fortune--2020-10-23--What Canada’s COVID response can teach the U.S. about social safety nets

The polls are wrong .
The U.S. presidential race is a near dead heat , this A.I .
‘ sentiment @ @ @ @

For many Americans, accessing financial assistance during the pandemic has been like chasing a dot on the horizon: The closer you get, the further away it is.
And some people never catch it. Research from Columbia University published in October shows the poorest Americans are now even poorer, despite the generous top-up unemployment benefits paid out by the $2.2 trillion CARES Act. By September, the researchers noted, “the monthly poverty rate for Black and Hispanic individuals was 25.2% and 25.8%, respectively, compared to 12% for white individuals.”
Layers of state bureaucracy, outdated computer systems, and, in some states, anti-welfare attitudes kept timely help out of the reach of many. In states such as Florida, where about a quarter of the population is Latinx, people waited well into the summer to get their unemployment benefits. The result has been unpaid bills, long lines at food banks, and increasing difficulty at catching up financially. When people finally did get their benefits, Evercore ISI policy economist Ernie Tedeschi told Fortune that roughly one-third of it went to paying down debt; one-third was spent on consumption (mainly food); and one-third was put into savings. The July 31 expiration of the $600 unemployment add-on and the impending end of the $300 Lost Wages Assistance program means people will soon start running out of those savings.
At the same time, the American economy is being kept afloat primarily by low-income household spending, according to Brookings Institution economist Gary Burtless. “The biggest proportional and absolute drops in spending have been on the part of higher income people,” he said.
The failures in timing and efficient, centralized disbursal of aid, plus the labyrinthine complexity of accessing unemployment benefits and other help, were key factors causing major financial damage to Americans, according to researchers and economists who spoke to Fortune.
It didn’t have to be that way.
On the other side of the U.S.–Canada border, Canadians received $2,000 deposited directly into their bank accounts three days after filling out an online form on the federal revenue agency’s website. “It gave people the ability to do what they had to do during the pandemic: stay home, not get on the bus to go to work, those sorts of things,” said Margot Young, a law professor specializing in constitutional and social justice issues at the University of British Columbia.
That Canadian assistance program, called the Canadian Economic Recovery Benefit (CERB), was accessed by nearly 9 million people—about a quarter of the population. In all, the Canadian government has paid out C$81 billion (about $61 billion in USD) in benefits since CERB’s April launch, which provided retroactive payments to March 15. In October, it ended and was folded into a newly reformed unemployment system expanded to include self-employed and gig workers.
Canada isn’t a utopia amidst the pandemic, and CERB didn’t catch everyone. Its initial version was designed for people who were totally unemployed; it was later updated to allow people earning up to C$1,000 a month to qualify. People on disability and welfare receiving less than $2,000 a month were angry; they now had proof they had been receiving less than what the government determined to be a livable wage. Students who couldn’t find a summer job received only $1,250 a month over the summer, and Canadian provinces were ill-prepared to cope as COVID swept through migrant worker populations, particularly those in agriculture and food processing. Women were disproportionately affected by the pandemic as they took on homeschooling and more caretaking duties of children and elders. Other measures—$40,000 interest-free emergency loans to small businesses, six-month mortgage deferrals, eviction moratoriums for renters—were badly needed lifelines, though they only pushed off inevitable strife.
“But certainly, Canada has done more, and more consistently, for more people than in the U.S. And we have been rewarded with much more robust job recovery and fewer business failures to date,” Armine Yalnizyan, a prominent Canadian economist and Atkinson fellow on the future of workers, tells Fortune. In September, statistics show Canada’s labor force participation was at 64.8%, compared with the U.S.’s 61.4%. Additionally, Canada’s third-quarter economic growth outpaced the United States’ by 16 percentage points.
Canada has also had a much smaller percentage of its population become sick with or die from COVID-19. Compared with U.S. figures, Canada has had one-third of the deaths and one-fifth of the confirmed infections, after adjusting for population size differences—an outcome partly owed to the speed of Canada’s emergency benefits, which enabled people to shelter in place faster. As for health care—the biggest piece of Canada’s social safety net and the elephant in the room—it’s still unknown what role the country’s universal single-payer system played in those outcomes. However, as Boston University assistant professor of health law, policy, and management Paul Shafer noted, data indicates people in states without expanded Medicaid are faring worse because health insurance is more strongly tied to employment.
“There’s some data from the Urban Institute that showed that in states that didn’t expand Medicaid, adults within a family that lost a job were about three times more likely to become uninsured,” said Shafer. “So it goes back to this story of where you live has a lot to do with how well you’re supported during this.”
Regardless of jurisdiction, though, managing debt and organizing debt forgiveness will be what comes next for everyone. The politicization of pandemic debt will cause governments at every level to rise and fall for years to come.
In the U.S., the “not on my taxpayer dime!” sentiment is strong, and it has long been an underpinning of the systematic weakening of the country’s social safety net. According to UCLA professor Martin Gilens’s book Why Americans Hate Welfare, individualism, economic self-interest, the trope of the “undeserving” welfare recipient, and racial discrimination each contribute to American attitudes on wealth redistribution through taxation.
Canada’s social safety net and collectivist mindset are stronger, yes, but Yalnizyan argues that there are sound economic reasons why it’s better for federal governments to hold pandemic debt instead of individualizing the debt.
“If you’re going to say households that lost their jobs should be shouldering the debt, that’s cool—but that’s the most costly form of carrying debt,” she said. Households pay higher risk premiums for debt—think interest rates on credit cards and lines of credit—and the poorest households often pay the most because they are the likeliest to turn to noninstitutional lending like high-interest payday loans. The longer household debt stays in the system, the worse off everyone is.
Yalnizyan explained that in terms of cost of debt, “households pay more than small businesses; small businesses pay more than big businesses; big businesses pay more than municipalities; municipalities pay more than provinces [or states]; and provinces [or states] pay more than the federal government.”
“The federal government has the least risk on paying back loans and for borrowing money, which makes it the lowest cost borrower in the ecosystem of debt. And debt is rising because of the pandemic,” she continued. “So if you are a true fiscal conservative, you will want the system of debt to be paying the least amount of money to the lenders—and that would be the federal level of government.”


fortune--2020-10-23--Walmart sues government to pre-empt allegations it helped fuel opioid crisis

Walmart Inc. sued the federal government in an effort to preempt regulators’ claims that the retailer added fuel to the U.S.’s opioid crisis by filling suspicious painkiller prescriptions in its pharmacies.
The world’s largest retailer argues in the suit that the U.S. Justice Department and Drug Enforcement Administration is scapegoating the chain to divert attention from the agencies’ failures to effectively address the public-health crisis over opioids.
Watchdog groups have “meticulously cataloged” the ways regulators have “failed to safeguard the public from improper diversion of prescription opioids,” Walmart’s lawyers said in the 54-page complaint. Walmart indicated it sued the government in anticipation of the DOJ filing its own lawsuit alleging the retailer mishandled the highly addictive pills. The company wants a judge to remove “unacceptable uncertainty” about its practices.
A spokesperson for the Justice Department didn’t immediately respond to calls for comment after regular business hours. James Pokryfke, a DEA spokesman, declined to comment. The complaint comes a day after federal prosecutors announced an $8.3 billion deal with drugmaker Purdue Pharma LP under which the company will plead guilty to criminal charges over its marketing of its opioid-based OxyContin painkiller.
Walmart has been promoting its health-services offering in the U.S. — where care is expensive and the insurance system is complex. The company has announced plans to expand its low-cost clinics in Georgia and the Chicago area.
Walmart sued the government in Sherman, Texas — the same district in which federal prosecutors once weighed hitting the chain with criminal charges over its opioid-dispensing practices, according to ProPublica. Joe Brown, the former U.S. Attorney for east Texas, threatened to indict the retailer for intentionally supplying doctor-run pill mills that routinely wrote hundreds of prescriptions for opioid painkillers, according to the report. DOJ officials in Washington nixed the indictments, ProPublica said.
Maureen Smith, a spokesperson for the U.S. Attorney’s office in Sherman didn’t immediately return a call seeking comment. Brown, who stepped down in May, didn’t return a call and email seeking comment. The Wall Street Journal reported earlier on the suit.
Walmart has been sued by more than 2,000 states, cities and counties seeking to recoup billions in tax dollars spent battling the fallout from the opioid crisis. The retailer, along with pharmacy chains, was set to face a federal trial in Cleveland over its opioid handling, but the case was delayed by the Covid-19 outbreak.
Local government officials claim Walmart and companies such as CVS Health Corp., Walgreens Boots Alliance Inc.and Rite Aid Corp intentionally turned a blind eye to suspiciously large opioid prescriptions to ramp up billions in profits.
In its suit, Walmart said it has a robust system for monitoring opioid prescriptions and federal regulators are making unreasonable demands on the chain.
“DOJ and DEA are placing pharmacists and pharmacies in an untenable position by threatening to hold them liable for violating DOJ’s unwritten expectations for handling opioid prescriptions—expectations that are directly at odds with state pharmacy and medical practice laws,” the company said.
The case is Walmart Inc. v. U.S. Department of Justice, 20-cv-00817, U.S. District Court, Eastern District of Texas (Sherman).(Updates with details on opioid suits against Walmart starting in eighth paragraph)
–With assistance from Chris Strohm and Laurel Calkins.


fortune--2020-10-23--Trump claims at debate that China is paying for farm subsidies. In fact, U.S. taxpayers are footing

Trump claims at debate that China is paying for farm subsidies. In fact, U.S. taxpayers are footing the bill

