fortune--2020-03-16--Here’s where Goldman Sachs predicts the stock market will bottom out

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Goldman Sachs says we haven’t seen the bottom yet.
The firm said Friday that the S&P 500 could see a mid-year trough at 2,000—that’s down around 20% from current levels and 41% from its all-time high. Goldman says it is using the Fed model, a Dividend Discount Model, and history to come to that bottom—and has already cut its EPS forecast twice in two weeks (the firm is now forecasting S&P 500 EPS will decline by 5%) .
For those like Randy Frederick, the vice president of trading and derivatives at Charles Schwab, markets could easily test the lows from December of 2018, which is 2,351 on the S&P. “We got relatively close [on Monday] but we didn’t get there,” Frederick tells Fortune. But given that the S&P 500 hit around 2,400 in intraday trading on Monday, it’s likely the index might test that support level soon—”50 points could evaporate in five minutes in this market,” he says.
An emergency Fed rate cut on Sunday that whittled interest rates effectively down to zero seemingly had no impact on investor sentiment, as stocks plunged over 7% right at the bell, triggering yet another circuit breaker.
But Goldman is by no means alone in seeing a steeper drop on the horizon. Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, notes the trajectory is clear: “In the absence of more clarity, the market’s natural direction will be down,” Zaccarelli said in a note. “However, I would expect sharp bounce backs whenever fiscal stimulus and/or more positive Covid-19 news develops.”
The message for investors this week? Don’t “become their portfolio’s worst enemy by locking in these declines by selling out,” CFRA’s Sam Stovall suggests in a note.
That rings true for Bankrate.com’s chief financial analyst Greg McBride: “Despite fear and uncertainty, investors should think to the future, beyond the economic pause and when business and life resumes normalcy,” he said in a note. “Thinking 5, 10 years down the road could prevent that regrettable knee-jerk selling reaction and reveal potential buying opportunities.”
Many investors were not taking that message to heart on Monday, however, as the Dow and S&P 500 both plunged more than 11% in intraday trading.
Still, Charles Schwab’s Frederick thinks the worst may be yet to come. Because the market plunge has been so fast (and the spread of coronavirus so rapid), we haven’t seen much impact on economic data—yet. Frederick points to the Empire State manufacturing index data released Monday, which saw a record 34.4 point drop, coming in at negative 21.5 in March—that’s not only way off estimates of a 4.8 reading, but is also the lowest level since 2009. Frederick says it’s “inevitable we’re going to see some serious deterioration in all the data over the next few weeks.”
But all hope is not lost. Goldman maintains the S&P 500 could likely end the year back up at 3,200 points—which would represent a roughly 27% increase from current levels.
More must-read stories from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The stock market is usually a poor predictor of recessions—but this time it’s right
—Bitcoin bloodbath: What people are saying about the crypto collapse
—1 in 3 Americans were stocking up before coronavirus was ruled a pandemic
—Dormant PayPal Credit accounts are coming back to hurt credit scores
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fortune--2020-03-16--Crude is tanking. Why then are the Saudis so confident?

Computer monitors and other work-at-home essentials are in big demand in the coronavirus era

Saudi Aramco, the state-run oil giant, has laid bare its calculations for how it could win a ferocious oil price war, one mostly of its own making.
On Monday, it doubled down on its vow to defeat the twin forces of plunging oil demand and the coronavirus pandemic by pumping and selling more oil. A lot more.
It has a big advantage over much the rest of the oil-producing world in that it can still make money at today’s rock-bottom oil prices. And if it gluts the market with more, it’s still in the black. Analysts though aren’t so sure it’s that easy.
Still, company officials took them through the numbers on a webcast in which the company also discussed the company’s first annual results since its December IPO. It was a rare occasion to see inside one of the most powerful, but most secretive, players on the world energy markets.
Key to the company’s last-man-standing strategy is the conviction that a protracted crude price war will drive higher-cost producers, including many U.S. shale drillers, out of business.
The oil price has plummeted since Saudi Arabia failed earlier this month to persuade Russia to agree to deeper oil production cuts to bolster prices as coronavirus ravages global demand, grounding planes and shuttering factories. Brent fell below $30 a barrel Monday as new figures showed Chinese industrial output plunging at the start of this year.
That’s not a big deal though, says Khalid al-Dabbagh, Aramco’s chief financial officer, who maintains the company can profitably produce oil for just $2.80 per barrel.
“We are very comfortable with a $30 price in terms of our gearing. We are very comfortable we can meet our dividends commitment, and we are very comfortable we can meet our shareholder expectations at $30 and even lower,” he told analysts. “As production increases, our unit costs would significantly go down.”
Strained finances
Despite the fighting talk, a persistently low oil price would in fact slash the royalties Aramco pays to the Saudi government, putting intense pressure on the country’s already strained finances.
After talks with Russia broke down, Saudi Aramco announced last week that starting in April it would supply 12.3 million barrels per day of oil to its customers—that’s around 27% (300,000 barrels a day) above current levels, and above the company’s current maximum sustained oil capacity.
Saudi Aramco chief executive Amin Nasser added that it will dip into its supply stock to hit that figure, and that it’s in it for the long haul, beyond April.
“The decision for April is 12.3 (million bpd), and I doubt if May will be any different but we will evaluate it,” he said.
Nasser said Aramco could sustain maximum production capacity of 12 million bpd for a year without the need for additional capital spending. “After that it can be sustained indefinitely if required,” he said.
Ripple effects
Since the so-called OPEC+ agreement broke down, the United Arab Emirates has said it will increase production and Moscow has said it could do so, raising the prospect that the world could be flooded with cheap oil at a time when demand is feeble.
Analysts warn the strategy could easily backfire as the global economy limps along from the effects of coronavirus.
“The potential loss of demand in March-April may dwarf anything the world has ever seen, just when OPEC+ producers open the floodgates of new supply to the market,” said Bjoernar Tonhaugen, head of oil markets at research firm Rystad Energy.
The Saudis showed their resolve over the weekend when they provisionally hired 25-30 giant carriers to load later this month or early next, according to Paola Rodriguez-Masiu, Rystad Energy’s senior oil analyst.
“As the COVID19 proves more resilient than anticipated, and Saudi Arabia and Russia continue to be engaged in a market-share war, we find that the oil price could fall even into the $20 territory to trigger production shutdowns, as the level of global stock building that we currently see is not sustainable,” she said in a note.
Saudi Aramco, the world’s most profitable company, was already seeing fierce headwinds to its business even before the pandemic outbreak. On Sunday, the company said its net income fell by 20% in 2019 to $88.2 billion, mainly due to lower crude oil prices and production volumes. It said it would cut capital spending to $25-$30 billion in 2020, “in light of current market conditions,” from $32.8 billion last year.
Saudi Aramco’s shares fell another 3% Monday to 27.80 riyals, 13% below the price it floated at in December.
While Saudi institutional and retail investors bought heavily into the IPO, many Western investors shunned the offer, believing it to be over-priced. At current market prices, the company is valued at $1.5 trillion, down from the peak of more than $2 trillion it hit within days of listing.
More must-read stories from Fortune:
—The stock market is usually a poor predictor of recessions—but this time it’s right
—Bitcoin bloodbath: What people are saying about the crypto collapse
—1 in 3 Americans were stocking up before coronavirus was ruled a pandemic
—It’s time to start preparing your personal finances for a recession. Here’s how
—Dormant PayPal Credit accounts are coming back to hurt credit scores
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-16--Supreme Court shuts for first time in a century, delaying key Trump-related cases

The Supreme Court has suspended oral arguments scheduled for March because of the coronavirus outbreak, marking the first time in over a century that it has resorted to such drastic measures.
The announcement on Monday means 10 scheduled hearings will not take place as planned. Some of the cases involve technical matters, such as trademark registrations, while others are focused on civil liberties issues such as deportation rules and arrest procedures.
The most high-profile cases to be postponed include one pitting Google against Oracle over alleged intellectual property theft, and another two cases that will determine the scope of investigations into President Trump’s financial records.
In a letter announcing the postponements, a Supreme Court spokesperson said the court was exploring procedures to reschedule. One possibility is for the court to move the cases to open slots in April, or else hear them during its next term in the fall.
Of the 10 cases, only the two involving President Trump’s finances are particularly time sensitive.
There is little in the way of precedent when it comes to closing the Supreme Court for significant time. The only previous examples were in 1918, when emergency measures to curtail the Spanish flu delayed the court’s opening for several weeks, and in the 1790s, when fears of yellow fever briefly closed the court. The top court also closed for a day following an anthrax scare in October of 2001.
The court remained open through both World War I and II, and during major snowstorms that shut other parts of Washington, D.C.
The closing of the Supreme Court is a drastic but understandable measure, given that three of the nine Justices are in their 70s and 80s—including Ruth Bader Ginsburg, who is 87 and has undergone numerous medical procedures in recent years. Older people are at higher risk of death from the coronavirus.
When the court reopens, it may bar the public from visiting, but continue its practice of releasing audio recordings at the end of the week they are heard. While the court could release the recordings on the same day as the hearings, it may be reluctant to establish such a precedent, according to Tom Goldstein, the publisher of the influential SCOTUSblog.
While the court has considerable latitude to adopt technology, such as live-streaming, that could disseminate its proceedings to a broader audience, it has so far resisted doing so. A prolonged period of closed hearings, however, could force the tradition-bound court to change procedures, in part because public access to court proceedings is a bedrock principle of American law.
Other federal and state courts across the country have taken similar measures to close or limit gatherings, including jury duty.
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—It’s time to start preparing your personal finances for a recession. Here’s how
—The 100 greatest designs of modern times
—How mainland China’s closest neighbors have kept coronavirus cases so low
—Dormant PayPal Credit accounts are coming back to hurt credit scores
—WATCH: When it comes to coronavirus, “things are going to get worse”
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fortune--2020-03-16--Coronavirus catch-up: Stocks plunge, restaurants and schools close, and vaccine trials begin

