fortune--2020-03-08--Does the Hummer EV make sense? Culturally, no. Economically, absolutely

More than a decade ago, as a newly inaugurated President Obama settled into the White House and signs emerged that a global recession had begun to ease, the Hummer brand disappeared. At a time of relative restraint, General Motors’ pseudo-military marque—as discreet as a pair of Carhartt boots at a charity ball—screamed excess. Its unorthodox trucks (if you could call them that) were heavy and wide at a time when the modest Toyota Camry was America’s bestselling vehicle. At just nine miles per gallon in the city, their rate of gasoline consumption was two and a half times that of a conventional car.
Such brawny attributes were so deeply out of step with consumer demand that in 2010, as gas prices in much of the U.S. surpassed $3 a gallon, and President Obama called for new standards requiring new cars to increase fuel economy to 54.5 miles per gallon by 2025, GM abandoned the brand and dismantled its distribution system. Hummer, it seemed, had come to embody everything that was wrong with the world’s largest automaker: too brash, too thirsty, too irrelevant and out-of-touch for a company seeking clarity after its 2009 bankruptcy.
And then there was one. This January, nearly a decade after the last Hummer rolled off the production line in Shreveport, La. and before 100 million Super Bowl viewers, GM’s truck-focused division, GMC, unveiled the Hummer EV in a 30-second ad spot touting 1,000 horsepower, 11,500 pound-feet of torque, and an all-electric powertrain generating zero emissions.
That’s right: Zero.
The Hummer EV won’t receive a proper debut until May 20, but industry observers expect it to be a pickup truck or sport-utility vehicle that can go at least 200 miles between charges. Whatever form it takes, the vehicle nevertheless prompts a host of new questions. Perhaps the greatest: Does the world need another Hummer?
A look at sales trends in the U.S. automotive market, the second largest for GM behind China, suggests the answer is “yes.” For several years running, American drivers have opted to purchase bigger, costlier, and generally thirstier SUVs (and their diminutive counterparts, CUVs) over conventional cars, leading automakers like Ford and Fiat Chrysler to stop selling nonsporty coupes and sedans in the U.S. market. “Luxury vehicles are now SUVs,” says Jake Fisher, director of auto testing at Consumer Reports. “Cars are just around as a curiosity.”
Meanwhile electric vehicle sales are rising, albeit from a tiny base, as the technology’s costs drop and its niche novelty wears off. No longer relegated to environmental nerd-mobiles, electric powertrains are set to appear in pickup trucks from Ford, Tesla, and startup automaker Rivian beginning late next year. With electric motors on tap, “any concerns about environmental conditions are taken off the table,” says Phil Brook, vice president of GMC and Buick Marketing, of the Hummer EV, though it remains unclear whether prospective Hummer buyers were ever sensitive to such concerns.
Whatever the case, sales of GM’s two earlier plug-in electric vehicles, the hybrid Chevrolet Volt (approx. $34,000) and all-electric Bolt EV (approx. $37,000), have fallen in the face of competition from the $40,000 Tesla Model 3. GM discontinued the Volt last year after investing almost a billion dollars in its development. Meanwhile Bolt sales dropped almost 30% between 2017 and 2019. The automaker is planning a new, larger—and yes, more SUV-like—version of the car for 2022, and it expects to expand its EV lineup from there. “Two cars does not make a strategy,” said GM President Mark Reuss at the press conference announcing the new vehicle.
In part, GM’s strategy with the Hummer EV mirrors that of Tesla: Start upmarket. The electric automaker run by entrepreneur Elon Musk entered the industry in 2008 with a $109,000 sports car and has lowered its average sales price (and increased its volumes) with each successive model. GM seeks to enter the fray touting more performance, more luxury, more expense. And a lot more truck.
Counterintuitive? Perhaps. But there’s precedent in the automotive industry. Innovation—as electric cars represent today—has always started at the high end of the market. In earlier days those developments included electric starters, automatic transmissions, air conditioning, turbochargers, and disc brakes, says John Voelcker former editor of Green Car Reports, who has written extensively on both trucks and electric cars. More recent innovations that were first introduced on luxury models include automatic driver safety aids that help bridge the gap between conventional cars and fully autonomous driving machines.
And, of course, electric car batteries. Pricey early Tesla vehicles allowed that company to more easily amortize the high cost of developing new battery technology. “If you’re going to put a costly lithium-ion battery in an electric vehicle, it’s going to be a lot more cost effective to put it in such an expensive vehicle than in an economy car that has to be affordable,” Fisher says.
Reuss has promised that the Hummer EV will, unlike GM’s previous electric efforts, be profitable from its first day on the market. One would hope so: Top-of-the-line models could cost as much as $100,000, comparable to Land Rover’s fashionable Range Rover and far more than Tesla’s planned $40,000 Cybertruck (though history suggests the first models will sell for a much higher price). That should give GM plenty of headroom to pay for big new batteries, analysts say.
For GM, the Hummer EV is only a peek into its broader strategy. The automaker announced plans for its Cadillac brand to lead future electric efforts, and analysts expect a new electric Escalade to be the third product based on the Hummer EV. (The division is also developing new electric architecture that’s expected to appear in an SUV planned for 2023.) But for the broader auto industry, it’s a sign that the era of the “compliance car”—those fuel-efficient models that automakers offered in a bid to reduce their fleet-wide average fuel economy in the wake of tighter national emissions standards finalized during the Obama administration—is over.
“For years, automakers have been trying to figure out the price ceiling for a full-sized truck,” says Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. “They haven’t found it.”
More must-read stories from Fortune:
—How Tesla’s stock price reacted to China coronavirus concerns
—What’s next for a self-driving car startup poised to make history
—Why Nissan is suing Carlos Ghosn for $91 million
—Tesla’s growth problem, by the numbers
—How British automakers are bracing for Brexit
Subscribe to Data Sheet, our daily newsletter tracking the business of technology.


fortune--2020-03-08--New tech startups challenge AmEx in the niche corporate card market

Curing HIV and sickle cell falls short if the most vulnerable populations are left out

For decades, corporate credit cards were a boring industry, dominated by money-colored AmExes, the default choice for power lunches and client dinners around the world.
Now, a fleet of richly funded startups wants to change that. Venture capitalists and other investors have poured big money into a growing group of companies that make credit cards for businesses. That includes more than $1 billion in funding and debt for just three startups: card-makers Ramp, Divvy and three-year-old Brex Inc., which was valued last summer at an eye-watering $2.6 billion, according to PitchBook data.
The fresh interest in the industry comes as American Express Co.—the undisputed leader in the market—revamps its corporate card portfolio, raising the fees on its cards this week after adding benefits for Uber rides and Hilton stays. Accenture estimates that overall spending on business credit cards in the U.S. will climb to $1.1 trillion in 2024 from $625 billion in 2019.
AmEx, with a $92 billion market value, is the largest issuer of commercial cards in the world, and has relationships with almost two-thirds of the Fortune Global 500. It’s also the largest issuer of cards to small businesses in the U.S. “Obviously AmEx has a massive stronghold,” said Lisa Ellis, an analyst at MoffettNathanson. “I’d characterize the new players now as on the radar screen but not of concern to AmEx yet.”
Brex, founded in 2017, started by introducing a product aimed at other startups. New companies, it said, often had a hard time getting traditional corporate cards due to their lack of credit history. Instead of credit histories, Brex monitors how much money its customers have in their bank accounts on a daily basis. If they’re well-funded with cash on hand, Brex believes, they’re likely to be able to pay off their credit card debt.
Though Brex has gone after a relatively niche slice of the market, it wants to take on American Express directly. “We’ve always competed with AmEx,” said Henrique Dubugras, Brex’s 24-year-old co-founder. Dubugras and his investors, which include Peter Thiel and Kleiner Perkins Digital Growth Fund, believe tech-savvy competition could loosen the company’s hold on the market. “We don’t underestimate AmEx though. We’re aware, we’re measuring, we’re looking.”
Dubugras explained his company’s strategy at a meeting earlier this year in a café Brex has leased and operates in San Francisco’s South Park, a venture capital hub. Wearing a Brex-branded T-shirt, Dubugras said that while the bulk of its customers are startups, it’s made efforts to make further inroads with e-commerce companies and life sciences companies. Even the café is an example of diversification.
Brex, which has raised about $317 million in venture capital funding according to PitchBook data, and more in debt capital, had drawn some questions about its decision to dabble in food services. The café menu includes ingredients like “smoked grapes” and “béarnaise aioli.” But Dubugras noted that American Express also operates lounges in airports, and Capital One Financial Corp. has cafés in a number of their branches. “We serve startups, and this is the core of the startup community in San Francisco, so having a lounge and café here made sense,” Dubugras said. (The company poached the head chef from payment startup Stripe Inc.)
Brex is the one of the most valuable venture-funded card startups at the moment, but it’s far from the only one. Ramp, based in New York, is only a year old and recently attracted about $25 million in funding from Founders Fund and others. In addition to offering corporate cards, Ramp can use payments data to find redundant spending at the companies it works with — such as extra software subscriptions or paying for separate document storage accounts. “Anyone at a large company can tell you that there is a lot of waste,” said Ramp co-founder Eric Glyman, 29.
Divvy, based in Lehi, Utah, last April raised $200 million from New Enterprise Associates, Insight Partners and others, and has secured millions more in debt capital. In addition to its corporate cards, Divvy offers additional expense tools that make it easier for employees and people in charge of a business’s accounts to keep track of spending.
American Express has taken notice of the uptick in competition. “We definitely see these new startups,” said Anna Marrs, president of the firm’s global commercial services unit. “That reminds us that we need to keep innovating.”
In October, American Express introduced a new card program made for startups. Like Brex, it has begun using new technology that allows it to see a company’s bank balance as part of its underwriting process. And the credit card giant is rolling out new systems for automating a small business’s payments to suppliers—a process that normally involves writing checks and tracking down invoice information.
As credit card startups ascend, competition is working as intended said Frank Martien, a managing director at Accenture. “We actually see a competitive answer from the large players,” he said. That will ultimately mean more options for small companies, and more clashes ahead for American Express and its upstart rivals.
American Express may not be in a position to worry right now, but Dubugras predicts the day will come. “I don’t think they like us very much,” he said.
More must-read stories from Fortune:
—How psychedelic drugs may revolutionize mental health care
—Before coronavirus, there were SARS and MERS. Do epidemics ever really end?
—Funding for female founders increased in 2019—but only to 2.7%
—Coronavirus spreads to a previously healthy sector: corporate earnings
—How to think about COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-08--Curing HIV and sickle cell falls short if the most vulnerable populations are left out

