Know someone who would like this newsletter? Forward it to them.
The World
The U.S. economy won't bounce back until 2022 even with good vaccine rollout, according to new BCG analysis. Under its most likely scenario, a “good-but-not-great rollout [of a vaccine] delays defeating the pandemic by about six months, until the first quarter of 2022.” The firm presents an even darker timeline in which less effective trials, delayed authorization and distribution of the vaccines mean the pandemic continues for another two years. Meanwhile, McConnell warned the White House against making a stimulus deal, suggesting that Democrats are not negotiating in good faith and could disrupt Supreme Court nomination — while the White House says aid to states and cities is the biggest stimulus sticking point. 66% of U.S. likely voters want the Senate to prioritize coronavirus relief over filling the Supreme Court vacancy (34%), while 10 of higher education’s most influential associations signed an urgent appeal calling for billions of dollars in supplemental aid to help colleges survive the current “existential crisis.” (Finance 202, Washington Post, New York Times, CNBC, Chronicle of Higher Ed)
CEO confidence has skyrocketed on expectations of layoffs and wage cuts, jumping 19 points since July, and rising above the 50-point threshold that reflects more positive than negative responses for the first time since 2018. However, CEO confidence may not be a good sign for workers. Over the next 12 months, 37% of CEOs expected to reduce capital budgets in the year ahead, while 38% expected no change and 25% anticipated increasing spending. 34% expected a net reduction in their workforce, another 34% expected no change and just 9% expected an expansion of the workforce above 3%. 21% foresaw no increase in their employees’ wages and 5% said they may reduce wages. 62% of CEOs expected little to no problems finding qualified workers, while 11% expected widespread talent shortages or hiring problems. (Axios)
Defense Secretary Mark Esper said the U.S. will expand arms sales to ‘like-minded nations’ to counter China, Russia, as the U.S. also needs to help build capabilities of friendly militaries and boost ties with them. (South China Morning Post)
A number of people have been shot dead or wounded at a protest against police brutality in Nigeria's biggest city, Lagos. Witnesses and the rights group Amnesty International said several people were killed and wounded when soldiers opened fire. Lagos remains under lockdown. In Thailand, Prime Minister Prayuth Chan-ocha backed down over emergency measures he imposed last week to stop three months of protests, but demonstrators said it was not enough and demanded he resign within three days. (BBC News, Financial Times, Reuters)
Israel has been conducting undercover diplomacy in Bahrain for more than a decade through a front company listed as a commercial consulting firm. The existence of the covert diplomatic mission in the Bahraini capital Manama — which remained under an Israeli government gag order for 11 years — shows the depth of a secret relationship that came out into the open with a White House ceremony last month. (Axios)
Pope Francis called for the passage of civil union laws for same-sex couples, departing from the position of the Vatican’s doctrinal office and the pope’s predecessors on the issue. The remarks came amid a portion of the documentary that reflected on pastoral care for those who identify as LGBT. (Catholic News Agency)
Some good pandemic news: Contrary to some beliefs, lockdown and stay-at-home orders don’t appear to have led to the increase in suicides that many had feared. More good news: death rates are going down in hospitalized patients, suggesting that doctors are learning more about how to treat the virus. Meanwhile, a third wave appears underway, as the percentage of tests coming back positive is rising across the country, including in states that are also seeing a spike in cases. New Mexico Gov. Michelle Lujan Grisham called the current Covid-19 explosion the most dire crisis New Mexico has ever seen, while WI Gov. Tony Evers warned “our economy is going to tank,” as his state’s surge shows no end in sight. The Washtenaw County (MI) Health Department issued a stay-in-place order for University of Michigan undergraduate students, effective immediately until Nov. 3. (Washington Post, NPR, MedRxiV, Axios, Santa Fe New Mexican, Milwaukee Sentinel Journal, Michigan Daily)
Three-quarters of U.S. farmers say they will vote for President Trump, despite trade disruptions, tumbling grain prices and rising farm bankruptcies. (Farm Futures)
Economy
64% of corporate decision-makers said they are making permanent a significant increase in remote working. One-third say they will permanently shrink their office footprint accordingly. The survey also found corporations are placing more priority on environmental sustainability and social responsibility and three-quarters (77%) of those surveyed will be extending new workplace flexibility considerations to their employees. Separately, BCG reports that “a very small fraction” of the company’s roughly 21,000 workers are back in offices globally. (Finance 202, S&P Global Market Intelligence)
