fortune--2020-10-11--What Wall Street’s favorite election indicators say about who will win the White House in 2020

This article is part of Fortune‘s quarterly investment guide for Q4 2020.
It’s a time-honored tradition on Wall Street every four years: proclamations from analysts and observers who claim that this or that economic metric can accurately predict who will be the next President of the United States.
After all, the identity of who will occupy the White House is a major, market-moving variable—one that influences all sorts of policy decisions that in turn can influence the greater economy. And since markets are famous for hating uncertainty, it’s only natural that investors and their advisers would try to get a read on who exactly will be calling the shots at 1600 Pennsylvania Avenue.
While there is no shortage of indicators that prognosticators like to cite as their own crystal ball every election cycle, some have undoubtedly proved more popular—and, indeed, more accurate—than others. Here are some of Wall Street’s favorites and what they say about who will win the presidency this November.
The stock market
The stock market may not be an entirely accurate reflection of the state of the overall economy, but it is a pretty good measure of investor confidence in corporate America and the business environment at large.
As far as elections are concerned, a down market can be looked at two ways. On the one hand, it could indicate negative business sentiment, increasing the likelihood that voters choose to ring in some changes in Washington. And on the other, a sagging market can be read as a sign that investors believe a change is imminent—and are opting to sit on the sidelines until that political uncertainty passes.
There are few broader, more popular reflections of the American stock market than the S&P 500, so it’s not surprising that the S&P is a favorite of Wall Street prognosticators as far as presidential elections are concerned. In fact, the folks at Boston-based broker-dealer firm LPL Financial say the benchmark index has accurately predicted the winner of the presidential election 87% of the time since 1928—and every time since 1984.
LPL’s metric is very simple: When the S&P 500 is trending upward over the three months in advance of the election, the incumbent party usually keeps a hold of the White House. When it’s trending lower, that usually means a change is in order.
As an example, LPL senior market strategist Ryan Detrick says to look no further than 2016. Though Hillary Clinton was a heavy favorite leading up to that fall’s presidential election, a tepid S&P 500 did not bode well for her. “Everyone thought Hillary was going to win, but the stock market didn’t,” Detrick says. He also cites the Dow Jones industrial average as another indicator, noting that the index experienced nine consecutive days of declines leading up to the 2016 election. The market, Detrick says, was “sending a signal that Trump’s chances were much higher” than people thought.
“I think the S&P is a good measure of the confidence that Wall Street has in the person in office,” echoes TD Ameritrade chief market strategist JJ Kinahan. A strong S&P before the election “tends to indicate that [investors] believe the policies in place are going to continue, and you can buy stocks because you don’t have to worry about a change in policy,” he adds.
So what does the stock market tell us about the 2020 election? Since Aug. 3—exactly three months before Election Day 2020—the S&P 500 has climbed roughly 5%, having rebounded from a weak September that saw the index briefly slip into the red. President Trump has pinned much of his economic record to date on the success of the stock market, and the market appears to suggest that he has a better chance of retaining his office than many polls would indicate.
But with more than three weeks to go until Election Day—and few signs of another market-boosting stimulus deal in the pipeline—the picture coming out of Wall Street is still very much subject to change.
The dollar
It’s been a rough year for the U.S. dollar. The coronavirus pandemic, the resulting economic downturn, and the Federal Reserve’s subsequent monetary stimulus measures have contributed to a gradual weakening of the dollar relative to other major currencies—leading the likes of Ray Dalio and Stephen Roach to question whether the greenback’s status as the global economy’s preeminent currency is now under threat.
But the dollar also appears to provide a window during election years into who will be the next President of the United States. “History shows that a stronger dollar does not bode well for the incumbent President,” according to LPL’s Detrick. That’s because a weaker dollar tends to indicate a “risk-on environment”—one usually featuring healthier market conditions in which investors are willing to pour money into equities and other, riskier asset classes.
Conversely, Detrick cites conditions in 2008, when the dollar maintained its strength despite a global financial crisis that battered stocks, bonds, and other securities. “The dollar was strong [in 2008] because that’s where you go when you have a pure risk-off mentality; people still come to [the dollar] when the you-know-what hits the fan.” While a stronger dollar in 2008 coincided with Barack Obama winning the White House after eight years of Republican rule, a weaker dollar usually translates into “a good scenario for the incumbent to win reelection,” according to Detrick.
As a specific measure of how the strength of the dollar relates to the outcome of the presidential election, LPL points to the performance of the benchmark ICE U.S. Dollar Index in the three months leading up to the election. According to the brokerage, the index has accurately predicted the winner of all but one of the last eight presidential elections—with Bill Clinton’s landslide reelection in 1996 proving the only instance in which a stronger dollar did not translate into a defeat for the incumbent party.
While the ICE U.S. Dollar Index has slipped 3% in 2020 to date, it’s been a slightly different story since Aug. 3. In that time, the index has climbed marginally, to the tune of less than 0.2%. That would appear to spell good news for Joe Biden and bad news for President Trump—though, as Detrick notes, the dollar’s relatively meager movement could render the metric “a wash” as far as predicting this election is concerned.
Manufacturing data
According to a 2011 analysis by statistician and FiveThirtyEight editor-in-chief Nate Silver, the ISM Manufacturing Index had proved the “best-performing variable,” among 43 different metrics, for predicting the outcome of every presidential election since World War II up to that point.
The monthly survey has long stood as a benchmark measure of manufacturing activity in the U.S., and according to Silver’s analysis, its performance from January through September of an election year has proven a relatively reliable indicator of which way the election will go. If the ISM averages above 50 during that time (signaling an expanding manufacturing sector), that tends to bode well for the incumbent party, while an ISM average of below 50 (reflecting a contracting manufacturing sector) usually corresponds with a new party taking control of the White House.
In 2016, the index barely managed to average in expansion territory from January through September—a lukewarm reading that signaled changes were in order in D.C., culminating in Trump’s victory over Hillary Clinton. This year, the ISM is proving even more tepid; the index has averaged only 50.3 through the first nine months of 2020, thanks largely to a sharp, coronavirus-induced contraction in April and May.
While a mediocre ISM was good news for Trump last time around, it’s a foreboding indicator for his prospects against Joe Biden in this election—and yet another measure of a struggling economy that appears increasingly likely to cost Trump the presidency.
Other election predictors
While other economic statistics—including job growth and gross domestic product—are often disseminated as telltale predictors of presidential elections, what’s clear is that the state of the economy is usually top of mind for American voters. “It’s the economy, stupid,” went the famous adage coined by James Carville, the political strategist who helped mastermind Bill Clinton’s victory in the 1992 presidential election—and it is a credence that still rings true today, as the economy continues to poll at the top of voters’ concerns every election.
“Historically, people vote with their pocketbooks,” LPL’s Detrick notes. But he adds that this year, it’s exceptionally hard to get a read on things. While recessions like the one experienced by the U.S. economy this year in the wake of the coronavirus pandemic are typically a surefire signal “that the incumbent isn’t going to win,” other indicators—such as a surging consumer confidence index—seem to indicate a relatively brisk recovery that could help President Trump stay in power.
“In our opinion, the election will probably be a lot closer than what the polls are saying,” according to Detrick, pointing to a continually bullish stock market as justification. “The stock market has a funny way of predicting these things. If the incumbent loses, there’s almost always some skittishness, because the market doesn’t like uncertainty.”
But TD Ameritrade’s Kinahan notes that investors could indeed be bracing for some uncertainty, after all. He points to how futures contracts tracking the CBOE Volatility Index, a popular measure of perceived stock market volatility, are “elevated” for several weeks after the Nov. 3 election. That could indicate that investors are wary of the uncertainty that could stem from a potentially delayed result, due to tens of millions of expected mail-in ballots—not to mention the President’s own refusal to commit to accepting the outcome of the election.
“I think that’s a whole new element to this election that we haven’t dealt with before,” Kinahan says of the potential for post–Election Day volatility.
As if 2020 wasn’t already unpredictable enough, it could be that the year’s presidential election is beyond the grasp of any indicators we have to offer.
Explore Fortune’s Q4 investment guide:


fortune--2020-10-11--10 stocks to buy now: These names should perform well no matter who wins the White House

What Wall Street ’ s favorite election indicators say about who will win the White House in 2020