At Thursday’s U.S. presidential debate, President Donald Trump falsely claimed in an exchange with rival Joe Biden that China is paying American farm subsidies.
“I just gave $28 billion to our farmers,” Trump said.
“[That’s] taxpayers’ money,” Biden, the Democratic nominee, interjected. “[The money] didn’t come from China.”
Trump objected: “No, no. You know who the taxpayer is? It’s called China. China pays $28 billion, and you know what they did to pay it, Joe? They devalued their currency, and they also paid up, and you know [who] got the money? Our farmers, our great farmers, because they were targeted.”
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Trump’s claim that China paid for American farm subsidies is false, given that the U.S. has drawn from its own government coffers to pay for subsidies to bolster farmers hurt by the U.S.-China trade war. It is also unclear how his claims of China “paying up” or “devaluing its currency” relate to U.S. government subsidies to American farmers.
Trump’s January phase 1 trade deal with China—a first step in resolving the yearslong trade war—included a vow from China to vastly increase its purchases of American farm goods. Such action would have benefited U.S. farmers, but as of now, China is far behind on meeting its targets.
Farm relief
The trade war began in July 2018, when the Trump administration levied $34 billion in tariffs on Chinese goods, meaning it cost more for American companies to import products from China. In response, China imposed a 25% tariff on U.S. soybeans and other agricultural products, meaning American goods became more expensive for Chinese importers. Subsequent rounds of tit-for-tat measures followed, which raised China’s tariffs on soybeans to as high as 33%; Chinese tariffs on U.S. pork products reached 72%.
Trump often claims that China paid the tariffs his administration imposed on Chinese goods. It’s true that the U.S. Treasury has collected billions of dollars in tariffs in recent years, but that money is paid by U.S. importers of Chinese goods, not by Chinese entities or China itself.
In reality, tariffs are intended to be a deterrent. Those imposed by the Trump White House made it more expensive for American companies to buy Chinese items; the idea being that American companies would import fewer Chinese goods if the products became more expensive, which would ultimately hurt China. American companies did seek out alternatives to Chinese products after the tariffs went into effect, but they also responded by raising their prices to cover the added cost and by cutting other expenses, like jobs. In June 2019 alone, a group of trade associations found that Chinese tariffs cost U.S. businesses $3.4 billion. By the time of the trade deal in January 2020, Trump administration tariffs had cost U.S. companies tens of billions of dollars.
The $28 billion figure that Trump mentioned on Thursday appears to refer to the $28 billion in subsidies the United States Department of Agriculture (USDA) allotted to American farmers between 2018 and 2019. The USDA rolled out the subsidy mechanism, called a Market Facilitation Program, in 2018 to provide relief to farmers whose crops had been targeted by China’s retaliatory trade war tariffs.
A farmer pulls a planter through a soybean field in Buda, Ill., in July 2019. Soybean farmers were hit especially hard during the U.S. trade war with China. Daniel Acker—Bloomberg/Getty Images
Just as U.S. tariffs on Chinese goods made the items more expensive in the U.S., China’s retaliatory tariffs on U.S. goods made American products more expensive in China. And in this instance too, the added cost was a deterrent. Instead of importing, say, soybeans from the U.S., Chinese companies imported them from other countries, such as Brazil. That was bad news for U.S. soybean farmers, who exported roughly 25% of their harvest to China in 2017, before the trade war began.
The tariffs led to a precipitous drop in U.S. soybean exports to China. From 2017 to 2018, they fell 70%.
It is not clear how Trump came to the conclusion that China footed the $28 billion bill for farmer subsidies. The payments were the handiwork of the USDA’s Commodity Credit Corporation, an agency that is authorized to borrow from the U.S. Treasury to stabilize America’s farm economy.
“President Trump has great affection for America’s farmers and ranchers. He knows that they’re fighting the fight and that they’re on the front lines,” Agriculture Secretary Sonny Perdue told reporters in 2018.
Farmers are viewed as a core constituency in Trump’s electoral base, and the President continues to hold commanding leads over Biden in 2020 polls of American farmers.
Observers have criticized Trump for using the little-known USDA mechanism to shield his administration from the negative political consequences of the trade war, without having to put the measure before federal lawmakers.
“What’s unique about this is, [the subsidies] didn’t go through Congress,” Joe Glauber, the USDA’s former chief economist, told NPR in December 2019. “The sector that is hurt the most [agriculture], and which would normally complain, all of a sudden, it’s assuaged by these payments.”
The Trump administration’s approach has caught the attention of the U.S. Government Accountability Office, the U.S.’s watchdog agency. It’s investigating whether the payments were disproportionately distributed to large corporations or to places that supported Trump in the 2016 election.
Trade deal
The trade deal that the Trump administration signed with Beijing in January of this year holds China to new purchasing targets in exchange for the lowering of tariffs. Officially, Chinese tariffs on U.S. goods remained in place, but in practice China granted tariff-free waivers on goods like pork and soybeans to Chinese importers.
As part of the deal, China agreed to purchase $36.6 billion worth of agricultural goods, a $12.5 billion increase from pre–trade war levels in 2017. On paper, that action by China provides real relief to American farmers. But through August, China had only purchased $11 billion worth of agricultural products, less than half of what it needed to buy to be on track to meet the conditions of the trade deal.
Meanwhile, from 2018 to 2020 U.S. farmers relied more heavily on U.S. government support. The share of income they receive from the U.S. government, as opposed to what they receive from selling their crops, has steadily increased in the past three years. So far in 2020, 40% of farmers’ net cash income has come from government subsidies, the highest percentage in two decades.


fortune--2020-10-23--Gilead shares jump on FDA approval of remdesivir

The U.S. Food and Drug Administration approved Gilead Sciences Inc.’s antiviral therapy remdesivir on Thursday, making it the first drug to obtain formal clearance for treating the coronavirus.
Shares of Gilead gained 6.3% in pre-market trading on Friday. Analysts estimate that remdesivir will have sales of $2.17 billion this year, according to 13 surveyed by Bloomberg.
Regulators had granted an emergency-use authorization for remdesivir earlier this year, and since then the drug has become a widely used therapy in hospitalized Covid-19 patients. It was given to President Donald Trump this month when he was diagnosed with the virus.
The approval of remdesivir, sold under the brand name Veklury, will allow Gilead to market the drug and talk about its benefits to doctors, nurses, and patients. That could help solidify its position as a go-to medicine for Covid-19 patients even as other drugs for the disease begin to reach the market.
“Veklury is now the first and only approved Covid-19 treatment in the United States,” Gilead said in a statement. While the drug was in short supply initially, Gilead said that the medicine is now widely available in hospitals across the country as manufacturing capacity has rapidly expanded.
The drug hasn’t been proven to reduce deaths from Covid-19. In a World Health Organization trial, the medicine failed to reduce fatalities, according to preliminary results that were posted on preprint servers last week.
Gilead has criticized the WHO study. In a letter posted on the company’s website, Chief Medical Officer Merdad Parsey said the findings don’t negate other results.
The company said in June that it will charge U.S. hospitals roughly $3,120 for most patients who need remdesivir.
The approval is based on a U.S. government-sponsored trial involving more than 1,000 hospitalized coronavirus patients that found that those who received the drug recovered about five days faster than those who got a placebo.
The overall side-effect rate was similar to the placebo in the government study. The most common side effects are nausea and elevated liver enzymes, according to the product’s label.


fortune--2020-10-23--Meeting the reskilling challenge

Meeting the reskilling challenge

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
If there is one issue that motivates CEOs at the forefront of the stakeholder capitalism movement, it is training and upskilling. They see the dangerous fissures that exist between the highly educated and the less so—a gap that widened during the pandemic. And they understand that technological change is driving that gap ever wider. While the pandemic, racial injustice and climate change may get more attention from society at large, it’s the reskilling challenge for which CEOs feel most directly responsible.
Deanna Mulligan, who is stepping down as CEO of Guardian Life Insurance at year’s end, is one of those CEOs, and she has put her passion into a new book out next week: Hire Purpose: How Smart Companies Can Close the Skills Gap. I spoke with Mulligan earlier this week, and she told me about her evolution on the issue.
Mulligan joined Guardian in 2008, in the midst of the Great Recession. Guardian “wasn’t wildly impacted by the recession, but I was looking around and seeing so many of my friends losing jobs.” When she became CEO in 2011, she realized a combination of pervasive low interest rates and technological change was going to drive huge disruption for her company and her employees. “I said to myself, I don’t want to be one of those companies that has to turn all these people out on the streets.”
She started a program to teach people in the company’s call centers to write code, teamed with General Assembly to teach actuaries to be data analysts, and developed a program of “train in, train out”—providing two years tuition at a local community college for workers whose jobs were eliminated.
“Companies have an obligation to society to try and do this,” she said. “And it’s less expensive than firing people.” Like a number of her CEO colleagues, she is committed to extending such programs beyond her own employees. “It’s very important that we do this at scale.”
We’ll be talking about this topic more on Monday, at the annual meeting of the Fortune CEO Initiative. Mulligan will be there, along with a great group of CEOs. A partial list: Vas Narasimhan of Novartis, Mark Schneider of Nestle, Aneel Bhusri of Workday, Michelle Gass of Kohl’s, Francesco Starace of Enel, Tiger Tyagarajan of Genpact, Jim Fitterling of Dow, Julie Sweet of Accenture, Enrique Lores of HP, Antonio Neeri of HPE, Kevin Sneader of McKinsey, Joe Ucuzoglu of Deloitte, and Sonia Syngal of Gap. Ford Foundation President Darren Walker also will join, along with two U.S. governors who have been working on the retraining challenge: Maryland’s Larry Hogan and Rhode Island’s Gina Raimondo.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Walmart vs DOJ
Walmart has attempted a preemptive strike against what they claim is an impending Justice Department lawsuit, in relation to the opioid crisis. The retailer wants a federal judge to say the government cannot seek civil damages over its pharmacists filling valid prescriptions that ought to have raised red flags. Walmart: "In the shadow of their own profound failures, DOJ and DEA now seek to retroactively impose on pharmacists and pharmacies unworkable requirements that are not found in any law and go beyond what pharmacists are trained and licensed to perform." Wall Street Journal
Last debate
Donald Trump and Joe Biden held their final debate last night, and—perhaps due to the greater enforcement of rules about not interrupting—it was a more civil and watchable affair than the first. Fortune's coverage included Rey Mashayekhi on corruption claims, Aric Jenkins on pre-existing conditions, and Nicole Goodkind on Trump's debate strategy.
Remdesivir approval
Gilead Sciences' remdesivir has become the U.S.'s first approved COVID-19 treatment. The Food and Drug Administration showed its green light for the drug, which is marketed as Veklury, yesterday. One U.S. trial has shown remdesivir to modestly shorten recovery time for some severely ill patients, but another study, sponsored by the World Health Organization, said it had no such effect, nor did it help patients survive the disease. Fortune
Bye, malls
Gap's eponymous and Banana Republic brands are largely pulling out of mall locations in North America. Gap Global president Mark Breitbard: "What we're doing is restructuring the fleet, shifting and pushing more of the business to digital and growing (market) share in key categories…We've been overly reliant on low productivity, high rent stores." Fortune
AROUND THE WATER COOLER
Biden tax
Joe Biden has reassured America's hometown entrepreneurs that he won’t be taxing their businesses more. However, Fortune's Shawn Tully argues, his tax hike on those earning over $400,000 a year would leave small businesses "less money for opening another hair salon or restaurant and [undercut] their incentive to take chances, since once they reach a certain size, they'll pocket a lot fewer cents in profit for every dollar they invest." Fortune
Chinese pledge
How can China meet the climate pledge President Xi Jinping made a month ago? According to Yanzhong Huang of the Council on Foreign Relations, it would have to fundamentally change its governance system from one based on economic growth to one based on the rule of law. Fortune
British-shaped trade
The U.K. has officially signed its first post-Brexit trade deal, with Japan. British international trade secretary Liz Truss: "It used to be said that an independent U.K. would not be able to strike major trade deals or they would take years to conclude. But today we prove the naysayers wrong with this groundbreaking, British-shaped deal that was agreed in record time."
Social media
Is it helpful for social media platforms such as Twitter to act as referees in cases of alleged misinformation? Writing for Fortune, Cornell University political scientists Sarah Kreps and Douglas Kriner say an experiment they conducted suggests such efforts "may unintentionally further fan the flames of partisan polarization." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-23--Debate night was a tamer affair, as are stock markets today

