The World
Fed policymakers worry that growth is plateauing, as state and local governments from Georgia to California cut money for schools, universities and other services. NYC’s unemployment rate is hovering near 20%, the highest since the Great Depression. Texas saw a $650 million drop in tax revenue collected in June, while nationally the public sector has shed more than 1 million jobs, as governments slash staffs to balance budgets. (Reuters, New York Times, Wall Street Journal, Washington Post)
China approved a 3-year plan to enhance the role of state-owned enterprises, as President Xi told Russian President Putin that China and Russia should stand firmly together against hegemony and unilateralism, and intensify their strategic communication and cooperation. Separately, FBI Director Wray said acts of espionage and theft by China's government pose the "greatest long-term threat" to the U.S. future. Meanwhile, as Germany reappraises its longstanding reliance on the U.S., leaders see growing need to reenergize its partnership with China, Germany’s largest trading partner. (South China Morning Post, South China Morning Post, BBC, Politico)
Israel is in a ‘dangerous place’ as virus infections surge, as its top health official quits amid warnings that country has ‘lost control of pandemic’ and the country is seen as “a ship without a rudder.” Meanwhile, Sweden’s decision to carry on in the face of the pandemic has yielded a surge of deaths without sparing its economy from damage. “They literally gained nothing,” said a senior fellow at the Peterson Institute for International Economics. “It’s a self-inflicted wound, and they have no economic gains.” (Financial Times, Jerusalem Post, New York Times)
Employees face a child-care crisis, as working parents face dwindling options for financial help as employers begin to call them back to work. (Washington Post, Bloomberg Law)
Harvard and MIT sued to block the U.S. government’s directive that would strip foreign college students’ visas if their coursework was entirely online. (New York Times)
As the Trump administration threatens to cut off funding to schools that do not open in the fall, NYC public schools will not fully reopen in September, as in-person classes will be limited to 1-3 days a week. San Francisco schools also are unlikely to send all kids back full-time, and MI schools expect teacher absences to increase. Still, a survey of 20,000 students (grades 5-12) finds that just 39% said they learn a lot every day during remote learning. (Reuters, New York Times, San Francisco Chronicle, Education Week, EducationDive)
Bets on a relatively smooth reopening of businesses across America are fizzling out in the stock market. Meanwhile, as stores reopen, in-store events are less important to consumers than safety precautions.(Wall Street Journal, Civic Science)
Economy & Finance
June business spending was down 10.9% from last year but up about 2.7% from May, with gains in manufacturing and transportation spending. Meanwhile, homebuyer mortgage demand spiked 33% as rates set another record low. (CNBC, CNBC)
Companies chose furloughs over layoffs to manage the slowdown: Of the 87 firms in the S&P 500 to announce staff reductions from early March through the end of June, 65 chose to furlough workers. (Wall Street Journal)
Financial services firms suffered their sharpest ever downturn in 2Q20, with as many as 62% hit by a slowdown. (The Telegraph)
Over 80% of private equity managers integrate ESG criteria into their investment process. As ESG implementation continues to gain traction in the market, the number of PE managers ranked ‘excellent’ or ‘good’ on ESG integration has increased by 78% since 2015. (Funds Europe)
Interest in sustainable investing was not wiped out in the March U.S. stock market crash, as 46% of investors polled in May described themselves as very or somewhat interested in sustainable investing funds, little changed from 52% saying the same in mid-February as market indexes approached record highs. (Wells Fargo/Gallup poll)
M&A deal value fell 50% to $1 trillion in 1H20, the lowest level since the depths of the euro-zone debt crisis. Finance and Asia technology were among the rare bright spots. (Bloomberg)
Technology
Senior Facebook executives, including CEO Mark Zuckerberg, failed to adequately address concerns behind a growing advertiser boycott of nearly 1,000 companies during a private meeting — pointing toward a possible protracted campaign extending beyond July’s original time frame. (The Information, Wall Street Journal)
Facebook and Google’s ad market has rebounded from its bottom, rising roughly 1% every 10 days since early April when prices hit a low. Facebook will likely show a stronger rebound than Google when the companies start to report financial results later this month. That’s even considering a potential drag on Facebook sales from the advertiser boycott announced in late June. (The Information)
Walmart’s Amazon Prime competitor will launch in July: Walmart+ will cost $98 a year and include same-day delivery of groceries, fuel discounts, and other perks. (Recode)
The Federal Trade Commission and the U.S. Justice Department are looking into allegations that popular app TikTok failed to live up to a 2019 agreement aimed at protecting children’s privacy. (Reuters)
Omnicom plans to spend $20 million on advertising in podcasts distributed by Spotify under a deal covering the second half of this year. (Wall Street Journal)
Smart Links
What does an M&A boutique do when the deals dry up? (Financial Times)
Why Japanese businesses are so good at surviving crises. (Harvard Business School)
Ryder Cup to be postponed until 2021, Presidents Cup pushed back. (ESPN)
Dr. Michael V. Drake named University of California president, the system’s first Black leader. (Los Angeles Times)
Podcast listeners are 39% more likely to be hybrid drivers. (Nielsen)
Europe’s tourist hot spots suffer as Americans are told to stay away. (Wall Street Journal)
Brooks Brothers, founded in 1818, files for bankruptcy. (New York Times)