fortune--2020-04-23--Yet another way the coronavirus is disproportionately hurting women

This is the web version of the Broadsheet, Fortune’s daily newsletter for and about the world’s most powerful women. To get it delivered daily to your in-box, sign up here.
Good morning, Broadsheet readers! European venture capital does a worse job funding women than U.S. VCs, some Latin American countries separate genders in public to control coronavirus spread, and women are more likely to have considered quitting their jobs during the pandemic. Have a nice Thursday.
– The question of quitting. Over the past few weeks, has it ever occurred to you that pandemic-era life would be more manageable if you could just quit your job?
If so, you’re certainly not alone. In fact, Emma has a report out this morning on a new survey from pay equity software company Syndio that found that 14% of women have seriously considered leaving their job because of the family demands created by the COVID-19 crisis. A slightly smaller 11% of men said the same.
Emma spoke to Angela—she asked that we not use her last name (for fairly obvious reasons)—a mom who is considering leaving her job in the outdoor industry to help relieve some of her family’s childcare burden. Her situation is a common one: she makes less money than her husband, so if someone needs to step away, she says, it’s clear that it should be her. “The biggest part of my decision is how to best take care of my kids,” she tells Emma.
Between the financial strain of becoming a one-income household and the damage that a break from the workforce can inflict on women’s longterm career prospects and lifetime earning potential, this is a scary trend. Worse, it appears to be affecting some women more than others: the survey found that 26% of Hispanic women said they were considering quitting their jobs, compared to 15% of both black and Asian women, and 12% of white women.
We’ve all been reading about the myriad ways in which this pandemic is disproportionately hurting women. Looks like it’s time to add another one to the list… You can read Emma’s full story here.
And if you missed Fortune‘s virtual conversation about Seattle’s response to the COVID-19 outbreak—based on Erika Fry’s feature in the latest issue of Fortune—you can watch a replay here.
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was produced by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Tasked with the task force. How are companies managing their responses to the coronavirus pandemic? Get an inside look at Lyft's COVID-19 task force and the women who run it: Fortune
- L Brands loss. The deal for L Brands to sell Victoria's Secret—which led to the departure of chairman and CEO Les Wexner, who was tied up in the Jeffrey Epstein scandal—may fall apart. Private equity firm Sycamore Partners wants to abandon its $525 million deal, citing store closures and furloughs as in violation of its terms. Wall Street Journal
- EU oops. Even though the U.S. venture capital industry doesn't do a great job funding female founders, it's still doing better than Europe. Women-only teams in 2019 got 0.4% of venture capital funding—compared to the U.S.'s 2.7%. Crunchbase
- Disney digs in. Abigail Disney, heir to the Disney fortune, weighed in on the company's decision to furlough theme park workers while still paying shareholder dividends and executive bonuses. "WHAT THE ACTUAL F***?" she tweeted. CNN
MOVERS AND SHAKERS: Food52 hired Claire Chambers, former VP and GM for home at Walmart eCommerce, as chief commercial officer.
IN CASE YOU MISSED IT
- Day by day. Some Latin American countries and cities—Panama, Peru, and Bogotá—have taken a drastic step to fight COVID-19: segregating men and women in public. Policies allowing women outside to get essential goods on some days and men to do the same on other days are intended to reduce the total number of people who are out and about. Financial Times
- Up next? With Kim Jong Un reportedly in ill health and without an adult male heir, observers are speculating about who could replace him as leader of North Korea. His sister, Kim Yo Jong, is a candidate; she's the "only other member of the Kim family with anything approaching real power in the regime." Bloomberg
- Civil liberties? Governors are in the spotlight for their coronavirus responses, but South Dakota Gov. Kristi Noem is taking an unusual approach. She has declined to issue a stay-at-home order and says that her citizens shouldn't "give up their liberties for just a little bit of security." Guardian
- Following precedent. Supreme Court Justice Elena Kagan sided with the conservative wing of the court to dissent this week in Ramos v. Louisiana, a decision that struck down the practice of conviction by a non-unanimous jury for serious crimes. This piece examines Kagan's commitment to precedent, the key factor in her decision here: Slate
ON MY RADAR
Greta Thunberg’s organization just created one of the most visceral climate crisis ads ever Adweek
Do you hate me for my yard? The Cut
How my Soviet mom prepared me for the coronavirus pandemic The New Yorker
PARTING WORDS
"The first week, I was kind of enthusiastic about it—we’re going to be a family and be a unit! But now we’re sort of trapped."
-Tanya Denise Fields, a mom of 6 who contracted COVID-19, on life in quarantine


fortune--2020-04-23--Real unemployment rate soars past 20%—and the U.S. has now lost 26.5 million jobs

Why the coronavirus crisis makes moral leadership more important than ever

Another 4.4 million Americans filed initial unemployment claims in the week ending April 18. That’s down from 5.2 million the week prior, however it marks the fifth consecutive week over 3 million, according to the U.S. Department of Labor.
At the highest of levels of unemployment following the 2008 financial crisis, there were 15.3 million jobless Americans. But in the past five weeks a staggering 26.5 million workers have already filed jobless claims.
Prior to this five-week stretch of 26.5 million initial jobless claims, there were already 7.1 million unemployed Americans as of March 13, according to the U.S. Bureau of Labor Statistics. When the figures are combined, it would equal more than 33 million unemployed, or a real unemployment rate of 20.6%—which would be the highest level since 1934.
The official unemployment rate from the BLS is 4.4%, but that calculation is through March 13—that was before the massive wave of stay-at-home orders. The April rate, which gets released in early May, is when we’ll see the unemployment rate top double digits.
We’re already seeing states fiscally and technologically overwhelmed by the continued flood of jobless claims. Many states, including Texas, are about to run out of unemployment trust funds—and will need to borrow from the Federal government. On Tuesday, New York Gov. Andrew Cuomo said his state’s unemployment site has “collapsed” following the spike in online claims.
The out-of-work who get approved to collect unemployment benefits will be eligible for an additional $600 in weekly payments. This money, which is on top of their state benefits, stems from the $2.2 trillion stimulus package and runs through July 31.
Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
More must-read finance coverage from Fortune:
—5 veteran investors on how to approach the coronavirus stock market
—These countries’ stock markets have been hit the hardest by the coronavirus
—China’s next coronavirus crisis: What happens after a country closes its economy
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—How the American economy can recover from the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-23--Blind trusts, inside information, and the ‘mosaic theory’: Why charging members of Congress with ins

Blind trusts, inside information, and the ‘mosaic theory’: Why charging members of Congress with insider trading is so fraught

What to know if your small business is applying for Round 2 PPP loans from the SBA