Coronavirus symptoms : The progression from moderate to severe can occur ‘ very , very quickly ’

The year was 1984. I was finishing my medical genetics training at Yale, working on the molecular genetics of disorders of human hemoglobin. I was at a job interview at the University of Michigan when one of the senior professors asked what my lifetime goal was. “To contribute to scientific advances that would lead to a cure for sickle cell disease in Africa,” I said. The professor laughed and said I was a hopeless dreamer.
That same year I saw my first case of HIV/AIDS. It was heartbreaking. This young man was wasting away in front of us, his body ravaged by infections that were taking advantage of his devastated immune system. There was little we could do, and he died in just a few weeks. I promised myself if there was ever a chance to help find a cure, I would do so.
Fast forward to today. The National Institutes of Health (NIH) and the Bill & Melinda Gates Foundation (BMGF) have just embarked on a bold 10-year program to develop gene-based approaches to cure both sickle cell disease (SCD) and HIV. Furthermore, we are committed to make this practical and affordable in low-resource settings like those found in much of sub-Saharan Africa. This is not an idle dream. We aim to make it happen.
Sub-Saharan Africa is home to the majority of the world’s people with SCD, an extremely painful and debilitating blood disorder. We also know that approximately 100,000 Americans in the U.S. are affected. SCD is more common in sub-Saharan Africa because while individuals who inherit two copies of a certain gene variant develop SCD, those who carry just one copy have a survival advantage against malaria, a mosquito-borne infectious disease prevalent in the region. As a result, over the course of millennia, sickle cell carriers have become more prevalent in the sub-Saharan African population, which in turn has increased the numbers of children born with SCD.
Gene-editing approaches for SCD that are now being tested in the U.S. and other developed nations show great promise. However, they require bone marrow stem cells to be removed from the body of an affected child or adult in sterile laboratory conditions, and then, after a risky bone marrow ablation to “make space” for the corrected cells, reinfused into the patient. This usually requires a long period of high-intensity care in a hospital setting. While such approaches hold great promise, they are currently impractical and prohibitively expensive in developing regions, including sub-Saharan Africa.
As for HIV, about 67% of the 38 million people infected with the potentially deadly retrovirus live in sub-Saharan Africa, according to the Kaiser Family Foundation. Thanks to the global public’s generosity and availability of antiretroviral drugs, people can live near-normal lifespans. However, in low-resource areas of the world, it can still be very difficult to access or afford a lifelong regimen of antiretroviral therapy. An absolute game-changer would be the development of a gene-editing strategy to seek out and destroy the HIV genetic material that can remain hidden in the body, even after years of treatment. If successful, that could also be applied here at home—perhaps contributing to the Trump administration’s historic promise of ending the HIV epidemic in the U.S. by 2030.
To accelerate development of accessible, affordable models for curing these two diseases that can be implemented in low-resource settings, NIH, which is the world’s leading public funder of biomedical research, and BMGF recently forged a public-private partnership that plans to invest $200 million over an initial period of four years. The goal for both diseases is to develop a gene-based approach that can be given to a living person in one outpatient visit, delivering the gene correction apparatus to the appropriate tissues and requiring no significant suppression of the immune system. The dream is to initiate African clinical trials in 10 years—using procedures that are not much more complicated than receiving a blood transfusion.
Without doubt, this is a highly ambitious plan—among the most groundbreaking public-private collaborations that NIH has ever initiated aimed at a specific research challenge—and achieving its aims will be no easy task. Many of the technologies needed to achieve this bold goal do not yet exist or are in the very early stages of development. Still, the need to develop new technologies hasn’t stopped scientists from taking on big challenges in the past. An example that I am deeply familiar with is the collaborative, international effort that successfully sequenced the human genome—ahead of schedule and under budget.
But affordability poses a huge hurdle. In the past, many public-private partnerships have focused on adapting therapies developed in a very high-tech environment, trying to figure out how to modify them so they can be exported to low-resource settings. That has proven difficult because, at that point, there already may be significant patent, royalty, and other business entanglements. In our new initiative, NIH and BMGF will place a high emphasis on affordability and accessibility from the start, making very careful choices along the way to make sure those goals are kept at the forefront.
In contrast to many past research efforts involving low-resource communities, patients will be at the center of this new model. NIH and BMGF will actively pursue collaborative relationships with patient advocates, as well as scientists, clinicians, and other thought leaders in Africa to develop contextual and country-specific approaches toward achieving these shared goals.
The individuals who stand to benefit most from this initiative at first are the millions of people with sickle cell disease and HIV who live in sub-Saharan African nations, where these diseases take such an enormous toll on health and economic productivity.
In the long run, easy-to-deliver gene-based cures may help people with SCD or HIV who live in other developing areas of the world, as well as rural and other low-resource areas of the U.S. Successful gene-based technology for cures of SCD and HIV may also be adapted to cure or treat additional diseases in other low-resource settings, such as the blood disorders beta thalassemia in the Mediterranean and alpha thalassemia in India and Southeast Asia.
Ultimately, our shared aim is to make my admittedly naive 1984 dreams of saving lives come true—and advance public health. If the new one-stop, gene-based approaches prove as safe and effective as higher-tech systems, who wouldn’t choose the more convenient, less costly option? Indeed, our hope is that this unprecedented effort will yield an outstanding example of reverse innovation, in which creative, low-cost solutions originally developed to meet the needs of low-resource areas can subsequently be embraced by all.
Francis S. Collins is director of the National Institutes of Health.
More opinion in Fortune:
—Coronavirus shows why we need vaccines before, not after, an outbreak
—How Democrats’ impeachment campaign helped Trump
—Being a CEO is more tenuous than ever. How I survived 30 years at Aflac
—How Warren Buffett built Berkshire Hathaway
—Are the Houston Astros irredeemable cheaters? Or are they all of us?
Listen to our audio briefing, Fortune 500 Daily


fortune--2020-03-08--15 powerful women share the personality trait that’s key to their success

One of the goals of International Women’s Day is to celebrate the achievements of women and girls. So, as we mark this year’s holiday, it seemed appropriate to turn to some of the highest achieving women in the business world—the executives who comprise Fortune‘s annual Most Powerful Women list. Below, 15 of those leaders told us about the personality trait they credit for helping launching them into the C-suite—and share their advice for women who hope to follow in their footsteps.
Marillyn Hewson, Chairman, President, and CEO, Lockheed Martin
A focus on effective communication—and it all starts with the ability to really listen. Listening to your customers leads to a customer-focused vision. And listening to those you lead creates a climate of understanding and trust. By focusing on consistent and effective communication, leaders can also more quickly identify those times when it is critical to step forward and reach out directly to customers, shareholders, or employees. Simply put, effective communication is the engine for effective leadership and effective decision making at every level.
Ginni Rometty, Chairman, President, and CEO, IBM
Be curious. A constant thirst to learn has served me well my entire career, especially in the tech industry. We’ve always hired for curiosity at IBM. We receive 7,000 job applications a day, and our managers and HR teams are geared to look for people who are curious and committed to constantly advancing what they know.
Gail Boudreaux, President and CEO, Anthem
My strong focus on leadership has been a large part of my success to date. I believe the ability to build and inspire teams is critical and that individuals and organizations can accomplish extraordinary results when they leverage the power of their collective strength working together.
Julie Sweet, CEO, Accenture
Openness: starting with my decision to learn Chinese and live in Taiwan and China in 1987 and 1988, before it was commonplace. I have often pursued paths that were not well-trodden. It has helped me become a continuous learner and to understand that it is often from unexpected sources and places that you learn the most.
Judith McKenna, President and CEO, Walmart International
It must be somewhere between curiosity and always focusing on people. Both are really important, and I really believe that if we always keep our associates, our people, at the heart of everything we do, and build out strong teams, then we’ll continue to make our business successful.
Amy Hood, EVP and CFO, Microsoft
I’m pretty gritty. I can work through most things and come out on the other side feeling like I’ve learned a good lesson and I’ll get better.
Ann Marie Campbell, EVP, U.S. Stores, Home Depot
I think in any industry, and especially in retail, it’s crucial to be able to build emotional connections and motivate others. When I was working in the stores, I was fortunate to have a mentor who saw my potential and helped me realize what I could accomplish. I try my best to do the same for our associates, whether they’re working in the stores or in one of our Store Support Centers.
Vicki Hollub, President and CEO, Occidental Petroleum
Being competitive, but team-oriented—I want my teams, I want Occidental to win. That means continuously challenging every Occidental employee to look for the most efficient and effective ways to get top results. It’s a culture and an attitude of not settling that values innovation, collaboration, and continuous improvement.
Pam Nicholson, Former President and CEO, Enterprise Holdings
I personally believe there is no one personality type that determines success in today’s complex business environment. That said, being open to professional feedback is universally beneficial for everyone, regardless of their title or field. As a result, I asked three fellow CEOs for their thoughts and help in figuring out what traits have helped me the most in my own career. Their responses ranged from “honest,” “genuine” and “strong work ethic,” to “positive” and “inclusive,” which means I tend to be pretty straightforward and collaborative on most days. But I am particularly proud that my reputation is based on trust and integrity—something that has enabled me to confidently make tough decisions at Enterprise for more than 37 years.
Leanne Caret, President and CEO, Defense, Space & Security, and EVP, Boeing
I love being authentic and letting people see the real me. That hopefully creates an environment where we are all in it together.
Beth Ford, President and CEO, Land O’Lakes
I’d say it’s a combination of intellectual curiosity and a love of people. Asking questions, then really listening to the answers is key in people-intensive businesses like mine. When I hire people, I make sure they have that appreciation of people as well.
Jennifer Taubert, EVP, Worldwide Chairman, Pharmaceuticals, Johnson & Johnson
I think two qualities have been critical in my career: optimism and perseverance. Optimism because I believe in stretching and redefining the boundaries of what’s possible. Perseverance because, with determination, you can overcome any obstacle to do the right thing for patients.
Michele Buck, President and CEO, Hershey
Being a great listener has long been one of my hallmark leadership qualities. I find immense value in seeking diverse perspectives when I’m making an important business decision. I want to hear from people who are deep in the organization, closest to the work, as well as those outside the decision domain who may see things a bit differently. As a leader, it’s important to set direction and impart your knowledge to others; but, you have to balance that with listening to the expertise and point of views of those around you. Intentional listening, and the learning associated with that, has undoubtedly been key to my success. One of the most important lessons I’ve learned is to weigh the perspectives of those around me with my north star. Then, I listen to my gut, which to me isn’t just natural instinct, it’s been built through years of experience, successes, failures, and everything in between.
Mary Dillon, CEO, Ulta Beauty
Curiosity and empathy. I told my children as they were growing up to always ask other people about themselves, to be curious to learn about others and to respect their journey. At Ulta Beauty, this is the way we do business. We have a deep curiosity about our guests and their needs, and we treat associates with the respect they deserve. We believe these values are helping us win customer loyalty.
Bridget van Kralingen, SVP Blockchain, Industry Platforms, Accounts, and Partnerships, IBM
Lead with an intent toward solving, not blaming. Start by always giving everyone, no matter the situation, the benefit of the doubt.


