|Bid||24.42 x 3100|
|Ask||0.00 x 800|
|Day's range||24.40 - 26.33|
|52-week range||20.00 - 45.86|
|Beta (5Y monthly)||0.37|
|PE ratio (TTM)||13.13|
|Earnings date||29 Apr 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||32.10|
(Bloomberg) -- President Donald Trump called for $2 trillion in spending on U.S. roads, bridges and tunnels, seizing on the coronavirus outbreak and record low interest rates to advance one of his longest-standing priorities.Speaking at his daily coronavirus briefing on Tuesday evening, Trump said low rates would allow the country to borrow cheaply to finance spending on infrastructure. He said none of the funds should go toward environmental initiatives called for in the Democrats’ Green Deal.Infrastructure spending could help blunt the surge in unemployment and businesses failures expected to result from the coronavirus pandemic and economic shutdown.The number of Americans filing for unemployment benefits is forecast to set a record for the second straight week, following 3.28 million in last week’s data. The darkest predictions are for that figure to almost double, the result of business closures and government efforts to keep people at home to prevent spreading the virus.The American Society of Civil Engineers has said more than $2 trillion in additional funding is needed for U.S. infrastructure by 2025 alone. The World Economic Forum this year ranked the U.S. 13th in matters of infrastructure, according to its global competitiveness report. Nations listed higher included Singapore, Hong Kong, Switzerland, Japan, Korea and Spain.The White House and Congress have begun circling the idea of a fourth round of stimulus to combat economic fallout from the coronavirus outbreak. Both Trump and House Speaker Nancy Pelosi have begun floating ideas for such a measure, just days after Trump signed a $2 trillion virus-related bill.Trump pledged in his 2016 campaign to seek $1 trillion in infrastructure spending and called on Congress in his 2018 State of the Union address to dedicate $1.5 trillion in new investment. But the plan Trump proposed in 2018 went nowhere because of disagreement over how much federal funding would be included.Any hopes for a federal bill ended last May when Democrats said the president walked out of a meeting on a $2 trillion proposal and vowed not to work with them unless they stopped investigating him and his administration.Lawmakers who attended a closed-door meeting with Trump in February 2018 said he told them he’d support a 25-cent per-gallon increase in gas taxes, but Trump never publicly endorsed the idea. The plan drew opposition from Republicans who don’t want to raise taxes and Democrats worried about the impact on low-income residents.Pelosi, a California Democrat, last week raised the prospect of infrastructure legislation as part of the next round of fiscal stimulus. “Our next bill will lean toward recovery, how we can create good-paying jobs as we go forward, perhaps building the infrastructure of America,” she said.In an MSNBC interview Tuesday, Pelosi specifically mentioned broadband and water projects as examples of infrastructure works that would be relevant to the coronavirus response.Read more: Why Trump’s Infrastructure Push Stalled: QuickTakeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- New Jersey reported more than 2,100 new coronavirus infections, bringing its total to 18,696 as the state ramps up testing. Deaths climbed to 267.Governor Phil Murphy said three more county-sponsored test sites have opened or will do so, in Camden, Middlesex and Ocean counties.The number of new infections Tuesday didn’t approach Monday’s spike of more than 3,300. But the death toll was notable, up 35%.Murphy said at a news conference in Trenton that New Jersey isn’t going to go through the rigors of testing and social isolation only to expose itself again.“I don’t want anyone coming in from some other part of the country where they had lax policies and lax regulations,” he said, without offering details.Amid the economic shocks of the pandemic, New Jersey will make a roughly $680 million quarterly pension payment due Tuesday, the governor said.“The pension payment will be made” on time, he said.The state’s skipped or shorted payments in the past have preceded downgrades of its credit rating.Murphy, a Democrat, came to office in January 2018 pledging to restore New Jersey’s fiscal health, with a special focus on pension payments. For the fiscal year that starts on July 1, he has pitched a $4.6 billion infusion -- a record, but still more than $1 billion short of the annual required contribution.(Updates with details starting in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Twitter Inc., Facebook Inc. and Google’s YouTube have all removed posts shared by Brazilian President Jair Bolsonaro for including coronavirus misinformation that violates the social media companies’ rules against posting harmful content.Facebook said it took down a video on Monday that had been shared to both Facebook and Instagram, in which Bolsonaro said the anti-malaria prescription drug hydroxychloroquine was an effective treatment for Covid-19. Twitter earlier had removed two tweets that also showed video of Bolsonaro praising hydroxychloroquine and encouraging the end of social distancing. On Tuesday morning, YouTube also said it had pulled two videos from Bolsonaro’s official account for violating its policies.Small studies testing the effects of hydroxychloroquine on Covid-19 patients have had mixed results, though the Centers for Disease Control and Prevention website says the drug is “currently under investigation in clinical trials” for use as a treatment for the virus. U.S. President Donald Trump has also praised the drug, which was given emergency FDA approval to be prescribed to Covid-19 patients, though scientists have criticized the move as premature.Facebook has a policy against sharing posts that could cause users physical harm, a spokesperson said. Twitter, too, has a policy that requires people to remove tweets that recommend cures or advice that goes against the recommendations of public health authorities.“Twitter recently announced the expansion of its rules to cover content that could be against public health information provided by official sources and could put people at greater risk of transmitting Covid-19,” a Twitter spokesman said. Bolsonaro declined to comment on the Twitter removal when speaking to journalists earlier Monday.YouTube, like other social media sites, has tried to curb the flow of disinformation about the virus in recent weeks by promoting what it calls “authoritative” videos. But it has rarely taken action against videos from elected officials.“Since early February, we have manually reviewed and removed thousands of videos related to dangerous or misleading coronavirus information,” Farshad Shadloo, a YouTube spokesman, said in an email. He declined to identify the two videos removed.Twitter and Facebook have also taken a stronger stance on coronavirus misinformation than other types of controversial content, including some political postings. Facebook Chief Executive Officer Mark Zuckerberg said earlier this month that fighting medical misinformation is easier because companies can follow clear guidance from the World Health Organization on what can be defined as “harmful,” instead of deciding as a company in a way that could be considered biased or restrictive of free speech.“This a very different dynamic than trying to be referee of political speech,” Zuckerberg said at the time.(Updates with details on YouTube’s removal of Bolsonaro videos.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Three years ago, manufacturing gadgets in China was a given. That’s changed fundamentally in the era of trade wars and coronavirus.Under the new reality, the world’s electronics makers are actively seeking ways to diversify their supply chains and reduce their dependence on any single country, no matter how attractive.Never has there been so much angst among suppliers. And no wonder, because by most reckonings, the world is facing some of the biggest shocks to production since Taiwanese manufacturers — responsible for assembling the majority of the world’s gadgets — began to decamp en masse to China 30 years ago.The latest trend started with the U.S.-China tariff battle,which reached a boiling point last year. Now the onset of the Covid-19 pandemic has rapidly accelerated those plans and emboldened officials to speak openly of their exodus efforts.These days, more conversations with Taiwanese tech executives revolve around choosing the best location outside mainland China for manufacturing. They like Vietnam because of its proximity to China, though labor costs there are on the rise. While Taiwan is home, it’s considered too expensive, again mainly due to relatively high wages.On earnings calls, analysts are increasingly asking companies how they plan to shake up the geographic spread of facilities to avoid U.S. tariffs on Chinese imports. At the beginning of Donald Trump’s presidency, executives shied away from such questions as they did not want to anger Beijing. But recently they openly provide details of shift from China now seen as inevitable. No one wants to be seen as lagging behind in hedging against risk.Simon Lin, chairman of iPhone assembler Wistron Corp., was even bold enough to tell analysts last week that his company can have 50% capacity outside of China by 2021. Two other Taiwanese assemblers also announced further plans to bolster their non-China production capacities in the past seven days.Covid-19 is hastening such moves. Eric Tseng, chief executive officer of Taipei-based Isaiah Research, said some companies had been holding back from making any major supply-chain decisions, waiting to see if there would be any lasting resolution to the Washington-Beijing trade spat. “But coronavirus risks people’s lives. Now A lot of companies will accelerate their departure,” he said.It won’t be easy to replicate the intricate network of suppliers, competent workers, efficient distribution systems and large domestic consumer that China offers, and authorities are also doing their part to sway manufacturers to stay. In Zhengzhou, home to the “iPhone City” mega-complex, the local government has appointed specially designated officials to help Apple Inc. partner Foxconn address logistics and labor-shortage related issues brought about by the coronavirus spread.Apple has also said it wasn’t looking to make any quick moves out of China because of virus-related interruptions. “We’re talking about adjusting some knobs, not some sort of wholesale, fundamental change,” Chief Executive Officer Tim Cook said in late February.Still, Foxconn begun churning out older iPhones in India last year, a move that appeared to signal Apple’s growing interest to bolster its presence in the world’s largest market for smartphones after China. Regardless whether they select India, Vietnam or any other country — it’s clear that electronics makers are past the point of no return in their gradual migration from China.Charting the Trade TurmoilChina’s steel exporters face bleak times as sweeping lockdowns from Europe to Southeast Asia squeeze demand by shutting factories and stifling trade. An index of new export orders released Tuesday collapsed, registering its most serious contraction since the aftermath of the global financial crisis.Today’s Must ReadsStorage wars | From oil tanks in Oklahoma to wagyu beef refrigerators in Kobe, the only commodity in high demand right now is somewhere to put all the surplus raw materials. On the rebound | Chinese manufacturing activity rebounded strongly, signaling that the world’s second-largest economy is restarting into a slump in demand elsewhere in the world. Group think | Trade ministers from the G-20 economies pledged to try to keep supply chains open as the world fights to contain the coronavirus pandemic and limit the fallout. Cleaning house | A group of Amazon employees at a New York-area fulfillment center walked off the job to demand cleaning at they facility, the latest in a wave of virus-related protests. Garden party | Sales of fruit and vegetable seeds have sky rocketed in the U.K. as people locked down in their own homes look for a productive way to fill their time and gardens. Corn hole | Brazil’s two largest fuel distributors declared force majeure on purchases of ethanol as the coronavirus pandemic hammers demand in Latin America’s largest economy.Bloomberg AnalysisChina’s bounce-back | The latest economic data showed a rebound after the virus outbreak slammed output. Rough ride ahead | North American trucking faces more volatility in the face of supply and demand shocks. Use the AHOY function to track global commodities trade flows. See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities. Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- London’s Old Vic theater is about to make an unusual offer to the audiences it’s turned away: watch the drama at home instead.It’s allowing people who bought tickets for Samuel Beckett’s “Endgame”, featuring Harry Potter actor Daniel Radcliffe, to see what they missed over a dedicated video platform. The show -- a bleak, one-act reflection on life and death with occasional sparks of humor -- closed two weeks early because of the coronavirus.It may not replace the live experience, but a remote audience is better than none as long as venues are shut. As the offer is just for ticket holders who don’t demand a refund, it could ease the financial hit to the historic venue from Britain’s national lockdown.The National Theatre nearby on London’s South Bank is also turning to streaming to stay connected with audiences. It’s releasing stage productions of shows including “One Man Two Guvnors” with James Corden and Bryony Lavery’s adaptation of “Treasure Island” free on YouTube in the coming weeks.If these experiments are a success, it may help convince wary stage directors to embrace streaming as a way to reach wider audiences. The National already airs some of its productions live in cinemas for less than the theater ticket price.The Old Vic is using the video production and distribution knowhow of Digital Theatre, a developer of online tools for drama teachers that’s been trying to build a consumer following for theater streaming.Cultural DemocracyMost big stage productions are captured on video in some form for posterity, learning or research purposes, said Digital Theatre Chief Executive Officer Neelay Patel. He’s now trying to get other struggling theater companies on board.“We’ll need to decide which recordings are good enough, as some of the material will not be top standard,” he said.Advocates of theater streaming see it as an exercise in cultural democracy that can bring the stage to new audiences. But it’s a challenge to produce a stage show for a remote audience in a compelling way.Part of the point of live theater is the invisible bond created by the proximity of actor and viewer, and the tension that builds when drama unfolds in a confined space. Efforts to bring theater to TV audiences have often failed over thorny questions of royalties for copyright owners, actors and technicians.The National Theatre sees its YouTube performances as a stopgap while theaters and cinemas are closed, Executive Director Lisa Burger told industry website The Stage.Still, she hopes they will “lift the spirits, bring people together and become something to talk about.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Shaking hands has a publicity problem -- so does walking through crowds, attending a concert and passing out high fives.Scenes like these are disappearing from advertisements as companies come to grips with public health orders to self isolate and limit the spread of the novel coronavirus pandemic. Ads that were in the works have been shelved and campaigns have to be reworked on a short timeline. Travel and hospitality companies have gone quiet. Meanwhile, with so much of the world on lockdown, it’s not exactly easy to shoot new commercials.“You have to ask what meaning does your commercial have right now, given that everything has changed in the immediate realities of life,” said Mark Lund, chief executive officer of McCann Worldgroup U.K. “How do you avoid that tone deafness which might offend and alienate people?”The U.K. advertising regulator said it got 163 complaints about a KFC television ad in March which featured people licking their fingers. Complaints said it was irresponsibly encouraging unsanitary behavior, according to a spokesperson for the Advertising Standards Authority. When the agency contacted the fried-chicken fast food chain, whose longtime slogan is “Finger lickin’ good,” the company had already decided to pull the ads.Unilever Plc suspended its “Unstoppable” campaign for Domestos, including a video ad that said the toilet cleaner kills germs that are “hiding, breeding, infecting the weak.”Getting InventiveIn addition to new sensitivities around hygiene, advertisers are having to cope with limited resources to make new commercials as production crews and actors self-isolate.“World War II comes to advertising land. What can you make out of this empty washing-up-liquid bottle and a bit of sticky-back plastic?” said Emma de la Fosse, chief creative officer of Digitas Inc.’s U.K. business. “It’s about being inventive.”A cookie brand that Digitas works with had to pivot quickly from a campaign about going out to one about staying in and staying safe, she said. Agencies are getting creative with footage that’s already been shot, and they’re looking at user-generated content and social-media influencers, though the quality can be hit-and-miss, Fosse said.Lund said that McCann has done an ad for grocery store Aldi using existing footage and resurrecting an animated carrot from its Christmas campaign telling shoppers to “go easy” on the vegetables.As the lockdown drags on, advertisers will also have to make the decision about whether to make a bigger pivot on campaigns, such as commissioning more animation and using computer-generated imagery that can be produced by teams of graphic designers, art directors and 3D modelers working from home.“The likelihood is things will take a bit longer, but there is no creative compromise,” said Mark Benson, CEO of global creative ad studio Moving Picture Company. Brands are coming to the studio to complete ads that were already in production with special effects, he said. “For example, an auto spot where the car would have normally been shot by a specialist auto director -- it still can be, but the car will be built by animators in computer graphics instead of shot live-action on location.”New TechnologyAnimation and visual effects studios were already changing the way they work so teams can collaborate remotely, and shifting computing horsepower from office servers to the cloud. The shock of the coronavirus will hasten the move to new video production methods, said Neil Hatton, CEO of film and TV industry lobby group the UK Screen Alliance.“There are parallels with the Japanese tsunami, which accelerated a move from production delivered on tape to production on computer file as the tsunami wiped out the tape-manufacturing companies on the coast of Japan,” said Hatton.For an industry that prides itself on creativity, ingenuity is more important than ever. Advertisers may be facing a worse setback than the 10% retraction in marketing spending that followed the 2009 financial crisis, Bloomberg Intelligence analyst Matthew Bloxham said. Ads typically cost companies the equivalent of about 11% or 12% of sales and are easy to reduce. The slump is going to spread quickly from the travel and leisure industry clients, who cut their spending immediately, to luxury goods, cars and clothes, he said.Read more: TV Industry Faces Billions in Lost Ads During Sports Hiatus“We know that it’s going to be quite a sharp kind of effect -- the question is how long that effect goes on for,” McCann’s Lund said. “We’re having conversations with our clients about what does the world look like on the other side and what does it mean for brands and how they exist in people’s lives.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- There are no atheists in foxholes, and no tech regulators in a coronavirus lockdown.What was once thunderously described as “surveillance capitalism” is now a pandemic necessity. Twitch is where our children go to school; Twitter where epidemiological models are debated; and WhatsApp where we have drinks with friends. Some 40% of the world’s population is living under lockdown, according to AFP, creating exactly the kind of bored and isolated citizens whose fingers linger over their Facebook app button, as my colleague Alex Webb notes. Our personal information is hoovered up as before, but data privacy is now gone from our hierarchy of needs.Likewise, the market power that made Big Tech look so dangerous makes it look vital and dependable now. Amazon.com Inc., which has always wanted to be the Everything Store, is now the Only Store in cities like Paris or San Francisco, where it’s an essential lifeline for a myriad of household goods (with some restrictions) that can’t always be found in the grocery stores or drugstores that are still operating. The iniquities of the gig economy are still as outrageous as ever — as complaints by Amazon’s workers show — but there’s no mistaking the message sent by the company’s pledge to hire 100,000 more people: A firm once under fire for killing the economy now is the economy.Where does that leave the “techlash,” the drumbeat of outrage against data-extracting, competition-killing platforms banged on by consumers, small firms and government regulators? At first glance, as Wired magazine recently surmised, it’s dead — or at least in hibernation — as the focus shifts from constraining Big Tech to supporting it to ensure it can reach all of us in this time of need.In fact, we may already be seeing the contours of a new, post-virus grand bargain between Big Tech and Big State.It says something that the most high-profile move from the European Union in recent weeks has been to ask the bosses of Netflix Inc., and Alphabet Inc.’s Google and YouTube to throttle streaming quality to reduce Internet congestion. The EU’s technocrats in Brussels, the land of sweeping data-privacy laws, are now eying the use of smartphone geolocation metadata — anonymized, of course — to monitor the outbreak. Digital rules designed to boost the EU’s technological sovereignty are being re-thought, the FT reports.What the current crisis has emphasized is how much of what the tech industry’s billionaire-run corporations provide resemble essential public, or quasi-public, goods and services. As the virus has shut schools, libraries and public parks in some cities, those spaces have moved online. Information, education, and health care in these times are overwhelmingly reliant on the Internet — and by extension dependent on the FAANG firms (and Microsoft Corp.), which as of last year accounted for more than 40% of all traffic. It’s hard to imagine the genie will be put back in the bottle. Even once countries lift lockdowns, Big Tech will retain its power.Which is why, when we emerge from self-isolation to rebuild the post-Covid-19 society, we can’t just return to the earlier status quo. The virus has already prompted governments across the world to re-think where the fire hose of financial stimulus should be aimed in an emergency, with trillions in aid going to support workers, hospitals and the unemployed, not just big business. A similar re-think is due for tech platforms. If they’re going to provide essential public goods, they need to be held to a higher standard.If social media firms are our sidewalks and parks, they should be kept clean — virtually speaking — of misinformation and bad actors. If e-commerce platforms are delivering vital medical equipment for the authorities, they shouldn’t traffic in fakes or quack cures. If online marketplaces are infrastructure for small firms and gig workers, they must be run fairly. And if collecting and processing our personal data helps the greater good of healthcare, more benefits should accrue to the public by ensuring that what’s being collected, and how it’s handled, isn’t harmful. Oceans of data generated by what Stephen Roberts of the London School of Economics calls the “digital turn” of health surveillance will require new rules and explicit terms of engagement to limit abuse.The message is starting to get through to the companies themselves, which have tended to drag their feet in the past. Facebook Inc. is taking down harmful misinformation related to the new coronavirus and redirecting users to public health authorities. Amazon has banned more than one million products that falsely promised to cure the coronavirus. Google is banning promotional ads for medical masks so they aren’t hoarded by panic-buyers. A new Covid-19 data partnership between Britain’s National Health Service and tech firms, including Google and Palantir Technologies Inc., has explicitly promised to abide by EU data-privacy principles and destroy its data store after the pandemic. It will take regulatory pressure to make sure this isn’t all just for show.In return for responding more proactively to the prodding of watchdogs, Big Tech will probably find itself in less political hot water in the future, and justifiably so. The current pandemic has focused our minds on the common good and decreased polarization in several countries — in the U.S., for example, Republicans’ and Democrats’ views toward coronavirus concerns are gradually converging. If online platforms that have historically tended toward some toxic behaviors can themselves undergo a similar refresh, it will be one step in the right direction.If there is the risk of another techlash appearing on the horizon, however, it’s that we don’t know what the long-term effects will be of Big Tech making peace with Big Brother — namely, a state that has also expanded its emergency powers, surveillance capabilities and size during the crisis. The mix could prove toxic in the long run, even if for now, it’s helping the common good. We’ll have to keep our eyes open.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Meituan Dianping surged as much as 10% after the internet services giant said its food delivery business began to recover in March, when shuttered restaurants re-opened and much of China returned to work.Meituan, backed by Tencent Holdings Ltd., told analysts on a conference call Monday that demand for food delivery picked up this month, putting it on track for a longer-term recovery after Covid-19 froze a swath of the world’s second largest economy. But it also projected an operating loss and revenue decline this quarter, and warned that the full extent of fallout from the pandemic -- particularly on its travel and ride-sharing businesses -- remained uncertain in 2020. Its stock was up roughly 7% in early trade after Daiwa lifted its price target and said Meituan should return to growth in the second half.Meituan joined sector bellwethers from Sony Corp. to Apple Inc. and Twitter Inc. in emphasizing the difficulty of parsing an unprecedented event and its impact on their business. The Chinese company is one of the most exposed of the country’s major tech corporations to the spread of Covid-19. The company’s outlook is further clouded by China’s worsening economy, which may contract this quarter for the first time since 1989, denting consumer spending.