This article is part of Fortune‘s quarterly investment guide for Q4 2020.
It’s been one thing after another for investors in 2020.
First came the novel coronavirus that threw many a shareholder for a loop. Then came a stressful summer in which the global economy moved in fits and starts, petering out from a quick recovery to a slower rebound. Now, with less than a month until the ballots will be counted in a polarizing U.S. election, some are anxious about the outcome, wondering what a Biden presidency or a second Trump term would mean for their stock market holdings.
That anxiety partly reflects the fear of what a disputed election result could do to markets. Such uncertainty would likely mean volatile markets in the short term; indeed, some investors are already buying futures, options, and other derivatives that could pay off if markets swing wildly immediately following Election Day. And others are doing a bit of old-fashioned hand-wringing over whether the candidates’ stances on health care, Big Tech regulation, taxes, and trade could hurt their portfolios down the road.
But for such fretful types, market pros like Matt Benkendorf, chief investment officer of asset manager Vontobel Quality Growth, offer a reassuring reality check. “I think the election impact is generally overexaggerated,” Benkendorf tells Fortune. “Quite frankly, if we go and look back historically, the elections themselves don’t have as tremendous outcomes [on the market] as people believe. It’s the underlying health of the economy and growth there and corporate profit growth, ultimately, that are going to impact stock prices.”
The economy isn’t nearly as healthy as it could be, of course, and there remains plenty of uncertainty about how long it will take for it to recover from the pandemic. Money managers in general have earmarked a few key sectors to steer clear of (among those who spoke with Fortune, for example, most are avoiding financials and energy). And many recommend looking to stocks that have defensive elements to them: Think shares in steadily growing companies that are able to deliver reliable dividend yields.
That’s certainly not to say that the race for the White House means nothing, portfolio-wise. A Biden presidency may mean higher corporate taxes but perhaps increased government spending, while a status quo Republican administration could translate to rising trade tensions but more relaxed taxes—and either result could create winners and losers. In the near term, Saira Malik, head of global equities at Nuveen, believes the biggest risk is volatility from a contested election. But longer term, Malik believes we’ll return to a moderate growth environment akin to the days BC (before coronavirus).
With that in mind, as Malik notes, the question now is “What can you own in either scenario, if you don’t want to place your stake in either camp?” To help investors answer that question, Fortune asked four top portfolio managers to nominate their stocks for a portfolio that’s as election-proof as possible, the kind that might hold up nicely for the next four years or more.
Concentrate on the consumer
One element of the economy that isn’t in the crosshairs for the 2020 election? Consumer spending. Though the pandemic delivered a hit to employment and incomes, and spending on optional activities like travel has plummeted, consumer spending still makes up roughly 70% of the economy.
So portfolio managers are scanning the consumer economy for steadily growing companies that tend to perform well in all environments and can piggyback on new trends in the way we’re spending. Most of these companies fall in the category of consumer staples, Malik explains: “They’re defensive; they’re going to perform well because of the types of goods they produce that are needed in any kind of environment; and you can find some yield there.” (Yield is something investors are particularly eager to capture: With interest rates likely to stick at near zero through at least 2023 regardless of who is in the White House, and the average S&P 500 dividend yield having slipped to 1.7%, significant dividend-payers look even more attractive.)
One such stock Malik favors is Lowe’s (LOW, $171), chief rival of home improvement retailer Home Depot. She likes the stock’s 1.4% yield and the fact that the company is poised to serve a housing market that’s booming once more. With more people investing in their homes “because their workspace can now be their house,” Malik sees Lowe’s as having a “whole host of factors that work in their favor.” In particular, she believes Lowe’s will benefit from a boost in e-commerce as the company upgrades its website; from cost controls as it improves its supply chain; and from the return of its professional crowd as more customers feel comfortable using contractors again. (Malik prefers Lowe’s over Home Depot for its significantly lower P/E.)
Eric Schoenstein, a managing director and portfolio manager at Jensen Investment Management, likes PepsiCo (PEP, $138) for its 3% dividend. But he argues the stock isn’t “just yield for yield’s sake.” “They’re producing real growth and revenues and earnings and free cash flow,” he says. Although what PepsiCo calls its “away from home” sales (which make up roughly 35% to 40% of total sales, Schoenstein says) have taken a hit this year owing to closures of venues like baseball stadiums and restaurants, Schoenstein argues that its convenience store and at-home products (including snack-at-home staples like Quaker Oats and Cheetos) have helped to somewhat stem the losses. Moving forward, he anticipates earnings growth in the mid-to-high single digits.
The infrastructure play
David Bianco, the chief investment officer for the Americas at DWS Group, is making the call: “A lot of people think that infrastructure is going to be the play postelection” no matter who wins. There’s bipartisan support for increased investment in infrastructure, and Bianco “wouldn’t doubt there’s some kind of investment package” likely to emerge from Congress. But from Bianco’s perspective, this isn’t your grandpa’s “infrastructure.” The term doesn’t only mean roads and bridges, but also includes the “new economy structure, which to me is an intelligent power grid, 5G communications.”
One sector that Bianco argues is “low-hanging fruit for good return,” even amid political uncertainty: utilities. Not only are utilities “very mature, very reliable income-producing businesses,” he notes, but moving forward he thinks electric companies in particular will play an important role in the rollout of 5G technology: “The electric poles are owned by the utility companies, and they will play a big part in installing 5G cells and will receive some rental income for the space” over time.
Such trends are likely to boost NextEra Energy (NEE, $301), a big player in the power grid and in renewable energy. The stock currently trades at around 30 times forward earnings with a 1.8% dividend yield. NextEra is the parent of utilities Florida Power & Light and Gulf Power, and it has a heavy focus on investing in clean energy. The company has been able to grow under a Republican administration, even without the full-on clean-energy support likely to come with a Democratic President. As NextEra’s CEO James Robo declared on a recent earnings call: “We always position our business to try to win, regardless of the outcome of elections.”
Nuveen’s Malik also says she expects a postelection infrastructure boost. That’s likely good news for Terex (TEX, $25), a producer of aerial work platforms and equipment used for construction. The company has taken a big hit owing to the coronavirus and recession, with revenues falling more than 25% in the past 12 months. It’s also a bit on the expensive side, trading at roughly 35 times trailing earnings from continued operations (the industrial sector average is currently 21). But Malik believes Terex is “a survivor,” and argues an expected rebound in the company’s aerial work platforms division (roughly 60% to 65% of its sales) will be the “main driver” in Terex’s earnings recovery. She highlights Terex’s solid balance sheet, noting that “they have no debt due until 2024 [and] positive free cash flow.” She also commends CEO John Garrison for streamlining the company through the sale of segments like cranes in 2019. “This will be a company that returns to normalized earnings over time and survives the recession,” she argues.
To be sure, more infrastructure and fiscal spending is not a done deal, and many investors are eager to make sure their stocks aren’t fully tethered to more government cash. That’s why Jensen’s Schoenstein likes 3M (MMM, $168), the multifaceted industrial behemoth whose products include components for aircraft, transportation, rails, and commercial vehicles (and, of course, personal protective equipment). “Its individual industries can work hand in hand to help offset each other in tough times but grow together in good times,” Schoenstein argues. He believes 3M’s business model is “a bit more resilient” in that it’s not “solely reliant upon huge stimulus spending” but can still be a beneficiary of those forces. Plus, the stock comes fairly cheap at 19 times forward earnings with a 3.5% dividend yield.
Surprise sectors: Tech and health care
Investors besieged by myriad headlines and political rhetoric may think of these two sectors as among those facing the biggest threats from the election. Health care could see some big changes, for example, from an expansion of a “public option” for insurance to White House efforts to lower drug prices. Tech, meanwhile, faces criticism from lawmakers over its size and market power, along with the growing conviction among some investors that their stock prices have just become too high. But portfolio managers still see plenty of opportunities that should skirt any major headwinds in either space.
DWS’s Bianco, for one, doesn’t “think you’re going to get any difficult legislation” around tech from either party (“There’s competition of Western tech versus Eastern tech, and I don’t think U.S. politicians are going to do things that hobble the ability of Western tech to compete,” he argues).
Still, some Big Tech companies will be more vulnerable than others. That’s why Benkendorf favors Microsoft (MSFT, $211), which is “not the focus of government ire right now on either side of the aisle” compared with peers like Amazon. With a growing and stable subscription software business, a booming cloud platform in Azure, and a recent M&A spree, Benkendorf thinks Microsoft “continues to be undervalued and underappreciated even despite the stock doing well.” At 32 times forward earnings, Microsoft’s valuation is dwarfed by many of its high-flying peers.
Jensen’s Schoenstein is equally convinced Microsoft has “insulation from some of the regulatory concerns,” pointing out the tech giant faced these troubles two decades earlier and lived to tell the tale. He notes Microsoft’s tools and products (including Teams, its business communication platform) are helping people “pivot into this work-from-home environment.” That’s likely to stick around in coming years, which could all translate to low-double-digit earnings growth, Schoenstein estimates.
Health care is another arena in which, as Benkendorf argues, investors may be too focused on the “headline fears”: “People sort of think, ‘Oh my goodness, if you get a Democratic supermajority [then] this and that happens,’” he says. But “if you have great businesses that add tremendous value for customers, I think medical devices is still a relatively safe space.”
One company that fits that bill for Benkendorf is Medtronic (MDT, $108), a medical-device manufacturer he deems a “safe, well-run, steady, predictable grower.” The company makes devices like pacemakers and insulin pumps, and trades at roughly 22 times forward earnings—a discount to the sector at large. Benkendorf says Medtronic is seeing strong growth in its Micra AV device, a miniaturized pacemaker that doesn’t require wires. He also believes the company’s new CEO, Geoff Martha, is “looking to push more autonomy down to the business units, which should ultimately lead to a more nimble organization.” Even if a blue wave washes over the U.S. health care system, Benkendorf argues, “what we had under Obama was not a bad situation for those companies by any means.”
Beyond the U.S.
With election headwinds stateside, some portfolio managers are looking for promising growth outside the U.S. altogether—with an eye to East Asia in particular. To be sure, portfolio managers agree tensions between the U.S. and China won’t disappear, no matter who is in the White House in January. But that’s not stopping them from investing in companies that are strong enough to defend against what Vontobel’s Benkendorf calls “legitimate” yet “heated political rhetoric.”
None is quite as formidable as China’s Alibaba Group (BABA, $301). The massive retailer has an Amazon-like ingrained foothold among China’s consumers, but it trades at roughly 29 times forward earnings, compared with nearly 89 for Amazon. Nuveen’s Malik believes Alibaba has “an attractive valuation, strong ad growth in e-commerce,” yet is “less levered to the economy” than other retailers; she also likes that it’s moving into local supermarket services.
Benkendorf, meanwhile, is bullish about the upcoming IPO of fintech Ant Group, of which Alibaba owns roughly 33%, which he says, “should crystallize an additional piece of value within [Alibaba’s] share price.” And rivalry between the U.S. and China may pose less of a threat to Alibaba than to other companies, because Alibaba is a “very domestically focused business, and China has a very deep domestic market,” Benkendorf notes.
Elsewhere in Asia, Japan-based Ibiden, which makes printed circuit boards and integrated circuit packaging, is a lesser-known but equally appealing name. Malik notes the “next generation CPU market is in high demand from Intel and AMD,” and argues Ibiden is “the leader” in packaging—a space with high barriers to entry. She expects a “multiyear period of growth as Ibiden expands capacity to meet volume demands,” which should translate into higher profit margins.
Malik also favors Taiwan Semiconductor Manufacturing Co. (TSMC) (ADR: TSM, $88), the world’s largest contract chipmaker. She likes TSMC in particular because it’s benefiting from the global buildout in 5G. Smartphones make up roughly half the chipmaker’s business, Malik notes, and “as Apple ramps up for the iPhone 12, they benefit.” TSMC makes complicated, advanced products that pose huge barriers to entry for competitors. And Malik predicts its growth will be driven by “high-performance computing for data centers” of the kind being built by Amazon, Microsoft, and Google (chips for such cloud computing account for roughly 30% to 35% of revenues, she notes). TSMC also has a major potential new customer in Intel, which has signaled that it might subcontract more of its own chips to TSMC. Malik estimates that business could add 20% in incremental revenue to the company over the next five years. The stock has room to run, trading at 25 times forward earnings—below the current semiconductor industry average at 29.
All stock prices calculated as of Oct. 8, 2020.
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fortune--2020-10-11--‘Flights to nowhere’ are popular. Experts explain the psychology behind the COVID-era concept