fortune--2020-03-08--Charleston Restaurant is the most relaxed formal dining experience in Baltimore

At the end of this month, Cindy Wolf will learn if she’s a nominee for the James Beard Best Chef: Mid-Atlantic award, an honor for which she’s been nominated for six consecutive years but has never won. It seems like a long time to wait, but it’s all relative for Wolf, who’s been at the helm of her restaurant, Charleston, the well-mannered bastion of fine dining in Baltimore’s Harbor East, since Titanic was tops at the box office.
Wolf has called herself the Susan Lucci of the Beards, self-deprecating but also a comment on her, and Charleston’s, staying power. “Neither Tony [Foreman, her business partner] nor I care about a trend,” says Wolf. “We do what we think is the right thing for us and our guests.”
Cindy Wolf, executive chef at Charleston and a 2006, 2008, 2014, 2015, and 2016 James Beard Foundation finalist for Best Chef: Mid-Atlantic. Will Napier
Charleston may be allergic to fads, but if you keep doing the same thing long enough, fashions eventually circle back to you. Which is how the 23-year-old restaurant finds itself at the headwinds of a major industry shift. Since late 2016—I mark the era with the opening of New York’s Le Coucou—restaurants across the country have resumed interest in fine dining and continental cuisine, resurrecting tableside service, pulling white tablecloths out of storage, and feeding millennials prime rib and poached pears as if they were their grandparents out for a night in the city after the war. To wit: While you might expect boomers on business dinners to populate Charleston’s dining room (I did), more than three-quarters of the diners the night I was there appeared to be younger than 40. There are definitely hipper places to dine in Baltimore—natural-wine bar Le Comptoir du Vin and mezcal specialist Clavel come to mind—but the gospel in Charm City still seems to be, If you want a nice night out, you go to Charleston.
Wolf and Foreman just renovated the main dining room in January, recovering the winding crimson-and-coral banquette in indigo velvet, painting the walls a cool gray, and decorating them with colorful abstracts by Bob Salazar, head of the painting program at the Maryland Institute College of Art. The waitstaff wear suits and ties. Martinis arrive on trays in individual shakers smoked with frost, and the silverware is silverware. There’s a Persian rug under the urinal in the men’s room. (That’s a Persian rug under the urinal in the men’s room for all the people in the back.)
The Palm Room for private dining. Will Napier
Outside Charleston’s clubby bar, where you can order à la carte, Wolf only offers a tasting menu. You choose three courses ($79) to six courses ($124) from a menu of 30 or so dishes that weave together the chef’s affinities from the American Low Country and France, to which she takes field trips at least once a year. The fondness reveals itself in butter sauces and enriched breads, truffles, game, and offal. The first bite to land on my table was an amuse-bouche of onion soup kissed with Madeira, pureed, and capped with a flaky snail shell of puff pastry wound around goat cheese.
Foreman and sommelier Lindsay Willey plan the pairings. One of them may be in the dining room to explain why the lobster soup has been matched with González Byass 30-year amontillado sherry, for example, but neither were present during my dinner—a disappointment since half the fun of a paired menu is learning the intricacies of how wine and food interact. The match was nonetheless spot-on, the sherry’s whiplash acidity and caramelized-walnut flavor balancing the soup’s profound umami. A pink island of butter-poached lobster rose in the center of the puree, tender and sweet but interrupted by a stowaway piece of shell.
Restaurateur Tony Foreman and chef Cindy Wolf opened Charleston in 1997. Will Napier
Wedges of artichoke heart wore crisp tempura jackets and came with perky basil-lime mayo for dipping and a fat-cutting pour of an Austrian Sauvignon Blanc with notes of pineapple. Chewy on the trunks and crispy around the caps, trumpet mushrooms dovetailed with mellow white truffle powder in a nest of house-made fettuccine so gold the pasta appeared to be made with saffron instead of just eggs. Foreman and Willey tethered it to a lighthearted Massolino Barbera that conjured roasted plum tarts.
Familiar and cleanly executed, these dishes soothe rather than excite. Others might just put you to sleep, like an under-seasoned grilled medallion of venison leg with mashed sweet potatoes and rum-and-cider reduction that tasted like neither. Still others might confound, like the seared foie gras dropped in a lemon-and-artichoke broth. The foie was stringy as a harp and came with a laminated truffle brioche twisted up like a morning bun, but no explanation of how to eat them together. I unwound the pastry and tucked bits of liver into the folds—foie in a blanket? Wolf later explained the bread was for soaking up the broth, but its crisp, flaky exterior repelled rather than absorbed liquid. You can re-create this experience at home by serving a bowl of chicken noodle soup with a croissant.
Shrimp and grits: andouille sausage, tasso ham, and Anson Mills stone-ground creamy grits. Jasmin Hejazi
One upside to the foie was my favorite wine of the pairing: a natural Galician Grenache-Carignan blend as cool and inky as walking barefoot on the beach at midnight. My favorite dish of the tasting, meanwhile, was a classic Wolf has been perfecting for decades: shrimp and grits. Ringed in a luminous beurre blanc, succulent twin Gulf prawns locked heads over creamy, perfectly cooked Anson Mills grits. (Before he became the ambassador of Low Country corn and grains, Glenn Roberts was the manager at the old Silk’s in Charleston, S.C., the restaurant where Wolf did her culinary internship.) A meticulous brunoise of andouille sausage and tasso ham covered the shrimp, whispering smoke and spice into each bite with a Cajun accent.
The cheese cart rolled over after the last savory course. It’s a Cadillac, all mahogany frame and silver hardware with a collection of wedges and wheels beneath the hemispheric plexiglass cover. My server went over each by heart, then sliced me off a piece of Nettle Meadow Kunik, a pungent cow-goat blend from the Adirondacks, plating it with thin crostini and nothing else. “I think fruits and marmalades take away from the cheese,” Wolf says. I prefer to desecrate mine with a little honey, but hey, Charleston is Cindy Wolf’s world, and we’re just living in it. She explains condiments are available on request, which probably should be written down on a menu somewhere so you know it is okay to ask.
The requisite cheese cart. Will Napier
Throughout the night, Wolf zipped between the gleaming glassed-in kitchen and the dining room, touching both the tables of regulars and strangers like me. She radiates hospitality, a feeling the staff has learned to emulate. Front- and back-of-houses are notably diverse, as the Charleston way of rigorous training and promoting from within has helped counterbalance the barriers that exist to women and people of color in the restaurant industry. “We have the ability to give people opportunities,” Wolf says. “If you want to learn, I don’t care if you have any experience at all, I will teach you.”
When a young food runner fumbled over the ingredients in pastry chef Anne Blanchard’s refreshing dessert (crisp pink grapefruit sorbet, buttery strawberry sablé, lime cream), the senior server standing behind him didn’t swoop in or gape in horror. He let him power through the moment, whispering encouragements like a coach. “Thanks for your patience,” maître d’ Peter Keck said as he stopped by my table. “He just started training tonight.” At that moment, Keck could have rolled his eyes or grimaced or conveyed some other conscious or subconscious signal of contrition or distress. Instead he smiled, seeming proud of the trainee’s effort.
Wolf preparing for dinner service at Charleston. Will Napier
This is top-down culture. Maybe that’s why employees tend to hang around Charleston’s hallowed halls. A full third of the staff has worked here for more than a decade, including Willey, who started as a server, Keck, and Everardo Florentino, Wolf’s chef de cuisine for the past 23 years. Maybe that’s why, according to a Baltimore magazine profile, when Wolf had cancer and lost her shock of platinum hair, her kitchen staff wore bandannas in solidarity as she worked all through treatment. Maybe that’s why, whether or not Wolf wins a Beard award, to her employees, she’s already a winner. And the feeling is mutual. “I’m delighted by the people that work for us,” she says. “And I’m thankful for every single one of them.”
More must-read stories from Fortune:
—The most essential travel apps you need to know about
—One of Bordeaux’s most revered estates is launching a new high-end wine in Napa
—Inside a sleep and wellness hotel that rents out minimalist “cocoons”
—Behind the scenes of the Dalai Lama’s early history with the CIA
—WATCH: Can San Francisco Be Saved?
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-03-09--A Saudi-Russian price war tanks oil, sinking the global markets