It’s the kind of controversy that gives further ammunition to those who believe Washington, D.C., is a self-serving swamp that should be drained.
As the U.S. economy continues to take a pounding from the coronavirus pandemic, it’s emerged that some lawmakers may have parlayed information from private congressional briefings on the threat posed by the virus into potentially lucrative stock trades. If true, it would mean that before the stock market tanked from its all-time highs and tens of millions of Americans lost their jobs to the ongoing economic lockdown, members of Congress took privileged information on the impending damage and used it to enrich themselves—in effect, an act of insider trading.
Two senators in particular—North Carolina Sen. Richard Burr and Georgia Sen. Kelly Loeffler—have drawn more attention due to the size and nature of stock transactions made in their names. While both lawmakers have denied the allegations, both the Department of Justice and the Securities and Exchange Commission (SEC) are reportedly investigating whether there was any wrongdoing. Spokespeople for the Justice Department, the SEC, Burr, and Loeffler all declined to comment.
Should authorities uncover misconduct, it could prove the biggest test to date for the Stop Trading on Congressional Knowledge Act. Better known as the STOCK Act, the law has seldom been put to action since President Obama signed it into effect eight years ago.
The bill came about after a 2011 60 Minutes exposé revealed how members of Congress, through stock trades (as well as other financial maneuvers), were profiting from information that they gleaned on the job and doing so without consequences. So the STOCK Act reiterated that congressional officeholders were not, in fact, exempt from federal securities laws prohibiting insider trading—a legal gray area dating back to the passage of the Securities and Exchange Act of 1934.
“Prior to the STOCK Act, it was a source of controversy whether the existing securities laws applied to members of Congress,” according to Robert Kelner, chair of law firm Covington & Burling’s election and political law practice.
While it was “theoretically possible” to pursue insider-trading cases against members of Congress before the STOCK Act, such cases “were difficult to bring,” adds Barak Cohen, a partner at law firm Perkins Coie and a former Department of Justice prosecutor.
“The STOCK Act made it clear that there’s a fiduciary duty that members of Congress owe with respect to material, nonpublic information, and makes it possible to bring those kinds of insider-trading cases,” Cohen notes.
Despite that clarification, STOCK Act cases have proven few and far between in the years since the law’s passage. Some congressional ethics investigations—like that of former Wisconsin Rep. Tom Petri, who owned stock in a defense contractor that he was advocating for on Capitol Hill—failed to rear criminal charges. Even former New York Rep. Chris Collins, who was recently sentenced to 26 months in prison after pleading guilty to charges of insider trading, wasn’t indicted under the STOCK Act. (Collins sat on the board of the pharmaceutical company involved in his case, rather than acting on information learned in his capacity as a congressman.)
But that could well change depending on what investigators looking into Burr’s and Loeffler’s financial dealings find, according to securities attorneys and government ethics experts who spoke to Fortune.
“The simple fact of the matter is that if you have insider info and you go and use it [to trade securities], it’s not yours to use,” according to Thomas Gorman, a partner at law firm Dorsey & Whitney who formerly served as senior counsel at the SEC’s Division of Enforcement. “If you’re a corporate officer, it belongs to the company and is supposed to be used by the shareholders. And if you’re a legislator, it’s not for your use; it’s for the public, and you’re supposed to be doing the public’s business.”
Taking stock
At the heart of the matter are stock trades executed by, or on behalf of, Burr and Loeffler in the wake of private Senate briefings on the evolving threat posed by the coronavirus in late January and early February.
After the briefings, on Feb. 13—the day after the Dow Jones Industrial Average closed at an all-time high of 29,551 points, and before it began its steep descent into bear market territory—Burr sold up to $1.7 million worth of stock holdings, including stakes in hotel companies that have been ravaged by the coronavirus outbreak, ProPublica first reported.
Likewise, freshman Sen. Loeffler—who is the wife of New York Stock Exchange chairman Jeffrey Sprecher and the wealthiest member of Congress with an estimated net worth of $500 million—unloaded up to $3.1 million worth of stock in the three weeks following a Senate Health Committee briefing on Jan. 24, the Daily Beast first reported. By contrast, Loeffler did not disclose a single stock transaction between the time she took office on Jan. 6 (as the governor-appointed successor to former Georgia Sen. Johnny Isakson, who resigned due to health issues) and Jan. 23.
While both politicians have vehemently denied allegations that they profited off nonpublic information, their reasonings differ. Burr claims that in divesting his stock holdings, he “relied solely on public news reports to guide my decision.” (He also asked the Senate Ethics Committee to open an investigation into the matter, in the interest of “full transparency.”)
Loeffler, meanwhile, counters that she had no knowledge of the stock trades whatsoever. “I do not make investment decisions for my portfolio,” she said last month—noting that such investment decisions “are made by multiple third-party advisers without my or my husband’s knowledge of involvement.”
Other senators whose stock dealings have drawn attention in recent weeks—including Dianne Feinstein of California and James Inhofe of Oklahoma—have also claimed that their portfolios are managed by third parties and that they themselves had no knowledge of trades made on their behalf. Additionally, neither Feinstein nor Inhofe attended the Senate Health Committee briefing on Jan. 24, they claim.
Richard Painter, a professor of corporate law at the University of Minnesota who served as chief White House ethics lawyer during President George W. Bush’s administration, says that the scale of and circumstances around Burr’s and Loeffler’s trades demand closer scrutiny than those of other lawmakers.
“I think both of them crossed the threshold where, if I was at the SEC, I’d investigate,” Painter tells Fortune, citing the senators’ divesting of hotel and travel stocks and Loeffler’s investment in software and cloud-computing firm Citrix, which produces teleworking software. “It just looks fishy. If I were in the SEC’s enforcement division, I’d want some more information.”
A tale of two defenses
Assuming authorities are scrutinizing the senators’ stock dealings, then the diverging defenses offered by Burr and Loeffler could be put to the test in different ways, legal sources told Fortune.
For Loeffler, things are relatively straightforward, given that she claims she had no knowledge of the trades made on her behalf until after the fact. If that’s proven to be the case, it’s almost certain that she would be exonerated. Otherwise, investigators would have to determine whether or not she informed investment advisers of any material, nonpublic information gained in her capacity as a senator before the transactions were made—circumstances that could be revealed by digging into Loeffler’s phone records and emails.
In the case of Burr—who acknowledges that he himself made the stock trades in question—the situation is more convoluted. The onus would fall on investigators to prove that the senator specifically acted on nonpublic information gained through his position. But that’s easier said than done, as Burr—a 25-year Capitol Hill veteran who has chaired the Senate Intelligence Committee since 2015—could hypothetically fall back on the so-called mosaic theory defense in claiming that his decisions were informed by a variety of factors and sources of information.
“The difficulty [in pursuing STOCK Act cases] is that people in the legislative and executive branches are privy to a lot of inside information from many different sources, and are typically able to defend themselves by referencing a ‘mosaic theory’ of receiving information,” Perkins Coie’s Cohen notes.
Painter adds that, in Burr’s case, “the government has to show that the nonpublic information itself was material” to the stock trades pursued by the senator, and that they weren’t transactions that Burr “would have done anyway.”
Covington’s Kelner also points to “carve-outs” in Section 10 of the STOCK Act that, while not very clear, are “intended to protect members of Congress in engaging in their constitutional duties.” While no legislators have yet been indicted under the STOCK Act, Kelner believes that “it’s predictable that they would defend themselves based on those constitutional carve-outs.”
In general, congressional insider cases “are not easy cases to prosecute as a criminal matter,” Kelner adds. “Like anything, it’ll depend on the clarity of the evidence available.”
A matter of trust
The STOCK Act’s effectiveness as a piece of legislation remains up for debate—both in terms of preventing members of Congress from unduly profiting from their positions and also protecting legislators from legal liabilities that could see them unfairly end up in hot water.
For some observers, the simplest way to deal with the entire matter is to prohibit members of Congress from owning individual stocks in the first place, and, instead, restrict them to holding investments in broad-based mutual funds and exchange-traded funds. Loeffler announced her intention to do just that earlier this month, in response to the uproar over her stock trades.
“What [the STOCK Act] didn’t do is simply tell members of Congress to not invest in individual stocks—that they should invest in mutual funds [instead]. That would solve this conflict of interest problem,” Painter says. “Why should members of Congress who own medical device stocks decide whether to repeal the medical device tax?”
Painter notes that statutes prohibiting such conflicts for executive branch employees already exist. Under Title 18 Section 208 of the United States Code, it is a criminal offense for members of the executive branch (except for the President and vice president) to participate in government matters in which they or their immediate family has a financial interest.
“That’s why I told [former Goldman Sachs CEO] Hank Paulson that he had to sell his Goldman Sachs stock to become Treasury Secretary [in 2006],” Painter recalls of his time as the Bush administration’s chief ethics lawyer. But in addition to exempting the President and vice president, he adds, the law also “doesn’t apply to members of Congress.”
In order to comply with 18 U.S. Code 208, as it’s more commonly known, many executive branch members place their assets, including stock holdings, in a blind trust. While Loeffler claims to have had no knowledge of the stock trades made on her behalf by investment managers, her holdings are not in a blind trust—an arrangement in which she would have no way of knowing or intervening in how her assets are being managed.
“My advice to clients is typically, if they’re in office or in a position where these laws apply, that a blind trust is an excellent way to protect themselves from liability,” Perkins Coie’s Cohen says.
But blind trusts do come with a stigma. “The general thinking is that blind trusts don’t tend to be invested very well,” Covington’s Kelner notes. “There aren’t many people comfortable with the idea of having no idea what risks they are exposed to.”
There is also the option known as a Rule 10b5-1 plan, which establishes a predetermined plan for purchasing or selling select securities and is often used by corporate insiders to comply with insider-trading laws. Along with blind trusts, 10b5-1 plans are among the most viable “safe harbors” available to politicians seeking to insulate themselves from insider-trading scrutiny, according to Dorsey & Whitney’s Thomas Gorman.
In Gorman’s estimation, because neither Burr nor Loeffler chose to adopt any of the measures designed to protect lawmakers from accusations of self-dealing, “the government has to investigate them” to determine whether or not there was any wrongdoing.
Should investigators find such evidence, it would be the STOCK Act which, while little used thus far, would be deployed to hold those lawmakers accountable for their actions.
“Without the STOCK Act, I’m not sure any regulators would be looking at stock trading by members of Congress,” Kelner says. “The hurdles were higher before. It would have been difficult to bring a case.”
More must-read finance coverage from Fortune:
—5 veteran investors on how to approach the coronavirus stock market
—These countries’ stock markets have been hit the hardest by the coronavirus
—China’s next coronavirus crisis: What happens after a country closes its economy
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—How the American economy can recover from the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-23--‘What do you do?’ How to write a professional bio