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The news surrounding the COVID-19 coronavirus pandemic is coming at a breathtaking pace. It’s hard to keep up, even if you’re obsessively watching the news.
Between a stock market plunge, rapid fire announcements, and the rumors that inevitably arise in a situation like this, it’s hard to keep a handle on what’s happening. The White House will offer an official update at 3:30 p.m. ET today, which will certainly have some sort of impact on Wall Street. In the meantime, here’s the latest on the pandemic and its impact on both businesses and nations.
Trial of Moderna’s coronavirus vaccine starts Monday, government official says
The first participant in a clinical trial for a vaccine to protect against the new coronavirus will receive an experimental dose on Monday, according to a government official.
The National Institutes of Health is funding the trial, which is taking place at the Kaiser Permanente Washington Health Research Institute in Seattle.
Read more
Stocks continue sinking after halt in trading triggered by 10% plunge
U.S. stocks plunged as investors fled risk assets amid the mounting economic toll of the coronavirus outbreak. Treasuries surged despite dramatic moves from the Federal Reserve and other central banks.
The S&P 500 fell 10% as of 9:46 a.m. in New York, bringing into play the circuit breaker cautionary measure that would pause trading for 15 minutes.
Read more
New York, New Jersey, and Connecticut take coronavirus precautions, shut down restaurants
Governors of New York, New Jersey, and Connecticut, on a conference call Monday, announced they would be ordering the closing of restaurants, bars, movie theaters, gyms, and casinos as of 8 p.m. ET.
Read more
How A.I. is aiding the coronavirus fight
On the last day of 2019, an artificial intelligence warning system run by Toronto startup BlueDot flagged a news report from China about a mysterious pneumonia strain in the city of Wuhan. The system, which sifts through 100,000 articles and online posts daily in 65 languages, alerted BlueDot’s human employees, who immediately saw parallels to the deadly SARS outbreak in 2003.
After switching to a system based on data from billions of airline passenger itineraries, BlueDot was able to determine almost instantaneously which cities worldwide were most at risk if the mystery illness spread. The company quickly sent out warnings to health authorities and other clients about what would come to be called the coronavirus outbreak, which has so far infected almost 100,000 people and killed more than 3,000 as of early March.
Read more
How the coronavirus could upend America’s business relationships to China
From the moment it erupted in Wuhan, China, the COVID-19 virus has proved particularly lethal to patients with the prior, chronic illnesses often described as “underlying health conditions.” Now the contagion is having a similarly grim effect on the U.S.-China economic relationship—where accumulated mistrust and resentment have created unhealthy conditions of a different kind.
As the virus shakes the world’s business community, sending global stocks into or close to bear-market territory, it’s easy to forget that many of the first economic warning signs came from U.S. companies with significant China exposure.
Read more
Airlines slash flights by up to 90% as coronavirus destroys demand
The airline downturn reached new levels as carriers from American Airlines Group Inc. to British Airways parent IAG SA slashed schedules and braced for a drought that could last for months.
American will pare long-haul international flights by 75%—the biggest reductions to date by a U.S.-based carrier—because of the collapse in travel demand and government restrictions imposed to slow the spread of coronavirus.
Read more
China’s coronavirus economic slump was even worse than feared
China suffered an even deeper slump than analysts feared at the start of the year as the coronavirus shuttered factories, shops and restaurants across the nation, underscoring the fallout now facing the global economy as the virus spreads around the world.
Industrial output plunged 13.5% in January and February from a year earlier, retail sales fell 20.5%, and fixed-asset investment dropped 24.5%. The unemployment rate jumped to a record 6.2% in February, when the outbreak worsened and much of the economy was shutdown.
Read more
Hong Kong will start charging quarantined travelers rent to stop coronavirus freeloading
As it continues to battle the global coronavirus outbreak, Hong Kong, the world’s most expensive property market, is going to start charging people quarantined in government housing after it found some were abusing the system.
Read more
More coronavirus coverage from Fortune:
—How A.I. is aiding the coronavirus fight
—How the coronavirus could upend America’s business relationships to China
—The best Twitters to follow for reliable information on the coronavirus outbreak
—3 months before the coronavirus, a war game showed we weren’t ready
—How mainland China’s closest neighbors have kept coronavirus cases so low
—Couples are scrambling to prepare last-minute wedding alternatives
—SARS taught Taiwan how to contain the coronavirus outbreak
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-16--AMC Theaters will limit attendance to 50 people per showing

U.S. movie theaters nationwide are preparing to shut down after President Donald Trump announced new guidelines urging against gatherings of more than 10 people because of the coronavirus pandemic. With big screens across the country going dark, Hollywood moved to rush some new releases onto home entertainment platforms.
Regal Cinema’s the national’s second largest theater chain, said Monday that would close all cinemas beginning Tuesday. AMC Theaters, the largest theater circuit, didn’t immediately respond to messages. Earlier in the day, AMC said it would limit audiences to less than 50 people for every screening to facilitate social distancing.
The coronavirus pandemic also cracked Hollywood’s traditional theatrical window. Universal Pictures on Monday said it will make its current and upcoming films available for on-demand rental, becoming the first major studio to turn directly to home viewing in light of the virus.
The studio said it will put movies currently in theaters — “Invisible Man,” “The Hunt,” “Emma” — up for rental beginning as early as Friday. It also said that “Trolls World Tour,” one of the only major releases left on the April film release calendar, will debut in theaters and on-demand services simultaneously. A 48-hour rental will cost $19.99.
The move came as theaters worldwide have closed and many North American cinemas were shuttering. On Sunday, the mayors of New York and Los Angeles ordered their cities’ theaters closed. Theaters in Massachusetts and Quebec also shuttered. Overseas, most European cinemas have shut down, as have those in China, India and elsewhere.
Over the weekend, ticket sales plunged to their lowest levels in at least 20 years at the box office for U.S. and Canadian theaters. Not since a quiet September weekend in 2000 has weekend box office revenue been so low, according to data firm Comscore. More people went to the movies the weekend after Sept. 11, 2001.
“Rather than delaying these films or releasing them into a challenged distribution landscape, we wanted to provide an option for people to view these titles in the home that is both accessible and affordable,” said NBCUniversal CEO Jeff Shell in a statement. “We hope and believe that people will still go to the movies in theaters where available, but we understand that for people in different areas of the world that is increasingly becoming less possible.”
The extraordinary move marked what could be seen as either a watershed moment for Hollywood or an aberration due to extremely unusual circumstances. With few exceptions, the major studios have guarded the usual 90-day exclusivity window even as digital newcomers like Netflix and Amazon have challenged it. For the studios, box office still represents the industry’s primary revenue generator. Last week, the Motion Picture Association said worldwide ticket sales reached $42.2 billion last year.
The National Association of Theater Owners, the trade group that represents movie exhibitors, declined to comment.
NBCUniversal is prepping its own streaming service, dubbed Peacock, but it isn’t to launch until July 15. On Sunday, the Walt Disney Co. made “Frozen 2” available on its streaming service, Disney Plus. But that film had already completed its theatrical run. Its digital release didn’t break the traditional 90-day theatrical exclusivity window.
Discussing ticket receipts for titles including “The Hunt” and “Invisible Man” on Sunday, Universal’s distribution chief Jim Orr called the situation a unique time for the industry. “But we’ll get to the other side of it, and the box office will come back very healthy,” said Orr. “It’s just a matter of when that might be.”
Hollywood has postponed most of its upcoming releases. This week’s previously most anticipated movie, “A Quiet Place Part II,” has been removed from the schedule. Other releases, including Disney’s “Mulan” and the James Bond film “Die Another Day” have been put off. Universal earlier pushed its latest “Fast and Furious” movie, “F9,” from late May to April of next year.
Other distributors are also shuffling plans. The boutique studio A24 said Monday that it will re-release the acclaimed “First Cow,” which opened in limited release March 6, later this year since its initial bow has been marred by theater closures.
Most of the entertainment world has shut down. Broadway theaters, major museums and theme parks have closed their doors. Concerts have been called off: Elton John was the latest as Monday he announced dates in North America for his “Farewell Yellow Brick Road” tour from March 26 to May 2 would be postponed: later dates remain unchanged.
Festivals including South by Southwest in Austin, Texas, and the Tribeca Film Festival in New York have been canceled or delayed. Most live-action film and TV production has been put on hiatus.
For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia.
The vast majority of people recover from the new virus. According to the World Health Organization, people with mild illness recover in about two weeks, while those with more severe illness may take three to six weeks to recover.
Update, March 17, 2020: This post has been updated to reflect that theaters are now closing after initially planning to enact social distancing measures.
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—Don Cheadle on Black Monday, Wall Street in the Trump era, and hope about the climate change fight
—How Netflix’s Lost Girls upends the conventions of serial killer movies
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—Diao Yinan discusses The Wild Goose Lake, his Chinese motorcycle noir
—How coronavirus is affecting the global concert industry, including SXSW and Coachella
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fortune--2020-03-16--New York, New Jersey, and Connecticut shut down restaurants as pandemic spreads

