fortune--2020-05-07--ViacomCBS shares rise on surge in streaming subscriptions and YouTube TV deal

ViacomCBS Inc. shares rose as much as 16% on a surge in streaming subscriptions among homebound viewers during the coronavirus pandemic, along with a new distribution deal with YouTube.
The increase at ViacomCBS echoes the huge recent gains at Netflix Inc. and Walt Disney Co.’s Disney+. The New York company said its two paid services, CBS All Access and Showtime OTT, delivered record subscribers, sign-ups and consumption, with subscribers surpassing 13.5 million, up 50% year-over-year. Its free streaming service, Pluto TV, saw monthly active users grow to 24 million.
The shares gained as much as $2.38 to $17.26 in New York trading. They were down 65% this year through Wednesday.
On an earnings call, ViacomCBS Chief Executive Officer Bob Bakish said the company is accelerating plans to roll out an expanded streaming service that will combine Viacom and CBS programming, citing “major changes coming this summer.”
ViacomCBS faces a crowded field in streaming, with most other major media companies having already introduced their own competitors to Netflix. And ViacomCBS didn’t share many key details, like how much it will charge for the service or when exactly it will come out.
While ViacomCBS’s quarterly profit beat analysts’ estimates, investors are also likely celebrating a new distribution deal the company announced Thursday morning with Alphabet Inc.’s YouTube TV. The agreement adds 14 of its channels to YouTube’s online TV service, which has more than 2 million subscribers. With advertising sales in trouble due to a pandemic-fueled recession, investors like the certainty that comes with added subscriber revenue from a new pay-TV deal.
The YouTube pact will immediately add about 2 percentage points to ViacomCBS’s U.S. affiliate revenue, or the carriage fees it receives from cable operators, Evercore analyst Vijay Jayant said in a note.
“More broadly, we view the news as a positive indicator of the affiliate strategy of the combined company, which is seeking to leverage the must-have CBS content to get better distribution for the Viacom channels,” Jayant said.
Still, Covid-19 spoiled the party for ViacomCBS’s first full quarter as a combined company. Revenue declined, driven by a 19% drop in advertising sales. While that’s partly due to a tough comparison to last year when CBS aired the Super Bowl, it also reflects the fact that another major sports event that CBS broadcasts — the March Madness college basketball tournament — was canceled this year due to the pandemic.
ViacomCBS expects a “significant impact” on advertising sales in the current quarter as marketers pull back spending due to the recession, though the company didn’t try to quantify how much revenue would fall. Bakish cited the upcoming return of some sports, like professional golf in June, as a positive for advertising and said the annual upfront ad market will be later and longer than normal due to the pandemic.
“We believe there will be an improvement on advertising in the third and fourth quarter — assuming businesses begin to reopen at scale,” Bakish said.
–With assistance from Crayton Harrison and Catherine Larkin.
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fortune--2020-05-07--UnitedHealthcare, Cigna, and Humana offer discounts to customers

‘ This crony doesn ’ t cut it.
’ Democrats speak out against the new head of the USPS

Several of the U.S.’s biggest for-profit insurers will give money back to customers and cut upfront costs for care and prescriptions, after they got an unexpected windfall because patients delayed normal medical services during the pandemic.
UnitedHealth Group Inc., the nation’s largest insurer, said it will rebate premiums to some commercial customers and waive cost-sharing for Medicare members as part of a $1.5 billion pandemic assistance program. Separately, Cigna Corp. said its pharmacy unit will cap the costs of some drugs for people who have lost health insurance. Earlier this week, Humana Inc. announced it would waive cost-sharing for Medicare members to see primary care doctors for the rest of the year.
The pandemic and the social distancing to quell it have cost millions of people their jobs and health insurance, slashed income for many families, and resulted in widespread delays of medical care as hospitals were cleared to make room for Covid-19 patients. Insurers, however, have been experiencing a sudden, short-term increase in profits as medical procedures and visits were canceled.
“This is the right thing to do,” UnitedHealth Group Chief Executive Officer David Wichmann said on a call with reporters discussing the plan. “Many people we serve have been deferring routine or planned care, reducing our anticipated medical costs.”
UnitedHealthcare said it would credit between 5% and 20% of a plan’s premium cost for June. The rebate will apply to the company’s fully insured employer and individual health plans, which cover about 8 million people. It doesn’t apply to the roughly 19 million people in self-insured health plans common among large employers, where UnitedHealth acts as administrator but doesn’t bear the financial risk. The $1.5 billion amounts to 44% of the company’s first-quarter net income.
Most Americans under 65 get health insurance through their employers. But economists expect April may have been the single worst month for job losses ever in the U.S.: Non-farm payrolls are forecast to have contracted by more than 21 million jobs last month, according to data compiled by Bloomberg. The unemployment rate is expected to climb to 16%, from 4.4% in March. The Labor Department is scheduled to release the April data on Friday.
The insurer is also waiving cost-sharing for primary care and specialist visits for people who get their Medicare coverage through the company, at least through September.
“They’ve deferred a lot of this care, and so it’s important for us to provide the proper motivations for them to seek care as quickly as possible,” Wichmann said. The company is also expanding food and housing benefits in its Medicaid plans, which cover lower-income people, and assisting with premiums in its Medicare supplement business for the elderly.
Most insurers have waived cost-sharing for Covid-19 testing and care and sped up payments to medical providers. As the pandemic’s effects ripple through the economy, however, the health-insurance industry may face pressure to do more.
Drug Costs
Cigna’s Express Scripts unit announced a new program for people who have lost health insurance as a result of Covid-19. Dubbed “Parachute Rx,” the program caps costs for a 30-day supply of generic medications at $25 and at $75 for more than 40 brand-name drugs.
The offering, which Express Scripts plans to have available for the rest of the year, covers a range of medications, including insulin, contraceptives and products for heart disease and migraines.
Express Scripts said it created the program in collaboration with drug manufacturers and retail pharmacies, including Eli Lilly & Co., which offers brand-name insulin products through the program. Lilly also introduced its own offering in April for patients with commercial insurance and those who are uninsured to get best-selling insulins, including Humalog, for $35 a month.
“As people are losing their insurance, their jobs, we’ve been making sure that nobody is not able to afford insulin,” said Chief Financial Officer Josh Smiley in an interview in April.
Drugmaker Bristol-Myers Squibb Co. also said this week that it was expanding patient support programs so those who have lost health insurance due to the pandemic can access the company’s brand-name drugs for free.
Major health insurers including UnitedHealth and Cigna have maintained their profit outlooks for the year as economic damage accrues all around them. The health-care providers they contract with have seen revenue vanish. Many of their employer customers face faltering businesses. Historic job losses threaten to wreck household finances of their members.
Under the Affordable Care Act, insurers are required to eventually rebate some premiums to their customers if medical claims fall far short of expectations, based on a three-year average of medical costs. UnitedHealth’s Wichmann said the company was going beyond what it would have been required to give back.
Only a “small fraction” of the June rebates would be eventually required under the ACA, he said. The rest, he said, represents “an economic imbalance that we think will persist, that we feel is appropriate to get it into the hands of people as quickly as possible.”
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—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
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fortune--2020-05-07--IBM thinks tech being tested by astronauts could help us take care of isolated loved ones