China ’ s box office was supposed to surpass North America ’ s this year .
Then came the coronavirus

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.
Happy Monday, everyone. A historic plunge in oil prices along with coronavirus contagion fallout are taking just about everything down. Let’s dig into the numbers.
But first we have a language advisory—today’s newsletter will contain that other B-word. You may want to refrain from reading this one aloud.
Markets update
Asia, Europe and the U.S. future are a blur of red with the S&P futures, as I write, down close to 5%. Within the first 10 minutes of European trading today, the benchmark Stoxx Europe 600 had entered—hold your ears—bear territory. We haven’t seen drops like these since the fall of Lehman Brothers in September 2008.
The picture is even worse in the oil markets where Brent futures tanked at the open by more than 30%. THIRTY. Royal Dutch Shell opened down over 20%, before recovering some, underscoring the carnage in energy stocks.
These falls appear to be no blip. Goldman Sachs slashed its Q2-Q3 crude price outlook to $30 a barrel and warned that price shocks could take it closer to $20. CitiGroup analysts, hours later, reached a similar conclusion. The latest culprit is the Saudi-Russia price war. A breakdown in talks over the weekend between OPEC-plus producers could trigger market and political turmoil from Riyadh to Moscow to U.S. shale country.
Elsewhere, the euro and the yen are surging against the dollar, and just about all commodities are collapsing.
Yes, it’s a risk-off day. Investors are barging into safe-havens. Gold climbed above $1,700 an ounce and the entire U.S. Treasury yield curve sunk below 1%. Don’t look now but yields are getting scarily close to zero.
I had planned to talk more about coronavirus today, living as I do in a country where one-quarter of the population is in lockdown, but then I woke up to the crude sell-off. So, let’s head there right now.
Crude collapse
You have to travel back in time 29 years, to January 1991, to find a worse day for the oil markets.
The start of the Gulf War that day sunk the price of oil by roughly one-third. Today was nearly as bad—worse, it should be noted, than in the days following the Sept. 11 attacks.
***
As the chart above shows, Brent crude dropped 31.5% at the Asian open today. As I write, it’s clawed back some of those losses, but it’s still down more than 20%, and down 45% year-to-date.
Unless you have some crazy hedge position on oil, a precipitous drop like that is bad news.
Coronavirus is a global health crisis that’s roiling every corner of the global markets. And so while the Goldman and Citi oil forecasts look dramatic, there’s a very likely chance those analysts will need to come back soon to revisit the numbers. Traders will be holding their breath.
That’s it from me, everybody. Before I go, I want to give a big shout-out to my colleague Rey Mashayekhi who took the wheel last week in my absence. Chapeau!
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
Looking for more detail on coronavirus? Fortune has a new pop-up newsletter. The aptly named Outbreak will keep you up to date on the latest news surrounding the coronavirus outbreak and its impact on business and commerce globally. Sign up here.
Today's reads
Throttled. Employees working from home to curb the spread of coronavirus could find they are swapping the traffic jams of their daily commute for congestion on the Internet. With 42 million Americans able to work from home, there’s a risk of overload on the home broadband network. “People will hit congestion, just like a highway, where the speed goes from 60 miles an hour to 20,” says Lisa Pierce, a network expert with Gartner.
On a roll. Gold briefly surged above $1,700 an ounce for the first time since 2012 as investors scrambled for a safe haven amid turmoil in the oil and equities markets, the spreading coronavirus and expectations of easier monetary policy. Goldman Sachs has predicted prices could top $1,800 while UBS Group’s wealth management unit has said gold could rally toward that level within weeks.
German aid. Germany, known for its resistance to loosening the purse strings to boost growth, plans to spend more than the United States—so far—to help the economy weather the coronavirus outbreak. German Chancellor Angela Merkel’s government will invest an additional $14 billion between 2021 and 2024, Bloomberg reports. The U.S. House of Representatives last week passed an $8.3 billion bill to counter the spread of the virus but there has so far been no major U.S. package to help business.
Market candy
Quote of the day. “We are headed to closer to $3 a barrel than $30.”
That’s Bob McNally, president of market research firm Rapidan Energy Group, talking to Bloomberg TV about the outlook for oil prices after Saudi Arabia and Russia failed to agree on a new production-limiting agreement, sending prices into freefall.


fortune--2020-03-09--Oil analysts see prices dropping into the $20s on coronavirus and Saudi Arabia-Russia price war

Oil’s getting hammered by a unique concurrence of demand and supply shocks that could send prices into the $20s, according Ed Morse, Citigroup Inc.’s head of commodities research.
Crude prices were already falling as the global fallout from the coronavirus destroys demand, but the collapse of the OPEC+ coalition and ensuing price war between Russia and Saudi Arabia sent prices 30% lower on Monday. The rout could deepen in coming weeks, according to Morse.
“This is the first time I can recall that there has been a significant oversupply crunch and demand shock at the same time,” Morse said in a phone interview. “The combination is really unusual and makes it more difficult to see how you work your way out of it.”
Morse has seen his share of oil crises, focusing on international energy policy in the U.S. state department starting in the late 1970s, to publishing industry journal Petroleum Intelligence Weekly through most of the 1990s, followed by positions at Hess Trading Co., Lehman Brothers and Credit Suisse Group AG.
Russia on Friday walked away from the OPEC+ alliance to cut output, in place since late 2016, after members of the coalition failed to agree how to respond to the coronavirus. Saudi Arabia retaliated Saturday by slashing its official selling prices and pledging to boost production, effectively declaring a price war.
“The Russian government, for whatever reason, had the view that all the efforts to cooperate with OPEC had failed, since they had given up market share and the U.S. had seized it,” Morse said. The Saudi reaction is “signaling to other producers, and the Russians in particular, that we’re happy to cooperate with you if you want to get back on track. Otherwise, we’re going to screw things up for both of us, for everybody.”
The decision by Saudi Arabia, led by Crown Prince Mohammed bin Salman, will eventually work to pressure Vladimir Putin’s Russia, but there’s no clarity on how long it will take, Morse said.
Oil has now returned to levels that first inspired OPEC and other producers to join forces. That collapse, which began in 2014, was also triggered by a Saudi move to maximize output and crush other producers.
This time around though it’s likely to be a short-lived tactic to get Russia back to the negotiating table, which could take about a quarter, Morse said.
U.S. producers can stabilize supply at $40 a barrel for West Texas Intermediate, Morse estimated. Below that, output begins to decline, with a lag of about six months. WTI on Monday lost as much as 34% to $27.34 a barrel, while Brent fell 31% to $31.02.
More must-read stories from Fortune:
—Why the U.S. is so far behind other countries in coronavirus testing
—Travel insurance is booming, even though it doesn’t help flight changes and cancellations
—H&M wants to help other fashion houses become sustainable—for a fee
—10 journalists who deserve justice immediately
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-09--Capitalism and closing the great divide