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, Bull Sheeters. There’s still no progress on a stimulus deal, but there’s plenty of economic data, corporate and political news to focus on.
On that note, we’re a mere eleven days to the presidential election. More than 47 million Americans have already voted. That’s a record.
Meanwhile, U.S. futures have been trading sideways all morning. Stock gains have been muted for much of the past two weeks as investors brace for the likeliness there won’t be a stimulus deal before Election Day.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes were mostly higher in afternoon trading with Japan’s Nikkei up 0.2% .
were mostly higher in afternoon trading with up . Not long ago Chinese startup Renrenche was a darling, fetching unicorn valuation status and a roster of bluechip investors, including Goldman Sachs. Now it may need to sell its core asset for little more than 1,200 bucks .
was a darling, fetching unicorn valuation status and a roster of bluechip investors, including Goldman Sachs. Now it may need to sell its core asset for little more than . Goldman Sachs is hoping to finally put the 1MDB bribery scandal behind it after agreeing to pay nearly $3 billion in fines to settle the affair that started a decade ago in Malaysia. The settlement “includes the highest penalty ever under the Foreign Corrupt Practices Act,” Bloomberg reports.
Europe
The European bourses were flat at the open. And then Germany reported better than expected manufacturing data, lifting the euro and stocks. The Europe Stoxx 600 was up roughly 0.5% two hours into the trading session.
were flat at the open. And then Germany reported better than expected manufacturing data, lifting the euro and stocks. The was up roughly two hours into the trading session. Economists now predict the ECB will boost monetary stimulus by a further €500 billion —bringing the total to €1.85 trillion ($2.18 trillion)—as soon as next month to keep the COVID-stricken economy from falling into a deep recession .
—bringing the total to ($2.18 trillion)—as soon as next month to keep the COVID-stricken economy from falling into a deep . Daimler shares were up 1.7% in mid-morning trade after the carmaker revised upwards its full-year forecast thanks to solid growth in China.
U.S.
U.S. futures are in the red. That’s after the three major indexes eked out gains yesterday in incredibly volatile trade.
are in the red. That’s after the eked out gains yesterday in incredibly volatile trade. In premarket trading, Gilead Sciences shares were up as much as 7% after its remdesivir got FDA approval to treat COVID-19. As Fortune‘s Sy Mukherjee notes, remdesivir is “not a save-all” treatment, but the regulatory approval is significant.
after its remdesivir got FDA approval to treat COVID-19. As Fortune‘s Sy Mukherjee notes, remdesivir is “not a save-all” treatment, but the regulatory approval is significant. Shares in Tesla are flat in pre-market trading after a modest bump yesterday. Investors cheered the latest profit beat , but doubts linger over whether that will be enough to vault the EV maker into the S&P 500 .
, but doubts linger over whether that will be enough to vault the EV maker into the . Looking ahead: we get the latest batch of manufacturing data before the bell. Let’s see if it can match today’s rosy German numbers.
Elsewhere
Gold is up, trading just above $1,910/ounce .
is up, trading just above . The dollar is down.
is down. Crude is down. Brent continues to trade just above $42/barrel.
***
By the numbers
13K
We don’t talk often about Bitcoin and its ilk here on Bull Sheet, if only because there’s so much to say about equities and other asset classes. But cryptocurrencies are on a tear at the moment, and worth talking about today. Yesterday, Bitcoin hit a 16-month high, topping $13,100, after PayPal announced it would let users buy a handful of cryptocurrencies, including Ethereum and Bitcoin. As Fortune‘s Bitcoin specialist Jeff John Roberts notes, “Bitcoin is notoriously volatile (though considerably less so than during its early days), and it is often hard to identify single factors that explain price swings. While this week’s surge was almost certainly spurred in large part by the PayPal news, there may be other tailwinds driving the price up.” One theory is that investors are souring on the gold trade, and hopping on the crypto bull run.
-130.54
The Dow Jones Industrial Average closed yesterday at 28363.66—that’s a loss of 130.54 points (-0.4%) over the past five trading days. The stimulus rally continues to show signs of running out of gas. The three major exchanges have been trading in a tight range for much of the past two weeks—going sideways.
5 vs. 495
We’ve talked a lot here about the incredible 2020 bull run for the S&P Five, a.k.a., the FAAMG—Facebook, Apple, Amazon, Microsoft, Google—stocks. Their dominance appears locked in for quarters—and perhaps years—to come as they are not just out-growing the pack, they’re also out-investing the pack. According to Goldman Sachs, the cash-rich FAAMG quintet have a sizable edge in Capex and R&D spending, suggesting they’re sinking big sums into longterm bets while the laggards pull back. It also helps that FAAMG stocks are well ahead in plowing cash into buybacks and dividends, helping driving up their stock prices.
***
Have a nice weekend, everyone. I’ll see you here on Monday.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's read
Mind the Gap. "We're shrinking North American specialty stores and getting out of mall-based locations," Gap Global president Mark Breitbard told analysts yesterday. The retailing giant is exiting a total of 350 store locations in North America, leaving a giant hole in America's malls, reports Fortune's Phil Wahba.
A beat on labor. U.S. jobless claims fell to a level last seen in March when a wave of layoffs decimated the jobs market. After reporting 787,000 unemployment claims in the previous week—plus downward revisions in previous weeks—it appears as if the U.S. labor market is gaining important momentum leading into the end of the year. Let's hope the latest COVID wave doesn't derail this progress.
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Market candy
Quiz Time
President Trump again last night cited the stock market as a noteworthy example of his Econ bona fides. Out of the past four Republican presidents (including President Trump), which has seen stocks climb the highest during his presidency?
A) Ronald Reagan
B) George H.W. Bush
C) George W. Bush
D) Donald Trump
The answer is A, Ronald Reagan. According to LPL Research, the Dow's annualized return topped 11.3% during the Reagan years. George Herbert Walker Bush comes in second at 9.7%. Looking at all presidencies since World War II, the crown goes to Bill Clinton (by the same measure of Dow annualized return). Barack Obama would be No. 2.


fortune--2020-10-23--Huawei releases less information about its business as U.S. sanctions take effect

Under pressure from the pandemic and U.S. sanctions, Huawei Technologies is being less forthcoming about the state of its business.
“Throughout the first three quarters of 2020, Huawei’s business results basically met expectations,” the Chinese company said in a statement announcing its results for the first three quarters of the year.
In the first nine months, revenues at the beleaguered tech giant increased 9.9% over last year, amounting to $98 billion. The company’s net profit margin was 8%. But that’s all the information Huawei offered, declining to report revenue breakdown by segment as it did in its second-quarter report.
In its Q3 results last year, Huawei lauded its 26% increase in smartphone shipments and the growth of its Huawei Mobile Services ecosystem—an alternative to Android. (Huawei no longer has access to the Google operating system due to a U.S. embargo.)
Huawei, which launched its new Mate 40 flagship series on Thursday, hasn’t mentioned smartphone sales in any of its quarterly reports this year. Asked why smartphone shipments are absent from its Q3 report this year, a Huawei spokesperson said the company “will disclose additional business performance details in due course.”
According to market research firm Canalys, Huawei was the world’s leader in smartphone sales for the second quarter of 2020, marking the first time in nearly a decade that the top spot hadn’t been held by Apple or Samsung.
That impressive milestone was indicative of global decline in smartphone sales amid the pandemic. In the second quarter, Canalys reports, Huawei’s smartphone shipments contracted 5% compared with the same period in 2019. The company saw 8% growth in its domestic market in China, but 27% decline in international sales.
Samsung—the world’s leading smartphone seller in the first quarter—saw sales plummet 30% globally in Q2, leaving Huawei in the lead. But now that a U.S. blockade on Huawei’s semiconductor suppliers is in full effect, Huawei’s ability to maintain its lead is uncertain.
Thursday’s Mate 40 was the first phone launched since the U.S. cut off Huawei’s access to advanced semiconductors by prohibiting companies that use U.S. tech from supplying to the Chinese smartphone maker. It will likely be the last smartphone to use Huawei’s advanced Kirin chipsets.
Overall, the company’s revenue growth has slowed. Last year, Huawei reported a 24.4% surge in revenue for the first three quarters, compared with 9.9% this year. The company’s profit margin in the first three quarters last year was also slightly higher, at 8.7%.


fortune--2020-10-23--On corruption claims, Biden cites facts while Trump tosses unproven allegations