“Although we have seen gradual recovery from March especially for food delivery business, the active merchants of our in-store service category remain at a very low level as of late March,” Chief Financial Officer Chen Shaohui said on the call. “We expect consumers will need more time to build their consumption confidence for local consumption especially those discretionary consumption scenarios in our in-store business.”What Bloomberg Intelligence SaysDespite mild improvements in Meituan’s local services in late March as the virus outbreak subsided in China, the timing of a full operational recovery remains highly uncertain. Its food-delivery business may stay slow, with many restaurants still closed and consumers wary of interactions with delivery personnel. Its in-store, hotel and travel businesses may take even longer to recover, as users stayed home. Strong 42% sales gains and 117% gross-profit expansion in 4Q suggest Meituan’s longer-term growth drivers are intact. The company plans to maintain strategic investments in B2B food distribution and restaurant management systems.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Read more: Chinese Abandon Food Delivery Fearing Drivers Will Spread VirusThe coronavirus dealt an as-yet unquantifiable blow to a company that, before the outbreak erupted in January, was on track to take its place among the country’s most influential technology corporations. While Meituan’s stock has taken a pounding like every other Chinese internet firm, a 2019 rally secured its position as China’s largest publicly traded internet firm after Alibaba and Tencent.“Market expectations were very low as investors have seen the damage COVID-19 has inflicted on offline service providers,” Nomura analyst Shi Jialong wrote.Meituan on Monday reported a better-than-expected 42% jump in revenue to 28.2 billion yuan ($4 billion) in the three months ended December, compared with the 26.5 billion-yuan average of analysts’ estimates. It booked a profit for the quarter of almost 1.5 billion yuan, versus expectations for a loss.The company still harbors ambitions well beyond its current core business. Meituan had been diversifying from takeout, investing in other online services including travel, competing directly against Alibaba Group Holding Ltd. But others are elbowing their way into Meituan’s turf. Ride-hailing giant Didi recently launched a delivery service similar to Uber Eats across major Chinese cities, while Alibaba-backed Alipay is also morphing into an all-in-one online services platform that allows everything from restaurant booking to car-hailing.Executives on Monday stressed the company will keep investing in new initiatives from bike-sharing to online groceries, an e-commerce segment that accelerated sharply after the pandemic forced millions to work -- and cook -- from home. Meituan said it’s setting up the logistics to support that business while exploring ways to roll out the business to more Chinese cities.“The pandemic has already caused severe disruptions to the daily operations of our merchants, including restaurants, local services merchants and hotels, which in turn resulted in downward pressure on our own operations for the first quarter of 2020,” Meituan said in its filing. “Due to the high uncertainty of the evolving situation, we are unable to fully ascertain the expected impact on full year 2020 at this stage.”Read more: Virus Outbreak Exposes $46 Billion Rift in China’s Tech IndustryFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Hungary’s parliament handed Prime Minister Viktor Orban the right to rule by decree indefinitely, effectively putting the European Union democracy under his sole command for as long as he sees fit.While governments around the world assume emergency powers to fight the coronavirus, locking down all aspects of every-day life and shutting borders, few democracies have given their governments such latitude without an end date.Hungary’s ruling party lawmakers overrode the objections of the opposition in a vote on Monday, handing Orban the right to bypass the assembly on any law. The Constitutional Court, which Orban has stacked with loyalists, will be the main body capable of reviewing government actions.The emergency-rule law “poses no threat to democracy,” Orban told lawmakers after the vote. His detractors didn’t agree.“I don’t know of another democracy where the government has effectively asked for a free hand to do anything for however long,” said Renata Uitz, director of the comparative constitutional-law program at Central European University in Budapest.German Chancellor Angela Merkel reacted with skepticism to Orban’s move. Although all EU states are determined to fight the coronavirus, this crisis also demands the rule of law, Merkel’s spokesman said in an emailed statement. Citing a declaration of the EU Council from last Thursday, he said, “We will do everything that is necessary to protect our citizens and overcome the crisis, while preserving our European values and way of life.”The legislation’s scope is “limited” and envisions only “necessary and proportionate measures” to fight Covid-19, Justice Minister Judit Varga told journalists on Friday. The cabinet has already been granted emergency powers and the legislation actually gives parliament the right to end that, she said.Varga asked journalists not to “distort” facts, a crime the legislation makes punishable by as long as five years in jail for anyone deemed hampering the virus fight.The forint tumbled toward a record low against the euro on Monday, weakened in part by the dovish policies of the central bank.Faith in Orban to exercise restraint is running low. In the past decade, the nationalist leader has used supermajorities in parliament to dismantle checks and balances, build the EU’s largest state propaganda machine and crack down on civil society to silence dissent.The EU is probing the erosion of the rule-of-law, though it’s lacked the will to rein in Orban as populism flourishes across the bloc. The EU’s executive will review Hungary’s emergency-rule law to see if it’s in line with its norms, Justice Commissioner Didier Reynders said on Twitter.Orban’s track record indicates he may not give up the powers quickly. His anti-immigrant Fidesz party has continuously renewed a “state of emergency for mass immigration,” announced after the 2015 refugee crisis, even after the number of asylum seekers arriving to Hungary plunged.‘Human Pandemic’The law approved Monday is for the “prevention, handling and elimination of the human pandemic as well as to prevent and blunt its harmful effects,” which legal experts said may allow Fidesz to keep the emergency measures in place as long as they see potential effects of the virus.By-elections and referendums can’t be held. There’s no word on national elections, with the next parliamentary ballot due in 2022.Orban is portraying the opposition, which had pleaded with the premier to introduce a renewable 90-day sunset clause, as deserting the country at a time when unity should have prevailed.It may help him deflect blame for failing to fix Hungary’s underfunded hospitals, which are at risk of being overwhelmed faster than health-care systems in some other EU countries. Opposition parties have for years criticized Orban for splurging on vanity projects, including over-sized soccer stadiums.“In light of previous experiences with authoritarian dynamics in Hungary, once passed, the enabling act will not be rescinded anytime soon,” said Daniel Hegedus, a fellow at the German Marshall Fund in Berlin.(Updates with German reaction in 6th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Dominic Cummings, the most senior aide to U.K. Prime Minister Boris Johnson, is self-isolating after developing symptoms of the Covid-19 coronavirus over the weekend, according to a government official.Cummings, a powerful and divisive figure who masterminded the Brexit campaign in 2016 before joining Johnson to run the government, is still in contact with his colleagues, the official said.He’s the latest senior official at the top of government to be hit by the outbreak. Johnson tested positive for coronavirus last week, as did Health Secretary Matt Hancock, while the chief medical officer for England, Chris Whitty, is also self-isolating with symptoms.The U.K. government has been criticized for being too slow to respond to the pandemic, which has killed 1,228 people, according to figures released on Sunday. Official data showed 19,522 confirmed cases, though a scientist advising the government suggested the true figure may be nearer 2 million.According to Neil Ferguson, a professor at Imperial College London, between 2% and 3% of people in Britain may have become infected with coronavirus. In central London, the proportion may be as high as 5%, he told BBC radio on Monday. He said it was difficult to determine the precise number because as many as 40% of people with the virus don’t show symptoms.LockdownThe government has ordered a national lockdown banning gatherings in public and closing pubs, restaurants, non-essential shops and schools. On Sunday, a senior medical official warned it could be six months or more before life begins to return to normal.The pound fell on Monday after the U.K.’s credit rating was downgraded by Fitch Ratings, which cited the weakening of public finances caused by the impact of the coronavirus outbreak.In a video message from self-isolation on Sunday night, Johnson said 20,000 former medical workers were returning to the National Health Service to help. He praised the nationwide response effort.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The Covid-19 pandemic has already precipitated nationalist calls to repatriate supply lines for everything from masks and surgical gowns to ventilators. But we may be about to see protectionism going local. In the U.S., the competition for new gear in the face of a surge of cases has state and municipal governments scrambling to obtain all of those things and officials complaining that the federal government is making things worse. The barriers to internal travel are also going up. President Donald Trump, who has clashed with state governors, backed away from a plan to impose a federal quarantine on the states of New York, and parts of New Jersey and Connecticut over the weekend. But some states are already taking things into their own hands. Florida reportedly set up roadblocks on Interstate 95 to turn away New Yorkers at the state border. Rhode Island threatened to do the same before backing away and deciding simply to hunt down New Yorkers on its beaches for failing to self-isolate when they entered the state.It’s not just a state-level phenomenon. The New York Post last week reported that year-round residents in the Hamptons have revolted against a new influx of part-time refugees from New York City. The same push against the privileged apparently is being seen in Europe, according to the New York Times.For its part, the European Union is trying to lean against internal trade curbs. In return for restricting the export of personal protective equipment outside the EU in mid-March, the bloc’s member nations were asked to ease restrictions on the sale of such gear inside the 27-nation economy.There are good public health reasons for localism. No one wants to see the virus spread from urban centers to rural areas with few hospital beds and far more tenuous food-supply chains, as one local politician from Oregon pointed out last week in the Washington Post.But there may be economic consequences for all of this. What if we experience a further fracturing of supply lines as the pandemic grows? What if it’s not just international commerce that shuts down, but intra-national trade as well? There have been moments when G-7 and G-20 leaders have come together in recent weeks to proclaim the need for a common front to take on Covid-19. Everywhere, world leaders are appealing for national unity. A G-20 call with trade ministers Monday is a good place to start.There are signs also that for all the nationalism now in the air, governments are cooperating. A shipment of medical equipment from China landed in New York over the weekend. The federal government in the U.S. is shipping ventilators and protective equipment to state and local governments. But it’s not unreasonable these days to imagine a day when a need for ventilators in Michigan or Indiana provokes a push by local politicians to compel carmakers like Ford and GM — now venturing into the business of making the machines — to prioritize local communities. Or a local government in Bavaria or Baden-Württemberg from pressuring BMW or VW from doing the same. There is no doubt that globalization and international supply chains are under assault during this pandemic. Fear is a real thing. But before long, federalism and nationalism could be as well. All politics are local, the saying goes. Pandemics may by definition be anything but local. That doesn’t mean, though, the urges of politicians and their constituents won’t be. Charting the Trade TurmoilUrgent demand for medical equipment to fight the coronavirus has sent the cost of chartered aircraft skyrocketing, turning a usually humdrum process into a competitive auction.Today’s Must Reads Chain links | The pandemic is playing out in ways that few companies could have prepared for. But despite the shocks, the system should continue to function even under heavy strain, according to researchers of supply-chain logistics. Maine problem | Republican Senator Susan Collins called on Treasury Secretary Steven Mnuchin to temporarily defer tariffs for U.S. companies that are suffering economic hardship. Food security | The Philippines identified additional measures to ensure sufficient food supply amid a month-long lockdown of the country’s main island. Meanwhile, empty shipping containers are piling up in Manila. Machine orders | The Pentagon’s logistics agency has modified an existing contract and will spend $84.4 million to buy 8,000 ventilators from four vendors, with first delivery of 1,400 by early May. Inside look | Newly revealed details show that General Motors has been continuously engaged in the effort to build emergency ventilators. It’ll take about a month to ramp up. Grain hoarding | Russia, the world’s biggest wheat exporter, proposed limiting grain shipments to protect its own food security in the face of the spreading pandemic.Bloomberg AnalysisWork week | Bloomberg Economics says China’s back-to-work rate edged up to around 90%. Supply shortages | Disinfectants and sanitizers that help fight the virus may be absent from store shelves for weeks. Use the AHOY function to track global commodities trade flows. See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities. Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The Covid-19 pandemic has disrupted the sprawling networks of contract workers who keep social-media services running smoothly. Software is picking up the slack, but Facebook Inc. and YouTube are already warning there’ll be less content moderation and slower customer support.While tech platforms believe artificial intelligence software will ultimately reduce the need for human oversight, many experts think the technology is not yet ready to take on nuanced decision-making required for tasks like content moderation. “Now it's going to be really obvious to everyone how poorly they actually work,” said Hannah Bloch-Wehba, a law professor at Drexel University who studies internet governance.Facebook has about 15,000 contract workers policing its platform. While full-time employees log on remotely, the company won’t let contractors who filter disturbing content work from home, citing privacy concerns and legal considerations. Many are employed through staffing firms such as Accenture Plc, which recently sent some Silicon Valley-based workers home to comply with a shelter-in-place order. One moderator who asked not to be named for fear of retribution said he was told the cuts would last at least three weeks. As he left the office on March 16, he wondered if he’d ever return. Accenture didn’t respond to a request for comment. Read more: Inside Silicon Valley’s Shadow WorkforceThe following day, Facebook users began complaining that their posts were being removed at curiously high rates. Jodi Rudoren, editor-in-chief of The Forward, complained on Twitter that her newspaper’s links were disappearing, cutting traffic to its website. Within hours, Facebook restored many of the links. The company blamed a glitch in its spam-moderation software, and executive Guy Rosen said it was “unrelated to any changes in our content moderator workforce.”Still, the incident undermined confidence in Facebook’s technology at a time when the company is relying more on automation. “I posted a scientific article about COVID spread and it was censored. That is some Orwellian Machine Learning you have there,” genomics scientist Kevin McKernan wrote on Twitter. “If you censor COVID, I’m off the platform forever.”Facebook Chief Executive Officer Mark Zuckerberg told reporters the next day that shortages of contract workers will mean less content moderation. With fewer people to make difficult judgment calls on what content to keep up, the company is prioritizing the most-urgent cases, such as posts recommending people drink bleach to cure Covid-19. Other problem areas, such as “back-and-forth accusations a candidate might make in an election,” will get less attention, he said. The largest U.S. internet gatekeepers have come under immense criticism in recent years for spreading toxic content and misinformation. In response, they hired thousands of contractors who work alongside software to filter out the dross. The novel coronavirus is forcing the companies to re-assess that combination. Google, which has more than 10,000 contractors, recently said it would temporarily increase the use of automated content moderation on its services, including YouTube. The internet's largest video site warned this would mean more videos will be removed. Creators can challenge these automated decisions, but YouTube said “workforce precautions will also result in delayed appeals reviews." There was a similar message at the top of the YouTube Creator Support website on March 26. Much of the public debate over content moderation has centered on social and political issues, as when YouTube's AI systems labeled footage of the Notre Dame cathedral fire a conspiracy theory last year. But it can also hurt creators who rely on YouTube and similar services like Instagram for income. YouTube's automated decisions about advertising, for instance, have sparked outrage from its stars for years. As global Covid-19 cases surged earlier this month, YouTube's systems automatically pulled ads from videos that mentioned the virus in an effort to curb misinformation. After creators protested, CEO Susan Wojcicki announced changes to the company’s guidelines to allow ads on a limited number of video channels that go through a formal approval process. “Sometimes these automated systems can make mistakes, which we know can be frustrating,” a YouTube creator support representative said in a video describing the certification procedure. On Tuesday, Forrest Starling, who runs the popular gaming YouTube channel KreekCraft, alerted YouTube that far fewer people were visiting his channel from the service’s search engine. He couldn’t get an explanation from the company, but suspected an algorithmic mishap. "It’s a very weird time in the world right now and I understand everyone there is doing the absolute best they can," he wrote in an email. "It’s just frustrating when issues like this pop up."The day after, YouTube issued a statement attributing problems like Starling’s to Covid-19 related staff shortages. “Content may not show in search, etc. until a reviewer takes a look, & w/fewer reviewers available, this is taking longer,” the company wrote on Twitter. "Completely understandable considering the circumstances," Starling said afterward.The staffing challenges for tech companies may get worse before they get better. On March 24, the government of India ordered all 1.3 billion of its citizens to stay in their homes for 21 days. The country is a significant source of remote technical and support staff for U.S. tech companies. Read More: How India Plans to Lock Down 1.3 Billion People in a DemocracyA YouTube spokesman described the staffing shifts as a temporary response to virus-related disruptions. Facebook’s Zuckerberg hasn’t been shy about his long-term vision of a content-review regime that relies far more on machines than humans. This holds appeal because content moderation is labor intensive and brutal, with some workers complaining of trauma from exposure to disturbing content. Regardless of the long-term prospects, people like Starling see troubling signs. On Thursday, he sent a tweet from KreekCraft’s Twitter page: “Well I woke up and YouTube crashed,” he said. He added an emoji of a face sneezing. For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Billionaire investor Bill Ackman suggested that President Donald Trump put Americans back to work with the “biggest infrastructure program of all time.”In a series of tweets directed at the president, Ackman advocated for the construction of roads, bridges and tunnels. Such outdoor work would allow for social distancing and could be financed with low long-term interest rates, Ackman wrote. He also suggested building costs would be lower due to “lower commodity prices and less competition for labor.”“You will get unanimous support from Democrats and Republicans and give us hope for the future. Let’s get a good many of our fellow Americans working again in all 50 states while those of us with desk jobs work from home,” Ackman added.Trump in the past has proposed a $1 trillion infrastructure spending plan, but the legislation has not passed during his presidency.Ackman, the activist investor who runs Pershing Square Capital Management, said last week he had made a “recovery bet” on the economy, investing $2.5 billion in equities.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The U.S. became the first country to reach 100,000 coronavirus cases. Italy had its deadliest day with almost 1,000 fatalities. British Prime Minister Boris Johnson and his health secretary tested positive.President Donald Trump ordered General Motors to start making ventilators by invoking a Cold War-era law. Toyota’s idled U.S. manufacturing facilities will make much-needed face shields and masks.New York Mayor Bill de Blasio said new infections will be “astronomical.” Los Angeles Mayor Eric Garcetti warned his city may see a New York-like surge in less than a week.Key Developments:Cases top 585,000; 26,800 dead, 130,000 recovered: Johns HopkinsU.S. cases top 100,000, more than Italy, ChinaU.S. ramps up virus testing, but demand still outpaces supplyWorkers critical to world’s food supply falling illU.K. orders unprecedented shutdown of housing marketTokyo braces for critical weekendFrom Spain to Germany, farmers warn of fresh food shortagesSubscribe to a daily update on the virus from Bloomberg’s Prognosis team here.Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts. For analysis of the impact from Bloomberg Economics, click here. To see the impact on oil and commodities demand, click here.U.S. Becomes First Nation With 100,000 Cases (5:27 p.m. NY)The U.S. became the first country to surpass 100,000 confirmed cases of the coronavirus on Friday, a day after it overtook China to become the largest outbreak in the world. America’s most prominent hot spots are New York and New Jersey, which together account for half the country’s total cases. California has more than 4,000.L.A. Warns of New York-Level Surge in Five Days (5:06 p.m. NY)Los Angeles could see a coronavirus surge similar to New York City’s in five days if the spread continues at the rate it’s been going, Mayor Eric Garcetti said.“We will have doctors making excruciating decisions,” Garcetti said at a press briefing alongside Governor Gavin Newsom. They spoke in front of the U.S. Navy hospital ship Mercy, which docked in Los Angeles to lend extra medical space for non-coronavirus needs. It will be the largest hospital in the city, Garcetti said.Rhode Island Stops Cars With N.Y. Plates (5 p.m. NY)Rhode Island police, aided by the National Guard, on Saturday will conduct house-to-house searches to find people who traveled from New York to demand they begin 14 days of self-quarantine. State police are already stopping cars with New York license plates.“Right now we have a pin-pointed risk,” Governor Gina Raimondo said. “And that risk is called New York City.”Raimondo, a Democrat, said she consulted lawyers and while she couldn’t close the border, she felt confident she could enforce a quarantine. Many New Yorkers have summer houses in the state, especially in tony Newport, and the governor said authorities would be checking there.Trump Signs $2 Trillion Stimulus Bill (4:47 p.m. NY)President Donald Trump signed the largest stimulus package in U.S. history, a $2 trillion aid bill intended to rescue the economy. The plan will provide a massive injection of loans, tax breaks and direct payments to large corporations, small businesses and individuals whose revenue and income have plummeted under social distancing restrictions.Read full story hereFour Die on Holland America Cruise Ship (4:30 p.m. NY)Carnival Corp.’s Holland America line said four passengers died on its Zaandam ship, which has had an outbreak of flu-like symptoms on board, including at least two confirmed cases of Covid-19. The cruise line said the passengers were “older” but didn’t say how they died.The Zaandam, currently near Panama, was still at sea when cruise companies halted new voyages earlier this month.Trump Orders GM to Make Ventilators (4 p.m. NY)President Donald Trump ordered General Motors Co. to immediately begin making ventilators, invoking a Cold War-era defense act amid productive talks with the automaker.