The tri-state area is locking things down as the COVID-19 coronavirus pandemic continues to spread.
Governors of New York, New Jersey, and Connecticut, on a conference call Monday, announced they would be ordering the closing of restaurants, bars, movie theaters, gyms, and casinos as of 8 p.m. ET.
“We have agreed to a common set of rules that will pertain in all our states. So don’t even think of going to another state,” Cuomo said.
Restaurants will still be allowed to deliver food, but no dining-in will be permitted.
The states also said that gatherings of more than 50 people are now prohibited, which is in line with the Center for Disease Control and Prevention’s guidance that was issued Sunday evening.
The news comes days after New York (and several other states) closed schools. Broadway has also largely gone dark.
The tri-state area is the first to order the closing of all restaurants, but it likely won’t be the last. As the CDC continues to update its guidance on social distancing, several states are looking at common gathering points and considering similar bans.
Sunday, during a presidential press conference, Dr. Anthony Fauci, the government’s top infectious disease expert, indicated he would be in favor of a 14-day national shutdown—and suggested people avoid restaurants for now.
“Everything is on the table,” he said. “Right now, myself personally, I wouldn’t go to a restaurant. I just wouldn’t because I don’t want to be in a crowded place. … I don’t want to be in a situation where I’m going to be all of a sudden self-isolating for 14 days.”
More coronavirus coverage from Fortune:
—How to get a refund on your Broadway tickets after coronavirus shut down
—A Q&A with WHO special envoy David Nabarro on COVID-19
—The best Twitters to follow for reliable information on the coronavirus outbreak
—After SXSW cancellation, Austin hotels and restaurants are bracing for a rough road
—While canceling mass gatherings, the U.K. is still aiming for deliberate “herd immunity”
—Walmart, Target, CVS, and Walgreens will loan space for coronavirus test centers
—Let’s remember what we learned in WWII, as well as in 2008
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-16--Stocks continue sinking after halt in trading triggered by 10% plunge

U.S. stocks plunged as investors fled risk assets amid the mounting economic toll of the coronavirus outbreak. Treasuries surged despite dramatic moves from the Federal Reserve and other central banks.
The S&P 500 fell 10% as of 9:46 a.m. in New York, bringing into play the 13% circuit breaker that would pause trading for 15 minutes. The index plunged 8% at the open and trading halted for 15 minutes.
Hyper-turbulent financial markets started the week back in risk-off mode, with investors trying to assess the likely extent of the economic damage after countries around the world moved to combat the virus spread by virtually shutting down social activity.
“The market’s in panic mode,” Chris Rupkey, chief financial economist for MUFG Union Bank, said in a phone interview. “The move overnight was a shock and the market isn’t taking it as the Fed officials riding to the rescue. They’re taking it as ‘get out of the way, look out below, this could be really, really bad.’”
Here are some of Monday’s key moves across major assets:
The S&P 500 sank, wiping out all of Friday’s final-hour rally. The Dow Jones Industrial Average plunged 9.7% before being halted.
A measure of fear in U.S. stocks surged to the highest since 2009.
A regional manufacturing index sank the most on record.
Brent crude tumbled below $30 a barrel for the first time since 2016.
Treasury yields plunged all across the curve, with that of benchmark 10-year notes retreating more than 33 basis points at one point before trimming the decline.
Shares tumbled in Asia and Europe, where the continent is now reporting more new virus cases each day than China did at its peak as more countries lock down. The Stoxx Europe 600 Index plunged almost 10% led by travel and construction shares.
The yen surged, the Swiss franc rallied and the dollar fluctuated.
Oil resumed losses. Gold failed again to capitalize on the rush to havens and reversed an earlier gain to tumble.
Bonds declined across most of Europe, where a measure of market stress hit levels not seen since the 2011-2012 euro crisis.
The Fed and other central banks have dramatically stepped up efforts to stabilize capital markets and liquidity, yet the moves have so far failed to boost sentiment or improve the rapidly deteriorating global economic outlook. An International Monetary Fund pledge to mobilize its $1 trillion lending capacity also had little impact in markets.
The problem is, bad news keeps stacking up. The New York Fed’s regional gauge of factory activity plunged. Ryanair Holdings Plc said Monday it will ground most of its European aircraft while a consultant said the pandemic will bankrupt most airlines worldwide before June unless governments and the industry step in. Nike Inc. and Apple Inc. announced mass store closings.
“In normal circumstances, a large policy response like this would put a floor under risk assets and support a recovery,” Jason Daw, a strategist at Societe Generale SA in Singapore, wrote in a note. “However, the size of the growth shock is becoming exponential and markets are rightfully questioning what else monetary policy can do and discounting its effectiveness in mitigating coronavirus-induced downside risks.”
The yen rebounded from Friday’s plunge after the Fed and five counterparts said they would deploy foreign-exchange swap lines. Australian equities fell almost 10%, the most since 1992, even after the Reserve Bank of Australia said it stood ready to buy bonds for the first time—an announcement that sent yields tumbling. New Zealand’s currency slumped after an emergency rate cut by the country’s central bank.
Meanwhile, China reported Monday that output and retail sales tumbled in the past two months.
More must-read stories from Fortune:
—The stock market is usually a poor predictor of recessions—but this time it’s right
—Bitcoin bloodbath: What people are saying about the crypto collapse
—1 in 3 Americans were stocking up before coronavirus was ruled a pandemic
—It’s time to start preparing your personal finances for a recession. Here’s how
—Dormant PayPal Credit accounts are coming back to hurt credit scores
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-16--What to read when all you can read about is coronavirus

Good morning.
This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
I wish I had a single uplifting message for you today about tech’s role in combating the scourge that is upon us. I don’t. I hoped to make sense of the public-private effort by Google (or is it Verily) to compensate for the Trump administration’s failure to anticipate the need for testing kits. Instead, I simply am disgusted by the president’s attacks on the news media, which is working tirelessly and valiantly to inform a worried public.
The best I can do is to point you to a few of the tech-related, or not-so-tech-related, things I read this weekend that may help you start what will be a trying week.
Have you heard of Accenture, the spawn of Andersen Consulting, which I learned from this Economist article is a portmanteau of ‘accent on the future’? It has quietly become one of the most important technology players of our time, providing a gamut of services from humdrum outsourcing to cutting-edge digital advice-giving. As it happens, Clifton Leaf, Fortune’s editor, has an interview in the current issue with Accenture’s newish CEO, Julie Sweet. It is quite illuminating.
Private-equity mogul David Rubenstein has a side gig as an extraordinary interviewer and public intellectual. (I told him recently he had a future as a journalist if things got bad in finance; he smiled.) This New York Times interview with him is worth the read.
We all may be spending a lot more time reading as we become quarantined in our homes. I’m reading the first novel by the young Irish writer Sally Rooney, Conversations With Friends, having recently finished her second book, Normal People. I also loved this obituary of Andreas Brown, the former owner of New York’s Gotham Book Mart.
Want to feel inspired about the work journalists are doing right now? Read this message to her readers from San Francisco Chronicle editor-in-chief Audrey Cooper.
Finally, I’ve been interested in cities of late, so I was pleased to learn that former Chicago mayor Rahm Emanuel, whom I’ve interviewed onstage a couple times for Fortune conferences, has written a well-reviewed book about their importance.
Please stay safe.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
On and on it goes. Tech continues to do its part as the world combats the coronavirus pandemic. Comcast, AT&T, and Charter Communications announced free public Wi-Fi for 60 days. All kinds of retailers closed all U.S. stores, from Apple (which also put its WWDC event online) to Nike to Warby Parker to Allbirds. The stock market, which rose 9% on Friday, appears ready to give up that entire gain on Monday.
No rest for the weary. Antitrust authorities are not on hold during the pandemic. France fined Apple $1.2 billion for improper deals with wholesalers Tech Data and Ingram Micro.
Turn and face the strange. Billionaire Bill Gates stepped down from Microsoft's board on Friday, marking the first time he'll have no official role since Gates and Paul Allen founded the company in 1975. Gates said he needed “to dedicate more time to philanthropic priorities including global health and development, education, and my increasing engagement in tackling climate change.”
We were that close. Speaking of billionaires, Elon Musk's SpaceX had to halt a rocket launch at the very last second on Sunday. The Falcon 9, carrying 60 more satellites for Musk's Spacelink Internet-from-space service, had an engine power problem that forced an abort code as the countdown reached zero.
FOOD FOR THOUGHT
Sixty years ago, Fortune conducted a vast survey of the era’s top designers, architects, and design teachers to create a list of the 100 best-designed products. Some winners are still popular today, like Porsche cars and Eames armchairs. To mark the anniversary, Fortune returned to partner IIT Institute of Design for another go-round. The whole list is fascinating (Steve Jobs would be proud), but IIT dean Denis Weil explains some trends behind larger changes.
The results show a clear shift in design philosophy over the past six decades. “Design has graduated from ‘value-adding,’ ” says Weil. “Now it’s value-driving, unlocking and making accessible the value in new technology.” Sixty years ago, the word design was almost synonymous with the aesthetics of the finished product. Today the emphasis is on how elegantly the product or service performs its specific purpose or function. Perhaps the clearest example of this evolution is a new category that appears on our updated list: Internet services. Google Search, ranked No. 3, is a great design not because of visual adornment, but because it eschews all unnecessary elements to do its job—organizing vast troves of information—near perfectly.
IN CASE YOU MISSED IT
The best Twitter accounts to follow for reliable information on the coronavirus outbreak By McKenna Moore
How A.I. is aiding the coronavirus fight By Aaron Pressman
How early GPS gadget maker Garmin mapped out success against the likes of Apple and Google By Danielle Abril
Sci-fi tech tackles climate change with fake trees By Jennifer Alsever
Plastic that travels 8,000 miles: the global crisis in recycling By Vivienne Walt
How to be effective when you’re presenting remotely By Jenna Birch
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
As Adam noted, we're all cooped up and looking for something to read. My colleague Rachel King raves about the new behind-the-scenes business book No Filter by Sarah Frier. Come for the story about Ivanka Trump setting the Insta crew up in Las Vegas for a party after the $1 billion sale to Facebook, and stay to read about why so many employees got disillusioned with being part of Zuck's machine.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-03-16--Much of the business world shutters operations in the wake of coronavirus