Halfway through the second and final debate of the 2020 presidential campaign on Thursday night, Donald Trump and Joe Biden engaged in a remarkable exchange: The two men went back and forth, each accusing the other of blatant financial corruption, mostly having to do with shady dealings in foreign countries.
Without any fact-checker on-site to hold Trump or Biden accountable for their statements, any unwitting viewer—say, your average, undecided, nonideological swing state voter—could be forgiven for thinking they were witnessing a debate between the two most corrupt candidates in American political history, such was the incendiary nature of the allegations being flung across the stage.
But all it would take is a little digging to recognize that most of Biden’s claims against Trump were based in factual reporting and raise serious questions about the integrity of a President who has violated numerous ethical norms during his time in office.
Trump’s accusations against Biden, meanwhile, bore the hallmarks of a politician whose relationship to the truth has proven tenuous at best: more hot air than smoking gun and characteristic of the propagandized, right-wing news environment that envelops the President and huge swaths of his base.
It all kicked off when Biden slammed Trump for his soft stance against foreign governments who are “interfering with American sovereignty”—namely, efforts by Russia and Iran to interfere with the U.S. election, as well as Russia’s bounty program against American troops in Afghanistan. “To the best of my knowledge, I don’t think the President has said anything to Putin about it,” Biden said of the Russian President whom Trump has been reluctant to criticize. “Any country that interferes with us will, in fact, pay a price.”
That set Trump off on a line of attack against Biden and his son, Hunter, who has recently been the subject of New York Post reports alleging unsavory dealings with foreign entities in Ukraine and China—articles based on evidence so dubious that at least one journalist at the Post refused to put his name on them.
The President repeated an unsubstantiated claim that Biden “got $3.5 million from Russia”—referring to unproved allegations that a firm cofounded by Hunter Biden once received a payment in that amount from Russian businesswoman Yelena Baturina as part of a “consultancy agreement.” Trump also brought up Hunter’s well-documented ties to Burisma, the Ukrainian energy company whose board he once sat on, despite no evidence of wrongdoing involving Hunter Biden or his father. (It was Trump’s urging of Ukrainian authorities to investigate the Bidens’ ties to Burisma that eventually led to Trump’s impeachment late last year.)
Such is the Trump campaign’s infatuation with Hunter Biden and his business dealings that, before the debate, it organized a press conference for Anthony Bobulinski, a former business associate of Hunter Biden’s who alleges that the former vice president was involved with his son’s Chinese ventures. On Thursday night, the Wall Street Journal reported that it had reviewed corporate records that show no involvement by Joe Biden in any such dealings.
On the debate stage, Biden was quick to brush off the President’s attacks, declaring in no uncertain terms that he has “not taken a penny from any foreign source ever in my life.” And he was happy to return fire—bringing up the President’s “secret bank account in China,” which was revealed for the first time this week in a New York Times report.
Unlike Trump, Biden’s allegations against the President have their basis in fact—specifically, vetted claims, made by a publication of record, which were confirmed by the President’s own attorney. And Biden was also right to note that his own financial dealings are significantly more transparent than Trump’s, as he has released “22 years of my tax returns” to the public while Trump has yet to voluntarily disclose “a single, solitary year.”
“Release your tax returns, or stop talking about corruption,” Biden shot at the President.
Trump, for his part, professed he has “many bank accounts, and they’re all over the place”—not the most convincing defense for any public servant attempting to dispel allegations of financial conflicts. More importantly, Trump lied in declaring that the Chinese bank account in question “was closed in 2015”; in fact, the Times’ reporting indicates that the account is still open, as confirmed by Trump’s own lawyer.
Still, the President was happy to act as though his opponent was the truly corrupt one on the stage Thursday night. Alluding to special counsel Robert Mueller’s costly investigation into the Trump campaign’s ties to Russia in 2016, Trump insisted to Biden: “I guarantee if I spend $1 million on you, I could find plenty wrong.”
But Biden, speaking from a position of fact, would not be moved. “The guy who got in trouble with Ukraine was this guy, trying to bribe the Ukrainian government to say something bad about me,” Biden said of the President. “The only guy who’s made money in China is this guy.”


fortune--2020-10-23--There’s no reason to believe Trump will protect pre-existing conditions

During Thursday’s presidential debate, President Donald Trump claimed that he would protect a provision in the Affordable Care Act that prevents health insurers from denying coverage to people with pre-existing conditions.
“Pre-existing conditions will always stay,” Trump said onstage. “What I would like to do is a much better health care, much better, will always protect people with pre-existing. So I’d like to terminate Obamacare, come up with a brand-new beautiful health care.”
This statement flies in the face of the actions Trump has actually taken during his presidency. For one, he is responsible for legislation that allows the sale of cheap, lightly regulated insurance plans that are not required to cover sick patients. Other, unsuccessful legislation he has supported would erode many of the core protections of the pre-existing provision. His administration is also gearing up to argue before the Supreme Court in November that the Affordable Care Act is unconstitutional—despite having no plan for a replacement. More than 20 million Americans currently rely on Obamacare for health insurance coverage.
Repealing the Affordable Care Act would have consequences extending far beyond that. In a court brief filed by a bipartisan group of economists and health care experts, the scholars wrote that “billions of dollars of private and public investment—impacting every corner of the American health system—have been made based on the existence of the ACA,” and that abolishing the law “would upend all of those settled expectations and throw health care markets, and one-fifth of the economy, into chaos.”
The President did recently sign an executive order pledging to protect pre-existing conditions, but an executive order is not legislation and has no power in the court of law. If the Affordable Care Act was outright eliminated—which is exactly what the Trump administration is trying to accomplish in the Supreme Court—the order would do nothing to force insurers to protect patients with pre-existing conditions.
Democratic nominee Joe Biden targeted Trump on this posturing during the debate, saying, “I guess we’re going to get the pre-existing conditions plan at the same time we’ll get the infrastructure plan,” in reference to Trump’s promises earlier in his presidency to spend $1 trillion on improving American infrastructure.
The former Vice President said that he would expand upon Obamacare, referring to his new health care policies as “Bidencare.” He plans to expand eligibility for financial assistance within the Affordable Care Act marketplace; cap premiums at 8.5% of a family’s income; and uphold the pre-existing conditions provision.
During the debate, Biden also picked up on a key point regarding the ongoing coronavirus pandemic: Those who tested positive for COVID-19, even if they made a full recovery, would qualify as having a pre-existing condition. More than 8 million people in the U.S. have tested positive for the virus, potentially resulting in drastic impacts on the American health care system should the Affordable Care Act be repealed without a replacement.
That means Trump himself now has a pre-existing condition. He may also have a policy in mind to protect those like himself should the Affordable Care Act be eliminated, but as of now, he’s done nothing to indicate that’s true.


fortune--2020-10-23--Trump’s debate strategy: Blame Biden for not being President in 2009

As President Donald Trump and former Vice President Joe Biden faced off Thursday evening in their last debate before the presidential election, their disparate strategies to appeal to undecided American voters became very clear: Biden presented his vision for the future of the country, and Trump attacked Biden.
Trump took many opportunities through the night to paint himself as an outsider and Biden as a Beltway stalwart. The President repeatedly refuted Biden’s policy discussion by pointing out that he had “eight years with Obama” to accomplish his proposals and didn’t get them done.
“Just a typical politician,” he said of Biden early in the evening. During a question about criminal justice reform Trump used his time to ask Biden why he hadn’t already enacted his newly proposed legislation while in office four years ago. “You’re all talk and no action,” he said before explaining that he ran for the presidency specifically because of the failures of the Obama administration. Trump also ran in 2000, when Obama was a member of the Illinois State Senate.
The strategy was a strange one for a sitting President, the holder of the most powerful title in U.S. politics, but it forced Biden to backtrack and defend his record while explaining why he didn’t accomplish his 2020 presidential vision while he was vice president in 2016.
Biden, at first, said that he wasn’t the President and that his job was to aid and support President Barack Obama and his decisions. Later, he argued that it was a Republican Congress that tied his and Obama’s hands.
During the Obama administration, Senate Majority Leader Mitch McConnell and the GOP made a “no compromise pledge” to “kill, stop, or slow down” any piece of legislation the White House backed or court seat Obama attempted to fill. “The single most important thing we want to achieve is for President Obama to be a one-term President,” McConnell said of Obama in 2010.
The attacks from Trump came just one day after Obama joined Biden on the campaign trail in Philadelphia. “For eight years, Joe was the last one in the room when I faced a big decision,” Obama said. “He made me a better President. And he’s got the character and experience to make us a better country.”
Trump has long attacked Obama as part of his campaign, but the former President’s incredible popularity and favorability make him a dangerous target. Obama currently has a 58% approval rating. He typically laps Trump in popularity and was ranked by Americans as the “best President of the last 40 years.”
Biden has long spoken about his close working relationship and friendship with the former President while stumping. “I’m proud of having served with him. I’m proud of the job he did. I don’t think there is anything he has to apologize for,” Biden said of Obama after his record was attacked during last year’s primary debates.


fortune--2020-10-23--The electric car frenzy is helping even troubled companies raise big money

Trump claims at debate that China is paying for farm subsidies .
In fact , U.S. taxpayers are footing the @

