fortune--2020-10-13--40 ‘recovery and reopening’ stocks to buy now, according to Morgan Stanley

Looking for upside? Check out “mispriced” stocks, say analysts at Morgan Stanley.
According to the bank, not only is the economic recovery “intact” and likely forming a V-shape, there are plenty of pockets where investors have not accurately priced in the coming recovery and eventual reopening—meaning opportunity for investors.
In a recent report, the bank’s analysts first lay out the good news: they expect global and DM (developed markets) GDP to reach their pre-COVID levels “by 4Q2020 and 3Q 2021, respectively.” The analysts further point out that retail sales in many areas are running above pre-COVID levels; that ‘PMI new orders to inventory level,’ which they call a leading indicator for the global cycle, is at multi-year highs; and overall U.S. household personal income “already reached 2% above pre-COVID levels in August.
Furthermore the analysts write that “The Morgan Stanley Biotech team expects we will see efficacy data from the 3 leading vaccine candidates in November…with a vaccine broadly available to the general population in 2Q21.” They conclude: “We would expect a broad-based dissemination of a vaccine to ultimately clear the way for the recovery to gain further momentum via the normalization of out of home activities.”
But even if you believe that relatively sunny outlook, there is the competing sense that the market may already be overvalued. As Fortune‘s Shawn Tully explained recently: “Imagine the 500 as S&P 500 Co., an enterprise that earns $120 for each share outstanding. What should the share price be? At the close on Monday, October 13, the S&P hit 3534, just 1.4% off its all-time high reached in early September. So by our reckoning, the S&P is putting a 29.5 multiple on its most probable future profits. Since 1990, its P/E has averaged 21.8; over the past 60 years, the norm is a much slimmer 16.9.”
Which is why Morgan Stanley’s analysts set out to hunt for names that haven’t yet been swept up in the market’s enthusiasm. They started with a quantitative screen estimating where stocks may be valued at the end of 2021 assuming they “hit analyst numbers and see a return to normalized multiples.” They kept the universe to companies with a market cap of over $1 billion, a high rating by a MS analyst, names that were at least 15% down from pre-COVID highs, and have significant EPS and price upside. Companies that have high premiums to the S&P 500 overall were excluded to “avoid growth stocks that have grown into their multiples.”
The 40 names that fit the bill?
“Our list can be categorized into 2 subsets, roughly equal in size: (1) those tied primarily to a reopening and return to out of home activities by consumers—airlines, hotels, restaurants, casinos—and (2) those tied primarily to a general recovery in economic activity—trucking and equipment, banks and consumer finance, brand based apparel,” the analysts wrote.
The bottom line? This list is “a way to take reasonable exposure to the themes of reopening and recovery into 2021 while avoiding excessive concentration and stocks that have already priced in the fundamental upside into next year.”


fortune--2020-10-13--Why the SoftBank Vision Fund is getting into SPAC-ing

How the World ’ s Best Workplaces have led the way in a year unlike any other

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SoftBank Vision Fund is hopping on 2020’s hottest trend: the special purpose acquisition company.
On Monday, SoftBank Vision Fund head Rajeev Misra revealed that the mega-fund, after a rocky 2019, is preparing to debut a SPAC in the next two weeks or so, allowing public investors to bet on SoftBank’s money managers and their chops.
While Misra was scant on the details of the SPAC itself, including how much the blank check company was seeking to raise, he did openly state his thinking on raising one.
“Why take money from us when you can get better valuations from the public market, with no strings attached?” Misra said at the Milken Institute Global Conference.
Public markets have been on a tear recently, erasing many losses suffered in the early days of the pandemic as low-bond yields have investors chomping at the bit for returns. Perhaps best capturing the sentiment is a tweet from banker Carl Chiou, joking about Twilio’s $3.2 billion acquisition by Segment: “Damnit, I could have SPAC-ed them for at least $6 billion.”
SoftBank is no stranger to the SPAC trend. SoftBank-backed private equity shop Fortress filed for two IPOs that have raised $300 million each this year, while Vision Fund portfolio company Opendoor is slated to go public via merger with Chamath Palihapitiya’s Social Capital Hedosophia II in a $4.8 billion deal.
SPEAKING OF ROBUST PUBLIC MARKETS: Hardest hit in the first half of the year, exit activity among venture capital-backed startups jumped to $103.9 billion across 185 companies in the third quarter, according to a PitchBook/NVCA analysis. The numbers represent a rise of about 292.5% and 7.6% respectively compared to the previous quarter—which means bigger exits by deal size in general. The surge was led by the multibillion IPOs of companies such as Snowflake, Palantir, Asana and Unity. Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- N26, a Berlin-based fintech, is weighing another round of fundraising that would value it north of $3.5 billion next year, per Bloomberg. Read more.
- Kahoot! AS, an Oslo, Norway-based education startup, raised about $215 million from SoftBank Group.
- EdiGene, a Beijing-based developer of genome editing technologies, raised about $67 million in Series B funding. 3H Health Investment led the round and was joined by investors including Sequoia Capital China, Alwin Capital and Kunlun Capital.
- Snapdocs, a San Francisco-based real estate startup, raised $60 million in funding. YC Continuity led the round and was joined by investors including Docusign and Lachy Groom. Read more.
- deepwatch, a Washington, D.C.-based cybersecurity startup, raised $53 million in Series B funding. Goldman Sachs led the round and was joined by investors including ABS Capital Partners.
- NinjaCat, a New York-based maker of a platform to track, store, report, monitor, and analyze marketing performance data, raised $26 million in Series A funding from Clovis Point Capital.
- Spendesk, a Paris-based spend management platform for small to medium sized businesses, raised $18 million in funding. Eight Roads Ventures led the round.
- Qatalog, a London-based developer of a tool to combine a company’s existing apps, raised $15 million in Series A funding. Atomico led the round and was joined by investors including Salesforce Ventures, Jacob de Geer (co-founder of iZettle), Chris Hitchen (partner at Inventures), and Thijn Lamers (former EVP at Adyen). Read more.
- Yotascale, a San Francisco-based cloud cost management software maker, raised $13 million in Series B funding. Felicis Ventures' Aydin Senkut led the round and was joined by investors including Crosslink Capital, Pelion Ventures, and Engineering Capital.
- Cyberpion, a Tel Aviv-based cybersecurity startup, raised an $8.3 million in seed funding. Team8 Capital and Hyperwise Ventures co-led the round.
- Navina, a Tel Aviv-based developer of a platform for primary care utilizing A.I., raised $7 million in seed funding. Grove Ventures led the round.
- Claravine, a Lehi, Ut.-based technology platform for standardizing marketing data across every team, raised $5 million in Series A funding. Grayhawk Capital led the round and was joined by investors including Next Frontier Capital and Peninsula Ventures.
- Moment House, a ticketed digital live experiences platform connecting fans with artists, raised $1.5 million in seed funding. Forerunner Ventures led the round and was joined by investors including Scooter Braun, Jared Leto, Troy Carter, and Palm Tree Crew (Kygo and Myles Shear).
- Rise Gardens, a Chicago-based maker of in-home, smart hydroponic garden systems, raised an undisclosed amount of funding from the Amazon Alexa Fund.
PRIVATE EQUITY
- Gallatin Point Capital acquired FIFS Holdings Corp, a Houston-based company offering auto financing. Financial terms weren't disclosed.
OTHER
- Paladina Health, backed by NEA and Oak HC/FT, agreed to acquire Healthstat, a Charlotte, N.C.-based provider of onsite, near-site, shared and virtual employer-sponsored health centers. Financial terms weren't disclosed.
- Huya Inc (NYSE: HUYA) agreed to acquire DouYu International Holdings (NASDAQ: DOYU), in an all-stock transaction valued the company at about $6 billion.
EXITS
- Ardian acquired a 50% stake in ANGUS Chemical Company, a Buffalo Grove, Ill.-based maker of nitroalkanes and their derivatives, from Golden Gate Capital at a total enterprise value of approximately $2.3 billion. Golden Gate Capital will retain a 50% stake in ANGUS.
- Helios Technologies agreed to acquire Balboa Water Group, a maker of bath and spa products, from AEA Investors for $218.5 million.
IPOs
- Roblox Corp., the U.S. gaming company, filed confidentially for an IPO.
SPAC
- John Henry, the owner of the Boston Red Sox and Liverpool Football Club, is in talks to take his holding company public via merger with blank-check firm RedBall Acquisition Corp., per Bloomberg. Read more.
F+FS
- David Roux, a co-founder of Silver Lake, and Anjan Mukherjee, a former Blackstone Group executive, plan to raise a private equity fund together, per Bloomberg. Read more.
- Levine Leichtman Capital Partners closed Levine Leichtman Capital Partners Europe II with €463 million in commitments.
- Long Ridge Equity Partners closed its third fund with $400 million of commitments from LPs.
PEOPLE
- Downing Ventures appointed Warren Rogers, a former venture partner at Airbus, as a partner.
- Värde Partners, promoted Jon Fox to president and Andy Lenk to Deputy CEO.


fortune--2020-10-13--Why a very conservative Supreme Court will be bad for business