Good morning, Term Sheet readers.
It feels a bit strange to be making this announcement as there are immensely more important things going on in the world at the moment, but after five incredible years, Friday will be my last day at Fortune.
I’m leaving to build my weekly newsletter The Profile into a standalone business. Right now, it features a compilation of longform profiles on interesting people and companies, but I believe it can grow to be much more. After writing about so many people’s entrepreneurial paths, I hope to pave my own. You can sign up here.
Not to worry, Term Sheet will continue its regularly scheduled programming, and you’ll be left in capable hands. I’ll keep this short and won’t get too sappy today, but tune in this Friday for more details on what’s to come.
Thank you all for trusting me with your stories in the last two and a half years. It’s been a huge honor to write this newsletter for you every morning. I’ll miss this awesome community beyond words, and I hope we stay in touch.
But now, let’s get to the news:
CLOSED FOR BUSINESS: Yesterday, “CLOSED” was one of the top trending topics on Twitter, and for good reason. A host of retail companies are closed for business, including Patagonia, Urban Outfitters, Warby Parker, Glossier, Everlane, Allbirds, Lululemon, Nike, Apple and Abercrombie.
So are small businesses across the nation. Last week, President Donald Trump announced that companies affected by the coronavirus outbreak will be given $50 billion more in low-interest loans federally guaranteed by the Small Business Administration. But small business owners still feel fear and uncertainty as customers stay at home, spend less, and wait for clarity.
HOW STARTUPS CAN HELP: The European Commission announced Friday that it’s looking for startups and small businesses developing technologies that could help combat the COVID-19 outbreak. The Commission encouraged them to apply for fast-track EU funding.
“We are calling for startups and small businesses with technologies and innovations in: treating, testing, monitoring, and other aspects of COVID19,” the European Commission said in a tweet.
Read more.
XEROX’S AUDACIOUS QUEST TO BUY HP: In non-coronavirus news, my colleague Shawn Tully has a fascinating deep dive about Xerox’s bid to buy HP, its much larger rival. The offer is now set at $35 billion. How is that possible, you may wonder, given that Xerox is tiny compared to HP? Xerox posted sales of $9.1 billion—less than one-sixth of the $58.8 billion HP tallied in its most recent fiscal year.
Here’s some detail on how Xerox plans to finance the merger:
One person’s “bold,” of course, is another person’s crazy. To finance the merger, Xerox would take on $24 billion in new debt. “It makes no sense because all that debt would make the combined company much riskier,” says Bill George, former CEO of Medtronic and a professor at Harvard Business School. HP brass, who oppose the merger, argue that the leverage would threaten the companies’ survival. “You can’t work through economic cycles with that level of debt,” says CFO Steve Fieler, who calls Visentin’s $2 billion in planned annual savings “unachievable.”
Read the full story here.
Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com
VENTURE DEALS
- Impossible Foods, a Redwood City, Calif.-based plant-based meat company, raised approximately $500 million in Series F funding round. Mirae Asset Global Investments led the round, and was joined by investors including Khosla Ventures, Horizons Ventures, and Temasek.
- Cloudbeds, a San Diego-based hospitality management solution provider, raised $82 million in Series C funding. Viking Global Investors led the round, and was joined by investors including PeakSpan Capital, Recruit Co., Ltd., Counterpart Ventures and Cultivation Capital.
- ZeroNorth, a Boston-based provider of risk-based vulnerability orchestration across applications and infrastructure, raised $10 million in Series A+ funding. Crosslink Capital led the round, and was joined by investors including ClearSky, Rally Ventures and Petrillo Capital.
- LumenAd, a Missoula, Mt.-based provider of a leading advertising management platform, raised $2 million in seed funding. Next Frontier Capital led the round.
- Expense Robot, a Switzerland-based AI and financial technology startup, raised CHF 1.7 million ($1.8 million) in seed funding. Swisscom Ventures and SIX Group co-led the round.
OTHERS
- Compass Diversified Holdings will buy Marucci Sports, a Baton Rouge, La.-based manufacturer of baseball bats and baseball gear, for $200 million.


fortune--2020-03-16--Here’s how far the S&P has to fall Monday for the dreaded circuit breaker to kick in

Despite the Federal Reserve dropping interest rates to near zero Sunday, stocks are poised for another brutal fall Monday morning. Circuit breakers, once exceedingly rare, are likely to kick in for the third time in a week as investors continue to panic about the COVID-19 coronavirus pandemic.
Dow futures were limit down by early Sunday evening, halting pre-trading at a 5% drop. So now, all eyes turn to the S&P 500. Here’s how far the index will need to drop for circuit breakers to be instituted:
Level I
A 7% drop Monday would be -198.77 points, taking the S&P to 2,521.25. That would result in a 15-minute halt to trading. If last week is any judge, the time-out would come within minutes of the opening bell.
Level II
The 13% threshold is hit if the S&P 500 drops -352.43 points to 2,358.59. That, too, would result in a 15-minute pause if it’s before 3:25 p.m. ET. (If it’s later, trading will continue until market close at 4:00 p.m. ET.)
Level III
Should the S&P fall -542.20 points (to 2,168.82), that would constitute a 20% drop and would result in the immediate cessation of trading for the day, regardless of the time.
The expected drop comes after Friday’s monster rally that saw stocks climb 9%.
Donald Trump, on Friday, declared the pandemic a national emergency. And over the weekend, things got worse, with the White House extending the travel ban to the U.K. and Ireland, Georgia postponing its presidential primaries and many states closing schools for several weeks.
Global markets were sharply lower Monday morning as well.
More must-read stories from Fortune:
—The stock market is usually a poor predictor of recessions—but this time it’s right
—Bitcoin bloodbath: What people are saying about the crypto collapse
—1 in 3 Americans were stocking up before coronavirus was ruled a pandemic
—It’s time to start preparing your personal finances for a recession. Here’s how
—Dormant PayPal Credit accounts are coming back to hurt credit scores
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-16--How are you navigating childcare and self-quarantine?

Good morning, Broadsheet readers! The House passes coronavirus relief legislation, Chrystia Freeland steps into the spotlight in Canada, and we want to know how you’re dealing with childcare during a quarantine.
– Childcare and coronavirus. Since the last Broadsheet, more of you are probably spending time at home—maybe with your whole family.
We want to know: how’s it going? If you have children and are lucky enough to be able to work from home, how are you handling childcare and work? Your new duties as a homeschooling parent? Sharing home workspaces and electronic resources between multiple adults, college and high-school students, and small children?
Has your employer acknowledged the difficulties of accessing childcare during this time? (Some, including Vox and the Washington Post, have told employees things like “do your best” or even made unlimited paid-time off available). If you’re the one making those decisions, what are you telling your employees?
If you work in a field that keeps you out of the house by necessity—health care, the service industry—first: thank you for all you do; second: how are you managing childcare if your kids aren’t in school? (New York City closed its public-school system—the largest in the country—yesterday.)
This story in the Wall Street Journal gives a good picture of what a similar reality has been like for one family in Hong Kong. But we want to hear from you directly. Tell us what working from home (or not) is like, especially when it comes to childcare, by replying to this email or emailing broadsheet@fortune.com. Your responses may be used in a future edition of the newsletter.
Stay safe, healthy, and socially distant!
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- Biden's veep. Joe Biden committed to selecting a female running mate during the Democratic debate last night. "There are a number of women who would be qualified to be president," he said in making the pledge. He also promised—if elected—to choose a cabinet that reflects U.S. demographics and to nominate a black woman to the Supreme Court, if he has the chance. Politico
- Families first act. The House of Representatives passed House Speaker Nancy Pelosi's bipartisan coronavirus financial aid package on Saturday; it now awaits Senate approval. The bill provides three months of paid family and medical leave and two weeks of emergency sick leave to some workers, although it has a gaping hole: large employers with more than 500 employees are exempt from the requirement. New York Times
- RNC-ovid. Republican National Committee chairwoman Ronna McDaniel is awaiting COVID-19 test results after exhibiting flu-like symptoms but testing negative for the flu. McDaniel last met with President Trump a week ago and attended a Senate GOP lunch last week. CNN
- Deputy in the spotlight. With Canadian Prime Minister Justin Trudeau in self-quarantine because of Sophie Grégoire Trudeau's COVID-19 diagnosis, even more responsibility than usual may fall to Deputy Prime Minister Chrystia Freeland. The Atlantic analyzes Freeland's view on the world based on her past writing: The Atlantic
- In other news... We understand if you only have bandwidth for Covid-19 news right now. But if you're hungry for a little counter-programing, I'd recommend an important new package of stories Fortune published this morning, focused on the ways the business community is (finally!) beginning to tackle the climate crisis. Read it here
MOVERS AND SHAKERS: Kathy Vrabeck is GameStop’s new board chair.
IN CASE YOU MISSED IT
- Closed for business. Retailers are starting to close their store locations to try to stem the flow of the coronavirus. Emily Weiss's Glossier was one of the first to make the call; Glossier has now been joined by Apple, Nike, and co-working space The Wing. Fortune
- Pandemic expert perspective. Beth Cameron, the former senior director for global health security and biodefense on the White House National Security Council, ran the White House pandemic office—opened in 2014 in response to the Ebola crisis—that President Trump closed in 2018. She writes for the Washington Post about the consequences of that decision. "The job of a White House pandemics office would have been to get ahead," she writes. Washington Post
- Hyde in the House. As the House of Representatives raced to pass coronavirus relief legislation this weekend, House Republicans attempted to make sure that any new funding for COVID-19 relief included the same language as the Hyde Amendment: no federal funds for abortion. "We can have that debate another time," Rep. Alexandria Ocasio-Cortez said about the disagreement slowing down the legislation during a Fox News interview. Mother Jones
- Binge watch. While spending more time at home, have you watched Hillary, the new Hulu documentary, yet? This piece makes the case for the enduring legacy of Hillary Clinton's wardrobe through the decades, as seen in the series. Director Nanette Burstein says fashion is an "organic" part of Clinton's legacy and story. Marie Claire
ON MY RADAR
Love in the time of coronavirus: Couples are scrambling to prepare last-minute wedding alternatives Fortune
Women are turning their 40th-birthday parties into wedding-level extravaganzas Glamour
The masculine bluster of Trump's coronavirus handshaking tour Slate
Megan Thee Stallion's sweet defiance The Atlantic
PARTING WORDS
"How about you amaze me and do the right thing[?]"
-Simone Biles, asking USA Gymnastics to conduct an independent investigation into Larry Nassar's abuse, after the organization wished her a happy birthday on Twitter and said she "amazed" them


fortune--2020-03-16--The Fed made a bold move to calm shaky bond and credit markets. But is it enough?