The conventional path to taking a company public is pretty simple: demonstrate some early success, then sell shares for capital that can be used to expand. This year, electric vehicle startups have gone public in droves on those terms, with multibillion-dollar valuations doled out to innovators like QuantumScape, a battery developer, and Hyliion, which makes electrified powertrains for freight trucks.
EVs are so hot right now that startups don’t need to be particularly promising or novel to nab funding. Raising money before turning a profit is no longer particularly notable, but when it comes to EVs, years of outright failure are apparently just fine by some investors.
The latest example came early this month when EV startup Faraday Future announced that it is negotiating to go public via a Special Purpose Acquisition Company or SPAC. The company aims to raise $850 million to fund its first commercial electric car. SPACs, also known as “blank check companies,” are a quick path to public fundraising that has seen a massive surge in popularity this year, particularly in the EV realm, largely because the method is faster than a conventional initial public offering.
But that speed—which entails somewhat less financial transparency and public scrutiny than a traditional IPO—may not serve investors well. After all, Faraday has already burned through $2 billion without producing a vehicle, thanks to a variety of financial and operational problems.
But Faraday wouldn’t be alone: Two other EV companies with checkered histories, Fisker and Karma Automotive, have secured or are pursuing major new funding. It’s a remarkable indicator of the promise investors see in EVs—or, maybe, of a market craze that has lost touch with reality.
Faraday’s failure
If and when Faraday Future hits public markets, it will bear a huge legacy of mismanagement and alleged deceptive behavior by its founder, Jia Yueting.
Jia started Faraday Future in 2014 using funds from his massive China-based conglomerate, LeEco. But as early as 2016, Faraday was wracked by problems including unpaid bills, canceled factories, and an opaque relationship with LeEco’s EV effort that reportedly drew resources away from Faraday’s own work.
Some of those problems stemmed from problems at Jia’s other company; LeEco was at the time relying on huge debt, much of it drawn from China’s “shadow banking” sector, to fund aggressive expansion. That bet went very badly: LeEco has since gone through massive layoffs and shed many of its subsidiaries.
Most shocking of all, it soon became clear that Jia was personally on the hook for a staggering $3.6 billion worth of liabilities stemming from LeEco’s collapse. That led Jia to declare personal bankruptcy, but his creditors accused him of using a variety of deceptions to hide assets and escape his debts.
Fisker’s bad Karma
Fisker hasn’t dealt with anything like the chaos at Faraday, but it is tarnished by arguably avoidable failure. The company in July announced plans to go public via a SPAC and raise around $1 billion at a $2.9 billion valuation. But Fisker is the second electric vehicle startup from founder Henrik Fisker—and the first, Fisker Automotive, was a flop.
Fisker Automotive was founded in 2007 and collapsed by 2013 after the failure of its first model, the luxury gasoline-electric hybrid Fisker Karma. Though widely praised for its design, the vehicle suffered from inconsistent production quality, supply chain problems, and technical issues. Only about 2,000 were ever produced.
The remains of Fisker Automotive were sold to a Chinese auto-parts maker and spun out as Karma Automotive. Karma Automotive has since produced a rebranded version of the Fisker Karma, now known as the Karma Revero, though in small quantities; only about 1,000 Karma Reveros were reportedly sold in 2019. But Karma Automotive, too, recently announced plans to go public, aiming to raise $300 million in an IPO.
What changed?
So what has changed to help investors look past these companies’ troubled roots?
“Even with all of the internal and external forces we’ve encountered, we are still moving forward,” said John Schilling, a spokesperson for Faraday Future, of the company’s prospects. The $2 billion invested so far, he says, positions Faraday well for the future: “We have our own technology…robust manufacturing capabilities, and can begin production quickly.”
But the most significant change at Faraday is that Jia Yueting no longer owns shares in the company. Jia’s power had been cited as a significant deterrent to new investors, given his track record, but he gave up his ownership stake as part of his personal bankruptcy. He does still have a significant role at Faraday, though, as its “chief product and user-eco officer.”
Despite the failure of the Karma, Fisker’s baggage isn’t nearly so heavy. The Karma was a real trailblazer, hitting the market before the Tesla Model S. And a Fisker spokesperson emphasized that “the company we’re building today draws on all of the lessons learned from the past.”
Among other things, that has meant shifting focus from a high-end sports sedan to a mid-market all-electric SUV, expected to go on sale in 2022. Fisker recently signed up contract builder Magna Steyr, which also produces EVs for the likes of Mercedes-Benz and Toyota, to produce the car. And unlike Faraday, Fisker says it already has enough funding to produce its debut vehicle, describing its fundraising as “another way to de-risk.”
In September, Karma Automotive announced a major transition of its own. It plans to roll out a new slate of fully electric vehicles, including a pickup and SUV, starting in 2021. It has also added some notable talent, including chief operating officer Kevin Pavlov, formerly of Magna.
Broader market changes have also made EVs generally more appealing to investors. In September, California declared that all cars sold in the state must be zero-emission—primarily meaning electric—by 2035, which can be expected to expand the EV market substantially. And continued declines in the cost of batteries could soon make EVs price-competitive with gas-burning cars and trigger a rapid, market-wide shift to EVs.
But really, Fisker’s and Faraday’s ability to raise money hinges on one word: Tesla. Elon Musk’s company has seen a staggering stock run-up over the past 12 months, as the idea of an EV-dominated future catches on. Fisker, Faraday Future, and Karma Automotive all acknowledge that the active investment market influenced their decision to pursue a public offering right now. As long as the EV growth story holds up, investors will likely be happy to hand over money to other EV makers, even if their halos are slightly tarnished.


fortune--2020-10-23--Despite Trump’s claims, the Dept. of Defense doesn’t plan to lead vaccine distribution

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President Donald Trump doubled down on his optimism that a COVID-19 vaccine for the masses is just around the corner during Thursday night’s final presidential debate with former Vice President Joe Biden. That flies in the face of what most experts, including senior Trump administration officials, have said, as debate moderator Kristen Welker noted.
But Trump insisted that he believes in a more accelerated timeline that can be boosted by the U.S. military, which would ostensibly help deploy tens of millions of doses to the general population once a vaccine clears regulatory hurdles.
“You have said a vaccine is coming soon within weeks now. Your own officials say, ‘It could take well into 2021 at the earliest for enough Americans to get vaccinated,’” said Welker.
“No, I think my timeline is going to be more accurate. I don’t know that they’re counting on the military the way I do, but we have our generals lined up, one in particular that’s the head of logistics, and this is a very easy distribution for him. He’s ready to go,” Trump responded. “As soon as we have the vaccine—and we expect to have a 100 million vials—as soon as we have the vaccine, he’s ready to go.”
While it’s true that the military may be involved in transportation of some vaccine doses, practical logistics suggest it won’t be at nearly the scale that Trump suggested in the debate and has repeated multiple times in the past.
For one thing, distribution of any COVID vaccine will likely be dictated by need through a tiered prioritization strategy. The U.S. Centers for Disease Control (CDC) and National Institutes of Health (NIH) commissioned a framework for equitable distribution of the COVID vaccine by the National Academies of Sciences, Engineering, and Medicine.
That initial framework recommends, in its delivery and allocation section, that the Department of Health and Human Services (HHS) build “the capacity and systems to collect and integrate the necessary data (digital and other) from public health and private providers of care to facilitate the identification and monitoring of people with pre-existing conditions and other high-risk characteristics” for the first tranche of people to receive a vaccine.
Theoretically, a military jet could help in this transport system. But there are myriad complexities involved given the nature of a coronavirus vaccine. Many vaccines currently under development, including from drug giants like Pfizer and smaller biotechs like Moderna, would need to be refrigerated at temperatures as low as negative 112 degrees Fahrenheit. Others, such as one under development by Johnson & Johnson, could eventually be stored at conventional fridge temperatures for up to three months.
While Air Force cargo jets could be equipped with the proper refrigeration units to transport ultracooled vaccines (in collaboration with the companies developing them), there’s another logistics dilemma: transferring these highly sensitive materials from a manufacturing site or truck to units on a military plane.
That process could possibly taint the product, which is why experts note that a more realistic option is likely relying on supercooled cargo trucks that can transport a COVID vaccine directly to a medical center that has its own specialized infrastructure.
The Defense Department itself said as recently as late September that it doesn’t expect the military to be involved in vaccine distribution in any large-scale fashion. In a statement to the trade publication American Shipper, a Pentagon spokesperson said that “DOD-required support would be by exception,” noting that “military air assets may be called upon to deliver vaccines to a remote location only if no other means of transportation is feasible.”
On a broader level, Trump’s suggestion that a vaccine will be instantly available once granted FDA authorization or approval defies practicality and the nature of rolling out a vaccine in less than a year. Much like coronavirus testing, high-risk patients and frontline workers will be prioritized before the broader populace will be able to get their shots, likely sometime next year.


fortune--2020-10-23--AstraZeneca cleared by U.S. regulators to resume COVID vaccine trial

AstraZeneca Plc, the U.K. drugmaker developing a Covid-19 vaccine with the University of Oxford, has been cleared by U.S. regulators to restart a trial halted in the country for more than a month on concerns about a volunteer who became ill.
The U.S. Food and Drug Administration authorized the trial to resume Friday, according to statements from AstraZeneca and Oxford. The FDA reviewed data from global studies and decided it was safe to begin testing again, the partners said.
The decision removes a significant impediment for the partners trying to get their coronavirus shot across the line. They are among the front-runners in the global quest for a vaccine, along with developers such as Pfizer Inc. and Moderna Inc. Astra’s U.S. trial will test the shot on 30,000 volunteers, taking the total number of participants in advanced trials for the jab to 50,000, according to Oxford.
“We should be reassured by the care taken by independent regulators to protect the public and ensure the vaccine is safe before it is approved for use,” Pascal Soriot, the drugmaker’s chief executive officer, said in a statement. This “allows us to continue our efforts to develop this vaccine to help defeat this terrible pandemic.”
A representative for the FDA didn’t immediately respond to a request for comment.
Unprecedented speed
Trials of the Astra-Oxford vaccine resumed weeks ago outside the U.S., in countries including the U.K., South Africa and Brazil. Symptoms that prompted the partners to pause the studies were unlikely to be linked to the shot, or there was insufficient evidence to say for sure, according to documents sent to participants. The safety reviews began after volunteers developed unexplained neurological symptoms including limb weakness or “changed sensation,” a document posted by Oxford shows.
Tests to decide whether experimental Covid-19 shots are safe and effective are progressing at an unprecedented speed as drugmakers and governments look for a way out of the crisis. The virus has continued to advance, killing more than 1.1 million people worldwide.
Results from the late-stage trials of the Astra-Oxford shot are expected later this year, and will depend on local rates of infection where the studies are taking place, according to Astra.
The British pharmaceutical company faced a flurry of headlines this week when it emerged that a participant in the Brazil vaccine trial had died. It was quickly determined the volunteer was in the control arm of the study and hadn’t received the shot. Brazil’s health authority said an international committee had reviewed the event and the trial would continue.
Another vaccine maker, Johnson & Johnson, said in mid-October that it would pause its trial to investigate an illness in a study participant. Operation Warp Speed head Moncef Slaoui said in an interview earlier this week that both the Astra and J&J trials could resume in the coming days.


fortune--2020-10-23--Here’s how to find best turnip prices ever on  ‘Animal Crossing’