Capitalism and closing the great divide

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
I’m sure you all were obsessed with coronavirus this weekend, but I hope you spared a moment to look at this arresting chart from the New York Times’ David Leonhardt. It is based on a book being published later this month by economists Anne Case and Angus Deaton, entitled Deaths of Despair and the Future of Capitalism. What it illustrates is the great divide that has opened up in the U.S. between those with college degrees and those without, tragically punctuated by rising death rates from alcohol, drugs and suicide.
What does this have to do with the future of capitalism? I’ll let the economists make their own case. But it’s worth noting that a small but growing group of far-sighted CEOs—including folks like IBM’s Ginni Rometty, Hyatt’s Mark Hoplamazian, Accenture’s Julie Sweet, Apple’s Tim Cook, and JPMorgan’s Jamie Dimon—have been focused for several years now on the challenge of creating “alternative pathways” to work. They recognize that the lack of a college degree too often has become an unnecessary obstacle to a well-paying job. It’s an important effort, and one that needs to be accelerated.
While I look forward to reading the Case and Deaton book, I’m taking a pass on Thomas Piketty’s 1,000-page Capital and Ideology, also out this month. You can read reviews in The New Yorker here and The Economist here. Inequality is a critical issue for our society; but exploring what causes inequality without also exploring what creates economic growth is a fool’s errand.
More news below. And read here how 15 of the world’s most powerful women in business describe the personality traits that led to their success–which we published yesterday in honor of International Women’s Day.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Oil crash
Brace yourselves. After talks broke down between OPEC and Russia, Saudi Arabia launched an oil price war. Prices collapsed by more than 25%, and the stock markets are ugly—the Nikkei 225 fell 5.1%, Australia's ASX 200 7.3%, the Hang Seng 4.2%. Europe's Stoxx 600 plunged more than 6%, and U.S. futures look dire. Bloomberg
Italy lockdown
With Covid-19 deaths increasing rapidly, Italy has locked down areas encompassing some 16 million people—including Milan, Italy's financial capital (where the market fell almost 10% at one point this morning.) Prime Minister Guiseppe Conte: "We are facing a national emergency…We have to limit the spread of the virus and prevent our hospitals from being overwhelmed." Germany's health minister has also recommended the cancellation of large events. Meanwhile, Saudi Arabia has locked down its oil-producing province of Qatif due to the coronavirus outbreak, and Israel may keep out visitors from all countries. Fortune
But don't worry…
…Because Elon Musk says "the coronavirus panic is dumb." Reminder: the outbreak has so far claimed around 3,800 lives, 22 of them in the U.S., where at least 539 cases have now been recorded. National Institute of Allergy and Infectious Diseases director Anthony Fauci warns that regional lockdowns could become necessary. The Hill
Boeing 737 Max
The Federal Aviation Administration is reportedly set to tell Boeing that it has to relocate electrical wires in each of its nearly-800 737 Max jets before they can return to service. The FAA is worried about wiring failures causing flight-control systems to point down the plane's nose, in a similar way to how automated maneuvers brought down two of the craft, killing 346 people. Wall Street Journal
AROUND THE WATER COOLER
Facebook privacy
Australia's privacy regulator has sued Facebook over the Cambridge Analytica scandal, in which more than 300,000 Australians were caught up. Information Commissioner Angelene Falk: “We consider the design of the Facebook platform meant that users were unable to exercise reasonable choice and control about how their personal information was disclosed." Guardian
Jack of all trades
Is Jack Dorsey distracted from his job as Twitter CEO? That's the question some investors are asking after Dorsey—who also heads up payments firm Square—said he would spend some months of this year in Africa. But is @Jack really pushing his luck? As the Financial Times notes: "How much time a CEO needs to devote to a company comes down to culture, conduct, context and consequences." FT
Chinese cars
Reuters has a sobering rundown of the collapse in vehicle sales that took place in China last month, due to the impact of the coronavirus. Overall, passenger car retail sales fell 80%. Reuters
British Steel
Jingye Group's takeover of British Steel should be completed today. The Chinese firm says it will save more than 3,000 jobs at the insolvent steelmaker (it had around 5,000 workers at the time of its collapse last year) and invest around $1.6 billion in its plants and machinery over the next decade. BBC
This edition of CEO Daily was edited by David Meyer.


fortune--2020-03-09--Australia sues Facebook for exposing data of 300,000 users in Cambridge Analytica scandal

Facebook Inc. is being sued in Australia by the nation’s privacy regulator, which claims the social media giant exposed the personal data of more than 300,000 users to the risk of being used for political profiling.
In proceedings lodged in the Federal Court, the Australian Information Commissioner alleges Facebook repeatedly breached privacy laws by disclosing user information to the “This is Your Digital Life” app, according to a statement Monday.
The personal data of 311,127 Australian Facebook users was “exposed to the risk of being disclosed” to consulting firm Cambridge Analytica and used for profiling purposes, according to the statement.
Facebook has weathered controversy over privacy almost since its inception and has come under particular scrutiny in recent years in both the U.S. and Europe. It reached a $5 billion deal in July with the U.S. Federal Trade Commission to settle an investigation into its privacy practices stemming from the Cambridge Analytica scandal that came to light in early 2018.
“All entities operating in Australia must be transparent and accountable in the way they handle personal information,” Australian Information Commissioner Angelene Falk said in the statement. “We consider the design of the Facebook platform meant that users were unable to exercise reasonable choice and control about how their personal information was disclosed.”
Facebook has fully cooperated with the commissioner over the past two years of her investigation, the company said in an emailed statement. “We’ve made major changes to our platforms, in consultation with international regulators, to restrict the information available to app developers, implement new governance protocols and build industry-leading controls to help people protect and manage their data,” the company said.
More must-read stories from Fortune:
—Why the U.S. is so far behind other countries in coronavirus testing
—Travel insurance is booming, even though it doesn’t help flight changes and cancellations
—H&M wants to help other fashion houses become sustainable—for a fee
—10 journalists who deserve justice immediately
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-09--China’s box office was supposed to surpass North America’s this year. Then came the coronavirus

Oil analysts see prices dropping into the $ 20s on coronavirus and Saudi Arabia-Russia price war

Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.
When Disney’s Mulan hit Chinese cinemas in 1999, the animated adventure bombed, earning just $373,000 at the box office in its first three days compared to $22.8 million in the U.S. At least part of the problem was that the film hit screens in China a year after its release in the U.S., so most Chinese consumers had already pirated it by 1999.
For the release of its live action Mulan reboot this year, Disney intended to launch the film on the same date worldwide—March 27—to scupper the pirates. With China still battling the coronavirus, however, Disney has had to postpone Mulan’s Chinese release. Beijing ordered theaters to close on January 23, the day before the normally lucrative Lunar New Year holiday began, in order to limit contagion, and many have yet to reopen.
This was supposed to be the year when China finally surpassed North America at the box office, but with the nation’s 70,000 cinemas still mostly shuttered, that feat looks unlikely. In 2019, Chinese ticket sales hit $9.2 billion, compared to $11.4 billion in North America. In the first two months of 2020, China’s ticket sales slumped 90%, falling from $2.15 billion in 2019 to just $238 million this year.
Enter Bytedance
The shutdown is a blow to Disney, which had hoped Mulan would do especially well in China. Disney’s other “live action” reboots have struggled in the market: Beauty and the Beast took in $84 million in China, compared to $504 million in North America; Aladdin collected just $54 million, compared to $355 million at home. Mulan, with a budget of $200 million, was the most expensive of Disney’s recent revival projects. But shutting the box office will be an even bigger blow to China’s distributors, which receive about 20% of ticket sales as payment.
Besides Mulan, foreign hits like Marriage Story, Jojo Rabbit, Little Women and 1917 have all pushed back their China release dates, as has the Sonic the Hedgehog, which delayed its global release twice already following fallout over its character design choices. Over a dozen domestic films have delayed their debuts, too, and production on upcoming releases has been forced on hiatus.
The sudden loss of screen time prompted one production house, Huanxi, to make the bold choice of selling distribution rights for Lost in Russia—the latest installment of the Lost in… comedy franchise—to Beijing Bytedance, the parent of TikTok and its Chinese sister app Douyin, for $90.70 million.
Bytedance streamed the film for free starting January 25. The two hour-long film was viewed 180 million times within its first three days. It was available across Bytedance’s content channels, including Douyin, where video clips normally max out at one minute. Bytedance doesn’t appear to have made any money from the deal but the agreement also signed Bytedance up as co-producer for an undisclosed number of Huanxi’s future productions, signaling Bytedance’s intention to move into long-form content.
The arrangement appeared to be a success for Bytedance, but China’s distributors weren’t happy about the disruption to their industry. A group of 22 cinema chains including giants like Wanda, which owns 500 theaters, published an open letter accusing the deal of undermining the current film industry and distribution system.
Watch offline
The current system in China is arguably ripe for disruption. Film distributors are known to collude with cinemas in order to inflate ticket sales during a movie’s opening run. The cinemas run phantom screenings in the middle of the night in which distributors buy all the seats, bumping up opening weekend box office earnings, and making the films appear more popular, which helps with sales.
Production companies make money back from ticket sales too, which explains why most movie studios have opted to delay films amid the outbreak rather than push them through online portals.
Disney just launched its own streaming service Disney+, which could be seen as natural direct-to-consumer platform for Mulan. The service launched in the U.S. and will be in Europe at the end of March, but it is not available in China, where operating as a foreign media company is complicated by stringent regulations on content.
Disney’s previous content service for China, DisneyLife, was run by ecommerce giant Alibaba, which also has a dedicated entertainment production unit. However, even with local hero Alibaba’s help, DisneyLife only survived five months before it was shut down by regulators for unknown reasons.
With the international release of Mulan going ahead as scheduled on March 27 but no new date set for its China opening, Mulan might once again suffer defeat at the box office as China’s entire cinema industry takes five.
More must-read stories from Fortune:
—Testing for coronavirus should be free, but it’s not always that simple
—Coronavirus is mutating: Chinese scientists find second strain
—Coronavirus is giving China cover to expand its surveillance. What happens next?
—The coronavirus is officially claiming its first corporate casualties
—Why the U.S. is so far behind other countries in coronavirus testing
—Travel insurance is booming, even though it doesn’t help flight changes and cancellations
—Six states are still not testing for coronavirus
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-09--Stakes rise for Sanders heading into Michigan primary