Businesses may be looking forward to a very conservative Supreme Court that gives them free rein. But ignoring stakeholder interests is a recipe for long-term disaster.
Justice Ruth Bader Ginsburg’s passing last month leaves a vacant seat on the court that Republicans are rushing to fill in hopes of furthering their political agenda on the bench, despite their indignant protests during the Obama administration that an open court seat not be filled during an election year. This turn of events means that a court that already has a sharp pro-business tilt will tip even further in that direction.
While Justice Ginsburg was the justice least likely to side with corporate interests, President Trump has nominated Amy Coney Barrett to fill the spot—a nominee whose record demonstrates clear bias toward corporate interests. Hearings began this week, and if Barrett is confirmed to the court, conservative appointees would increase their majority to 6-3.
Already, the U.S. Chamber of Commerce has a 70% success rate during the tenure of Chief Justice John Roberts. Business groups have responded to the friendly nature of the court and account for over three-quarters of the top 16 filers. Before the court this term are business cases touching on issues ranging from product liability to human rights.
If confirmed, Barrett’s presence on the court would further stack the deck against consumers and workers. As a federal judge, Barrett has sided with business interests over people more than 76% of the time. She voted that discrimination against older job applicants is permissible, asserting that job protections that apply to workers do not protect job applicants. In a case that is being appealed before the Supreme Court this term, Barrett sided with a credit agency and blocked the Federal Trade Commission from recovering fees for defrauded customers—contrary to other circuits’ precedent widely holding that the FTC can recover funds. She also refused to re-hear a case on racial segregation after a three-judge panel approved a company’s policy of racially segregating employees, allowing the panel’s decision to stand.
For businesses focused on long-term success, however, this record should be cause for concern and not celebration. While some business leaders argue shareholders should receive the lion’s share of profits because they are the ones who bear the financial risks, the fallacy of this thinking has been laid bare during the pandemic, as companies asked the government and taxpayers to help them stay afloat. Corporations rely not only on shareholders, but also on stakeholders such as the country, consumers, and their own employees. And a court that neglects that fact will ultimately harm business more than it helps it.
While placing stakeholders at the center of strategic decisions is an ethical business decision, it’s also a smart business decision. Studies have shown the positive effect a stakeholder mindset can have on business performance metrics. A stakeholder mindset is about more than just being socially responsible—it’s also good for the bottom line.
Stakeholder-minded businesses see reduced reputational risks and higher employee engagement, in addition to better investor evaluation and improved operating performance. Even consumers perceive products differently when businesses have a socially responsible reputation. When companies receive negative feedback from stakeholders, it becomes not only a civic duty but a business necessity to address these concerns, whether or not a court steps in. A stakeholder mindset should be seen as an overall value system through which all business decisions should be aligned.
There’s a broad range of actions that corporations can take to center stakeholders in their business planning. These actions range from setting high standards for workplace and product safety to compensating employees fairly and factoring in environmental harm when making manufacturing decisions. These actions would work to counteract the laissez faire attitude towards corporate regulation that would likely be adopted with even greater frequency if Barrett is confirmed to the court.
Many corporations have already started to work with a stakeholder-centered mindset. The Business Roundtable, a non-profit comprised of CEOs of major corporations, declared last year that it was changing its goal to focus on stakeholders. Leaders of companies such as IBM, Johnson & Johnson, Apple, and Amazon are eschewing a single-minded focus on shareholders and committing to include customers, employees, suppliers, and communities in their priorities. These stakeholders have not always been prioritized by the court, but a number of companies are taking responsibility for their role in society.
Corporations are part of the broader environment in which they operate, and they owe a civic duty to contribute to that environment. It’s paramount that corporations develop a stakeholder mindset because those stakeholders are essential to corporations’ survival. Even if the Supreme Court allows businesses to operate with more freedom, it’s in corporations’ best interests to uphold their duty to society.
Stephanie Wylie is the senior policy analyst for Legal Progress at the Center for American Progress. Her work primarily focuses on judicial reforms, fair courts, and access to justice.


fortune--2020-10-13--Amazon’s German workers launch Prime Day strike over pandemic pay

It’s Amazon Prime Day(s), and in Germany many of the company’s workers are marking the occasion by going on strike.
Labor union Verdi announced the strike on Tuesday, the first day of the two-day retail event. Workers are striking in shifts, so as to avoid the contagion risk of large crowds in front of their warehouses. Seven of Amazon’s 15 German fulfilment centers are affected, and the company claims there will be no impact on deliveries for Prime customers.
The industrial action is far from the first to hit Amazon’s German operations—Amazon’s German workers tend to strike around the most lucrative times of year for the company, such as Prime Day and Christmas. Usually the strikes are to do with Amazon’s refusal to enter into collective wage negotiations with Verdi, and that is a factor this time round, but not the main one.
This time the big issue is that of how workers are treated during the COVID-19 pandemic. As with strikes at Amazon facilities elsewhere earlier this year, there are allegations that Amazon isn’t doing enough to protect its staff, and also isn’t paying them enough considering the circumstances.
“Without suitable protection”
“Since the beginning of the coronavirus pandemic, employees have been performing at their best, often without suitable protection,” said Verdi retail and mail-order chief Orhan Akman in a statement. “While Amazon chief Jeff Bezos earns billions, the company scrapped the two-euro-per-hour allowance that was granted to employees from March to the end of May.”
Akman said this extra cash, which Amazon can easily afford, should be “converted into a permanent collectively secured salary increase for everyone, as the employees’ high performance generates the company’s profits.”
Bezos’s personal wealth has swelled by over $60 billion during the pandemic, which has benefited online retailers due to people having to stay home rather than browse bricks-and-mortar stores.
However, an Amazon spokesperson said in a statement that the company provides “excellent pay, excellent benefits and excellent opportunities for career growth, all while working in a safe, modern work environment.”
The spokesperson also told Fortune that Amazon has changed over 150 processes in its building to deal with the pandemic, from checking the temperatures of workers and truck drivers entering the facilities, to “organizing human flows so they don’t intersect.”
Earlier this year, there were clusters of COVID-19 infections that were associated with some Amazon facilities, but the company refuses to categorize them as outbreaks. “As with every big company, we were affected but did everything we could to support [infected workers] once they were in quarantine,” the spokesperson said.
Spy ads
Verdi’s Akman also laid into Amazon over its now-deleted job ads for intelligence analysts who can deal with (in the listings’ words) “organized labor, activist groups, hostile political leaders.”
“Employees are not fair game,” Akman said.
It’s not just union leaders who have expressed concern over those ads; dozens of members of the European Parliament last week wrote to Bezos, asking whether Amazon really does spy on “political representatives (including ourselves).”
Amazon has denied that the job posts were accurate descriptions of the roles being advertised.


fortune--2020-10-13--Amazon the innovator or Amazon the violator?

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
The last time I wrote a feature article about Jeff Bezos or Amazon was a political lifetime ago, in March of 2016. For the piece, about Bezos’s leadership skills, I took what felt like a refreshing and slightly novel approach. I examined the three major businesses on his plate: Amazon, The Washington Post, and Blue Origin, his rocket ship company.
The notion of Amazon facing antitrust concerns in those late Obama years never came up—or at least didn’t find their way into print. I did write this: “His company is expanding internationally and spreading its hydra-headed product and service offerings in unexpected new directions.” But this was written admiringly rather than forebodingly. Amazon was long considered a thug to competitors and a slavedriver to employees, hourly and salaried alike. But not a monopolist.
Times have changed. The long knives are out for Amazon, from the Trump White House, leftish quarters of Queens, N.Y., and even the Gard region of southern France. Along with its Big Tech brethren Facebook, Google, and Apple, Amazon also is in the crosshairs of House of Representatives investigators.
Amazon is powerful, no doubt. But it likely will take new laws or a novel interpretation of existing antitrust law to force it to break up. What I find surprising is the suggestion that Amazon isn’t innovative. True, the engines of its success had predecessors. There were web-hosting companies before Amazon Web Services, Costco memberships before Prime, Sonos speakers before Echo, and so on.
That line of reasoning reminds me, though, of the hollow knock against Apple back in the day. It didn’t invent the MP3 player (iPod) or jukebox software (it bought the company that became iTunes) or even the smartphone (Palm and Nokia came first). That argument was pedantic at best. Apple improved dramatically on each concept and profited handsomely. So has Amazon in its way.
An innovator can be an unfair monopolist too, of course.
***
After tomorrow you’ll see a new lineup on Data Sheet. Aaron will write the report top to bottom on Mondays, Wednesdays, and Fridays. Robert Hackett will do the same on Tuesdays. And Fortune tech writer Danielle Abril, who’s written for us a few times already, will join the fray on Thursdays. You’ll be in good hands with this crew.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Librageddon. Facebook's ambitious plan for a global cryptocurrency backed by real money, known as the Libra Project, has drawn the ire of the world's most influential financial regulators. Finance ministers and central bankers from the G7 are publishing a report on Tuesday concluding that the concept has yet to "adequately addresses relevant legal, regulatory, and oversight requirements." Elsewhere at the world's biggest social network, turns out 2020 is the year to ban posts that deny or distort the Holocaust.
Meeska, Mooska, Mickey Reorg. The House of Mouse announced a major restructuring as the company tries to deal with both the current pandemic and longer-term changes roiling the entertainment industry. Disney's new focus is streaming, so all media properties will be consolidated under one umbrella, the better to serve Disney+. “I would say Covid accelerated the rate at which we made this transition, but this transition was going to happen anyway,” CEO Bob Chapek told CNBC. But the company didn't make the change that rival Ted Sarandos, co-CEO of Netflix, recently said would be a true sign of commitment to streaming: "There’s still a thing called Disney Plus, it’s not just all called Disney.”
Trick or treat. The infamous botnet known as Trickbot got a taste of its own medicine last week. Microsoft says it got a court order allowing it to knock the cybercrime network of more than 1 million zombie computers offline. But the Russian crooks behind Trickbot will likely be able to reconstitute the network in computers beyond the reach of U.S. law. After all, they survived a head-on attack from the U.S. military's Cyber Command last month.
The girl's got curlers in her neural net. Remember that stunning demo two years ago at Google's I/O conference when the company showed off its digital assistant calling a hair salon to book an appointment? It's now a live feature on many phones, Venturebeat says. Still, I'm more excited for the new "wait on hold for me" feature Google just announced.
Rubbing my nickels together. It's finally Apple's iPhone debut day 2020. Follow along the streaming presentation at 1 p.m. ET/10 a.m. PT. The headline has been widely leaked: The iPhone is going 5G. PC Magazine discovered that Verizon has a little related news of its own: It will start offering a broadly available, low-band 5G network across the country to complement its current high-band but scarcely available 5G offering.
FOOD FOR THOUGHT
Addressing the climate crisis will require many changes in our habits and our technology. Airbus is working on aircraft that use hydrogen for fuel. Reporter Ned Potter gives the idea a reality check for IEEE Spectrum.
Others have their doubts. “A lot of these things, you can; the question is, should you?” says Richard Pat Anderson, a professor of aerospace engineering at Embry-Riddle Aeronautical University. “When we say, ‘Should you?’ and you get into economics, then it becomes a much more difficult conversation.” Anderson says battery-powered aircraft are likely to become practical later in this century, and it is a dubious proposition to build the massive – and costly – infrastructure for hydrogen power in the meantime.
ON THE MOVE
Twitter hired Tracy McGraw, top publicist at Tyler Perry Studios, as senior director of global consumer communications...Web-hosting company Squarespace appointed Marcela Martin as the company’s new CFO. She was previously CFO of Booking Holdings...AR game maker Niantic Labs hired Brian Benedik as VP of global revenue after seven years as Spotify's chief revenue officer...Chinese smartphone maker OnePlus co-founder Carl Pei has left the company and will start a new hardware venture...Online casino and sports betting company Rush Street Interactive hired Kyle Sauers as CFO. Sauers held the same position at Echo Global Logistics...AudioEye brought in Bryan Rodrigues as chief marketing officer. He was previously VP of marketing & ecommerce at Tile.
IN CASE YOU MISSED IT
Amazon Prime Day expected to hit nearly $10 billion in a big jolt to retailers’ holiday shopping plans By Phil Wahba
Exclusive: California’s board diversity law led to 670 board seats filled by women, report finds By Michal Lev-Ram
HP’s CEO on how the pandemic is accelerating change in technology and business By McKenna Moore
Some Chinese firms are unfazed by worsening U.S. relations. A fintech unicorn’s IPO is the latest proof By Naomi Xu Elegant
The system is ‘rigged’: Robert Reich on the Supreme Court, economic inequality, and his Twitter beef with Elon Musk By Rey Mashayekhi
The world’s best workplace: It's still Cisco By Alan Murray and David Meyer
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Okay, calm down, no one is actually saying we should eat the insects grown by French ag startup Ÿnsect. Right now, Ÿnsect just sells the larvae of the Tenebrio Molitor beetle as livestock and pet food. They're coming to an animal food shelf near you sometime by next summer upon getting approval from the U.S. FDA. Yum?
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-10-13--‘Hi, Speed:’ Apple walks the tightrope of embracing 5G