“Our negotiations with GM regarding its ability to supply ventilators have been productive, but our fight against the virus is too urgent to allow the give-and-take of the contracting process to continue to run its normal course. GM was wasting time,” Trump said in a statement. “Today’s action will help ensure the quick production of ventilators that will save American lives.”GM and ventilator maker Ventec Life Systems Inc. had much of what they needed in place to ramp up production of the breathing machines. They were just waiting on the Trump administration to place orders and cut checks.Belgium May Keep Limits Until May 2 (3 p.m. NY)Belgium extended restrictions on citizens and businesses, which took effect March 14, by two weeks until April 19, and Prime Minister Sophie Wilmes signaled a further extension to May 3, saying it’s too early to declare the epidemic under control. Belgians must stay at home except for essential activities such as grocery shopping. Gatherings by more than two people are banned and stores selling non-essential goods remain closed.N.Y. Seeks Aid for Four New Hospitals (2:45 p.m. NY)New York is seeking federal assistance for four new emergency hospitals, Governor Andrew Cuomo said, as the number of state deaths spiked 35% in a day to more than 500.The new sites would join four centers the U.S. is setting up in the city, he said. The state wants more beds for Nassau, Suffolk and Westchester counties. Cuomo spoke from the Jacob K. Javits Convention Center on Manhattan’s west side, which is being converted into a 1,000-bed emergency hospital that will open Monday.Cuomo said current demand for medical equipment is adequately covered and that the state is stockpiling additional supplies for a potential peak of infections three weeks from now. “We don’t need them yet,” he said. “We need them for the apex.”The governor said he would keep the state’s schools closed for an additional two weeks, at which time the situation will be reassessed.Luxembourg Plans to Test for Herd Immunity (1:30 p.m. NY)Luxembourg is in an intensive planing phase to be among the first nations to research so-called herd immunity based on new blood tests the country is expecting to get, Health Minister Paulette Lenert said Friday.The new tests wouldn’t check for Covid-19 infections but whether people have developed immunity against the new virus. Luxembourg, due to its small population of just over 600,000 people, is in a fortunate position to do this, the minister said. Scientists would be able to test samples that would be representative of the entire population, the minister said.Italy’s Daily Toll Nears 1,000 (12:35 pm. NY)Italy had its highest daily death toll even as the number of new cases declined on Friday. Fatalities shot up to 969, the most in a 24-hour period since the start of the outbreak.New infections totaled 5,959, compared with 6,153 the previous day, civil protection authorities said at their daily news conference in Rome. Italy now has 86,498 total cases, roughly the same number as the U.S. and more than China, where the disease’s first outbreak occurred.U.S. Buys More Ventilators (12:30 p.m. NY)President Donald Trump said the federal government bought “many ventilators” from several companies he didn’t identify. Trump in a tweet said the names will be announced later.State and local officials have been pleading with the federal government for more ventilators as cases of the coronavirus mount.France Extends Restrictions (12:20 p.m. NY)French Prime Minister Edouard Philippe said public confinement is being extended to April 15. The restrictions could be further extended if needed, he said in a press conference after a cabinet meeting on Friday. A scientific committee consulted by the government recommends at least six weeks of confinement, he said.Portugal’s Cases Rise 20% (12:14 p.m. NY)Portugal’s cases rose 20% to 4,268 from 3,544 a day earlier, the government’s Directorate-General of Health said. That compares with a daily increase of 18% reported Thursday and a 27% rise on Wednesday. The total number of deaths increased to 76 on Friday from 60 reported through Thursday morning.Director-General of Health Graça Freitas said the data suggest the peak won’t be a moment in time but rather a plateau, and may not occur before May.Libya, Syria Face Catastrophe: WHO (11:35 a.m. NY)Libya reported its first case this week, meaning 21 of 22 Eastern Mediterranean nations have infections. The World Health Organization said Libya’s capacity to respond is extremely limited in some areas and non-existent in others, with a large movement of people from neighboring countries.The outbreak also threatens to cause a catastrophe in Syria, the WHO said. Half of the nation’s hospitals are not functioning after nine years of war and thousands of health workers having fled the country. Millions of displaced people live in overcrowded camps in the country’s northwest, but after two days of tests using 300 WHO kits, no cases so far have been detected, the agency said.Toyota Shifts Factories to Face Shields (11:07 a.m. NY)Toyota Motor Corp.’s idled manufacturing facilities in the U.S. will make much-needed face shields and masks, and the Japanese automaker is closing in on deals with medical-device makers to help them boost production.The carmaker said Friday it will start mass production of face shields early next week to supply hospitals near its plants in Indiana, Kentucky, Michigan and Texas. Toyota also said it is finalizing pacts with at least two companies to make breathing ventilators and respirator hoods, and it’s looking for partners to make protective masks. The company on Thursday extended its shutdown of North American factories for two weeks.U.K. Virus Deaths Jump 30% (10:29 a.m. NY)The number of people in the U.K. who have died from coronavirus increased by 31% to 759 as of Thursday, the Department of Health said. That’s higher than the five-day average of 20%.Some 14,579 have tested positive for the disease as of Friday, an increase of about 25%, above the five-day average of 20%.Two Fed Bankers Confident of Rebound (10:29 a.m. NY)Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan expressed confidence the U.S. economy will rebound when restrictions on activity are lifted.“This is a public health crisis” and different from a typical recession, Bostic said on Bloomberg Television Friday. Kaplan offered a similar view a few minutes earlier. “We were strong before we went into this, and we believe that we’ve got a great chance to come out of this very strong,” he said.Kaplan said unemployment would peak “in the low to mid teens” before recovering to around 7%-to-8% by year-end.Coronavirus Response Leaves U.K. Vulnerable: Lancet (9:29 a.m. NY)A delayed response by the U.K. government to the coronavirus pandemic has left the health system “wholly unprepared” for an expected surge of critically ill patients, according to the editor of the medical journal The Lancet.In a letter posted on the journal’s website, Richard Horton described chaos and panic across the National Health Service, basing his comments on messages he received from workers. The government last month should have expanded testing capacity, ensured the distribution of protective equipment and stepped up training, he said.U.K. Prime Minister, Health Secretary Have Virus (9:17 a.m. NY)British Prime Minister Boris Johnson will self-isolate in Downing Street for seven days after a test found he had the coronavirus, spokesman James Slack told reporters on Friday. Health Secretary Matt Hancock has also contracted the illness, in a double blow to the U.K. government’s response to the crisis.Both men have reported mild symptoms. Meals will be left at Johnson’s door while he continues to work by video-conference, Slack said. Hancock is self-isolating and working from home.These are the latest high-profile individuals to contract the virus in Britain after Prince Charles, the heir to the throne, tested positive.U.K. Sees No Change to Brexit Timetable (8:29 a.m. NY)“In terms of the timetable there’s no change from our point of view,” the U.K. prime minister’s spokesman James Slack told reporters in a conference call. Slack was asked if there would be an extension to the Brexit transition period beyond December.NYC Mayor Says Trump Needs to Face Reality on Ventilators (8:20 a.m. NY)New York Mayor Bill de Blasio said cases of the new coronavirus are going to become “astronomical,” putting unprecedented strain on the hospital system. Trump said in an interview on Fox News that he didn’t think New York state needed the 30,000 ventilators that Governor Andrew Cuomo has asked for to treat Covid-19 patents with respiratory conditions.“When the president says the state of New York doesn’t need 30,000 ventilators, with all due respect to him, he’s not looking at the facts of this astronomical growth of this crisis,” de Blasio said. “If they don’t have a ventilator, a lot of people are just not going to make it.”Rolls-Royce Pauses U.K. Civil-Engine Output (8:07 a.m. NY)Rolls-Royce Holdings Plc will wind down jetliner-engine production in the U.K. as it spends a week implementing cleanup and safety measures to cope with the coronavirus outbreak. The company, which makes turbines for wide-body planes, will “significantly reduce” all but essential activities within its U.K. civil aerospace facilities from midnight, it said in a statement Friday.Rolls-Royce is taking a break from manufacturing after customer Airbus SE also paused production to check on measures to protect employees from Covid-19. Boeing Co. has gone a step further, winding down planemaking in the Seattle area for two weeks after a worker died of virus-related complications.China Ramps Up Stimulus Measures (8 a.m. NY)China will “appropriately” raise its fiscal deficit as a share of gross domestic product, issue special sovereign debt and allow local governments to sell more infrastructure bonds as part of a stimulus package to stabilize the economy, according to a politburo meeting on Wednesday, central China television reported late on Friday.Italy Virus Curve Seen Flattening Slightly (7:49 a.m. NY)The curve of new coronavirus cases in Italy appears to have started flattening slightly since March 20, Silvio Brusaferro, head of the country’s National Health Institute, said at a press conference on Friday. The mortality rate in the country is proportional to patients’ age, Brusaferro said.The National Health Institute said the country wasn’t at the peak of the contagion yet, but the head of the Superior Health Council Franco Locatelli said there were clear signs that the containment measures “are efficient, so people must respect them.”Italy reported its biggest rise in coronavirus infections in the last five days on Thursday, as the disease spread further in the northern Lombardy region, even after weeks of rigid lockdown rules.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- To say it’s been a volatile week doesn’t quite describe it. For traders, it was mayhem.For a brief 24 hours this week, it looked like Canada’s stocks would technically crawl out of a bear market. Those hopes came crashing down Friday as rapidly deteriorating economic conditions gripped markets even as central banks and governments rushed to announce more stimulus measures.The week started with the S&P/TSX Composite Index plunging to its lowest in almost nine years after Ontario and Quebec -- the nation’s economic heavyweights -- ordered the shutdown of non-essential businesses.That was followed by a 12% rebound on Tuesday, the biggest jump since at least 1977, as stimulus packages eased concerns about a global economy in freefall. After another big rally Wednesday, the Canadian benchmark was a mere 335 points away from a 20% rise -- the standard measure for a bull market.For a couple of hours on Thursday, the TSX actually crossed that level, but backed away from it at the close. Then the kicker on Friday -- the index slumped as recession fears escalated.“We believe the moves higher that we have seen over the past couple of days would fall in the camp of ‘bear-market rally’,” said Philip Petursson, chief investment strategist at Manulife Investment Management. “The overall move by the market is very typical of what we see in advance of a recession.”The three-day surge earlier in the week was “just a recovery from oversold panic drop. A bull market is real when the virus recedes and we can go back to work,” said Barry Schwartz, chief investment officer at Baskin Wealth Management.Governments are spending unprecedented amounts of money to stem a downward spiral that is showing up in some shocking weekly unemployment claims -- 3.28 million in the U.S. and almost 1 million in Canada.Trudeau’s government added tens of billions Friday to a stimulus package that had already topped C$100 billion. In the U.S., a $2 trillion package passed the House and is on its way for Donald Trump’s signature. Trillions more will be spent in the rest of the world.Read More: Trudeau Unveils 75% Wage Subsidy to Help Companies Survive VirusCentral banks are also in shock-and-awe mode: the Bank of Canada announced a large scale asset purchase program and cut its benchmark rate to a record low.Coronavirus cases in Canada have quadrupled this week with about 40 deaths announced so far. About 80% of Canadians believe it will be at least three months, if not much longer, before their lives go back to normal, according to an Angus Reid Institute survey released Thursday.Even after a week in which it rose about 7%, the Canadian benchmark is still down about almost 30% from its Feb. 20 record high. Breadth is abysmal with only three and seven members of the index trading above their 50 and 200-daily moving averages respectively. And there’s limited evidence fundamentals are improving as more companies announce the temporary suspension of operations, pulling their first quarter and annual forecasts.