Teflon. Velcro. Memory Foam. LEDs. All technologies that became consumer hits with a helping hand from NASA.
Now IBM, which has a long history with the space program, is exploring whether a digital assistant undergoing testing on the International Space Station could join the pantheon of products whose commercial adoption on Earth was boosted by its use in the Heavens.
“We have been looking at it from an aging perspective and how do we allow individuals to stay in their own homes for longer and help family and friends to keep an eye on them,” says Heather Fraser of the digital assistant. Fraser is the global life sciences and healthcare lead at IBM’s Institute of Business Value, Big Blue’s internal think tank.
She says the current coronavirus pandemic, in which many people are rightfully afraid to physically visit elderly relatives for fear of potentially infecting them, has brought new urgency to the quest for technology that can help older people to live safely on their own—and which can potentially help relatives monitor their condition remotely.
A few weeks ago, astronauts aboard the ISS began testing a self-propelled robot, called CIMON-2, that hovers in the station’s microgravity and can serve as an assistant onboard the craft. The name is an acronym for Crew Interactive Mobile Companion. This version, which arrived aboard a Space X-launched Dragon 2 cargo capsule launched in December, replaces the original CIMON which went into orbit in 2018.
Right now the astronauts are just checking to make sure the robot can understand their voice commands and follow simple instructions.
But astronauts may soon use CIMON-2, or its successor, for real work: doing useful things like reading them passages from spacecraft manuals or checklists, so the astronauts can keep both hands free, and performing the vital, but often annoying, job of shooting video documentation of everything the astronauts do. Eventually, the robot may be equipped with grasping arms and tools that will enable it to complete some tasks on its own in response to the astronaut’s instructions.
The robot’s hardware is built by Airbus, but its brains run on IBM’s Watson A.I. platform. It uses several different Watson artificial intelligence modules to understand the astronaut’s instructions, to look up information for them, and, critically, to assess their emotional state: Are they calm or joking or frustrated? It does this through linguistic analysis of what the astronauts say—it does not take into account their tone of voice or body language.
IBM is among dozens of technology companies pushing the boundaries of natural language processing, a type of artificial intelligence that can analyze and manipulate language. A key strand of this research deals with identifying the sentiments being expressed.
This emotional monitoring is part of a research project that Judith-Irina Buchheim, an anesthesiologist and medical researcher at the University of Munich, is running back on Earth with funding from the German Space Agency, DLR, and help from the astronauts onboard the Space Station. She’s interested in the connection between stress and the immune system and the ways in which the digital assistant may be able to reduce pressure on the astronauts.
Astronauts are trained for both the physical and mental rigors of space but that doesn’t mean they aren’t impacted by the harsh conditions, she says. They have to deal with long-periods of confinement with the same small group of people and have busy work schedules. They operate in an environment where mistakes can be costly or even deadly. So it’s not surprising that they can at times become annoyed with their crewmates, anxious, agitated, or frustrated.
These conditions can be exacerbated by the space capsule’s microgravity and by the way the space station’s orbit around the Earth wreaks havoc with the astronaut’s circadian rhythms (the astronauts will experience 15 to 16 sunrises and sunset each day). Combined with relatively high levels of background noise on the space station, this can lead to astronauts having difficulty sleeping, she says. Poor sleep, in turn, can also degrade immune response.
Buchheim wants to see if working with CIMON-2 can help. “The idea is to reduce workload and stress,” she says. “What CIMON can do is bring back more fun to work.”
In the future, a digital assistant like CIMON-2 may be able to help the astronauts more directly with their mental health—perhaps by acting as a kind of agony aunt or confidant for the astronauts, she says. “You might not want to share your feelings with your fellow crewmates because of a fear of weakening your position,” she says. “It’s easier sometimes to open up to a neutral person, or in this case, a neutral entity.” The digital assistant might even be able to respond using some basic techniques from cognitive behavioral therapy to bolster the astronaut’s mental health.
She also says A.I.-enabled digital assistant will be particularly important as humans begin to contemplate longer space journeys, especially a manned mission to Mars. Right now, if astronauts need help with a problem, they can quickly get advice from ground controllers—it takes just one one-thousandth of a second for a radio signal to travel from the station to Earth. But it can take a radio signal as long as 24 minutes to reach Mars—so astronauts there would not be able to communicate with Earth in real-time. Having a huge store of knowledge available “on device” and an easy way to access it through a voice-controlled digital assistant will be essential, Buchheim says.
Big Blue thinks there are parallels between what CIMON-2 is doing for astronauts in space and what it could do for the elderly back on Earth. Fraser says the system could help older people remember things—like to take medication—and help instruct them in how to perform routine things around the house. It can help them telephone friends and relatives.
It could possibly monitor them for signs of dementia and engage them in activities that might slow the pace of cognitive decline—asking them to tell stories or play brain teaser games, she says. Finally, simply having a digital assistant to converse with might help combat loneliness. And, as envisioned with the astronauts, it may be able to assess a person’s mental health and offer therapy-based interventions.
But Fraser emphasizes that the system might need to be programmed with a large number of different personalities to keep people engaged, citing experiments IBM has already conducted using virtual reality.
“People will get very bored very quickly with just three backgrounds and three avatars,” she says. “So we need to develop ways to personalize this so you can change those and be with who you want to be with.”
A digital assistant like CIMON-2 could also be combined with other technologies to help family and friends remotely monitor their loved ones. For instance, it could be coupled with sensors that detect vibrations, humidity, and temperature in a room and could determine whether a person has kept to their normal routine of switching on a kettle to make tea or cooking meals, Fraser says. If the system didn’t detect these things, it could send an alert to the person’s family, who could then try to make contact with the person through the digital assistant, or, failing that, contact someone to go physically check on the person.
Fraser acknowledges though that it may be far harder to convince older people to use a digital assistant like CIMON-2 than it was to recruit the Space Station’s astronauts for Buchheim’s research project.
“Getting them to use it to begin with and building [the] trust their information is going to be stored safely and not misused, that is a big initial hurdle,” she says.
And, of course, just because something works in Space doesn’t guarantee long-lasting commercial success back on Earth. Anyone remember Tang? Would you willingly drink it today? ‘Nough said.
This story has been updated to correct the spelling of Heather Fraser’s name and the spelling of Judith-Irina Buchheim’s last name on the second and third references.
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—The trillion-dollar question: How far will GDP fall?
—How each industry is fueling the U.S. unemployment rate in one chart
—What we can learn from China’s color-coded apps for tracking the coronavirus
—The retailers that are smartest about tech will finish on top after the coronavirus
—Big Pharma has the chance to come to the world’s rescue
—More surveillance and less privacy will be the new normal after the coronavirus
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--A tale of two entertainment companies—one thriving, one struggling