A few hours after this newsletter hits your in-box, Apple will host an online product event at which it is widely expected to unveil the 20th iteration of its iconic smartphone.
The tech giant announced the event last week on its website. Apple executives, ever the masters of savvy marketing, won’t reveal what they plan to unveil. But a steady drip of leaks and supplier reports have stoked anticipation among Apple fans and industry analysts.
If the rumor mill is right, Apple will introduce a new generation of iPhones that includes four new versions, with faster processing chips, a boxier design, larger and smaller size options than those offered for the iPhone 11, and jazzy new color options.
But what’s grabbing the biggest headlines is speculation that the new iPhone will come equipped with 5G—fifth generation wireless technology that, at least in theory, will operate at speeds of ten or 20 times faster than current 4G wireless networks.
Apple won’t confirm that, but gave us a wink. The tagline for this morning’s event: “Hi, Speed.”
Apple lags its global rivals in joining the 5G revolution. As the Wall Street Journal points out, nearly all of Apple’s major competitors, including South Korea’s Samsung Electronics and China’s Huawei Technologies, introduced 5G phones last year.
China, where the state has declared 5G a national priority, has an early lead over the U.S. in building out its high-speed wireless network. Carriers in that nation already have built more than 450,000 5G base stations and, by some accounts, signed more than 110 million 5G subscribers. In this year’s second quarter, China accounted for more than three-quarters of 5G device shipments, according to Counterpoint Research.
In the U.S., where 5G coverage is far more limited, market intelligence firm IDC pegs sales of 5G-enabled devices in this year’s first half at 4.2 million, about 7.5% of total domestic smartphone sales.
Apple’s belated embrace of the technology will go a long way toward taking it mainstream. Analysts expect the iPhone 12, as the device has been dubbed, to be a blockbuster. This is the first major revamp of the iPhone’s design since 2017, when Apple introduced the iPhone X, with facial recognition and wider screens.
Dan Ives, analyst for Wedbush Securities, estimates 40% of Apple users haven’t upgraded their phones for three and a half years, creating a huge potential demand for replacement. He calls iPhone 12 a “once-in-a-decade upgrade opportunity for Apple”—and predicts iPhone sales in the current fiscal year will top the record 231 million devices the company sold in 2015 after the introduction of the iPhone 6 Plus.
Bloomberg reports that Apple has ordered at least 75 million units of the new phone for 2020.
5G has been touted as one of the most transformative technologies of the digital age. Presentations about how 5G will change our lives often conjure the prospect of downloading high-definition movies in the blink of an eye, self-driving vehicles, remote-controlled surgery, real-time video games, augmented reality, and totally automated factories.
But for now, America’s 5G networks mostly rely on low-band wireless spectrum that is slower than high-band spectrum, but more reliable over longer distances.
The most common variety of 5G technology is sub-6GHz, which is used by T-Mobile and delivers speeds that are roughly double that of 4G. A second type of 5G called millimeter Wave, or mmWave, is significantly faster but works over shorter distances. Verizon Communications Inc has the largest mmWave network, but offers it in limited areas. Apple is expected to offer both types of 5G on its premium iPhone 12s, and only sub-6GHz on the more afforable devices.
Either way, as Reuters observes, the rudimentary state of the U.S. 5G network requires Apple to walk a tricky marketing tightrope. The company needs to give consumers a reason to upgrade. But at the same time, it may want to avoid over-promising what 5G can do.
As Boris Metodiev, associate director at the research firm Strategy Analytics, told Reuters: for U.S. consumers, having a 5G-enabled smartphone will be “like having a Ferrari…but using it in your local village and you can’t drive up to 200 miles per hour, simply because the roads cannot maintain those speeds.”
It doesn’t help that developers have yet to build any must-have software applications that take advantage of the high-speed networks. Or that 5G remains a deeply misunderstood technology. One recent survey found that half of iPhone owners in the U.S. think they’ve got 5G already. Meanwhile, a considerable number of Americans believe the technology will kill them.
More design news below.
Clay Chandler
— clay.chandler@fortune.com
NEWS BY DESIGN
Dining out
For many restaurants, creating additional seating space outside has been a lifesaver during the pandemic. In order to keep that option available during the bitter winter months, IDEO partnered with the city of Chicago to crowdsource ideas for how restaurants can continue to seat customers outside—generating ideas beyond the traditional space heater model.
Spun
Adidas partnered with Kram/Weisshaar to create a wholly woven upper, spun by a robot, that can be custom made to the needs of individual athletes. The upper—the body of the shoe that sits on top of the sole—is just concept-proving at this point. It’s the latest in Adidas’ FutureCraft line of shoe innovations.
Looop
H&M’s flagship store in Stockholm has launched a service called Looop where customers can turn in old clothes and have them shredded and reassembled into new clothes within five hours. The machine is limited in what garments it can produce—a scarf, a sweater, or a baby blanket—but H&M hopes to expand the production range over time.
Off white
D&AD announced Naresh Ramchandani, a partner at design firm Pentagram, as the agency’s new president. The appointment came after former vice president Ben Terrett declined the role, eschewing a tradition in which the VP replaces the incumbent president. Terrett said he decided to “stand aside and make space for others” as he sees “too many people who look like me, middle-aged white men, in positions like this.”
Design Bridge
Global design agency Design Bridge appointed 26-year veteran Tim Perkins as the group’s new chairman. Perkins, who established Design Bridge’s studio in Singapore—one of five studios worldwide—will continue to work with Design Bridge CEO John Morris to build client relations. Kasia Bannon, head of the New York studio, will take on Perkins’ former duties as executive vice president.
Boldly go
NASA launched a $23 million toilet, known as the Universal Waste Management System, into space. The toilet is bound for the International Space Station, where it will be installed, tested and—if it works—later used on the Artemis 2 lunar mission. Space toilets are no small feat of engineering but what sets the UWMS system apart from others is that it is the first to be designed with women in mind.
EVENTS BY DESIGN
October
London’s Frieze art fairs went ahead last week, held in galleries at limited capacity rather than in vast exhibition tents strewn across Regent’s Park.
Dutch Design Week is cancelling the real-world elements of this year’s event in Eindhoven as coronavirus case numbers rise in the city. The online portions of the event will continue, October 17-25.
Swiss furniture designer Vitra is hosting its inaugural Vitra Summit October 22-23, bringing together architects, curators and designers to discuss the future of spaces. The event will be online.
November
Dubai’s inaugural architecture festival, d3 Architecture Festival, will run November 11-13 on the sidelines of Dubai Design Week. The event will focus on sustainability—an existential issue for the desert city.
Canada’s annual graphic design fest, DesignThinkers, is running online this year, November 10-21—the first time in the event’s 20-year history that it hasn’t been held in person.
QUOTED BY DESIGN
“If there are needles anywhere nearby—and, on the Internet, there always are—the magnets will pull them in. Remove as many as you want today; more will reappear tomorrow. This is how the system is designed to work.”
Andrew Marantz writes in the New Yorker, taking issue with the narrative posted by Facebook vice president of global affairs Nick Clegg that moderating content on Facebook is like searching for a needle in a haystack. “This metaphor casts Zuckerberg as a hapless victim of fate: day after day, through no fault of his own, his haystack ends up mysteriously full of needles,” Marantz writes.
This week’s edition of BxD was curated by Eamon Barrett. Email him tips and ideas at eamon.barrett@fortune.com


fortune--2020-10-13--‘Can I call it B.S.?’ Jennifer Siebel Newsom is fed up with skepticism of board quotas

