A nation divided

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Good morning.
The U.S. election appears to be heading toward a relatively orderly conclusion. The feared violence and chaos, so far, has been avoided. There was no blue wave. There was no red wave. But there is still an intensely polarized nation, almost evenly divided, highly energized, sometimes angry, and living with completely different views, and even facts, regarding their national lives. The great challenges of our time—like climate change, COVID-19, and racial injustice—are perceived as almost entirely different realities on either side of the great divide.
At a time when CEOs are increasingly involved with their employees’ well-being, that political division can’t be ignored. “For CEOs right now,” says BCG CEO Rich Lesser, “the challenge is how do you convey a sense of community and humanity and support for the democratic process at a time when there is so much distrust and division. That’s the balance many of us are trying to navigate right now.”
Alan Fleischmann of Laurel Strategies predicts the election will “further elevate the role of what I call the CEO Statesmen. These past years have seen a dramatic rise in the willingness and necessity of private sector and civil society leaders stepping up to fill the void of government inaction. This trend only accelerated this past year. And as inspiring as it has been to see CEOs speak up on issues of social and economic justice, it will be just as important for the private sector and civil society to help the nation find a healing middle ground.”
In the meantime, visit Fortune.com to get a look at Lesser’s advice for surviving the COVID winter, how Presidents Xi and Putin view the U.S. election, and how California’s Prop 22 ballot initiative will affect the future of Uber and Lyft. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
"Tarnished" election
International election observers say the U.S. election has been "tarnished" by legal uncertainty and President Trump's "unprecedented attempts to undermine public trust." The Organization for Security and Cooperation in Europe issued a preliminary report that said "baseless allegations of systematic deficiencies, notably by the incumbent president, including on election night, harm public trust in democratic institutions." The report also highlighted systemic problems that disadvantage poor people and ethnic minorities, such as varying voter ID requirements. Guardian
Weaker recovery
The European Commission has issued its fall economic forecast, and while this year's contraction is looking less grim than previously feared, the subsequent pandemic recovery is looking weaker and more protracted. Valdis Dombrovskis, the Commission's economy chief: "This forecast comes as a second wave of the pandemic is unleashing yet more uncertainty and dashing our hopes for a quick rebound." Fortune
Commerzbank loss
Commerzbank is feeling the pain of COVID—it lost €69 million ($81 million) in Q3, largely because of rising loan loss provisions linked to the pandemic (€181 million, up from €131 million in Q2.) A year ago, Q3 saw €297 million in profits. Germany's second-largest lender said most clients who deferred servicing of loans earlier this year have now resumed payments, but it could take a hit next year when the government un-suspends its insolvency law. Financial Times
Indian vaccine
A senior government scientist in India has indicated that a government-backed COVID-19 vaccine could be launched there as early as February. Developer Bharat Biotech had been expecting a rollout of COVAXIN in Q2, but tests thus far have turned out well. Phase 3 trials aren't complete yet, though. Reuters
AROUND THE WATER COOLER
Faithless electors
There is a remote possibility that, even if Joe Biden seems to have secured the 270 electoral votes he needs to claim the presidency, some state electors could break their pledge to vote for the highest vote getter in their state. These people are called faithless electors, and Fortune's Lance Lambert explains here how the scenario might play out. Fortune
Weighty Ant
China's suspension of Ant Group's IPO is a bigger deal for Asia than the U.S. election is, according to Reyl Singapore chief investment officer Daryl Liew. There has been a consensus that regulatory concerns are more of a Western issue, said Liew, but now Eastern tech firms also need to watch out. "The fact that the Chinese are also now looking into this is a concern," he said. CNBC
Supermarket shift
Supermarkets in the U.S. have been slow to pick up on the e-commerce trend, but that's changing in the pandemic, with grocers devoting more of their floor space to the fulfillment of online orders. However, the extra costs associated with fulfillment, such as having to pay workers to pick and package items on customers' behalf, provide a new challenge. Wall Street Journal
Unwise rebrand
The Indian conglomerate Adani decided to rebrand its Australian mining operation, which has been embroiled in controversy over a new coal mine in Central Queensland. CEO David Boshoff said the new name, Bravus, was the medieval Latin word for "courageous". It isn't, though—as Latin experts have pointed out, the word would be more accurately translated as "crooked," "assassin," or even "depraved barbarian." Guardian
This edition of CEO Daily was edited by David Meyer.


fortune--2020-11-05--Biden one state away from victory after winning Michigan and Wisconsin

Biden received more total votes than any presidential candidate in U.S. history

Joe Biden won Michigan and Wisconsin Wednesday, putting him on the brink of taking the White House from President Donald Trump, hours after the president’s team opened legal fights to stop vote counting in at least two states.
Both CNN and NBC projected Biden would win Michigan, which Trump took in 2016, giving him 264 Electoral College votes out of the 270 needed to win the presidency. Trump has 214.
Biden needs only to win an additional outstanding state, such as Nevada where he is leading, or Georgia, where his campaign believes absentee votes will push him over the top.
Biden said he expects to prevail. “I’m not here to declare that we’ve won, but I am here to report that when the count is finished, we believe we will be the winners,” he told reporters in Wilmington, Delaware.
His remarks came after he scored a win over Trump in Wisconsin, closing off one of the president’s best routes to re-election.
Trump is cutting into Biden’s lead in Arizona’s Maricopa County, even though the Associated Press already projected the former vice president would win the battleground state. Election officials released more results overnight that showed Biden leads in the county by about 75,000 votes – or 52% to 47% — after roughly 63,000 more ballots were reported. He had earlier led by 85,297. State-wide, Biden is ahead by about 69,000 votes.
The county still has about 300,000 ballots left to count, according to the Maricopa County Elections Department. Maricopa County, the state’s most populous, plans daily updates at 9 p.m. Eastern Time until all remaining ballots are reported.
Tensions were high in downtown Phoenix Wednesday night as protesters supporting Trump gathered outside the county ballot tabulation center and the Arizona State Capitol to demand their votes be counted. The elections department tweeted that that employees will “continue our job, which is to administer elections in the second-largest voting jurisdiction in the county.”
Trump’s campaign said it is suing in Pennsylvania and Michigan to halt vote counts that have been trending toward Biden.
Trump falsely declared victory in Pennsylvania, one of the six states that has yet to be called by the Associated Press. The president was ahead in the state by 383,000 votes but Pennsylvania officials said more than a million ballots still have to be counted.
Trump faces a more difficult path to victory. Trump would have to win all the battleground states that have not yet been called.
Biden’s Wisconsin and Michigan victories reverse Trump’s upsets in 2016 when he defeated Hillary Clinton.
Trump’s campaign said it would demand a recount in Wisconsin, where the candidates were less than 1 percentage point apart.
Biden’s campaign said it expects to be able to declare overall victory Wednesday afternoon, sooner than many expected.
Election officials continued to count votes in several battleground states as Democrats, whose expectations for a “blue wave” were dashed.
Trump tweeted throughout the day casting doubt on the count of mail-in ballots, which were heavily Democratic, after the Election Day in-person votes were counted, which leaned Republican.
“How come every time they count Mail-In ballot dumps they are so devastating in their percentage and power of destruction,” the president said on Twitter. Another tweet mused about his leads “magically” disappearing in states run by Democratic governors.
Bill Stepien, Trump’s campaign manager, insisted the president was headed for re-election and that the campaign was readying its lawyers to challenge results in some states.
In a middle-of-the-night speech from the White House, Trump threatened to ask the U.S. Supreme Court to intervene to stop what he called the disenfranchisement of Republican voters, without offering evidence that any wrongdoing had occurred.
“Frankly, we did win this election,” Trump said, noting that he held a lead in a number of states where results were still uncertain. “So we’ll be going to the U.S. Supreme Court. We want all voting to stop.”
It wasn’t immediately clear what Trump meant, as states including Michigan, Pennsylvania, Georgia, North Carolina and Nevada were counting legally cast votes. It is routine for states to continue counting votes after Election Day, and Pennsylvania said results likely wouldn’t be finalized for several days.
U.S. stocks held onto their gains after the news, led by technology shares, on speculation that a split Congress would ensure the extension of key elements of the bull market, such as Trump’s 2017 corporate tax cuts. Treasuries also rallied.
The unresolved outcome — due to an unusually large number of mail-in ballots because of the coronavirus — risks stoking tensions further in the U.S., beset by an economic downturn and the raging virus.
But the Biden campaign was optimistic of the outcome and slammed Trump’s efforts to halt vote counting.
“When all of the votes are tallied, we are confident that Vice President Joe Biden will be the next president of the United States,” said Biden campaign manager Jen O’Malley Dillon.
O’Malley Dillon said in a statement early Wednesday that Trump’s remarks were “outrageous, unprecedented and incorrect” and “a naked effort to take away the democratic rights of American citizens.”
In Nevada, where tallying was halted until Thursday, Biden was clinging to a lead of almost 8,000 votes. In the nationwide popular vote, Biden leads by roughly 2 million.
Last night I was leading, often solidly, in many key States, in almost all instances Democrat run & controlled. Then, one by one, they started to magically disappear as surprise ballot dumps were counted. VERY STRANGE, and the “pollsters” got it completely & historically wrong!— Donald J. Trump (@realDonaldTrump) November 4, 2020
There were few surprises among states where the Associated Press announced winners, with Republican and Democratic states generally falling in line, despite expectations for several upsets.
Trump won Florida, a crucial prize in the race to the White House that closed off Biden’s hopes for an early knockout in the election. The president also won Texas, which Democrats had hoped might flip and entirely reshape the electoral map.
Trump won Ohio and Biden won Minnesota, states that each candidate had sought to take from the other but wound up politically unchanged from 2016.
Trump still holds small leads in North Carolina and Georgia, though there are votes outstanding in each. Trump won both states in 2016. But Trump’s lead in Georgia was narrowing Wednesday evening.
In addition to Wisconsin, Biden won Nebraska’s second congressional district, Minnesota, Hawaii, California, Oregon, Washington, Colorado, New York, Virginia, Illinois, Maryland, New Jersey, Massachusetts, Connecticut, Vermont, Rhode Island, New Mexico, Delaware, District of Columbia and New Hampshire, according to the AP.
Trump won Nebraska’s other four Electoral College votes, Ohio, Florida, Texas, Iowa, Idaho, Kansas, Arkansas, Indiana, Kentucky, Tennessee, South Carolina, Alabama, Mississippi, West Virginia, North Dakota, South Dakota, Wyoming, Louisiana, Oklahoma and Missouri.
Nebraska is one of only two states, with Maine, that award an Electoral College vote to the winner of each congressional district. Trump won two districts and Biden won one. Trump won the state overall, giving him Nebraska’s two remaining Electoral College votes.
Trump won Maine’s second congressional district and Biden won the first, plus the state’s two at-large electoral votes.
Even if Democrats yet claim the White House, a wave of support they hoped would also give them control of both chambers of Congress may fall short.
Democrats would need to win three of the five Senate seats still undecided to leave the Senate with a 50-50 split, which would leave the party in the White House in control.
Biden’s lead appears to be thanks to holding onto Latino and African-American voters in numbers similar to what Clinton had four years ago. And he narrowed Trump’s margin among White voters, voter surveys from the AP show.
Trump had a 12-point lead among White voters in Tuesday’s election. Network exit polls four years ago showed him with a 20-point advantage among those voters. Biden led among Latino voters 30 points, Black voters by 82 points, and women by 12 points.
(Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News, provided $100 million in support of Biden and his running mate Kamala Harris in Florida, half of that from his Independence USA PAC.)(Updates with count in Arizona in sixth paragraph. An earlier version of this story corrected the ninth paragraph to remove language about the first Republican wins in Michigan and Wisconsin.)
–With assistance from Gregory Korte, Tyler Pager, Jennifer Epstein, Alan Levin and Brenna Goth.