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Epic Games, the maker of Fortnite, has been absolutely on fire recently as consumers stuck at home look for entertainment from their living rooms.
But Endeavor Group Holdings, the major Hollywood talent agency that owns a stake in Epic Games, is struggling as live events and cinemas go dark.
Now in a bid to raise cash to carry itself through the pandemic, Endeavor is selling a part of its stake in the video-game publisher that it considers noncore to its larger focus on entertainment, per Bloomberg. It will sell as part of Epic’s next round of fundraising that values the gamemaker above its last $15 billion valuation in 2018.
Will the sell off be an example of short-termism in the middle of coronavirus? Epic games appears to be thriving for sure—but game titles come and go, and Fortnite showed signs of slippage even before the pandemic hit.
The answer will depend on Epic’s ability to launch off of its coronavirus-fueled surge. Epic’s staying power may also lie in its gaming engine, Unreal, which relies less on the whims of gamers and more on developers building games on top of it. In December, a Twitter user asked if the company’s CEO considered Fortnite a game or platform. Chief executive Tim Sweeney responded: “Fortnite is a game. But please ask that question again in 12 months.”
Revamping the city: A spinoff of Alphabet’s cities-of-the-future arm, Sidewalk Labs, raised $400 million in Series A funding from the Google parent company and Ontario Teachers Pension Plan, per my colleague Jeff John Roberts in a Fortune exclusive.
Led by Jonathan Winer and Brian Barlow, Sidewalk Infrastructure Partnership (SIP) has lofty goals to revamp America’s infrastructure—though not so lofty as to run afoul of privacy concerns in the same way Sidewalk Labs did. Sidewalk Labs envisioned a smart city that used sensors to determine where people moved and how they lived in Toronto. But citizens grew fearful over Google amassing their data—stunting the project.
SIP is focused on a less glamorous approach, instead identifying “infrastructure that towns already need.” For instance, the company plans to tackle America’s plastic waste pile by sorting it with robotic arms and artificial intelligence.
Read more.
On that note: Cities are embracing tech more than ever. On Wednesday, New York Gov. Andrew Cuomo tapped former Google CEO Eric Schmidt to head a commission tasked with “reimagining” the state following the coronavirus. Schmidt said he will focus on areas such as telehealth, remote learning, and broadband.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- GRAIL, a Menlo Park, Calif.-based cancer detection company, raised $390 million in Series D funding. New investors include the Public Sector Pension Investment Board and Canada Pension Plan Investment Board.
- Chehaoduo, a Chinese online used car and new car trading platform, raised $200 million in additional Series D funding. Sequoia Capital China and SoftBank Vision Fund were the investors. Read more.
- Lime, a scooter rental startup, raised $170 million in funding. Uber led the round, and was joined by investors including Alphabet, Bain Capital Ventures, and GV. Lime will also acquire Uber’s JUMP business.
- ASR Microelectronics, a Chinese chip developer, raised $119 million in extended Series D funding. China’s state-owned China Internet Investment Fund led the round, and was joined by investors including Sequoia CBC Cross-Border Digital Industry Fund and GL Ventures. Read more.
- Enflame Technology, a Shanghai-based artificial intelligence training platform, raised RMB 700 million ($98.6 million) in Series B funding. SummitView Capital led the round, and was joined by investors including Government-backed Shanghai Innovital Capital, Red Dot Capital, Redpoint Ventures China, Delta Capital, and Tencent, among others, also participated in the round. Read more.
- Ventus Therapeutics, a Waltham, Mass. and Montreal, Canada-based a biopharmaceutical company, raised $60 million in Series A financing. Versant Ventures led the round and was joined by investors including GV.
- Symend, a Calgary, Alberta-based customer engagement platform, raised $52 million in funding. Inovia Capital led the round and was joined by investors including Ignition Partners, Impression Ventures, BDC Capital’s Women in Technology Fund, Mistral Venture Partners, and angel investor Markus Frind.
- Covariant, a Berkeley, Calif-based AI Robotics company, raised $40 million in Series B funding. Index Ventures led the round, and was joined by investors including Radical Ventures and Amplify Partners.
- Owkin, a New York and Paris-based startup focused on AI in medical research, raised closed $25 million in funding. Bpifrance led the round and was joined by investors including Cathay Innovation.
- Peanut, a London-based network for women focused on fertility and motherhood, raised $12 million in Series A funding. EQT Ventures led the round, and was joined by investors including Index Ventures and Female Founders Fund.
- Helium Health, a Nigerian health startup, raised $10 million in Series A funding. Global Ventures and Africa Healthcare Masterfund co-led the round and was joined by investors including Tencent and Y-Combinator. Read more.
- Braid Health, a San Francisco-based developer of AI-powered diagnostic tools for radiology, raised $9 million in seed and Series A funding. Lux Capital led the round, and was joined by investors including 01 Advisors, and Rucker Park Capital.
- VNDLY, a Cincinatti, Oh.-based vendor management startup, raised $8.5 million in funding. Madrona Venture Group led the round. Read more.
- Qrvey, a Tyson, Va.-based analytics platform, raised $7.5 million in Series A in funding.
- Hydrant, a New York-based wellness brand focused on hydration, raised $5.7 million in Series A funding. Coefficient Capital led the round and was joined by investors including Rx3 Ventures, and existing investors Soma Capital and Sixers Innovation Lab.
- Hub Security, a Tel-Aviv-based startup offering cybersecurity solutions for fintech and data storage, raised $5 million in Series A funding. AXA Ventures led the round, and was joined by investors including OurCrowd.
- Invisible AI, a San Francisco-based maker of computer vision for manufacturing companies, raised $3.6 million in seed funding. 8VC led the round, and was joined by investors including iRobot Ventures, K9 Ventures, Sierra Ventures, and Slow Ventures.
- StorySlab, a Syracuse, N.Y.-based digital sales company, raised $2.7 million in funding. Armory Square Ventures led the round and was joined by investors including RiverPark Ventures and TIA Ventures.
- Banked, a London-based fintech using open banking, raised £2.35 million ($2.9 million) in further seed funding. Force Over Mass led the round and was joined by investors including Backed and Acrew Capital. Read more.
- AskRobin, an Estonia-based fintech focused on customers in Latin America, raised $1.7 million in funding. Investors include Change Ventures, Vereeni Early Stage Fund, BENE Asia Capital, and Lemonade Stand. Read more.
- Deep Render, a London-based machine learning startup raised £1.6 million ($2 million) in funding. Pentech led the round, and was joined by investors including Speedinvest.
- Burst Oral Care, a Venice, Calif.-based seller of electric toothbrushes, raised an undisclosed amount of Series C funding. Goldman Sachs Growth Equity led the round.
- White Ops, a New York-based bot mitigation and fraud protection firm, raised an undisclosed amount. Goldman Sachs Merchant Banking Division and ClearSky Security were the investors.
PRIVATE EQUITY
- Aspen Surgical Products, backed by Audax Private Equity, acquired Precept, a North Carolina-based provider of disposable face masks and gowns. Financial terms weren't disclosed.
- Astra Capital Management made a majority investment in DartPoints Holding Company, a Dallas, Texas-based owner and operator of edge colocation data centers. Financial terms weren't disclosed.
- Bregal Sagemount invested $80 million in Corcentric, a Cherry Hill, N.J.-based provider of business spend management and revenue management software and services. Read more.
- Global Emerging Markets invested C$100 million ($70.6 million) in Global Crossing Airlines, a Canadian jetliner. Canada Jetlines (TSXV: JET) will combine with Global Crossing Airlines.
- General Tools & Instruments, a portfolio company of High Road Capital Partners, acquired Garden Weasel, a Secaucus, N.J.-based provider of specialized lawn and garden tools, from Faultless Brands.
- Intrepid Solutions and Services, backed by Bluestone Investment Partners, acquired a business unit of Delta Solutions and Strategies, a Colorado Springs, Colo.-based consulting service.
- Sole Source Capital acquired Supply Chain Services, an Oakdale, Minn.-based provider of factory automation software. Financial terms weren't disclosed.
- VertexOne, backed by DFW Capital, acquired WaterSmart Software, a San Francisco-based provider of customer engagement and analytics for the water utility industry. Financial terms weren't disclosed.
OTHERS
- Telefonica SA and Liberty Global have agreed to create the U.K.’s largest phone and internet operator by combining Telefonica’s O2 and Liberty’s Virgin Media for a new company valued at $38 billion. Read more.
- GlaxoSmithKline (NYSE: GSK) is selling $3.45 billion worth of shares in Unilever’s (NYSE: UN) Indian business in the open market, per Reuters citing sources. Read more.
- BioNTech (Nasdaq: BNTX) acquired Neon Therapeutics (Nasdaq: NTGN), a Cambridge, Mass.-based biotech. Financial terms weren't disclosed.
- JD Sports Fashion’s purchase of Footasylum, a U.K.-based seller of sneakers, was blocked by the U.K. antitrust regulator. Read more.
EXITS
- Arcline Investment Management acquired Unitec Elevator, a New York City-based provider of elevator maintenance, repair, and modernization services, from Pacific Avenue Capital Partners. Financial terms weren't disclosed.
- HPS Investment Partners, GIC and Farallon acquired a stake in Ateno (NYSE: ATTO), a provider of customer relationship management services in Latin America, from Bain Capital. Financial terms weren't disclosed.
F+FS
- Apollo Global Management is seeking to raise up to $3 billion for its second infrastructure fund, reported Bloomberg. Read more.
- Autotech Ventures raised $150 million for its second fund.
PEOPLE
- Adams Street Partners appointed Robin Murray as its Head of Growth Equity Investments.


fortune--2020-05-07--In defense of Elon Musk

In defense of Elon Musk

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The archetype of the eccentric genius goes back way before Bill Gates and Steve Jobs, before Marie Curie and Nikola Tesla, before Mozart and Shakespeare. Think of Sappho and Pythagoras or even to myths like Icarus and Daedalus and Cassandra. In the 20th century, we added a new twist: the eccentric genius billionaire, like John D. Rockefeller and Howard Hughes.
There’s an obvious reason why the genius needs to be eccentric—the better to see the world not as it is, but as it could be. Change is hard, the forces of stasis powerful, the views in favor of the status quo entrenched.
Which brings us to the case of Elon Musk.
Lately, we’ve been focused on the first half of the archetype, the eccentric, with him. It’s almost hard to remember that Musk helped pioneer online payments despite the power of the credit card industry, pioneered private spaceflight despite the power of defense contractors and government space agencies, and pioneered the first popular electric car in a century despite the powers of the auto industry, the oil industry, and a few others.
Instead, it’s the Tesla and SpaceX CEO’s hijinks that have drawn all the attention. The crazy tweets, the crazy lawsuits, the crazy baby name that I can’t mention here not because it’s inappropriate but because my web typography skills don’t encompass all the proper characters. And to the dear PR person who emailed me yesterday with an offer to interview the developer of the Instagram photo filter that allowed Musk and his girlfriend Grimes to post a picture of the young lad with faux facial tattoos, sorry, no, I can’t even.
But even if we have a little fun with Elon now and then, we should still acknowledge that making electric cars cool and relatively affordable (complete with a nationwide charging network to address the range issue) is an awe-inspiring and possibly planet-saving move. That putting hundreds of broadband satellites in space to offer fast Internet service to everyone in the world (without going bankrupt even once) could be another game changer for the planet.
That’s not to say that everything Musk does is making the world better. His recent attempt to keep a Tesla factory open during a shelter-in-place order was accused of putting lives at risk, for example.
But who knows what comes next? We might still be debating Musk’s deeds as we scooter across the red landscape in our Tesla Mars rovers.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
If life is a video game, the graphics are great, but the plot is confusing. Facebook revealed the first 20 members of an eventual 40 who will form its independent content decision review board. The board is to serve as a type of appeals courts for users who disagree with the social network's decision to remove their content from its site. The co-chairs are Helle Thorning-Schmidt, the first woman to serve as prime minister of Denmark; Jamal Greene, a Columbia University law professor; Michael McConnell, a former U.S. federal circuit judge; and Catalina Botero-Marino, dean of law at the Universidad de los Andes in Colombia.
Funding secured. After the U.S. wireless industry just consolidated to three titans, somebody in the U.K. must have gotten jealous. On Thursday, Telefonica's O2 and Liberty Global's Virgin Media announced a deal to merge valued at $38 billion. The combination will claim over 46 million video, broadband, and mobile subscribers.
If this works, I'm treating myself to a volcano lair. If you're keeping score at home, Zoom got unbanned in New York City schools on Wednesday thanks to the video conferencing service's improvements in security and privacy.
Why is there no Flat Mars Society? In the latest virtual product launch, Microsoft debuted its Surface Book 3 convertible tablet/laptop and Surface Go 2 iPad-wannabe. It's mostly a typical speeds and feeds update, with faster processors, better graphics, yadda yadda. The starting price of the Book is up $100 to $1,600, while the Go sticks with its old price of $400.
We are literally a brain in a vat. On Wall Street, we learned more about the initial damage to the tech industry from the coronavirus pandemic. Square's revenue increased 44% to $1.4 billion, but said it sees a big slowdown in its business and set aside a large reserve for loan losses. Its shares, previously up 9% in 2020, lost 3% in pre-market trading on Thursday. Lyft did better than analysts expected, but was still slowed. Revenue grew just 23% to $956 million. Lyft's share price, which had cratered 39% this year, jumped 16% in pre-market trading. At PayPal, where processing volume rose 18% to $181 billion last quarter, the company said it's seeing strong demand in this quarter due to increased online shopping. Its stock price, up 19% in 2020, gained another 8%.
Secretly creating a zombie apocalypse. Self-driving car startup Cruise developed its ride hailing app internally. It was not based on the acquisition of Sidecar as we said in Tuesday's newsletter.
(Headlines this morning courtesy of our favorite eccentric billionaire genius.)
FOOD FOR THOUGHT
Apple has come out with praise-worthy keyboards for its newest laptops and iPads, and there's also some software magic happening to improve the writing experience. For iPad users, there's now a re-thought cursor/pointer experience that works with a mouse or trackpad. TechCrunch's Matthew Panzarino interviewed Apple SVP Craig Federighi to get the story on how it came about.
“When we were first thinking about the cursor, we needed it to reflect the natural and easy experience of using your finger when high precision isn’t necessary, like when accessing an icon on the home screen, but it also needed to scale very naturally into high precision tasks like editing text,” says Federighi.
“So we came up with a circle that elegantly transforms to accomplish the task at hand. For example, it morphs to become the focus around a button, or to hop over to another button, or it morphs into something more precise when that makes sense, like the I-beam for text selection.“
IN CASE YOU MISSED IT
Sheryl Sandberg: The coronavirus pandemic is creating a ‘double double shift’ for women. Employers must help By Sheryl Sandberg and Rachel Thomas
Exclusive: Alphabet vets raise $400 million to remake America’s infrastructure By Jeff John Roberts
No buses, no problem. Some cities provide subsidized Uber rides amid pandemic By Danielle Abril
Google and Gates Foundation to help spread digital payments in developing countries By David Z. Morris
India and Japan offer land and funding to lure factories out of China By Eamon Barrett
The pandemic makes the case for more transparent layoffs By Michal Lev-Ram
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
The mother of Elon Musk's new son, the musician and artist known as Grimes, shouldn't be overlooked in any tally of modern-day eccentric geniuses, even if she's not a billionaire. Dinner in the Pressman household on Wednesday night involved mom and dad getting schooled on some of Grimes' best tracks, award-winning albums, and arresting if disturbing visual artistry. Rock on.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-05-07--Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs

Around 3.2 million Americans filed initial unemployment claims in the week ending May 2, according to the U.S. Department of Labor. That brings the total unemployment claims over the past seven weeks to a staggering 33.5 million.
Before this seven-week stretch of 33.5 million initial jobless claims, there were already 7.1 million unemployed Americans as of March 13. When those figures are combined, it equals more than 40 million unemployed, or a real unemployment rate of 24.9%. That’s just under the Great Depression peak of an unemployment rate topped 25.6%.
While the 3.2 million initial unemployment claims are down from the prior week’s 3.8 million, they are still almost five times the previous record from October 1982 of 695,000 claims. That former record has been topped for seven weeks straight.
On Friday the Bureau of Labor Statistics (BLS) will release the April unemployment rate, which a White House advisor thinks could be between 16% to 20%. But this jobless rate will just be through mid-April and will exclude the 7 million jobless claims over the past two weeks. It is not until May that it will likely go above 20%.
And the BLS official unemployment rate may remain well under the real unemployment rate through this crisis. Only out-of-work Americans who are searching for new positions are categorized as unemployed. And many Americans are choosing to wait out the virus and stay-at-home order before starting their search.
Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
More must-read finance coverage from Fortune:
—Saving lives vs. saving the economy is a false tradeoff, economists say
—ExxonMobil’s CEO is banking on a return to normal, but most others aren’t so sure
—Cybercriminals adapt to coronavirus faster than the A.I. cops hunting them
—How cannabis purveyors are coping during the pandemic
—Inside the chaotic rollout of the SBA’s PPP loan plan
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--Employers must do more to support women during the pandemic, Sheryl Sandberg says

Good morning, Broadsheet readers! The Supreme Court hears oral arguments on employers and birth control, warehouse workers question the essentialness of Rent the Runway, and Sheryl Sandberg says in Fortune that employers must do more to help women during the crisis. Have a productive Thursday.
– Sheryl says step up. Yesterday, Claire wrote about the gendered impact of the coronavirus crisis. Today, we have a different perspective on the same issue, from LeanIn.org co-founders Sheryl Sandberg and Rachel Thomas.
In a Fortune op-ed, Sandberg and Thomas argue that employers must do more to support their female employees who are carrying outsized burdens during the pandemic. The duo have named the phenomenon the “double double shift:” an extra pandemic layer on top of the “double shift” of job and domestic duties than women already shouldered before COVID-19.
Original research from Lean In and SurveyMonkey finds that this burden is manifesting itself physically. One in four women say they are now experiencing severe anxiety with physical symptoms like a racing heartbeat, compared to one in 10 men. Thirty-one percent of women with full-time jobs and families say they have more to do than they can possibly handle, compared to 13% of men.
So, employers must do more to make work flexible, accessible, and supportive during this time. “We know companies are under tremendous financial pressure during this economic downturn, but helping their teams avoid burnout and illness needs to be a priority,” the pair write. “That is how they’ll get the best out of their employees amid all this disruption and retain those workers when the crisis is over.”
Read the rest of Sandberg and Thomas’s op-ed here. The piece is the first in a Fortune series from Lean In about the impact of the coronavirus crisis on women in the workplace, so keep an eye out for the next one in the coming weeks.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- He said, she said. Is home schooling yet another area where women are bearing the brunt of quarantine life? Well, it depends on who you ask: A new poll finds that nearly half of dads with kids under 12 report say they're spending more time educating the kids than their spouse is. Women beg to differ, with just 3% saying that their spouse is doing more. New York Times
- Happy anniversary? This weekend will mark 60 years since the Food and Drug Administration approved the first birth control pill in the U.S. That milestone arrives as the Supreme Court is set to rule on Trump v. Pennsylvania, a case that could give employers more latitude to refuse to cover contraception for their employees; Ruth Bader Ginsburg weighed in on the case from her hospital bed yesterday. Planned Parenthood acting president Alexis McGill Johnson writes about the issue here: Elle
-Big bailout for tiny businesses. Sen. Kamala Harris and Rep. Ayanna Pressley collaborated on a bill that will specifically help the smallest American businesses. The Saving Our Street Act would provide grants up to $250,000 to businesses with fewer than 10 employees. Vox
- Rental safety. Rent the Runway warehouse employees worried about their safety question why the clothing rental service is still operating, under what they call the "loophole" of being considered a fulfillment center. "We will do everything we can to protect our teams and offer them continued employment opportunities while ensuring the short and long term future of our business," CEO Jennifer Hyman said in a statement. HuffPost
IN CASE YOU MISSED IT
- Revised rules. The Education Department yesterday released new rules governing how sexual assault is handled on college campuses, strengthening protections for students accused of assault. Secretary Betsy DeVos said that the rules "support survivors" without "sacrificing important safeguards to ensure a fair and transparent process." Vox
- Trucking along. General Motors, led by CEO Mary Barra, posted stronger earnings this quarter than Ford and other competitors. The company credited the numbers to restructuring before the pandemic hit and strong trucks sales; parts of the country where GM does the most trucks business have been less affected by the crisis and stay-at-home orders. Wall Street Journal
- Filling the Gap. Gap Inc. plans to reopen 800 stores by the end of the month, with a strategy that CEO Sonia Syngal calls being "responsibly aggressive." The retailer is taking cues from Asia, where it's already reopened 250 stores, and argues that consumers will look to Old Navy, especially, for activewear and other at-home wardrobe staples. New York Times
- Parting gift. When Kelly Loeffler left her position at Intercontinental Exchange to become a senator in December, the company altered the terms of its stock awards to allow her to keep about $9 million that she otherwise would have forfeited. This piece examines her finances—she's the wealthiest member of the Senate—after concerns over coronavirus-related stock trades: New York Times
ON MY RADAR
Normal People has a Marianne problem The Cut
How motherhood changed my... New York Times
Few lesbian bars remain in the U.S. Will they survive COVID-19? NBC News
How 'Karen' became a coronavirus villain The Atlantic
PARTING WORDS
"I support this kind of competition."
-Quibi CEO Meg Whitman on the Supreme Court streaming oral arguments


fortune--2020-05-08--Coronavirus originated in bats, WHO says, but scientists also see link to cats, ferrets and pangolin

Coronavirus originated in bats, WHO says, but scientists also see link to cats, ferrets and pangolins

What France ’ s ‘ patient zero ’ doctor wants you to know about COVID-19

A World Health Organization scientist said Covid-19 comes from bats and can spread among cats amid an international debate about the virus’s origin.
The novel coronavirus comes from a group of viruses that originate or spread in bats, and it’s still unclear what animal may have transmitted the disease to humans, Peter Ben Embarek, a WHO expert in “zoonotic” animal diseases, which jump to humans, said Friday in a briefing with reporters.
The virus probably arrived in humans through contact with animals raised to supply food, though scientists have yet to determine which species, he said. Studies have shown that cats and ferrets are susceptible to Covid-19, and dogs to a lesser extent, he said, adding that it’s important to find out which animals can get infected to avoid creating a “reservoir” in another species.
Questions about the origin of Sars-CoV-2, the virus that has caused the pandemic, have burned hotter since U.S. President Donald Trump suggested that it came from a lab in China. Scientists who have studied the issue maintain that the virus originated in an animal, and probably entered the human population in November.
New Mission
WHO scientists are considering a new mission to China to get more information about the virus’s animal origin, Maria Van Kerkhove, one of the agency’s top epidemiologists, said at a press briefing Wednesday. Questions remain about whether the virus traveled directly from bats to people, or if other species were involved.
Pangolins, armored mammals that live in Asia, have been found to harbor versions of Sars-CoV-2 that are similar to those in people. The WHO wanted to conduct more animal investigations on an earlier mission to China, but the lockdown of the outbreak’s epicenter in Wuhan made that impractical, Ben Embarek has said.
The first human cases were detected in and around Wuhan, and most of those people had contact with the animal market, though not all, Ben Embarek said.
Trump has doubled down on claims that the Chinese mistakenly released the virus from the laboratory as the outbreak in the U.S. has grown to become the world’s largest and deadliest. Chinese officials have said that the U.S. has no evidence to back up those claims and called the allegations a blame game.
Dive into stories from Fortune’s print edition:
—The trillion-dollar question: How far will GDP fall?
—How each industry is fueling the U.S. unemployment rate in one chart
—What we can learn from China’s color-coded apps for tracking the coronavirus
—The retailers that are smartest about tech will finish on top after the coronavirus
—Big Pharma has the chance to come to the world’s rescue
—More surveillance and less privacy will be the new normal after the coronavirus
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-08--What France’s ‘patient zero’ doctor wants you to know about COVID-19