On three days in early October, hundreds of Taiwanese travelers boarded packed Eva Air flights at Taoyuan International Airport. They were not bound for an international or even regional destination; instead, the flight would end exactly where it started. The passengers were set to depart on a so-called flight to nowhere, which would take them on a night-time loop around Taiwan’s main island.
The flights coincided with the Asian holiday of Mid-Autumn Festival, and pilots tilted the planes to give fliers clear views of the full moon. Flight attendants treated passengers to the holiday’s traditional delicacy: moon cakes. Three hours later, the plane touched down again at Taoyuan. In the pandemic era, it counted as a getaway.
Flights to nowhere are a desperate attempt by airlines to scrounge up sales. Parts of Asia have largely contained COVID-19, but the region’s air carriers remain mostly grounded as border closures and quarantine requirements continue to decimate demand. The ‘flight to nowhere’ gimmick is succeeding in attracting die-hard fliers. Experts say the novel trips satisfy frequent fliers’ desire for normalcy and give customers the sense of escape. But climate activists have condemned the boomerang flights for needlessly harming the environment, and the trips underscore that a more comprehensive solution for airlines—much-discussed ‘travel bubbles’—has yet to come to fruition.
Destination: nowhere
In August, Taiwan’s Eva Air introduced the ‘flight to nowhere’ concept with a Hello Kitty-themed aircraft that flew passengers on a daytime journey along Taiwan’s coastline and over Japan’s Ryuku islands.
The inaugural flight took place on Taiwan’s Father’s Day so Eva Airways numbered the flight 5288, a set of numerals that sounds like “I love you Dad” in Mandarin Chinese.
Since then, airlines across the region—in Brunei, Japan, Hong Kong, and Australia—have started offering flights to nowhere. Carriers say the trips are popular.
Eva Airways said its three-day Mid Autumn festival flights sold out. In September, Australia’s Qantas airways claimed that customers snapped up seats on a seven-hour flight over Australia’s Gold Coast and outback wilderness within 10 minutes of them going live.
Why would passengers endure the discomforts of flying—cramped quarters, mediocre food, close proximity to strangers, plus new coronavirus risks—without the payoff of landing in a new place?
Eva Airway’s first ‘flight to nowhere’ was Hello Kitty-themed. The Taiwanese airline’s Hello Kitty kiosks are seen here in 2016. Yeung Kwan—Pacific Press/LightRocket/Getty Images
A passenger on one of the Mid-Autumn Festival-themed flights in Taiwan told a reporter from the Singapore-based Straits Times that the flight offered a substitute for her family’s regular holiday trips outside Taiwan.
“We’ve been dying to travel abroad,” the passenger said. “The last time we went anywhere was when I took my family to Hokkaido, [Japan] last October.”
Alan Joyce, the chief executive of Australia’s Qantas Airlines, said in a statement to the New York Times that Qantas’ customers simply missed the experience of flying.
“So many of our frequent fliers are used to being on a plane every other week and have been telling us they miss the experience of flying as much as the destinations themselves,” Joyce said.
Benjamin Iaquinto, a professor of tourism studies at Hong Kong University, concurs. Regular air travel has become habitual, he argues—at least among those who can afford it. “[Flying] has become like a fact of nature, like something we’ve always done,” Iaquinto says.
And, in an environment where air travel has been effectively closed off, even the mundane aspects of flying may be more appealing.
“When you’re at the airport, even though it’s really boring, there’s something exciting about it,” Iaquinto says. “There’s some sense of anticipation about being in those places that are quite ordinary.”
Sebastien Filep, a professor at Hong Kong Polytechnic University studying the intersection of psychology and tourism, says that an innate “desire to escape” helps drive the travel experience and pandemic-era lockdowns likely intensify that urge.
Digital signage for Qantas flight number QF787 on Oct. 10, 2020 in Sydney, Australia, indicates that it is a ‘scenic flight’ with no destination. James D. Morgan—Getty Images
Filep says that, for many travelers, the destination is not always the most important thing. “Who you go with matters more than where you go,” he says. And Filep says there’s a growing body of evidence that “travel leads to greater well-being,” including in reducing stress levels and possibly improving cardio vascular health.
Because the ‘flight to nowhere’ phenomenon is so new, it’s difficult to tell if it offers the same benefits as normal traveling. “It’s an experiment,” Filep says.
Failing to take flight
There are flights to nowhere and then there are flights that don’t even leave the ground.
On Sept. 29, Singapore Airlines, the nation’s flagship airliner, announced a “suite of experiences” that would give customers the chance to tour airplanes, eat airline food, and meet with pilots. Kids even have the option of dressing up and playing the role of flight attendants.
“With COVID-19 drastically reducing the number of flights operated by the SIA Group, we have created unique activities that would allow us to engage with our fans and customers during this time,” Singapore Airlines Chief Executive Officer Goh Choon Phong said in a statement.
The airline said in its statement that it had considered flights to nowhere, but opted to keep its planes grounded amid backlash from local climate activists.
A Singapore Airlines plane approaches for landing at Changi International Airport in Singapore on August 23, 2020. A climate group criticized the airline as it considered ‘flights to nowhere.’ The airline will offer land-based plane ‘experiences’ instead. ROSLAN RAHMAN—AFP/Getty Images
SG Climate Rally, an organization aimed at making Singapore carbon neutral by 2050, voiced opposition to reports that Singapore Airlines was considering conducting flights to nowhere. The flights, the organization wrote, “encourages carbon-intensive travel for no good reason.”
Climate activists in Australia, the U.K., and elsewhere have voiced similar concerns about the environmental impacts of flights that serve no purpose beyond tourism.
“I personally think it’s an environmental disaster,” said Iaquinto. “It’s really frustrating if you’re in sustainable tourism because transportation takes up the vast majority of tourism’s carbon emissions.”
The popularity of flights to nowhere is not an encouraging sign to those who hope that a post-pandemic world may usher in a new era of more sustainable travel.
“There’s so much talk about how this is the perfect opportunity to reset and start being sustainable,” says Iaquinto. “I agree it’s a great opportunity, but I’m just not convinced it will happen.”
Blowing the travel bubble
However successful, flights to nowhere won’t make up for airlines’ cratering sales.
As of now, airliners are only offering the flights on a limited basis and their ticket sales are likely to make little to no impression on balance sheets. Hong Kong’s HKExpress is offering three flights in November at prices starting from $50. Eva Air’s three-day Mid-Autumn Festival flights cost between $200 and $300, while Qantas’s one-day flight will range from $566 to $2,734.
On Oct. 6, the International Air Transport Association said it expects airlines globally to burn through $77 billion in cash in the second half of 2020. The organization warns that 5 million people in the airline industry are at risk of losing their jobs.
Singapore Airlines recently cut 4,300 workers after posting over $1 billion in losses in the first half of 2020. In quarterly earnings posted in August, Qantas reported nearly $2 billion in losses and Eva Airways recorded a loss of over $20 million.
For Asian airline carriers, a return of cross-border flights would provide more relief.
Government officials in Asia have discussed the concept of ‘travel bubbles,’ in which countries with few coronavirus cases would open travel routes with each other and drop quarantine requirements for each other’s visitors, since at least May, but until now they have failed to materialize.
But there are signs that travel bubble talks are once again picking up steam.
Singapore and Hong Kong are reportedly moving closer to creating a two-way flight corridor, and Thailand recently announced that it will begin admitting Chinese tourists at the end of October. South Korea and Japan announced that they will begin introducing cross-border, quarantine-free business travel this week.
Flights to nowhere may be popular among some travelers for now. Even so, for air carriers there is substitute for flights to somewhere.


fortune--2020-10-11--How the finance industry can combat racism

10 stocks to buy now : These names should perform well no matter who wins the White House