fortune--2020-11-05--How AI and advanced tech are being used to stop the spread of COVID-19

Trump ’ s odds of winning have surged in the past 48 hours , according to this data scientist ’ @ @

Kimberly Powell, vice president and general manager of health care at Nvidia, believes her company, in effect, is building time machines.
Using artificial intelligence and supercomputing to drastically shorten the time doctors and researchers spend diagnosing diseases and developing antiviral drug treatments, Nvidia, which got its start as a chipmaker for video games, has played a key role in accelerating efforts to stop the spread of COVID-19.
“We’ve really essentially built a time machine for these researchers,” Powell says. “Instead of waiting three months to screen 12 billion potential drug candidates, we did it in 12 hours on the world’s largest supercomputer.”
On this episode of Fortune Brainstorm, a podcast about how technology is changing our lives, Powell speaks with Fortune’s Michal Lev-Ram and Brian O’Keefe about how Nvidia has been leveraging its technology to help key stakeholders diagnose and treat existing cases of the disease as well as assist in the race to a vaccine.
In particular, the company is working to make its A.I. and computing platforms “domain specific.” Moreover, transitioning away from developing A.I. technology that is broadly applicable but must be adapted by customers for industry-specific use, Nvidia is focused on making its products better suited to assist specific fields, such as radiology, digital pathology, genomic sequencing, and drug discovery, among others.
For example, Nvidia––in partnership with the National Institutes of Health––has developed an A.I.-based alternative to traditional versions of COVID-19 testing.
“Our testing strategy here in the United States hasn’t been extremely straightforward,” Powell says. “But if you go back to technology like medical imaging, it’s a very common practice, it’s readily available, and the results are potentially instantaneous. And so we thought, Could we use the power of medical imaging to really give a second option for testing? And we did just that…We created an A.I. model with the NIH that does lung segmentation and a CT scan, and then it does a classification of whether or not you have COVID.”
Zig Serafin, president of the software company Qualtrics, also joins the podcast to discuss how his company is assisting governments with the logistical nightmares of both distributing a potential coronavirus vaccine and convincing a critical mass of people to take it.
In addition to helping hospitals and governments with tasks like tracking vaccine candidates, scheduling patient appointments, and contact tracing, Qualtrics is working to help gauge sentiment around the vaccine so it can provide officials with information about which people are averse to receiving it, why that is the case, and what can be done to encourage them to get it.
“Really, it comes down to actually understanding people––who they are; what their needs might be given what demographic they might be from; what age they might be; what their living conditions might be,” Serafin says. “And, then, how do you accommodate people in the best possible way? So, it isn’t just about the process. Sentiment is a big part of the way in which you end up taking action, the way you end up building trust and confidence.”
Nvidia and Qualtrics are both using tech to provide support throughout the pandemic in a variety of other ways. To hear more about them, as well as why Powell thinks the pandemic has ultimately caused the health care and pharmaceutical industry to take a long-overdue step forward in regard to their approach to drugmaking, listen to the episode above.


fortune--2020-11-05--COVID-19 resurgence sets back Europe’s economic recovery hopes

Europe’s economic outlook is looking less grim this year than previously feared—but its planned recovery from next year could be even weaker than previously hoped, thanks to the resurgence in COVID-19 case numbers across the continent.
That’s according to the European Union’s executive body, the European Commission, which on Thursday issued its fall economic forecast and pleaded for the European Parliament and Council—the EU’s two big political beasts—to wrap up negotiations around its $860 billion coronavirus recovery fund.
In the summer, the Commission forecast an overall 8.3% contraction in EU GDP for 2020—worse than the 7.4% shrinkage forecast back in the spring, in the early days of the pandemic—and growth of 5.8% next year.
Now, the predicted contraction for 2020 is back to 7.4%. Meanwhile, the forecast for 2021’s growth has pulled back to just 4.1%, followed by 3% in 2022. That means the recovery wouldn’t be complete even two years from now.
‘Dashing our hopes’
“This forecast comes as a second wave of the pandemic is unleashing yet more uncertainty and dashing our hopes for a quick rebound,” said Valdis Dombrovskis, the Commission’s economy chief, in a statement.
Economy Commissioner Paolo Gentiloni added that “it will be two years until the European economy comes close to regaining its pre-pandemic level.”
“We agreed [on] a landmark recovery package…to provide massive support to worst-hit regions and sectors,” said Dombrovskis. “I now call again on the European Parliament and Council to wrap up negotiations quickly for money to start flowing in 2021 so that we can invest, reform, and rebuild together.”
There is still a risk that pandemic-linked bankruptcies, supply disruptions, and long-term unemployment could “be deeper and farther reaching,” the Commission warned, as it pointed out that many countries will be phasing out emergency support measures in 2021.
Uneven recovery
The other big factor worth considering is that Europe’s contraction and recovery will probably be highly uneven. For example, the Commission expects German real GDP to fall by 5.6% this year before growing by 3.5% in 2021 and 2.6% in 2022. But Spain is looking at a 12.4% drop this year, followed by 5.4% and 4.8% growth in 2021 and 2022, respectively.
“The economic impact of the pandemic has differed widely across the EU, and the same is true of recovery prospects,” the Commission said. “This reflects the spread of the virus, the stringency of public health measures taken to contain it, the sectoral composition of national economies, and the strength of national policy responses.”
By way of global comparison, the Commission set out likely contraction and recovery stats for other major countries. It reckons the U.S., for example, is looking at a 4.6% contraction this year, followed by 3.7% growth in 2021 and 2.5% growth in 2022. The U.K. is not looking good—shrinkage of 10.3% in 2020, followed by growth of just 3.3% and 2.1% in 2021 and 2022, respectively.
The Commission’s EU and U.K. figures assume that there will be no post-Brexit trade deal between the two sides, implying “a much less beneficial trade relationship, with economic costs for the U.K. and, to a lesser extent, the EU.”


fortune--2020-11-05--If bullish investors are to be believed, the election is over—and Joe Biden has won