Coronavirus originated in bats , WHO says , but scientists also see link to cats , ferrets and pangolins

The French intensive care specialist Yves Cohen who appears to have found the first COVID-19 case outside China—the West’s “patient zero”—now has some advice for health authorities trying to rein in the pandemic while regular citizens slowly begin resuming their normal lives: Search for the millions of infections you have probably missed during the past three months. And brace yourselves for a big second wave of the coronavirus.
“To fight an enemy you have to better understand it,” Cohen tells Fortune. “All doctors should do the same studies to help us understand the life of the virus.
Courtesy of Yves Cohen
Cohen, who heads the intensive-care unit at Avicenne Hospital in the northeast Paris suburb of Bobigny, decided with colleagues in April to retest the nasal swabs and reexamine the chest X-rays of 14 patients they had treated last December; all the patients had been suffering from various respiratory illnesses.
Among them was Amirouche Hammar, a 42-year-old Algerian-French fishmonger living in the nearby suburb of Bondy, who arrived at the emergency room last December 27, coughing blood and struggling to breathe. Four months later, his nasal swab, which still sat in the hospital lab, showed that Hammar had been suffering from COVID-19—a disease almost no one in Europe and the U.S. had even heard of in December and for which there was no test available.
It is unclear how Hammar was infected. Fully recovered, he is back home, kicking a soccer ball around his back yard and somewhat shocked at his sudden “patient zero” celebrity, as well as the fact he apparently survived the worst pandemic in a century.
Amirouche Hammar shows his picture taken at the hospital from December 2019 when he was hospitalized. Four months later, his nasal swab, which still sat in the hospital lab, showed that Hammar had been suffering from COVID-19. Michel Euler—AP Images
Cohen says that since March, when he first heard that the outbreak had likely begun in China as early as November, he suspected that some infected people had surely made their way to France, which has extensive business links with China and receives about two million Chinese tourists a year. Until his findings were published in the International Journal of Microbial Agents, health authorities believed the first case outside China appeared on January 24 in the French Alps, carried to Europe by a British man who flew from Singapore. Many officials have speculated that the virus then rampaged across Europe as people returned home from Alpine ski vacations.
But Cohen and his colleagues doubted that theory.
“We thought surely there were patients of COVID-19 in December,” Cohen says. “All day long, airplanes were coming from China.” The hospital and Hammar’s home are both relatively close to Charles de Gaulle Airport.
Having stumbled on a key clue to the pandemic, Cohen now believes health authorities across the world have likely counted a minuscule fraction of COVID-19 infections. About 3.77 million people are counted as infected, and in France, there have been 174,224 confirmed cases, and about 25,812 deaths, according to Johns Hopkins University.
Cohen believes those figures are a tiny fraction of the reality, reflecting how the virus has spread at lightning pace. Based on the small number of tests available, he estimates that in France alone—with a population of 67 million—the true number of COVID-19 cases is between three and five million people.
In other countries, too, Cohen believes, “doctors will eventually find millions more cases.”
So far, there are just a few attempts to do so—but those suggest Cohen might be right. After New York State health authorities conducted antibody tests on a random sampling of people, they concluded that about 2.7 million people in the state have probably been infected with the virus, about 10 times the official rate.
Epidemiologists say that looking for missing cases, as Cohen did, is crucial in understanding the pandemic and preparing for the next one.
“The incredible speed with which it started and spread, should be investigated,” Tom Jefferson, a clinical epidemiologist based in Rome, who is part of Oxford University’s COVID-19 Evidence Service, told journalists on Thursday in a Zoom meeting hosted by the Global Investigative Journalism Network. “We should really compile a universal global history of this pandemic.”
That could take many years to do. And Cohen says that by then COVID-19 cases will probably have spiked again.
Cohen says he and other doctors are bracing themselves for a fresh surge of infections in the coming weeks, as countries—including France—reopen and people begin venturing out of their homes again. France, which has been under a severe lockdown since March 17, has declared a staggered reopening beginning on Monday, dividing the country into hard-hit red zones and relatively unaffected green zones. The French will no longer be required to show police signed documents stating why they have left their house, as they have done for the past seven weeks.
Paris, in the red zone, will not return fully to normal until later in June. Only elementary schools will reopen next week. But already, thousands of Parisians have begun spending more time outdoors.
Cohen predicts his hospital will again be overwhelmed with COVID-19 patients. “Before the crisis, we had 16 ICU beds. In April we had 48 beds in the ICU, and now we have 32.”
He predicts that number will rise sharply after France reopens. His final word of advice: Do not grow complacent, as life begins again after months of restrictions. He worries particularly about the current focus on facial masks.
“I am afraid people will think that with masks, everything is good,” he says. But as crowds increase, so will the risks. “There will be many, many people in the parks, on public transportation, on trams,” he says. “We will see a new peak of the epidemic.”
Dive into stories from Fortune’s print edition:
—The trillion-dollar question: How far will GDP fall?
—How each industry is fueling the U.S. unemployment rate in one chart
—What we can learn from China’s color-coded apps for tracking the coronavirus
—The retailers that are smartest about tech will finish on top after the coronavirus
—Big Pharma has the chance to come to the world’s rescue
—More surveillance and less privacy will be the new normal after the coronavirus
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-08--East vs. West: How differing recovery rates will reshape the global economy