Investors and traders around the world were anxiously waiting on Monday to see if the U.S. Federal Reserve’s sweeping moves Sunday to inject additional liquidity into the economy would restore normal market conditions.
The Fed’s goal is not to save the stock market: It’s to protect the real economy from worrying signs that both cash and credit are drying up, and the banks, which provide essential grease to the markets, have stopped lending as usual.
The question now is whether the Fed’s move—or any move—will be enough to stanch the spread of the coronavirus contagion in the real economy.
The Fed’s big step
After a week in which plummeting equity markets were met with discord in the bond and credit markets, the central bank announced yet another round of emergency measures on Sunday. In addition to slashing its benchmark interest rate yet again, to a range of 0% to 0.25%, the Fed announced that it will be purchasing $700 billion worth of Treasury bonds and mortgage-backed securities—pumping additional liquidity into markets.
Perhaps as crucially for businesses, consumers, and the banks that they borrow from, the Fed also said that it will expand its “discount window” to depository institutions to 90 days and reduce their reserve requirement ratios to 0%. Those actions are intended to allow banks to more readily “meet unexpected funding needs” and support “the smooth flow of credit” to borrowers feeling the economic impact of the coronavirus outbreak, it said.
The Fed’s dramatic actions follow moves last week that attempted to alleviate roiling securities markets, including an initial emergency interest rate cut and the extension of $1.5 trillion worth of short-term repurchasing agreements to financial institutions. But it appears that those moves alone failed to adequately address the cracks appearing in the financial markets.
Most notably, U.S. Treasury yields—which had previously slipped to historic lows as investors flocked to the safety of government bonds—uncharacteristically climbed last week despite the stock market’s continued losses, indicating liquidity issues in what is usually considered one of the safest, most liquid markets in the world. Other assets considered traditional safe havens—namely, gold—also suffered losses.
Strange market moves
Market participants told Fortune that the strange movements were troubling and may have indicated that large, highly leveraged investors, such as hedge funds, were being forced to liquidate even their highest quality assets to raise cash to cover losses or margin calls on other bets.
Among the firms that some market participants believe were in this position were Bridgewater Associates, the large hedge fund founded by billionaire Ray Dalio. Over the weekend, Dalio acknowledged that at least one Bridgewater investment vehicle, its Pure Alpha II fund, has been caught off guard by last week’s market plunge and endured double-digit losses, although he did not say whether Bridgewater had been forced to liquidate safe assets, like Treasuries and gold, to cover these losses.
More alarming for many were indications that banks were becoming wary of lending to one another. The spread between two instruments banks often use for this purpose, three-month forward rate agreements and overnight interest rate swaps, jumped to nearly 0.66% on Friday morning, from 0.6% on Thursday.
There were also worrying signs that the Fed’s usual tools for jump-starting liquidity flows might not work after years of ultra-low interest rates and the new capital and risk controls put in place following the 2008 financial crisis.
For instance, despite the Fed offering $1.5 trillion in short-term repurchase agreements on Thursday and Friday, banks drew down only about $119.5 billion of this facility at the end of last week. Market participants said this indicates the Fed’s repo market intervention was likely to be ineffective this time for reasons that are not fully understood.
Some suggested banks already hold too many U.S. Treasuries on their balance sheets and are therefore unwilling to take on more, even on a short-term basis, in exchange for lending out cash. That may be why the Fed over the weekend said it would begin buying those securities back from banks directly.
Corporate bond fears
Meanwhile, the markets for municipal bonds and mortgage-backed securities also showed signs of shakiness last week. And just as worryingly, concerns arose regarding trillions of dollars of outstanding corporate bonds—particularly lower-rated, triple-B notes, which make up over half of the investment-grade bond market—and the ability of some companies, such as those in the coronavirus-hit energy and transportation sectors, to repay or refinance their debts given current economic headwinds.
“There’s a risk that a lot of these triple-B [bonds] can get downgraded to junk, which would make it more difficult for [those companies] to refinance,” Charles Schwab fixed-income strategist Collin Martin told Fortune. “If you’re a company that has been triple-B-rated and has been able to issue debt with relatively low yields, and now you’re suddenly a junk-rated company, you’re going to be faced with higher financing costs.”
In the face of such concerns, the Fed’s latest efforts look to ensure that banks have ample liquidity to meet borrowers’ credit needs should economic conditions continue to worsen, as seems likely. Goldman Sachs revised its U.S. GDP growth forecast to 0% in the first quarter of 2020 and, more worryingly, called for a 5% contraction in the second quarter, in anticipation of economic damage from the coronavirus.
“If things continue to deteriorate and corporates start withdrawing from their credit facilities, then banks need to be able to provide financing and we need to be sure they have [liquidity],” said Martin, who pointed to Boeing’s recent draw-down of a $14 billion credit facility as an example of a beleaguered company relying on its lenders to get it through an exceptionally tough time.
“The good thing is that [Boeing is] able to get that money, and now they are liquid,” he added. “But a risk for the broader market is if a lot of corporates have to be doing this down the road, and what kind of strain this puts on the financial markets.”
By pursuing an exceptional, emergency round of quantitative easing and freeing up banks to lend more easily, the Fed is hoping to avoid such strains on the U.S. financial system. As market participants noted, that system is significantly better prepared to deal with liquidity constraints than it was 12 years ago, when the financial crisis sent the global economy into a recession.
But with the coronavirus outbreak, and its impact on global commerce, showing no signs yet of going away, it appears that major financial markets and institutions—and the businesses that rely on them—will once more be put to the test.
More must-read stories from Fortune:
—The stock market is usually a poor predictor of recessions—but this time it’s right
—Bitcoin bloodbath: What people are saying about the crypto collapse
—1 in 3 Americans were stocking up before coronavirus was ruled a pandemic
—It’s time to start preparing your personal finances for a recession. Here’s how
—Dormant PayPal Credit accounts are coming back to hurt credit scores
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-16--How swing-state economies have performed since the 2016 election in 6 maps

Since Bill Clinton won the White House in 1992, his adviser James Carville’s famous dictum that pocketbook issues drive voting has endured as an electoral truism. To get a sense of how voters are feeling about their finances in this year’s election, we looked state by state at six economic indicators since President Trump took office. The numbers point to a close race: For example, Michigan—a key battleground state and one of 11 decided by less than five percentage points in 2016—is in the bottom quartile in income growth (3.8% annualized vs. a national average of 4.1%) but just above the mean in property value gains. Ohio’s homeownership growth (5.1%) doubled the average while its employment figure (1.7%) lags badly. The new economic X-factor? Coronavirus fallout.


fortune--2020-03-16--Apple fined $1.2 billion by French antitrust regulators over anti-competitive supplier deals

Apple Inc. was fined a record 1.1 billion euros ($1.2 billion) by French antitrust regulators for anti-competitive agreements with suppliers that thwarted independent resellers.
The French competition authority also fined two of Apple’s wholesalers — Tech Data and Ingram Micro — 76.1 million euros and 63 million euros for taking part in the sales curbs. The case focuses on the distribution of all Apple products except iPhones.
“Apple and its two wholesalers agreed to not compete against each other and prevent resellers from promoting competition between each other, thus sterilizing the wholesale market for Apple products,” Isabelle de Silva, head of the French agency, said in a statement on Monday.
The Apple fine is the latest crackdown on U.S. tech giants by the French watchdog. It fined Google 150 million euros late last year for setting “opaque” rules for its Google Ads advertising platform that it applied unfairly and randomly.
Apple didn’t immediately respond to a request for comment.
The fine comes after Apple said Saturday it’s closing its hundreds of retail stores outside of Greater China until March 27 and is moving to remote work in order to help reduce the spread of coronavirus.
Monday’s fine dwarfs the previous record antitrust penalty in France for a company — 350 million euros — which was handed down to Orange SA in 2015.
The French regulator said the Apple case was prompted by a complaint lodged by eBizcuss, an Apple premium reseller, in 2012.
More must-read stories from Fortune:
—Bitcoin bloodbath: What people are saying about the crypto collapse
—Bill Gates cuts formal ties with Microsoft, marking the end of an era
—The best Twitters to follow for reliable information on the coronavirus outbreak
—Dormant PayPal Credit accounts are coming back to hurt credit scores
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-17--Big liquor brands are pushing to incorporate more Irish whiskey in popular cocktails