“I’m going to tell them there’s an African American man threatening my life.” – Amy Cooper
“I’m a tenant of the building; are you?” – Tom Austin
Amid the unrest, anger, and outrage at the sheer injustice of systemic racism, Amy Cooper and Tom Austin are just two examples of white people using their privilege in an attempt to control Black people who dared to exert personal agency in shared spaces. After being called out publicly, Cooper lost her job, and Austin lost his office lease.
Why point out these incidents instead of the thousands of other examples? Because while both apologized and stated “I’m not a racist,” they had tremendous influence in the finance industry through their leadership positions.
There are real questions as to how these implicit biases influenced hiring, advancement, and access to capital at their firms. Their actions in these moments provide a spotlight on how decisions are made in their institutions.
In an industry overwhelmingly driven by personal networks, relationships, and opaque decision-making processes, and dominated by pedigree, the personal quickly becomes (and remains) structural. In this system, decision-makers give preference to peers and managers who look like them.
These decision-makers think they have to choose between performance and diversity, when in fact they might actually be undermining their fiduciary responsibility by not prioritizing diversity and inclusion. This reality is highlighted in an Illumen Capital study that concludes, “racial bias could potentially result not only in the unfair treatment of fund managers of color and their grantees, but also in leaving significant financial opportunities on the table, thus hurting the entire financial ecosystem.”
Let’s be clear, we haven’t “found ourselves” in this predicament. The disparities in access, opportunity, and evaluation of performance are the result of intentional decisions that have accumulated advantage and disadvantage along the lines of race. Dismantling the barriers that have resulted requires naming and addressing the truth of systemic racism.
As Ibram X. Kendi has shared in his groundbreaking book, How to Be an Antiracist, claiming that you’re not racist is not enough. We must move in a way that is antiracist and confront features holding the system in place. Here are a few actions asset owners can take:
Be uncomfortable
Anti-Black bias is a central feature of systemic racism, so take a minute to actually understand your bias by taking Harvard’s implicit bias test. This is not to make you feel judged, but to make you aware. If you value diversity, yet continue to invest in nondiverse firms collecting fees to build wealth, then you should do some self-exploration.
Address institutional accountability
This can be accomplished by issuing a race-informed investment policy statement. Your policy is a statement of purpose that will orient you toward equity. Then hold yourself and your primary decision-making body accountable by using metrics and adding quarterly or annual reporting requirements. This might include tracking the demographic composition and ownership of all firms you’re invested in, the number of firms in your portfolio with majority Black, Indigenous, or people of color (BIPOC) ownership, how many meetings you are taking with diverse firms, and how much funding is allocated to such firms across your portfolio.
Know who you’re doing business with
Include diversity performance and metrics in your consultants’ scope of work and require regular reporting on your decision-makers’ progress toward meeting these goals. Require your consultants to provide information regarding their internal diversity and inclusion policies and practices.
Change the environment
Keep an eye on where and how you spend your time. Attend, sponsor, and speak at diverse management events, and invite those managers to speak at industry events in your sector.
Pursue relationships with different industry affinity groups
The National Association of Securities Professionals, National Association of Investment Companies, Association of Asian American Investment Managers, New America Alliance, and Opportunity Hub are a few examples. Establish regular contact and connection with diverse managers and make a robust list of media to consume on this topic, such as Emerging Manager Monthly and The Plug.
Once you’ve taken these steps, go and allocate your funds with diversity in mind.
This moment has been building for generations. Let’s accept the challenge and make change that will help us all.
Erika Seth Davies is a Beeck Center for Social Impact and Innovation fellow and founder of the Racial Equity Asset Lab. She is the author of “Foundation Investment Management Practices: Thoughts on Alpha and Access for the Field” and “Diverse Managers: Philanthropy’s Next Hurdle.”


fortune--2020-10-12--America’s backwards privacy laws leave women vulnerable

I had already left the abusive relationship I was in when I filed a complaint against my abuser. He had launched a campaign of harassment and stalking, and I was afraid. But I also reported the abuse because by doing so, I thought I was protecting his next potential victim.
What I didn’t know was that protecting other women would be harder than I realized. In fact, someone had reported him before, in California. His previous record of violent behavior was buried in a legal system that cares more about a perpetrator’s rights than a victim’s safety.
One study on interpersonal violence found that a person who commits sexual assault has, on average, 11.7 other victims. The 120 rapists involved in this study were responsible for “1,225 separate acts of interpersonal violence, including rape, battery, and child physical and sexual abuse.”
I founded a nonprofit online background check platform to prevent gender-based violence because I often come back to one thought: If only I had known. The earlier you know that someone has a pattern of violent behavior, the better chance you’ll be able to steer clear of becoming their next victim.
The number one way a person can know if someone they plan to date, or is dating, has any history of violence is through public records. That is especially true in this era of online dating, where very often we are not being introduced to dating partners by friends who can vouch for them.
But there are a few problems. First of all, once an incident of domestic violence is reported, the crime funnel kicks in—cases fall by the wayside because a witness backs out, or any other number of reasons—which translates into less than 1% of crimes ending in conviction. That means a large percentage of abusers walk free. It also means violent offenses frequently do not surface on an official criminal record.
Another problem is that privacy laws across the country most often make even criminal records documenting previous violence difficult to find. The process of obtaining these records is different in each state, frequently requires an onerous process for requesting; it often takes up to 30 days to receive information.
For example, here in New York City, the court system keeps an informal history of someone’s convictions. You don’t need fingerprints to do a criminal history record search—but it does cost $95 per search. Many people cannot afford $95 for one search, let alone many. In New Jersey, you can only search for criminal history for a prospective employee or if you are an attorney or private detective. In Georgia, you can request criminal history records for another individual only if you have their signed consent. In Alabama, you can only search for another individual’s criminal record if you are their prospective employer.
Another route to finding records is by using state freedom of information statutes. But even when using these laws, getting public records about individuals is difficult because requesting information about domestic violence allegations is considered an unwarranted invasion of an individual’s privacy.
Even traditional online public record search platforms (also known as online background checks) don’t provide access to this information—although they claim to have criminal records. For example, my abuser’s crimes don’t show up on these websites.
Ironically, the level of privacy afforded perpetrators of violence is much higher than for potential victims. It is very difficult to find records of violence, yet there are websites that provide access to incredibly invasive information such as addresses, phone numbers, and email addresses.
I learned the hard way that for just $0.99, my home address was available online for my abuser to find. On top of this, my ex was able to post false information about me on “liars and cheaters” forums enabled by Section 230 of the Communications Decency Act, which allows digital platforms to relinquish ultimate responsibility over user-posted content.
I’ve been playing whack-a-mole ever since, trying to keep the personal data that puts my life in danger off the Internet.
Our privacy priorities need to be flipped.
I had no way of knowing that my ex had been accused of violence by a previous partner, but he could do a simple Google search of my name and find my new address and phone number, culled from my voter registration or sold off by banks I had accounts with.
Our current public records system makes it easier to find a victim’s address online than it does to find the records of a serial stalker or perpetrator of domestic violence. We should eliminate this breach of privacy, as many other countries already have for obvious reasons.
On the other hand, we should expose the records of any arrests, convictions, orders of protection or restraining orders, or any other legal documents that report abuse, harassment, or other crimes for those who have been violent in the past, given the high probability they could reoffend.
Some may argue that a criminal record shouldn’t follow a person around for the rest of their life, and I agree—except in cases of violent crime. Due to the high frequency of repeat offenses, a potential victim’s right to safety overrides the violent offender’s right to privacy.
Helping victims in the aftermath of violence is not enough. We must change our laws to give people a chance to prevent gender-based violence before it can begin. Countless women’s safety—lives, even—depend on it.
Kathryn Kosmides is founder of nonprofit background check platform Garbo.


fortune--2020-10-12--This plant-based ice cream startup celebrated its first summer season during a pandemic