Trump confidants in quarantine as US grapples with virus

Bernie Sanders proved he was a serious presidential candidate in 2016 with an upset victory in Michigan powered by his opposition to free trade and appeal among working-class voters. Four years later, the same state could either revive the Vermont senator’s campaign or relegate him to the role of protest candidate.
Michigan and five other states hold presidential contests on Tuesday at a critical point in the Democratic race.
Former Vice President Joe Biden is looking to cement his front-runner status after winning the most delegates during Super Tuesday last week. He’ll campaign later Monday in Detroit with former presidential rivals Kamala Harris and Cory Booker, who have endorsed Biden in recent days as part of a broader consolidation of support among party leaders.
Sanders is in an urgent fight to turn things around as the primary calendar quickly shifts to other states in the coming weeks that could favor Biden and narrow his path to the nomination. He countered the parade of Democratic firepower lining up behind Biden by securing the endorsement of the Rev. Jesse Jackson.
Tuesday marks the first time voters will weigh in on the Democratic contest since it effectively narrowed to a two-person race between Sanders and Biden. It will be another test of whether Sanders can broaden his appeal among African Americans. Biden, meanwhile, must show that he can keep momentum going after his surprise Super Tuesday turnaround.
“I like his chances,” Michigan Gov. Gretchen Whitmer, who has endorsed Biden, said of the former vice president in a phone interview Monday.
“He knows Michigan,” Whitmer said. “When our back was up against the wall during the auto struggles of the past, it was Barack Obama and Joe Biden who had our backs. Others were saying, ‘Let Detroit go bankrupt.’”
That’s a reference to the Obama administration overseeing federal bailouts that helped the auto industry — the lifeblood of Michigan’s economy — weather the 2009 financial crisis. Sanders counters that he, too, voted to save the auto industry. He also says that, unlike Biden, he opposed the North American Free Trade Agreement, which he said prompted thousands of Michigan jobs to move to Mexico since taking effect in 1994.
One of the big questions going into Tuesday is whether Massachusetts Sen. Elizabeth Warren, who dropped out of the race last week, will endorse Biden or Sanders. So far, she’s declined to back either man, an especially frustrating development for Sanders, who could use Warren’s help in unifying progressives in much the same way Biden has been able to rally moderates.
Sanders has scoffed at suggestions he could drop out if he doesn’t win Michigan, but his travel schedule underscores its importance. He canceled a trip to Mississippi and instead made five campaign stops across Michigan since Friday. And he was holding a roundtable in Detroit on Monday with health experts to discuss the spread of the new coronavirus.
Sanders has accused Biden of relying on billionaires to finance his campaign but also says he’s now running against “the Democratic establishment.” The senator told Fox on Sunday that he’d win Michigan and repeated that at a rally in Grand Rapids, but added the major caveat for supporters that he’d only pull it off “if we stick together, we bring our friends out to vote.”
Sanders won’t say if he’s personally lobbying Warren for her endorsement. He did manage to secure the backing of Jackson, who said it was no time for centrist compromise.
“With the exception of Native Americans, African Americans are the people who are most behind socially and economically in the United States and our needs are not moderate,” Jackson said at Sanders’ Grand Rapids rally. “A people far behind cannot catch up choosing the most moderate path.”
Still, one of Sanders’ highest-profile supporters, New York Rep. Alexandria Ocasio-Cortez, struck a far more conciliatory tone addressing 10,000-plus on the campus of the University of Michigan on Sunday night, saying, “In order for us to win, we have to grow.”
“We must be inclusive. We must bring more people into this movement,” she said, urging Sanders supporters to shed “cynicism and exclusion” and “turn with an embracing posture where all people are welcome in a people’s movement.”
Sanders is hoping to do well in Washington state on Tuesday, but could face hurdles in Mississippi and Missouri. Sanders’ team acknowledges he will also struggle in next week’s Florida primary, where the senator’s past defense of Fidel Castro looms large. He also could face hurdles in the Rust Belt states of Ohio and Illinois — especially if he underperforms in Michigan. Those states also vote March 17.
The wild card next week could be Arizona, where Sanders will be counting on strong Latino support, which lifted him to victory in California.
The intricate arithmetic of how delegates are won makes it possible Tuesday for a winning candidate to reap a bigger haul of delegates with a smaller margin of victory than any other night. This gives Biden an opportunity to greatly increase his lead over Sanders or for Sanders to close the gap.
Delegates are awarded proportionally mostly in congressional districts. And nearly two-thirds of Tuesday districts have odd amounts of delegates up for grabs.
When there are an odd number of delegates available, that means one of the two candidates will get more delegates. In districts with an even number of delegates, proportional distribution means that in close races, both candidates get the same number of delegates and that makes it more difficult for Sanders to catch Biden. After March 17, most delegates are in districts with an even number of delegates.
Still, Sanders advisers are aware that trading a few big wins for Biden’s running up the score elsewhere eventually gives the former vice president an insurmountable delegate lead as the race rolls on. They are hoping to continue to do well in the West and then pick up momentum of their own in places like New York, which holds its primary next month.
There’s no guarantee he could last that long this time, however, given the higher expectations he now faces. Even some of those attending Sanders rallies are beginning to feel it.
“I think last time in 2016, it felt more spontaneous. Now I think his support has hardened,” said Nathan Brunner, a 34-year-old sales and marketing professional from Grand Rapids who attended Sanders’ rally there on Sunday, voted for the senator in the 2016 primary and plans to vote for him again on Tuesday. “I think a lot of his supporters came into the election last time not knowing what to expect. Last time it was more like, ‘Hey, we’re happy to be here. Oh, look how well we’re doing.’ Now he has expectations.”
More must-read stories from Fortune:
—Are we undergoing an industrial revolution or a phase change?
—Twitter’s testing new ways to fight misinformation. Is open-source the answer?
—Meet Trump’s Giuliani-approved power broker—and Melania’s new senior adviser
—How the 2020 election could influence your personal finances
—WATCH: What happens to leftover campaign funds once a candidate drops out?


fortune--2020-03-09--China iPhone sales drop 61% year-over-year, report says, as Apple struggles with coronavirus

New details out of China suggest Apple’s coronavirus problems may be worsening, as iPhone demand takes a major hit.
Apple sold 494,000 iPhones in China in February, a 61% drop compared to the 1.3 million the company sold in February 2019, according to data released on Monday from China Academy of Information and Communications Technology (CAICT). Apple hasn’t confirmed the sales data, but the steep decline suggests coronavirus, which has impacted China more forcefully than any other country in the world, is significantly affecting Apple’s core smartphone business.
Last month, Apple announced that it wouldn’t meet its $63 billion to $67 billion guidance for the quarter ending in March because of coronavirus’s impact on its business. Apple said that a combination of less output from manufacturing plants in China and lower-than-expected demand due to closed Chinese stores would force it to miss its revenue guidance.
Apple’s announcement stopped short of adjusting its guidance, and failed to include data points to illustrate how big of a problem the iPhone maker is having in China. The CAICT report on Monday was one of the first concrete examples of Apple’s China woes. Apple did not respond to Fortune‘s request for comment on the report.
In an interview with Fortune on Monday, Needham & Co. analyst Laura Martin says Apple’s China sales will account for about 15% of the company’s total revenue during the March quarter. And considering the iPhone accounts for vast majority of Apple’s China sales, the 61% drop in Chinese iPhone sales in February, alone, could shave billions of dollars off Apple’s quarterly performance.
“Declining iPhone sales are a proxy for iPad, AirPods, and other products Apple sells,” Martin adds. She says Apple’s sales across tablet, accessories, and other businesses could be off just as much as iPhone.
And with coronavirus showing no signs of going away, Apple’s woes have only just begun. “March will be worse,” Martin says.
Only worrying about Apple’s problems in the first quarter is short-sighted, says Omdia analyst Wayne Lam. He says there are still major questions on whether Apple’s major manufacturing partner Foxconn can recover quickly and get back to full production capacity anytime soon, despite the company’s claims that it will resume full capacity by the end of the month. And as coronavirus continues to spread, it’s possible other countries could feel the effects China already has on consumer demand.
“It isn’t too far-fetched that the global economies may sink into a recession due to the lack of productivity and consumption during this time,” Lam says.
William Ho, an analyst and manufacturing industry expert at 556 Ventures, says coronavirus will remain a global concern for the foreseeable future, creating more strain on companies like Apple that rely on China for their manufacturing output.
“With no coronavirus solution in sight, the bigger issue is future quarters as it relates to a global economic downturn,” Ho says of Apple’s business.
Consumer outlook is something Martin sees as the next big story for Apple. She notes that most industry experts have focused on Apple’s supply chain. But the latest Chinese data shows Apple now faces a potentially major consumer problem.
“People are not getting paid an hourly wage because they’re not at work,” Martin says. “That gives them less disposable income to buy an iPhone because they’re dipping into their savings and buying food.”
Not all is lost. Lam says Apple’s business will eventually rebound, but he doesn’t believe Apple will recover its lost revenue and return to stability until the second half of the year, when manufacturing should resume full capacity.
Indeed, adjusting manufacturing might be one of the biggest lessons Apple should learn from coronavirus, Martin argues. Apple’s near-universal reliance on Chinese manufacturing partners has constrained its supply and put unnecessary pressure on its business.
Before the next epidemic, Apple should develop alternatives to its Chinese suppliers, Martin says.
“Over the next three to five years, Apple must have alternative sources for every part in its hardware,” he says. “It’s like buying an insurance policy.”
More must-read stories from Fortune:
—Google Doodle celebrates International Women’s Day
—Growing coronavirus threat weighs on Apple
—When will PlayStation 5 and Xbox Series X debut? With coronavirus, it’s anyone’s guess
—Chinese company publishes purported evidence of CIA hacks
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-09--Trump confidants in quarantine as US grapples with virus