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning, Bull Sheeters. First, a bit of politics.
Here’s the state of play, according to the Wall Street Journal, Bloomberg and Fox News: Donald Trump has one path to 270. He needs to win Pennsylvania, Georgia, Nevada and North Carolina. Joe Biden has four ways to get over the hump, and win the presidency; he needs just six votes. CNN is less aggressive calling states, meanwhile, saying Biden holds a 253-213 lead.
The markets have already crowned the winners, starting with gold, tech, health care and consumer discretionary stocks. Meanwhile, financials and utilities—the value stocks that would have gained from a giant Democrat-led stimulus package—are stumbling.
Impressively, yesterday’s post-election rally was one for the record books. Why? Because, even with the threat of recounts and lawsuits, the markets are betting on a victor. “While neither candidate can authoritatively declare victory, markets appear to expect former U.S. Vice President Biden to become U.S. president-elect, with a Republican Senate and a Democrat House,” UBS chief economist Paul Donovan writes in an investor note this morning.
An important reminder: the election is far from decided. Stick with Fortune for all the latest elections and markets news.
Meanwhile, let’s see where investors are putting their money.
Markets update
Asia
The major Asia indexes are higher with Hong Kong’s Hang Seng the best of the bunch, up 3.3% in afternoon trading.
are higher with the best of the bunch, up in afternoon trading. Two clear winners have emerged so far from the 2020 U.S. election: Russian President Vladimir Putin and Chinese President Xi Jinping , both of whom are likely to benefit from a divided electorate and divided Washington.
have emerged so far from the 2020 U.S. election: Russian President and Chinese President , both of whom are likely to benefit from a divided electorate and divided Washington. Investors are calling the suddenly canceled Ant Group IPO the “biggest busted trade in stock market history.” The dual listing had attracted a staggering $3 trillion in orders from investors looking to cash in, Bloomberg reports.
Europe
The European bourses were higher out of the gates with the Stoxx Europe 600 up 0.9%. Yep, tech stocks were surging.
were higher out of the gates with the up Yep, tech stocks were surging. The Bank of England this morning delivered a bigger than expected 150 billion pound ( $195 billion ) shot of stimulus to a teetering British economy that goes into a partial lockdown today. The pound sterling and FTSE climbed at the open.
this morning delivered a bigger than expected 150 billion pound ( ) shot of stimulus to a teetering British economy that goes into a partial lockdown today. The pound sterling and FTSE climbed at the open. 189 countries signed the Paris Agreement back in 2015. Yesterday, it lost a key member, the United States, the first major economy to exit the climate-protection pact. Even still, there are encouraging signs the corporate world and local governments will continue to do their part to reduce emissions.
U.S.
U.S. futures are far more stable than they were 24 hours ago, solidly in the green. That’s after all three major indexes rallied on the prospect of a Biden presidency and split Congress.
are far more stable than they were 24 hours ago, solidly in the green. That’s after all three major indexes rallied on the prospect of a Biden presidency and split Congress. Tech stocks were the big winners yesterday with Uber Technologies and Lyft closing up by 14.6% and 11.3% , respectively, after California voters passed a proposition allowing the ride-hailing firms to continue to classify drivers as independent contractors.
were the big winners yesterday with Uber Technologies and Lyft closing up by and , respectively, after California voters passed a proposition allowing the ride-hailing firms to continue to classify drivers as independent contractors. The “blue wave stimulus trade,” as it was being called on the eve of Election Day, looks remote. On cue, investors yesterday punished financials, utilities, industrials and materials—the sectors that would have benefited from a big, fat Biden-Dems spending plan.
Elsewhere
Gold is up, trading around $1,920/ounce .
is up, trading around . Bitcoin bulls are sending the cryptocurrency to new heights. It was up about 6% , trading at one point above $14,500 .
are sending the cryptocurrency to new heights. It was up about , trading at one point above . The dollar is lower, creeping down as Biden’s odds on the White House rise.
is lower, creeping down as Biden’s odds on the White House rise. Crude is lower, with Brent trading above $40/barrel.
***
Buzzworthy
A rally for the record books
William Jennings Bryan was also a Democrat.
In praise of partisan division
“The S&P 500 historically has done quite well under a divided Congress, up more than 17% on average,” analysts at LPL Financial wrote in a note Wednesday. Fortune‘s Anne Sraders digs into the numbers.
Stimulus in doubt… tax hike out?
“A divided Congress will make it more difficult to pass the big $2 trn+ ‘blue wave’ fiscal package that some market participants are hoping for. This is the scenario which many in markets saw as the most positive potential result a while ago as a Republican-majority Senate could prevent tax hikes.” — Holger Schmieding, Chief Economist of Berenberg Bank.
While the markets rally, public health officials fret
At this rate, the U.S. will surpass 10 million confirmed COVID cases by Monday.
***
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's read
Monday morning in Beijing. The breath-taking unraveling of the Ant Group IPO began with a hastily called meeting. Alibaba founder Jack Ma was summoned to the China Securities Regulatory Commission where he was informed the deal was off. Bloomberg recreates what happened in that fateful meeting that's shaken the investing world.
The state of play. Is the blue wave well and truly dead? Stimulus-package fans, the odds aren't looking good. Here are the states where U.S. Senate races have yet to be been called.
Congress's new crypto bull. Given Bitcoin's recent rally, this item should come as no surprise. Wyoming voters on Tuesday elected Cynthia Lummis to the U.S. Senate, "the first member of Congress’s upper chamber to own cryptocurrency," reports Fortune's Jeff John Roberts. It comes as Wyoming has passed a series of laws to promote crypto commerce and crypto banking.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
As America holds its breath...the world cracks jokes
American elections are uniquely gripping affairs. You have to admit, these nail-biters make for great television viewing. To many foreign observers, the race to 270 has an almost gameshow-like quality. If it seems like the entire world is following every disputed vote-count in places like Maricopa County, Detroit and Philadelphia, it's probably because the entire world is. With the help of my colleague David Meyer, I chronicled some of the most humorous Election Day quips, cracks and observations from around the world. Call it a bit of levity as we wait out a vote-count that could get nasty.


fortune--2020-11-05--Is China ‘open for business’? Beijing is sending mixed messages

On Wednesday, hours after the election polls closed in the U.S., President Xi Jinping delivered a keynote speech to the China International Import Expo (CIIE) in Shanghai—an annual trade event China created just two years ago to prove China remained open to foreign trade even as it entered a trade war with the U.S.
The President didn’t mention the U.S. election during his talk, as official policy is to remain neutral until the results are announced. Instead, Xi looked to assure investors that China remained open for business, despite a global pandemic that has shut borders and fractured Beijing’s relationship with its peers.
“This year’s CIIE is convened at a special time. COVID-19, which caught us all by surprise, has hit countries hard and dealt a heavy blow to the world economy,” Xi said in his opening remarks. China’s economy has already returned to growth, after a bruising first and second quarter when China enacted severe lockdown measures.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
The country’s comeback—with GDP rising 4.9% in the third quarter over the year before—has been fueled largely by exports of medical equipment and electronics, which saw a demand spike as working from home became the norm.
But China’s domestic consumption has not yet returned to the same extent, with retail sales rising for the first time in August by just 0.5% over last year. Facing weak consumer appetite at home, Xi began promoting a new policy for economic growth in May called “dual circulation.”
The somewhat nebulous policy seeks to boost domestic consumption as well as onshore high-tech manufacturing. Bo Zhuang, chief China economist at TS Lombard, says the policy is an act of “rebalancing” in the face of deglobalization, but some business leaders worry the policy means China’s market will become less open to foreign investment. Xi’s speech at the CIIE Wednesday sought to dissuade those fears.
The President—who delivered his speech via video—told attendees that “China is hosting this global trade event that demonstrates China’s sincere desire to share its market opportunities with the world and contribute to global economic recovery.”
But the President’s words are at odds with Beijing’s recent actions. China is piling import restrictions on goods from Australia, including barley, beef, wine, coal, and copper ore with media reporting that a raft of new restrictions will be introduced this week. And on Thursday, China closed its borders to travelers from Britain and Belgium, citing a rise in coronavirus cases in those countries.
China began granting entry to foreign residents with valid visa or work permits in September, after closing borders to all foreign nationals in March. The early restrictions “stirred feelings of resentment” among the international business community, the European Chamber of Commerce said in its annual report on the state of doing business in China, published in September.
The report also said that the importance of China’s market had been overshadowed by political factors, such as the persecution of Uighurs in Xinjiang, the oppression of dissent in Hong Kong, and the rise of pugnacious “wolf warrior” diplomats.
In its report Jörg Wuttke, president of the EU Chamber of Commerce in China, said, “Closing the gulfs between rhetoric and reality, market potential and market access, and the positive progress in China’s private sector and the regression of the state-owned sector, is in China’s immediate and long-term interests.”


fortune--2020-11-05--Trump wants a recount in Wisconsin. How would that work?

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President Trump’s campaign stated on Wednesday that it plans to request a recount in the state of Wisconsin, which major news outlets have called in favor of his opponent Joe Biden.
A recount can—in theory at least—change the outcome of a presidential race if the new count leads to a state’s electoral votes being awarded to a different candidate. But, while recounts are fairly common, they almost never affect the outcome of elections at any level.
If you’re curious about Trump’s particular recount demand, and what it will mean, here is a plain English Q&A.
What type of recount is Trump asking for?
Trump’s campaign manager claimed without evidence on Wednesday that there have been reports of voting irregularities in Wisconsin and that the President would request a recount.
Under Wisconsin law, candidates have the right to request a recount if the margin of victory is under 1%. Current returns show Biden leading by 20,000 votes, which would appear to fall within that margin. Wisconsin law allows a candidate in these situations to request a recount of the whole state’s vote or just individual counties. The Trump campaign hasn’t indicated if it will demand its Wisconsin recount to be statewide.
Will a recount change the outcome in Wisconsin?
It’s all but certain it won’t. Wisconsin was also the subject of a recount demand in 2016 filed by a third-party candidate. The recount saw a total of 131 additional votes being added to the total of President Trump—an all but insignificant amount given Trump’s initial lead of more than 20,000 votes. Given that Biden’s lead is about the same, it’s hard to see how a recount could change the outcome.
Can Trump ask for recounts in other states?
Possibly, but it’s unclear if he will. While the laws of certain states require an automatic recount in the case of a very close race, others allow a recount if a candidate requests one. In some cases, candidates must go to court to demand a recount.
Election site Ballotpedia is a helpful place to find the recount rules for individual states, including other battleground states like Georgia, Arizona, and Pennsylvania. For now, however, the Trump campaign hasn’t said it will pursue a recount outside of Wisconsin—and it’s unclear for now if the margins in those states will be close enough to justify a recount demand.
Who pays for the cost of a recount?
It depends on the state and the tightness of the race. In some cases, the state will foot the bill if the outcome is exceptionally close. In others, the candidate challenging the vote count must pay—as happened in 2016 when Wisconsin required the third-party candidate to pay $3.5 million. Such rules may explain, in part, why the Trump campaign has yet to request recounts in other states.


fortune--2020-11-05--Americans assemble in protests and rallies across the country as votes are counted