Animal Crossing: New Horizons players for the next few days will be able to sell their turnips, a key commodity in the video game, for the highest price ever.
Animal Crossing is a hugely popular video game, designed by Nintendo and exclusive to the Switch platform, in which players farm, gather items, and build island homesteads. The favorable exchange rate means that some players will be able to turn big profits on their stashes of the digital root, and use them to buy virtual clothes, furniture, and other in-game accessories.
During the promotion, players will be able to collect 1,000 bells for each turnip. Usually, turnips only sell for 15 to 650 bells each.
The deal will only be available on Ally Island, a location in the game created by digital bank Ally Financial. It’s part of a well-known mini-game within Animal Crossing called the Stalk Market that involves buying and selling turnips. The basic goal parallels that of the real-world stock market: Buy low, sell high.
Through those sales, players collect in-game currency called bells, which can be used to upgrade their characters or islands. Players can also use their earnings to pay off the large mortgages they begin the game with.
To access Ally Island and collect those bells, players must get a code from Ally’s landing page at Turnip.exchange. Turnip sales will be offered starting at 9 p.m. ET on Oct. 23, then during daily windows from 6 p.m. to 11 p.m. ET weekdays and noon to 6 p.m. ET on weekends, through Oct. 27.
Ally said it will manage the anticipated queue of players waiting to reach Ally Island. If there’s substantial demand, players could end up waiting for quite a while.
It may seem strange that Ally, a company offering mortgages and corporate lending, is promoting itself through a game that is aimed at children. But the company’s chief marketing officer, Andrea Brimmer, said that many players are in their late thirties.
“We like the idea that we can use it to teach financial literacy,” she told Fortune. “The entire game is about managing your finances well.”


fortune--2020-10-23--Is it time for a new agency to oversee Big Tech? Many say yes

The Justice Department’s decision to sue Google this week elicited mixed reactions, but there’s one point on which everyone agreed: The antitrust case will take years to play out. There are various reasons for this—from the complexity of the case to Google’s vast legal resources to the sluggishness of the judicial process—but the upshot is that the search giant will be able to conduct business as usual for the foreseeable future.
Not everyone is satisfied with this situation. As the New York Times reports, a growing number of influential figures, from law professors to former regulators, are calling for a different approach. Concluding that antitrust law is simply too slow, they believe it’s time for a new body to oversee tech behemoths like Apple, Facebook, Google, Microsoft, and Amazon. From the Times:
“A more rapid-response approach is required, they said. One solution: a specialist regulator that would focus on the major tech companies. It would establish and enforce a set of basic rules of conduct, which would include not allowing the companies to favor their own services, exclude competitors or acquire emerging rivals and require them to permit competitors access to their platforms and data on reasonable terms.”
As the Times notes, the idea of a specialized regulator for certain sectors or companies is hardly unprecedented. The Federal Aviation Administration oversees airlines, for example, while the Food and Drug Administration regulates pharma companies, and the Federal Communications Commission watches over the likes of AT&T and Verizon. Meanwhile, the government singles out certain financial institutions for special regulation on the grounds of their size.
Among those calling for a specialized regulator for Big Tech is Jason Furman, a Harvard University professor who is advising the U.K. government on creating a new body to oversee digital utilities. Furman describes himself as a “small ‘c’ conservative,” and the Times points out that he and other advocates for a new regulator are hardly progressive firebrands.
Currently, the tech giants aren’t free from regulation, of course. The Federal Trade Commission has a sophisticated team of technical staff and has repeatedly launched into Facebook, Google, and others for a variety of misdeeds, including privacy violations. That said, the FTC also appears to lack the legal tools to bring the tech firms to heel. Its primary tool—so-called consent decrees—don’t allow the agency to impose fines for a first offense and, when a company violates those decrees, the penalties haven’t been enough to change their behavior.
A new agency that is both nimble and specialized could thus be just the tool to prevent the tech behemoths from abusing their monopoly positions. But not everyone is in favor of the idea. Zephyr Teachout, a law professor at Fordham University and an influential tech critic, warned that those advocating for the idea may have other agendas:
This needs translating.
The named experts pushing a special tech regulator instead of antitrust enforcement are:
1. Furman, infamous neoliberal Walmart booster.
2. Morton, a paid consultant to Amazon and Apple.
2. Kimmelman of PK (funded by big tech)https://t.co/CTMaJdB7QR — Zephyr Teachout (@ZephyrTeachout) October 22, 2020
Teachout goes on to note that the scope of a Big Tech regulator’s authority would be uncertain and that the agency would be prone to being captured by powerful tech lobbyists (something that many claim occurred at the FAA in the wake of the 737 Max air disasters).
Other critics of the proposal claimed that antitrust law is an effective tool so long as political leaders are willing to deploy it:
Re this article…antitrust hasn’t worked because it’s been stuffed in a closet for the last 40 years!(!!)
Grateful for leaders like @RepCicilline who are demonstrating how antitrust + reg is essential for restoring fair competition and democracy itself. https://t.co/gmHt11EDL5 — Sarah Miller (@sarahmillerdc) October 22, 2020
The tweet cites Rep. David Cicilline (D-R.I.), who led a landmark new report on anticompetitive activities by big tech companies, and who this week called for an end to an “era of weak enforcement” in antitrust.
Others, however, praised the idea for a new regulator. Karen Kornbluh, an executive with the influential policy group GMF Digital, noted that such calls are consistent with a recent report she coauthored that claims a new breed of regulator is required to check the abuses of big tech companies.
Ultimately, though, it would fall to Congress to create any Big Tech regulator and, for now, there appears to be little momentum to do so.
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fortune--2020-10-23--Lead poisoning affects 1 in 3 kids worldwide—but it’s not too late to act

We write with good news concerning a fresh effort to combat a threat to global health that will claim more than 900,000 lives this year. Because symptoms are not always visible, the danger posed by this threat is insidious. Even when not fatal, it contributes to poverty, undermines human potential, and hurts communities.
Yes, COVID-19 is such a menace, but not the only one. So, too, is exposure to lead-based pollution. Human use of lead is pervasive. Across the globe, people are exposed to lead in the water they drink, the air they breathe, the food they eat, the soil they till, and the ground on which they walk.
Lead poisoning is neither infectious nor as fast-acting as the coronavirus, but recent research shows its deadly impact. More than 800 million children—one in three worldwide—have levels of lead in their blood that could affect their brain development and slow their ability to learn.
Boys and girls under the age of five are at greatest risk. The consequences for them are both life-altering and lifelong, and can include a decline in intellectual development, behavioral changes, and a heightened risk of damage to the heart and kidneys. There are economic consequences as well, with lead exposure in children causing an estimated $1 trillion in lost economic potential.
A young boy washes pieces of metal collected from a dump on the banks of the Buriganga River in Bangladesh in 2007. Shehzad Noorani—UNICEF/UNI9918
What, then, is our good news?
Lead can be safe if it is recycled and used properly, and exposure to lead poisoning can be prevented. Especially in middle- and upper-income countries, concerted action in prior decades has done much to reduce the harm caused by lead-based gasoline and paint.
However, while paint and fuel are no longer a threat in most parts of the world, lead acid batteries are now the leading cause of lead contamination. As the number of vehicles—which require multiple lead acid batteries over their lifetime—has spiked across low- and middle-income countries in the past 20 years, so has the risk of lead pollution.
An estimated half of these batteries end up in the informal recycling sector, where they are broken apart and smelted, causing lead particles to leak into the environment. This is how they make their way to children: Children play with lead; they breathe it in; their parents unknowingly bring it home on their clothes.
It is not too late to act. That is why today, we are drawing attention to a new partnership, the Protecting Every Child’s Potential Initiative, aimed at addressing this problem in an urgent and comprehensive fashion. It brings together Unicef, the United Nations’ leading children’s agency; Clarios Foundation, the philanthropic arm of the world’s largest manufacturers and recyclers of lead acid batteries; and Pure Earth, a global leader in cleaning up toxic pollution. (Clarios is a client of Albright Stonebridge Group.)
The initiative’s goal is to mobilize collective measures to reduce lead exposure through heightened awareness, community action, technical assistance, and collaboration across societies and sectors. The steps that participants will support include enhanced education, testing, and monitoring, the elimination of unsafe lead recycling and smelting activities, and the cleanup and rehabilitation of toxic sites.
The aim is to influence better global, regional, and national legislation and policy, including the enforcement of environmental regulations for smelting operations. Outreach of all kinds will play a major role, especially in ensuring that local communities understand their own stake in creating a safer and healthier environment for their young people.
A young girl searches for metal in a pile of garbage on the bank of the Buriganga River in Bangladesh in 2007. Shehzad Noorani—UNICEF/UNI9919
The initiative is based on a simple, unsurprising fact. Global progress on health issues depends on the shared efforts of the public and private sectors. We have seen this truth demonstrated repeatedly when countering polio, HIV/AIDS, malaria, Guinea worm, and now COVID-19. It is only common sense to combine the resources and know-how of government, business, and civil society. Together we can move rapidly to identify and correct the causes of suffering.
While COVID-19 is the most dramatic public health issue facing the world right now, it should not detract from our awareness and determination to confront other threats. Lead poisoning is affecting children on a massive scale, silently wreaking havoc on their health and development, with possibly fatal consequences.
We know what we must do to halt this insidious threat. Together, governments, businesses, and philanthropies can and should make a difference. The Protecting Every Child’s Potential Initiative can help point us all in the right direction, but it cannot succeed alone. It will need, and it will deserve, the support and cooperation of us all.
Madeleine Albright served as U.S. permanent representative to the UN (1993–97) and U.S. secretary of state (1997–2001), and is currently chair of Albright Stonebridge Group, a global strategic advisory firm.
Henrietta Fore is the executive director of Unicef.


fortune--2020-10-23--The  debate gave Trump a bump in a crucial swing state, betting data suggests

