had been in the government during a prior administration.

Per the sources, Trump is also likely to rope in Republican Cathy McMorris Rodgers (R. Wash) to lead the Interior Department. If approved by the Senate, she would lead Trump's efforts to excavate federal lands and waters for fossil-fuel development and reverse that environmental policies that the Obama administration had implemented.

Since her first election to Congress in 2004, McMorris Rodgers has risen in ranks and is now the fourth-highest-ranking Republican in the House and the highest-ranking GOP woman in Congress. She also serves on the Energy and Commerce Committee.

Year to date, ExxonMobil's price chart reveals that its shares have risen by 14.2%, while the broader market has increased by 16%. The impact of this news on the stock price is yet to be seen.

ExxonMobil currently has a Zacks Rank #3 (Hold). Some better-ranked players in the same sector include SunCoke Energy Inc. SXC , Suncor Energy, Inc. SU and Futurefuel Corp. FF . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

SunCoke Energy posted a positive earnings surprise of 177.78% in the last reported quarter. It reported a positive earnings surprise in three of the four preceding quarters.

Suncor Energy posted a positive earnings surprise of 300.00% in the preceding quarter. It reported an average earnings surprise of 40.55% for the four preceding quarters.

Futurefuel Corp. posted a positive earnings surprise of 20.83% in the last reported quarter. It reported a positive earnings surprise in all of the four preceding quarters.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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