Fund managers betting that green-type stocks with ESG credentials will benefit from an expected Biden win are also looking at a swathe of other companies expected to rise along with them, such as solar and clean energy. Meanwhile, automakers are gearing up for tough new vehicle emissions standards and policies favoring electric vehicles. (Reuters)
The market for leveraged buyouts has sprung back to life after private-equity firms finished triaging their coronavirus-stricken portfolio companies and shifted attention back to their mounting cash piles. In 3Q20 firms struck $146 billion of new deals globally, up from a feeble $53.3 billion in the second quarter and $103.8 billion in the third quarter of 2019. In the opening weeks of the fourth quarter, $17.4 billion of buyouts have already been announced. (Wall Street Journal)
PayPal joined the cryptocurrency market, allowing customers to buy, sell and hold bitcoin and other virtual coins using the U.S. digital payments company’s online wallets. (Reuters)
Apprenticeship-style programs are paying off for graduates, who typically earn nearly six figures within five years of graduation. These program graduates earn about $59,164 one year after completing the program — 63% more than non-program graduates. After five years, program graduates were earning about $98,000, 86% more than non-participants. (NPR, Wall Street Journal, Opportunity America)
Children’s uninsured rate rose by largest annual jump in more than a decade. After reaching a historic low of 4.7% in 2016, the child uninsured rate began to increase in 2017, and as of 2019 jumped back up to 5.7% — translating to approximately 726,000 more children without health insurance. Meanwhile, children's hospitals are projected to lose $10 billion in revenue by the end of 2020, as states struggle to maintain their Medicaid budgets. (Georgetown University, HealthcareDive)
Technology
The DOJ says Google monopolizes search. Here’s how: The case centers on Google’s tactics and market dominance in search. It currently receives 80% of all U.S. search queries, and the DOJ says it uses the tens of billions of dollars of annual profits from search advertising to unfairly suppress its competition. The DOJ is not explicitly looking to break up Google or impose fines. Rather, it’s asking for “structural relief as needed to cure any anticompetitive harm.” In layman’s terms, this means selling part of the business off. The judge who will preside over the case is an Obama appointee. Meanwhile, Texas joined the lawsuit, as Google-parent Alphabet's stock (up 14% for the year) is underperforming the Nasdaq and other big techs. Facebook is up 29% for the year, while Apple and Amazon have jumped 58% and 73%, respectively. (MIT Technology Review, New York Times, Texas Tribune, Wall Street Journal)
Netflix’s 3Q20 growth cooled considerably with just 2.2 million new subscribers — below Wall Street’s expectations and under the Netflix’s own forecast of 2.5 million, and following record adds in 2Q20 (10.1 million) and 1Q20 (15.8 million). Conversely, Snap posted Snapchat’s highest daily active user growth rate since 2017 and significantly topped 3Q20 revenue expectations, rocketing the stock more than 20% to new all-time highs. Much of the growth came internationally, as Snapchat’s Indian users rose 150% in 3Q20. (Variety, Variety-2, The Information)
Chinese tech companies including Huawei expressed strong concerns to local regulators about Nvidia’s proposed acquisition of Arm, potentially jeopardizing the $40 billion semiconductor deal. Several of the country’s most influential tech firms have been lobbying the State Administration for Market Regulation to either reject the transaction or impose conditions to ensure their access to Arm technology. Meanwhile, Sweden will ban Huawei and ZTE from supplying 5G services. (Bloomberg, PTS.SE)
Financial technology startups usually launch with a single, core product. But over time they tend to add features and services. Lately, they’re coming to resemble more closely the very incumbent banking giants they sought to disrupt, with one-stop-shopping for an array of financial services. (Crunchbase)
Smart Links
2020’s 100 Most Sustainably Managed Companies: Sony’s No. 1. (Wall Street Journal)
2021 Best Global Universities Rankings: Harvard’s No. 1; Oxford top non-U.S. school. (U.S. News & World Report)
Bob Iger invests in vegan dairy start-up Perfect Day, seeing ‘enormous potential’ in animal-free food trend. (Financial Times)
A “property gold rush” is underway in Montana. (Washington Post)
NASA spacecraft successfully touches asteroid. (NASA)
28% of college students come from immigrant families (up from 20% in 2000). (Inside Higher Ed)
CUSIP requests surge in September led by higher corporate and municipal totals. (S&P Global)