This is the web version of Eastworld, Fortune’s newsletter on business and technology in Asia. Get it in your inbox by subscribing here.
Welcome to Eastworld, Fortune’s new newsletter on business and technology in Asia.
You’re receiving this inaugural edition of Eastworld because you’ve previously indicated your interest in receiving a Fortune briefing on tech and business developments in this region.
I’m Clay Chandler, Fortune’s Asia editor, writing from Hong Kong. My team and I will publish Eastworld weekly. In each issue, we’ll lead with a short essay offering analysis and commentary, followed by a roundup of curated links to Asia coverage from Fortune and other media. Look for highlights of Fortune interviews with experts, executives, investors, and policymakers with deep knowledge of Asia. We’ll also keep you up to speed on Fortune’s virtual events calendar in the region.
In the weeks and months to come, one of Eastworld’s main objectives will be to track Asia’s economies as they recover from the shock of the COVID-19 pandemic. The coronavirus originated in China and in the outbreak’s early stages spread most rapidly to Asian countries including Japan, South Korea, and Singapore. It’s starting to appear as though the virus will do far less economic damage in Eastworld than in the West.
China dithered early in the outbreak. Local officials sought to muzzle reports of an epidemic. Central government leaders took too long to act. Even so, in late January, Beijing imposed an unprecedented lockdown that effectively imprisoned more than 60 million people in their homes. Those measures, however belated and heavy-handed, proved far more successful in containing the spread of the virus in China than did the flat-footed responses in the U.S. and Western Europe.
In China, total cases of the virus have leveled off at around 82,000. Today, the country reported 17 new cases. In the U.S., total infections exceed 1.2 million and are still surging by 25,000 per day.
The result, as I noted last week for Fortune, is that China’s economy is likely to bounce back within the next two to three months, while the U.S. suffers slow to negative growth through the end of the year. The International Monetary Fund expects China to post a growth rate of 9.2% in 2021—nearly double projected U.S. growth.
The difference in recovery rates for Eastworld and Westworld has emerged as a defining story for the global economy, and will force business leaders in both regions to make harrowing choices. President Donald Trump has sought to deflect criticism for his COVID-19 response by blaming China for the outbreak. He’s fanned the global backlash against Beijing by suggesting that China pay damages akin to reparations and is reportedly considering incentives to lure American manufacturers out of China.
But Disney’s announcement this week that it plans to reopen its theme park in Shanghai on May 11—even as it refuses to speculate about reopening parks in California or Florida—underscores multinationals’ enormous incentive to continue doing business with and in China. My guess is that, as the pandemic progresses and ultimately ebbs, China and the other economies of Eastworld will be more relevant to global businesses than ever.
Here in Hong Kong, the week’s biggest news is that the city, following a two-week streak with no new locally-transmitted COVID-19 cases, has begun relaxing social-distancing requirements.
As of today, bars and movie theaters are allowed to reopen for the first time in two months. Restaurants now can seat as many as eight people per table, up from four. This morning I could actually go the gym!
Hong Kong’s not out of the woods yet. Schools will stay closed for another few weeks. We’re all still wearing masks, hotels are empty, and many residents are avoiding the subways. On Monday, the government said the city’s economy slumped nearly 9% in the first quarter compared to the same period last year—its most severe quarterly contraction since record keeping started in 1974.
To fully recover, Hong Kong must reopen its borders. The city welcomed more than 55 million visitors last year. On the last day of January, nearly 219,000 people crossed into the city. But daily visitor tallies have fallen to fewer than 100. Non-Hong Kong residents are not allowed entry. Every returning resident must submit to a coronavirus test. Those who test positive are whisked to a government quarantine center, and even those who test negative must remain under home quarantine for two weeks with their movements tracked by an electronic bracelet.
For a trade and finance hub that bills itself as “Asia’s World City,” that’s not sustainable. Hong Kong, perhaps more than anywhere else in the world, owes its prosperity to the free circulation of money, goods, and people. City officials are under enormous pressure to reopen travel to the rest of China—a move that could come soon given the mainland’s success in containing the virus.
Charles Li has been one of the most ardent proponents of more closely integrating Hong Kong’s financial system with that of the mainland. In his decade-long tenure as chief executive of the Hong Kong Stock Exchange, Li championed bold reforms that made it easier for global investors to buy shares in Chinese companies and for Chinese companies to list in Hong Kong—boosting shares of the HKEX, which are themselves listed on the exchange, by 76%. On Thursday, Li announced that he will not seek reappointment as chairman when his current contract expires in October 2021. I’ll interview Li next week to get his take on the coronavirus crisis and how the region might recover from it. Do you have questions for him? Send me an email. I’ll feature our conversation in the second edition of Eastworld next week.
More news below.
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
A teetering trade deal
U.S. President Donald Trump is giving China a trade deal deadline. In the next week or two, Trump says the U.S. will know if China is fulfilling the purchasing obligations agreed to in the January Phase I deal and will decide whether to keep the agreement intact. The two sides now seem intent on defusing tension. In a Friday phone call between China’s Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer with Treasury Secretary Steven Mnuchin, the two sides pledged to create favorable conditions in implementing the Phase I deal. Reuters
Is India the new China?
Indian officials reached out to over 1,000 American companies in April to offer incentives to move supplies from China to India. India is hoping to capitalize on heightening U.S.-China tensions to lure manufacturing lines for over 550 products to its country. Whether or not U.S. firms will take the bait remains an open question. For now, U.S. firms don't seem eager to leave China any time soon. Fortune
Inside China's reopening
Tracking apps, 6 a.m. coronavirus swabs, and the threat of a new lockdown. China is emerging from its lockdowns to a new post-pandemic reality, and this week Fortune profiled seven individuals in seven different cities for an on-the-ground peek at what the reopening actually looks—and feels—like. Fortune
China’s exports surge
In April, China’s exports were over 8% higher than they were during the same month of last year, a startling gain as much of the world economy has ground to a halt amid the COVID-19 pandemic. Economists attribute the growth to strengthening demand in Southeast Asia, where markets are reopening, and a surge in medical supply exports. Another possible boost was a backlog of orders that had been delayed earlier in the year as China battled the pandemic. The longer-term outlook for China’s exports may still be grim given the sharp decline in the global economy. South China Morning Post
Duterte silences news
The Philippines largest television network, ABS-CBN, has been shut down since Wednesday as the country remains under lockdown due to the pandemic. The Philippines’s top telecoms body ruled this week that ABS-CBN will be off Filipino airwaves until President Rodrigo Duterte’s government renews its broadcasting license. Duterte has previously attacked the channel for its critical coverage of his administration, which has included investigations into the thousands of people killed during his government’s ‘war on drugs.’ The network still carried out its flagship newscast on Thursday night, but did so on Facebook and YouTube, garnering 8 million views. Al-Jazeera
Death of a Quantum Man
Zhang Shoucheng was a leading quantum computing scientist at Stanford University, before he committed suicide in April 2018. A Chinese-born, naturalized American citizen, Zhang had for years worked in both U.S. and Chinese research circles, with connections to technology companies and academic institutions on both sides of the world. In a suicide note, Zhang noted his long battle with depression, yet those around him said he was also coming under increasing scrutiny from the FBI for his ties to China. Zhang may have been one of the first casualties of the U.S.-China trade war. The Wire China
Bat flip
This week, the South Korean KBO professional baseball league celebrated its opening day, after months of COVID-19-induced delays. In a feature for ESPN, senior reporter Mina Kimes (a Fortune alum) dives into bat flip culture in South Korean baseball. In the U.S., bat flips after home runs can be seen as disrespectful; in Korea they are celebrated as an art. The tricks will have a wider audience this season, as South Korea games air in the live-sports-starved U.S. ESPN
Coronavirus by country
Vietnam is becoming an unheralded success story of the coronavirus pandemic. The country has recorded only 271 cases of coronavirus and zero deaths since its first case in late January. This is largely thanks to the early and decisive actions it took to stop its spread. The country cut all flights to and from China, Hong Kong, and Taiwan on Feb. 1 after recording just a few cases. It then enacted strict, nationwide social isolation measures on April 1 after a wave of March infections. Vietnam began easing the lockdown restrictions on April 23, but its economy—reliant on tourism and exports—faces an uphill battle to return to normal in still largely shut-down world. Still, observers are optimistic that Vietnam’s ability to quickly beat back the virus makes the country an attractive destination for manufacturers being driven from more COVID-19-afflicted countries and those seeking to diversify from China. Guardian
Markets and movers
HSBC – The London-headquartered bank announced on Monday that it was purchasing the remaining 50% stake in its Chinese life insurance joint venture company, HSBC Life China. Until this year, China capped foreign ownership of firms operating in China at 50%. Yahoo
ASR Microelectronics – The Shanghai-based Chinese chipmaker garnered $119 million in a series D+ financing round that values the company at over $1.6 billion dollars. The company develops chips for consumer products like smartphones, focusing on artificial intelligence and technology to enable the Internet of Things. Caixing
Reliance Jio – On Friday, the American firm private equity firm, Vista Equity Partners, announced it was taking a 2.3% stake in India’s leading telecom company, Reliance Jio, for $1.5 billion. The announcement comes just days after the Silicon Valley private equity firm Silver Lake, announced its own $750 million investment in the company, and two weeks after Facebook’s blockbuster deal with Reliance Jio, in which the social network agreed to pay $6 billion for a 10% stake in the Indian firm. Financial Times
GlaxoSmithKline (GSK) – On Wednesday, the British pharmaceutical giant, GSK, announced it was selling its 5.7% stake in Hindustan Unilever, a consumer products manufacturer, for $3.4 billion. The deal is India's largest-ever block trade. Reuters
Final figure
3%
China’s expected GDP target this year was supposed to be around 6%—until the coronavirus hit. Analysts say that, given the financial impacts of the pandemic, 3% is a more realistic figure. A growth target of 2-3% may feel uncomfortably low to China’s government, but meeting the 6% figure would require levels of financial stimulus that Beijing can't stomach. Hence the growing speculation that China might not set any target for the first time in decades when top policy makers meet later this month. Bloomberg


fortune--2020-05-08--To reopen safely, the private and public sectors need to ramp up collaboration