This is an installment in a special series, Startup Year One, interviewing startup founders about the major lessons they learned in the immediate aftermath of their businesses’ first year of operation.
Eclipse Foods introduced its first product in November 2019: a plant-based ice cream developed to taste and function just like conventionally-made dairy ice cream—only that it’s made with a blend of plants including cassava, potato, oats, and corn. Aiming to distinguish itself from other vegan ice cream makers, Eclipse makes its ice cream base in a kitchen, not a lab, using only whole, sustainable ingredients—no GMOs, no nuts, no soy, no coconut, and no gluten.
But what would have been the brand’s first summer ice cream season was turned on its head with the pandemic. With so many restaurants struggling during the pandemic, Eclipse quickly switched to a direct-to-consumer model, and launched national shipping earlier this summer.
Fortune recently spoke with cofounder Aylon Steinhart (formerly of the Good Food Institute) about how the first few months are going and what the company plans to do next.
Eclipse Foods cofounders Aylon Steinhart and Thomas Bowman Courtesy of Eclipse Foods
The following interview has been condensed and lightly edited for clarity.
Fortune: A few years ago, dairy-free ice cream didn’t get much respect, but now it’s one of the most popular items in the frozen foods aisle, from Halo Top to Ben & Jerry’s producing their own vegan ice creams. What inspired the launch of Eclipse? How does it stand apart from the rest?
Steinhart: [My cofounder] Thomas Bowman and I started Eclipse to change the food system—for good. Today, many of the default options for our food (meat, dairy, eggs) are produced through industrial animal agriculture. This is a system that is destroying the planet, hurting animals, and making people sick.
What we knew from our work in the alternative protein world, however, is that mainstream consumers would be happy to switch their animal-based products to plant-based ones as long as the switch doesn’t require a sacrifice in taste, texture, price, or availability. It is with this understanding that we created Eclipse, to provide incredibly delicious and affordable plant-based dairy products that are indistinguishable from conventional dairy, thus making the sustainable, healthy, and humane choice the default choice. This is how we will change the world.
What all of this really culminates to is that Eclipse is the first ever dairy replacement (versus a dairy substitute). In the burger world, substitutes are things like black-bean burgers, while true replacements are things like the Beyond Burger. In dairy, there are many substitutes (oat milk, cashew cheese, soy ice cream), but Eclipse has created the first ever true dairy replacement.
“Thomas and I joined forces because we believe the best way to create a more sustainable, healthy, and ethical food system is by giving consumers plant-based products that don’t require any sacrifice on taste, texture, or functionality, ever,” Steinhart says. Courtesy of Eclipse Foods
Restaurants and retailers have taken huge hits during the pandemic. Eclipse was originally supposed to partner with local eateries and ice cream shops (including OddFellows in New York City and Mitchell’s Homemade Ice Cream in San Francisco, among others), but since pivoted to a direct-to-consumer model. What motivated this change precisely, and how has it worked out thus far?
Before the pandemic, Eclipse was focused almost exclusively on foodservice: restaurants, ice cream shops, burger chains, universities, etc. The reception in the foodservice world was astounding; just weeks after Eclipse publicly launched, we had hundreds of businesses asking to put Eclipse on their menus. Sadly, the pandemic hit the foodservice industry hard with many of these businesses shifting their focus on their internal operations. This shift caused us to take a step back and ask: What can Eclipse do to support our foodservice partners and the industry at large, and how can Eclipse retool our strategy to make our product available in additional channels to complement foodservice?
The answer to what Eclipse could do to support foodservice led us to two paths. First, we continued partnering with amazing foodservice operators to help drive lots of attention to their brands and new customers to their business. For example, we recently launched a partnership with Afters Ice Cream, a popular 28-location ice cream chain in Southern California. The launch created tons of exciting attention on social for the partnership as well as several news articles.
Second, we could support foodservice by creating a campaign to donate proceeds to restaurant support funds and other non-profits, which is exactly what we did. In the past few months, we have had the honor of partnering with some of the most acclaimed chefs in the world to create exclusive limited-time collaboration pints with all proceeds going to support the restaurant industry and other important nonprofits.
The pandemic’s impact on foodservice also led us to retool our strategy to make our product available to consumers in additional channels. We quickly expanded to two new channels: direct-to-consumer and grocery stores. In doing so, we gave consumers the ability to order Eclipse directly to their door or to find Eclipse at their local grocery store so they could experience our indistinguishable, cowlessly creamy ice cream anywhere they chose.
Prior to founding Eclipse, Steinhart was a software entrepreneur turned self-described vegan advocate. Courtesy of Eclipse Foods
Our direct-to-consumer channel has been an incredible success. While setting up a direct-to-consumer channel for a frozen product had its challenges, from maintaining our commitment to sustainable packaging to ensuring that product arrives perfect and cold, we were able to execute efficiently to create an incredible customer experience with customers telling us they were impressed by our product. We also launched our chef collaboration flavors on the website, and they sold out in a matter of days. We are incredibly grateful to all of the people from all across the nation who have been early supporters of our online store.
Our grocery channel has been exciting as well. While getting started in grocery required some heavy lifting, including designing pints that would pop on freezer shelves and figuring out frozen distribution, the reception from buyers and consumers has been phenomenal. Since launching just a few months ago in the Bay Area, our ice cream pints are selling faster (per store per week) than [other] plant-based ice creams at Whole Foods. We are seeing volumes go up every week and more and more stores are coming on-board. We’re excited to bring our groundbreaking ice cream to consumers all over the nation.
All that said, what has it been like to secure funding for Eclipse? How did Reddit co-founder Alexis Ohanian and Beyond Meat Executive Chair Seth Goldman get involved? How has business and funding progressed during the pandemic and economic downturn?
Eclipse is blessed to get to work with some of the best investors out there. Alexis Ohanian has been an Eclipse supporter since the early days. Seth Goldman is one of the most knowledgeable people in our industry. Paul Buchheit (the creator of Gmail), Eric Patel (a former Dreyer’s exec), and Y Combinator have all also been incredible supporters. All of these visionaries got involved with Eclipse because they share Eclipse’s vision for transforming the food system and believe that Eclipse is poised to make that vision a reality.
With the support of such superb investors, along with the exciting growth of Eclipse and the overall plant-based space throughout the pandemic, we’ve been able to keep the business going strong. As the world realizes the importance of the plant-based industry in helping prevent future pandemics, climate disasters, and other threats, there continues to be a high level of investor interest in plant-based companies like Eclipse. With plant-based meat demand continuing to skyrocket through the pandemic (with sales jumping 264% from March to May 2020), in part due to consumer health and environmental concerns and in part due to supply chain disruptions in the meat industry, the momentum of the plant-based space is clearly only accelerating. This growth is exciting for investors, retail and foodservice partners, and consumers alike.
A dairy-free collaboration between Eclipse Foods and popular New York ice creamery OddFellows. Courtesy of Eclipse Foods
Post-pandemic and five years down the road, where do you see Eclipse Foods in the market?
Eclipse’s mission to create a more sustainable, healthy, and humane food system will only succeed when our indistinguishable, delicious plant-based dairy products are available in every place and every form. This means continuing to focus on increasing availability in food service, retail, and through direct to consumer channels.
This means our plant-based soft serve being available in every Wendy’s and our ice cream pints being available in every grocery store. This also means expanding into other dairy categories, like Eclipse cheese, milk and sour cream, and more, with these products being available in dairy cases across the world.
The future of Eclipse is the future of the world, one where the default choice, the best choice, is the more sustainable, healthy, and humane one. We’re excited for that future.


fortune--2020-10-12--Short the dollar if Biden wins the White House, Goldman Sachs suggests

The dollar may tumble to its lows of 2018 on the rising likelihood of Joe Biden winning the U.S. election and progress on a coronavirus vaccine, according to Goldman Sachs Group Inc.
“The risks are skewed toward dollar weakness, and we see relatively low odds of the most dollar-positive outcome—a win by Mr. Trump combined with a meaningful vaccine delay,” strategists including Zach Pandl wrote in a note Friday. “A ‘blue wave’ U.S. election and favorable news on the vaccine timeline could return the trade-weighted dollar and DXY index to their 2018 lows.”
The ICE U.S. Dollar Index has fallen more than 3% so far this year — trading just over the 93 level on Monday — as investors reacted to unprecedented pandemic-related monetary stimulus from the Federal Reserve and rock-bottom interest rates. The gauge traded below 89 in 2018, a level which would imply a further slide of more than 4%.
Goldman joins the likes of UBS Asset Management and Invesco Ltd. in predicting a weaker dollar as Biden extends his lead over President Donald Trump with less than three weeks to election day. It recommends investors short the dollar against a volatility-weighted basket consisting of the Mexican peso, South African rand and Indian rupee.
The strategists also suggest buying the euro, Canadian and Australian dollars against the greenback. The firm is keeping open long recommendations for the yuan through unhedged Chinese government bonds.
“The wide margin in current polls reduces the risk of a delayed election result, and the prospect for near-term vaccine breakthroughs may provide a backstop for risky assets,” they wrote.


fortune--2020-10-12--Europe is walking a tightrope with its looming antitrust reforms

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning. David Meyer here in Berlin, filling in for Alan.
The Financial Times reports that the European Commission is drawing up a “hit list” of Big Tech firms that need to be reined in with stronger and more easily enforced competition rules. Unsurprisingly the list is said to include major U.S. players such as Facebook, Apple, Google and Amazon.
The Commission has been planning for some time to reform its antitrust rules, which look set to finally appear next year. There are many reasons for this, including a desire to allow the creation of “European champions” where competition rules currently make this difficult (case in point: the Siemens-Alstom merger, the thwarting of which earned competition chief Margrethe Vestager significant criticism from Germany and France.) But one of the biggest drivers is the growing mismatch between the lightning pace of technological development and the glacial pace of European antitrust enforcement.
As Alan pointed out last week, regulatory measures are sometimes ill-conceived. And perhaps the worst situation can be found where rules are designed to be hard-hitting but, as times change, become practically ineffective.
That is arguably the case with the EU’s regulation of competition in the tech sphere. The bloc may have fined Google nearly $10 billion for various antitrust abuses over the last few years, but a) that’s a limited deterrent for a company with annual revenues north of $160 billion, and b) it took the best part of a decade to get to that point, during which time Google’s abusive activities continued largely unchecked.
As one unnamed insider told the FT, “the immense market power of these platforms is not good for competition.” Hence the Commission’s reported desire to force the companies to share business data with their rivals (a longstanding aim of Vestager’s) and to stick to tougher rules than those applying to their smaller competitors.
The Commission is certainly walking a tightrope here. There is a risk of its antitrust reforms being seen as protectionist, even though U.S. firms’ likely dominance of the Big Tech “hit list” would mainly be a function of those companies’ market dominance in Europe. (The situation is not helped by the fact that Competition Commissioner Vestager’s other role is that of EU digital champion.)
But on the other hand, few people would argue that the current EU antitrust system is working as it ought to in the digital context. As in the U.S., where lawmakers are also calling for severe antitrust remedies including the potential breakup of Big Tech firms, there is a clear problem that needs to be fixed.
As for whether the solution makes sense, well, the devil will be in the detail. More news below.
David Meyer
@superglaze
david.meyer@fortune.com
TOP NEWS
BA CEO
British Airways CEO Alex Cruz is out, in one of the first big moves made by new IAG chief Luis Gallego. Cruz, who becomes non-executive chairman with immediate effect, is being replaced by Aer Lingus boss Sean Doyle (IAG is the parent of both BA and the Irish flag carrier). Gallego: "I want to thank Alex for all that he has done at British Airways. He worked tirelessly to modernize the airline in the years leading up to the celebration of its 100th anniversary. Since then, he has led the airline through a particularly demanding period and has secured restructuring agreements with the vast majority of employees." Evening Standard
Hyundai recall
Hyundai is extending its Kona electric-vehicle recall to the North America, China and Europe. Last week the South Korean automaker issued a recall for over 25,000 cars back at home; now it's expanding that to twice the number across other markets. Hyundai says there's a potential fire risk due to faulty manufacturing of battery cells, but battery supplier LG Chem said this wasn't the cause. Reuters
Hong Kong
The U.S. government has begun blocking Hong Kong residents from accessing at least two U.S. federal websites, namely those for the Bureau of Labor Statistics and the Census Bureau, both of which refer to the move as a security measure. It's certainly not very helpful for analysts working in the financial center, though they can access the data they need through a virtual private network or a Bloomberg or Eikon terminal. Financial Times
Google News
Google's News Showcase deal with press publishers, announced less than two weeks ago, is already cancelled in Australia. Google is blaming the "pause" on its dispute with publishers and lawmakers over a new arbitration code for judging the fees it must pay for reproducing news content—though the dispute predated the News Showcase announcement by some margin, so it's not entirely clear what Google is playing at here. Engadget
AROUND THE WATER COOLER
Election indicators
What do Wall Street's favorite indicators say about the outcome of the upcoming election? S&P 500: Trump has a shot. The dollar: maybe good news for Biden? Manufacturing data: also favoring Biden. But overall, uncertainty is the order of the day. (And here's a guide to 10 stocks that should do well no matter who wins.) Fortune
CEOs WFH
Some CEOs are enjoying one benefit of the pandemic: they get to spend more time with their families, eating together and even doing a few household chores. Anne Fishel, director of the Massachusetts General Hospital family therapy program: "What they’re finding is these are the activities that provide ritual routines and the glue of family life." New York Times
Workers WFH
Some Silicon Valley firms have been planning salary cuts for employees who are working remotely from cheaper locales. It's a big shift from the tech sector's standard drive to endear itself to its workers. Stripe workers, for example, face a cut of as much as 10% for moving away from San Francisco, New York or Seattle, while VMware workers moving from the Bay Area to Denver may lose as much as 18%. Wall Street Journal
Reforming capitalism
With the COVID-19 response, and the "stakeholder capitalism" push of the U.S. Business Roundtable, we may be "on the cusp of structural transformation of society toward a new era of state capitalism," writes Karthik Ramanna, professor of business and public policy at the University of Oxford’s Blavatnik School of Government. Ramanna's observations: "The first is that while deregulation is a myth, regulation often becomes captured by private interests. The second is that both privatization and nationalization disappoint, because both processes are frequently marred by expropriation." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-12--Inside the plan to radically remake BP