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As Americans waited for the final results of the 2020 presidential election, citizens across the nation took to the streets on Wednesday to fight for or against counting every vote.
Marchers in cities including Chicago, Minneapolis, Washington, D.C., and New York hoisted banners and signs and chanted “Count every vote.” In Detroit, residents called for officials to stop counting. And in North Carolina and Philadelphia, people on both ends of the spectrum participated in public demonstrations.
The gatherings formed as results of the races in several states, including Nevada, Pennsylvania, and Georgia, were still too close to call. At the same time, President Donald Trump lobbed lawsuits at the battleground states of Pennsylvania and Michigan to stop the vote count, claiming that campaign observers haven’t had enough access to review the process. The President also called for a recount in Wisconsin.
Gatherings spread from city to city as Wednesday evening progressed. Here’s what happened in some of those locations.
Philadelphia
“Count Every Vote” protest in Philadelphia, Nov. 4, 2020. Kevin R. Wexler—NorthJersey.com/Reuters
Pennsylvania is at the center of political controversy for two reasons:
The state, which still hasn’t reported the majority of its results, could be key to determining the presidency. Meanwhile, protesters are calling for racial justice after police fatally shot Walter Wallace Jr., a 27-year-old Black man who was carrying a knife at the time.
On Wednesday, hundreds of people gathered around Philadelphia’s City Hall—some chanting “Count every vote,” while others waited for the police to release body-cam video showing how Wallace was shot. Meanwhile, a group of Trump supporters gathered to support their cause, which has quickly mobilized around the hashtag #StopTheSteal.
Detroit
Election challengers yell as they look through the windows of the central counting board in Detroit on Nov. 4, 2020. Carlos Osorio—AP Images
Michigan is another state that’s at the center of the rift between the two presidential candidates.
The Associated Press on Wednesday declared Biden had won Michigan. But even before the call, Trump’s campaign filed a lawsuit in the state contesting the results.
At Detroit’s downtown TCF convention center, where ballots continue to be counted, groups of people gathered to chant “Stop the count.” Guards blocked the door to ensure election officials could continue their work.
Graham, N.C.
Marchers in the Push to the Polls March, led by Rev. Greg Drumwright, hold a rally at the Alamance County Historical Courthouse on Nov. 3, 2020, in Graham, N.C. Ricky Carioti—The Washington Post/Getty Images
A demonstrator yelling “Trump 2020” waves his Confederate flag during the Push to the Polls March in Graham, N.C., on Nov. 3, 2020.
Black Lives Matter supporters in Graham, N.C., were met by a small group of Trump backers on Wednesday. On display was a stark contrast between BLM banners and Confederate flags.
As of press time, however, there had been no reports of violence or arrests during the demonstrations—a much different picture than just a few days ago. Black Lives Matter supporters were pepper sprayed after marching to the Graham courthouse polling location on Saturday. Civil rights groups have since filed lawsuits.
Chicago
A large group is rallying tonight in #Chicago’s Daley Plaza “to send a message to the rest of the country: count all the votes,” said one organizer. @WGNNews reporter @rob_sneed_ will have a report tonight at 9 p.m. #WGNElection pic.twitter.com/tQKoOfo1k0 — Mike Lowe (@MikeLoweReports) November 4, 2020
In Chicago, a group gathered at Daley Plaza carrying signs that said, “Free & fair” and “Count every vote,” hoping to send a message to officials across the nation.
Some videos taken from the scene show marchers carrying drums and cowbells, chanting “Trump, Pence, out now” as they make their way through the plaza.
Phoenix
President Trump’s supporters gather to protest the election results at the Maricopa County Elections Department office on Nov. 4, 2020 in Phoenix. Courtney Pedroza/Getty Images
Pro-Trump protesters, several of whom reportedly were armed, chanted “Count those votes” and “Stop the steal” outside of the Maricopa County Elections Department, where ballots were being counted on Wednesday night. The county sheriff’s department locked down the building to protect the people still counting votes inside.
Arizona is another state Trump has watched closely, as Biden maintains a narrow lead. On Election Night, Trump claimed that some news organizations had prematurely declared the outcome in that state. The AP is among the organizations that have declared Biden won the 11 electoral votes in that state.
Voters reportedly have raised concerns over rumors that the county lent voters Sharpie pens to cast their votes, allegedly making them invalid, according to the Arizona Republic. The Arizona Attorney General’s Office is investigating the claim but clarified that all ballots, regardless of what kind of pen was used, will be counted.


fortune--2020-11-05--Tuesday’s election-night TV audience was big. But another recent election’s was even bigger

Just over 56.9 million TV viewers tuned in to watch election returns on U.S. TV networks last night, a decline from four years ago that may have reflected voter exhaustion and the lack of a clear winner.
Fox News led overall, with an estimated 14.1 million viewers in prime time, an 18% increase from 2016, according to Nielsen data supplied by the network. AT&T’s CNN finished second. Walt Disney’s ABC said it was first among broadcast networks with an audience of 6.3 million. ViacomCBS’ CBS unit reported record online viewers.
Livestreams from the networks may have siphoned viewers from traditional broadcasts. The election-night audience had been trending up over the past 20 years with the growth of cable TV. The most recent high was 71.4 million viewers in 2008, when Barack Obama defeated John McCain to become the first African-American U.S. president.
Four years ago, about 71 million viewers tuned in to watch the results on 13 networks offering live coverage during prime time, according to Nielsen. That was up from 66 million total viewers in 2012.
Fox News, a division of Fox, made some early calls election night, including identifying Democrat Joe Biden as the winner in both Virginia and Arizona.
Audience trends have been mixed this election season. Viewers for the national conventions was soft, continuing a trend of declines for those events. But Americans flocked to the two debates between Donald Trump and Biden. The first debate delivered 73.1 million total viewers, the third-best showing in the last four decades.


fortune--2020-11-05--The Senate races still in play on Wednesday night

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Democrats have secured the presidency for Joe Biden, but the story is a different one in the Senate. Like the White House, it was projected to turn blue, with poll analysts like FiveThirtyEight giving the chamber about a three-in-four chance of shifting to a blue majority. But that hasn’t gone as planned for Democrats, who are facing a potential reality in which the Senate remains in the hands of the GOP.
As of now, the Democrats effectively hold 48 seats in the Senate, with independents Bernie Sanders of Vermont and Angus King of Maine caucusing with the party. Because Biden was able to win the presidency, his vice president, Kamala Harris, could break a 50–50 tie in the Senate, meaning Democrats need at least two seats from the remaining four elections that are still counting ballots or facing a runoff election. Here are the races to keep an eye on:
Georgia
Any realistic shot of Democrats flipping the Senate will come down to Georgia, which has two seats up for grabs. Even if they lost the other remaining races in North Carolina and Alaska—where they currently trail— winning both seats in the Peach State would give Democrats majority control, in the event that Biden is indeed declared President-elect.
Both of these seats are going to be decided by a runoff election in January. One is between Democrat Raphael Warnock and Republican Sen. Kelly Loeffler. They advanced after failing to win a 50% majority in a 20-candidate special election, but managing to finish in the top two. With 98% of the vote reported at the time of writing, Warnock held a seven-point lead over Loeffler, though conservative votes in the race were split between her and Republican Doug Collins, who finished third.
The other Georgia race comes down to Republican incumbent David Perdue and Democrat Jon Ossoff. The former led by a couple percentage points votes with 98% of the vote counted. But, as with the other special election, Perdue didn’t earn at least 50% of the vote to avoid a January runoff. He got agonizingly close with 49.8%, but Ossoff was able to rally late with much of the final batch of votes being based in the heavily liberal Atlanta metro region. A runoff has now officially been scheduled for both races.
Biden’s victory is a significant achievement for the Democrats, but he won’t be able to implement many of his policy plans in a Mitch McConnell-led Republican Senate. This means Georgia is about to become the center of the American political universe for the next two months as both parties view for majority control.
North Carolina
This one is all but over as Democratic challenger Cal Cunningham conceded to Republican incumbent Thom Tillis on Tuesday. The remaining votes will continue to be counted, as mail-in ballots postmarked by Election Day are accepted until Nov. 12., but Republicans appear to be headed to victory.
Alaska
The GOP incumbent Dan Sullivan has a sizable 30-point lead over the independent Al Gross (backed by the Democrats), but only 58% of the vote has been counted so far. Alaska leans Republican, but it has a large number of independent voters, and many absentee ballots won’t be counted for several more days. Some observers have suggested the possibility of a Democrat upset here, and Gross himself is projecting an air of confidence. “We believe we will win once every vote has been counted in the state,” he tweeted last week.


fortune--2020-11-05--Biden received more total votes than any presidential candidate in U.S. history

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Not only did Democrat Joe Biden pass the necessary 270 electoral votes threshold to become the next U.S. president, he also scored more votes than any other presidential candidate in U.S. history.
Biden received 75 million votes as of Saturday evening, according to the Associated Press, eclipsing President Barack Obama’s previous popular vote record of 69 million votes in the 2008 election. President Donald Trump, on the other hand, had garnered about 70.7 million votes as of Saturday, the AP said.
Overall, Biden has accumulated 4.3 million more votes than Trump in a historic U.S. Presidential election that generated the highest voter turnout in over a century.
The President-elect’s milestone came after days of anxious waiting by millions of Americans for final voting counts in pivotal battleground states like Pennsylvania. As of Saturday, President-elect Biden had 290 electoral votes compared to Trump’s 214, the AP reported.
Biden officially topped Obama’s previous popular vote record on Wednesday when he reached 69.9 million votes. On that same day, Trump had about 67 million votes.
Wednesday was a pivotal day for Biden when it became clear that he had won Michigan, one of the “blue wall” states that became particularly crucial in the election. Earlier on that day, Biden acknowledged his momentum during a press conference, but he did not declare victory.
“We believe when the count is finished, we’ll be the winner,” Biden said at the time.
The 2020 presidential election has resulted in the highest voter turnout in over a century, according to the nonpartisan U.S. Elections Project. That site said that there have been over 160 million votes cast during this election, thanks in part to young Americans who appeared to have voted in record numbers.
About 139 million votes were cast in 2016.


fortune--2020-11-04--A blueprint for whoever wins the presidential election to fix America’s health care mess