Work Space is a biweekly Q&A column tackling the work challenges that keep you up at night. You can read all the columns here. If you want advice on something you’re navigating at work, send your questions to workspace@fortune.com.
Work Space will be taking a break after this column.
The question has been lightly edited and condensed for clarity.
Q: I read your last column on freelancing and what freelancers can do right now. I’m interested in hearing more about redoing your bio. I don’t even know where to start. I am so bad at thinking through what I’m trying to accomplish. I start a new career every five years.
I don’t know that I need a bio or where I would put it. Every time people ask me what I do, I usually just make something up on the spot about what I’ve been doing recently that I think will matter to them. The only times I’ve had to talk about who I am are in job interviews, and I haven’t done one of those in a long time.
—Erin
Dear Erin,
You’re not the only one who has a hard time talking about yourself professionally. I’ve coached dozens of people on improving their résumés and pitches, and over and over again, the same things come up. People feel blocked about describing their own experience. Many find it easier to talk about other people’s work than their own. People don’t know where to start. And many worry that if they’ve changed jobs, people may think they lack focus, or worse: that they’ll have to start over in a new industry.
When coaching new people, the first thing I focus on is how they are describing themselves and their work. Having a clear narrative around your work is one of the most powerful tools you have to demonstrate your expertise. A well-crafted bio is a powerful way for you to share who you are, and in a professional context, it’s about what you do and why you’re qualified to do it. It should focus on what experiences have informed your approach.
Once you can have a bio that you’re happy with, you can adapt it to a range of contexts, shorter for social media, longer when you want to share more specific expertise, like if you’re speaking at a conference or posting on your website. It will also give you a succinct way to describe yourself. Not only will this be helpful the next time a stranger asks, “What do you do?,” it’s also a great starting point in updating how you’re presenting yourself, whether that’s on your résumé, in pitches, on your website, or in conversation with your coworkers or potential employers. Having a grasp on your career arc is crucial so you can give other people a sense of what you care about and what you’d like to be doing in the future.
There is power in introducing yourself on your own terms. Your story is yours to tell. Show how you’ve been able to get things done with examples from your past experiences. Tell people what you’re passionate about doing and what you’re excited about now. Frame your accomplishments in big-picture ways—launching a project, forming new partnerships, managing people, getting promoted—and offer details that show your impact. Trust that your big wins will translate, even if you’re working in a different industry than you were in the past. If people have questions, they’ll ask you for the details if you’ve captured their attention with the broad strokes of what you were able to get done.
My please-if-you-do-one-thing-from-this-advice-column-do-this-one-thing is for you to start by describing the work you do in one sentence. Focus on the approach that you have taken and the impact that you have had in your work. A concise summary lets you lead with how you define your work, not what you think other people want to hear. It also helps you keep people’s attention without losing them in the details. Based on your process, you may start with one piece, like your title, and need to add details to get to a concrete description. Or you may find that you can describe your work in a paragraph, and need to take a few passes to boil it down to something concise.
Your goal is to get to one sentence that clearly tells people what you do and what your approach is. I’m a magazine columnist who offers real talk with deep empathy. In another professional world, I’m a program director who identifies talent and invests in innovative media projects. You may be an event producer who designs experiences that connect people with new technology. Or a restaurateur committed to teaching people about mezcal and food deeply rooted in the Sinaloan ritual. All of these descriptions give people a place to anchor their understanding of you and how you’re approaching your work.
Once you have a strong idea that summarizes what you do, build on it. Find a through line between your past experiences—either by way of the approach you’ve taken to your work, the impact that you’ve had, or what you’ve accomplished in those roles. Again, one sentence is great for this. You should be framing it thinking about what’s most important for people to know about how you approach work. For example, the restaurateur I mentioned has collaborated with chefs and artists at multiple restaurants, creating authentic experiences centered around regional cuisines and small-batch products.
To craft a narrative, you’ll build on how you define your work and the arc of your career with more examples from your experience. Here are prompts that will help you unpack your work experience:
How would you describe the work you do now in one sentence?
Think about someone who understands what you do well or who you work with often. How would that person describe what you do?
Think of a project that you are proud of. What was your role in the project?
What was the impact of that project?
Name one thing that you’re proud of in this role or a past role.
Your next task is to frame your experience with a focus on what you want to be doing—whether that’s in your current position, in your work with clients, or in your next role. Based on your range of experience, there are lots of things you can do. What do you want to be doing most? Find examples from your past that show how you’re qualified to do that work. The better you are at capturing what you’re interested in now and how you’re qualified to do it based on your past work, the more likely you are to find new opportunities that fit with what you’d like to be doing.
Your range of experience is a major asset. If you’ve had a nonlinear career, don’t discount your past because it’s not exactly the same as what you’re doing now. People change jobs all the time, and people grow within the jobs they have. Having a range of experience and responsibilities gives you valuable insights. You need to show people how it has shaped you and your approach, and how it makes you a more interesting candidate or collaborator. Think about the parts of your experience that inform how you approach your work. Find examples that show you can deliver.
These questions can help you think through how you want to position yourself:
What are you most passionate about at work?
What parts of your experience are unique to you and give you a valuable perspective?
What experience informs your approach?
How can you show people that you can deliver?
Do you need to revise how you are presenting yourself for who you are now? Or where you want to go next?
If you’re having a hard time thinking about what you want your next accomplishment to be, start small with what you’d like to be doing right now. Track what you do at work for a week, and note which things you enjoy doing and which you would prefer not to be doing. You may need to revise how you’re presenting yourself to be more in line with the work that you’re actually doing now (as opposed to how you may have defined your work in the past), or for where you’d like to be focusing more energy in the future.
While you’re working through how to present yourself, write all of these things down. Your bio will change over time as your experience and your goals change. If you have a hard time working on it by yourself or actually making the time to do it, ask someone you trust to be your accountability buddy. Ask them to talk things through with you, to check in with you in a couple of weeks to see if you’ve written a new bio, and to read things when you need feedback.
Like you, I’ve changed a lot over the course of my career. I’ve worked in completely different industries in a range of roles. For years, I was more comfortable rambling on about the details of the work I was doing at the moment than I was talking about myself. More than once, I felt like I missed an opportunity because I was so focused on what other people might be interested in that I didn’t give them more context about who I am. I was underselling myself in two ways: I was letting other people guide the conversation, and, worse, I thought I needed to convince people that I was hirable.
A turning point came when I realized that I didn’t need to focus on convincing people I was capable. I needed to help people understand what it means to work with me and what I value in coworkers and collaborators. Now I focus on showing the bigger picture about how I get things done and what I’ve been able to accomplish. The reframing has been a game changer for me, and I think it will be for you too. Owning your past accomplishments and being able to give people a snapshot of what you’ve been able to do opens up more possibilities for what you can do in the future, on your terms. At this point in your career, it’s not just about showing people that you can do work. It’s about showing them how you approach things and what you want to get done.
Sending you good vibes,
Jen
More must-read careers coverage from Fortune:
—How Fortune 500 companies are stepping up during the pandemic
—3 ways to put your best foot forward on a video job interview
—Everything you need to know about furloughs—and what they mean for workers
—The coronavirus could change how freelancers work in the long term
—Accenture and Verizon work to help furloughed or laid-off workers find new jobs
—WATCH: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Get Fortune’s RaceAhead newsletter for sharp insights on corporate culture and diversity.


fortune--2020-04-24--Former Cisco CEO John Chambers finally gets his wish: Video conferencing is now mainstream

The Russell 2000 may have predicted the stock market crash—and could foreshadow the next bull market