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! Amy Coney Barrett’s confirmation hearings continue, a senator shares his abortion story, and the Fortune MPW Next Gen Summit gets a sneak peek from California’s Jennifer Siebel Newsom. Have a terrific Tuesday.
– Boards report. The Fortune MPW Next Gen Summit is kicking off this afternoon, and today’s programming will feature a conversation with California First Partner Jennifer Siebel Newsom.
Ahead of her session, Siebel Newsom shared with Fortune some stats from the organization she cofounded, California Partners Project. The group dug into the state’s 2018 legislation requiring gender diversity on corporate boards of directors and discovered that since the law went into effect, 669 public company board seats have been filled by women. In 2018, nearly 30% of public company boards in California consisted of men alone; now that figure is down to under 3%.
The numbers show the effectiveness of California’s mandate, Siebel Newsom says. “Can I call it B.S.?” she asked Fortune‘s Michal Lev-Ram about those old concerns that quotas would lead to unprepared women being appointed to board seats. “Women are talented, women are ready and there are so many women who could add value to any board—public, private, or non-profit. This is just an ‘old boys’ club’ narrative.”
Michal will also speak to the first partner on stage today, where the pair will have the opportunity to dive further into the issue—and to look ahead to the effects the state’s recently enacted legislation on racial diversity on corporate boards could have down the line.
You can see the schedule for the details on Siebel Newsom’s session—and the rest of today’s programming—here.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- ACB. During the first day of confirmation hearings for Supreme Court nominee Amy Coney Barrett, Republican senators emphasized the judge's personal life as a mother of seven, while Democrats sought to drive home how her confirmation would affect the future of the Affordable Care Act. The hearings will continue today. CNN
- Benefits of background checks. Kathryn Kosmides, founder of the nonprofit background check platform Garbo, writes for Fortune about how her own experience in an abusive relationship inspired her to develop a tool to prevent gender-based violence. Fortune
- Leading legislation. The United States should follow in the footsteps of its neighbor to the north and enact legislation to guarantee equal pay for equal work, writes Katica Roy, founder of the pay equity platform Pipeline, in a Fortune op-ed. Fortune
- Megan's view. In a new op-ed, rapper Megan Thee Stallion explains why she speaks up for Black women, reflecting on violence against women (she was recently shot by a man as she walked away from him) and her activism on behalf of Breonna Taylor on stage at Saturday Night Live. "Black women ... struggle against stereotypes and are seen as angry or threatening when we try to stand up for ourselves and our sisters," she writes. "There’s not much room for passionate advocacy if you are a Black woman." New York Times
MOVERS AND SHAKERS: Bumble—the parent company of the app—hired Univision Digital SVP and CFO Anu Subramanian as CFO and former Snapchat global head of fashion and beauty partnerships Selby Drummond as chief brand officer. Squarespace hired Booking.com CFO Marcela Martin in the same role. NBCUniversal promoted Linda Yaccarino to chairman, global advertising and partnerships.
IN CASE YOU MISSED IT
- Important perspective. Michigan Sen. Gary Peters is the first sitting senator to share an abortion story after speaking out about a medical crisis that almost caused his first wife, Heidi, to die when she was denied the procedure and told to wait for a miscarriage. Peters' story also makes him one of few men in public life to make clear how abortion rights affect them. Elle
- Caught on camera. Gisele Barreto Fetterman, as the wife of Pennsylvania Lt. Gov. John Fetterman, is the state's second lady. When she was at the grocery store this past weekend, a woman started yelling racial slurs at her. Barreto Fetterman recorded the exchange and posted the video. "This hatred is taught," she wrote. Washington Post
- Open letter. A group of female executives from mostly Silicon Valley companies coauthored an oped arguing that the United States must elect Joe Biden as President in November. Signees include execs from former GOP gubernatorial candidate Meg Whitman to Rent the Runway's Jennifer Hyman. Business Insider
ON MY RADAR
Roberta McCain, John McCain's mother, dies at 108 Time
The billionaire who stood by Jeffrey Epstein New York Times
Bangladesh approves death penalty for rape after protests Guardian
PARTING WORDS
"I’m not doing anything wrong or shameful. In fact, it’s something that’s made me a happier and healthier person."
-Tamana, a 33-year-old Afghan woman, on going to the gym. This story profiles a rare women's fitness club in Kandahar, Afghanistan.


fortune--2020-10-13--‘Risky and dangerous’: Energy industry body IEA sounds the alarm on oil demand and even uses the P-w

‘Risky and dangerous’: Energy industry body IEA sounds the alarm on oil demand and even uses the P-word

Oil demand is expected to take a years-long hit from COVID-19—and oil-dependent export nations must fundamentally shift their economies to meet that reality.
That was the message on Tuesday from Fatih Birol, executive director of the International Energy Agency, which ultimately downgraded its oil outlook yet again. He warned that oil demand, thanks to COVID, will be weak in the coming years.
But even after the pandemic (hopefully) fades away, the market prospects don’t look much better. Oil demand will ultimately flatten—the IEA prefers the word “plateau” to “peak oil”—by the end of the decade, the IEA says, a prediction similar to one made by OPEC last week.
You’ll see that shift in some obvious parts of the economy. “This reinforces oil demand for cars plateauing in this decade at roughly 2019 levels of demand, before declining after 2030,” the IEA said.
That future, paired with current sinking demand for oil and volatile prices, and broad shifts towards climate policies worldwide, means that the world’s petrostates must find other ways to sustain their economies.
“They have to prepare themselves before it is too late,” Birol said in an interview with Bloomberg TV on Tuesday.
A weak outlook
In its annual World Energy Outlook, the IEA warned that COVID-19 is now expected to depress global oil demand until at least 2023, or even later.
“The recovery of oil demand may not be as quickly as we or the others thought a few months ago, mainly because of the governments around the world not being able to have the coronavirus under control,” Birol said Tuesday.
The crucial factor for oil demand is now the virus—more to the point, when will the global economy return to pre-pandemic levels. And it doesn’t look good.
“The rebound may be slower than one hopes to see,” he said. Demand also won’t shift to other forms of energy without changes in government policy, Birol said.
But it’s not the only headwind. Since the start of the pandemic, the IEA has been warning that any economic recovery must include the energy transition to low-carbon sources, including the full range of options, from hydrogen to nuclear.
That shift will transform countries that depend on oil and gas revenues—many of which have economies with a “one to one” relationship with oil prices, Birol said.
Such a diversification requires serious financial means, and he added that there is an element of déjà vu: “we saw this movie before, and [diversification] didn’t happen.”
But such a dependency is now “risky and dangerous,” he said, and even oil economies including Saudi Arabia and Iraq are increasingly heeding the call, he added.
It’s not just countries that are at risk. As the pandemic has sunk oil prices once again, cities and regions including Houston and Calgary, Canada are also grappling with what their economic future will look like.
The IEA did not lay out a specific date for “peak oil,” and Birol said the industry does not think that the peak for oil demand has already passed, forecasting that demand will return as economies recover. Meanwhile, industry majors like BP have also forecast that oil demand may in fact never recover, and laid out some scenarios where the peak has already passed.
Several major legacy oil and gas companies, including BP, have committed to “net zero” carbon emissions goals by 2050, also indicating a shift away from fossil fuels that has continued even amidst the pandemic.


fortune--2020-10-13--Exclusive: California’s board diversity law led to 670 board seats filled by women, report finds

California has had a rough few months. There was the summer surge in COVID cases, wildfires that set grim new records—officials have now announced that 4 million acres have been burned throughout the state—and the subsequent toxic, smoke-filled air that enveloped the West Coast, sometimes for weeks on end. In other words: The Golden State could use a ray of sunshine.
There is promising news, though, too—for those who aim to diversify corporate boards. Today, new data on women’s representation on corporate boards in California is being revealed. The report, made exclusively available to Fortune, was commissioned by California Partners Project, a nonprofit co-founded by the state’s First Partner, Jennifer Siebel Newsom. Siebel Newsom’s organization shared the findings with Fortune ahead of her appearance at the Fortune Most Powerful Women Next Gen Summit on Tuesday.
It all started in 2018, when then-Governor Jerry Brown signed a bill into law to require publicly-held companies headquartered in the state to have at least one woman on their board of directors by the end of 2019. For the time being, companies are encouraged to comply with the law, though financial repercussions from the state could kick in at a later date. But as the most recent findings show, the impact of the new regulations is already being felt: The report from California Partners Project concluded that, while in 2018, nearly 30% of public company boards in California consisted of men alone, that figure has now gone down to less than 3%. In real numbers, that means that 669 board seats have been filled by women since 2018. In Siebel Newsom’s view, that is a resounding success.
“There is this positive radiation that happens when women are at the table making decisions,” says Siebel Newsom, a filmmaker who has focused much of her work on gender equity, in a phone interview with Fortune.
Siebel Newsom points out that companies with more diverse boards have been found to drive better business performance across several metrics, including stock performance. This data is nothing new—back in 2012, Credit Suisse issued a report that showed large-cap companies with at least one woman on their board outperformed those with no women on their board by 26% over a six-year period. And other studies have shown similarly positive trends. But that doesn’t mean that action followed the data. In fact, the California law is the first such mandate in the country. (Some other countries, meanwhile, like Germany, do have board diversity mandates.)
Siebel Newsom is hopeful that other states will follow California’s lead. “We are the fifth largest economy in the world,” she says. “If we can get this right, we have an opportunity to inspire the rest of the country and other countries.”
Already, Washington State has signed its own board diversity bill into law, and several other states—like Hawaii and New Jersey—have explored similar mandates. But not everyone is a fan. Some have challenged California’s law and its gender quotas as “unconstitutional,” or worried that the law would actually backfire, creating a situation where women who are not qualified are somehow hurried into board positions before they are ready to serve in that capacity.
“Can I call it B.S.?” Siebel Newsom says, when asked how she responds to such concerns. “Women are talented, women are ready and there are so many women who could add value to any board—public, private, or non-profit. This is just an ‘old boys’ club’ narrative.”
In the meantime, California is moving forward. By the end of 2021, some boards will be required to appoint two or three women—depending on the size of their board of directors. And just last month, Siebel Newsom’s husband, Governor Gavin Newsom, signed another law: This one requires publicly traded corporations headquartered in the state to appoint board members from underrepresented racial and ethnic backgrounds.


fortune--2020-10-14--Are college degree requirements holding Black job seekers back?