“Who would dare to issue a forecast at all?” David Rosenberg, founder and chief economist of Rosenberg Research and Associates, said in an interview on BNN Bloomberg television.Scenes from a Shutdown: Canadian Workers Face the Covid-19 SlumpBe PreparedWith virus cases still climbing in many parts of the world, it’s too soon to rule out another setback, said Kurt Reiman, who sets strategy for the Canadian arm of BlackRock Inc. “Elevated levels of implied volatility suggest we should be prepared for large market moves, both up and down.”Investors who are focused on the longer term would be better off reshaping their portfolios to a neutral stance, he said. Stick with strong and high quality companies that are sheltered from big volatile market moves, Reiman added.Petursson is applying a similar strategy. “While we believe the markets can potentially see further downside, we believe it is less than what we have already experienced and at these levels we are starting to view equities with more optimism. There are some great bargains to be had.”Dip Toes“We suggest dipping a toe in rather than jumping in waist deep as the market may be prone to further downside,” Petursson said. But “for those clients that have been looking to increase their equity weight, we believe the markets are presenting those opportunities now.”Too Soon to Call a Bottom“Investor sentiment is almost certain to remain extremely fragile in the near-term as investors weigh the latest developments on the Covid-front,” said Candice Bangsund, portfolio manager at Fiera Capital Corp.While concrete and sizable stimulus measures should help revive investor sentiment, it’s too soon to call a bottom, Bangsund said.“With little visibility on the depth and duration of the economic fallout as the virus continues to spread across Europe and the U.S., investors will be beholden to virus-related headlines that are likely to inflict more periodic episodes of volatility and the erratic market gyrations that come with it.”Markets -- Just The NumbersTrendingInCanadaTrudeau called on Canadian celebrities across the world to tell their fans to social distance and self-isolate where necessary. Singer Michael Buble and actor Ryan Reynolds got the ball rolling with their own social media posts, with Shawn Mendes and Seth Rogen among other stars joining in.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Americans may have to start eating older eggs as the staple flies off grocery shelves amid the coronavirus pandemic.U.S. Agriculture Secretary Sonny Perdue said in a tweet Friday the the department is relaxing some grading regulations “to ensure American consumers have greater access to safe, quality, and affordable eggs.”The department is waiving a prohibition on granting a USDA grade to eggs more than 21 days old or which have previously shipped for sale, according to an explanation posted on its website.The step will allow eggs that have been shipped to food service outlets to be returned, repackaged and sold to consumers at grocery stores, according to the notice. Eggs up to 30 days old will now be eligible for a USDA grade.U.S. grocers have boosted orders for eggs by as much as six times normal volumes, eroding inventories that producers were building for Easter sales.Wholesale large eggs in the Midwest cost $3.09 a dozen, according to Urner Barry prices, the benchmark for the industry, up 180% since the beginning of March.If an expiration date appears on a carton, it can be no more than 30 days from the day the eggs were packed into the carton, according to the USDA’s Food Safety and Inspection Service’s website. That means under the new procedure, eggs with a USDA grade may be up to 60 days old.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- It was only a matter of time before a sitting world leader tested positive for Covid-19. In confirming he has a mild case of the new coronavirus, Boris Johnson follows a string of other lesser political figures, from France’s culture minister to Iran’s deputy health minister (and Britain’s Prince of Wales if you consider his constitutional role).He won’t be the last. Pandemics don’t respect class or wealth, and the virus has thrived in the political world, where age and experience reign, crowds gather to press the flesh and travel is constant.It’s a safe bet this virus will change the course of human history as a result, even if we don’t yet fully understand how deadly it will be. The past offers several examples, from the benign to the dramatic. The Spanish flu epidemic a century ago struck several leaders at a critical time for peace talks after the First World War, confining British premier David Lloyd George to his sick bed for 10 days. In the 19th century, yellow fever killed so many of Napoleon’s troops in Haiti that he ended up abandoning his imperial ambitions in the U.S., resulting in the Louisiana Purchase and Haitian independence.If the coronavirus seems much less politically cataclysmic so far, it’s because 21st-century technology and health care are helping western leaders such as Johnson — and Germany’s Angela Merkel when she confined herself to her Berlin flat because of a suspected Covid-19 case — to project an aura of “business as usual.”Whereas a great deal of information about the Spanish flu was kept hidden from the public to avoid creating fear and uncertainty, including Lloyd George’s illness, Johnson has announced publicly that he will run the country via video-conference even as he self-isolates. “Be in no doubt that I can continue, thanks to the wizardry of modern technology, to communicate with all my top team,” Johnson told his Twitter followers. If the public can work from home, so can the prime minister; as can his health secretary, Matt Hancock, who tested positive too.Nevertheless, running countries via video-conference is new in world affairs. It would be wrong to assume that the transition will be smooth. In Brussels, for example, the workings of the European Union have been turned upside down as leaders and officials meet virtually to respect social-distancing measures. That doesn’t just make vital crisis meetings prone to technical glitches and delays — multiplied by 27 in the EU’s case — it also robs them of the huddles, side-meetings and mini-breakthroughs that can lead to more fruitful results.On Thursday, six hours of video talks between European leaders on the Covid-19 response ended in a dispiriting fudge. History is full of underwhelming EU summits, of course, but forced distance could make things even worse.That the virus has also infected ministers and local officials lower down the chain of command in several countries will also have an impact, putting more sand in the gears of government. Every minute counts when a country is rolling out vast and unprecedented stimulus packages to save businesses from going under, divert precious resources to overwhelmed health services, and to maintain other public services as normal.Longer-term plans are also likely to be frustrated, such as Johnson’s promise to the British public of a quick post-Brexit trade deal with the EU. London and Brussels have already had to cancel the second round of face-to-face trade negotiations, and both sides’ chief negotiators have tested positive for Covid-19. Will video-conferencing really help overcome what Michel Barnier called “very serious” differences? It’s doubtful.The public craves leadership in a crisis, hence the sky-high polling for many leaders over their handling of the pandemic, including Johnson. For now politicians believe they can keep delivering it, despite infection. But politics is a “cut-and-thrust” business, where fortunes rise and fall rather quickly. If squabbling advisers or gossiping factions take advantage of a “self-isolating” leader, that might chip away at their authority. What do they say about keeping your friends close, and your enemies closer still.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- When Saudi Arabia kicked off its oil-price war and triggered the worst crude crash in a generation, U.S. President Donald Trump lauded the ensuing decline in pump prices, saying it would be “like a tax cut” for Americans.Weeks later, the crisis remains a low priority for the president, who has continually expressed his satisfaction with cheap gasoline and whose agenda has been consumed by the coronavirus pandemic itself, according to people familiar with the situation.While Secretary of State Mike Pompeo on Wednesday took the strongest action yet to calm the market -- pressing Saudi Arabia to dial back its production surge -- the kingdom has shown no signs of slowing down.Now, with thousands of oil jobs hanging in the balance and the U.S. shale industry in upheaval, any action by Trump himself may be too little, too late. Oil’s downturn has rapidly devolved from a simple case of too much supply to a worst-case scenario of total demand destruction -- a problem far harder to solve from the Oval Office.“The window for Trump to pressure the Saudis and/or Russians to cut oil supply may have closed last week,” said Ellen Wald, a nonresident senior fellow at the Atlantic Council. “Now, with most of Europe, the United States and India shutting down their economies and issuing stay-at-home directives, collapsing demand is the big story.”Pompeo’s latest intervention helped to modestly and briefly lift prices, but did nothing to change the outlook on demand, which is disintegrating at a record pace as virus-related lockdowns halt transit across the globe. At this point, higher oil prices could further imperil refiners, responsible for churning out the cheap gasoline Trump prizes.That puts the president in a quandary: Shale producers are pushing for increasingly radical solutions to the problem -- such as a tariff on foreign oil -- as refiners beset by falling demand are scrambling to keep their plants in operation. Industry divisions have made finding a solution even more difficult for the administration, whose efforts so far been patchy as best.While U.S. diplomats are now pressuring Saudi Arabia to restrict production, the kingdom has no intentions of changing course, at least not while Trump keeps cheering low pump prices, said people with knowledge of the matter.Trump has yet to intervene, himself, despite saying last week that he might. A meeting of the leaders of the Group of 20 major economies on the global pandemic Thursday ended with a statement that made no reference to oil.At the same time, the Department of Energy suspended plans to purchase 77 million barrels of U.S. crude meant to buffer the shale industry because the agency has no way to pay for it. Should funding become available -- via Congress or the agency’s own budget -- the oil buy will resume.In the meantime, “the oversupply is snowballing much faster than any policy reactions to it,” said Bob McNally, president of Rapidan Energy Group LLC. Even a total halt to Saudi Arabia’s price war wouldn’t be enough to save the market, Goldman Sachs Group Inc. said in a note Wednesday.The White House didn’t immediately respond to a request for comment. But in a public acknowledgment of how the virus has weighed on America’s crude demand, Trump said in a tweet late Thursday that the oil and gas industry was “under seige.”“It will get better than ever as soon as our Country starts up again,” he said. “Vital that it does for our National Security!”Few OptionsOn the demand side, the president’s options are actually looking increasingly limited. One thing he can do is stimulate the struggling economy so that businesses and consumers can better weather widespread, virus-related shutdowns.“Dispensing $4 trillion in credit to keep businesses running is ultimately, probably the best you can do to maintain demand,” said Jamies Lucier, managing director of research firm Capital Alpha Partners LLC.Congress is poised to pass a $2 trillion stimulus package, days after the Federal Reserve unveiled a sweeping set of economic measures this week.Meanwhile the Saudis and Russians continue to unleash unprecedented volumes of crude into an already oversupplied market, with no signs of slowing down even as the coronavirus outbreak chips away at their customer base.“These are very drastic times for the oil and gas industry,” said Dan Eberhart, a Trump donor and oil executive who said he’s taken part in several calls with administration officials in recent weeks. “Drastic action on the policy front is needed.”(Updates with G20 meeting in ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Chancellor of the Exchequer Rishi Sunak said he’d do “whatever it takes” to prop up businesses and jobs as Britain grapples with the coronavirus pandemic, and he’s putting the country’s money where his mouth is.Sunak’s fourth emergency package of measures announced Thursday -- 9 billion pounds ($11 billion) of support for the self-employed -- brings the total aid he’s announced since March 11 to 65.5 billion pounds. That eclipses the 42 billion pounds (in today’s money) in tax cuts and additional spending Gordon Brown’s Labour government deployed during the financial crisis a decade ago.“We are all in this together,” Sunak said. “I am confident we now have the measures in place to ensure we can get through this emergency.”Sunak has been racing to protect businesses and workers as the pandemic brings normal economic activity to a halt. The stimulus stands at about 3% of gross domestic product, compared with 2% during the financial crisis -- and if the pandemic drags out, there’s the prospect of more to come, as guarantees on wages for the employed and self-employed roll over into future months.About 3.8 million workers from hairdressers to cleaners will be eligible for the grants to the self-employed. While Sunak initially said the measure would cost tens of billions of pounds, the Treasury later clarified it would cost about 3 billion pounds a month for three months.