John Chambers has always had an eye for innovations that are way ahead of current technology trends. The long-time Cisco Systems chief executive officer, who retired in 2017 after 20 years at the helm, bet early (and big) that Internet-enabled video would become an indispensable mode of communication. But with this particular innovation, he was way, way ahead of the curve.
Chambers made his first big push in the then-nascent market years before the current COVID-19 crisis forced many of us to adopt video conferencing for everything from yoga classes to corporate board meetings. In 2006, he launched a pricey, ultra-high definition video conferencing system called Telepresence, tailor-made for deep-pocketed enterprises. In subsequent years, under Chambers’ lead, the computer networking company invested billions in the space, snapping up collaboration software provider Webex in 2007 (still broadly used by corporations) and the Flip mini camcorder in 2009 (which was killed off just two years later). Cisco even launched a short-lived “personal” Telepresence set, called Umi, in 2010.
To be sure, not all of Chambers’ pushes into video communications were successful. For starters, some were just too costly to become ubiquitous. And Cisco’s strength has never been in the consumer space. But Chambers, who now runs his own venture capital firm, JC2 Ventures, was both prescient and pioneering in his belief that video conferencing would someday become mainstream. Webex, which provides screen sharing and video conferencing tools for businesses, hit a record 324 million users in the month of March. (Its more headline-grabbing competitor, Zoom, whose founder is a former Webex engineer, recently hit the 300 million daily user mark.)
To hear more about the early days of video conferencing and the evolution of the market, Fortune recently caught up with Chambers.
This conversation has been lightly edited and condensed.
You were early on in videoconferencing, from WebEx to Telepresence. Did adoption move as fast as you’d hoped?
Not only were we early adopters to video conferencing, but we actually launched Telepresence at Cisco in 2006 as a direct response to another healthcare crisis: Bird Flu. In fact, I was actually in Mexico City meeting with the President of Mexico and his cabinet the day the virus broke. They were receiving inaccurate information from Southern Mexico about the speed of spread, death rate, and the hospitals being overwhelmed. Government leaders were being advised not to meet in groups larger than two to three because of the rate of transmission. Thank goodness it turned out not to be as serious as first indicated, but this is one of the reasons we sped up our development of Telepresence, and the Mexican government then became one of the early adopters of the technology.
I’ve believed for a long time that video is the communication channel of the future, and I’ve been working hard over the past few years to have my team adopt video in their day-to-day lives. We became very dependent on email in recent years but that channel —and even phone—can be extremely impersonal. It’s never more important to focus on strengthening relationships than in times of crises. In fact, I would argue that one of the very early steps a CEO should take in addressing any crisis and leading through downturns is to reach out to employees, customers, stakeholders, and partners to communicate how an issue will be handled. Video is a great way to build confidence and help others during this challenging time.
What has changed in the last few years and paved the way for broader adoption?
I think what we have started to see is every company recognizing that they need to be a technology company, no matter what industry they are in. In order to control their own destinies in the Digital Age, companies have to be open to using technology to enable their business strategies. The real magic happens when companies can create business model changes, enabled by new shifts in technology. The pace of innovation leading up to the COVID-19 crisis was something we had never seen before—not even in the Internet Era. I think that companies really started realizing that they had to keep up with those changes, otherwise they would get disrupted by their competitors and left behind.
Do you expect that the “work from home” trend will continue past the pandemic?
In the last week alone, I have already seen a major trend, by my startups, the VC community, enterprise companies, and even the media, of not just a comfort level with video conferencing, but a view that it is even more productive than face-to-face meetings. Many anticipate meetings in the future will have less people, and I agree—this is here to stay, in my opinion, and will transform work in ways we’re just beginning to imagine. For example, it’s very possible, maybe even likely, that call centers that used to be in one central location will be run with all of the agents in their own home, enabled by AI, bots, virtual assistants, and video capabilities over time.
I do expect a sense of normalcy to return eventually in terms of people going back to offices but that likely won’t happen for some time. The worst thing we can do, of course, is to do this too quickly because then we would see a second wave of the pandemic. In the meantime, the focus for CEOs will shift. In a matter of weeks, business leaders went from prioritizing growth, then innovation, and then cost savings—but today that has flip-flopped. Cost savings are more important than ever. CEOs will focus on protecting their revenue streams in the months ahead, and innovation will get pushed to the bottom of the list.
Valuable, meaningful work can happen in virtual ways, no matter the industry. Beyond the call center example I shared earlier, just think about the value of listening to your customers even when you aren’t with them in-person. For example, consider Sprinklr, one of the companies in the JC2 Ventures portfolio that focuses on customer experience management. Sprinklr was able to pick up on social conversations about the frustrations healthcare employees were having about getting to and from work because of coronavirus disruptions, allowing their customer Grab [a ride-hailing company] to make the quick decision to develop a new fleet of cars dedicated specifically to healthcare workers.
Lastly, why do you think Zoom in particular has managed to become so popular?
There are a lot of great videoconferencing tools out there, from Zoom to Google Hangouts to Skype. I was the most comfortable using Google Hangouts before the COVID-19 pandemic started making its impact around the world, but I quickly had to make myself adept at using other videoconferencing programs because I am now doing 100% of my meetings via video using a variety of platforms. This includes weekly video calls with each of the startups in the JC2 portfolio, as well as very high-level Board meetings with various stakeholders, conversations with Verizon and Comcast, media interviews, and even a virtual dinner event with more than 20 participants from different locations around the U.S. where Shake Shack helped us simulate an in-person discussion over burgers, fries, and milkshakes. [The dinner, a gathering of startup and enterprise leaders, was originally supposed to take place in mid-March at the Shake Shack Innovation Kitchen in New York City.]
At the end of the day, we all need to remain flexible and agile in this challenging environment, doing our best to pick up on new skills in order to stay connected and identify the best ways to serve customers, employees, and stakeholders when they need support the most.
Dive into stories from Fortune’s print edition:
—The trillion-dollar question: How far will GDP fall?
—How each industry is fueling the U.S. unemployment rate in one chart
—What we can learn from China’s color-coded apps for tracking the coronavirus
—The retailers that are smartest about tech will finish on top after the coronavirus
—Big Pharma has the chance to come to the world’s rescue
—More surveillance and less privacy will be the new normal after the coronavirus
—WATCH: Ford CEO Jim Hackett on the company’s pivot to combat coronavirus
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-24--The Russell 2000 may have predicted the stock market crash—and could foreshadow the next bull market

Former Cisco CEO John Chambers finally gets his wish : Video conferencing is now mainstream

The stock market is like a collective crystal ball, in which investors value stocks by what they expect companies to do in the future, using the immediate past to support their hunches. But when shares have plummeted, the hardest question to answer is also the most pressing: When will we be past the worst?
And on this point, there’s one corner of the market that may offer some clues.
A group of analysts, advisers, and investors point to the Russell 2000, which comprises small-cap and midcap companies, as important to track. The Russell has often presaged a crash, or blow-off top, and on the other side of a bear market indicated when conditions were again turning favorable.
“Not many people pay attention to that, but that’s how many bear markets start, with the smaller and midsize companies,” said Steven Jon Kaplan, CEO of True Contrarian Investments. “Hardly anybody reports on a story how the Russell 2000 did on a particular day or week or year.”
“In most correction cycles, small-caps tend to lead the charge on the way down,” said Dan Wantrobski, associate director of research at Janney Montgomery Scott.
The Russell 2000 began to indicate potential danger 18 months ago when it started to dip after hitting its high back on Aug. 31, 2018. Meanwhile, the S&P 500 would continue to climb for another year and a half. The divergence continued until the broader market crashed in February 2020.
Then, when things really turn around (versus a short-term bump, followed by another fall), stocks on the Russell frequently lead the large-caps. When this happens, it tells you “investors are moving back into the riskier areas of the equities market,” Wantrobski said. “You’ll know we’re getting close to a bottom when we see small-caps starting to outperform large.”
Getting the theory
To understand, it helps to look at the foundation on which Russell stocks operate.
“Small-caps are domestically focused: 80% of the revenue of the index comes from the United States,” said Nathan Moser, senior vice president and portfolio manager of the Pax World Small Cap Fund. That compares to about 40% among the S&P 500, he noted.
As a result, “the Russell 2000 is more directly exposed to GDP growth in the United States than either the S&P 500, Dow, or Nasdaq,” said Stephen Mathai-Davis, CEO of fintech company Quantalytics AI. Swings in the domestic economy have a bigger impact on Russell companies. Large-caps, which are generally more geographically diversified, are more likely to weather U.S. economic downturns.
Large-caps also have more access to financial resources to manage difficult conditions. Small-cap stocks, on the other hand, are less able “to secure funds, such as bank credit lines,” said Dr. Tenpao Lee, a professor of economics at Niagara University, in a note to Fortune.
In addition, the business cycle for small-cap companies is typically shorter than that of the economy’s overall business cycle. “As a result, when the economy is turning into a recession, we will observe negative signals from small stocks first, such as revenue and profit declines, layoffs, and even bankruptcies,” Lee noted. He also pointed out that Russell-type companies are more flexible, so they can and will make faster adjustments like laying off employees, making economic impacts more obvious than with slower big businesses.
For example, during the rally at the start of Donald Trump’s presidency, “for every one unit gain in the S&P 500, the Russell 2000 was going up nearly one-and-a-half times,” Mathai-Davis said.
But 2019 was a very different story. “The S&P and Dow kept posting new highs,” said Wantrobski. “It was never confirmed by the Russell 2000 or the SmallCap 600. We were cautious. In any healthy bull market, you have to see breadth.” Even without the impact of the pandemic, assuming a continuation of a bull market was becoming riskier.
Now that we are firmly in the grips of a bear market—and likely a recession—some experts will be looking again to the Russell 2000 companies for signs that the worst is over. As in the past, finding the real change is a day-to-day search. At some point, or so goes the theory, the Russell 2000 will be growing faster than the S&P 500, Dow, and Nasdaq indexes, although there’s no way to know when that might happen.
Analysts caution, however, that we are in uncharted economic waters, and small companies may have a harder time than usual bouncing back. “Small-caps haven’t done themselves any favors by leveraging their balance sheets,” Moser said. “Equity investors may be concerned that you can’t refinance the debt coming due or that refinancing will be much costlier.” The uncertainty will translate into greater caution toward smaller and more heavily leveraged companies.
According to data provided by FactSet to Fortune, on a trailing 12-month basis, the S&P 500 overall shows a total debt to assets ratio—a measure of leverage—of 31.2 while the S&P SmallCap 600 index is at 40.4.
“It will be something that we’ll be watching for in the days or weeks ahead,” Wantrobski said.
More must-read finance coverage from Fortune:
—5 veteran investors on how to approach the coronavirus stock market
—These countries’ stock markets have been hit the hardest by the coronavirus
—China’s next coronavirus crisis: What happens after a country closes its economy
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—How the American economy can recover from the coronavirus pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-24--‘State aid or bust:’ Germany’s Lufthansa is running out of cash