Worst day in a decade : Nasdaq , S & P , Dow down nearly 8 % in massive market @

A public health and economic maelstrom brought on by the coronavirus swirled around President Donald Trump and drew closer to him personally Monday as several of his congressional confidants placed themselves in quarantine, including one who traveled with him on Air Force One.
While intent on projecting calm, Trump lashed out about the plunging stock market and convened a meeting of his top economic advisers to address what to do about it. Meanwhile the number of Republican lawmakers who announced they were isolating themselves because of possible exposure to the virus grew to five.
As Trump grappled with an epidemic whose consequences he has repeatedly played down, the White House asserted it was conducting “business as usual.” But the day’s business was anything but normal. Lawmakers pressed for details on how the Capitol could be made secure, a Pentagon meeting was broken into sub-groups to minimize the number of people in the same room and the Army commander in Europe placed himself in a precautionary quarantine.
Trump was set to hold a press briefing Monday at 6 p.m.
The president dove into handshakes with supporters Monday morning when arriving to headline a fundraiser in Longwood, Florida, that raised approximately $4 million for his reelection campaign and the Republican Party. He ignored shouted questions about the sinking stock market as he boarded Air Force One for the flight back to Washington.
On that flight: Florida Rep. Matt Gaetz, who later went into a voluntary quarantine. He was one of several GOP lawmakers who were exposed to a person at last month’s Conservative Political Action Conference who tested positive for the virus.
In Monday morning tweets, Trump vented about the market drop and news that large public gatherings were being called off because of the virus.
“At this moment there are 546 confirmed cases of CoronaVirus, with 22 deaths,” Trump tweeted, comparing it to seasonal influenza and the thousands of deaths that causes. “Think about that!”
Scientists at this stage don’t know what the death rate of the new coronavirus actually is and whether it will wind up being about the same as flu or worse.
At the same time, administration officials were insistent that they weren’t trying to dismiss public concerns. “This is a very serious health problem,” Health and Human Services Secretary Alex Azar told Fox News.
At the Pentagon, officials have begun “social distancing” measures.
On Monday, Defense Secretary Mark Esper’s regular meeting with senior staff, which normally would be held face-to-face in a single room with 40 to 50 participants, was broken up into three rooms, with video-teleconferencing among the rooms, according to the Pentagon’s chief spokesman, Jonathan Hoffman. He said Esper and the 15 to 20 people in his room, including Gen. Mark Milley, chairman of the Joint Chiefs of Staff, sat at least six feet apart, in line with health guidance.
Trump was delegating much of the virus response to Vice President Mike Pence, who convened a video teleconference to give an update on the federal government’s virus response Monday afternoon with the nation’s governors.
On Capitol Hill, where many lawmakers are older and have frequent constant contact with the public, leaders were fielding questions from members and staff about how the complex will be secured. Leaders have so far shown little willingness to close the Capitol, but meetings were scheduled throughout the day to discuss preparations.
On Monday, Rep. Doug Collins, R-Ga., and Gaetz put themselves in voluntary quarantine because of their contacts with someone at the Conservative Political Action Conference.
Both said they did not have any symptoms but would wait out the remainder of the 14 days since the contact at home. Gaetz last week wore a gas mask to the House vote on the emergency funding bill for the virus response and said he wanted to highlight how Congress could become “petri dish” for the virus.
Collins met Trump on Tuesday night at the White House and shook hands with him Friday when the president visited the Centers for Disease Control and Prevention’s Atlanta headquarters.
Sen. Ted Cruz, R-Texas, and Rep. Paul Gosar, R-Ariz., also placed themselves in quarantine after coming in contact with the same person at the conservative conference.
“The president of the United States, as we all know, is quite a hand washer,” press secretary Stephanie Grisham told Fox News earlier Monday. “He uses hand sanitizer all the time. So he’s not concerned about this at all.”
The White House didn’t immediately respond to a request for comment on the new cases.
As well, Rep. Julia Brownley, D-Calif., said she met last week with a person who has since been diagnosed with the virus. She closed her office and said she and her staff are “self-monitoring and maintaining social distancing practices.”
Vast numbers of visitors come to the Hill, especially at this time of year when advocacy groups arrange “fly-in” trips to lobby and speak to lawmakers, and school groups descend for tours.
In one manifestation of lawmaking in the age of the coronavirus, Rep. Richard Neal, D-Mass., approached a Republican colleague on the House floor Monday for a routine congratulatory handshake after the chamber approved a bill expanding a visa program. “Shake or bump?” Neal asked Rep. Kelly Armstrong, R-N.D.
The two men bumped elbows.
Trump met Monday afternoon Treasury Secretary Steven Mnuchin, Larry Kudlow and other aides when he returned to the White House about a range of economic actions he could take, officials said. He also invited Wall Street executives to the White House on Wednesday to discuss the economic fallout of the epidemic.
Kudlow, director of the president’s National Economic Council, told reporters Friday that the administration is not looking at a “massive” federal relief plan. Rather, any federal aid package would be “timely and targeted and micro.”
Lawmakers on Capitol Hill had barely started to contemplate the economic implications of the spread of the virus and what might be needed to stimulate the economy as people cancel vacations and business trips and stay away from stores. Senate Finance Committee Chairman Chuck Grassley is “exploring the possibility of targeted tax relief measures that could provide a timely and effective response to the coronavirus,” spokesman Michael Zona said Monday.
“Everything’s on the table,” Grassley told reporters.
Democrats indicated they preferred other responses, like passing legislation requiring employers to give their workers paid sick leave — a longtime policy priority of Democrats — and additional help for those with lower incomes.
“The best way to ensure economic security for the American people right now is to deal with the coronavirus itself, competent and full on,” said Senate Democratic Leader Chuck Schumer. “Something we haven’t yet seen. Getting a handle on the crisis and containing the spread of the virus is by far the best way to address any effects on the economy.”
A day after saying it was “proceeding as normal,” Trump’s campaign canceled a three-day Women for Trump bus tour across Michigan that included Mercedes Schlapp, the former White House aide who is married to the American Conservative Union chairman, Matt Schlapp.
Schlapp is under self-quarantine after after he, too, was exposed to the infected person at CPAC. He introduced Trump and greeted him with a handshake on stage before the president’s spoke on Feb. 29.
More must-read stories from Fortune:
—Bloomberg, Sanders, and Warren want to use post offices as banks
—Politics with your coffee? These cafés are taking sides
—Are we undergoing an industrial revolution or a phase change?
—How the 2020 election could influence your personal finances
—WATCH: What happens to leftover campaign funds once a candidate drops out?
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-03-09--A devastating day leaves the Dow only 210 points from bear market territory

Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.
It should have been the bull market’s 11th birthday on Monday: Since March 9, 2009, stocks have notched record-setting gains without a market crash; as recently as Feb. 19—less than three weeks ago—the S&P 500 closed at an all-time high of 3386.15.
Instead, the stock market recorded its worst day since the depths of the financial crisis in December 2008, as a Saudi-prompted crash in oil prices combined with spiraling fears that coronavirus quarantines could freeze the global economy. A swift selloff forced a rare halt in all stock trading just moments after the market opened Monday, as a 7% decline in stocks triggered what’s known as “circuit breakers” on the exchanges.
By the end of the trading day, the major stock indexes had lost nearly 8% of their value, with the Dow Jones Industrial Average plunging 7.8%, the S&P 500 falling 7.6%, and the Nasdaq closing down about 7.3%. Even Walmart, which for most of the day was the only one of the Dow index’s 30 stocks in positive territory, turned slightly negative before the closing bell.
Now, the S&P 500 is down almost 19% from its recent peak last month, putting it on the teetering edge of a bear market, defined as a 20% decline from the high. Indeed, if it does not achieve a new record before falling further—just another 38 points, to 2708.92, to put it below the 20% threshold—the longest-ever bull market will officially be over, according to Sam Stovall, chief investment strategist of CFRA.
Still, it wasn’t bad news for all stocks on Monday. While oil companies and industrial stocks were hardest hit, investors bought up shares of familiar recession go-tos, such as dollar stores and auto parts companies (which car owners tend to frequent during hard times for repairs and upgrades rather than purchasing a more costly new vehicle). Autozone was the biggest winner in the S&P 500, up more than 5% for the day, followed by Dollar Tree, which climbed more than 4%.
“Before the bull can blow out the proverbial candles, it needs to climb out from under an avalanche of assumptions for global GDP and EPS growth that have been dampened by the prospects of a worldwide recession brought on the spread of Covid-19,” Stovall wrote in a note Monday morning.
Likewise, the DJIA need only fall less than 210 points, to 23,641.14, to officially hit bear market territory.
More must-read stories from Fortune:
—Why plunging Treasury yields are so alarming
—Furious Robinhood customers want payback following two day outage
—Why investors suddenly turned on pot stocks
—With stocks down sharply are we approaching”buy” territory? Not by a longshot.
—Why it’s so hard to find the next Warby Parker
—Testing for coronavirus should be free, but it’s not always that simple
—Coronavirus is mutating: Chinese scientists find second strain
—Coronavirus is giving China cover to expand its surveillance. What happens next?
—The coronavirus is officially claiming its first corporate casualties
—Why the U.S. is so far behind other countries in coronavirus testing
—Travel insurance is booming, even though it doesn’t help flight changes and cancellations
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-09--Worst day in a decade: Nasdaq, S&P, Dow down nearly 8% in massive market rout

Any hopes that the coronavirus-induced volatility that has slammed the markets recently could be overcome this week were dashed in dramatic fashion on Monday.
The Dow Jones Industrial Average ended the day down more than 2,000 points, or 7.8%, while the S&P 500 fell 7.6% and the Nasdaq Composite dropped 7.3%—losses that kept the market drifting ever closer to bear territory. It was the summation of a wild, brutal day on Wall Street, one that saw automated circuit breakers halt trading across the entire market for 15 minutes on Monday morning after the S&P 500 plunged 7% from its previous close.
The circuit breakers, which took effect for the first time since 1997, underscored fears that the current, post-recession bull market—which began 11 years ago to this day, on March 9, 2009—has all but come to a close. The Dow had its biggest percentage drop since the height of the financial crisis in 2008 (and its single-largest points drop in history) and closed more than 19% off its all-time high in early February—with official bear-market territory, defined as a 20% decline from a recent peak, only another 210-point dip away. Likewise, the S&P 500 and Nasdaq Composite both ended the day down 19% off their own recent peaks in early February.
Besides the coronavirus outbreak, a crude oil price war between the Saudi Arabia-led OPEC and Russia sent oil plummeting nearly 25% on Monday, with the West Texas Intermediate (WTI) and Brent crude benchmarks both having their worst day since the midst of the Gulf War in 1991. Meanwhile, the yield on the 10-year Treasury note—which dipped below 1% for the first time last week—slipped close to a once-unthinkable 0.5% as investors flocked to the safety of government bonds.
That had the effect of battering the S&P 500’s energy sector, which lost an eye-watering 20% of its value on Monday, while the index’s financials sector also fell nearly 11% as banks and financial services firms felt the squeeze of lower yields. Last week’s emergency interest rate cut by the Federal Reserve has so far failed to calm the markets, and many economists now expect the central bank to continue slashing rates when it meets next week and again in April.
The steep declines in New York echoed those seen in the global markets earlier on Monday. Tokyo’s Nikkei 225 lost 5% while Hong Kong’s Hang Seng was down 4% and Shanghai’s SSE Composite fell 3%. In Europe, London’s FTSE 100 and Frankfurt’s DAX were both down 8%, while the pan-European STOXX 600 lost more than 7%.
More must-read stories from Fortune:
—Why plunging Treasury yields are so alarming
—Furious Robinhood customers want payback following two day outage
—Why investors suddenly turned on pot stocks
—With stocks down sharply are we approaching”buy” territory? Not by a longshot.
—Why it’s so hard to find the next Warby Parker
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-09--New federal rules allow patients to access medical records via smartphone