Although economic fault lines of racial and economic injustice were exposed by COVID-19, their fissures have been laid bare by a long overdue reckoning on race that is challenging employers to move beyond old saws of diversity and inclusion toward the question of what it means to be anti-racist at every level of the enterprise.
With good reason. Even before the pandemic, the job picture for Blacks was bleak. Since 1972, the Black unemployment rate has been double the rate for whites. That gap has narrowed only slightly: The Black unemployment rate still stands at 12.1%, compared to a white unemployment rate of 7%.
The U.S. labor market is, in turn, in the throes of twin disasters. The first is the ongoing health and economic crisis. The second is systemic racism that has led to structural economic inequality, including inflated credential requirements for good jobs and biased corporate hiring practices, both of which have left many Black Americans stuck in low-wage work.
Unfortunately, our solution to the first may actually exacerbate the latter. Because in our haste to get Black Americans “back” to work, we may overlook the potential to create a more inclusive, equitable post-pandemic workforce.
Research suggests that short-term training programs now en vogue among policy elites may not yield the sort of sustainable wage gains that policymakers (and employers) expect. In a series of pre-COVID studies funded by the Institute for Education Sciences, researchers found that wage increases for those with credentials below a bachelor’s degree can be modest and vary by the type of credential.
In some cases, the initial bump in wages from earning a certificate actually decreases over time. It turns out that the overemphasis on short-term credentials to get Black Americans back to work is a shortsighted, temporary solution. For economic equity and justice, we need to make sure that short-term programs complement degrees rather than replace them, and that we increase access to longer-term credentials such as bachelor’s and graduate degrees.
The bar has to be set much higher.
The economic ceiling for Americans who have not completed college stems, in part, from college degree requirements that often slam the door on qualified Black and other minority job applicants. Before the pandemic, education researchers determined that “degree inflation”—requiring a bachelor’s degree for a position that is currently successfully occupied by an employee with a lower-level credential—has an outsize impact on low-income and nonwhite job seekers, who are less likely to have earned a college degree. A 2017 Harvard Business School analysis posited that degree inflation was responsible for as many as 6.2 million workers potentially missing out on job opportunities for which they were qualified.
Sadly, the problem may get worse before it gets better. During periods of economic recovery, when competition for jobs is more intense, employers often default to degree requirements to sort and filter prospective employees.
In fact, during the recovery that followed the last recession, employers actually tightened education requirements. Of the 7.1 million net jobs lost during the economic downturn that followed the financial crisis in 2007, nearly all were occupied by workers holding less than a bachelor’s degree. But only 3.2 million of the jobs added during the recovery went to that population—and the vast majority of those were people with an associate’s degree or at least some college education.
The research is now clear that millions of workers without degrees have the skills to thrive in higher-wage work. This means that—as some companies are starting to realize—employer reliance on bachelor’s degree requirements (and failure to recognize skills built on the job) actually exacerbated inequality during the last decade of economic growth. The middle class shrunk.
Opening doors on the demand side of the workforce ecosystem is necessary, but insufficient. Many jobs legitimately require a bachelor’s degree or even higher, which means eliminating degree inflation and increasing four-year college completion among these traditionally underrepresented groups are complementary, not competing, objectives. Bachelor’s degrees still command a 74% premium in median lifetime wages compared to high school diplomas. That’s the difference between earning $2.3 million and $1.3 million.
Bachelor’s degrees also open the door to graduate and professional school, which increases the wage premium even more. Moreover, workers with bachelor’s degrees are more resilient in economic downturns: The Federal Reserve reported employment had fallen 35% from February to May for workers who were previously in the bottom fourth of wage earners. Higher-wage earners saw employment fall between 5% and 15%.
Reconciling the seemingly paradoxical relationship between college and economic mobility for Black Americans requires that we embrace two opposing concepts simultaneously. It is true that degree requirements are closing the door on talent, but it is also true that too few low-income people and people of color have the requisite credentials for jobs with 401(k)s, paid time off, and the option to work remotely.
For Black Americans, fundamental changes in both hiring practices and bachelor’s degree attainment must be equal partners in an equitable economic recovery. Together, such changes hold the potential to disrupt the systemic and structural barriers to economic opportunity and advancement that are holding Black job seekers back.
Michael Collins is vice president of JFF (Jobs for the Future). He previously served as assistant commissioner for participation and success at the Texas Higher Education Coordinating Board.


fortune--2020-10-14--The polls are wrong. The U.S. presidential race is a near dead heat, this A.I. ‘sentiment analysis’

The polls are wrong. The U.S. presidential race is a near dead heat, this A.I. ‘sentiment analysis’ tool says

An analysis of the emotions being expressed on social media indicates that the upcoming U.S. presidential election may be a much closer contest than many commentators and pollsters believe.
That’s the conclusion of Expert.ai, a company with offices in Modena, Italy, and Rockville, Md., that uses an A.I. technique called “sentiment analysis” to understand the emotions being expressed in social media posts.
The company’s analysis puts Democratic candidate Joseph Biden ahead of President Donald Trump, 50.2% to 47.3%, a margin that is much narrower than the double-digit lead that Biden has over Trump in most national opinion polls.
Based on these polls, many political analysts and commentators are expecting that Biden may win a historic landslide. But Expert.ai’s A.I.-based analysis indicates the race may be much tighter than these human experts are expecting.
Expert.ai’s political forecasting model was successful in predicting that the U.K. would vote to leave the European Union in 2016. And academic research has shown that similar social media sentiment analysis would have better predicted Trump’s victory in the 2016 U.S. presidential election than polling data.
Trump was the focus of far more social media activity than Biden, accounting for almost 60% of all the posts Expert.ai analyzed, compared to slightly less than 17% for Biden. But Biden ranked higher in terms of positive emotions such as “success” and “hope,” while Trump scored higher on negative emotions such as “fear” and “hatred.”
The only positive emotion on which Trump scores better than Biden, according to a statement from Expert.ai, is “action.”
Walt Mayo, Expert.ai’s chief executive officer, said the company’s ability to analyze hundreds of thousands of social media posts in real time gives it “insight into what voters are discussing and how their attitudes are evolving as we get closer to the election.” He said the analysis helped the company glean “the issues of most importance to voters and the emotions in social media posts that may drive decision-making at the polls.”
Expert.ai’s system looked at 500,000 Twitter posts and other social media comments made over the past week. It uses natural language processing, a form of A.I. that can understand aspects of language, to categorize the sentiment being expressed in these social media posts according to 84 different emotional labels.
These labels are then given a rank in terms of their intensity, on a scale from 1 to 100, and are multiplied by the number of occurrences for each candidate. The emotions are also classified as either “positive” or “negative” and used to create an index that can compare the two candidates against one another.
This story has been updated to include comments from Expert.ai CEO Walt Mayo.


fortune--2020-10-14--Apple’s 5G iPhone debut didn’t go as planned in the world’s biggest 5G market

The launch of Apple’s new 5G-enabled iPhone 12 on Tuesday promised to make a splash in China, the world’s largest 5G market. But Apple’s introduction of the phone didn’t go as planned.
Apple CEO Tim Cook revealed the new iPhone 12 from California over a live stream, marking the long-anticipated debut of Apple’s first phone with 5G capabilities.
“Today is the beginning of a new era for iPhone. Today, we’re bringing 5G to iPhone,” said Cook at Apple’s digital event day. “This is a huge moment for all of us, and we’re really excited.”
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
However, many Apple fans in China, the world’s largest 5G smartphone market by sales, missed all the “excitement” as online channels that were supposed to carry Cook’s announcement failed to do so.
Five weeks ago, Apple said big Chinese social media sites like Tencent Video, Bilibili, Iqiyi, and Weibo would air Cook’s live stream. But on Tuesday, none of the sites carried it. Instead, Cook’s announcement was available to Chinese users only via Apple’s website, according to Bloomberg.
What content appears on the Chinese Internet and what doesn’t is a political matter in China because government censors police online content. It’s unclear, though, what caused the Apple live-stream snafu and whether or not it was deliberate. Apple declined to comment, and Tencent, Bilibili, Iqiyi, and Weibo did not respond to requests for comment on the matter.
Regardless of the reason, the iPhone 12’s botched introduction to China means Apple missed an opportunity to make a great first impression on the world’s most advanced 5G market. China has a far more developed 5G network than the U.S., making it a ripe market for the iPhone 12. Research firm Canalys forecast in September that China would account for 62% of all 5G smartphones sold globally in 2020.
In a nod to China, Apple displayed the logos for China’s three major carriers—China Telecom, China Mobile, and China Unicom—in discussing how the iPhone 12 can access different 5G networks around the world.
China is a ripe market for Apple for another reason: China’s top smartphone maker Huawei is in dire straits. Huawei said in September that it is running out of chips to produce new 5G smartphones because of fresh U.S. restrictions. Experts say Huawei may only have enough chips to produce phones through the end of this year. Huawei’s crisis is a chance for Apple to capture more of China’s smartphone market, which Huawei currently dominates with a 40% share.
Apple’s live-stream trouble on Tuesday will likely fuel ongoing speculation that the tech giant is on Beijing’s bad side. As the Trump administration has lashed out against Chinese tech giants like Huawei and ByteDance, experts have repeatedly pointed to Apple as a likely target for Beijing’s tit-for-tat retribution.
Experts told Fortune last month that even if Beijing has Apple in its sights, taking drastic action against the iPhone maker—like shutting down its supply chain in China—would inflict too much self-harm.
Instead, Beijing could rely on a broader “tool box” of responses to limit Apple’s growth in the country, such as promoting consumer boycotts or increasing bureaucratic requirements for its stores. Apple’s limited live stream on Tuesday raises the question of whether Beijing is dipping into that arsenal.


fortune--2020-10-14--China is making up some ground on its U.S. trade deal commitments