Inside the plan to radically remake BP

Bernard Looney worked at BP all of his adult life, rising through the ranks until becoming CEO in February.
But it was only two weeks into the new job when Looney told his employees that the company had to change—and change profoundly.
Looney, as head of the one of the world’s biggest oil and gas companies, told them that the world does have a carbon budget, and it is running out fast. BP, he argued, needed to join the fight against climate change: “We are seen by many as a source of the problem, and we are still an obstacle to solving it.”
How the company once known as British Petroleum is trying to move beyond oil and gas is the subject of this week’s episode of Reinvent, a podcast about fighting to thrive in a world turned upside down by COVID-19.
For the episode, my co-host Fortune executive editor Adam Lashinsky spoke with Fortune foreign correspondent Vivienne Walt about her August magazine feature, “Is oil giant BP finally ready to ‘think outside the barrel’?” She explains that BP plans to reach “net zero” emissions by 2050 by becoming a different kind of energy company.
That declaration is a tall order. In one year, BP adds 100 times the amount of carbon into the atmosphere as the city of Houston. The company’s new plan is to make massive investments in renewable energy as oil and gas become an ever-smaller piece of its revenue.
“They have not been in solar or wind or hydropower until now so people are rightly skeptical about their abilities to pull this off,” Walt says.
The most striking thing, she says, is that the company intends to cut oil and gas production by 40% within the next decade. “It’s potentially a lot of assets BP currently has on its books that it’s simply not going to drill,” she says. “It cannot get to net-zero in any other way. The arithmetic simply does not add up.”
Walt says that the decision to shift the business is really about the bottom line. Looney is convinced that investors are not going to be on the side of oil and gas in the long term, she explains. “Trillions of dollars will get spent rewiring and re-plumbing the earth’s energy system,” Looney tells her, “and I believe that presents an enormous opportunity for a company of our skills and capabilities.”
He also sees it as an important decision for recruiting and retaining talent. “Our employees I think were increasingly becoming anxious about what I would describe as their personal purpose being misaligned with corporate purpose,” he says.


fortune--2020-10-12--Why earnings season could be the next big lift for stocks

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. Global stocks and U.S. futures are starting the week on strong footing, looking to add to last week’s gains. Stimulus talks might be bogged down, but investors are getting excited for earnings season, which kicks off in earnest tomorrow. More on that below.
Let’s see where investors are putting their money.
Markets update
Asia
The major Asia indexes are mostly higher in afternoon trading with Hong Kong’s Hang Seng up a whopping 2.3% .
are mostly higher in afternoon trading with up a whopping . Google plans to pull the plug on its new News Showcase platform in Australia. The tech giant and the Australian government have been sparring over a new media bill that would require the platform to compensate publishers for displaying their work.
and the have been sparring over a new media bill that would require the platform to compensate publishers for displaying their work. From Nepal to New York, coronavirus cases are rising at the fastest pace yet with over 1 million new infections recorded over a three-day span. What’s most worrying is this data point: hospitalizations and deaths are climbing too.
Europe
The European bourses are mixed with London in the red and Frankfurt up a quarter-of-a-percent at the open. That’s as national governments mull additional restrictions as coronavirus cases rise.
are mixed with in the red and up a quarter-of-a-percent at the open. That’s as national governments mull additional restrictions as rise. Boris Johnson has threatened to walk away from post-Brexit trade talks this Thursday if a deal looks unlikely. In the meantime, he hit the phones this weekend to try to draw concessions from Germany and France over a major sticking point, fisheries .
has threatened to walk away from post-Brexit trade talks this Thursday if a deal looks unlikely. In the meantime, he hit the phones this weekend to try to draw concessions from and over a major sticking point, . Europe is looking to escalate its turf war against Big Tech. According to the Financial Times, EU regulators are drawing up a “hit list” that would include firms believed to be abusing their market dominance. Facebook, Apple and Amazon are thought to be on the list.
U.S.
U.S. futures are in the green this morning, and ticking higher. That’s after the major exchanges posted their best week last week since the summer. That’s despite zero progress on stimulus talks .
are in the green this morning, and ticking higher. That’s after the major exchanges posted their best week last week since the summer. That’s despite zero progress on . JPMorgan, Citigroup, BlackRock and Johnson & Johnson are among the big names to report earnings tomorrow as the Q3 earnings season begins.
With three weeks before Election Day, the dollar trade is becoming clearer. A Joe Biden blue wave would sink the greenback, says Goldman Sachs. Fortune‘s Shawn Tully does a deep dive on the world’s reserve currency, detailing why a weak dollar could be a huge problem for whomever presides over the White House next year.
Elsewhere
Gold is up, trading above $1,930/ounce .
is up, trading above . The dollar is up slightly, too.
is up slightly, too. Crude is off again, with Brent trading below $42.50/barrel.
***
Turning a corner
Earnings season gets underway this week, and there’s a bit of optimism in the air. No, profits are still expected to be pretty lousy, but there’s still room for an upside surprise as the economy continues its lengthy rebound from the March-April lows.
We got a whiff of investor enthusiasm last week as the S&P 500 and Nasdaq both rallied to their highest weekly gains in three months. One sector that’s outperforming of late is the banks. The KBW Bank Index is up 8.5% since Oct. 1. On cue, Big Finance will be heavily represented in this week’s quarterly results. The feeling is there’s only one direction for the banks to head: up.
Most Wall Street analysts concur that Corporate America will begin to show growth—strong growth, even—beginning next year. “Looking forward, we project a strong 30% earnings rebound to our baseline 2021 EPS forecast of $170, followed by 11% growth to $188 in 2022,” Goldman Sachs wrote in a recent investor note.
BofA, meanwhile, sees a strong potential for a parade of earnings beats as soon as this quarter. “Actual results tend to surprise to the upside with on average +3.8% for earnings growth and +0.6% for revenue growth versus expectations at the start of the season, but we expect the substantial beats in 2Q to continue for at least another quarter in 3Q,” BofA wrote last week.
Here’s how BofA charts out the next few quarters. Watch for strong bottom-line performances in Q1 of next year. And, yes, even finance and energy should show a rebound by then (which is no doubt why investors are piling into battered bank stocks now.)
But the fundamentals still look pretty underwhelming.
Don’t bank on many top-line surprises until next year.
***
Postscript
This weekend my neighbor informed me he’s a proud negazionista.
It’s a label with ugly origins. Before the COVID pandemic, the term was applied to Holocaust deniers. The Italian media—both right- and left-leaning—now uses the label to describe those who don’t believe the COVID-19 outbreak is a thing.
My neighbor’s boast totally took me off guard, not least because he was masked up when he pronounced his denialist stance to me and another neighbor.
The negazionisti are unhappy with the Italian government. They are unhappy with the scientists. They are unhappy with public health officials. They are unhappy with the media. And, for some reason that’s beyond me, they are unhappy with 5G cell towers.
This weekend the negazionisti organized a protest in Rome to call out the coronavirus as a fake, and to carp about steep new fines for anyone caught in public without a mask. The turnout was so meager the Italian newspaper, La Repubblica, called it “un flop.” The poor attendance may have something to do with the escalating COVID cases here. Or, we’re seeing the negazionista movement for what it is—an oddball curiosity that’s relegated to the fringes of Italian society.
As for my neighbor, he didn’t bother going to the Saturday protest at all. He can’t afford to get busted for not wearing a mask, he grumbled.
Why was he wearing a mask now?, we asked him. Surely, there’s little risk of getting busted on our side street on a Sunday just before lunch.
Because, he said, he doesn’t want to be seen as a problem neighbor. He’s decided to stifle his beliefs so as not to make waves with anybody in the condominium, he said, adjusting his mask to better cover his mouth and nose.
I guess you could call him a denier wracked with self-denial.
***
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
Coronavirus and cash. Here in Italy, unfortunately, cash is still king. And that could pose a COVID health risk. The virus, it turns out, can linger on banknotes (on smartphone screens, too) for more than a week under seemingly normal conditions, Australia’s biosecurity experts found.
Are travel bookings really on the upswing? The cruise ship sector reported promising news last week: that 2H 2021 bookings are soaring. There are signs of life elsewhere in the travel sector, but there's a lot of reason to be skeptical that the surge in interest from cooped-up consumers will translate to actual revenues, the WSJ reports.
Brainstorm. Fortune's incomparable duo of Brian O'Keefe and Michal Lev-Ram have teamed up to host a new weekly podcast, Brainstorm. In each episode, they dive into the big stories at the intersection of tech and business, speaking with leaders of Fortune 500 companies and promising startups to give a glimpse of what's coming next. It's already become one of my must-listens.
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Fortune's crack finance staff has published the indispensable Quarterly Investment Guide, a package of articles we believe will deliver investor advice that can help you navigate these particularly uncertain times. How indispensable? Take this piece from my colleague Anne Sraders where she details the ten stocks to buy now, regardless of who wins the White House in November... I've had more than a few emails in recent days from Bull Sheet readers asking me, Has Wall Street lost its marbles!? How can a Biden-blue wave possibly be good for stocks and the wider economy? I would politely direct your attention to the Quarterly Investment Guide where we address these very questions. Happy reading!