Deutsche Lufthansa AG risks running low on cash within weeks, with the German airline saying the global oil rout has deepened its distress, and its survival now depends on a multibillion-euro bailout from four states.
Liquidity will fall sharply if Europe’s largest carrier is unable to soon access aid, Lufthansa said late Thursday. The coronavirus pandemic has forced the sprawling airline group to halt most flights, choking off revenue while outgoing costs for ticket refunds and financial obligations strain its reserves.
Lufthansa is discussing a package worth up to 10 billion euros ($10.7 billion) including guarantees, loans and some form of equity with negotiatiors in Germany, Switzerland, Austria and Belgium, according to people familiar with the matter. Talks are snared on the form the bailout will take, with the airline fighting to have as few conditions as possible attached to the assistance.
The collapse in oil prices has rocked Germany’s flagship airline, already in crisis after the outbreak brought global travel to a near halt. Lufthansa connects the country’s powerhouse economy to the far-flung markets on which its export juggernaut depends. With a fleet of 763 jets before the coronavirus hit, the carrier dominates business travel in the wealthiest areas of Germany, Switzerland and Austria.
The statement “indicates a need for state aid within weeks,” Bernstein analysts Daniel Roeska and Alex Irving said in a note. “Right now, it is quite literally state aid or bust.”
Lufthansa shares fell as much as 5% in Frankfurt on Friday. The stock has more than halved since the start of the year, leaving it with a market value of 3.56 billion euros ($3.8 billion). It said this month said it would scale back its fleet by more than 60 jets and close its Germanwings unit, resizing the group for depressed levels of travel that could last for years.
Hedging Losses
Hedging losses will push first-quarter earnings deeper into the red, Lufthansa said, while postponing a results announcement due next week. The carrier said it would give more details later.
The circumstances are so dire that Lufthansa doesn’t expect to be able to raise funds from capital markets, despite owning some 10 billion euros worth of planes it would be able to use as collateral in normal times.
Bailout talks with the governments of the four countries, where it now owns airlines after years of expansion, have dragged on for weeks. The airline said it still expects to access aid, though it’s been under increasing pressure to accept partial ownership by Germany as a component of state support.
“The management board is confident that the talks will lead to a successful conclusion,” Lufthansa said in the statement.
Like many European airlines, Lufthansa hedges its massive fuel costs to guard against a sudden rise in price that can accompany shock events such as geopolitical conflict. The company spent 6.7 billion euros on jet fuel last year, using financial instruments tied to oil prices to steady its exposure. But after prices unexpectedly dropped, those same hedges are costing it money.
Before the coronavirus hit, Lufthansa had forecast Brent crude prices at $63 per barrel for 2020. In January, the company said a drop to $45 per barrel would result in $800 million in hedging losses this year. Brent crude traded at about $22.32 per barrel Thursday on spot markets.
In early April, Ryanair Holdings Plc estimated it would report a 300 million-euro hit to profit for its fiscal year ended March 31 because of costs arising from fuel hedges.
In Politicians’ Hands
The company’s liquidity is “worrying, and now a decision for politicians,” the Bernstein analysts wrote. “Evidently, credit markets are all but closed even to the group with the largest unencumbered fleet in Europe.”
Lufthansa said first-quarter revenue dropped 18% from a year earlier, but was down as much as 47% in March after lockdowns spread from Asia to its home turf in Europe. The loss on earnings before interest and taxes totaled 1.2 billion euros in the three months.
The group had around 4.4 billion euros in liquidity remaining.
More must-read finance coverage from Fortune:
—Real unemployment rate soars past 20%—and the U.S. has now lost 26.5 million jobs
—Why charging members of Congress with insider trading is so fraught
—Out of work, but not unemployed: How much Europe is paying its idled workers
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—Furlough vs. layoff? What to know about your rights and benefits
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-24--A fresh trillion in stimulus spending fails to lift the global markets

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, and Happy Friday. Stocks and oil are down. After yesterday’s rollercoaster ride, the markets look to end the week on a down note.
Let’s see what’s moving those markets.
Markets update
Asia
Asia indices are in the red, and falling, with Shanghai leading the way down.
leading the way down. The big focus is the apparent failed trial of Gilead Science‘s remdesivir, a hopeful drug candidate to fight Covid-19. Gilead shares tumbled 9% yesterday. That deflated yesterday’s U.S. market rally, and is sinking Asian shares today.
Europe
Europe opened with a thud, too. The benchmark STOXX Europe 600 Index was down 1.5% in early trade, wiping out yesterday’s gains.
opened with a thud, too. The benchmark was down 1.5% in early trade, wiping out yesterday’s gains. The ECB Christine Lagarde warned EU leaders yesterday that the eurozone GDP could shrink by as much as 15% this year unless member states ready the proverbial bazooka.
Christine Lagarde warned EU leaders yesterday that the eurozone could shrink by as much as this year unless member states ready the proverbial bazooka. On cue, the EU’s top pols endorsed a 540 billion-euro ( $580 billion ) plan to support the hardest-hit businesses and economies, but the divisions between the indebted South and their richer northern partners are vast.
top pols endorsed a 540 billion-euro ( ) plan to support the hardest-hit businesses and economies, but the divisions between the indebted South and their richer northern partners are vast. Lufthansa shares sank nearly 4% in early trade as Europe’s largest airline warned of a cash crunch and need for state aid.
U.S.
The Dow , S&P 500 and Nasdaq sunk in afternoon trade on the Gilead bombshell, with only the Dow closing in positive territory. All three look set to open lower this morning.
, and sunk in afternoon trade on the Gilead bombshell, with only the Dow closing in positive territory. All three look set to open lower this morning. President Trump promises to sign today at noon a House-passed coronavirus aid bill. It’s the fourth such rescue package. The quartet of aid adds up to nearly $3 trillion , or 15% of GDP .
promises to sign today at noon a House-passed coronavirus aid bill. It’s the fourth such rescue package. The quartet of aid adds up to nearly , or . This latest measure aims to give much needed relief to America’s small businesses who where shut out in round one. Fortune‘s Anne Sraders lays out what you need to know this time around.
who where shut out in round one. Fortune‘s Anne Sraders lays out this time around. Last night kicked off the NFL draft. Today, online sports betting operator, Draftkings, begins trading as a public company. The Nasdaq listing will trade under the symbol, DKNG.
Elsewhere
Gold is up.
is up. As is the dollar .
. Crude is down, as I type, with Brent futures sinking below $25/gallon.
By the Numbers
0.88. If you live in Michigan, you may have seen the price of gasoline is now under a buck at some gas stations around the state. The national price is a bit higher, standing at $1.79—for now. “We’re expecting to see prices to continue to decline,” says AAA, the automobile club. The price-at-the-pump collapse follows the historic crash in oil prices earlier this week. Typically, cheap gas is a boom for consumers, but the tumult in the oil markets—reminder: we hit negative oil on Monday—is having huge ripple effects across the global economy. This will be a jolt to oil-dependent emerging markets from Angola to Venezuela, and very likely become a big political issue in fracking country.
26.5 million. That’s how many workers in the United States have filed for unemployment benefits in the past five weeks. Yesterday’s tally of 4.4 million jobless claims filed was an improvement over previous weeks, but was more or less in line with economists’ estimates. The markets shrugged off the data as a flattening-the-curve success. But we’re still staring at a real unemployment rate of 20.6%, my colleague Lance Lambert calculates.
76.76. After two straight weeks of gains, the S&P 500 has fallen by nearly 76.76 points, or 2.7%, over the last four trading sessions. In a week where oil has plunged to historic depths, the economy has shed another 4.4 million jobs, and corporate earnings go from bad to worse, that’s not a bad performance. But the bulls won’t be happy.
Postscript
When I joined Fortune full-time last September, one of my first calls was to Adrian Croft. We had worked together at Reuters back in the day. While I toiled on the equities desk in London back then, Adrian was off on glamorous assignments. He was embedded with the U.S. 15th Marine Expeditionary Unit during the invasion of Iraq in 2003 while I was covering the collapse of the Big 5 music labels. I saw some great concerts; he saw history.
A true Fleet Street veteran, Adrian has great stories to tell. (Do yourself a favor and read his farewell note to colleagues when he retired from Reuters last year).
Adrian agreed to come out of retirement and write for us, on topics ranging from the Saudi-Russian price war, to king dollar, to the wolf in cashmere, Bernard Arnault. He also wrote the “Today’s reads” and is the genius behind “Market candy.”
He won’t be happy that I’m making such a fuss about him, but I just wanted to thank him publicly for all his help these past few months. Today is his last day on BS duty.
I’m sure we’ll work together again some day. The gods of journalism wouldn’t want it any other way.
All the best, my friend.
***
Have a nice weekend, everyone. I’ll see you here on Monday.
Correction: yesterday’s Bull Sheet contained a misspelling. It should have read, “Okun’s Law.”
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
Why it's better to be unemployed in Europe. Unlike in the United States, where 26.5 million workers have filed jobless claims in five weeks, millions of idled workers in Europe are being kept on company payrolls while governments pick up the tab. The schemes vary widely in generosity, with the Dutch paying up to €9,538 ($10,371) of an employee's gross monthly wages while the Italian government will cover up to €1,129, Fortune details.
Pandemic pay-day. The combined wealth of America’s billionaires, including Amazon.com founder Jeff Bezos and Tesla CEO Elon Musk, grew by nearly 10% over a three-week period in March and April during which 22 million Americans lost their jobs, a U.S. thinktank, the Institute for Policy Studies, said. Since the start of the year, eight U.S. billionaires, including Bezos, Musk and Zoom CEO Eric Yuan, have seen their fortunes swell by over $1 billion each.
The not so great reopening. Car dealerships are starting to reopen across Germany in an easing of the coronavirus lockdown. Fortune's David Meyer found there’s only one problem: customers. Germany’s near-empty car showrooms highlight the plight businesses face even when they are allowed to reopen—customer confidence around Europe is desperately low as the scale of the economic fallout from the pandemic becomes ever more apparent and amid uncertainty over whether infections have peaked.
Market candy
“I really screwed up.”
That's the admission of Yngve Slyngstad, the outgoing chief executive of Norway’s $1 trillion sovereign wealth fund. In a memo to staff, he apologized for straying from compliance rules in accepting a flight from the hedge fund manager set to replace him, Bloomberg reports. Central bank authorities are now investigating him for that free flight, and the matter has become a national scandal in Norway.