On Tuesday, data from China’s General Administration of Customs showed a surge in imports and exports in September, with 13.2% and 9.9% growth year on year, respectively. The strong uptick shows how Beijing is navigating the politics of a post-pandemic recovery—exporting vital goods to worse-hit nations while aiming to meet its trade deal commitments to the U.S.
“China’s surprising resilience in exports has been mainly driven by its status as the first economy in and the first out of the COVID-19 pandemic,” analysts at Nomura said in a note, adding that demand for medical equipment and personal electronics continues to bolster China’s export growth.
Exports of high–value-added electronics have proved particularly good ballast for China’s economy this year, as much of the world’s middle-class workforce pivots to working from home. Shipments of personal computers provided a much-need boost to China’s second-quarter GDP data, returning the economy to growth after a decline in the first three months of the year.
While export growth in September remained relatively stable—up 1.9% over the month before—China’s imports are surging, leaping 15% over August. According to Bo Zhuang, chief China economist at TS Lombard, imports of pork and soy from the U.S. are driving the growth as China tries to uphold its commitment in phase 1 of the trade deal.
“China doesn’t want further escalation or deterioration with the U.S., so they’re trying to be nice for a few months,” Zhuang says, suggesting Beijing is biding time until the elections in November.
The U.S. and China struck a truce in their trade war in January. Washington agreed to stop piling tariffs on Chinese exports, and Beijing agreed to boost purchases of U.S. goods. The value of China’s imports from the U.S. skyrocketed 24.7% to $13.2 billion in September, the highest total since August 2018.
Nevertheless, China’s total imports from the U.S. are up only 0.2% in the first nine months of the year compared with the same period in 2019, according to customs data. That puts China far behind its commitment of boosting imports by 60% over 2017 levels.
And, even with China trying to “be nice,” trade relations with the U.S. have continued to deteriorate this year. In September—the month when a U.S. blockade on chipset sales to Huawei Technologies came into effect—semiconductor imports increased 18% over August and 28% over September 2019.
According to Zhuang, China’s tech giants are racing to stockpile semiconductors in case the U.S. throttles supply chains further. In the year to date, semiconductor imports are up 13.8%—the sixth largest driver of China’s import growth.


fortune--2020-10-14--Three big changes in the post-pandemic world

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Accenture CEO Julie Sweet has a unique window into what’s going on in the world of business. Her company serves hundreds of large companies in 120 countries, with a half million employees and more than $40 billion in revenues. And from that perch, she told me recently, she sees three big—and I mean big—changes going on in the post-pandemic world.
“The first is a shift around the value of tech. We are no longer spending time talking about, is technology good or bad and what are the risks. Tech became the lifeline for individuals, societies, business and government.”
“The second big shift has been about speed. The most successful economies, countries, companies are those whose speed is as fast as possible. We are seeing that every day.”
“The third shift, which is the one I’m most excited about, is a shift in the opportunity to accelerate the achievement of the UN sustainable development goals (SDGs).”
For those not into UN lingo, the SDGs are the UN’s attempt to identify and address societies’ biggest needs. The increasing embrace of those goals by business is indicative of a major change that was already underway before the pandemic, but has been accelerated by it. “We definitely have passed the tipping point,” Sweet says. “The pandemic has highlighted the interconnection around the globe. The risks around climate seem much more imminent. The risks of a pandemic in the future are real.” And then there is the need for a massive training and upskilling effort, to give more people the opportunity to benefit from the technology revolution.
In response to these changes, Accenture itself is changing. Sweet today announced a new brand campaign (“let there be change”) a new purpose (“to deliver on the promise of technology and human ingenuity”) and, perhaps most importantly, a new approach to business that emphasizes what she calls “360 value”—helping companies address issues like sustainability and reskilling as part of their technological transformations.
Companies need “to think about serving stakeholders as something that you need to do by design in the change they are driving. It’s not separate from the business. It’s responsible business by design.”
You can watch the entire interview with Julie Sweet here. More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Herd immunity
Trying to achieve "herd immunity" to the coronavirus by letting it sweep through the population (as there is no vaccine yet to achieve the same effect) is "simply unethical," according to World Health Organization chief Tedros Adhanom Ghebreyesus. And yet, a fringe group of scientists pushing the idea met last week with Health and Human Services Secretary Alex Azar. Fortune
Eli Lilly
Eli Lilly has paused a clinical trial of its experimental COVID-19 treatment, due to a potential safety concern raised by an independent data safety monitoring board for the trial. There are hopes that the antibody-based drug, LY-CoV555, could benefit COVID-19 patients when added to Gilead's remdesivir. But the pause, which came shortly after J&J suspended its vaccine trial due to a sick volunteer, underscores how unpredictable the timelines for coronavirus vaccines and treatments really are. Wall Street Journal
iPhone 12
As expected, Apple announced the iPhone 12 range yesterday, including the first iPhone mini, and with 5G across the board. But it also announced a couple other things: a smaller version of the HomePod smart speaker, and MagSafe wireless charging accessories for the smartphones. Fortune
EU tariffs
A WTO arbitrator has given the EU the all-clear to whack tariffs on up to $4 billion in U.S. imports, in the latest stage of a long-running (16 years and counting) saga about aerospace subsidies. But the U.S., which says Boeing no longer receives a contentious tax break from Washington State, argues that the EU has no right to impose those tariffs. Fortune
AROUND THE WATER COOLER
Oil's unwell
The world's petrostates might want to rethink their strategy, according to International Energy Agency chief Fatih Birol, who said yesterday that oil demand will "plateau" (don't say "peak"!) in the 2030s. "They have to prepare themselves before it is too late," he said, warning that the COVID-19 pandemic will depress demand until at least 2023. Fortune
Social media
Meghan, The Duchess of Sussex has "a lot of concerns" for people who have become addicted to social media, she told Fortune's Emma Hinchliffe at the Fortune Most Powerful Women Next Gen Summit, which kicked off yesterday. Meghan: "There is something in there, algorithmically, that is creating this obsession." Fortune
Excel warriors
Excel spreadsheet errors are pretty common, and they can have huge ramifications—for example, that time Canopy Growth accidentally posted a CA$52 million loss that should have been CA$155 million. So enjoy this novel piece on the "Excel warriors" that (sometimes) swoop in to save the world from spreadsheet disaster. Wired UK
New normal
What will the new normal for earnings be, now that stocks appear to be enjoying a modest comeback? Fortune's Shawn Tully: "The pandemic has taken the air out of profits in mere months that might have taken far longer, but was still inevitable. By this analysis, we won't see anything even close to the rampaging earnings rebound Wall Street expects." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-14--Europe gets to whack fresh tariffs on $4 billion of U.S. imports, thanks to illegal Boeing subsidies

The European Union has been given the go-ahead to whack tariffs on nearly $4 billion worth of U.S. imports, owing to illegal subsidies furnished to Boeing.
The authorization, announced Tuesday by a World Trade Organization arbitrator, marks the latest stage in a saga that has been rumbling on for 16 years now. EU countries illegally subsidized Airbus, and the WTO allowed the U.S. to impose tariffs on $7.5 billion in EU goods as a result. Now the EU gets to take its shot over Boeing’s illegal subsidies.
It would rather have a friendly chat, though, EU trade commissioner Valdis Dombrovskis said Tuesday.
“This long-awaited decision allows the European Union to impose tariffs on American products entering Europe,” Dombrovskis said in a statement. “I would much prefer not to do so—additional duties are not in the economic interest of either side, particularly as we strive to recover from the COVID-19 recession. I have been engaging with my American counterpart, ambassador [Robert] Lighthizer, and it is my hope that the U.S. will now drop the tariffs imposed on EU exports last year.”
The markets weren’t satisfied either; the news sent shares in both planemakers down more than 3% on Tuesday.
“Level playing field”
The EU has been demanding that the U.S. drop its WTO-allowed tariffs—on products ranging from aircraft to clothing and cheese—since July, when Airbus finally stopped receiving the last of its contentious subsidies from the Spanish and French governments.
Will those talks pan out? Maybe.
In a Tuesday statement, U.S. Trade Representative Lighthizer said his team was “waiting for a response from the EU to a recent U.S. proposal and will intensify our ongoing negotiations with the EU to restore fair competition and a level playing field to this sector.”
However, in an echo of the EU’s own argument regarding the validity or otherwise of U.S. tariffs, Lighthizer said Boeing’s last remaining illegal subsidy (a tax break in Washington State) had been repealed earlier this year, so “the EU has no valid basis to retaliate against any U.S. products.”
So, in short, both sides were illegally subsidizing their planemakers, both sides claim to have stopped doing so, and so neither side believes the other has the right to levy tariffs anymore, despite the WTO having clearly given them the go-ahead to do so.
All this is playing out against the backdrop of broader trade tensions between the U.S. and EU that have largely been initiated or exacerbated by the Trump administration and Lighthizer, a trade chief who shares his boss’s combative, market-rattling views on the subject.
Although the aerospace-subsidies dispute has been going on for nearly two decades, the next step could depend on the outcome of the U.S. election in three weeks’ time; Lighthizer could soon be out of the picture.
But whatever happens, the COVID-19 pandemic’s assault on the travel industry has ensured that neither Boeing nor Airbus is doing very well, subsidies or no subsidies. Airbus is already cutting 15,000 jobs and may shed more, while Boeing is in pretty much the same position, give or take a thousand roles.
Boeing said Tuesday that it had won no new orders last month and had delivered just 11 aircraft to its customers.
“Airbus did not start this WTO dispute, and we do not wish to continue the harm to the customers and suppliers of the aviation industry and to all other sectors impacted,” said Guillaume Faury, Airbus’s CEO, in a statement responding to the arbitrator’s announcement.
“As we have already demonstrated, we remain prepared and ready to support a negotiation process that leads to a fair settlement. The WTO has now spoken, the EU can implement its countermeasures. It is time to find a solution now so that tariffs can be removed on both sides of the Atlantic.”


fortune--2020-10-14--WHO director calls herd immunity ‘scientifically and ethically problematic’

Herd immunity is neither an effective nor an ethical strategy for controlling the COVID-19 pandemic, the director-general of the World Health Organization has warned.
Speaking on Tuesday, Dr. Tedros Adhanom Ghebreyesus warned that discussions of reaching “herd immunity”—the point at which a population is considered protected from a virus—had misunderstood what the concept entails.
“Herd immunity is a concept used for vaccination, in which a population can be protected from a certain virus if a threshold of vaccination is reached,” he said. In measles, the threshold was 95% of a population, while in polio, the threshold is 80%, he noted.
“In other words, herd immunity is achieved by protecting people from a virus, not by exposing them to it,” Ghebreyesus said. “Never in the history of public health has herd immunity been used as a strategy for responding to an outbreak, let alone a pandemic. It is scientifically and ethically problematic.”
That’s because not enough is known yet about immunity to the coronavirus, and it was still not clear how strong or lasting an immune response is, he said. Some people have also been reinfected, he added.
Meanwhile, the vast majority of the population has still not been exposed to the virus, with surveys indicating that in most countries, less than 10% of the population has been exposed. He also referred to those who have experienced long-lasting symptoms from COVID-19.
“Allowing a dangerous virus that we don’t fully understand to run free is simply unethical,” said Ghebreyesus. “It’s not an option.”
The WHO continues to advocate for a targeted approach to containing the virus, relying on well-functioning systems to trace, test, and isolate cases of COVID-19 before they spread.
However, many countries—including the U.S. and the U.K.—are struggling to implement even the most basic infrastructure required to “test and trace,” including building capacity for tests and persuading people to register where they go and whom they interact with. Political division, too, has undermined decision-making on how to approach containing the virus.
The concept of “herd immunity” appears to be making a comeback as cases rise and governments struggle to control the virus while often resisting full-scale lockdowns of the type seen in the spring.
But the concept already became more mainstream at the start of the pandemic, as the U.K. in particular briefly appeared to be pursuing the strategy before being forced into a U-turn by public outcry and scientific advisers, who warned the strategy would result in huge numbers of deaths, particularly of the elderly and most vulnerable.