Why the Saudi Arabia-Russia oil price war could mean the death of OPEC

Sean Muldoon, cofounder of downtown Manhattan bar The Dead Rabbit, has advice when it comes to crafting Irish whiskey cocktails: Keep it simple.
“The way to make Irish whiskey accessible to the masses is through simple drinks, like an Irish Coffee,” says Muldoon. The Dead Rabbit’s Irish coffee has just four ingredients: an ounce of Bushmills Irish whiskey, sugar syrup, coffee, and whipped cream. The Dead Rabbit sells as many as 2,000 Irish coffees each week, making it the bar’s most popular drink.
Irish whiskey cocktails, mixed with ingredients like ginger ale or soda, aren’t often complex. A straight shot and the Irish Car Bomb (dropping a shot of Baileys Irish Cream into a pint of Guinness) are also basic drink orders. But the category’s most popular cocktail, the Irish coffee, lags rival libations. The margarita, martini, and old-fashioned are all far more popular, according to research conducted last year by Nielsen. Across all major cities and times of the day that Nielsen tracked, the Irish Coffee failed to make the cut.
An Irish coffee made with Tullamore D.E.W.—a signature drink at The Buena Vista in San Francisco. Courtesy of Tullamore Dew
Often served hot, there are a few things holding the Irish coffee back. It is an annoyance for most bars to make, as coffee and whipped cream are key ingredients that most establishments don’t invest in. The caffeine in the drink limits the Irish coffee’s appeal late into the evening. It is also hard to imagine drinking more than one during a night out.
Despite struggling for a cocktail hit, Irish whiskey demand has boomed. As recently as 2007, Irish distillers were selling less than 1 million nine-liter cases stateside, but sales soared to nearly 4.9 million annually, according to data from industry advocate the Distilled Spirits Council. Irish whiskey volume jumped 8.6% last year in the U.S., research firm IWSR has reported. Jameson, Tullamore D.E.W., Teeling, Proper No. Twelve, and Slane are all growing brands.
“We are in the early stages of creating interest and awareness of what Irish whiskey can be,” says Jack Teeling, cofounder of his namesake distillery.
The Irish weren’t always so lucky. Heading into the 1900s, as much as 60% of whiskey consumed in the U.S. was Irish. But the industry’s decline was brutal, stung by Prohibition, the Irish Civil War, and a trade war with the United Kingdom. There were 100 legal distilleries in Ireland prior to Prohibition but that number dwindled to six by 1945, and further consolidation resulted in just one surviving holding company only a few decades later.
Roe & Co. Irish whiskey debuts in select markets this spring. Courtesy of Roe & Co Irish Whiskey
Rising consumer excitement for all whiskeys globally have helped the Irish. There are now 31 distilleries in Ireland, up from only four in 2010.
“Irish accounts in America are stocking a wider range of Irish whiskeys,” says Slane cofounder Alex Conyngham. “To support that, they are making their staffs better educated on the brands and different types of Irish whiskeys.”
The renaissance has led to dealmaking. Within the past decade, Jack Daniel’s maker Brown-Forman acquired Slane Irish whiskey, Beam scooped up the Cooley distillery, and Bacardi bought a minority stake in the Teeling distillery. Diageo, two years after it unloaded Bushmills Irish whiskey, reentered the category in 2017 with the launch of Roe & Co.
Elevating the cocktail experience at bars and restaurants remains an opportunity to propel Irish whiskey to even loftier heights. At The Dead Rabbit, new Irish drinks include a cocktail with freshly extracted apple juice. This month, it debuted an Irish coffee martini, the first time it has sold a cold variation in a bid to boost sales in the summer when demand for the hot drink tends to ebb.
A Jameson “Brewtini” Courtesy of Jameson Irish Whiskey
Jameson is on the same page, recently debuting a limited-edition cold brew. “It brings together the familiar flavor of cold-brew coffee with the smoothness of Jameson,” says Matt Foley, Jameson brand director at Pernod Ricard USA. Like many new coffee-based alcoholic beverages that have hit the market recently, Jameson Cold Brew is meant for brunch or as the ideal first drink ordered at night.
With 7.7 million cases sold globally, Jameson is the second-most-popular liquor brand sold by Pernod Ricard, trailing Absolut vodka alone. Sales for the brand, which commands an estimated 80% of the Irish whiskey market in the U.S., have been rising, and new expressions to generate buzz have included Jameson Caskmates and Jameson Black Barrel. But years ago, an effort to popularize the Jameson and Ginger at the local pub was less successful, insiders say.
The Tipperary, made with Chartreuse and bitters, is a classic cocktail that’s making a tepid comeback. Tullamore’s “D.E.W. and a Brew” aims to encourage pairing with stouts, red ales, and IPAs. Proper No. Twelve has been promoting the Knock Out, which is made with ginger liqueur, cinnamon syrup, lemon, and angostura bitters. Roe & Co., a whiskey with tasting notes of stone fruit and pear, is “made to stand up in cocktails” owing to a higher alcohol content than most rivals, says brand director Jason Sorley.
“Some bartenders were hesitant to put [Proper No. Twelve] in cocktails,” says Brian Axelrod, the brand’s U.S. director. “They thought it was more meant for shots. We are trying to change that perception.”
The Knock Out cocktail, made with Proper No. Twelve, cinnamon syrup, ginger liqueur, lemon, and angostura bitters. Courtesy of Proper No. Twelve Irish Whiskey
The Irish are also angling to encourage drinkers to enjoy their liquor without any mixers or just a little ice. Kilbeggan Single Pot Still, newly released this winter, has lingering spice notes and is meant for sipping. Slane encourages drinkers to order Slane Rocks, with just a little ice, the way most bourbon is enjoyed.
“With any whiskey, I’d recommend that people try them neat to begin with,” says Jamie MacKenzie, director of marketing at Kilbeggan Distilling Co.
Still, the Irish coffee looms large. Slane holds an annual competition in Chicago challenging bartenders and baristas to make the greatest Irish coffee. Kilbeggan’s whiskey ambassadors partner with local coffee roasters to recommend Irish coffee drinks that can be made with the brand. Muldoon argues that better-tasting Irish coffees are a necessity for the industry’s bars and distillers.
“What can help promote Irish whiskey as a category is that if people like [the Irish coffee], they’ll say, ‘What’s in that drink?’ And you can say, ‘Irish whiskey,’” says Muldoon. “It is a gateway cocktail to build trust.”
More must-read stories from Fortune:
—The man behind some of Napa Valley’s most acclaimed wineries
—5 things the CEO of Barry’s Bootcamp always packs when traveling
—Where you should eat, visit, and stay in Marrakech
—This Raja Ampat yacht trip might be the world’s most exclusive escape
—WATCH: Can San Francisco Be Saved?
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-03-17--Belarusian soccer takes center stage as bettors search for games amid U.S. coronavirus sports blacko

Belarusian soccer takes center stage as bettors search for games amid U.S. coronavirus sports blackout

The temporary halt to the U.S. sports calendar has left gambling services scrambling to find something for clients to bet on.
DraftKings Inc. has heavily promoted sports like Mexican soccer and UFC, both of which were still holding events through last weekend, and the company did its first-ever fantasy politics offering, letting people pick whether Joe Biden would say “coronavirus” or whether Bernie Sanders would say “millionaire” or “billionaire” first. On Wednesday, DraftKings will run its largest-ever fantasy tournament around esports — competitive video gaming — one that carries a $60,000 prize.
At William Hill Plc, bettors will see a lot of small-time soccer, maybe from countries they didn’t know existed.
Joe Asher, chief executive officer of William Hill’s U.S. operations, rattled off the options: “It’s rugby. It’s Belarus Premier League. It’s Kazakhstan Premier League. The Ukraine’s got stuff going. Turkish soccer. Argentina, Chile, Brazil, Gibraltar, Kosovo, Serbia,” he said. “And I’m only scratching the surface.”
That’s how sportsbooks will cope until the coronavirus pandemic eases and U.S. leagues are allowed to resume. It’s a mix of offering odds on the few global sports still running and developing new opportunities — such as political wagers, assuming regulators allow them — all while prepping for whenever U.S. games go live again.
That said, it will cost the industry tens of millions in dollars, pounds and euros, if not more. March Madness, the just-canceled NCAA college-basketball tournament, is a multimillion-dollar event at a company like William Hill, which operates over 114 sportsbooks in Nevada and takes bets in eight other states. Add in the suspended NBA and NHL seasons, the delay in the launch of baseball season, and the dozens of other events that either won’t happen or will be pushed into the future, and it’s a crushing blow.
“We’re not sharing numbers, but it’s pretty easy to say — there’s no sports, there’s no betting,” said DraftKings CEO Jason Robins.
Last year, Nevada sportsbooks made $329 million in revenue, excluding horse racing. In New Jersey, it was $299 million.
The situation surrounding the coronavirus remains fluid. PointsBet spent time over the last week creating new products around Mexican soccer and Russian hockey, only to see both leagues later suspend play. Now the company is exploring competitions like esports and chess, and expanding its offerings for the upcoming NFL season.
Bettors can now wager on each game in the Giants, Jets and Eagles 2020 schedule. PointsBet is also launching what it is calling “March Strangeness,” which will highlight a different obscure sport each day, including tutorials on how to bet on them.
The coronavirus pandemic will affect betting operators in different ways. Those with large staffs and in-person business will likely feel it most. MGM Resorts International, for example, has closed all its Las Vegas properties. DraftKings is currently seeking regulatory approval for its $3.3 billion merger deal with a blank-check company, a process that Robins said would be unaffected.
The impact will also vary state by state. New Jersey offers so-called iGaming, such as online blackjack, which DraftKings said saw a massive uptick in users this weekend. Each state has its own regulations as well, meaning some may approve more obscure sports, while others may reject them.
On the whole, bettors can expect to see more creativity from sports operators — providing something to keep the lights on for the next few months and an enticement for people to keep money in their accounts.
Some customers are pulling out. Asher said William Hill had a 15% to 20% withdrawal rate among its Nevada clients, but that was less than he had expected. Robins said the total was lower at DraftKings.
“I’m hoping we can have the games played in empty arenas soon to give people something to watch on television,” Asher said. “Obviously that’s self-serving and helpful to our business, but I also think it’s so important for the country to help us get through it. Sports plays a big role in that.”
More coronavirus coverage from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The coronavirus could upend America’s business relationships to China
—The best Twitters to follow for reliable information on the coronavirus outbreak
—3 months before the coronavirus, a war game showed we weren’t ready
—How mainland China’s closest neighbors have kept coronavirus cases so low
—Couples are scrambling to prepare last-minute wedding alternatives
—SARS taught Taiwan how to contain the coronavirus outbreak
—How A.I. is aiding the coronavirus fight
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-17--Why the Saudi Arabia-Russia oil price war could mean the death of OPEC

Big liquor brands are pushing to incorporate more Irish whiskey in popular cocktails