“Like all the other programs that have been announced in recent weeks, it will be costly -- the Treasury’s estimate of 3 billion pounds a month looks in the right ballpark -- but it will be money well spent if it succeeds in preventing a recession becoming a depression,” said Dan Hanson, Bloomberg Economics’s senior U.K. economist.Hanson and Bloomberg Economics colleague Jamie Rush estimate the shutdown of the economy could cost Britain 700,000 jobs. That would take the unemployment rate to 6% -- the highest for six years.“Some lasting economic damage will be created by the coronavirus pandemic,” Hanson and Rush wrote. “The support has come too late for some while the difficulty in getting money to the right people and companies means some bankruptcies and job losses are inevitable.”Tax experts also questioned whether the intended recipients will get the money fast enough. Self-employed workers won’t be able to access the cash until the start of June.“This will leave many of the self-employed, whose business has diminished as a result of Covid-19, with little money to live on over the next two months,” said Tom Evennett, head of personal tax at accounting firm EY.In another setback for the self-employed, Sunak suggested that once the coronavirus crisis is over, he may re-examine rules that allow them to pay less tax than their salaried counterparts.“There is an observation that there is currently an inconsistency in contributions by self-employed and employed,” Sunak said. By treating them the same when doling out coronavirus assistance, “it does just throw into light that question of inconsistency and whether that is fair to everyone going forward,” he said.The coronavirus crisis has transformed the fiscal landscape at a stroke. Britain was on course for a budget deficit of 55 billion pounds in the fiscal year starting April. Now, according to the Institute for Fiscal Studies, borrowing could be as much as 200 billion pounds as an economy on course to shrink at least 5% this year hammers tax revenue and drives up spending on welfare.That could leave the deficit just below the 10% reached in the aftermath of the financial crisis and push up already elevated debt levels.The chancellor announced his first economic package to deal with the outbreak when delivering the budget on March 11, unveiling 12 billion pounds of measures to mitigate the effects of the outbreak on the economy.As evidence mounted that the crisis was snowballing, he followed up with a 350-billion pound stimulus package comprising government-backed loans as well as 20 billion pounds of grants and tax cuts for struggling companies.Then, last Friday, he announced 7 billion pounds of extra welfare spending and said the government would pay 80% of salaried employees’ wages up to a maximum of 2,500 pounds a month -- a plan Bloomberg Economics estimates will cost 17.5 billion pounds. Announcing further details of the job-retention program today, the Treasury said the government will also cover employers for the National Insurance and minimum auto-enrolment pension contributions of furloughed workers, saving firms 300 pounds a month per employee on average. (Updates with further detail of job-retention plan)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- When Alberto Fernandez visited Mexico on his first foreign trip since winning Argentina’s presidency, he said that both countries would face the “challenge of globalization” together.Less than five months later, the respective stances of Fernandez and Mexico’s President Andres Manuel Lopez Obrador to fighting the coronavirus pandemic couldn’t be further apart.Whereas the Mexican leader has only now started urging citizens to stay at home -- after encouraging them to eat out to support the local economy -- Argentina shuttered social life and imposed a strict stay-at-home policy a week ago, even at the risk of disproportionately affecting the livelihoods of Fernandez’s mostly middle-to-lower class voter base.Key to that decision was the upgrade of the virus to a pandemic and stark conversations with leaders at the heart of fighting the disease, people familiar with the strategy said.“The choice is to take care of the economy or take care of lives,” Fernandez said Wednesday. “I chose to take care of lives.”In Latin America, where huge numbers of people rely on the informal economy to survive, there are no good options for leaders. Fernandez’s decision to go all-in to fight Covid-19 stands out not just for its contrast with Mexico but also with Brazil, where President Jair Bolsonaro has downplayed the risks and publicly clashed with state governors who are taking stringent measures to combat the virus locally.Key Moments“This is a make or break moment for Alberto Fernandez to show he’s in control and leading the country,” said Jimena Blanco, head of Latin America political research at consulting firm Verisk Maplecroft. “The worst scenario is to get a disorderly response -- or no response at all -- which is what we’re seeing in Mexico and Brazil.”Fernandez’s move to put his country into quarantine was deeply influenced by the World Health Organization’s March 11 announcement that the coronavirus was a pandemic, according to a senior government official. Dr. Maureen Birmingham, the WHO representative in Argentina, is in constant communication with the authorities and Fernandez himself.That decision was reinforced when the president saw cases balloon rapidly in Italy and Spain -- two countries where many Argentines’ ancestors hail from. Prior to his announcement of a lockdown, Fernandez spoke with the Italian and Spanish prime ministers, Giuseppe Conte and Pedro Sanchez, to hear their experiences, the official said. Fernandez developed good relations with both men after visiting them earlier this year. Mexico’s president is by contrast famously loath to travel abroad.Buying TimeHe also wanted to buy time for Argentina’s fragile health-care system by trying to flatten the curve as soon as possible, the official said. The president speaks on a daily basis with the governor of Buenos Aires province and the city’s mayor, where most cases are concentrated.On Thursday night, the government ordered the closing of the borders to stop even Argentines from going out and into the country until the quarantine ends. At the same time, Fernandez, who has publicly conceded his strategy will put the economy in a bigger hole, has said that he expects cases to peak in the first half of May and is willing to extend the lockdown that ends March 31 if needed.ARGENTINA INSIGHT: Lockdown, Uncertainty to Deepen RecessionGovernments worldwide are adopting their own approaches to curb the spread of the virus, with some countries like Japan that are relatively unaffected taking minimal measures, others including Spain and Italy at the heart of the epidemic in total lockdown, and a third group including Australia seeking to balance economic damage with protecting public health.While each stance is contentious, in Argentina, a land of chronic financial crisis and fiercely divisive politics, the challenge of tackling the coronavirus is bringing an unusual sense of unity. Fernandez stood together with leaders from different ends of the political spectrum for the March 19 lockdown announcement, a rare display of consensus made all the more unlikely given that the country is enduring a third year of economic crisis and again flirting with default.Under the ShadowBeyond purely humanitarian motives, the show of consensus hands Fernandez an opportunity to emerge from the shadow of his vice president, Cristina Fernandez de Kirchner, the two-time former president who was instrumental in catapulting her namesake -- who is no relation -- to his election victory in October.“A mass external shock that makes things terrible everywhere, instead of just where you are, can be politically useful,” said Daniel Lansberg-Rodriguez, a geopolitical risk analyst who teaches at Northwestern University’s Kellogg School of Management. “The early adopters were often the leaders who were most ready to change the conversation.”Polls shows a majority of Argentines approving the government’s response.Still, it’s a huge gamble for Fernandez. While the wealthy can sit out the crisis working from home, that’s not a luxury afforded the less well-off who make up his base. As of 2018, almost half of Argentine workers were in the informal economy, according to the research institute at the Universidad Catolica de Argentina, including jobs like street vendors and household workers.The government’s financial response to the crisis has attempted to bridge that gap, with measures like extra payments for low-income parents and retirees, a 10,000-peso ($155) transfer for informal and some independent workers in April, and a price freeze on 2,300 essential products.Harsh MeasuresThere is still no guarantee that his harsh measures, also implemented by some other smaller economies such as Chile, Peru and Colombia, will be successful in fighting a pandemic that’s quickly spreading throughout Latin America.Cases rose to 589 as of Thursday evening, with 12 deaths recorded. Also, with just about 2,800 tests performed this month, Argentina shows a poor testing rate when compared to neighbors like Chile, where President Sebastian Pinera’s government has conducted more than 7,500.The sudden bipartisan cordiality may not last long either. Yet it still represents a political bargain notably absent in Brazil and Mexico, the region’s No. 1 and No. 2 economies respectively.In Mexico, Lopez Obrador is taking advantage of his popularity and majority in congress to follow a more Quixotic route, focusing for weeks on preventing an economic collapse before shifting gears Thursday when he called on people to stay home. Bolsonaro has left state governors with no other option than to take the difficult decisions themselves, sending conflicting messages to the country of 210 million.Read More: Latin America Isn’t Ready for the Virus Onslaught Headed Its WayIt’s true the coronavirus offers a distraction for Fernandez, who has yet to unveil a comprehensive plan to take Argentina out of the economic crisis. It also justifies more social spending on his base. Regardless of any political motives, he may have bought Argentina valuable time to fight the virus.“We saw what was happening in Europe, we had the images in newspapers of Spain and Italy, countries very close to us, that created anxiety and stress in Argentina, and the government went out to attack the situation,” said Juan Negri, a political science professor at Torcuato Di Tella University in Buenos Aires. “He’s trying to anticipate the worst case scenario of a social crisis exploding.”It’s too early to say if Fernandez’s approach will work any better than those of Lopez Obrador or Bolsonaro. But if it does, he might just have a chance to heal Argentina’s bitter political divide, according to Blanco, of Verisk Maplecroft.“If steered well, it could cement him as the leader for the population, including people who didn’t vote for him,” she said.(Adds decision to close borders in 11th paragraph and updates number of cases in 20th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- At first blush, this coronavirus pandemic would seem to be social media’s moment. Social distancing has us stuck in our homes, cut off from family and friends, trying to work, parent or — blessed be — both, and most of all trying to keep up with the avalanche of information coming out every day about Covid-19.Indeed, Facebook use is surging — the company reports that in Italy time spent across its apps (including WhatsApp and Instagram) is up as much as 70% since the outbreak began there. Twitter has seen an increase in activity, too. I alone am probably worth a few percentage points of that uptick, given how often lately I’ve stared into the blue glow of my iPhone.This is not a positive development. User sentiment on these platforms has become overwhelmingly negative since the virus hit, according to marketing companies that track such things: Feelings of fear and disgust are rising along with the number of posts. Pre-pandemic studies conducted on heavy Facebook use consistently show that it increases rates of depression, anxiety and loneliness. That’s the last thing we need during a deadly disease outbreak, when we’re confined to our homes, grieving for lost normalcy and feeling anticipatory grief over future lost lives.Even if all the information circulating on social media could be trusted — which of course, it can’t — now is not the time to continually seek new information.In many situations, accumulating facts can alleviate anxiety, since nothing is more fearful than the unknown. “People are not very good at coping with uncertainty,” says Tomas Chamorro-Premuzic, professor of business psychology at University College London and Columbia University, in what feels like a bit of an understatement. In normal circumstances, rationally collecting facts can be a healthy way to cope. But that’s not the case here.Getting more information “is helpful when it influences what you would do,” says Alice Boyes, author of “The Anxiety Toolkit.” “But at the moment, most of us are doing all the things we can possibly do.” We’re hunkered down, washing our hands, staying six feet away from others.