fortune--2020-04-24--Coronavirus will hammer transportation and hospitality sectors

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning, and happy Friday.
If you wonder how badly the pandemic is going to hit the transportation and hospitality businesses, take a look at research out this week from Fortune Analytics. In a survey of U.S. adults, 74% said they have cancelled domestic trips they had planned for this year as a result of the pandemic. And a similar amount—71%—said they won’t consider flying until at least four months from now. A substantial number—35%—said they wouldn’t consider flying anytime in the next 12 months.
By the way, once they do resume flying, Southwest and Delta remain the popular favorites—with 46% and 41% net favorability ratings respectively. And Frontier and Spirit remain the dogs, with favorability ratings of 2% and 12% respectively. (Note: the full research is available only to our Premium Tier subscribers. Sign up here.)
One person who is bullish on travel is Egon Durban, co-CEO of Silver Lake, who spoke yesterday to a virtual gathering of the Fortune Brainstorm Tech community. Silver Lake revealed yesterday it had joined Apollo to invest $1.2 billion in online travel booking engine Expedia, just a couple of weeks after joining Sixth Street Partners to invest $1 billion in Airbnb.
When does he think travel will come back? “We believe that we are going to go back to being a functioning society, and capitalism is not going to fail. At some point, people will travel, and at some point, they will stay in hotels,” Durban said. “Whether travel comes back in six months, 12 months, 18 months, is less relevant to us.”
Separately, take a moment to read Dov Seidman’s Fortune essay on why business leaders need to demonstrate moral leadership to survive the pandemic. An excerpt:
“The business of business can no longer just be business. Everything is now personal; the business of business is therefore society. Mission and margin, profit and principle, success and significance are now inextricably linked. In the fused world, how we behave, how we operate, how we govern, and how we relate to people and communities matters more than ever. Going forward, businesses are going to compete on trust, on responsibility, and on creating and maintaining deep relationships with their stakeholders rooted in shared truths and values.”
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Remdesivir disappointment
Gilead Sciences' remdesivir antiviral drug failed a crucial clinical trial as a COVID-19 treatment, according to a draft document accidentally published by the World Health Organization. Per that document, the Chinese trial showed remdesivir neither improved patients' condition nor reduced the coronavirus's presence in their blood. Gilead says the study was terminated early because of low enrolment, and its results were inconclusive. Nonetheless, its share price fell 4% on the news. A subsequent drop in global stocks has also been pinned on the blow—but the EU's failure to agree a major economic recovery program is also a likely factor there. Financial Times
Penney drops
J.C. Penney is reportedly in advanced talks for bankruptcy funding from existing lenders Wells Fargo, Bank of America and JPMorgan Chase. The troubled retailer could file for bankruptcy within weeks. It has been losing money for years, and the coronavirus lockdown could be the last straw. Wall Street Journal
Chinese figures
A study published in the Lancet medical journal estimates that there are as many as four times as many coronavirus cases in China as officially reported. It noted: "The case definition was initially narrow and was gradually broadened to allow detection of more cases as knowledge increased, particularly milder cases and those without epidemiological links to Wuhan, China…Estimates of key epidemiological parameters using epidemic curves could be biased if they do not account for such changes in case definitions." Fortune
Digital currency
McDonald's, Subway and Starbucks are, according to Chinese media, participating in a digital-currency trial that's underway in the Xiong'an special district near Beijing. The People's Bank of China has been developing its digital-currency concept for a few years new, though details about its functioning remain scarce. CNBC
AROUND THE WATER COOLER
Easterbrook protest
Union pension funds are protesting against the pay package being granted to former McDonald's CEO Steve Easterbrook, who was sacked in November over a consensual relationship with an employee. Easterbrook is getting a $44 million payout and CtW Investment Group—which works with the funds—wants investors to vote against board members Enrique Hernandez, Jr. and Richard Lenny, who were responsible. Bloomberg Law
Gates memo
Bill Gates penned a 6,000-word "memo" on the coronavirus pandemic, arguing that the response has been no overreaction. The essay is heavy on can-do spirit, noting: "This is like a world war, except in this case, we’re all on the same side…Everyone can work together to learn about the disease and develop tools to fight it. I see global innovation as the key to limiting the damage." Fortune
Really, please don't
President Trump suggested during a live TV briefing that coronavirus might be beaten if people inject themselves with disinfectant. Over to pulmonologist Dr. Vin Gupta: "This notion of injecting or ingesting any type of cleansing product into the body is irresponsible and it's dangerous. It's a common method that people utilize when they want to kill themselves." BBC
Empty showrooms
Germany may have allowed car showrooms to reopen following weeks of lockdown, but that doesn't mean customers are flocking to scope out their next purchase. As showroom manager Joachim Niersmann puts it: "As before the virus, customers don’t know what they have to buy: hybrids or electric vehicles or diesel. I think it will be better in coming times, but this week they don’t want to make a mistake with the car, or with the virus." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-04-24--New study casts more doubt on true scale of China’s coronavirus outbreak

Coronavirus cases in China may have been four times higher than officially reported numbers, according to a study published in the Lancet medical journal.
Infections would have been 232,000 in China as of Feb. 20 if the calculation of cases confirmed by “clinical diagnosis” had been applied throughout the outbreak, the Lancet reported. That compares to the 55,508 cases announced at the time by the country’s National Health Commission, according to the report.
Measurement of infections can change significantly as a virus spreads, more information becomes available and testing evolves and increases. The study’s authors said seven versions of the coronavirus case definition were used by the NHC in China from Jan. 15 to March 3 and changes should be considered when estimating growth rates.
A change of methodology that included cases diagnosed with CT imaging scans, alongside the previous method of nucleic acid testing kits, led to the addition of nearly 15,000 virus cases in a single day. Previously, patients with pneumonia-like symptoms found only via CT scans weren’t confirmed as positive cases without the other test, which was short of supply back then.
“The case definition was initially narrow and was gradually broadened to allow detection of more cases as knowledge increased, particularly milder cases and those without epidemiological links to Wuhan, China,” according to the study published April 21 and led by Tim K Tsang from the Hong Kong University School of Public Health.
While the study doesn’t project the current total of cases using the different methodology, it casts further doubt on the true scale of the outbreak in China, where data and death tolls have been repeatedly revised in the past three months. There have been 83,884 infections and 4,636 deaths in China, according to Johns Hopkins University data.
With the virus infecting more than 2.7 million people globally, and killing 190,000, countries are having issues working out accurate numbers of cases, especially when it comes to asymptomatic infections.
In China, serological surveys have been started to detect how many people overall have been infected, while the government urged mass testing of both the virus and its antibodies nationwide.
Amid accusations it’s under-reported numbers and concealed the true extent of its outbreak, China added confirmed infections and an extra 1,290 fatalities to its tally last week. The revision was aimed at including cases where people died without being treated or tested and from overwhelmed health institutions that failed to report them in time.
The Lancet article says among the 232,000 estimated infections nationwide by Feb. 20, 127,000 cases would have been from the city of Wuhan where the pathogen was first identified in December. This includes some 11,000 infections that met the fifth version of case definition with illness onset by the start of the year.
“Estimates of key epidemiological parameters using epidemic curves could be biased if they do not account for such changes in case definitions,” Tsang and other scientists wrote.
They added that when the case definition changed, there could be a backfill of cases that met the new definition around the change time.
Still, the findings suggest the lockdown measures in Hubei province turned out to be very effective in curbing growth as Wuhan implemented unprecedented control measures on Jan. 23. Before the lockdown, 92% of cases were undetected, the study said.
More coronavirus coverage from Fortune:
—Bill Gates explains how to beat the coronavirus pandemic
—Elective surgeries—mostly paused due to the pandemic—are critical to hospital finances
—World Health Organization says 3 more coronavirus vaccines are in human trials
—Late payments soar, revealing extent of coronavirus pain on European companies
—14% of women considered quitting their jobs because of the coronavirus pandemic
—Forget “wet markets” and bats: For scientists, failing environmental policies have created a boom time for outbreaks
—Out of work, but not unemployed: How much Europe is paying its idled workers
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s forthcoming Eastworld newsletter for expert insight on what’s dominating business in Asia.


fortune--2020-04-24--You’re the breadwinner in the relationship. Now what?