fortune--2020-10-12--A Chinese app managed to scale China’s Great Firewall, then got taken down

For a brief moment over the weekend, China’s heavily censored Internet took one step closer to being integrated with the rest of the world’s. Now, China’s Internet remains as restricted as it was before.
On Friday, the Chinese Internet-security giant Qihoo 360 launched a pair of apps, Tuber for smartphones and sgreennet.com for PCs, that allowed Chinese Internet users to view censored versions of sites like YouTube, Facebook, Google, and Twitter that are banned in China.
Pro-government voices within China celebrated Qihoo 360’s new apps.
“Exciting news!! China launched a new web browser Tuber that can connect to [Facebook], Twitter, Google, etc, without using VPN!!” wrote Rita Bai Yunyi, a journalist for the state-media outlet the Global Times, on Twitter on Friday. “I think it’s good for China’s stability and it’s a great step for China’s opening up!”
The apps did not allow unfettered access to content beyond China’s Great Firewall, a term used to describe the range of methods China’s government employs to block foreign websites and censor sensitive content. Searches on Google and YouTube for potentially controversial terms like ‘Tiananmen Square’ or ‘Xi Jinping’ did not return any results, according to Techcrunch and users in China.
However, even this censored look into Western social media platforms and search engines proved popular. On Huawei’s app store in China, users reportedly downloaded Tuber over 5 million times.
Users in China told Fortune on Monday that Tuber was not available on app stores in China and that sgreennet.com similarly could not be accessed, and Qihoo 360 did not respond to Fortune’s request for comment on why the apps had been taken down.
But experts believe that while China’s government presumably censored Tuber and sgreennet.com for allowing users to skirt China’s censorship rules, it’s also possible that Qihoo 360’s new apps may not have been viable for the foreign platforms.
Rich Bishop, CEO of AppInChina, a company that helps foreign developers publish their apps in China, told CNBC that Qihoo 360 would need to acquire licenses from foreign sites like Google in order to legally host content on its platform.
“I guess if [Tuber] started becoming popular Google themselves would probably block that,” Bishop said to CNBC.
Qihoo’s seemingly ill-fated initiative does not close all pathways for Chinese users to scale China’s Great Firewall.
Experts believe that between 1% and 14% of China’s 850 million Internet users regularly use virtual private networks (VPNs) to access foreign sites blocked in China through masking their internet behavior and routing it through other countries.
Still, for a moment, Qihoo 360’s Tuber and sgreennet.com offered Chinese users a chance to legally access sites like Facebook, Google, and Twitter for the first time in over a decade. And while the apps were taken down, the fact Qihoo 360 launched the new apps at all may be indicative that China is interested in loosening at least some of its Internet controls.
“The Chinese Ministry of Foreign Affairs recently launched an initiative which promotes cross-border data flows,” Wang Huiyao, president of the Centre for China and Globalisation think tank in Beijing, told Bloomberg on Monday. “It makes sense for Beijing to lift restrictions of some selected sites as a way to send out a positive signal to the international community.”


fortune--2020-10-12--COVID-19 can survive up to 28 days on phone screens and money, new research shows

Researchers from Australia’s national science agency CSIRO have found that the COVID-19 coronavirus can survive on certain surfaces—such as banknotes and phone screens—for up to 28 days, roughly seven times longer than previous experiments suggested.
“These findings demonstrate SARS-CoV-2 can remain infectious for significantly longer time periods than generally considered possible. These results could be used to inform improved risk mitigation procedures to prevent the fomite spread of COVID-19,” the researchers wrote in their conclusion, published last week in Virology Journal. (A fomite is an inanimate object contaminated by an infectious agent.)
The experiment—measuring the time it took for samples of the virus to become inactive when left on different surfaces—was conducted at three ambient temperatures: 20°C, 30°C and 40°C. The virus survived longest on smooth surfaces, such as glass and plastic.
On glass and polymer banknotes—the smooth, wax-like notes used in Australia and other countries— it took 6 days for 90% of the virus sample to become inactive at 20°C. Paper money was even more hospitable, with 90% of the virus sample expiring after 9.13 days at 20°C.
“While the precise role of surface transmission, the degree of surface contact and the amount of virus required for infection is yet to be determined, establishing how long this virus remains viable on surfaces is critical for developing risk mitigation strategies in high contact areas,” deputy director of the Australian Centre for Disease Preparedness Debbie Eagles said.
China began treating its banknotes back in February, in a bid to stem transmission from currency. Banks were ordered to sterilize notes using either heat or UV light and then store the notes for 14 days before releasing the money into circulation. The country is perhaps the best poised to forego cash, too, as roughly 60% of the world’s mobile payment users are in China.
CSIRO’s research also found that the virus survived longest at a lower temperature. Observational evidence already suggested this was the case. In China, active COVID-19 samples have been found on packets of frozen food imports—suggesting the virus has survived on the frigid surface for weeks during transport. New Zealand investigated the possibility that frozen food imports carried COVID-19 into the country, too.
But even though the virus can survive on surfaces for longer than previously thought, surfaces themselves pose a relatively low transmission risk. The virus can only infect a person if it enters their body, usually through the mouth. CSIRO also conducted the experiment in the dark, to eliminate the damaging effects of UV-light on the virus. In normal situations, where surfaces are exposed to the elements, the virus might not survive for quite so long.
What the research reaffirms, Eagles says, is the importance of adopting best practices when it comes to personal hygiene—such as washing your hands at regular intervals, and cleaning surfaces.


fortune--2020-10-12--Google’s new Nest Thermostat is geared toward smart-home newbies

Google is pitching its newest Nest Thermostat as an entry-level gadget intended for people curious to jump aboard the so-called smart-home bandwagon.
The search giant debuted its new Nest Thermostat on Monday, the latest edition to the company’s growing portfolio of Internet-connected devices, like the Nest Audio smart speaker and various web-connected security cameras.
The Nest Thermostat costs $129.99 and comes in four different colors—snow (white), sand (pinkish tan), charcoal (dark grey), and fog (green).
Compared to the company’s high-end Nest Learning Thermostat, which costs $249, the new thermostat is significantly more barebones.
It lacks some of the more complex machine learning technologies of the Nest Learning Thermostat that enable that device to do feats like automatically adjusting the temperature of a home based on monitoring a person’s schedule, thus learning the patterns of daily routines. Instead, people can create schedules via the new Nest Thermostat to determine what the temperature should be when they leave their home, for instance. People can also choose from several preset schedules if they don’t want to spend too much time deliberating.
Google is still promoting the latest Nest Thermostat as a way people can save money on their energy bill. It contains a so-called Savings Finder feature, for instance, that may suggest little changes like decreasing the temperature at night when people are likely to be asleep—presumably, the suggestion wouldn’t cause someone to wake up at night from being too cold, but it would reduce the amount of energy spent heating up a home.
Ruchi Desai, a Google product lead for the Nest Thermostat, said that for most people unfamiliar with the concept of smart-home devices, cost and simplicity are their number one choices when deciding to buy a gadget.
With that in mind, Google’s new Nest Thermostat was designed to be as simple as possible, with a screen that displays in a large font the temperature in a person’s home and whether the home’s heating, ventilation, and air conditioning (HVAC) system is heating things up or cooling things down.
The thermostat also contains sensors that tell it when a person is near, so that it “will magically wake up when you approach it,” Desai said.
Desai described how people can set the thermostat’s temperature or adjust settings via the Google Home app as an example of how simple it is for laypeople to operate the device. People want to be able to control their thermostats with an app, she said.
Still, users may get confused by the fact that they can’t use the existing Nest smartphone app to control the Nest Thermostat’s settings—they must use the Google Home app, even though the new Nest Thermostat contains the Nest branding. It’s part of a larger problem with Google’s marketing and branding strategy that seems to carry over to all aspects of the company, from it’s recently renamed business software suite (now known as Google Workspace) to its recent rebranding of Hangouts Chat to Google Chat.
As for reports that the new thermostat would contain gesture controls that would allow people to change settings by moving their hands, Desai said “there is no gesture control” on the new device. A Google spokesperson declined to comment about the possibility that gesture controls would come to future thermostats.
The new Nest Thermostat also supports the Google Assistant voice technology so people can set their home temperature by speaking. Like the more expensive and older Nest thermostats, the newest gadget also supports Amazon’s Alexa voice technology, making it one of the few recent Google Internet connected devices that support a rival voice technology.
Despite the Nest Thermostat’s different features, it seems Google is banking that it’s low-price will be the main reason people buy the gadget. Other Internet-connected thermostats that cost around the same price include the Emerson Sensi Touch Smart Thermostat ($128.62) and Ecobee3 Lite ($169).
“The number one barrier and why people don’t purchase smart thermostats is price,” Desai said.