“When you’re already doing all you can do,” she says, “there’s not much additional benefit” in seeking more information.Moreover, humans are naturally inclined to pay attention to bad news, says Chamorro-Premuzic. And a lot of the news right now is bad. We may be spending more time online out of a sense of desperation or helplessness, or even just because many of us have more time on our hands. But if we’re mainlining bad news, we could be escalating our own anger and fear.There are times when that’s useful. Experts call it “upregulating,” says Boyes — amping up our negative emotions to help us summon the energy to act. Studies have found that amping up your anger can sometimes help you find courage, for example, and amping up fear can help you fight or flee. But it’s only helpful to a point. We may be doing more harm than good now — sowing panic in others as well as ourselves.Emotions can be contagious in real life, says Boyes, as well as online, because social media algorithms amplify the most intense posts so that we all get exposed. As social feeds have turned into a seething ocean of anxiety, fear and anger, there’s a risk of escalating and spreading these feelings via retweets and likes.Anger is, of course, one of the stages of grief. It’s normal to be angry that shoddy leadership has left us unprepared for this pandemic; that certain senators seemed more interested in preserving their personal wealth than in acting to protect the public; that delay and disorganization will put lives at risk. But anger is best channeled toward some productive purpose, whether it’s calling members of Congress or rage-sewing DIY masks.Another reason social media may be so appealing in these alarming times is that using it doesn’t take much mental discipline. When I suggested to Boyes that maybe a better use of time could be reading a book, she (politely) shot down the idea: For most of us, it’s just too hard to concentrate right now.Nevertheless, we can practice what one uncle of mine called “social media distancing” — it’s O.K. to check Facebook, but once or twice a day. It’s O.K. to check Twitter, but not after 9 p.m. You can quarantine your social media to prevent it from infecting your whole day.“Let’s not forget that these media were addictive in the first place — they were designed to be addictive,” Chamorro-Premuzic warns. He suggests it might be easier to avoid Facebook and Twitter if you intentionally replace them with something else. “Pick an activity that is somewhat distracting, somewhat rewarding and somewhat useful,” he suggests.As for me, rather than refresh Twitter, I’m going use my phone the old-fashioned way: to call a friend.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Sarah Green Carmichael is an editor with Bloomberg Opinion. She was previously managing editor of ideas and commentary at Barron’s, and an executive editor at Harvard Business Review, where she hosted the HBR Ideacast. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- With the U.S. now surpassing all other countries in the number of coronavirus cases and health experts estimating the peak may still be weeks away, President Donald Trump’s administration is having a harder time defending tariffs on health-related goods imported from China.That’s especially true for products used in the U.S. response to the pandemic that are in high demand but running short on supply, such as ventilators, surgical masks and hand sanitizers.Gojo Industries, the inventor and manufacturer of Purell-branded products, builds its hand-sanitizer and soap dispensers in the U.S., but a key input that ensures the dispensers work is made in China and subject to a 25% duty.In a tariff-exemption request last year, Akron, Ohio-based Gojo said it’s exploring third-country sourcing but added that unilaterally moving production would require reverse engineering of a key chip that’s manufactured by a Canadian company in China. “Such action would violate their intellectual property” and Gojo “does not control the ability to move that production,” the submission reads.The U.S. Trade Representative denied Gojo’s request earlier this month, saying the company failed to show that the duties “would cause severe economic harm to you or other U.S. interests,” according to USTR General Counsel Joseph Barloon’s letter on March 5.Three weeks later, the USTR issued exemptions for Apple’s watches and a range of other products that have no apparent link to Covid-19.The USTR didn’t respond when asked if the Gojo denial would be reassessed as part of a new exclusion process to identify more products needed to treat the virus or limit its outbreak.Publicly, American officials have doubled down on their tariff strategy and are calling for a rethink of supply chains, especially when it comes to key medical products.The reliance on other countries for those supplies has created a strategic vulnerability for the U.S., trade chief Robert Lighthizer said. “By encouraging diversification of supply chains and — better yet — more manufacturing in the U.S., President Trump’s economic and trade policies are helping to overcome that vulnerability,” he wrote in a Wall Street Journal editorial last week.Charting the Trade TurmoilConsumers across the globe are still loading their pantries — and the economic fallout from the virus is just starting. The specter of more trade restictions is stirring memories of how protectionism can often end up causing more harm than good. That adage rings especially true now as the moves would be driven by anxiety and not made in response to crop failures or other supply problems.Today’s Must ReadsSecond wave | Much of China’s industrial sector is ramping up production, only to find another painful economic shock: canceled orders from the U.S. and Europe. Workplace safety | Food workers getting sick is the latest threat to the global supply of everything from vegetables to pork, with quarantined workers at production facilities raising fresh concerns. Faster decoupling | One of Apple’s manufacturing partners said half its capacity could reside outside China within a year, underscoring the shift companies are making outside the world’s second-largest economy. Battle fields | Europe’s farmers are struggling to find people to harvest rapidly ripening fruits and vegetables, as the coronavirus prevents hundreds of thousands of migrant laborers from leaving home. Pulling the plug | Sony said fallout from the coronavirus may wipe out a previously projected increase in its profit and force it to delay an earnings report scheduled for April.Bloomberg AnalysisShrinking growth | A global recession has begun, according to a Bloomberg Economics review. Troubled waters | A Bloomberg Intelligence webinar explains how ship owners are positioned to weather the crisis. Use the AHOY function to track global commodities trade flows. See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities. Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Shareholders of companies such as airlines have a case to make when they argue that the coronavirus pandemic is nobody's fault, and therefore any entity that needs government relief shouldn't be penalized when it seeks public assistance. Why put restrictions on stock buybacks or executive compensation for a publicly traded company seeking aid if small businesses making similar requests don't receive the same restrictions? But in a situation like this requiring significant new legislation and spending, maintaining public trust and support is paramount. If penalizing shareholders and executives is what it takes to ensure political support and keep the country united behind the work of Congress, then it's worth doing, regardless of whether it's fair.A key question is why publicly traded companies alone warrant restrictions. Nobody's clamoring for workers to pledge not to buy a car or smartphone until they pay back whatever assistance they get from the government. There's not even a requirement that they repay. The same goes for small businesses that have been forced to close because of voluntary or state-ordered mitigation efforts in the fight against Covid-19. What makes American Airlines any different?The most common complaint about airlines seeking assistance is that they spent tens of billions of dollars buying back their shares during the past decade. If they hadn't done that, the argument goes, they'd have the money to survive this shock.This specific argument against buybacks has only come about in response to the crisis. For most of the decade, the argument against buybacks was that it was shortchanging investment, and hence, economic growth. I'm not aware of anyone arguing in 2016 that airlines and hotels should hoard cash in preparation for a pandemic rather than buy back their shares.Stockpiling cash also would have been untenable. Activists have spent much of the past decade pushing companies to take more shareholder-friendly actions. Just this month Elliott Management Corp. successfully pressured Twitter to agree to buy back $2 billion of its shares. Companies that hold excess cash quickly find themselves under assault from activist investors demanding that spare cash be returned to shareholders.Perhaps the public just hates stock buybacks. Maybe the tax code should be changed so that buybacks and dividends are treated equally because there doesn't seem to be the same level of outrage over dividends. AT&T pays more than $10 billion a year in dividends without earning the wrath of the public.In all likelihood, the public anger over aiding large companies stems from both the level of buybacks during the past decade, and lingering resentment over taxpayer assistance to Wall Street in the financial crisis. Banks and investors got bailed out while Main Street was left with a jobless recovery and a decade of subdued wage growth. And during the ensuing decade, the public has rightly felt that big companies went right back to business as usual, focusing on shareholders and executive compensation rather than workers and the common good. It's not hard to see why there might be an uneasy sense of déjà vu, with critics of the financial-crisis bailout seeing an opening to exact some revenge for bad corporate behavior.So it's understandable why there are demands that publicly traded companies seeking government relief should have strings attached to that assistance. What we're going through isn't a typical recession. It's a forced cessation of commerce as a way of fighting a lethal virus. Congress is close to wrapping up a third bill to help the economy weather this storm, but in all likelihood it won't be the last. States and local governments are experiencing a large decline in tax revenue and it may turn out that the $2 trillion in the current package is insufficient. Keeping the public engaged and supportive of new rounds of legislative aid is critical. If part of that effort means shortchanging some investors and limiting executive compensation, that's good politics.To get through this fight, everyone's going to have to give up something. Medical workers are accepting great risk to their own health to treat sick patients. Families are having to cancel vacations and postpone weddings. Parents are working at home while taking care of their kids as schools close for weeks or months. Millions of workers are losing their jobs. Fiscal conservatives are having to stomach trillions of dollars in new spending. Progressives have to accept large companies getting government assistance. If that means executive compensation and shareholders of some companies gets restrained for a while to shore up public support for fiscal bills, nobody should shed any tears.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Conor Sen is a Bloomberg Opinion columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Sony Corp. said fallout from the coronavirus may wipe out a previously projected increase in its profit and force it to delay an earnings report scheduled for April.The Japanese company said two factories in China are returning to normal operation but continue to face component shortages, while facilities in Malaysia and U.K. will remain shut until middle of April because of government requests. Sony said it can’t dispatch employees to these locations to discuss assembly of new products.Sony had raised its forecast on Feb. 4, saying operating income will probably reach 880 billion yen ($8.1 billion) in the year ending March 31, compared with the 840 billion yen forecast in October. If profit comes in at the earlier figure, that would be a shortfall of about $370 million.“Given their high exposure to consumer spending, it is not surprising that COVID-19 is having an adverse impact on their business,” said Damian Thong, an analyst with Macquarie Capital.Sony joins a growing list of corporations forced to revise or scrap financial forecasts because of the virus.Apple Inc., Expedia Group Inc., and Twitter Inc. are among the technology companies that have withdrawn or modified guidance in the wake of the pandemic, which has disrupted supply chains, upended demand and forced millions of people to work from home. On Thursday, Dell Technologies Inc. and VMWare Inc. became the latest to withdraw their earnings outlooks.Sony had been benefiting from strong demand for the image sensors that power smartphone cameras, but production and sales of such devices have taken a hit in recent weeks. It supplies Apple and Samsung Electronics Co., among others.A Sony spokeswoman said it doesn’t see any notable impact on the launch of its next-generation game console PlayStation 5 planned at the end of this year.Sony shares have slid about 10% this year.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.