There may be 22 hidden coronavirus hotspots in states poised to lift restrictions

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Here’s what to expect in the latest edition of the newsletter.
Broadside writer Kristine Gill offers advice from financial planners about what you should keep in mind regarding finances if you’re the one in the relationship making the lion’s share. Then, scroll on for job opportunities from the Department of Housing and Urban Development, Everlywell, Paylocity and more. (Many of them are remote positions!)
Notorious B.I.G. was onto something when he said that bit about more money leading to more problems. Until recently I would have disagreed, but during the COVID economic fallout, I’ve felt more pressure to earn more with side hustles and spend wisely as the breadwinner in my relationship.
It’s not just me. Millennial women are twice as likely than their mothers to be out-earning their partners, according to career news service The Ladders. Today’s mothers are increasingly becoming the breadwinners of their households, according to research by American Progress.
For heterosexual relationships in particular, many women who earn more than their male partners find themselves sparring over the gender dynamic. No wonder money is 20 times more likely than sex to be the biggest source of conflict in marriages.
If you’re the one in the relationship making more than your partner—especially if your partner is a man—you’re not just bucking the trends of yesteryear. You’re also navigating uncharted territory as women take charge of their family’s financial futures.
I figured I’d ask the money experts what you should keep in mind if you’re the one bringing home the smoke-flavored tempeh.
It pays to get with an expert.
Molly Ward, a certified financial planner and advisor with Equitable Advisors, experienced a transformation of her own after going through a divorce and being forced to take a more active role in her own financial future.
“I saw the value of a financial planner, how much value there is in that,” she said.
“It’s imperative that women get their financial planning done because if she’s busy at work and busy at home with the weight of the world on her shoulders but doesn’t have that planning in order, then it’s like a house of cards,” she added. “One perfect storm can just waylay that family.”
While they aren’t marriage therapists, talking with certified financial planners can usually help a couple navigate difficult money talk and pursue common goals in life and work. (For those of you looking for your next high-paying gig, by the way, check out Fortune‘s latest on writing a killer bio for employers.)
Ward goes over a checklist with her clients. It’s a list of expenses couples should discuss now, each month, and each year to inform progress made toward savings goals and debts.
Andres Garcia-Amaya, who leads a financial advising firm, recommends clients to write down goals and compare notes. Many couples don’t discuss money before marriage. If partners disagree on financial ambitions or plans to, say, buy a bigger house or send their kids to private school, couples can find themselves sparring over key expenses.
Attending meetings together is key, too. In fact, research shows that financial decisions made by couples are less risk adverse than those made by individuals.
“There’s always one person who is more eager to hire the financial planner, but we always encourage that other person to participate,” Amaya-Garcia said. “And after a few meetings even if they say, ‘Oh I’m not interested in that,’ they realize they do have an opinion.”
Talk it out.
Garcia-Amaya tries to coach clients and couples with his own experience in mind.
Years ago, when Garcia-Amaya was still in business school, his wife Jenny came home from a normal day at the office and set her bag down, letting out a sigh. Garcia-Amaya had been going to business school for a few months at that point, and the two-year stint meant that while he was busy with classes, he wasn’t earning income.
It also meant he had time to prep for a random weeknight costume party with friends as part of a networking event.
“It was like 9:30 p.m. when she came home, exhausted,” Amaya-Garcia said. “And she looked at me, and I said, ‘Does this shirt look like it’s from the ‘80s?’ And she was like, ‘Are you kidding me?’”
Despite their best efforts at establishing a fair balance of responsibilities, Jenny could feel at times that being the breadwinner meant shouldering her family’s wellbeing and all of the household chores.
“The tension usually arises if either spouse expects the man to be the primary breadwinner,” Garcia-Amaya said. When finances reverse, gender roles might cause issues: She might both bring home money and do the dishes, and he might feel resentful of the situation. “The best way to go about it is to have those conversations at the beginning of a relationship. Like, ‘What if I am the breadwinner?’ And it can alleviate a lot of issues.”
In the end, the Garcia-Amayas agreed that business school was a worthwhile endeavor. And they divided household chores for the duration.
“My wife was going to be the breadwinner and I was not going to make a penny for about two years,” Amaya-Garcia said. “We basically made sure both of us was confident with the decision for me to attend, and then how I could pull my weight with the household if she was going to be the breadwinner.”
The couple also followed up with each other to see how things were working. It was during these checkpoint meetings that they recalibrated household chores for times when one person was getting tired of their responsibilities, or when another needed help following a schedule change.
“Just because we agreed at the beginning doesn’t mean you don’t need to recalibrate throughout,” Amaya-Garcia said. “Because she said it was fine, but then here I am dressing for an ’80s party not really being conscious of what she’s feeling.”
Now that they’re both back to working full-time, they’ve shifted their household responsibilities for a better balance.
Think about protecting your assets.
For some couples, the financial imbalance is long-term. In those cases, if you’re about to get married, Shann Chaudhry, an estate planning attorney, says it might be worth considering a prenuptial agreement.
“There’s a lot of misconceptions about prenups,” Chaudhry says. “We’ve all seen things in the media like with Jay-Z and Beyonce’s prenup, but it’s so far away from what regular people need.”
instead, Chaudhry says prenups are best for people who have inherited money or assets, have been running a family business, or have started their own practice and want to maintain those assets in the event of a divorce. Millennials are more likely than their parents to be keen on signing a prenup.
“We’re seeing a lot more professionals who are getting later in life, and if you see a doctor with her own health practice, and she gets married at 45 or 50, she wants to be able to protect her practice,” he says. “Sometimes it’s about reframing what the agreement is. In Texas, it’s called a property characterization agreement, which sounds a whole lot less confrontational than a prenup.
“People should come at it from the angle of, ‘I want to make a plan and let’s talk about what this is going to look like and how we’re going to make it fair,’ instead of, ‘I want you to sign a premarital agreement,’” he said.
Keep in mind each partner will need their own lawyer to draft one up, which could run between $3,000 and $5,000 per spouse. Not terrible, considering Chaudhry says a divorce can cost about double.
If you didn’t get a prenup before “I do,” there’s still time. Chaudhry says there are such things as post-marital agreements, which can be signed after the fact and still stipulate who gets what in the event of a divorce.
— Kristine Gill
Making money moves
All Raise is hiring a VP of Marketing in San Francisco, Calif.
BetterRx is hiring a Director of Client Experience to work remotely.
The Climate Service is hiring an Executive Administrator in Durham, North Carolina.
The Department of Housing and Urban Development is hiring a Director of the Office of Public Housing in Miami, Fla.
DigitalOcean is hiring a Senior Project Manager who can work remotely, in New York City, or in Cambridge, Mass.
Everlywell is hiring a Product Manager in Austin, Texas.
Guardian Life Insurance is hiring a Head of Client Management to work remotely.
IFES is hiring a Program Manager to work remotely.
Indianapolis Housing Agency is hiring a Chief Operating Officer based in Indianapolis, Ind.
Magellan Health Services is hiring a VP of Sales to work remotely or in one of five major cities.
Netenrich is hiring an Account Executive to work remotely.
Paylocity is hiring a Software Engineer to work remotely.
PFSweb is hiring a Front End Developer to work remotely.
Shutterfly is hiring a Customer Insights & Analytics Senior Manager to work remotely or in Redwood City, Calif.
Worldwide Supply is hiring a Business Development Director to work remotely.
Events and other opportunities
April 29: Women Talk Design is hosting its Present Yourself: Craft Your First Talk and Deliver with Confidence workshop remotely, teaching participants how to deliver compelling talks.
April 29-May 20: Forté Foundation will hold a new weekly webinar called Don’t Quarantine Your Career: Login In and Level Up.
June 12-13: Forté is hosting MBA Women's Leadership Virtual Conference for MBA students and those planning to enroll in a program.
July 7: Fortune's Brainstorm Health conference will be held online.
June 1: Gallup’s workshop called How Millennials Want to Work and Live will be held in Omaha.
June 26: The Ellevate Network is hosting its annual Mobilize Women Summit in NYC. This year’s event will provide a space for leaders with diverse perspectives to share how to build more equity in business.
Oct. 7-9: TBEX North America 2020 will hold its summit in Lafayette, Louisiana.
Oct. 15-16: The Women of Silicon Valley's Women in Tech Event Series will take place in Santa Clara, Calif.
Nov. 5: The annual Women in Negotiation Summit will be held in New York City. The daylong event empowers women through negotiation-skills building.
Want to share a hiring or networking opportunity from your organization or elsewhere, or just have feedback about The Broadside? Email Kristine Gill.


fortune--2020-04-24--It’s judgment day for AT&T CEO Randall Stephenson

You ’ re the breadwinner in the relationship .
Now what ?