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Few pollsters or pundits figured Thursday night’s presidential debate to prompt a significant shift in betting odds or in the polls that strongly favor a Joe Biden victory over President Trump. And that “no big deal” scenario appears to be the outcome. At mid-morning on Friday, Biden’s big lead on the gaming sites where bettors wager instantaneously on how the Nashville duel is moving voters stood virtually unchanged from the moment the two candidates took the stage.
But in the crucial battleground state that’s a must-win for Trump, the President got a notable bump. “For me, Pennsylvania is the whole election,” says Paul Krishnamurty, a professional gambler and an election expert for the U.K. site Betfair. “Trump won’t win in Michigan or Wisconsin, so without Pennsylvania, he has no path to victory.”
It’s a gauge of Pennsylvania’s importance that the betting odds of him winning that state and the betting odds of him winning the election have mirrored each other closely (with both bouncing around between 35% and 40% of late). As the Keystone State trends, so do Trump’s odds, almost point by point. In betting on scenarios in which the election is decided by a single state, Pennsylvania is also handicapped as twice as likely to be the decider than second-place Wisconsin.
In recent days, Trump’s poll numbers in the Pennsylvania were dropping, and that drag was the principal reason for his dwindling prospects on the political gambling sites. But last night’s debate saw a shift in Trump’s favor. Minute-by-minute data provided to Fortune by the major betting site PredictIt shows that the shift started in the last 20 minutes of the debate, when Trump and Biden clashed over energy. In the contest’s most dramatic exchange, Trump demanded, “Would you close down the oil industry?” Biden parried, “I would transition from the oil industry.” Trump fired back, “That’s a big statement,” and the former vice president declared, “That is a big statement.”
Minutes later, Biden added, “The oil industry pollutes significantly. It has to be replaced over time.”
Trump was obviously hoping to goad Biden into going big by taking a clear, outspoken position on his opposition to fossil fuels. That’s what happened. The question is whether the former VP’s double-down will galvanize even more of the hundreds of thousands of Keystone State voters whose livelihoods depend on fracking to go to the polls on Nov. 3. And if those voters turn out in force, will Biden win enough votes in the Philadelphia suburbs, where people like his climate-friendly policies, to offset all or most of any losses in the Western coal regions?
It’s instructive to compare betting odds on both the national scale and for Pennsylvania before and after the debate. On PredictIt, at 9 p.m. Eastern time, just before the two candidates faced off, Biden was the favorite by 61% to 39%. At 11 a.m. on Friday, the numbers were precisely the same, holding Biden’s edge pretty much where it’s been for the past couple of weeks. In the RealClear Politics average of gaming sites, Trump got a tiny lift, going from 35.4% to 36.3% from Oct. 22 to 23. Betfair gave Trump his biggest boost, but that two-point lift raised his line to just 34%.
In Pennsylvania, however, Trump gained ground—albeit in more of a shuffle than a jump. The morning of the debate, Biden led Trump on PredictIt by 64.5% to 35.8%. By the end of the debate at 10:30 p.m. ET, his advantage had shrunk, 63.1% to 37.9%. By Friday morning, the President hit almost 39% to Biden’s 61%, though Trump had fallen back to 37.5% by noon. Still, the President had gained almost two points from his pre-debate numbers.
It’s fair to wonder if the “I’m for fossil fuels” boost would have to be far bigger if Trump is to win reelection.
Krishnamurty thinks that Trump made some progress in Pennsylvania: “He did much better than in the other debate, and Republicans are delighted that they get a dividing line from Biden on energy. That was smart politics.” But he notes that “Biden did a competent job of appearing a vanilla, stable, unifying candidate.” He forecasts that Biden will carry Pennsylvania, “the decider,” despite Trump’s gains there from the debate.
So Krishnamurty doesn’t see a surge in momentum in the Keystone State that could put Trump over the top. Charlie Gerow, a top Republican strategist who heads Harrisburg consultancy Quantum Communications, sees it differently. He believes a Trumpian wave that was already underway will hit a new gear because of what he characterizes as Trump’s checkmate in the debate. “Joe Biden’s war on oil and natural gas is a political killer for him,” says Gerow. “We’re taking about 1 million endangered jobs.” So far, the shift to Trump is small. Still, as Gerow says, the issue is large in the state that matters most. The betting odds will soon be showing us how large.


fortune--2020-10-23--Looming trade secrets decision may be ‘catastrophic’ for Ford and Volkswagen’s EV ambitions

Update Oct. 26: The USITC has announced it will delay a decision in the LG Chem/SKI matter until December 10, a move widely seen as a blow to LG Chem.
The U.S. manufacturing plans of major South Korean electric vehicle battery maker SK Innovation (SKI) could be upended if the company is slapped with the harshest penalty possible in a trade theft case.
The decision, to be announced by the U.S. International Trade Commission (USITC) as soon as Monday, could in turn seriously disrupt the electric vehicle ambitions of Ford and Volkswagen, which have signed deals to use SKI’s batteries in upcoming cars. It could also jeopardize a $2.6 billion battery factory that SKI is building in Georgia, funded in part by huge tax rebates.
The commission ruled in March that SKI, whose customers for EV batteries also include Hyundai-Kia and Mercedes-Benz, had stolen trade secrets for years from competitor LG Chem. In a parallel lawsuit in Delaware federal court, LG alleged that SKI had hired 100 LG engineers and researchers who were then required to provide detailed information about LG’s production and engineering.
Poaching talent from competitors is common in the tech industry, but using hiring to steal technical details is illegal. SKI seems to have been aware of that distinction. It destroyed internal emails, later recovered, in which its employees discussed LG technology in detail. SKI’s evidence tampering led the USITC to issue what’s known as a default judgment in the case, effectively deciding in LG’s favor without a full trial.
The legal drama is part of LG and SKI’s broader battle for the EV battery market, which is expected to grow dramatically over the next decade. LG executives believe that SKI won contracts over LG Chem because, without comparable R&D expenses, it could sell its batteries more cheaply. One veteran of the Korean battery industry said in 2019 that the damage to whoever lost the legal battle could be “fatal.”
SKI’s contracts make the stakes of the USITC’s pending decision that much more critical. They include deals to provide batteries for planned EVs from Volkswagen and Ford, whose plans could be disrupted by a harsh penalty. SKI is also nearly finished construction on a battery factory in Commerce, Ga., attracted to the area with $300 million in tax incentives and land donated by the local government. Those incentives were driven by SKI’s promise to create thousands of new jobs in Georgia. But an adverse ruling from the ITC could prevent SKI from ever operating that plant as intended.
Those conditions have made the LG-SKI suit politically complex. Georgia legislators and SKI customers have advocated leniency, arguing that punishing SKI could damage partners who had no role in or knowledge of SKI’s violations.
Possible outcomes
The impact of its decision, however, may not matter much to the USITC, a federal body with the power to adjudicate trade disputes. While the risk of collateral damage would hold significant weight in the sentencing phase of a conventional criminal or civil court proceeding, experts say the USITC’s mandate and structure makes leniency less likely.
“The ITC, unlike courts, tends to award exclusion orders once it finds a violation,” says Mark Lemley, an intellectual property law specialist at Stanford University. “That’s the one thing they can do.”
One possible ruling would block the import of any product built using stolen trade secrets, such as batteries built by SKI abroad. It could also halt the U.S. production of batteries using stolen techniques and prevent the import of products that integrate infringing components. That means that cars built with SKI batteries could be blocked from import into the U.S.
ITC orders can be imposed for decades. LG is hoping for a 10-year exclusion order. But an order of as little as five years could be devastating to SKI’s battery business, since automakers are in the midst of planning huge new slates of EVs and long-term supplier relationships.
It may seem strange that the USITC is poised to issue a potentially harsh punishment on the basis of a default judgment, rather than a full hearing of the case. But there is a recent precedent that does not bode well for SKI. In 2018, the USITC imposed a 25-year exclusion order based on a default judgment against Organik Kimya, a chemicals firm that destroyed evidence after being accused of trade secrets theft by Dow Chemical.
LG and SKI could reach a compromise outside the courtroom. “Oftentimes after you get an injunction, it’s a bargaining chip,” says Lemley, “and then the companies settle.” LG Chem, for instance, could let SKI license its technology in exchange for a large cash payment. An LG executive, who did not want to be identified as commenting on pending legal matters, told Fortune that LG has been negotiating with SKI over a possible settlement, but that those negotiations have so far been unsuccessful.
A SKI spokesperson maintains that SKI is “confident in our case before the ITC. We also are committed to doing everything within our power to ensure the SK Innovation battery site in Georgia produces the batteries needed by our customers.” That could, SKI says, include appealing the pending penalty decision in federal court. But when Organik Kimya pursued an appeal in its similar case, the USITC order was upheld.
SKI does have one other possible savior: Donald Trump. USITC decisions are subject to a 30-day review during which the President can overturn them. Lemley says such intervention is rare and is usually driven by serious worries about public health and safety rather than business or financial concerns.
Lemley also notes that the Trump administration “does not strike me as likely to think access to battery electric-vehicle technology is important and essential.”
“Collateral damage”
USITC board members are political appointees—of the current board, three were nominated by President Trump and two by former President Obama—and experts say they may be swayed by political pressure. That pressure is particularly strong from Georgia legislators, including Rep. Doug Collins, who initially argued that a harsh penalty would cost U.S. jobs at the plant in Commerce, run by subsidiary SK Battery America.
Unfortunately, SKI itself may have undermined that position. In May, Customs and Border Protection stopped 33 Korean nationals attempting to enter the U.S. in Atlanta using fraudulent employment documents. In September, 13 more Korean workers employed at SK’s construction site were arrested by immigration authorities.
SKI admitted the workers arrested in May were headed for its factory, but blamed its contractors for the violation. Unions in Georgia nonetheless believe that Korean workers at the factory have taken jobs that should go to Americans, and reporters have found evidence of large numbers of Korean workers living in dormitory-style houses near the construction site.
That discovery led Rep. Collins in particular to shift his tone, describing SKI’s use of foreign labor as “illegal and immoral” and “disgusting and a betrayal to Georgia taxpayers who have invested heavily in SK’s development in Jackson County.”
Both Ford and VW have warned the USITC that a ban against SKI would disrupt their supply of batteries seriously enough to make them, in VW’s words, “collateral damage.” VW signed a North America battery deal with SKI in 2018, while Ford the same year partnered with SKI to supply batteries for an electric version of its F-150 truck. VW described the potential supply disruption as “catastrophic,” and Ford warned that it could not easily replace a lost battery supplier, partly because of supply constraints and long development lead times.
LG argues, however, that both Ford and VW should have seen trouble coming. LG began legal proceedings against SKI in Korea in 2017, before either of the deals was inked, and an early judgment against SKI was handed down in Korean court in February of 2018.
LG Chem has said that it would be able to fill SKI’s shoes in the U.S. In fact, LG already provides VW with batteries in Europe.
Update: This story has been updated to clarify that while tax incentives were used to attract SK to Commerce, Georgia, most of them did not fund factory construction directly. It has also been updated to reflect that 13 Korean laborers arrested in September, though employed at SK’s facility, were arrested elsewhere.