Federal officials on Monday released groundbreaking rules that will let patients download their electronic health records and other health care data onto their smartphones.
“Patients should have control of their records, period. Now that’s becoming a reality,” said Health and Human Services Secretary Alex Azar. “These rules are the start of a new chapter in how patients experience American health care.”
Officials said the rules likely will give patients a greater say in health care decisions and put an end to a long-standing practice in which some doctors and hospitals resist handing complete medical files over to patients upon demand. Many of the provisions are set to take effect in 2022.
“The days of patients being kept in the dark are over,” said Centers for Medicare & Medicaid Services Administrator Seema Verma. “In today’s digital age, our health system’s data-sharing capacity shouldn’t be mired in the Stone Age.”
Yet the new rules also have raised concerns about privacy as technology companies, such as Google, Microsoft, Apple, and Amazon, open up new markets for providing medical records through mobile apps. Major EHR vendor Epic, for instance, has warned that freer flow of medical records could spur the unwanted sale of data or other unauthorized uses.
“Family members may be shocked to find that their most personal health data has been mined and sold by data brokers and is now known by others, Epic CEO Judy Faulkner wrote last June in opposing the rules.
Administration officials said they have taken privacy considerations into account and would require developers to attest to plans to protect the security and use of medical data.
Verma took a swipe at Epic in an interview with KHN and Fortune.
“We’re not afraid to take on special interests to do what’s right for patients. Some people disagree because they want to keep the data,” she said. “The reality is that patient data belongs to patients. It doesn’t belong to EHR companies.”
Verma said the nation’s health care system remains “hugely expensive and inefficient as repeat tests drive up costs and, perhaps most importantly, doctors are forced to provide care with an incomplete clinical picture, especially at a time when the health care systems could be under stress.”
“With the handling of the COVID virus, the urgent need for coordinated integrated care could not be clearer,” she said.
Donald Rucker, who coordinates health information technology policy for HHS, said the new rule “will allow patients the ability to manage their health care the same way they manage their finances or the travel or other parts of their life on their smartphone.”
While Epic, the maker of the most-used electronic health records software, led a campaign to derail the rules, its chief competitor, Cerner Corp., argued the rules were long overdue.
“Consumers should have the right to access the health care information their providers have about them and dictate where they want it to go. Although existing laws allow patients to access their data, it doesn’t work,” Cerner CEO Brent Shafer said in a statement.
The rules also attempt to prevent EHR vendors from silencing critics of their software products. The government wants to encourage doctors and other users of EHR technology to share their experiences about software problems by prohibiting so-called gag clauses in sales contracts. That could free users to criticize EHR systems, including more open discussion of flaws, software glitches, and other breakdowns.
“Botched Operation,” an investigation published by Kaiser Health News and Fortune last year, found that the federal government has spent more than $36 billion on the EHR initiative. Thousands of reports of deaths, injuries, and near misses linked to digital systems have piled up in databases over the past decade — while many patients have reported difficulties getting copies of their complete electronic files, the investigation found.
Consumers have long sought to be more in the loop on health care decisions in a user-friendly form. Many specifics about how that will happen, including how patients would make sense of complex pricing policies for purchasing health care and insurance and assessing quality, remain unclear, however.
To cut down on exorbitant “surprise” medical bills, Verma said, the CMS’ new rule would require insurers to let patients know which medical providers are in their networks. One study found that such bills—often not covered by insurance— have struck more than half of American adults.
For well over a decade, federal officials have struggled to set up a digital records network capable of sharing medical data and patient records. In 2004, President George W. Bush said he hoped to have a digital record for most Americans within five years. In early 2009, the Obama administration funneled some $36 billion in economic stimulus money to help doctors and hospitals buy the software needed to replace paper medical files.
Despite the slow progress, federal officials remain optimistic that digital records will save the nation billions of dollars while reducing medical errors, unnecessary medical testing, and other waste—and encouraging more Americans to take a bigger role in managing their health care by comparing prices.
Trump administration officials on Monday sought to blame the Obama administration for creating what they called a “tower of Babylon,” in which doctors and health systems couldn’t seamlessly share patient information or “talk to one another.”
“It’s led to a tremendous amount of frustration on the part of medical professionals and patients as physicians, interacting with patients, oftentimes spend more time looking at computer screens than they do into the eyes of the people they’re trying to heal,” said White House official Joe Grogan.
Key provisions
The Department of Health and Human Services on Monday issued two rules to give patients greater access to their electronic health records.
Patients must be able to access their medical records on a smartphone at no cost and can share those records as they choose.
Health systems must be able to exchange information about patients’ past medical treatments or conditions.
“Information blocking” practices (that is, anti-competitive behaviors) by health care providers, developers of electronic medical records, and others are prohibited.
Electronic medical record certification requirements are updated so that health professionals can discuss safety and usability concerns without being bound by gag clauses in software sales contracts.
Insurers are required to share health claim data with patients on Medicare and Medicaid through a mobile app.
Insurers must advise patients of their network of health providers through an app.
More must-read stories from Fortune:
—How coronavirus is affecting the global concert industry
—Coronavirus is mutating: Chinese scientists find second strain
—Some of the most extreme ways companies are combating coronavirus
—How Europe is adapting to the coronavirus outbreak
—China’s box office was supposed to surpass North America’s this year. Then came the coronavirus
—Growing coronavirus threat weighs on Apple
—Nearly half of American travelers are reconsidering their international trips due to coronavirus
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-09--Beware the coronavirus snake oil salesmen

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Happy Monday, readers. I hope you had a wonderful weekend.
You may have noticed there’s been a flurry of downright head-spinning news about the coronavirus outbreak over the past week.
It only intensified this weekend as we learned more about the factors undermining America’s response to COVID-19 (a combination of manufacturing issues for some coronavirus tests, a confused hodgepodge of federal and state reactions to the outbreak, and a decided break between what the White House and local public health officials are telegraphing to the country).
The best mantra in my experience tends to be: Prudence is better than panic. But the trouble is that confusion breeds panic—and panic is, in turn, a breeding ground for charlatans and snake oil salesmen.
Don’t take it from me. Here’s the chairman of the Federal Trade Commission, Joe Simons, admonishing a number of firms which claim they have products that can treat or prevent coronavirus.
“There already is a high level of anxiety over the potential spread of coronavirus,” said Simons in a joint statement with the Food and Drug Administration (FDA) pointing directly to seven companies accused of advertising treatments for the virus, which currently has no approved therapies or vaccines.
The agencies went further, vowing future reprisals should the firms not heed the warning. For the record: The accused companies are Vital Silver, Quinessence Aromatherapy Ltd., N-ergetics, GuruNanda, LLC, Vivify Holistic Clinic, Herbal Amy LLC, and The Jim Bakker Show.
“What we don’t need in this situation are companies preying on consumers by promoting products with fraudulent prevention and treatment claims. These warning letters are just the first step,” said the agencies in a statement. “We’re prepared to take enforcement actions against companies that continue to market this type of scam.”
If you’ve ever seen the movie Contagion, you know exactly the kind of people who might be seeking to profit off a public health crisis via means of social media and paranoia. That’s still not a reason to eschew caution—but it’s a reality to keep in mind.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
CMS releases interoperability rules that it calls "historic." The Centers for Medicare & Medicaid Services (CMS) have released their latest, and finalized, "interoperability rules" for sharing health data. This is a complicated process that's been long in the works. But to sum it up: The administration is proposing a whole lot of guidance on how public and private medical record providers have to (digitally) speak with each other—including by sharing data that patients may want access to. The proposed final rule will take plenty of time to implement, but it was required by the 21st Century Cures Act of 2016. (CMS)
INDICATIONS
Increasing number of coronavirus cases in Mass. linked to Biogen conference. Biotech giant Biogen finds itself in the midst of a coronavirus brouhaha after Massachusetts health officials announced that at least 15 new presumptive cases of the virus were linked to a Biogen employee conference. (You can head on over to biotech Twitter to witness the combination of caution and freak-out in real time.) Multiple companies including Biogen, Takeda, and others are now asking American employees to ponder telecommuting. (WCVB)
THE BIG PICTURE
How companies are combating coronavirus. So, teleworking can only get you so far. What happens next? How does a company prepare for the return of employees following a viral threat? My colleague Anne Sraders delves into the issue and the measures firms are taking—including deep cleans, requests for workers' health histories, and even setting up "disaster recovery sites." (Fortune)
REQUIRED READING
What are the odds the stock market will get back to even this year, by Shawn Tully
Why women in Mexico are planning a nation-wide strike, by Claire Zillman
Several lawmakers has contact with individual who got COVID-19, by The Associated Press
Why curing HIV and sickle cell could fall far short, by Francis Collins
Sign up for other Fortune newsletters.