fortune--2020-10-14--Investors pull back on vaccine jitters and earnings woes

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. COVID vaccine jitters broke up a four-day rally in U.S. equities yesterday. Underwhelming bank earnings and a ho-hum Apple iPhone event didn’t help investor sentiment either. U.S. futures and global stocks are trading mostly in the green this morning, but are off their highs, as another big day of corporate results—Bank of America, Goldman Sachs and United Airlines—awaits.
Let’s see what’s moving the markets.
Markets update
Asia
The major Asia indexes are mostly lower in afternoon trading with Japan’s Nikkei the best of the bunch, up 0.1% .
are mostly lower in afternoon trading with the best of the bunch, up . China’s Ant Group is looking to raise a record $30 billion in an IPO. It’s a better bet now after the payments juggernaut booked a $2.6 billion profit last year.
is looking to raise a record in an IPO. It’s a better bet now after the payments juggernaut booked a last year. China’s CSI 300 Index got a big boost from President Xi Jinping, nearly hitting a five-year high, on Wednesday. The president rolled out his plans for Shenzhen and the Greater Bay area.
Europe
The European bourses were flat out of the gates, before climbing. The Europe Stoxx 600 was up 0.2% two hours into the trading session.
were flat out of the gates, before climbing. The was up two hours into the trading session. The British pound is down significantly this morning as post-Brexit trade talks go down to the wire with the two sides still far apart.
is down significantly this morning as trade talks go down to the wire with the two sides still far apart. The World Trade Organization ruled in favor of Europe in a long-running dispute over subsidies to planemakers, allowing the EU to impose up to $4 billion in tariffs against U.S. firms. Shares in both Boeing and Airbus fell more than 3% on Tuesday as the markets are hoping for a negotiated deal, not more tariffs.
ruled in favor of Europe in a long-running dispute over subsidies to planemakers, allowing the EU to impose up to against U.S. firms. Shares in both Boeing and Airbus fell more than on Tuesday as the markets are hoping for a negotiated deal, not more tariffs. I know the bond market is upside down these days, but I still never thought in my lifetime I’d see a news flash like this one: investors are snatching up Italian zero-coupon bonds. Zero coupon? Daje, ragazzi. Che fate?!
U.S.
U.S. futures are up modestly, though off their highs. That’s after all three major indexes closed in the red on Tuesday.
are up modestly, though off their highs. That’s after all three major indexes closed in the red on Tuesday. A risk-off mood overtook markets in afternoon trade yesterday after Eli Lilly announced it was pausing its coronavirus antibody treatment trials . Johnson and Johnson and AstraZeneca have also halted their COVID work in recent weeks, giving the investment world a crash course in the ups and downs of drug trials.
overtook markets in afternoon trade yesterday after Eli Lilly announced it was pausing its . Johnson and Johnson and AstraZeneca have also halted their COVID work in recent weeks, giving the investment world a crash course in the ups and downs of drug trials. Shares in Apple closed down 2.65% after the company unveiled a range of new products, including a 5G iPhone, on Tuesday. It’s not uncommon for Apple shares to fall after these events.
Elsewhere
Gold is up after falling precipitously, below $1,900/ounce , yesterday on the latest setback on the vaccine front.
is up after falling precipitously, below , yesterday on the latest setback on the vaccine front. The dollar is up.
is up. Crude is up, with Brent trading around $42.50/barrel.
***
In praise of patience (again)
How many of you thought about cashing out your stock holdings last month amid the great September swoon?
It was a fraught moment. The markets were falling, COVID numbers were soaring, and concerns about a disputed election were sky-high. My in-box filled up with all kinds of commentary and analysis from Wall Street vets who trotted out historical data showing the weeks prior to a U.S. presidential election are usually a dud, if not worse. The implied message: cash out now.
Fast-forward to today and the S&P 500 has rallied 7% since Sept. 2. You’d be out a nice chunk of change had you pulled the plug back then.
It’s yet another lesson in the virtues of patience—in investor parlance, the buy-and-hold strategy.
Joachim Klement, head of investment research at London-based Liberum, shared an investor note yesterday about how market volatility tends to diminish the returns of active traders.
He cites a recent research paper by two academics, from Emory University and the University of British Columbia. They looked at typical investor portfolios across multiple countries, comparing active traders (those who try to time the market, getting in and out of stocks over relatively short intervals) with the buy-and-hold crowd. The results were illuminating, as the two charts (first, for a single stock portfolio; then for a 50-stock portfolio) here show:
It makes sense that the more you trade, the more volatility you encounter. And that’s what you see in these charts. For the active trader, timing your trade so as to avoid portfolio-sapping volatility is key, and not so easy to pull off.
The research also revealed another dynamic. The active trader risks missing out on dividends, and those payments add up over the years. As Klement notes, “the volatility experienced by the investor was significantly higher than the volatility experienced by a buy and hold investor who reinvests all dividends.”
Patience, everyone. Patience.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Earnings, earnings, earnings. The corporate reporting season kicked off in earnest yesterday with banks, airlines and drugmakers all holding analysts calls. As investors await a parade of beats, Fortune's Shawn Tully looks closely at the great collapse in corporate earnings this year and just how we should be thinking about stock valuations in the COVID age.
Investing for good... and for great gains. Here's another must-read piece from Fortune's Quarterly Investment Guide. Katherine Dunn digs deep into the mechanics of ESG investing with tips on how to (hopefully) save the world and your portfolio.
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Market candy
Quote of the day
The economic recovery is already slowing. Without additional support it threatens to stall out or even backslide.
That's Mark Zandi, chief economist at Moody's Analytics, who tells Fortune that Washington's failure to agree on a stimulus package (of any size) right now spells bad news for the U.S. economy. It almost certainly spells bad news for your portfolio too in the long run.


fortune--2020-10-15--A key COVID metric has surprisingly reversed course

The polls are wrong .
The U.S. presidential race is a near dead heat , this A.I .
‘ sentiment @ @ @ @

A key measure of COVID-19’s spread in the U.S. has been decidedly weird for more than a week. Day after day, the states with the highest infection rates—new cases per 100,000 residents—have been North Dakota, South Dakota, and Montana, among the least densely populated states in America. With social distancing critical to fighting COVID-19, how can this be? The emerging answer is significant for individuals, employers, and policymakers.
Back in April, when New York City was the pandemic’s epicenter, it all made sense. The city has 27,012 people per square mile, the highest density of any major U.S. city. Of course, it would be the nation’s hottest hot spot. But North Dakota and South Dakota have four people per square mile. Montana has seven. As of today, North Dakota’s infection rate is 78 times greater than New York City’s.
It’s immediately obvious that density is not the enemy, as bizarre as that seems. Researchers from the Johns Hopkins Bloomberg School of Public Health and the University of Utah uncovered this surprise in a paper published in June. They found no statistically significant relationship between density and COVID-19 infection rates, adding, “this runs counter to our initial expectations.” But if density isn’t the enemy, then what is?
The researchers suggested several factors that could account for the counterintuitive result, and more recent studies reinforce their hypothesis. The lead author of the paper, the Bloomberg School’s Shima Hamidi, tells Fortune: “Residents of dense places are better equipped to stay at home, reduce their trips, and comply with public health advisories such as stay-at-home orders because of their better access to services such as home delivery.” In addition, those people tend to be more aware of the threat, so they “are more likely to voluntarily adhere to social distancing advisories such as avoiding crowded places (restaurants, bars, beaches, etc.) compared to their counterparts in low density areas.”
More broadly, says David J. Peters, an associate professor of rural sociology at Iowa State University, “rural America is more vulnerable to COVID-19 than cities are.” That’s because “rural areas tend to have older populations than the national average, with more chronic health conditions that raise the risk of developing more severe cases of COVID-19,” he writes. “They also tend to be home to large group facilities, such as prisons, meatpacking plants, and nursing homes, where the virus can quickly spread to residents, and employees can carry it back into the community.” By contrast, “cities have lower percentages of older residents and people living in institutional settings.”
Attitudes may also play a role, though they weren’t studied in the research. Before South Dakota governor Kristi Noem hosted President Trump at an Independence Day celebration at Mount Rushmore, she told Fox news, “we won’t be social distancing.” Masks were available, but few in the tightly packed crowd of more than 7,000 wore them. The state also declined to cancel the annual August motorcycle rally in Sturgis, against the wishes of some locals. About 250,000 attended. Neither of the Dakotas has a statewide mask mandate.
The notion that density is not the enemy runs counter to the most widely held conventional wisdom on the pandemic. Surging prices of suburban and exurban homes reflect the view that density is bad—that “our closeness makes us vulnerable,” as New York governor Andrew Cuomo said in March. Pre-pandemic, urban planners nationwide focused on increasing density as a way to combat sprawl, but public opinion turned abruptly against that trend. Hamidi and her coauthors believe that’s a mistake. “Our findings suggest that planners should continue to practice and advocate for compact places rather than sprawling ones,” they conclude, “due to several environmental, transportation, health, and economic benefits of compact development.”
It’s still early for all large-scale pandemic-related research; future work will change our understanding further. But those towering infection rates in America’s wide open spaces are telling us loudly that some of our previous thinking was off-base. As apartment prices plunge in Manhattan, just maybe it’s a good time to buy.


fortune--2020-10-14--‘Grown-ish’ star Yara Shahidi, mother Keri discuss their production company and ‘centering’ the unde