fortune--2020-10-12--Microsoft tries to take down a global criminal botnet

Microsoft announced legal action Monday seeking to disrupt a major cybercrime digital network that uses more than 1 million zombie computers to loot bank accounts and spread ransomware, which experts consider a major threat to the U.S. presidential election.
The operation to knock offline command-and-control servers for a global botnet that uses an infrastructure known as Trickbot to infect computers with malware was initiated with a court order that Microsoft obtained in Virginia federal court on Oct. 6. Microsoft argued that the crime network is abusing its trademark.
“It is very hard to tell how effective it will be but we are confident it will have a very long-lasting effect,” said Jean-Ian Boutin, head of threat research at ESET, one of several cybersecurity firms that partnered with Microsoft to map the command-and-control servers. “We’re sure that they are going to notice and it will be hard for them to get back to the state that the botnet was in.”
Cybersecurity experts said that Microsoft’s use of a U.S. court order to persuade internet providers to take down the botnet servers is laudable. But they add that it’s not apt to be successful because too many won’t comply and because Trickbot’s operators have a decentralized fall-back system and employ encrypted routing.
Paul Vixie of Farsight Security said via email “experience tells me it won’t scale — there are too many IP’s behind uncooperative national borders.” And the cybersecurity firm Intel 471 reported no significant hit on Trickbot operations Monday and predicted ”little medium- to long-term impact” in a report shared with The Associated Press.
But ransomware expert Brett Callow of the cybersecurity firm Emsisoft said that a temporary Trickbot disruption could, at least during the election, limit attacks and prevent the activation of ransomware on systems already infected.
The announcement follows a Washington Post report Friday of a major — but ultimately unsuccessful — effort by the U.S. military’s Cyber Command to dismantle Trickbot beginning last month with direct attacks rather than asking online services to deny hosting to domains used by command-and-control servers.
A U.S. policy called “persistent engagement” authorizes U.S. cyberwarriors to engage hostile hackers in cyberspace and disrupt their operations with code, something Cybercom did against Russian misinformation jockeys during U.S. midterm elections in 2018.
Created in 2016 and used by a loose consortium of Russian-speaking cybercriminals, Trickbot is a digital superstructure for sowing malware in the computers of unwitting individuals and websites. In recent months, its operators have been increasingly renting it out to other criminals who have used it to sow ransomware, which encrypts data on target networks, crippling them until the victims pay up.
One of the biggest reported victims of a ransomware variety sowed by Trickbot called Ryuk was the hospital chain Universal Health Services, which said all 250 of its U.S. facilities were hobbled in an attack last month that forced doctors and nurses to resort to paper and pencil.
U.S. Department of Homeland Security officials list ransomware as a major threat to the Nov. 3 presidential election. They fear an attack could freeze up state or local voter registration systems, disrupting voting, or knock out result-reporting websites.
Trickbot is a particularly robust internet nuisance. Called “malware-as-a-service,” its modular architecture lets it be used as a delivery mechanism for a wide array of criminal activity. It began mostly as a so-called banking Trojan that attempts to steal credentials from online bank account so criminals can fraudulently transfer cash.
But recently, researchers have noted a rise in Trickbot’s use in ransomware attacks targeting everything from municipal and state governments to school districts and hospitals. Ryuk and another type of ransomware called Conti — also distributed via Trickbot — dominated attacks on the U.S. public sector in September, said Callow of Emsisoft.
Alex Holden, founder of Milwaukee-based Hold Security, tracks Trickbot’s operators closely and said the reported Cybercom disruption — involving efforts to confuse its configuration through code injections — succeeded in temporarily breaking down communications between command-and-control servers and most of the bots.
“But that’s hardly a decisive victory,” he said, adding that the botnet rebounded with new victims and ransomware.
The disruption — in two waves that began Sept. 22 — was first reported by cybersecurity journalist Brian Krebs.
The AP could not immediately confirm the reported Cybercom involvement.


fortune--2020-10-12--Happy Indigenous Peoples Day?

Happy Indigenous Peoples Day?

I am writing this column from my now socially distant home on the ancestral lands of the Osage, Miami, Sioux, and Haudenosauneega people.
That is what’s known as a land acknowledgement statement. They are common in Canada, Australia, and New Zealand, but are increasingly being adopted at meetings and convenings in the U.S. as a small but powerful step toward addressing the violence and erasure experienced by Indigenous people across the continent.
Saying their tribal names out loud is the very least we can do.
Questions of what more should be done are raised the second Monday of every October, as colleges, towns, cities and states are increasingly choosing not to mark the arrival of Christopher Columbus, a violent colonizer, and instead embrace Indigenous Peoples’ Day as a chance to deepen the work.
“Today we understand that while [Columbus] was an explorer and is credited with being one of the first Europeans to arrive in the Americas, we now know a great deal about the history and the way that he and his people behaved when they came to this continent,” Shannon Speed, a citizen of the Chickasaw Nation and director of the UCLA American Indian Studies Center told NPR. “Which included pillaging, raping and generally setting in motion a genocide of the people who were already here. That’s not something we want to celebrate. That’s not something anyone wants to celebrate.”
It feels like a takeaway for plenty of Italian Americans who still believe that the holiday was a way for their broader contributions to be appreciated. But it’s worth noting that the appreciation came at a steep price. Columbus Day became a holiday after President Franklin D. Roosevelt signed a 1934 decree in the wake of a concerted campaign by the Knights of Columbus, a charity which provides services to Catholic immigrants.
“When Italians first arrived in the United States, they were targets of marginalization and discrimination,” notes UNC history professor Malinda Maynor Lowery, who is both a a scholar of Native American history and a member of the Lumbee Tribe of North Carolina.
“Officially celebrating Christopher Columbus—an Italian Catholic—became one way to affirm the new racial order that would emerge in the U.S. in the 20th century, one in which the descendants of diverse ethnic European immigrants became ‘white’ Americans.”
But the unfortunately binary fight over which holiday to celebrate erases the terrible acts of violence, including terror lynchings—at least 50 have been documented — experienced by Italian immigrants. This history also deserves to be known, even if a retreat to whiteness makes it feel unnecessary.
But it’s all necessary.
This particular day falls at a time when Indigenous communities are under siege due to the coronavirus pandemic. The degree to which we will ever be able to understand exactly how devastating the impact will have been is not clear, because they are being literally erased from the conversation.
Rudolph Rÿser (Cree/Oneida), the executive director of the Indigenous rights think tank, the Center for World Indigenous Studies, is a leading expert on the impact of the pandemic on global Indigenous communities. He recently published a grim COVID-19 risk assessment study, and followed up with an in-depth interview with High Country News.
“Our first finding was that almost none of the U.S. government or state or county or municipality data relating to any tribal community, whether on a reservation or adjacent to a reservation in urban centers, was even remotely accurate,” he says. Part of the issue is that the U.N. only recently called for the disaggregation of public health data to identify Indigenous populations around the world. But it largely hasn’t happened in the U.S. Now, tribal communities, already grossly under-resourced, are on their own. “What the hell is Indian Country going to do with hundreds of thousands of people who are disabled from having been infected?” he asks.
Someday, when we meet in person again, I’ll make a land acknowledgement statement at a corporate event. Based on my experience, it was already highly unlikely that a Native American executive would be there to hear it. Now, it’s time to worry whether or not there will ever be.
It makes the statement that much more urgent. Once we understand our past, what role do we play in reinventing the future?
*this essay draws on observations from last year’s Indigenous Day column.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
raceAhead is edited by Aric Jenkins.
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fortune--2020-10-12--Amazon Prime Day expected to hit nearly $10 billion in a big jolt to retailers’ holiday shopping pla

Amazon Prime Day expected to hit nearly $10 billion in a big jolt to retailers’ holiday shopping plans

Once again, Amazon is setting the agenda in retail with its two-day Prime Day sales event starting on Tuesday, an annual shopping extravaganza that comes three months later this year than it has in the past.
The online retailer’s global sales on October 13 and 14 should hit about $9.9 billion, including more than $6 billion in the U.S. alone, according to projections from eMarketer. That’s up 43% over Prime Day in 2019, when the event took place in July. JPMorgan has similar expectations, projecting Prime Day will generate U.S. revenue of $7.5 billion, up 42% over last year. (Amazon does not disclose the sales results.)
Prime Day started off in 2015 as a made up event to drum up sales at the quiet time of the year for shopping. But this year, Prime Day stands in as the kick-off to the 2020 holiday season—three weeks before Christmas spending normally gets going, which tends to be when retailers quickly switch from Halloween wares to Christmas goods around Nov. 1.
“It is close enough to the holiday season that people are going to be thinking ahead if they’re looking for deals,” says Andrew Lipsman, principal analyst at eMarketer.
No sooner had Amazon finally announced its 2020 Prime Day dates in late September, did Walmart, Target, and Best Buy follow suit with their own plans for big sales events as “counterprogramming” to Amazon, as Lipsman puts it. J.C. Penney and Kohl’s joined the chorus on Monday morning with their own announcements. “This is really early holiday shopping,” says Lipsman.
While all those chains, and other large retailers including Petco, Dick’s Sporting Goods, Ulta Beauty, and Gap Inc have more than held their own against Amazon in the e-commerce wars this year, they have little margin for error and see the need for the early start.
Adding to the pressure on those brick-and-mortar chains, consumers are visiting stores far less often this year to reduce COVID infection risk, and one research firm projects in-store shopper traffic will be down 25% over Black Friday this year. Overall the season will see only modest growth, with Deloitte forecasting about 1.5% growth in retail spending.
Avoiding product shortages
A big factor that will spur the earlier shopping rush: Shoppers have had to contend with shortages this year as retailers kept tight inventory since the start of the pandemic this spring, and too often consumers have experienced shipping delays as retailers, Amazon included, struggled with the surge in e-commerce orders.
The election on November 3 is also likely to distract American consumers, making the early start even more crucial to retailers.
“Importantly, we believe Amazon stands to benefit from an earlier start to holiday shopping, with Prime Day representing ‘good’ pull-forward that helps smooth demand through 4Q,” JPMorgan analysts wrote in a research note last week. The goal for Amazon is also to sign up new Prime members—which number about 153 million Americans—at the start of holiday shopping.
Analysts say Amazon Prime Day’s offers will be less of a hodgepodge than in previous years and clearly more focused on holiday items, either for oneself or others, with a focus on home appliances and consumer electronics.
It has to put its best foot forward. Amazon is going up against brick-and-mortar retailers that have significantly increased their e-commerce firepower since last year, with Target’s digital sales nearly quadrupling last quarter, and companies like Gap Inc and Walmart seeing them double, thanks to their big networks of stores that double as delivery hubs and curbside delivery, an inviting option for COVID-weary shoppers.
“They’re getting stronger,” says Lipsman. “As is Amazon.”