The World
Celebrations over the EU's €750 billion Recovery Fund have been rudely interrupted. Italy is warning that the money will not come soon enough to avert an autumn liquidity squeeze, as the treasury will struggle to cover both a budget deficit near 12% of GDP and to redeem debts coming due over coming months. Meanwhile, the UK economy could take until 2024 to return to the size it was before the coronavirus lockdown, according to analysis from the EY Item Club, suggesting unemployment will rise to 9% from 3.9%, while the economy will shrink by 11.5% this year, worse than the 8% they predicted only a month ago. Europe’s biggest banks are expected to provision at least €23bn for loan losses in the second quarter, as the U.S. dollar sank to two-year low on U.S. economic concerns. (The Telegraph, BBC, Financial Times, Financial Times)
Beijing claimed the property of the U.S. consulate in the southwest city of Chengdu this morning. Meanwhile, Philippine President Rodrigo Duterte said Beijing was already "in possession" of the disputed South China Sea and Washington's return to a former naval base in the Southeast Asian country could raise the specter of war. Nevertheless, the number of IPOs by Chinese companies on Wall Street has more than doubled since the start of the year. (The Times, Nikkei Asian Review, Financial Times)
Latin America coronavirus cases surpassed combined U.S. and Canada infections for the first time, amid a surge in Brazil, Mexico, Peru, Colombia and Argentina, making it the world’s most impacted region, with 26.83% of global cases. China experienced its highest daily new case count since March, while Vietnam reintroduced quarantine and contact tracing and is evacuating 80,000 people from Danang. Meanwhile, Spain insists it remains a safe destination for tourists after Britain warned against “all non-essential” travel there and ordered returning visitors to self-quarantine for a fortnight — followed by Norway’s announced 10-day quarantine requirement. (Reuters, Reuters, Bangkok Post, The Guardian)
Google will keep its employees home until at least next July, the first major U.S. corporation to formalize such an extended timetable. The move will affect nearly all of the roughly 200,000 full-time and contract employees across Google parent Alphabet Inc. (Wall Street Journal)
U.S. National Security Adviser Robert C. O’Brien tested positive, the highest-ranking administration official known to have tested positive for the virus. Meanwhile, 11 Miami Marlins players tested positive for COVID-19, resulting in the postponement of its home opener against the Baltimore Orioles. The Marlins’ traveling parting is “self-quarantining in place” in Philadelphia while waiting for additional results — under MLB’s 2020 operations manual, players or coaches who test positive on the road are required to remain in that city and quarantine for 14 days, and must test negative twice at least 24 hours apart to return to the roster. The Phillies' home game against the New York Yankees also was postponed, as Miami just completed a series in Philadelphia. (Washington Post, Miami Herald, Washington Post, ESPN)
U.S. leadership remains unpopular worldwide, as the median global approval rating for U.S. leadership across 135 countries and areas edged up to 33% in 2019. Germany remained the top-rated global power for the third consecutive year, albeit on firmer footing than in the past several with a 44% approval rating. U.S., China and Russia’s approval ratings continue to cluster closely together in the lower 30s. (Gallup)
Economy
Oil prices dropped nearly 2%, as rising coronavirus cases and U.S.-China tensions clouded the outlook for oil demand’s recovery. Meanwhile, U.S. oil companies have raised production by 1.2 million barrels a day over the past six weeks, as they restore wells shut earlier this year as prices sank. (Reuters, Financial Times)
Goldman Sachs is adopting a performance review system that will grade up to 10% of its 39,000 employees as under-performers this year, according to an internal memo sent on Monday, potentially leading to more job cuts in 2021 than the bank has made in recent years. (Reuters)
Grocery shoppers are still stocking up and spending more per trip: 50 percent of shoppers say they’re spending more on groceries, and 66 percent say they are spending less on eating out than they did pre-pandemic. (Specialty Food)
As CEOs grapple with one of the biggest crises of their tenures, they may or may not be aware of the how those challenges are being felt in the boardroom. 1) They’re getting the message about diversity and social change. 2) Crisis brings out the best (and worst) in board members. 3) It’s time to get serious about succession planning. 4) The Covid crisis may take its toll on tenure. (Chief Executive)
Technology
Tencent’s WeChat cut off service in India amid the country’s ban on Chinese apps, as India considers banning 275 more China-originated apps. Meanwhile, Chinese firms are investing billions of dollars in India's e-commerce market. In one of the biggest deals, Alibaba has backed Paytm, India's most valuable unicorn. (South China Morning Post, The Next Web, The Wire China)
The pandemic is threatening the dominance of ‘superstar’ tech cities, creating new uncertainty for innovation hubs. The cities where tech has driven population spikes and surging home prices are confronting sudden budget shortfalls and scrambling to adjust. Seattle and San Francisco — home to the largest and most valuable tech companies in the country — are considering new business and wealth taxes to make up for the lost revenue. (GeekWire)
What Private Tech Firms Should Watch Out For in SPACs: For private tech companies looking to go public, they offer a new route for raising money that—unlike a direct stock listing—is faster than a traditional initial public offering. Several tech firms have gone this route to the public markets, including online lending platform Open Lending, online betting and fantasy sports firm DraftKings, electric truck powertrain maker Hyliion and plant-based–food company Tattooed Chef. More tech deals are in the works. (The Information)
XR hardware and consumer software revenue is now projected to reach $6.9B in 2020, up from a prior estimate of $6.3B. Continued strong demand, combined with new headsets launching in 2H20, mean VR hardware earnings are expected to generate $2.5B in 2020 and rise slightly year-over-year. (SuperData Research)
The world’s leading brands are jumping on the direct-selling bandwagon, as they seek not just sales but data, too. (The Economist)
Smart Links
Apple to give employees paid time off to vote in U.S. election. (Bloomberg)
Redfin data shows more homeowners looking to move out of Seattle, SF. (GeekWire)
AI hiring firm predicts '“job hopping” based on prospects’ interviews. (MIT Technology Review)
These 4 countries are accepting American travelers for remote-work trips. (Washington Post)
Neanderthal gene linked to increased pain sensitivity. (Nature)
Learn More (7/30): MIT Sloan Senior Lecturer and Research Scientist Renee Richardson Gosline discusses the application of behavioral science “nudges” in the customer journey and digital customer experience. (Register: MIT)