‘Grown-ish’ star Yara Shahidi, mother Keri discuss their production company and ‘centering’ the underrepresented

Actress Yara Shahidi has made a name for herself in recent years—first through her starring role on the hit ABC television series Black-ish, and more recently via her very own spin-off show, Grown-ish, on the Freeform network.
But the 20-year-old Shahidi is more than just a TV star; she’s also a student, activist, and—alongside her mother, Keri Shahidi—a producer with her very own production company, 7th Sun. Speaking at this year’s virtual edition of Fortune’s Most Powerful Women Next Gen Summit, Yara and Keri Shahidi discussed their journey to date, and their mission for 7th Sun to be a vehicle for, as Yara put it, “making familiar the many cultures and identities” that are too often looked over by the entertainment and media industries.
“I love the fact that it really allows us to honor all of our sensibilities,” Yara said of 7th Sun, citing her interests in “the business of business, and the creativity of business” among those that are served by the endeavor. “Foundational to our ethos is really audacious goals,” added Keri, pointing to the pair’s passion for “storytelling” and “opening doors” in describing how the production company came about.
Racial and cultural identity is part and parcel of the company’s vision—right down to its very name, which is derived from the writings and philosophy of the Black writer and activist W.E.B. DuBois. (“The Negro is a sort of seventh son, born with a veil, and gifted with second sight in this American world,” DuBois wrote.)
For Yara, 7th Sun is about “acknowledging and centering” the cultures and experiences too often overlooked by society through the medium of storytelling. As far as the production company’s projects, that includes “everything from four-quadrant animation, to dark comedies that are kind of genre-bending.” (The production company and its projects are still in their earliest stages, with 7th Sun having launched in July in partnership with ABC Studios.)
“It’s not so much about formats as it is core sensibility,” and the goal of allowing stories to “live on-screen that haven’t been told prior,” Yara added.
Keri Shahidi noted a particular goal of “continuing the evolution of media for young, brown and black boys that centers on joy, that centers on living… The idea that we have space to have our own Catcher in the Rye, but maybe it’s represented by people who we never thought we’d see on screen.”
The two women also discussed the intellectual journey that brought them to this point. Keri recalled her daughter’s natural curiosity, which manifested itself in a particular interest in Renaissance history as a seven-year-old—and eventually resulted in a childhood trip to Italy to view and experience the artifacts and relics of the time period.
“Our obligation as parents was to feed the curiosities of her and both of her brothers,” Keri said. “The idea, as a parent, is really to watch with excitement and intrigue the direction in which she’s leading us.”
That direction eventually led Yara to Harvard University, which she’s currently attending as a junior-year undergraduate. While this year’s pandemic-induced, remote academic experience has actually helped her more easily balance the demands of professional and student life, Yara said college has been a hugely instructive experience as far as informing the intellectual subject matter she wants to explore as a producer and storyteller.
And she was keen to attribute her success to her mother’s “flexibility” toward her education, and the multifaceted approach she took toward her daughter’s intellectual and academic growth.
“It meant that I had a level of investment in my education, because it was reflecting back worlds that mattered to me,” Yara said.


fortune--2020-10-14--‘Quarantine jeans’ and athleisure: How clothing retailers are adapting to pandemic life

The pandemic era has been tough on clothing makers as many people trade in their office and going-out clothes for sweats and slippers. This challenge has extended to the likes of Stitch Fix, which sends outfits to customers’ homes picked by a stylist, and Good American, a company backed by Khloe Kardashian that specializes in women’s denim.
Speaking at Fortune’s Most Powerful Women Next Gen summit, Stitch Fix president Elizabeth Spaulding said the pandemic has led the company to “lean hard into casual wear and athleisure” to reflect many people’s new lifestyle.
Spaulding also acknowledged that Stitch Fix has faced hard times, but said that the company is recovering. In June, the retailer announced a plan to lay off 1,400 employees, though the company has said this was part of a strategy to hire stylists in other, lower-cost regions. Spaulding also said its third quarter earnings would have been positive but for supply chain disruptions, and that August saw Stitch Fix’s highest rate of growth since the company went public in 2017. (The company later clarified that the growth referred to new client demand.)
Good American, meanwhile, saw the COVID outbreak put a major kink into its ambitions to launch a swimwear line. But the pandemic also brought an unexpected marketing boost as women began to refer to its denim pants—which are designed to adapt to women’s changing bodies—as “quarantine jeans.”
The company’s CEO, Emma Grede, told the virtual audience that navigating the pandemic has required the retailer to be good at “pivoting” and, especially, to listen to its customers’ changing preferences.
For Christina Stembel, the CEO of bouquet delivery service Farmgirl Flowers, the pandemic has been especially personal—not only did she have to furlough hundreds of workers, but she had to battle the disease herself over the course of six hard weeks. She has responded in part by providing biweekly COVID tests for all of the company’s employees—a process that has proved expensive, but one she feels is essential to providing a safe workplace.
One CEO who saw a benefit from the pandemic was Nicole Gibbons, whose company Clare lets consumers order paint for their homes. While Clare has benefited from the uptick in DIY during the pandemic, Gibbons has also had to make tough choices, including giving up the company’s office lease to preserve capital amid broad uncertainty.
Gibbons also addressed the other major challenge companies have faced this year: race. As a Black CEO, Gibbons said she has made an extra effort to provide resources and ideas on social media at a time when many companies have done little more than issue the same series of statements.
Editor’s note: This story has been updated to clarify information around Stitch Fix’s layoffs and growth.


fortune--2020-10-14--These cofounders believe sewage is the key to tracking COVID

“Everybody has a voice in the sewer.”
That was the message that Newsha Ghaeli and Mariana Matus, cofounders of Biobot Analytics, had for Fortune‘s virtual Most Powerful Women Next Gen conference on Wednesday.
As the pair noted, everyone engages in certain bodily functions every day. But excrement has an important public health purpose, too: In short, you can sniff out a burgeoning epidemic through wastewater.
“One of the things we’ve seen over the last several months is that data from wastewater is a leading indicator for detecting cases of COVID,” said Ghaeli.
Biobot analyzes sewage to detect everything from opioid use in a community to the chances of an infectious disease outbreak. That’s particularly important during the coronavirus pandemic so that a locale can take precautions when virus levels in wastewater indicate a growing outbreak.
“Every time we flush the toilet, we’re creating high quality medical samples,” said Matus, adding that Biobot was “the first team to build out this wastewater technology.”
“Post COVID-19, we’re deployed across most states across the country,” she said.
Some colleges and universities have begun using similar technology to detect COVID outbreaks in dorm clusters, including the University of Colorado at Boulder.
But coronavirus isn’t the only bug that Biobot can detect. “We can move to other infectious diseases such as influenza,” said Ghaeli. “This could be used to create an early tracker to alert communities to flu outbreaks or other pathogens like the norovirus.”


fortune--2020-10-14--4 ways the federal $300 unemployment benefit could be replaced

On Wednesday, Treasury Secretary Steven Mnuchin said stimulus talks continue with House Speaker Nancy Pelosi, however, they still remain “far apart” on certain issues.
“At this point, getting something done before the election and executing on that would be difficult just given where we are and the level of details,” Mnuchin said at the Milken Institute Global Conference on Wednesday, shortly after talks with Pelosi.
That all comes after Pelosi rejected the White House’s $1.8 trillion stimulus offer last week, which is $400 billion shy of the $2.2 trillion Democratic leaders are seeking.
Both parties support restarting enhanced unemployment benefits. But to do so, it will almost certainly require a broad stimulus deal.
More than 26 million jobless Americans were receiving the $600 enhanced benefit—which was paid on top of state benefits and expired at the end of July. President Donald Trump then signed a memorandum in August to provide a $300 enhanced weekly unemployment benefit, however, the $44 billion he set aside for it is running dry and most states have ended the additional payment.
Fortune examined the four most likely outcomes that would get enhanced unemployment benefits extended or replaced.
Trump and Pelosi reach a deal before the election
Down in the polls, Trump has every incentive to strike a stimulus deal before the election. That could push him to increase his offer to the $2.2 trillion Democratic leaders are seeking. Last week he even suggested he could offer more than $2.2 trillion.
Democrats might be tempted to wait for a President Joe Biden to strike a deal. But if Trump caves to all their demands, that could force their hand to accept a deal.
Then again, Trump might not have the support of his party to make that big of an offer. Republican Senators like Rick Scott and Marsha Blackburn already rejected the idea of passing a stimulus package of $1.8 trillion.
Biden wins and stimulus gets passed after the inauguration
If Democrats win back the White House and Senate in November, they’ll likely pass a massive stimulus package soon after the inauguration. Biden said that’s his plan. The polls are pointing to that outcome: FiveThirtyEight gives Biden a 87% chance of winning, and gives the Democratic party a 70% chance of taking the Senate chamber.
But if Biden wins and Republicans retain the Senate, the stimulus package deal they strike would likely be smaller than the $1.8 trillion the White House is offering, Mark Zandi, chief economist at Moody’s Analytics, told Fortune.
“They [Democratic leaders] are taking a really big chance by not taking Trump’s offer,” Zandi says. Trump is more keen on a big deal than his Senate Republican colleagues.
And waiting until January 20 to pass more enhanced unemployment could be a serious blow for tens of millions of unemployed Americans and could even result in a pullback in consumer spending, Zandi says.
Trump wins and stimulus gets passed after the election
If Biden wins, a broad stimulus deal is unlikely to pass in the Republican controlled Senate between the election and January 20 inauguration.
But if Trump wins, his allies in the Senate would likely open to passing an economic aid package before the start of his second term. Then again, they’ll still have to strike a deal with the Democratic-controlled House.
Another extension from the White House?
On Wednesday, Mnuchin said he plans to ask Congress for permission to repurpose $300 billion in unused funds from the $2.2 trillion CARES Act.
Trump might try to bypass Congress and issue a memorandum to repurpose that money for enhanced unemployment benefits. He’s hinted at that before. And that’s what he did in August when he moved $44 billion in funding from FEMA to pay for the $300 weekly enhanced unemployment benefit.
But such a move might be illegal and would likely face challenges in the court. Those funds, unlike the $44 billion FEMA disaster aid, weren’t designated for direct aid to Americans.