The World
The top executives of more than 100 companies — including Starbucks, Microsoft and Mastercard — and trade groups are calling on Congress to backstop small businesses facing economic calamity. The executives painted a dire picture: mass business closures as coronavirus cases surge and the recession deepens. Meanwhile, one-third of New York’s small businesses may be gone forever, as more than 2,800 businesses in NYC have permanently closed since March 1, according to data from Yelp, a higher number than in any other large American city. Separately, nearly half of all furloughed workers believe their temporary layoff will become permanent, while the U.S. expects to borrow an additional $2 trillion in 2H20 as federal spending ramps. (Washington Post, New York Times, CNBC, Wall Street Journal)
The Fed has long resisted becoming the world’s backup lender. But it shed reservations after the pandemic went global. During two critical mid-March weeks, it bought a record $450 billion in Treasurys from investors desperate to raise dollars. By April, the Fed had lent another nearly half a trillion dollars to counterparts overseas, representing most of the emergency lending it had extended to fight the coronavirus at the time. (Wall Street Journal)
Americans' satisfaction with the way things are going in the U.S. continues to tumble since it started trending downward at the beginning of the pandemic. 13% of U.S. adults are satisfied with the state of the nation, down 7% in the past month and 32% since reaching a 15-year high in February. Satisfaction has not been this low since November 2011. (Gallup)
The Lancet warns that Britain could be hit by a severe second wave this winter — double the size of the initial outbreak. France, too, is likely to face second wave in months to come, say advisers. Meanwhile, the IMF warns that a virus resurgence could plunge emerging economies into a debt crisis. In the U.S., cases are climbing in Midwest states with previously low infections. (Washington Post, Financial Times, Financial Times, Washington Post)
China vows it will take action if TikTok is forced to sell its U.S. operations, while President Trump said twice that the U.S. Treasury would need to get a portion of the TikTok sale price as a condition of regulatory approval. Separately, China vowed to retaliate if the U.S. persisted with “hostile action” against Chinese journalists who may be forced to leave in coming days if their visas are not extended. (Nikkei Asian Review, Axios, Reuters)
The U.S. Census Bureau is ending all counting efforts for the 2020 census on Sept. 30, a month sooner than previously announced. (NPR)
The public's view of almost every industry has improved since the beginning of the pandemic, with the exception of the media and airlines industries. 75% of consumers agree "companies were more reliable than the federal government in keeping America running." 81% agree that large companies "are even more vital now to America's future than before the pandemic." Leading the index are companies that focused on solving problems, including grocers, consumer packaged goods, streaming giants, and pharmacies. (Axios/Harris poll)
Economy
Private equity firms pledge to reduce carbon emissions in new sustainability push. So far, 47 firms have signed up to Initiative Climat International (iCI), a global network that will share knowledge, tools, experience, and best practice to help build and manage both climate-aligned and climate-resilient portfolios. Meanwhile, Farmers Business Network, a farmer-to-farmer information network, financing and e-commerce platform, raised $250 million at a $1.75 billion valuation. (Private Equity News, Bloomberg)
Hedge fund launches pick up: Raising money for a new hedge fund long was contingent on a host of in-person meetings. But a slate of managers are launching sizable startup funds despite complications wrought by the new coronavirus. (Wall Street Journal)
Chipotle Mexican Grill wants to hire another 10,000 employees in coming months as its sales rebound, one of several big restaurant chains looking to add staff. McDonald’s Corp, Starbucks Corp and Taco Bell parent Yum Brands Inc are seeing sales recover. Dunkin Brands Group Inc wants to hire 25,000 new restaurant employees. Meanwhile, U.S. manufacturing activity neared a 1-1/2-year high, while construction spending extended its drop. (Reuters, Reuters)
Facebook agreed to lease all the office space in the mammoth 107-year-old James A. Farley Building in Midtown Manhattan, cementing NYC as a growing global technology hub. With the 730,000-square-foot lease, Facebook has acquired more than 2.2 million square feet of office space in the city for thousands of employees in less than a year, all of it on Manhattan’s West Side between Pennsylvania Station and the Hudson River. Apple, Amazon and Google all lease space in the same area. Meanwhile, office markets remain under pressure as companies rethink rented space.(New York Times, Wall Street Journal)
Selection risks decreased in Western Europe, pushing the region further above the risk-return trendline from an already favourable position, and making it the most attractive region globally for private equity on a risk-return basis. Within Europe, Benelux, Nordic and UK LBO funds maintained their position at the top of the return spectrum, delivering IRRs of 16.64%, 16.29% and 15.6% respectively. Elsewhere, Chinese and Hong Kong LBO funds are positioned well above the trendline, with an IRR of 9.9%, signifying strong performance, and a notable decline in risk over the past year. Meanwhile, the US preserved its position as the best-performing VC market globally, with an IRR of 14.3%. Italy was the leading performer in Europe, recording an IRR of 10.9%. (Private Equity Wire)
Technology
Goldman Sachs is building an M&A dealmaking app called Gemini, which is already being used by Goldman’s bankers. The firm hopes clients will use it to identify under-performing parts of their businesses that make them vulnerable to attacks by activist investors or those that score poorly on environmental, social and government issues — allowing them to identify sale or spin-off opportunities and possible takeover targets. (Bloomberg)
Why Microsoft wants TikTok (hint: It’s the data): At first glance, a Microsoft acquisition of TikTok seems a little unusual. How does a service that caters to dancing teenagers fit with Microsoft’s buttoned-up business demographic? A move to acquire TikTok’s operations in the US, Canada, Australia, and New Zealand could benefit many of Microsoft’s existing businesses while setting the company up as a real competitor to YouTube and Facebook. The key part of any TikTok deal will be the data and users Microsoft gains access to. Meanwhile, Apple says it has no interest in buying TikTok. (The Verge, Reuters)
Twitter expects a fine of as much as $250 million for using personal information users provided for security purposes to target advertising instead, after receiving a draft complaint from the Federal Trade Commission, adding that the breach could hurt its ability to grow its user base and impact its brand and reputation among advertisers. (CNBC)
Bloomberg Media will launch a bundled subscription with The Athletic beginning this month, as it sees value in partnering with niche media outlets that it thinks can compliment its coverage. (Axios)
Smart Links
People live longer in blue states than red, pointing to impact of state policies. (Los Angeles Times)
The collapse of the ad industry, by the numbers. (Marker)
Traffic to career sites is down. (Axios)
Virgin Galactic reveals supersonic jet that would fly 3X speed of sound. (Space)
Demolishing vacant houses can have positive effect on neighbor maintenance. (Science Daily)
Most NFL, college football fans don’t believe seasons should begin as scheduled; 1 in 4 MLB fans say cancel season immediately. (Morning Consult)