OPEC may not survive to celebrate its own 60th birthday later this year. Saudi Arabia’s decision to abandon output restraint and flood the market with cheap crude signals the end for a group dubbed the world’s most successful cartel.
In a selfish bit of showmanship, Saudi Arabia, by far the biggest producer in the Organization of Petroleum Exporting Countries, tore up an output agreement that had lasted since the start of 2017. It did so because Russia, the largest of OPEC’s external allies, wouldn’t play ball and refused to make deeper production cuts to help prop up oil prices in the face of the economic devastation being wrought by the Covid-19 virus.
The kingdom had probably hoped to shock the Kremlin into coming back to the negotiating table, but that clearly backfired. The impact — compounded by the deadly virus’s continued spread — will be much more damaging for OPEC’s other members, from Algeria to Venezuela, than it will be for Saudi Arabia’s nemesis in the wider OPEC+ coalition.
The de facto leader of OPEC could have made other calculated choices before taking an every man for himself approach and starting an all-out oil price war. After all, Russia offered to extend the current output cuts beyond the end of March, and there was nothing to stop OPEC’s 13 members from agreeing further reductions just among themselves.
But Saudi Arabia seems to have decided that the OPEC+ pact, which started life as a temporary coming together meant to last only six months, needed to continue further into its fourth year. If the external partners weren’t prepared to cut deeper, then OPEC wouldn’t act either. And, since not everyone saw eye to eye, the current agreement wouldn’t be extended, leaving everybody free at the end of March to pump as much as they want, or are capable of.
Then, rather than wait and see, Saudi Arabia acted with a vengeance, slashing the cost of its crude for loading in April. Official selling prices — set as differentials to regional benchmarks — were cut by the most on record after the OPEC+ deal fell apart. With Brent trading around $30 a barrel and the discount for sales of Saudi Arabia’s key Arabian Light grade set at $10.25 a barrel, there is an ocean of $20 oil set to head for Europe next month. There have also been big increases in the volumes allocated to buyers in both Asia and on the U.S. Gulf coast.
Saudi Arabia’s monopoly oil producer, Saudi Aramco, says that it will supply its customers with 12.3 million barrels a day in April. That’s more than the company can pump out of the ground, even if it opens the taps fully, thus implying that it will draw down crude stored at home and in tanks in Japan, the Netherlands and on Egypt’s Mediterranean coast.
While the kingdom can partially offset the collapse in oil prices with the boost in volumes, most of its fellow OPEC members are much less fortunate. They are already pumping almost as much as they can.
In Libya, for example, production has been cut to near zero after a local warlord closed almost all of the country’s export terminals. A peace deal could increase it by more than 1 million barrels a day, but that seems remote. Iran and Venezuela could both boost output were it not for U.S. sanctions on their oil trade, although Venezuela’s upside is limited.
For the rest of team OPEC, Nigeria is the only country outside the Persian Gulf that can boost production by more than 100,000 barrels a day. But that’s not going to get it very far. A simple back-of-the-envelope calculation shows that lifting output to capacity would only reduce the West African nation’s losses from the price drop to $30 a barrel from $60 by 6%. For Angola, the region’s second-biggest producer, the potential reduction in its loss is just 3%. By contrast, Saudi Arabia, from its kingpin perch, could recoup more than a quarter of the oil revenue it would lose as a result of the price drop by increasing supply to 12.3 million barrels a day from 9.7 million.
This is not the first time that Saudi Arabia has cast smaller OPEC producers to the wolves. As a grouping of sovereign nations, they have little leverage over the group’s biggest producer. But the kingdom’s latest actions, in the face of an unprecedented hit to global oil demand, show its true disregard for fellow members.
When OPEC was originally formed back in 1960, part of its principal aim was “safeguarding the interests of Member Countries individually and collectively.” That goal was still paramount in the revised OPEC Statue, drawn up in 2012. So too was “eliminating harmful and unnecessary fluctuations” in oil prices. Saudi Arabia’s latest actions are diametrically opposed to those goals, and have helped cause oil prices to fall by almost 40% in a little over a week. That is certainly not in the collective interests of OPEC’s members.
The oil cartel was a useful fig leaf for Saudi oil policy when it wanted to support oil prices. Now that it wants to send them tumbling, OPEC is simply an inconvenience. The group has survived seemingly irreconcilable internal differences in the past. This one might just be a step too far.
More must-read stories from Fortune:
—Business is finally starting to reckon with climate change
—How mainland China’s closest neighbors have kept coronavirus cases so low
—Plastic that travels 8,000 miles: The global crisis in recycling
—How the world’s most densely-populated region fought off the coronavirus
—WATCH: Rethinking your travel plans because of coronavirus?
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-17--Global markets remain choppy after Monday’s historic plunge

Good morning. The markets are still on edge. After yesterday’s historic plunge, they’re up and down, tipping from green to red and back again.
Let’s see where investors are putting their money.
Markets update
We start again in Asia where the major indices are trading a bit higher.
In Europe, the new epicenter of the Covid-19 pandemic, it’s looking less rosy. Tech heavyweights S&P and ASML were both up more than 3% at the open, notable as hedge fund giant Bridgewater Associates has built a monster short position against these two, and a bunch of other European stocks. According to Bloomberg, Ray Dalio’s fund has gone all-in with a $14 billion bet against Europe. Two hours into the trading session, Europe had fallen into the red, as had Dutch chip-maker ASML.
Across the Atlantic, the U.S. futures are following Europe’s lead down, as I type. The Dow and S&P 500 look set to open flat after yesterday’s brutal sell-off.
Elsewhere, the dollar is up. Crude, after a strong start, is slipping again. And gold is down. Perhaps the most optimistic sign of the day is that investors are not flooding into bonds. The U.S. 10-year has ticked up to 0.80%, well off the worrisome lows it hit on Friday and early yesterday.
Let’s go back to equities. The Dow Industrials yesterday was down 2,997.10 points to close at 20,188.52. Last month we were talking about Dow 30,000. Now there’s the question of whether the index will fall to depths that will wipe out years of gains. If the Dow were to fall a further 362 points it would return to the level it was on January 20, 2017, inauguration day for President Trump.
Let’s put yesterday’s drop into historical perspectives.
***
Black Monday 2.0
This chart astonished me. We’ve had two sessions in the past week that were on par with the worst days of the crash of 1929. Yesterday set a couple of records, including biggest-ever point decline. The volatility far outpaces anything we saw during the 2008-2009 financial crisis.
Of course, there’s always opportunity amid such markets tumult. I’ll leave you with this thought from Frances Donald, managing director, chief economist, and head of macro strategy at Manulife Investment Management, who spoke to Erik Sherman at Fortune.
“When the market is so bad and you believe it’s only going to get worse and panic is running everywhere—when panic has peaked, that is a good time,” he said.
Have we reached that peak? Donald, for one, is not convinced we’re there yet. But that day will come. And we’ll be here to detail that moment.
Postscript
In college, my very first journalism job was on the obits desk. A few evenings a week, I wrote obituaries that ran in the pages of a family-owned newspaper in central New Jersey. This was back in the early 90s when local newspapers were a big deal in cities and towns across the country. No story was bigger, my editor told me, than the obit. Everybody reads them.
That’s probably why, wherever I travel, from Nairobi to New Jersey, I pick up the local newspaper and quickly head to the obits page.
I was startled to hear a radio interview this morning with an Italian journalist in Bergamo, one of the hardest coronavirus-hit regions up north. He mentioned that, since the start of the crisis, the obits now regularly run over 11 pages in the local newspaper there, up from a page or two. “We’re losing a generation,” the reporter said.
Sorry to leave you on such a pessimistic note. We’re into our second week of lockdowns here in Italy, and the official figures are still showing a pandemic on the rise. I imagine that not until we start to see those obit pages thin again will we be on more secure footing about the future.
Take care of yourselves, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
Looking for more detail on coronavirus? Fortune has a new pop-up newsletter. The aptly named Outbreak will keep you up to date on the latest news surrounding the coronavirus outbreak and its impact on business and commerce globally. Sign up here.
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Today's reads
Out of ammo? Billionaire hedge fund investor Ray Dalio is skeptical of the Federal Reserve’s efforts to prop up the coronavirus-hit U.S. economy. The Bridgewater Associates founder fears that a “hard 0%” interest rate floor could prove counterproductive for many asset classes and will deprive the Fed and other central banks of the ammunition to take further action if needed, writes Fortune’s Rey Mashayekhi.
The buy-back folly. The stock market selloff has revealed the dark side of U.S. corporations buying back their own shares. Some buybacks touted as great deals look terrible today. In many cases, CEOs and boards should have known better, and returned those billions in dividends instead, argues Fortune’s Shawn Tully.
Boomerang CEOs. It’s common for companies in dire straits to bring back a former CEO for a second stint. The most famous example is Steve Jobs, who transformed Apple when he returned after 12 years away. But for second-time-around CEOs, success is more the exception than the rule, writes Ryan Derousseau in Fortune.
Market candy
Quote of the day.
“Young investors should pray for bear markets because it allows them to buy more shares at lower prices.”
That's the view of Ben Carlson, director of institutional asset management at Ritholtz Wealth Management, who says that, while today’s plunging share prices are scary for those approaching retirement, they offer an opportunity for young investors who have decades to save and invest.