The verdict is in on Randall Stephenson’s massive strategic bet for AT&T: He has lost his case.
The surprise announcement that the telecom giant’s CEO will retire on July 1 is the latest and most dramatic example of events that have not been going as planned at AT&T. Six months ago the company announced that Stephenson would remain in his job “through at least 2020.”
Scratch that.
Last summer the company said its HBO Max streaming service would launch in last year’s fourth quarter, but it still hasn’t launched and is now scheduled to debut on May 27. Most important, Stephenson’s transformation of AT&T into an entertainment and distribution colossus has not thrilled investors as it was supposed to. One specific investor, the activist investing firm Elliott Management, which owns about 1% of AT&T, is clearly not on board.
Give Stephenson credit for boldness. He foresaw that delivering video would become the No. 1 use of wireless and wired consumer technology, which meant, he told Fortune last year, that “controlling your destiny to some degree would be really important—that is, owning premium content.” So in 2015 he bought DirecTV for $67 billion because it owned the rights to carry a great deal of programming, and in 2016 he announced a deal to buy Time Warner for $109 billion because it owned HBO, Warner Bros., and the Turner cable networks (CNN, TNT, TBS, and others).
With a few smaller acquisitions as well, Stephenson achieved his strategic vision—and made AT&T the most heavily indebted nonfinancial company in America. Total obligations exceeded $200 billion. Moody’s downgraded the company’s debt rating to two notches above junk.
Even that was manageable. The real problem was that many investors weren’t buying the strategy. They figured AT&T couldn’t outspend Netflix and Disney on content and couldn’t beat Verizon on 5G, the superfast successor to today’s wireless networks. Perhaps inevitably, Elliott Management came calling, loudly, last September. In a searing 23-page letter to Stephenson, it trashed his management of the business. His grand strategy was fundamentally flawed, the firm said bluntly: “AT&T has yet to articulate a clear strategic rationale for why AT&T needs to own Time Warner.” Elliott noted how badly AT&T stock had underperformed the market on Stephenson’s watch, then asked pointedly, “Does AT&T have the right mix of leadership at the Company?” You don’t ask a question like that unless you think the answer is no.
And even that would have been manageable if investors had shrugged off Elliott’s letter. But they didn’t. On the morning it was released, they bid up AT&T’s value by $12 billion within minutes of the opening bell.
From that moment it was clear that things would change at AT&T. In announcing Stephenson’s early departure, the company said he’ll be succeeded by COO John Stankey, 57, a 35-year AT&T man who is overseeing Warner Media until May 1. Elliott had previously signaled that it was no fan of Stankey, but partner Jesse Cohn said in a statement on Friday that “Elliott supports John Stankey as AT&T’s next CEO.” He also made clear that Stankey probably wouldn’t have been chosen without Elliott’s approval, saying, “We have been engaged with the company throughout the search process.”
With Stephenson gone, the big question is how much of his mega-strategy will go. He is scheduled to remain executive chairman until year-end, but Stankey will not succeed him as chairman, a power shift toward the board and presumably toward Elliott.
Stephenson’s career-defining bet could yet be vindicated. If HBO Max blows the doors off and customers stampede to AT&T wireless service so they can get exclusive Warner Media content, he’ll be a hero—and investors will be very surprised. For now, the unavoidable fact is that to this day the stock has never regained its price from just before AT&T announced it would buy Time Warner in 2016, when it was around $43, though the S&P 500 is up some 30% since then; the stock was at $35 in early February before the coronavirus pushed it below $30. That looks like the fundamental reason Stephenson is leaving early.
More must-read tech coverage from Fortune:
—How a pharmacy delivery startup has capitalized on the coronavirus pandemic
—SBA website leaks personal data of 8,000 small-business loan applicants
—Is A.I. better at diagnosing illnesses than doctors? Don’t believe all the hype
—What Seattle and San Francisco can teach us about mitigating the scourge of COVID-19
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-24--There may be 22 hidden coronavirus hotspots in states poised to lift restrictions

Emerging coronavirus hotspots likely already exist undiscovered in the eight U.S. states planning to ease social distancing restrictions, a new analysis reveals.
The study discovers that in the eight states planning to ease social distancing measures in the coming weeks, almost two dozen small cities and rural counties have infection rates poised to skyrocket, despite their currently not having large numbers of confirmed cases.
The analysis, by technology firm Dataminr, uses artificial intelligence to scrutinize social media posts on platforms such as Twitter and Reddit. The company also looks at 10,000 public data sources in more than 100 languages. Its technology is used by both governments and companies, including many hedge funds, to predict emerging events. It is also used by the World Health Organization and the United Nations.
The company’s warning about previously unknown hotspots comes on the day that Georgia became the first U.S. state to ease measures imposed to stop the spread of outbreaks.
The state has allowed gyms, tattoo parlors, hair and nail salons, massage therapists, and other businesses to reopen after less than a month of closures. It is allowing in-person religious services to restart this weekend and will allow restaurants and theaters to reopen starting on Monday.
Yet Dataminr forecasts that two Georgia counties—Chatham and Clarke—are among those that, even with social distancing in place, are already one to two weeks away from experiencing an exponential surge in COVID-19 cases.
Ted Bailey, Dataminr’s chief executive, said that his company’s study indicated that infection rates varied widely within the states that were now reopening for business: “While it may be the case that the outbreak is ‘peaking’ in major cities, it is also likely the case that new virus waves are on the brink of emerging in other small metro and rural areas.” Though not an epidemiologist, Bailey warned that easing social distancing restrictions in the midst of this kind of “rolling” outbreak “could be detrimental to recovery.”
Georgia’s experience is being closely watched by other states as they consider how to emerge from strict shelter-in-place orders, business and school closures, and social distancing measures. States that have already announced plans to ease most restrictions in the coming week include Montana and Oklahoma, while South Carolina and Tennessee have announced that only some restrictions will be lifted during this time. Several other states have said they will reduce social distancing measures by early May.
Among the areas where Dataminr has identified new emerging hotspots are counties in Indiana and Michigan. Indiana’s lockdown is due to expire on May 1, and the state is currently debating whether to extend it. Michigan announced today that its restrictions will remain in place until May 15 but will be eased for some recreational activities, including boating and golf, as well as for some businesses like garden centers, plant nurseries, and landscaping companies.
Earlier in the course of the coronavirus pandemic, Dataminr’s software was able to accurately forecast infection hotspots in 14 states between seven and 15 days prior to the actual case totals in those locations beginning to grow exponentially, according to a study the company published in March.
The company was also among the earliest to warn the world of a possible emerging epidemic, issuing an alert based on a surge in social media posts related to a potential novel disease on Dec. 30. It is one of a handful of companies, including BlueDot and HealthMap, that have used A.I. to try to spot emerging epidemics and track their spread.
Bailey said that previous experience during this pandemic has shown his company’s forecasts to be “highly accurate” in identifying regions about to experience rapid growth in infection rates, starting with Wuhan, China, and continuing with accurate predictions for places like Italy, South Korea, Spain, and Iran.
Dataminr uses natural language processing—a kind of machine learning that can analyze language—to look for geographic clusters of social media posts related to the coronavirus. But rather than searching for key words or monitoring aggregate volumes of social media posts, Dataminr instead looks for what it calls “eyewitness” accounts.
In this case, Dataminr’s software searches for posts in which people indicate that they have tested positive for COVID-19; are experiencing symptoms consistent with the disease; think they’ve been exposed to the virus but have not yet been tested; or provide firsthand accounts stating that relatives, friends, and colleagues are sick. It also looks for mentions of COVID-19-related supply shortages and closures.
This data is then fed into another algorithm that tries to correlate the volume and acceleration of such posts with the likelihood that a particular location will experience an exponential increase in infection rates in the next two weeks.
In addition to the two counties in Georgia, Dataminr is forecasting likely surges in the following counties:
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