fortune--2020-10-23--PetSmart and Chewy are splitting three years after their tie-up

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In the typical retail horror story, Amazon lurks behind the door wielding the metaphorical chainsaw.
But in the case of pet goods in 2016, it was fast-growing, online-focused Chewy that bit into the revenue of market leader PetSmart. So PetSmart, backed by BC Partners, took on debt to acquire the newfangled threat for $3.3 billion in 2017—ostensibly to galvanize its own digital transformation.
But now, as both companies are getting a boost from avid pet lovers, BC Partners is splitting the duo up. The move will result in a lower debt-to-income ratio for PetSmart (as Chewy is unprofitable), with BC Partners planning to recapitalize PetSmart with $1.3 billion in equity. BC also plans to raise $4.7 billion or so in debt from investors for the 34-year-old chain. Shares of Chewy, meanwhile, will be transferred to a BC Partners-led group. Moody’s upgraded PetSmart’s credit rating this week on the news.
Sure, hindsight is 20/20, but signs of a potential split were littered through the past few years. Just read my colleague Phil Wahba’s excellent May feature on the battle for the pet market.
Despite the 2017 tie-up, the two businesses have remained separate aside from the cross-selling of some products, with some in the industry viewing the acquisition as “less of an e-commerce strategy and more of a financial-management tactic,” per the feature. By staying separate, Chewy was able to command a higher e-commerce valuation at its IPO rather than get bogged down by brick-and-mortar numbers. That IPO, in turn, helped PetSmart pay off some of its sizable debt load.
In strategy, too, the two have diverged. While e-commerce has been the buzzword of the last decade, market leader PetSmart was able to bring its sales decline to a “near-halt” last year by focusing on in-person services like veterinary care, doggy day care, and grooming, with just 4% of its sales coming from online (this year, sales have grown 5.5% so far). But Chewy has continued to lean into the e-commerce trend—beating even Amazon in sales of pet goods in 2019.
Meanwhile, competitor Petco, backed by CVC Capital Partners and the Canada Pension Plan Investment Board, is barking after a sale or public offering.
ANOTHER UNICORN BUST: Renrenche, a Chinese car trading website once valued at $1.4 billion with backers including Goldman Sachs and Tencent, is now in talks to sell major assets for a little over $1,000. Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Yuanfudao, a Chinese tutoring platform, raised $2.2 billion in funding, valuing it at $15.5 billion. Tencent led the G1 round of funding round and was joined by investors including Boyu Capital, Hillhouse Capital and IDG Capital. DST Global led its G2 funding round and was joined by investors including GIC, CITICPE, Temasek, TBP, DCP, Ocean Link, Danhe Capital and Greenwoods.
- Eat Just, a San Francisco-based startup making plant-based eggs, is seeking to raise at least $200 million in a deal that could value it at over $2 billion, per Bloomberg. Eat Just investors include Khosla Ventures and Founders Fund. Read more.
- Applied Intuition, a Sunnyvale, Calif.-based maker of software for autonomous vehicle testing, raised $125 million in Series C funding. Investors include Lux Capital, Andreessen Horowitz, and General Catalyst.
- Sirnaomics, a company developing RNAi therapeutics, raised $105 million in Series D funding. Rotating Boulder Fund led the round and was joined by investors including Walvax Biotechnology and Sunshine Riverhead Capital.
- AavantiBio, a Cambridge, Mass.-based gene therapy company, raised $107 million in Series A funding. Investors include Perceptive Advisors, Bain Capital Life Sciences, and RA Capital Management.
- ACV Auctions, a Buffalo, N.Y.-based online auto marketplace, raised $55 million in funding. Durable Partners led the round. Read more.
- Allonnia, a Boston-based waste and wastewater treatment company, raised $40 million in Series A funding. Investors include Ginkgo Bioworks, Battelle, General Atlantic, Cascade Investment, and Viking Global Investors.
- Araris Biotech AG, a Zurich, Switzerland-based company pioneering antibody-drug conjugate (ADC)-linker technology, received an additional CHF 12.7 million ($14 million) in seed funding. Pureos Bioventures led the round and was joined by investors including 4BIO Capital, btov Partners, Redalpine, VI Partners and Schroder Adveq.
- Loyal, an Atlanta, Ga.-based A.I. conversation platform for health care providers, raised $12.5 million in Series A funding. Concord Health Partners led the round.
- TeleSense, a Sunnyvale, Calif.-based agricultural IoT startup, raised $10.2 million in Series B funding. Finistere Ventures led the round.
- Cohere Health, a Boston, Mass.-based digital health company, raised $10 million in funding. Flare Capital Partners and Define Ventures led the round.
- Lili, a New York City-based banking app for freelance workers, raised $15 million in funding. Group 11 led the round and was joined by investors including Foundation Capital, AltaIR Capital, Primary Venture Partners, Torch Capital, and Zeev Ventures.
- EveryoneSocial, a Salt Lake City-based employee-focused social platform, raised $7.6 million in Series A funding. Next Frontier Capital led the round and was joined by investors including Crane Group and Epic Ventures.
- Here.fm, a New York-based video chat room platform, raised $2.9 million in seed funding. FirstMark Capital led the round and was joined by investors including Y Combinator. Read more.
- Silverflow, an Amsterdam-based payment technology company, raised €2.6 million ($3.1 million) in seed funding. Crane Venture Partners led the round and was joined by investors including INKEF Capital.
- Render, a San Francisco-based dev-ops platform, raised $4.5 million in extended seed funding. General Catalyst led the round and was joined by investors including South Park Commons Fund, Lee Fixel, Elad Gil and GitHub CTO Jason Warner.
- OnSite Waste Technologies, a Newport Beach, Calif.-based company focused on the sterilization of medical waste, raised $3.5 million of Series A funding. Mark IV Capital led the round.
- Cobble, a New York-based decision-making app, raised $3 million in seed funding. Investors included Kerr Tech Investments. Read more.
- Ware , a San Francisco-based warehouse drone technology startup, raised $2.5 million in seed funding. UP Partners led the round and was joined by investors including Bloomberg Beta, and 2048 Ventures.
- PredictSpring, a San Francisco-based POS company, raised an undisclosed amount of funding from Salesforce Ventures.
PRIVATE EQUITY
- BC Partners plans to split PetSmart and Chewy, two pet goods retailers. It plans to recapitalize PetSmart with $1.3 billion, per Bloomberg. Read more.
- Syncapay, backed by Centerbridge and Bain, acquired the North American unit of Wirecard, the German payments firm. Read more.
- TIBCO Software, backed by Vista Equity Partners, agreed to acquire Information Builders, a data and analytics software company, per Reuters. Read more.
- Havencrest Capital Management acquired ThermoTek, a Flower Mound, Texas-based provider of temperature management solutions to the medical and industrial end markets. Financial terms weren't disclosed.
- Levine Leichtman Capital Partners acquired NMiCertin B.V., a Dutch metrology testing company, from First Dutch Innovations. Financial terms weren't disclosed.
- Oakley Capital agreed to acquire WindStar Medical, a German consumer healthcare company. Financial terms weren't disclosed.
- Achievers, backed by Silver Lake and P2 Capital, acquired TemboSocial, a Toronto-based employee feedback tool. Financial terms weren't disclosed.
- Finastra’s Filogix, backed by Vista Equity, acquired Doorr, a Toronto-based provider of point-of-sale mortgage software. Financial terms weren't disclosed.
EXITS
- PayPal Holdings is considering an acquisition of BitGo, a Palo Alto, Calif.-based crypto custodian, per Bloomberg. Craft Ventures, Pantera Capital, and others back Bitgo. Read more.
- Ares Management is considering a sale of Farrow & Ball, a U.K.-based paint maker, per Bloomberg. Read more.
- Symplr, backed by Clearlake Capital Group and SkyKnight Capital, agreed to acquire TractManager, a healthcare software platform, from Arsenal Capital Partners. Financial terms were not disclosed.
- Parcom Private Equity acquired a majority stake in Group of Butchers, a Netherlands-based supplier of artisanal specialty meat products, from Equistone Partners Europe. Financial terms weren't disclosed.
- Viagogo may have to sell all or part of StubHub, a ticketing platform, after the U.K.’s competition watchdog said the $4.05 billion acquisition could hurt consumers. Read more.
OTHER
- Flipkart plans to acquire a 7.8% stake in Aditya Birla Fashion, an Indian clothing retailer, for about $204 million. Read more.
- EQT Corp. is seeking to acquire CNX Resources Corp. (NYSE: CNX), a U.S. natural gas rival. Read more.
- Cognizant (NASDAQ: CTSH) agreed to acquire Bright Wolf, a technology services provider specializing in industrial internet of things solutions. Financial terms weren't disclosed.
- Wells Fargo & Co, the U.S. banking giant, is exploring a sale of its asset management business, per Reuters. Read more.
- Adidas is exploring a sale of Reebok, one of its sports brands, per Bloomberg.
IPO
- Lufax, the Chinese fintech lender, plans to raise $2.2 billion in an offering of 175 million ADSs priced between $11.50 to $13.50. Ping An Group backs the firm. Read more.
- Leslie’s, Inc. a U.S. pool and spa care company, plans to raise $600 million in an offering of 40 million shares (25% insider sold) priced between $14 to $16. BlackRock plans to buy $100 million worth of shares. L Catterton and GIC back the firm. Read more.
- Abcam, a U.K.-based maker of biological reagents, raised $157 million in an offering of 8.9 million ADSs priced at $17.50. T. Rowe Price Associates, Durable Capital Partners, and Aberdeen Asset Management back the firm. Read more.
SPAC
- CarLotz, a Richmond, Va.-based used-car selling platform, plans to go public via merger with Acamar Partners Acquisition Corp, a SPAC, valuing it at $827 million including debt.
- Altimar Acquisition, a SPAC formed by HPS Investment Partners, raised $250 million.
- Zanite Acquisition filed to raise up to $200 million.
- Churchill Capital Corp V, a blank check company formed by former Citi executive Michael Klein, now plans to raise $400 million, up 33% from its previous estimate.
F+FS
- Clayton Dubilier & Rice could raise about $14 billion for its latest buyout fund, per the Wall Street Journal. Read more.
- TPG has raised $2.1 billion for its second Rise Fund, its impact-focused vehicle. Read more.