As you may have surmised by now, the private health insurance industry in the U.S. didn’t accumulate its massive wealth by running deficits. It is a business designed to turn profit and please shareholders. But with COVID-19 ripping through our country and the 2020 presidential election still undecided, this may be a perfect time to reflect on our broken system and decide how we want it to work for us.
It is an auspicious moment. With over 9 million cases in the U.S. already and many more millions likely to come, we’re facing the very real possibility that COVID could qualify as a preexisting condition for patients going forward. And with an estimated 10% of COVID patients experiencing more prolonged symptoms like fatigue, “brain fog,” headache, and shortness of breath, the numbers of new patients with such preexisting conditions during this pandemic are both significant and worrisome.
This is concerning for insurers, too, but for another reason entirely: They make more money when they insure healthy people who make few or no claims. The industry is highly incentivized to avoid having people with high-risk or chronic conditions who visit providers often, frequent the hospital, and undergo lots of procedures.
The Affordable Care Act (ACA) has been critically important in this area. Prior to its passage, patients with preexisting health conditions could be denied coverage completely or not covered for those specific conditions. Insurers had the ability to make it difficult for high-risk patients to maintain their coverage by charging exorbitant premiums, being slow to process claims, and adding mounds of paperwork.
It’s not a new phenomenon, and it is one that I know intimately. In the 1980s, when I was just 23, I developed a rare salivary gland cancer. In addition to everything else that was suddenly swirling through my life, my insurance premiums shot up by 67% in six months. Now, decades later, we are seeing Americans similarly saddled with huge medical expenses—and that’s to say nothing of the millions among us who cannot afford coverage at all.
President Trump has tried repeatedly over the last four years to abolish the ACA. Without a clear replacement, such an action could leave millions of Americans, especially those with preexisting medical conditions, in dire straits. The case challenging the constitutionality of the ACA is before the U.S. Supreme Court for the third time. Said Karen Pollitz, an expert on health care law, in the Atlantic: “It just feels kind of scary. I mean, 20 million people could lose their coverage if this law gets erased. And a whole lot of us—over 50 million of us adults—could be again labeled uninsurable.”
I can relate, not just as a physician but as a patient. Presently, I appear to have a recurrence of my tumor. Why would any insurance company want to pick me up right now and risk the chance of being on the hook financially for possible radiation treatment, surgery, or some of the insanely priced new cancer drugs? The Supreme Court’s decision could topple many Americans into an abyss of despair—and could kill some.
How did we get here? Well, part of the problem is that our health care system was never really master-planned. During World War II, with the government restricting wage increases in order to fight inflation, businesses began creating employer-sponsored health insurance in order to attract new employees. That practice continued through the decades, and our health care system evolved into what Brad Spellberg, chief medical officer at LAC + USC Medical Center, describes in his book Broken, Bankrupt, and Dying as a “hodgepodge” of uncoordinated care involving insurance companies, health care providers, and government programs.
This makeshift system has cost us dearly. We spend more on health care than any other country, whether measured as a percentage of GDP or per capita. Our health care expenditure in 2018 was $3.7 trillion, or 16.9% of GDP—nearly twice as expensive as that of the average Organization for Economic and Cooperation and Development (OECD) peer high-income countries.
In a famous paper, Uwe Reinhardt, a Princeton economist who spent decades studying health reform, identified the reason for this excessive spending: “It’s the prices, stupid.” Sixteen years later, a 2019 study by Johns Hopkins researchers came to a similar conclusion. Higher pharmaceutical prices, medical charges, physicians’ and nurses’ salaries, and administrative costs explained America’s wild overspending on health care. That cost is expected to rise to $6 trillion by 2027.
We don’t even benefit from all this spending. According to research from the Commonwealth Fund, the U.S. ranks last in life expectancy among similar high-income countries, but first in suicides. We have the highest rate of avoidable deaths for conditions like heart disease, diabetes, or cancer, and the highest chronic disease burden (such as asthma, high blood pressure, and heart disease).
The awful advent of COVID-19 should provoke a hard look at our inefficient and needlessly complicated system—and serious ideas for reforming it. Ideally, we want a system that will take care of all of us, including those who have had COVID or post-COVID symptoms over the long haul. America’s current fee-for service model, which bills patients for every line item and every procedure, incentivizes physicians to do more and bill more. We need a system that prioritizes health outcomes over volume.
What can we do? In an email interview and in his book, Spellberg embraced the idea of a single-payer system (the type where the government pays private and county hospitals to deliver care) with an optional private insurance buy-in.
“Single-payer systems throughout the world deliver better outcomes at much lower cost than private multi-payer systems do,” he said. “That is an objective reality.”
The system would include health care for all via a public health plan, funded by central federal taxes collected from everyone. Private insurance options would exist for those who wish to purchase them, but these individuals would still contribute funds to the public plan. Australia and New Zealand are two countries that operate this way; costs are much lower, the systems perform very well, and average life expectancies are longer.
Under this model, businesses would no longer be burdened with paying for their employees’ health care, enabling them to be more competitive in the global marketplace. (U.S. companies spend more than $620 billion on such care annually.) Public and private insurance companies would be able to coexist and compete against one another, according to Spellberg. In Canada, 25 million people have purchased additional private insurance, despite most of their 37.5 million citizens being insured by the government.
Administrative costs would be drastically reduced with a simplified single-payer system (cost savings estimates range between $200 billion and $500 billion), and care would improve as the financial incentives become more aligned with quality rather than quantity. Pharmaceutical drug prices would be negotiated downward and out-of-pocket expenses minimized. Price transparency would actually exist.
Americans want options. We want access to affordable, streamlined health care. And in the midst of a pandemic, we certainly want universal coverage that does not deny those with preexisting conditions.
Spellberg notes that change in the U.S. is not a problem of knowledge, but a “problem of will and politics.” In this case, though, even two-fifths of Republicans have indicated that they would favor single-payer reform. As the author pointed out, it can be done, because other countries are already doing it.
“Americans are getting ripped off by our health care system,” says Spellberg. “Our system is horribly broken, outrageously expensive, and kills people.” It is time for each of us to demand change, so that all of us have access to health care while retaining our tried and true American value of free choice.
A big first step is to stop treating a single-payer plan as a hostile force, but rather a way to take care of our own. And the next step, of course, is to insist that health care reform be placed front and center of the national agenda no matter who sits in the White House for the next four years.
Carolyn Barber has been an emergency department physician for 25 years. She is co-founder of the homeless work program Wheels of Change and author of the new book, Runaway Medicine: What You Don’t Know May Kill You, which was a top-ranked Amazon best seller in health care administration.


fortune--2020-11-04--Who won the election? Putin and Xi, experts say

An election that confirmed America’s deep societal fissures and which may yet wind up the subject of legal challenges is likely to delight the U.S.’s geopolitical rivals, China and Russia, according to foreign policy experts and market commentators.
“Two Presidents have emerged as clear winners of the U.S. election. Unfortunately, they’re sitting in Beijing and Moscow,” Richard Berry, a financial markets commentator at Goodmoneyguide.com, said Wednesday.
Berry predicted a period of “intense volatility” in U.S. and global equity markets that could last days or weeks. “We should expect a torrid time on the markets as millions of Americans awake to a nightmare all too reminiscent of the Bush-Gore paralysis of two decades ago,” he said.
Although the current uncertainty—and the potential legal wrangling between the campaigns of President Donald Trump and Democratic challenger Joe Biden—may paint American democracy in a poor light, it is actually the stark political polarization that may hobble the ability of the U.S. to be a “beacon of democracy” in the long term, providing space for China and Russia to disparage U.S. leadership.
Dana Allin, a senior fellow at the International Institute for Strategic Studies (IISS), told Fortune that to the extent China and Russia view foreign policy as a zero-sum game, they may be happy to see U.S. democracy “brought down to size” through a contested election.
Peter Kammerer, a columnist for the South China Morning Post, recently wrote that both Russian President Vladimir Putin and Chinese President Xi Jinping “have held on to power by convincing their citizens that their systems of government are superior to the democracies of the West…The shouting matches at debates, the horrific mismanagement of the COVID-19 outbreak during which mask wearing and social distancing have been ridiculed, the collapse of the American economy and the extraordinary jobless figures have made it easy for the Chinese and Russian leaders to contend that democracy is broken, corrupt, and damaging.”
Not only do China and Russia benefit from U.S. political divisions, but both nations have an interest in exacerbating domestic conflict in the U.S. with the goal of making it more difficult for America to operate internationally, argues Janusz Bugajski, a senior fellow at the Center for European Policy Analysis in Washington, D.C.
“Kremlin disinformation offensives, increasingly mimicked by Beijing, have two strategic goals: to paralyze American democracy and incapacitate national decisions that challenge its global aspirations,” Bugajski wrote in The Hill earlier this year.
But both Allin and Bugajski note important differences between Russia’s and China’s aims.
“For Moscow, in an ideal world, Trump would be reelected with a freer hand to disregard his national security team by forging a partnership with Putin, lifting economic sanctions, sacrificing Europe’s East to Russia’s influence, and withdrawing American forces from Europe,” Bugajski wrote.
U.S. intelligence agencies have concluded Russia tried to interfere in both the 2016 and 2020 presidential elections, specifically to boost Trump’s electoral prospects.
Allin said the point of Russia’s disinformation campaigns was most likely less about getting Trump elected than about sowing division and casting doubt on the U.S. democratic process.
“In terms of propaganda, a delegitimized and deeply divided America has less standing to criticize Russia. And Russia probably likes that,” Allin said.
China “may be less supportive of a Trump presidency if the upshot is an intensified trade war and a U.S. campaign to discredit Beijing,” according to Bugajski. “But this will not signify support for presumptive Democratic nominee Joe Biden, who is likely to focus on China’s dismal human rights record. Instead, Beijing’s objective will be to deepen public distrust in the election process and denigrate American leadership.”
Allin concurred, noting that, while China initially viewed the Trump presidency hopefully, on the correct assumption that Trump would de-emphasize human rights, Beijing was stung by Trump’s willingness to engage in a bruising trade war with China and his efforts to hobble technology companies with ties to the Chinese government.
“They came to see the downsides of an unpredictable and erratic American foreign policy,” Allin said of Beijing.
That said, he noted, to the extent China is increasingly asserting its power both in Asia and around the world—and interested in forging a new relationship with the U.S. in this context—then “it is easier to cooperate with the U.S. if it is cut down to size a little bit.”
As for the suggestion, broached by some security analysts, that China might try to take advantage of any uncertainty over the U.S. election results or possible constitutional crisis to do something radical, such as launching an invasion of Taiwan or trying to grab other disputed territory in Asia, Allin said this would be a “a very dangerous move,” especially given Trump’s unpredictability. He thought it was unlikely that Beijing would take such a risk.


fortune--2020-11-04--Faithless electors could decide the tight 2020 election

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Joe Biden has the lead in Arizona, Michigan, and Nevada. If wins all three, he’ll have exactly 270 electoral votes—the magic number to take the White House.
But that alone might not guarantee a win. Members of the Electoral College—with the exception of Maine and Nebraska, which allocate by congressional districts—are pledged to vote for the highest vote getter in their state. However, in many states, nothing stops them from breaking that pledge and voting for another candidate. These electors who break that pledge are called faithless electors.
In 2016, a total of 10 electors cast faithless ballots, with seven—the highest since 1912—actually counting. Trump lost two electoral votes, and Hillary Clinton lost five. That wasn’t enough to change the outcome, but it could this time.
Let’s say Biden wins Arizona, Michigan, and Nevada, while Trump takes Georgia, North Carolina, and Pennsylvania. In that scenario Biden would have 270 electoral votes to Trump’s 268. It would take only one faithless Biden elector to cause a tie, 269 to 269.
If neither candidate reaches 270 electoral votes, the vote would move to the House of Representatives. But instead of voting as individual representatives, they’d have to vote as a state—with each state getting one vote. While Democrats have the most House seats, Republicans currently control the most state delegations. The President would be favored in such a scenario, as long as representatives voted along party lines.
Trump has already—without evidence—questioned the fairness of the voting process. But it’s uncertain if he would make an unprecedented request for Biden electors to cast “faithless” votes.
Some state laws are on the books to prevent faithless electors: Electors in 14 states, including Iowa and Michigan, would see their vote canceled if they don’t cast it for the statewide winner, according to fairvote.org. Those state laws were upheld by the U.S. Supreme Court in July when it ruled on the Chiafalo v. Washington case. The Supreme Court also deemed state penalties on unfaithful electors as legal. Five states penalize unfaithful electors with fines.
The Constitution gives state legislatures the power to determine how electors for their state are chosen. In total, 538 electors make up the Electoral College. They’ve never changed the final outcome for President. However, in 1836, they nearly changed the vice president outcome—which electors are also required to vote for. Enough electors flipped from Democratic nominee Richard Johnson that it forced the vice presidential race to the Senate—where he was confirmed. If none of the vice presidential candidates top 270 electoral votes, the Senate gets to pick.
If Biden wants to win without worrying about faithless electors, he’d likely need to claim at least one of the following: North Carolina, Georgia, or Pennsylvania—in addition to Arizona, Michigan, and Nevada.


fortune--2020-11-04--California just passed tougher privacy rules that may reverberate nationwide

Companies operating in California will have to comply with tougher data privacy rules after voters approved Proposition 24.
The measure, also known as the California Privacy Rights Act, passed with 56% of the vote as of midday Wednesday, according to the Associated Press. The proposition would impose stiffer fines on companies that break certain data privacy rules and create a new state agency that along with California’s Justice Department will enforce the state’s consumer privacy laws.
Prop. 24 revamps California’s current year-old data privacy law, known as the California Consumer Protection Act (CCPA), which gave residents the ability to demand that companies disclose and delete any personal data they gathered about them. Analysts considered the passing of that law a major blow to many tech companies like Google and Facebook that operate vast data-collection operations used to train their machine-learning systems and target consumers with online advertising.
Under the new California Privacy Rights Act, consumers will now be able to ask businesses to not share their personal data, a common practice in online advertising and marketing. Consumers will also be able to ask companies to correct any personal data they have gathered if they have noticed errors.
Additionally, companies that violate the data privacy rights of minors could be penalized up to $7,500 under Prop. 24, most of which will likely take effect by January 2023. Businesses that suffer data breaches as a result of lax cybersecurity will also no longer be able to avoid fines by fixing their security holes within 30 days of a data leak.
Prop. 24 received praise from notable politicians like former Democratic presidential candidate Andrew Yang, Silicon Valley Rep. Ro Khanna, San Francisco Mayor London Breed, and organizations like the California NAACP, Common Sense, and Consumer Reports. But it also faced criticism.
The ACLU, for instance, opposed Prop. 24, saying that it could result in Black and immigrant communities having to “pay for their privacy.” The ACLU said that Prop. 24 is “full of loopholes” and “allows companies to charge you more if you tell them not to sell your personal information.”
The Electronic Frontier Foundation, a digital rights nonprofit, abstained from either supporting or opposing Prop. 24, saying that it doesn’t “do enough to advance the data privacy of California consumers.”
Still, with Prop. 24’s approval, there’s a good chance that the new data privacy rules will have an impact outside California. For instance, several businesses like Microsoft had said that they would comply with California’s previous data privacy rules nationwide, and they may do the same with the new law.


fortune--2020-11-04--Gap ridiculed for tweet showing half-blue, half-red hoodie as a call for national unity

“Read the room,” wrote one Twitter user. “Gap honey please don’t,” tweeted another. Meanwhile food blogger and model Chrissy Teigen simply tweeted, “yay we can just walk sideways depending on the city we’re in.”
The object of wide derision was a tweet on Wednesday afternoon by fashion brand Gap which showed a half-red, half-blue hoodie bearing its logo with the caption, “The one thing we know, is that together, we can move forward.” Anyone clicking the clip would see the garment being zipped up. (Some of the harsher sartorial critics noted that the two halves of the letter A in GAP didn’t line up when the hoodie was zipped up, and one even compared it to a court jester’s outfit.)
A Gap tweet, since deleted, showing a red and blue zippered hoodie with the caption, “The one thing we know, is that together, we can move forward.” Gap, Inc.
Coming as the country was still on tenterhooks on Wednesday afternoon, and with nerves raw waiting to see who would win the U.S. presidential election amid threats of lawsuits and blocked recounts abounding, the tweet was poorly received and quickly deleted by Gap.
yay we can just walk sideways depending on the city we’re in https://t.co/W8qyxfb05s — chrissy teigen (@chrissyteigen) November 4, 2020
“From the start we have been a brand that bridges the gap between individuals, cultures, and generations. The intention of our social media post, that featured a red and blue hoodie, was to show the power of unity. It was just too soon for this message. We remain optimistic that our country will come together to drive positive change for all,” Gap said in a statement.
Gap is trying to execute a comeback and rebuild its relevance with customers after years of withering. That includes an upcoming collaboration with onetime presidential candidate Kanye West.
But the hoodie, which was not for sale, is a reminder to brands of the pitfalls of wading into tense political situations however innocuously they may think they are doing so, particularly with facile slogans and greeting-card sentiments. That is especially hazardous with election results that show how divided Americans are, how contentious the finalization of results may yet be, and how complex national reconciliation will be.


fortune--2020-11-04--Stocks historically perform better under a divided Congress

Investors may not yet know exactly what the political landscape will look like once all the votes have been counted. But one thing they can know? How stocks historically perform under a divided Congress, where one party controls the Senate and the other controls the House.
Many on the Street now believe Republicans could maintain control of the Senate, a prospect that until recently wasn’t considered the base case scenario (currently, races are tight). On Wednesday, stocks soared at the possibility of a split Congress—seemingly looking beyond the tumultuous presidential contest.
Historically, a divided Congress tends to be good for stocks: “The S&P 500 historically has done quite well under a divided Congress, up more than 17% on average,” analysts at LPL Financial wrote in a note Wednesday (see chart). “Additionally, in years with a divided Congress, stocks have been higher the past 10 times, with 2020 potentially being the 11th in a row.”
The reason is due in part to the fact that stocks “tend to like gridlock and taking out major policy disruption,” LPL’s Jeff Buchbinder told Fortune Wednesday. In a 2020 context, a divided Congress might lower the risk of a big tax hike if former Vice President Joe Biden were elected.
Buchbinder believes short-term there may be some volatility until investors get clarity about the election results, but “with divided government, the market should have an easier time getting comfortable with whatever policy road map we’re going to get, whether it’s Trump or Biden in the White House.”
The U.S. has frequently had a divided government in the past, and “it has had the impact of limiting some of the more extreme proposals for change over that time,” analysts at Columbia Threadneedle wrote in a note Wednesday. “For some, this check on power is the preferable outcome. But given the need for additional fiscal measures to address the economic damage caused by the ongoing pandemic, an ability to work together in the coming months is essential.”
That worry over a split Congress’s ability to work together over stimulus (and pass a meaningful package) remains a headwind for markets, analysts say. But so far “Wall Street’s positive response to the yet-to-be-decided election implies that investors think gridlock is good,” wrote CFRA’s Sam Stovall on Wednesday.


fortune--2020-11-04--Wyoming elects first Bitcoin owner to U.S. Senate

The cryptocurrency industry’s fortunes in Washington, D.C., received a potential boost on election night as Wyoming voters elected former congresswoman Cynthia Lummis to the U.S. Senate.
Lummis bought Bitcoin in 2013 on a tip from her son-in-law and, upon her arrival to Senate in January, will be the first member of Congress’s upper chamber to own cryptocurrency. Members of the House of Representatives, including former chair of the Judiciary Committee Bob Goodlatte, have disclosed owning crypto in the past, but no U.S. Senator has done so.
Lummis’s election also comes as her home state is branding itself as a haven for cryptocurrency entrepreneurs. In the past two years, Wyoming has passed a series of laws to facilitate crypto commerce and recently granted charters to two banks that will allow them to perform a variety of transactions using Bitcoin and other cryptocurrencies.
Caitlin Long, the CEO of one of those banks, Avanti Financial, predicted Lummis will advocate for the fast-growing crypto industry.
“In typical Wyoming fashion, we’re sending someone to D.C. who respects individual rights, and especially the right to keep the fruits of our labor. Cynthia believes in the philosophy behind Bitcoin, not just that it is a new asset class,” Long said.
Lummis could not be immediately reached for comment.
Even if Lummis emerges as an advocate for cryptocurrency in the Senate, the fast-growing crypto industry still faces significant regulatory headwinds. Despite the recent decision by big companies like Square and PayPal to embrace crypto, many lawmakers and agencies like the IRS view it primarily as a vehicle for money-laundering and tax evasion.
Meanwhile, Bitcoin and other digital currencies face an obstacle to their adoption in everyday commerce owing to tax rules that treat every transaction as a capital gains event. The crypto industry is trying to address that by pushing a bill that would create a so-called de minimis exemption for minor crypto transactions.
That initiative could be in peril, though, as the bill’s main sponsor, Rep. David Schweikert (R-Ariz.), is currently behind in a tight reelection race that, as of Wednesday, was too close to call.
Neeraj Agrawal, a spokesperson for the nonprofit crypto research group Coin Center, told Fortune that he doesn’t foresee major changes in political attitudes toward crypto, given that Congress will likely remain split after this week’s election. He added that he hopes lawmakers will have more time to pay attention to the topic in the coming year and that Lummis’s arrival could be a benefit.
“Senator-elect Lummis has shown an interest in cryptocurrency issues, which is great to see. We are looking forward to working with her,” said Agrawal.


fortune--2020-11-04--As America holds its breath over an election outcome, Twitter lights up with cracks from around the

As America holds its breath over an election outcome, Twitter lights up with cracks from around the world

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It could be several more hours—if not days—before we know the fate of a handful of nail-biter states to swing the election in favor of Joe Biden or Donald Trump. We’re looking at you: Pennsylvania, Michigan, and Wisconsin.
While America remains gripped with the uncertainty of a marathon vote count, the world cannot help but gawk—and, this being the social media age, deliver some smart-aleck cracks at the expense of the world’s No. 1 superpower.
Fortune has found a few worth sharing. (What else are we going to do while we wait?)
East Africa
A Nairobi-based cartoonist who goes by the Twitter handle @gathara couldn’t help but point out (repeatedly) the irony of America’s disputed election. Kenya has been no stranger to Election Day controversy and even violence in recent years, sometimes requiring international observers, such as former U.S. Secretary of State John Kerry.
Gathara figured it was time to turn the tables, applying some of the same journalistic tropes used on his homeland to the situation in the U.S.
#BREAKING Statement from AU headquarters condemns post-election violence in the US following a chaotic presidential poll, and urges "all parties" to engage in "inclusive dialogue to preserve cohesion and create a climate of confidence capable of guaranteeing peace and stability". — gathara (@gathara) November 4, 2020
Europe
President Trump himself has provided some choice material to the chattering masses on Twitter. In a now deleted early-morning tweet, the President punctuated his stop-the-vote-count directive with a meatball-size malapropism that quizzically pointed out, “The Poles are closed.”
That proved too much to resist for Jakub Krupa, a London-based journalist who writes about Polish and European politics. Not long after Trump’s tweet, Poland did in fact close—well, Poland’s schools, shops, and cinemas did in order to fight back a deadly wave of COVID infections. “Thanks, Donald,” Krupa faux grumbled.
And now the Poles have actually closed. Thanks Donald. https://t.co/FmdBTLGXlZ — Jakub Krupa (@JakubKrupa) November 4, 2020
Of course, the U.S. does not hold the monopoly on excruciating moments in the history of democracy, as several British commentators point out. In some U.K. voting districts, the field of candidates is so diverse it sometimes means the Prime Minister is on the same ballot as Lord Buckethead and some man dressed as the Sesame Street character Elmo. (Social media loves this about British politics. Please. Don’t. Change. A. Thing.)
With that in mind, one commentator, Owen Barder, asks his followers to consider what a “well-functioning democracy” looks like.
This is how an election count looks in a well-functioning democracy. pic.twitter.com/jChNbFO4RM — Owen Barder (@owenbarder) November 4, 2020
Down Under
Others cannot help but marvel that the fate of America’s presidential vote depends so heavily on the United States Postal Service—national postal services being a punching bag the world over.
Upon reflection, that realization elicits some sympathy, and plenty of yucks.
America regrets tasking Australia Post to deliver the election results — The Chaser (@chaser) November 4, 2020
Additional reporting by David Meyer in Berlin.
Correction and update, November 4, 2020: This post has been updated to correct the initial heading. It now correctly reads, East Africa.


fortune--2020-11-04--The Biden campaign lays out its path to victory, expecting to reach 270 today

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Americans across the country woke up Wednesday morning with no idea of who had won the presidential election. Around 2:30 a.m. ET, President Donald Trump falsely called an early victory. A number of pivotal states are still up in the air, and his path to the 270 Electoral College votes needed to secure a second term is windy if not precarious. In short: The election is too close to call and may be for days.
The Biden campaign, however, believes that they could be able to secure the votes they need to rightfully declare themselves the winners of the race by Wednesday afternoon. In a 30-minute video press conference, Biden campaign manager Jen O’Malley Dillon and campaign adviser Bob Bauer outlined what they think is the clearest way forward.
“We believe we are on a clear path to victory. By this afternoon, we expect that the Vice President will have leads in states that will put him over 270 electoral votes,” said Dillon. Today, she added, Biden will garner more votes than any presidential nominee in history. Over 135 million votes have been counted so far, and Biden has received more than 69 million of those.
Currently, said Dillon, Biden is on track to win in Michigan, Wisconsin, and Pennsylvania by more than President Trump did in 2016.
So how exactly does the Biden campaign think they’ll win? Here’s what they think is the way forward:
Wisconsin
“We believe that we have already won Wisconsin,” said Dillon. Biden is currently winning the state by just under one point with 97% of votes reported. Only two counties, Pierce and Richland, are outstanding, and they account for about 4,000 votes. The President would need four times that many votes to overtake Biden’s lead in the state.
“We believe that this state can be called,” said Dillon.
In 2016, Trump became the first Republican presidential candidate to win Wisconsin in more than 30 years. He beat Hillary Clinton by just under 30,000 votes. Democrats have since seen Wisconsin as a weak point that they would need to win back in order to secure their “blue wall” in the Midwest. Before COVID-19 made large gatherings dangerous, they had even planned to hold their convention there.
Nevada
Biden currently leads in Nevada by about 8,000 votes with 86% of estimated votes reported. There are no outstanding votes “that lead us to believe we won’t continue to add to our margin,” said Dillon, as ballots outstanding are vote-by-mail, a method that has favored Democratic candidates this election cycle.
Votes in Nevada, however, will not be officially counted until Thursday morning. President Trump narrowly lost the state in 2016.
Michigan
Biden is currently leading in Michigan by nearly 35,000 votes with 92% of all estimated votes reported. The outstanding votes are coming from typically heavily Democratic areas and from absentee ballots, making prospects look good for the former Vice President.
“We expect the final results to be today, and we expect to win this state,” said Dillon.
Pennsylvania
As it stands on Wednesday morning, Trump is currently ahead in Pennsylvania by more than eight points with 79% of estimated votes reported.
Still, said Dillon, “we expect to win Pennsylvania.” There are 1.4 million outstanding ballots that will be counted over the next few days—the majority of which are coming from Democratic areas and through mail-in votes. Those votes, claim the Biden campaign, will likely overcome the nearly 500,000 vote margin the President is currently carrying in the state. They expect the total counts to be completed by Thursday afternoon or evening at the latest.
The bottom line
If Biden wins Michigan, Wisconsin, and Nevada, he would hit 270 electoral votes exactly. This is where faithless electors could play a role, and the campaign would feel more comfortable adding Pennsylvania to the win column.
There are also two states still in play that will likely go to Trump, but it’s not impossible for Biden to win Georgia and North Carolina.
Georgia
Georgia has long been a Republican stronghold, and Trump is currently leading by about two points with 92% of estimated votes reported. Many of the outstanding ballots, however, are in the Atlanta-metro area which heavily favors Biden. Counting is underway this morning, and those ballots are expected to be reported today.
Democrats haven’t won a presidential election in Georgia since 1992, but what was once a strong win for Republicans has become a toss-up, with Biden presenting a strong challenge.
If Biden wins Georgia, along with the expected wins in Michigan, Nevada, and Wisconsin, he would cross the 270 mark even with a loss in Pennsylvania. Nevada and Pennsylvania will likely be the last states to report, so this could go down to the wire.
North Carolina
The state is critical to Trump’s reelection strategy, but Biden has presented a strong challenge. Biden currently trails by less than two points with 95% of all estimated votes reported. “We think the state is probably leaning towards Trump right now,” said Dillon. “But we also think that it’s going to go down to the wire and that we may have to wait several days to know the outcome of this race, depending on how quickly the state counts the remaining ballots.”
The President, meanwhile, spoke out against the counting of official votes cast by Americans on Wednesday morning. “They are finding Biden votes all over the place—in Pennsylvania, Wisconsin, and Michigan. So bad for our Country!” he wrote on Twitter. The votes had been sent in through legal and standard mail-in ballots, which have been used in the United States since the Civil War.