fortune--2020-03-17--Introducing the Leadership Next podcast

Introducing the Leadership Next podcast

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Tired of working from home yet? Well here’s something to brighten your social-distanced day: my new podcast, Leadership Next. The first episode features an interview with Microsoft CEO Satya Nadella on how he views the social responsibility of business, as well as an interview with Oxford Professor Colin Mayer, whose book Prosperity: Better Business Makes the Greater Good, was cited by Nadella as shaping his views. You can access the podcast here. The second episode, featuring Starbucks CEO Kevin Johnson, is also being released today.
I launched this podcast because I’m convinced something big is happening in the world of business. The rules of the game have changed. I’ve covered the intersection of business and society for four decades, but it’s only in the last few years that I’ve started hearing the best leaders talk more earnestly about how to increase their positive impact on society. Some are making big commitments to climate action. Others are struggling to create new work opportunities for the disadvantaged. Still others are making strong public statements on controversial issues like gun control or gay and transgender rights.
The more I explored this, the more I found it was linked to a bigger set of changes in how large companies operate. The folks in charge spend much less time than they used to giving orders—decision-making has been pushed to the edge—and much more time offering inspiration, motivation, and even moral leadership. The pace of change is so rapid, they can no longer make decisions at the top, and instead have to create an environment where the right decisions are made further down the line.
These 21st century leaders also are less focused on physical and financial capital, and more focused on human capital. They are in a competition for the best employees, and the best employees want to work for companies doing good in the world. Increasingly, consumers and investors are demanding the same. And all of this is taking place in a world of hyper transparency, when any action, good or bad, can be amplified almost instantly around the globe on social media.
To explore these developments, I thought it best to go straight to the source: the CEOs who are at the leading edge, and are changing the business world as we know it. We’ll publish a new interview every week, so keep watching this space.
In addition, a few new Fortune stories to pay attention to today:
–Cliff Leaf’s interview with Accenture CEO Julie Sweet, who says the coronavirus is accelerating companies’ use of internal collaboration tools and other digital technologies. “That’s going to be a big area of opportunity (for us) to help clients.”
–Our list of the 100 best designed products of modern times. Number one on the list may not surprise you, but others will. (You may be tempted to dig your Walkman out of storage.)
—Eamon Barrett and Grady McGregor’s piece on how densely-populated Macau managed to fend off the coronavirus. There’s a lesson there for the rest of us.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Volatile markets
In the wake of yesterday's carnage—the Dow suffered its worst one-day point loss ever—Asian markets were volatile but largely in the green, with the notable exception of South Korea's Kospi (down 2.5%). Europe also kicked off the day with a bright start, with the Stoxx 600 up 2.9%, but then the mood soured and it dipped below -3%; at the time of writing it's recovered to roughly neutral territory. U.S. futures suggest a mildly positive open. New York Times
Latest measures
U.S.: The Trump administration has recommended the closure of schools and avoidance of groups larger than 10 people, and the president told governors: "Respirators, ventilators, all of the equipment—try getting it yourselves." France: The Macron administration has announced a two-week lockdown of the entire country, with 100,000 police ensuring people don't leave home, plus a $50 billion aid package. Germany: The Merkel administration has ordered the closure of non-essential shops and also urged people to stay at home, with non-essential travel essentially banned. U.K.: The Johnson administration has changed its tune on allowing the virus to sweep the nation, and now recommends strong social distancing. New Zealand: The Ardern administration has announced a $12 billion package of stimulus and bailout measures that amounts to 4% of GDP. France24
Hewson out
Marillyn Hewson is to step down as CEO of Lockheed Martin, after seven years at the helm—in the most recent two of those years, she has headed up Fortune's Most Powerful Women list. Hewson, 66, has worked full-time for the last half-century. She will be succeeded by American Tower CEO James Taiclet. "After the financial success of last year and the record $144 billion of business in backlog, the timing is right for this leadership transition," the company said. Fortune
Amazon hiring
The coronavirus crisis is at least being good to Amazon, as people turn to online deliveries at a frantic pace. The company is looking to hire an extra 100,000 people in the U.S. alone—for context, it employs 800,000 people today, globally—and will raise its pay for fulfillment, transportation, store and delivery employees. Wall Street Journal
AROUND THE WATER COOLER
Airline support
The Trump administration has pledged to back the U.S. airline industry following its calls for over $50 billion in aid. But should it? New analysis shows the major carriers spent the last decade using almost all their spare cash—as in, 96%—for share buybacks. BBC
Where's the bottom?
According to Goldman Sachs, we have not yet hit the bottom. The company reckons the S&P 500 could be down to 2,000 points by mid-year. Anne Srader's piece contains this advice from Bankrate.com financial analyst Greg McBride: "Thinking 5, 10 years down the road could prevent that regrettable knee-jerk selling reaction and reveal potential buying opportunities." Fortune
Fake news
At a time when online disinformation is running dangerously rampant, a new report shows European fake news websites are making around $75 million a year in advertising, much of which is placed by Google. And yes, this includes sites peddling falsehoods about the coronavirus pandemic. Financial Times
Hanks for that
Rita Wilson and Tom Hanks have been released from hospital in Australia, following their positive coronavirus tests. They are now in self-quarantine. Less good news: Idris Elba has it now. CNBC
This edition of CEO Daily was edited by David Meyer.


fortune--2020-03-17--Even $150,000 won’t get you a ticket: Super-rich spurned by private jets as coronavirus stops flight

Even $150,000 won’t get you a ticket: Super-rich spurned by private jets as coronavirus stops flights

Private jet operators are turning away wealthy clients as coronavirus-related travel bans restrict their ability to operate, despite a surge in requests from people willing to shell out as much as $150,000 to secure a spot on their planes.
Inquiries for international flights on private jets have shot up ninefold, said Kanika Tekriwal, founder of New Delhi-based JetSetGo, as individuals with vast financial means try to escape virus hot spots. One of her clients, an Indian tycoon, tried to book a jet to fly with his family to New Delhi from London last weekend, but he remains stranded in the U.K. after a sudden travel suspension in a stopover country came in just half an hour before they were due to depart.
India then announced a ban on flights from Europe and the U.K. on Monday, potentially leaving the tycoon stranded in London indefinitely. The India ban comes into effect Wednesday.
“Rules are changing every half an hour,” Tekriwal said in an interview Monday, declining to identify the tycoon because of client confidentiality. “No one knows who’s changing what, some countries are suddenly not allowing pilots of some countries, some countries are not allowing aircraft of some countries.”
India extended its ban to countries including Malaysia and the Philippines on Tuesday, as confirmed coronavirus cases in the country rose to 125.
The pandemic, which has killed more than 7,000 people and infected about 174,000, has driven aviation into an unprecedented crisis that, according to Sydney-based CAPA Centre for Aviation, could push most of the world’s airlines into bankruptcy by the end of May as governments hastily impose entry and quarantine rules. The private jet industry isn’t immune to those restrictions, even as inquiries surge about bookings, including from Americans in Europe.
“There is a new directive or advisory coming out every day,” said Rajan Mehra, who heads business aviation company Club One Air. “Tourism is practically frozen for the time being and corporates are not traveling at all unless they have to.”
JetSetGo’s Tekriwal, who oversees a fleet of 28 private aircraft, said the surge in inquiries is essentially for one-time flights back home so it doesn’t reflect healthy demand. Overall, 87% of scheduled bookings with her company have been canceled, she said. Mehra’s company, which operates 10 planes, has seen travel decline as much as 70%.
“We are extremely worried as to what the future holds, how we’re going to pay salaries,” Tekriwal said. “It’s a ripple effect. If industries and corporates don’t do well, where will they get money to pay for us? We’re considered a luxury, a high-cost industry, so we get hit first.”
More coronavirus coverage from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The coronavirus could upend America’s business relationships to China
—The best Twitters to follow for reliable information on the coronavirus outbreak
—3 months before the coronavirus, a war game showed we weren’t ready
—How mainland China’s closest neighbors have kept coronavirus cases so low
—Couples are scrambling to prepare last-minute wedding alternatives
—SARS taught Taiwan how to contain the coronavirus outbreak
—How A.I. is aiding the coronavirus fight
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-17--How a Dr. Seuss book inspired Starbucks’ commitment to sustainability

When Starbucks president and CEO Kevin Johnson was asked by his 4-year-old grandson to read The Lorax together, he had no idea the tyke had picked an allegorical tale. Johnson was struck by the parallels in the Dr. Seuss book to the story of environmental sustainability today. The next week Starbucks launched an internal initiative with a fitting code name: The Lorax Project.
CEOs like Johnson—ones who are fundamentally redefining the relationship between business and society—are the subject of Fortune’s new weekly podcast Leadership Next. They’re answering the call not just to turn a profit but to prove they are doing good in the world. Johnson is the guest on our second episode, hosted by Fortune president and CEO Alan Murray. New episodes are released each Tuesday.
Starbucks was founded in 1971. (Coincidentally, The Lorax was published the same year.) The global coffeehouse chain is using its 50th anniversary next year as a milestone to make a new major commitment to the environment. As Johnson considers how to steer the company through its next 50 years, he’s clear that sustainability will be an integral component. Murray and Johnson speak at length about Starbucks’ bold, multi-decade aspiration to be a “planet positive company.”
Johnson says at the six-minute mark: “In a lot of ways our political infrastructure is not serving society as well as it needs to, and that creates an opportunity for the private sector to step up. I think, actually, businesses going forward are going to have to have a mission that goes far beyond the pursuit of profit, a mission that somehow contributes back to society in a way that creates a positive dynamic.”
Later in the podcast, Murray is joined by strategist Andrew Wanliss-Orlebar of Futerra, a U.K.-based company that helps businesses shape their sustainability policies. With many companies starting to make public their plans for environmental issues, Wanliss-Orlebar commends Starbucks for having a more comprehensive plan than others, saying, “It’s not just a carbon commitment. They are looking at carbon and water and waste… Only when you start looking at those together can you start getting to strategies that go beyond offsetting.”
Listen and subscribe to ‘Leadership Next’ now:
More must-read stories from Fortune:
—Here are two of the biggest losers from the Saudi Arabia oil price war
—The oil industry is finally talking climate, but don’t expect quick changes
—The oil sector takes its next hit: Coronavirus on offshore rigs
—The real victims of coronavirus and the oil price war won’t be on Wall Street
—Coronavirus may be the straw that breaks the back of oil fracking
Subscribe to The Loop, a weekly look at the revolutions in energy, tech, and sustainability.