The COVID-19 pandemic constitutes a public health crisis like no other in modern history, based on the sheer reach and damage it has wreaked around the world—physically, psychologically, and economically. While the pandemic may be showing signs of decline, a full recovery is still a long distance away. And that recovery phase will require greater international coordination among governments, multilateral institutions, and businesses.
Millions of lives and livelihoods are at stake in every corner of the world. Public health responses and economic measures to protect them need to be swift, aligned, and coordinated. While we recognize the importance of getting the economy, as well as our everyday lives, back on track, our world has forever changed, and we need to prepare accordingly. This means developing the global capacity to live with the coronavirus as a constant threat for the foreseeable future.
In recent history, the global community has managed public health challenges, in the form of MERS, SARS, and Ebola, in a way that allowed commerce to renew in hard-hit regions around the world. However, none of them were of the magnitude of the COVID-19 pandemic. Optimistically, the timeframe for a vaccine ranges amongst global experts from 12 to 18 months. But consider that we have been dealing with Ebola for five years and still lack a cure. Similarly, it has been 25 years since the first outbreak of AIDS and there is still no viable vaccine.
The point is: Science takes time. In all the cases cited above, management of the crisis has required adapting our behavior—and that is what we need to do with COVID-19 as we gradually reopen. Economies and societies across the globe need to prepare for the next normal that is starting to emerge.
Governments and lending institutions must guarantee the viability of the millions of micro, small, and medium-sized enterprises across the world, which employ more than 80% of the workforce in many countries. The injection of $5 trillion into the global economy already announced by the G20 is a good initial response, but more will likely be required. Developed countries and multilateral development banks must also step up now during this crisis to further assist governments, companies, and people in the developing world, where weak safety nets, insufficient public health infrastructure, limited fiscal resources, and high levels of foreign debt can set the stage for a humanitarian crisis.
New trade barriers are limiting the movement of critical goods in some countries, preventing people from receiving the lifesaving products they need. Governments must ensure better coordination to guarantee that supply chains remain operational despite challenges presented by the pandemic. They should refrain from taking any protective measures (including tariffs and export restrictions) against World Trade Organization (WTO) rules that interfere with the global trade of goods and services, especially frontline medical and health care products and supplies. It also means removing tariffs on protective supplies used in the fight against COVID-19, which currently have an average tariff of 11.5%, according to the WTO.
Getting ahead of the coronavirus is not solely the responsibility of government, and business has demonstrated that understanding. They have been agile to expand manufacturing capacity and shift supply chains to meet the increasing needs for medical supplies. Automobile and aircraft companies are producing ventilators, fashion companies are making masks, and hotels are repurposing as hospitals. The team spirit that this crisis has triggered in some companies serves as an example of the collaboration that will need to extend to the recovery phase.
Governments and companies will find themselves collaborating globally to support the technological transformation business is undergoing. Due to the pandemic, many employers and employees have shifted to remote working in a short period of time. When countries begin to loosen restrictions and reignite their economies, the private and public sectors must work together to enable better—and equitable—access to digital infrastructure as only an estimated 53.6% of the world is digitally connected. Such uneven access to digital infrastructure must be addressed in order to mitigate the economic and societal impact of the pandemic, as well as prepare citizens for the new post-pandemic reality. This will require businesses to create affordable and secure technologies, and governments to enact legislation and incentives to connect us all.
Finally, this pandemic has shown the need to revisit international rules for global health systems. Building the consensus to rewrite international health regulations will take a great effort from world leaders, which business leaders should also be engaged in, as appropriate. International health bodies should have more autonomy to make quicker decisions and conduct timely inquiries into countries’ health policies when needed.
Multilateral organizations play a critical role in facilitating global coordination efforts. They can set regulatory standards for governments to implement coordinated policies that set clear rules for business and help create measures that guarantee supply chains continue flowing and critical goods have equitable global distribution at fair prices. To that end, there should be more collaboration between the UN, the World Health Organization, the G20, and the private sector, as we take steps to overcome this crisis and prepare for future ones—starting with a post-crisis dialogue. This doesn’t mean a complete rewrite of the whole system, but rather an evaluation of what has worked, viable recommendations, and new approaches.
The global community must demonstrate solidarity and cooperation to fight COVID-19 together. We can only stop the virus if we coordinate policies and approaches, ramp up testing capacity, guarantee global supply chains, and unite to support developing countries. The longer we wait to come together, the bigger the damage will be to our health, our economies, and our social fabric.
Yousef Al-Benyan is chair of B20 Saudi Arabia, the business voice of the G20. He is also CEO of SABIC.
Dr. David Nabarro is a special envoy for COVID-19 for the World Health Organization (WHO).
Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
More opinion in Fortune:
—How the U.S. should invest in public health before reopening the economy
—Coronavirus is making clear there is no solidarity in the EU
—Most college students won’t get stimulus checks—but they should
—When government fails businesses, communities can step up to help them thrive
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: CEO of Canada’s biggest bank on the keys to leading through the coronavirus
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic.


fortune--2020-05-08--Record job losses pile up, and yet the stock markets continue to rally

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Happy Friday, everyone. All eyes will be on the big jobs report today. It will be bad. Historically bad. But not so bad as to spoil the global rally in equities.
If you see a perverse disconnect between the roaring stock markets and a tanking global economy, you’re not alone.
Let’s check in on the action.
Markets update
Asia
The major indices are all in the green this morning with Japan’s Nikkei leading the way higher, up 2.5% in afternoon trade. Hong Kong and Shanghai were up nearly 1% .
this morning with Japan’s leading the way higher, up in afternoon trade. and were up nearly . There’s a potential thaw in U.S.-China trade tensions as both sides announced some progress in implementing the bilateral trade deal signed in January.
in U.S.-China as both sides announced some progress in implementing the signed in January. Here’s a contender for today’s depressing coronavirus headline: a Chinese study finds that 5-15% of infected COVID-19 patients may have tested positive a second time.
Europe
The European bourses climbed out of the gates. The bluechip Stoxx Europe 50 was up 0.7% at the open.
was up at the open. London’s FTSE is closed for the Bank Holiday.
is closed for the Bank Holiday. Siemens this morning scrapped its 2020 guidance , and it believes the worst is yet to come this quarter. The German engineering giant has kept its factories open throughout the pandemic, but still saw a profit hit to all business segments.
this morning scrapped its , and it believes the worst is yet to come this quarter. The German engineering giant has kept its factories open throughout the pandemic, but still saw a profit hit to all business segments. The ECB’s Christine Lagarde had strong words yesterday evening for her critics in Germany, and for the wider market: don’t challenge the central bank’s independence . “We will continue to do whatever is needed, whatever is necessary, to deliver on that mandate. Undeterred,” she said, a swipe at Tuesday’s bombshell German high court ruling .
had strong words yesterday evening for her critics in Germany, and for the wider market: don’t challenge the . “We will continue to do whatever is needed, whatever is necessary, to deliver on that mandate. Undeterred,” she said, a swipe at Tuesday’s bombshell . Lagarde’s words seemed to calm the bond markets with the Italian spread standing firm.
with the Italian spread standing firm. Meanwhile, Airbus has logged a mere nine orders for new jets, another sign of longterm pain for the aviation sector.
U.S.
The Dow , S&P 500 and Nasdaq futures point to another 1% gain at the open.
, and futures point to another at the open. The Nasdaq aims to extend its rally to a fifth day today. It closed yesterday up 1.4% , which sent the tech-heavy index into positive territory for the year .
aims to extend its rally to a fifth day today. It closed yesterday up , which sent the tech-heavy index into . The jobs report , due out before the opening bell, is expected to be one of the worst in American history. The consensus estimate is for 22 million jobs lost in the past month. That grim figure understates the true turmoil in the labor market.
, due out before the opening bell, is expected to be one of the worst in American history. The consensus estimate is for lost in the past month. That grim figure understates the true turmoil in the labor market. Speaking of layoffs… Uber has had to slash payrolls in recent weeks as its core ride-haling business falters. But its food delivery business has been a pleasant surprise. The stock is up 6.3% in pre-market trading.
Elsewhere
Gold is up, a sign investors are buying just about everything.
is up, a sign investors are buying just about everything. But not the dollar ; the greenback is down.
; the greenback is down. Crude is rallying again with Brent back above $30/gallon.
By the Numbers
33.5 million. That’s how many workers in the United States have now filed for unemployment benefits over the past seven weeks. Yesterday’s tally of roughly 3.2 million jobless claims pushed the real unemployment rate to an unofficial 24.9%. You have to go back to the 1930s, to the Great Depression, to see this kind of jobs destruction. A reminder: the ’30s was a bad decade for global stability… Today, we get the Bureau of Labor Statistics April payrolls report, which Fortune‘s Lance Lambert notes, will undercount the level of lost jobs by at least 7 million (as such you’ll hear a more benign unemployment figure from the one I mention above). So, while today’s number will be awful, and will grab a lot of headlines, just remember: the situation in America is actually worse.
17. It’s jobs day so you’re getting two labor-related data points in today’s roundup. (And this has nothing to do with my growing alarm at seeing the stock market rally as the labor market collapses). In a recent Fortune-SurveyMonkey poll of U.S. adults, 17% of those who had recently lost their job said they’d given up on looking for a new one. There’s all kinds of explanations for this wait-it-out approach. It might be stay-at-home orders or the extended unemployment benefits convincing would-be job hunters to postpone the search. Whatever the reason, the truly dismal state of the labor market will—apologies for the repetition here—go underestimated in any official government tally for a while.
0.08. About an hour after yesterday’s jobless claims numbers came in, the opening bell sounded and the U.S. markets took off. In the opening minutes yesterday, the Nasdaq hit 8,974.01, meaning the index had gone positive for the year. For good measure, it tacked on a few more points by the close, meaning it’s now up 0.08% for 2020. For tech investors, it’s as if the pandemic never happened. Ok, not quite. But, still, a remarkable rebound. Investors are pouring into the big 5—Amazon, Microsoft, Apple, Facebook and Google’s Alphabet—presuming they’re more likely to withstand the worst of the economic crisis we’re in.
***
Have a nice weekend, everyone. I’ll see you here on Monday.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
M&A in the middle of a pandemic? Who does that? John Malone, the consummate dealmaker, that's who. Yesterday, Telefonica’s O2 merged with Liberty Global’s Virgin Media to create a U.K. telecoms behemoth valued at $38 billion. Talks between the two sides began in December, and picked up pace in recent days.
The doomsday short. At least one trader is betting the ECB will cut its benchmark lending rate by a further 50 basis points, which would suggest the eurozone will have gone from bad to worse. According to Bloomberg, this trader has "amassed over 100,000 options on interest-rate futures this week that will hit pay day if the ECB slashes its benchmark rate to minus 1% by early next year."
Fearing FOMO. There's more and more market chatter about the role of FOMO—fear of missing out—in sending the markets higher while the global economy sinks. And that's really worrisome, Morgan Stanley Investment Management's Andrew Harmstone tells CNBC. Piling into these rallies, he says, leaves investors potentially overexposed to a “disproportionate amount of downside risk” should the markets start to price in job losses and bankruptcies.
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Market candy
1706
The Bank of England warned yesterday that the UK economy could shrink by 14% this year. That's bad, but not quite as bad as the year 1706 when the British economy sank by 15%, the eagle-eyed stat checkers at the Guardian reported. Incidentally, the following year, in 1707, England and Scotland unified, and the economy recovered and strengthened for a good three centuries—an awkward history less in this age of Brexit.