fortune--2020-11-04--A plan for facing the long COVID winter

A plan for facing the long COVID winter

It took the world nearly 90 days to reach 500,000 COVID-19 cases. The U.S. alone recorded more than that many in the past seven days, an all-time high. We have already lost more than 230,000 American lives to COVID-19, more than 75 times the number who perished on 9/11. And while all eyes are on our U.S. election, we’re on track to lose 170,000 more Americans by the start of spring no matter who wins, bringing us to a total that is close to the number of Americans who died in World War II.
Winter is coming, if it isn’t already here, and we need to change our approach. Defeating this novel enemy requires a novel strategy that solves for both its epidemiological and economic—or as we call them, “epinomics”—threats. Against the backdrop of a potential change in administration, how we manage or fail to manage the current wave will set the stage for the remainder of the pandemic.
The good news is that the end may finally be in view. Promising vaccines are progressing at record pace. Drug companies have resolved to meet rigorous standards for safety and efficacy, and have pledged to expand access both in the U.S. and globally. The U.S. has four Phase III candidates and is on track for significant distribution in 2021, giving us the first glimpse of the end of the fight against COVID-19.
How we will manage the fight in the meantime is shaping up as a polarized debate between two extreme positions in the scientific community that have spread to the broader public sphere: herd immunity or communitywide interventions. Both positions create a false tradeoff between lives and livelihoods, disproportionately harming the most disadvantaged among us. Neither position meets this moment.
On one side, we have the strategy to let the pandemic more or less run its course to reach herd immunity, as proposed in the Great Barrington Declaration, a statement published in early October by a group of epidemiologists and public health scientists. Citing the economic and health consequences of existing lockdown policies, Barrington argues for “focused protection” of the vulnerable while letting all others “resume life as normal.” It fails to even mention masks or COVID-19’s potential long-term effects on younger, healthier people who contract it, among many other omissions.
The Barrington declaration also overlooks the vaccines on the horizon and the success of multiple countries in slowing the spread of the virus effectively. Moreover, once community prevalence is high enough and health care capacity is reached, it becomes virtually impossible to protect the vulnerable. With the arrival of flu season, the death toll could be staggering. If 50% to 60% of the population still needs to be infected to attain herd immunity, a fatality rate of 0.5% would imply another 750,000 deaths in the U.S. alone.
Unfortunately, the prevailing scientific rebuttal laid out in the John Snow Memorandum, named for the 19th-century English doctor who helped stop a deadly London cholera outbreak, is also quite concerning. The authors of the Snow memo argue that we should look to the lessons of Japan, Vietnam, and New Zealand—places that never experienced widespread outbreaks—for how best to impose communitywide restrictions to control the spread of the virus. At the same time, the Snow memo waves the flag of defeat, arguing that differentially protecting the 30% of the population more vulnerable to severe outcomes “is practically impossible.”
This strategy gets it wrong on two fronts. First, it ignores the mismatch between social costs and risk. People in their twenties are 1,000 times less likely to die from the disease than those older than 70, and most of them will not comply with interventions over longer periods. Differentiating interventions for the health vulnerable is vital. Second, new communitywide restrictions must be focused and short-lived. The public is suffering from COVID fatigue as compliance with social distancing has decreased markedly since the spring. Full lockdowns, which do work for virus containment, have enormous, regressive human costs. They disproportionately hurt lower-income Americans, often communities of color, who are least able to shelter in place.
In the early days of the crisis, the U.S. took unprecedented and bipartisan fiscal and economic steps to protect the economy. They worked, and now the U.S. is far better off economically than Europe, despite worse disease outcomes. It’s time for a new, more equitable “epinomic” strategy that integrates health, social, and economic imperatives—one that manages the course of the pandemic until vaccines end the fight.
5 smart ways to curb the pandemic
We believe we should focus immediate efforts on five things:
Get people to wear masks. Period. We don’t argue about wearing pants in public. Why are we arguing about masks?
Make every effort to protect the vulnerable. We know who is at risk, and we can provide that population with income and food security, and high-quality masks. And we can offer them special store hours, safe transportation, and an increased ability to work from home.
Prevent gatherings that lead to widespread transmission by surgically and progressively reducing those activities that both drive the most spread and have the least societal cost of restriction. For instance, schools should be more open than closed, bars more closed than open. Provide income and food security for hospitality workers and others whose livelihoods are hampered by shutdowns.
Continue to ramp up testing and tracing capacity. Let’s be more ready to contain the virus once we are at lower community prevalence.
Continue to develop vaccines safely, effectively, quickly, and equitably.
There is no time to waste. This pandemic will end. How it does will depend on our collective ability to act boldly and decisively to save lives and livelihoods over the coming weeks, and to set the novel course we need.
Rich Lesser is president and CEO of Boston Consulting Group. Marin Gjaja is a Boston Consulting Group managing director and senior partner and global COVID response leader.


fortune--2020-11-04--Stocks are soaring as markets price in a split Congress

Stocks rose early on Wednesday following a long election night as investors continue to wait for a victor to be declared. One reason for the boost?
“Stocks are sending the right message; stocks are interpreting what we know: The market is pricing in a split Congress today,” LPL’s Jeff Buchbinder tells Fortune, referring to the possibility of Republicans holding control of the Senate and Democrats controlling the House. “That has major implications for tax policy, which is probably the No. 1 market issue with regard to the election.”
The S&P 500 is trading up over 3.3% in midday trading, while the Dow is up nearly 3%.
To be sure, one of investors’ big fears in recent months, a contested election, has reemerged as a possibility. Though as of Wednesday morning the election is not contested (it simply hasn’t been called yet), President Trump spooked U.S. stock futures when he falsely claimed in a speech he had won the election even though millions of votes are still being counted, and said he would enlist the Supreme Court to stop ballot counting.
But Lisa Shalett, Morgan Stanley Wealth Management’s chief investment officer, believes that while a contested election could set markets up for a rocky couple of weeks (Wall Street analysts have argued a contested election would create post-election volatility if the race is dragged out), investors are largely “looking through the windshield as opposed to looking down at the ground and skiing the mountain” in front of them.
“It’s clear from the way markets are behaving that they care about Congress,” Shalett tells Fortune. “At this point I think they recognize if it’s Biden, he’s not going to have much room to do anything, which is kind of status quo, and if it’s Trump, it’s status quo.”
As of the writing of this article, the Senate election is in a dead heat, with 47 Democrat seats and 47 Republican seats, with several more yet to be called, per AP. LPL’s Buchbinder notes stocks historically perform better in a divided government environment, while major tax increases are “probably off the table” if the Senate remains in Republican hands—something that has vexed Wall Street.
It’s too soon to know which parties will take control of the House and Senate, but now some on the Street are arguing the most likely outcome would be a Biden presidency and a divided Congress: UBS estimates the probability of a Republican Senate has “increased,” analysts wrote in a note Wednesday. That could result in “the uncomfortable position of another two years of gridlock in Washington, probably a less generous fiscal stimulus, and a higher burden on the Fed to stimulate the economy,” Joachim Klement, head of investment research at London-based Liberum, wrote in a note Wednesday. In that case, he argues, “stock markets face a period of heightened uncertainty in the near term,” but “medium- to long-term consequences are likely to be negligible,” he believes.
Many market prognosticators were anticipating a “blue wave,” in which Biden won the presidency and Democrats flipped control of the Senate. That scenario, they believed, could be a boon for big stimulus spending and, as a result, stocks.
In fact, those like Morgan Stanley’s Shalett argue that while markets would “hate” a contested election, “they would hate it not because they care if it’s Biden or Trump, but more because it means the lame-duck session of Congress will not probably…pass stimulus. It means the stimulus gets pushed,” she says.
A new package would likely be passed regardless of who won the White House, but its size and timing would be determined by who controls the executive branch and, importantly, Congress. In that sense, the worry as we wait for election results is that “Washington is going to be in chaos until January, and we won’t get the fiscal stimulus. That’s the risk,” Shalett says.
For now, clarity on the presidential election might not come for days.
But both Buchbinder and Shalett argue investors aren’t as concerned as voters might be. “For markets, the legislative environment, what can actually get done in Washington matters more,” Buchbinder says.


fortune--2020-11-04--Massachusetts expands ‘right to repair’ law for automakers

Massachusetts overwhelmingly voted in favor of what has been described as the most expensive ballot measure in the state’s history: an extension of a “right to repair” law first signed in 2013.
The referendum will require automakers to open up data generated by vehicles to a broader set of constituents. Namely, it will force car companies to allow independent dealerships, auto repair shops, and mechanics to have access, as authorized by car owners.
The requirement is slated to take effect in model year 2022. While the earlier law required the sharing of mechanical data, the new proposal compels carmakers to include the sharing of telematics, driving, and diagnostics data, the kind that increasingly gets transmitted wirelessly from cars to automakers.
Advocates of the proposal argued that such information is essential for third-party businesses to continue providing maintenance and repair services. Opponents alleged that the new law, especially adopted on short notice, would present cybersecurity, hacking, and privacy risks.
The Massachusetts Right to Repair Committee, an industry coalition, declared victory after 9 p.m. ET, an or so hour before the Associated Press projected the ballot measure’s passage. With 86% of precincts reporting, the proposal has so far won over three-quarters of voters.
“The people have spoken—by a huge margin—in favor of immediately updating right to repair so it applies to today’s high-tech cars and trucks,” Tommy Hickey, the director of the Yes on 1 coalition, said in a statement. “Automakers were trying to corner the market on car repairs, but the voters stopped them.”
The Coalition for Safe and Secure Data, a group that opposed the proposal, released its own statement alleging that local repair shops’ right to access essential data was “already enshrined in Massachusetts law.”
“Today’s vote will do nothing to enhance that right—it will only grant real-time, two-way access to your vehicle and increase risk,” the oppositional group said. “At no point did the Yes side provide any credible arguments as to why national auto parts chains need this information to service your vehicles.”
The right to repair is a contentious issue. Corporate opponents range from iPhone maker Apple to tractor-maker John Deere, which prefer to maintain tight control of their products. As carmakers like Tesla and GM add autonomous driving features to their vehicles, the issue has grown more heated.
Kyle Wiens, cofounder of iFixit, a DIY community, praised the ballot measure’s passage. “It’s your car. You should be able to fix it yourself,” he said in a post on Twitter.
“This will be the most advanced #RightToRepair law in the world, opening wireless automotive diagnostics and unleashing a world of possible apps,” Wiens added.