The World
Economists are watching a raft of real-time data measuring everything from credit card spending to the extent to which people are venturing from home, as the crisis remains too fluid to judge solely by traditional indicators of stress. Their analysis depicts a recovery that peaked a month ago. The weeks since have seen an uptick in businesses closing permanently, a drop-off in consumer spending; and layoffs reaching into white-collar sectors that have typically proven more recession-proof. The upshot, economists warn, is likely a longer slog out of a deeper hole — and more permanent scarring. Meanwhile, Yelp reports that 55 percent of the business closures listed on its website as of July 10 are permanent, up 14 percent from June. (Finance 202, Yelp Economic Average Report)
The U.S. labor market recovery appears to stall with the first rise since March in weekly jobless claims to 1.4m as employers struggle with renewed lockdowns. Meanwhile, Senate Republicans won’t include a payroll tax cut in their emerging stimulus package. The trillion-dollar legislation is expected to include direct checks, school funding, limited unemployment insurance extension. (Financial Times, Washington Post)
China is believed to be shutting the U.S. consulate in Chengdu, a strategically important post given American interest in Tibet, in response to the Houston closure. However, more than 65% of respondents to nationalist newspaper Global Times’ online poll said China instead should close the U.S. consulate for Hong Kong. Meanwhile, Beijing has stationed eight warplanes on a strategic disputed island in the South China Sea, escalating tensions over territorial claims. Satellite images from July 15 showed at least four aircraft on Woody Island in the Paracels chain, believed to be J-11B air superiority fighters. (South China Morning Post, South China Morning Post, The Times)
After Britain said Hongkongers with British National (Overseas) passports will be exempted from income tests during their five-year stay in Britain before they can apply for full citizenship, China threatened to withdraw its recognition of BNO passports held by residents of Hong Kong in retaliation. Meanwhile, Morgan Stanley is blocking remote network access for China interns, as concern grows over Beijing’s cyber security rules. (South China Morning Post, Reuters, Financial Times)
As the U.S. surpasses 4 million known infections: Southwest says it will no longer let travelers without masks fly, enacting the strictest policy among U.S. airlines as, with American Airlines, it rethinks summer flight additions while demand stalls. Texas voters say 65 - 31% that the spread of coronavirus is "out of control," while 80% approve of the order requiring most people to wear a face mask in public (19% disapprove). Meanwhile, Brazilian President Jair Bolsonaro has tested positive for the third time. (New York Times, Washington Post, Reuters, Quinnipiac University poll, Reuters)
Only about 1 in 10 Americans think daycare centers, preschools or K-12 schools should open this fall without restrictions. Most think mask requirements and other safety measures are necessary to restart in-person instruction, and roughly 3 in 10 say that teaching kids in classrooms shouldn’t happen at all. (AP-NORC Center poll)
Economy
More than 25 large companies plan to reduce their office space in the year ahead, a move designed to reduce the second-largest expense after payrolls at corporations, a Reuters analysis of quarterly earnings calls over the past week revealed. (Reuters)
Investor appetite for tech private equity funds continues, as the economic turbulence makes the sector’s growth prospects and perceived resilience more appealing. A total of 33 private-equity funds focused on these types of investments closed this year through July 6, according to data provider Preqin Ltd., up from 32 funds that closed over the same period in 2019. Collectively, the funds raised $30.1 billion through July 6, a 21% drop from the same period a year ago, but still the third-highest sum on record during that period. Meanwhile, startup investments in Southeast Asia, led by e-commerce and fintech, nearly doubled despite COVID, while venture-capital funding for U.S. startups declined in 1H20. (Wall Street Journal, Nikkei Asian Review, Wall Street Journal)
M&A volume in health services for 1H20 was the lowest since 2015: Hospitals had 39 deals totaling $800 million in value, both year over year increases. For medical groups, the 66 deals represented 37% growth in volume from the year prior. Two subsectors did saw year-over-year growth: labs, MRI and dialysis and an other services category that includes medical office buildings. (HealthcareDive)
Billionaire Bill Ackman’s Pershing Square Tontine Holdings has raised $4bn to buy a ‘mature unicorn’ or private equity-owned company hit by the pandemic. (Financial Times)
European Central Bank Head Christine Lagarde says female leaders are doing a better job of handling the coronavirus crisis than men. Meanwhile, veteran CEO Betsy Atkins, who serves on the boards of Volvo Car Group, Wynn and SL Green Realty, revisited the works of the most prominent management thinkers of the past century-plus (Taylor, Deming, Ford, Drucker, Christensen and Collins) and came up with a series of fundamental questions worth asking business teams, including: 1) Have you clearly defined systems, tasks and continuity of work in this new environment? Are your employees clear on how work is to be conducted and what role their efforts play in the larger picture? 2) Do your leaders understand how all the parts of the system work together in this new environment? Are they clear on not just their goals but also the goals of other leaders, and the purpose of those goals? 3) Has your company researched and documented emerging best practices for leadership in this new, virtual workplace? Has your company developed any training programs to help front-line managers? Who is responsible for building their effectiveness in this changed environment? (The Guardian, Chief Executive)
Technology
China’s Tianwen-1 mission to Mars successfully lifted off shortly before 1pm local time today. The mission, which includes a lander, rover, and orbiter, is expected to arrive at the red planet in February 2021. It’s the first nation to try to transport all three components to Mars at once. (MIT Technology Review)
The New York Times said it would acquire Serial Productions, the maker of the hit podcast “Serial,” a deal that aims to further the newspaper’s podcasting ambitions. Meanwhile, imagine a NYT where you get your music and play digital games, along with your news. That vision is a big part of what Meredith Kopit Levien, announced as the company’s new CEO, sees as the future of the company. (Wall Street Journal, The Information)
Apple released a study defending the App Store’s 30% cut of digital goods — arguing the Apple’s App Store’s fees and practices are largely in line with other digital marketplaces, including the Google Play app store and the Amazon Appstore — ahead of Tim Cook’s congressional testimony next week. (CNBC)
Apple and Amazon offices were raided in Italy and its antitrust authority is investigating the companies after a local retailer complained they’d been banned from re-selling products on the online marketplace. Meanwhile, Slack filed an anti-competition complaint against Microsoft with the European Commission, claiming that the group unfairly bundles its rival Teams app with its Office 365 tools. (Bloomberg, The Times)
Twitter says it's looking at subscription options as ad revenue drops sharply. Twitter’s average daily user numbers surged by 34% in 2Q20 compared to a year earlier, to 186m - beating forecasts of 176m. But advertising sales - the core of Twitter’s revenue - fell 23% during the last quarter. (CNN, The Guardian)
Smart Links
5 best practices for strengthening the one-on-one review. (Chief Executive)
Jamie Dimon recalls what it was like being fired by Citibank 20+ years ago. (CNBC)
NYC escape pushes Hamptons home prices to 13-year high. (Bloomberg)
Union Square Hospitality Group ends no tipping policy. (Specialty Foods)
Exhaled biomarkers can reveal lung disease. (MIT News)
Astronomers capture first images of multiplanet system around sunlike star. (CNet)
How to stay productive when the world is on fire. (Wired)