fortune--2020-05-08--The lockdown is having a big mental health impact on employees

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
I’ve heard from numerous CEOs who say they expect a substantial proportion of their staff to continue to work from home, at least part time, once the pandemic passes. And why not? Now that we’ve learned the habit of video conferencing, it’s an opportunity to save both commute time and high-priced office rent.
But there’s a dark side to the work-from-home story that isn’t getting the attention it deserves. Speaking yesterday with a group of CEOs assembled virtually by Fortune, Salesforce’s Marc Benioff said 36% of his employees have reported having mental health issues during the lockdown. That’s a stunning statistic. Later in the day, Synchrony CEO Margaret Keane made a similar comment to a separate virtual group of executives, assembled by Fortune and McKinsey. “We’ve seen an increase in the number of calls” on mental health issues, she said. “It is something we have to be very focused on.”
Some of the problem is anxiety provoked by the pandemic. Some is the burden of caring for children out of school and elderly, vulnerable parents, often at the same time. Some, said Keane, is “domestic issues.” In a piece written for Fortune, Facebook COO Sheryl Sandberg and her Lean In Cofounder Rachel Thomas said the problem is particularly pronounced among women. “Homeschooling kids and caring for sick or elderly relatives during the pandemic is creating a ‘double double shift.’ It’s pushing women to the breaking point.”
Lean In conducted a survey in April that found “one in four women say they are experiencing severe anxiety with physical symptoms like a racing heartbeat. One in 10 men say the same. More than half of all women are currently struggling with sleep issues.”
You can hear more from the Benioff conversation, which focused on how to get companies reopened, here, and read the full Sandberg column here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Neiman Marcus
There goes another one: upscale department store Neiman Marcus has filed for chapter 11 bankruptcy protection. Like J.Crew, Neiman Marcus went into the coronavirus crisis already weighed down with debt. It hopes to emerge from bankruptcy protection in the fall, but faces a very tough time between now and then—little more than a third of its sales are online, and only a few stores have reopened. Fortune
Hydrochloroquine
Hydroxychloroquine, the malaria drug that President Trump has repeatedly touted as a miracle cure for COVID-19, is nothing of the sort. That's according to a study published in the New England Journal of Medicine, which found it failed to help those with infections stay off ventilators or live longer. Columbia University Irving Medical Center in New York City, whose researchers participated in the study, has now edited its clinical guidance to remove the suggestion that the drug (which can have terrible side-effects) is a suitable treatment for COVID-19 patients. Fortune
Norwegian wealth
Norway's sovereign wealth fund—at $1 trillion, the world's largest—is going to have to make the unprecedented move of liquidating some of its assets in order to cover withdrawals by the country's government. Such are the demand of the current crisis. Norges Bank Governor Oystein Olsen, who oversees the fund: "It obviously is a positive feature of our society that we have this room to maneuver, unlike a number of other countries." No kidding. Bloomberg
WeChat surveillance
Researchers at the University of Toronto's Citizen Lab have reported that Tencent's WeChat app surveils documents and images shared by its foreign users, in order to refine its censorship capabilities back home in China. The revelation comes at a time when popular Chinese social media apps (hi, TikTok!) are coming under major U.S. scrutiny due to their potential security implications. CNBC
AROUND THE WATER COOLER
German exports
Economists expected German exports to fall 5% in March—instead, they got an 11.8% drop. That's the biggest fall in German exports since records began three decades ago. Germany's government is expecting the economy to shrink by 6.3% despite all the measures taken to soften the coronavirus's blow. After all, Germany's economy is very dependent on exports, and the interconnected global economy makes a hard impact unavoidable. Reuters
Contact tracing
The U.K. is starting to build a second contact-tracing app that—by using decentralized technology provided by Apple and Google—protects privacy better than the first. Privacy campaigners had pointed out that the first app could give authorities detailed information about individuals' location. That would a) be a legal nightmare and b) a huge disincentive to people actually using the app, which would make it pointless. Oh, and it’s glitchy without the tech firms' support. Read Fortune's earlier explanation of the controversy for a reminder of what's at stake. Financial Times
Real estate
Some European real-estate markets are suffering more in the coronavirus crisis than others. Russia is in particular trouble, thanks to the "oil war" with Saudi Arabia, which has wiped around 30% off the value of the ruble. Berlin seems to be in better shape (perhaps in line with Germany's relatively good lockdown performance) and the Madrid market has slowed down dramatically. Wall Street Journal
There's the beef
America's milk glut is leading more U.S. dairy farmers to send their cows for slaughter. Milk and cheese demand is down due to restaurant and schools being shuttered, while the demand for ground beef is rising. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-05-08--Coronavirus demand means more milk cows are ending up as ground beef

More U.S. dairy farmers are sending their cows to be turned into hamburgers after the coronavirus reduced demand for milk and boosted retail demand for cheap beef.
Even with the meatpacking industry beset by shutdowns, the number of milking cows sent to slaughter has risen 2.3% in the past four weeks, according to INTL FCStone. Processors are paying a premium amid surging demand for affordable cuts from shoppers weathering the pandemic at home, said Dave Kurzawski, senior broker at the firm in Chicago.
American dairies could reduce their herd size this year by 80,000 to 90,000 amid a glut of milk, and the vast majority will head to the beef market, he said.
“Lean ground beef, principally from dairy cows, has become the prime meat of the day,” Kurzawski said by phone. “It can be ground up and used in what would be considered ground beef and ground chuck.”
The coronavirus has dashed hopes for a dairy recovery just as the industry had expected to see growing herds and better prices in 2020. While the virus has boosted retail sales of milk in grocery stores, it has not been enough to offset the rapid demand drop from restaurants and schools, forcing farmers to dump milk to curb supplies at a time of year when cows are entering their most productive period.
Futures of milk used in cheesemaking have lost more than 20% this year as lockdowns erode demand for cheese and butter. At the same time, wholesale beef prices have doubled to a record amid slaughterhouse disruptions.
Dairy farmers aim to reduce milk output by 5% to 15% due to significant imbalances in supply and demand, said David Darr, senior vice-president and chief strategy and sustainability officer with Dairy Farmers of America.
That could include extending a period where a cow doesn’t lactate, changing the diet of the herd to lower output or selling animals, he said.
The result has been “catastrophic” for some farmers and the full impact of the virus on the dairy market probably won’t be felt for another 30 to 60 days, Darr said.
“We’ve seen some farms who are using a combination of all three of those within their herds to adjust production,” Darr said. “There are some farms who are looking at addressing their milk production by removing some animals from their herds.”
Despite the recent increase in dairy-cow slaughtering, the herd had been trending higher prior to the coronavirus hitting North America. And as less efficient cows typically are the first to go, it may mean that dairy production can stay persistently strong even with some reduction in the herd.
“It looks like cow numbers are still going up and milk production is still going up, so there’s countervailing forces,” Jared Hutchins, a researcher in dairy economics at the University of Wisconsin-Madison, said by phone.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs
—McConnell focuses Senate on conservative judge appointments rather than coronavirus
—Photo essay: What life looks like in Europe as the continent starts to reopen
—Trump’s demand that China pay coronavirus reparations evokes an ugly history
—The coronavirus is driving a mental health crisis. Tech can help tackle it
—IBM thinks tech tested by astronauts could help us take care of isolated loved ones
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-08--Malaria drug Trump touted as ‘game changer’ for coronavirus treatment fails in new study

A malaria drug that was touted by U.S. President Donald Trump and widely used as a potential treatment for patients with Covid-19 failed to help those with infections stay off ventilators or live longer, according to a study published in the New England Journal of Medicine.
Researchers at New York-Presbyterian Hospital and Columbia University Irving Medical Center in New York City evaluated 1,376 consecutive patients who showed up at the emergency room with symptoms of coronavirus, comparing the fate of those who received the medication, hydroxychloroquine, to those who didn’t. Nearly 60% of the patients were given the drug, typically within 48 hours, and they were more sick on average.
There were no significant differences between the groups in the number of patients who needed to be put on a ventilator or who died, even after taking into account the differences between them, the researchers said.
Additional study, including more scientifically rigorous trials that randomly assign patients to treatment groups, is needed to confirm the findings, they said.
The results shouldn’t be used to rule out either a potential benefit or harm from the drug, though they don’t support use of the medication outside of clinical trials, the researchers said. The medical center updated its clinical guidance to remove the suggestion that patients with Covid-19 should receive it.
When Trump began touting the drug as a “game changer” for Covid-19 in March, a frenzy ensued as hospitals, patients and doctors raced to secure supplies. The president has stopped talking about hydroxychloroquine as the tide has now turned against the drug, with regulators and scientists raising concerns about potentially serious side effects.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs
—McConnell focuses Senate on conservative judge appointments rather than coronavirus
—Photo essay: What life looks like in Europe as the continent starts to reopen
—Trump’s demand that China pay coronavirus reparations evokes an ugly history
—The coronavirus is driving a mental health crisis. Tech can help tackle it
—IBM thinks tech tested by astronauts could help us take care of isolated loved ones
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic