fortune--2020-10-28--Wisdom from Day Two of the Fortune Global Forum

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Good morning.
Day Two of the Fortune Global Forum brought more insights into how CEOs are navigating a year like no other—which is undercutting their financial health, accelerating their technological transformation, and demanding more action on social issues, all at the same time. Several of the CEOs referred to it as the “defining moment” of their careers. The key challenge they face, as Hilton’s Chris Nassetta put it, is: “How do we position ourselves to be better, faster, stronger….so that we turn the crisis into opportunity.” Some excerpts:
On the speed of change:
“This whole circle of change is coming faster and closer…The real differentiator of us as leaders is being able to navigate change.”
—Barbara Humpton, CEO, Siemens USA
More on the speed of change.
“This is a new world. We won’t go back to the old world, that’s just gone. So what do we do? Do we just wait? Or do we accelerate transformation?”
—Alexandre Dayon, Chief Strategy Officer, Salesforce
Why the crisis has led CEOs to increase their commitments to social issues.
“What COVID has done is expose underlying issues in the economy in an even more stark way. SMEs and service-oriented businesses which tend to employ more women and minorities have been more heavily impacted.”
—Ajay Banga, CEO, Mastercard
On the defining moment:
“It occurred to me in early March that this was going to be my defining moment as CEO…How do we make sure we do the harder right, rather than the easier wrong?”
—Chip Bergh, CEO, Levi Strauss
More on the defining moment:
“This is truly the mother of all defining moments…In previous defining moments, if as a business leader you came out with the top and bottom line intact, that was defined as good enough. Now that is no longer good enough. People want to see that you’re making a positive contribution to some of these societal issues.”
—Mark Schneider, CEO, Nestlé
On the importance of reskilling:
“Every organization needs now to recommit to reskilling as a competency of their organization. I am still surprised by how many organizations still don’t have a reskilling competency, and I’m hopeful this moment will change that.”
—Liz Hilton Segel, Managing Partner, North America, McKinsey
More on reskilling.
“We see many companies today, on the one hand, laying off, restructuring, and at the same time hiring new people. It’s quite strange. What we say is it is much cheaper and much more socially responsible to look at your own workforce and look at the people you can upskill and reskill and make that investment.”
—Alain Dehaze, CEO, Adecco
On work from home and innovation:
“Our patent applications are down 50%.”
—Greg Hayes, CEO, Raytheon Technologies
On testing at airplane gates:
“It’s probably the only way we will get international travel back.”
—Ed Bastian, CEO, Delta
On empathy as a leader.
“One of the things that has been a silver lining, through Zoom and other contacts, we’ve actually become closer to our people and closer to their daily lives. All of our leaders have a better sense of the day to day lives of our employees.”
—Jim Fitterling, CEO, Dow
How the crisis has broken down business hierarchies:
“All the social codes of leadership have kind of all disappeared. We are all little pictures on Zoom.”
—Alexandre Dayon, Chief Strategy Officer, Salesforce
On China:
“Capitalism and capital markets could in a few years be more embraced in China than in the United States.”
—Ray Dalio, founder, Bridgewater Associates
On the wait for a vaccine:
“We have already manufactured hundreds of thousands of doses, and reequipped five manufacturing sites around the world. We will be ready if the FDA approves the vaccine…We have committed to the US government to provide this year 30 million to 40 million doses.” By the end of the first quarter “we will have 100 million doses.” (The Pfizer vaccine requires two doses per person.)”
—Albert Bourla, CEO, Pfizer
On navigating crises:
“Keep your eye on the prize. Play the long game.”
—Mark Carney, former Governor of the Bank of England & Bank of Canada
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Election integrity
The CEOs of over 500 companies ranging from Gap, Tyson Foods and Starbucks to Deloitte, Pepsi and Dow Chemical have issued a joint statement calling for safe access to the polls next week, the recognition of state and local election officials as the trusted source for certified results, and "patience as officials count every vote." Many of the firms have committed to giving staff time off to go vote. Civic Alliance
Visa and Plaid
Visa's $5.3 billion takeover of fintech firm Plaid has raised the alarm at the U.S. Justice Department, which is reportedly mulling an antitrust suit that would block the purchase. The department is apparently worried about the deal limiting new competition in the payments sector. Wall Street Journal
Aston Martin
Daimler, the owner of Mercedes-Benz, will quadruple its 5% stake in Aston Martin over the next three years. As part of the deal, the struggling U.K. automaker will get to use Mercedes-Benz's next-gen hybrid and electric powertrains and other components. The German giant has had its 5% stake in Aston Martin since 2013. Deutsche Welle
Delivery Hero
The Berlin-based food-delivery firm Delivery Hero was the one star performer on Germany's DAX today, with shares rising as much as 5% on extremely healthy results. Most of the DAX was a sea of red this morning, though, in line with the rest of Europe's stock markets—fresh national lockdowns are probably looming in Germany and France. U.S. futures aren't looking pretty, either. Fortune
AROUND THE WATER COOLER
Apple Search
Apple is building up its in-house search capacity, in a likely hedge against U.S. antitrust regulators cracking down on its multibillion-dollar search deal with Google. Apple's own search results have been quietly given greater prominence in iOS 14, the latest version of its iPhone operating system. Notably, Apple poached Google's search chief, John Giannandrea, a couple years back. Financial Times
Brexit software
The freight industry would dearly love to finish developing the software that will be needed to help transport companies submit their post-Brexit customs paperwork digitally—as opposed to doing it manually at the border, thus slowing everything down—but it can't, because the British government still hasn't provided the necessary details and direction. This software will be crucial in a mere two months' time, when the Brexit transition period ends. BBC
Election results
Will we know the results of the U.S. election a week from now? Deeply unlikely. As Fortune's Nicole Goodkind writes: "We’ll likely have a good idea of who will be taking the seat in the Oval Office by the end of election week. But until then, it will be up to already overburdened local elections offices and politicians to communicate disparities effectively to the press and American people, and they’ll potentially be speaking up against the wishes and voices of the well-oiled White House press shop." Fortune
Choose love
Angela Denker, a pastor and author, writes for Fortune that American Christians made a cynical choice in 2016 because "they figured if everyone was lying, at least they could elect a liar who claimed he’d lie for them." But now, she says, the pandemic has shown people wanting to be better: "Most people want to love each other, not hate each other…We agreed, millions of us, including those who voted for Trump in 2016, that this time we’d tune out the cynicism so that maybe we could hear the love and keep our lives." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-28--Trump’s final campaign push touts his China trade policy—but his signature deal isn’t delivering wha

Trump’s final campaign push touts his China trade policy—but his signature deal isn’t delivering what it promised

U.S. President Donald Trump is running for reelection, in part, on the idea that his aggressive trade policy with China has been a boon to the United States.
“It’s probably the No. 1 reason I’m standing here, because of trade, and have we turned that around,” Trump said at a rally in Michigan on Tuesday. “I put big fat, beautiful tariffs on China. We took in tens of billions of dollars,” he said later. (In fact, the money the U.S. Treasury took in from tariffs was paid by U.S. importers of Chinese goods.)
New data, however, suggests that the U.S. has so far failed to reap the full benefits of Trump’s signature trade deal with China. What’s more, the issue is not a top concern for U.S. voters.
The last tranche of U.S.-China trade data to publish before the 2020 U.S. presidential election on Nov. 3 shows that China is not on pace to meet the terms of the phase 1 trade deal the Trump administration signed 10 months ago.
In January, the U.S. and China took the first step to end a yearslong trade war, with China agreeing to buy $200 billion more of U.S. goods in 2020 and 2021 in exchange for relaxed U.S. tariffs.
Through September, China had imported roughly 53% of what it should have bought to be on track to meet the deal’s 2020 targets, according to the Peterson Institute for International Economics’ (PIIE) trade deal tracker.
“The evidence indicates that the deal is failing to live up to Trump’s pledge,” senior fellow for PIIE Chad Bown wrote on Tuesday. “No single reason explains why China has not met the phase 1 goals. The COVID-19 pandemic did initially knock China’s economy on its heels, but its trade has recovered faster than most. And some U.S. exports to China—including medical supplies, pork, and semiconductors—actually accelerated in 2020.”
After the election, Bown wrote, “the United States needs a new approach to address its trade concerns with China.”
Importance to voters
The latest figures undercut Trump’s boasts about his record on trade, but even his inflated claims may not resonate with voters. Surveys show that trade policy ranks low when it comes to the issues voters care most about.
In a 2016 preelection poll of registered voters, 57% of respondents said trade policy was “very important” to their choice of presidential candidate, according to the Pew Research Center. Still, it ranked 11th on a list of 14 issues pollsters asked about. Likewise, a 2016 Gallup poll found that trade policy didn’t rank as one of the top 10 most important issues for Republicans, Independents, or Democrats in choosing a presidential candidate.
Again this year, trade policy is not a top concern for U.S. voters. In January 2020, a Gallup poll found that voters ranked the U.S.’s “trade policy with other nations” 15th on a list of the 16 most important issues in the presidential election.
But in recent months, perhaps because of the pandemic, public support for a more aggressive U.S. trade relationship with Beijing seems to be growing, even if it isn’t top of mind at the ballot box.
In June 2020, Morning Consult found that 39% of voters believed that U.S. tariffs on Chinese exports would help the U.S. economy, while 38% said the tariffs would hurt it. In the same poll from May 2019, 36% of voters believed U.S. tariffs on Chinese exports would help the U.S. economy as opposed to 44% who said they would hurt the U.S.
Competing claims
Even though voters have more pressing concerns, Trump and Biden continue to relitigate Trump’s trade policies as they make their final appeals.
On CBS’s 60 Minutes, Biden blasted Trump for increasing the U.S.’s. deficit with China.
“We have a trade deficit that’s larger with China than when we were there,” Biden told 60 Minutes on Sunday, referring to the Obama presidency.
The U.S.’s trade deficit with China from 1985 to 2019, in U.S. dollars. USTR
Biden made a similar claim in a September debate with Trump, and, as Fortune previously reported, it’s at least partly true. The U.S.’s trade deficit continued to balloon in Trump’s first few years in office but has since returned to roughly Obama-era levels.
Meanwhile, Trump said at the rally that if reelected he will help the U.S. end its “reliance on China once and for all.”
In order to do so, the U.S. may need to start from square one in trade negotiations with China.
“[The phase 1 trade deal] did very little to tackle the major trade issues the United States has with China,” the PIIE’s Bown writes. “No matter who is President, the United States needs to get China to liberalize its tariffs, remove nontariff barriers, and rationalize its subsidies and other practices that distort economic incentives.”


fortune--2020-10-28--Not even Big Tech can save investors from the latest markets plunge

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. It’s a risk-off day with a capital R.
European bourses are having their worst day since May as COVID cases hit fresh records and new closures and curfews are in the works. The U.S. futures too are sinking. Microsoft’s muted outlook yesterday is weighing on tech futures, with one prominent investor warning we’re staring at an “enormous” bubble for tech stocks. More on that below.
Let’s see what else is moving the markets.
Markets update
Asia
The major Asia indexes are mixed in afternoon trading with the Shanghai Composite the best of the bunch, up nearly 0.5% .
are mixed in afternoon trading with the the best of the bunch, up nearly . A special g’day to our friends in Melbourne, Australia. They emerged today from one of the world’s longest and strictest lockdowns , one that offers stark lessons about the economic toll of shutting nearly everything down to combat the virus.
, one that offers stark lessons about the economic toll of shutting nearly everything down to combat the virus. Don’t get CNN’s Fareed Zakaria started on the logic of lockdowns. They “are a sign you have failed,” he told the virtual attendees of the Fortune Global Forum yesterday. “You are using a big blunt instrument, and you are crushing the economy.”
Europe
The European bourses are bombing out of the gates with Paris and Frankfurt down roughly 3% a half-hour into trading as speculation is rife of further lockdown measures across both countries.
are bombing out of the gates with and down roughly a half-hour into trading as speculation is rife of across both countries. In the past 24 hours, France and the U.K. reported the most COVID deaths since the spring, and hospital beds are filling up in both countries.
and the reported the most since the spring, and hospital beds are filling up in both countries. Shares in Heineken were down 2% at the open after the world’s second largest brewer announced layoffs and was unable to provide investors a full outlook for the year ahead.
U.S.
U.S. futures are sliding, in line with European shares. The Dow shed 222 points on Tuesday. It is now down 1.1% this month.
are sliding, in line with European shares. The shed on Tuesday. It is now down this month. More bad news for the bulls: you can forget about an imminent stimulus deal .
. Shares in Microsoft are down 1.7% in pre-market after the tech giant delivered an unenthusiastic top-line outlook. That’s weighing on Nasdaq futures this morning, off more than 1%, and falling.
Elsewhere
Gold is down, trading again today just above $1,900/ounce .
is down, trading again today just above . The dollar is up.
is up. Crude is having another bad day, with Brent at one point trading below $40/barrel.
***
Enormous bubble?
Every time I glance at Nasdaq futures this morning, the picture looks worse.
But is it as bad as David Einhorn says, that we’re staring at “enormous” bubble in tech stocks? According to Bloomberg, the head of hedge fund Greenlight Capital wrote in an Oct. 27 investor note that “Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped.
“If so,” he continues, “investor sentiment is in the process of shifting from greed to complacency.”
A refresher: On Sept. 2, the tech-heavy index hit a mid-day, all-time high of 12,439.48. It’s fallen 6.7% since then (as of yesterday’s close), and is off a further percentage point in pre-market trade this morning. YTD, however, the Nasdaq 100 is up a frothy 32.8%. That’s way out of whack when compared to just about everything else in the world of equities.
Meanwhile, the S&P 500 is up just under 5% YTD. It too hit an all-time high on Sept. 2, only to shed 5.5% since then.
Back to Einhorn… he finds a bunch of red flags in the rise of tech stocks, particularly in tech IPOs and the mid-cap tech stocks that carry enormous valuations. As Bloomberg notes, Einhorn has long held short positions on Nasdaq big caps like Amazon and Netflix.
To the surprise of no-one, Einhorn’s short strategy hasn’t worked out so well. His fund is down 16% YTD.
So, place him in the tech skeptic corner.
For the tech bulls, this is a good week to evaluate your positions. Microsoft delivered its quarterly results yesterday, and the other members of the FAAMG quintet come out tomorrow.
Judging by Microsoft’s mixed report yesterday, there could be some fireworks here; another thing to ponder ahead of Election Day.
***
Postscript
I don’t care if Monday’s blue
Tuesday’s grey and Wednesday too
Thursday, I don’t care about you
It’s Friday…
When I was living in London, writing at that point about tech and music for Reuters, I blagged tickets to an invite-only tribute concert for Robert Smith. I think this would have been 2004.
The Cure front man sat in the front row, surrounded by family and friends. Despite pleas from the crowd, he never left his seat. He watched other musicians jam, and perform his songs.
Probably the weirdest concert I’ve ever attended.
Still, The Cure tune popped into my head as I was glancing at stock futures while walking the dog this morning.
And that’s how the newsletter magic happens around here.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
On the ballot. From the possible legalization of marijuana (six states, including New Jersey) to income tax changes (Illinois) to a minimum wage hike (Florida), there are a score of ballot measure initiatives up for a vote this Election Day. Fortune rounds them all up, and details which ones are most important for business.
Trickle down. So far on the campaign trail, we've heard the boasts and the barbs of President Trump's Tax Cuts and Jobs Act of 2017. Was it a boon for American families, or just a big gift for the ultra wealthy? Peter Coy, economics editor of Bloomberg Businessweek, digs into the details, and finds that all income brackets did indeed benefit to some degree. Spoiler: the top 1%, on relative terms, make out the best from the TCJA. Our grandkids, left with staggering deficits, not so much.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
Quote of the day
It’s called state capitalism, but they’ll produce more billionaires [than the U.S.]... I think capitalism and the development of the capital markets could, in a few years, be more embraced in China than they are in the U.S.
That's hedge fund king Ray Dalio, speaking yesterday at the Fortune Global Forum. The head of Bridgewater Associates, the world's biggest hedge fund, believes China is well on its way to leapfrogging the United States as the world's preeminent economic power. Here's why.


fortune--2020-10-28--Delivery Hero shares soar on strong growth and raised outlook as European stocks tank

Europe’s stock markets were a sea of red early Wednesday morning, as soaring coronavirus case numbers threatened to trigger new lockdowns in countries such as France and Germany. But on the DAX, the index of the 30 biggest companies trading on the Frankfurt bourse, one stock was standing tall.
That stock was Delivery Hero, whose share price was up as much as 5% Wednesday morning, while the overall DAX was down over 3%.
The Berlin-based online food-delivery giant, which joined the DAX just a couple of months ago—it took the collapsed Wirecard‘s spot—is doing well during the pandemic. It released its Q3 results Wednesday, showing a year-on-year doubling of quarterly orders to 362 million. Quarterly revenues nearly doubled too, reaching €776 million ($913 million).
But the pandemic clearly isn’t the only driver of Delivery Hero’s success; this is the seventh consecutive quarter in which the company’s revenues pretty much doubled year-on-year.
“Delivery Hero continues to focus on expanding our business with several strategic investments, like our entry into Japan and the acquisitions of InstaShop in MENA and Glovo’s business in Latin America,” said CEO Niklas Östberg in a statement. “We are proud of the incredible growth trajectory that Delivery Hero is on.”
Delivery Hero said its “quick commerce” service—meaning the speedy delivery of groceries and household goods—is now available across 41 of the 49 markets in which the company has a presence, having launched in April this year. Overall, it said it is now partnering with over 30,000 shops and vendors. The company is also investing in hundreds of “Dmart” warehouses that it says could enable delivery times as low as 15 minutes in some markets.
Alongside its latest results, Delivery Hero updated the lower bound of its full-year revenue guidance from €2.6 billion to €2.7 billion (the upper bound stays at €2.8 billion).
It should be noted that Delivery Hero no longer operates in Germany itself, having sold off its German Lieferando brand to Anglo-Dutch rival Takeaway.com a couple of years back. This fact caused some controversy when Delivery Hero joined the DAX 30 this year, but membership in that club is based on market capitalization and trading volume, not German activity.
Delivery Hero’s share price has risen 107% over the past year, which is the kind of pop the rest of the DAX 30 can only dream of. The next-best performer is property firm Deutsche Wohnen, which had a 30% rise, followed by Deutsche Post at 27%. Wirecard aside (as it’s not there anymore), the biggest loser has been the pharmaceutical and life-sciences giant Bayer, whose share price has fallen 36% in the past 12 months (and nearly 3% Wednesday morning alone).
At the time of this writing late Wednesday morning, the continuing European stock market slump had seen the DAX fall 3.1%, France’s CAC 40 2.8%, Italy’s FTSE MIB 2.6%, and the U.K.’s FTSE 100 1.7%.
The trend looked set to continue into the U.S., where S&P 500 futures were down 1.4%—though that is also down to the looming U.S. election and fading hopes for an imminent stimulus agreement.


fortune--2020-10-28--Are tech stocks in an “enormous” bubble? Greenlight’s David Einhorn thinks so

Investor David Einhorn said technology stocks are in an “enormous” bubble and he has added a set of short wagers to profit from it.
“The question at hand is where are we in the psychology of this bubble?” the head of hedge fund Greenlight Capital wrote in an Oct. 27 note, seen by Bloomberg. “Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped. If so, investor sentiment is in the process of shifting from greed to complacency.”
Tech stocks have driven the market’s rally this year. The Nasdaq 100 Index is up 33% since Jan. 1, led by gains in Zoom Video Communications Inc. and Tesla Inc. By contrast, the S&P 500 has risen 5.3%.
As signs of a bubble, Einhorn points to a mania in IPOs, a huge market concentration in a small group of stocks or a single sector, extraordinary valuations and “incredible” trading volumes in speculative instruments.
As a result, Greenlight has adjusted the portfolio of companies its wagering against by adding a fresh so-called bubble basket of mostly “second-tier companies and recent IPOs trading at remarkable valuations,” he wrote. Einhorn has long held what he calls a bubble basket of short wagers which have included tech giants such as Amazon.com Inc. and Netflix Inc.
A spokesman for the firm declined to comment.
This isn’t the first time Einhorn has flagged a tech bubble. In early 2016, he “prematurely identified what we thought was a bubble,” he wrote in the letter.
It’s been a difficult road for Greenlight recently. The fund is down 16.1% through September, and has been trying to recoup losses that began in 2015. As of Jan. 1, the firm managed $2.6 billion, down from a peak of $12 billion.
Read more: Einhorn Hedge Funds Gained 1.1%, Helped by Homebuilder Rally
Other highlights from the letter:
The coming election may rank “among the most perilous times, absent war, in modern American history.” A “tempest” of troubles related to the Covid pandemic — including inequities, violence and calls for social change — could explode after the election, no matter which side wins.
The fund started “medium-sized” long positions in information technology company Synnex Corp., Austrian sensor maker AMS AG, and ATM-manufacturer NCR Corp.


fortune--2020-10-28--A city offers harsh lessons after emerging from one of the world’s longest lockdowns

As countries across the globe grapple with the prospect of renewed lockdowns, the Australian city of Melbourne offers a stark lesson on the costs of bringing the coronavirus under control.
The city of 5 million people on Wednesday emerged from one of the world’s strictest and longest lockdowns that shuttered businesses and confined residents to their homes for more than three months.
While infections have dropped from a daily peak of about 700 in early August to just two new cases on Wednesday, the economic and social impact of Melbourne’s second lockdown since the crisis began has been enormous. Australia’s government estimates 1,200 jobs have been lost on average a day across Victoria state, while demand for mental health services has surged by more than 30%.
Despite key factors working in Melbourne’s favor, including closed borders, an infection count that was tiny by international standards, and a state government with strong public backing, it still took twice as long as anticipated to crush the curve.
It’s a bleak reality confronting political leaders, particularly in Europe, who have already experienced the damage wrought by full-blown lockdowns and are now weighing options to fight a resurgence of the pandemic.
Australia was in the vanguard of nations that had early success in controlling community transmission. Its first nationwide lockdown, which lasted roughly from March to May, reduced the number of cases to just a handful a day.
But security failures at quarantine hotels for returning overseas travelers, poor communication of critical information to migrant communities and inadequate contact tracing allowed the virus to roar back in Victoria.
On July 7, state Premier Daniel Andrews announced a six-week lockdown, ordering Melbourne residents to stay home except for essential work and services, medical treatment, school or an hour’s exercise a day. Less than a month later, as cases continued to rise, the restrictions were extended across the entire state, Melbourne was placed under a nighttime curfew, schools were closed and large parts of retail, manufacturing and hospitality were shut down.
With Victoria accounting for about a quarter of the nation’s gross domestic product, the restrictions have deepened Australia’s first recession in almost 30 years.
The lockdown has slashed A$100 million ($71 million) a day from economic activity and through August and September resulted in a daily average of 1,200 jobs being lost across the state, Luke Yeaman, a Treasury department official, told a parliamentary panel this week.
Long Recovery
Business leaders say it may take years for Melbourne — ranked as the world’s second-most livable city last year — to recover. Melbourne chef Scott Pickett warned that ongoing capacity restrictions would continue to hit restaurants and cafes and that many would fold once government wage subsidies end early next year.
“Some may get to Christmas, January and say they can’t do this anymore,” said Pickett, who owns the bistro Estelle. “It’s going to be a bloodbath out there at some stage.”
The social costs are also mounting. The Royal Australian College of General Practitioners says demand for health services nationwide has risen 15% since early March, and by 31% between September and October in Victoria. Alcohol consumption has risen and domestic violence spiked.
“Only being allowed outside for an hour a day was awful,” said Tessa Patrao, 27, who is finally back at work as a primary school teacher after the 112-day stay-at-home order. The second lockdown was even harder than the first, particularly as much of the country had returned to normal, she said.
While governments in the U.K., Italy and Germany have faced protests against second lockdowns, Victorians have been largely compliant. That’s in part down to the popularity of the state’s Labor government, which won the 2018 election by a landslide, and the high approval ratings of Premier Andrews. The carrot-and-stick approach taken by authorities has also helped, with A$1,500 payments for people who couldn’t afford to self-isolate and court-imposed fines of as much as A$20,000 for repeat breaches of isolation orders.
Circuit Breakers
“It would’ve been impossible to meaningfully police if there wasn’t community support,” said Terry Slevin, chief executive officer of the Public Health Association of Australia. “It’s an example where a compact between a government and a community that’s been driven by expert advice has achieved a valuable public health outcome.”
According to Catherine Bennett, chair in epidemiology at Deakin University in Melbourne, it’s likely too late for the U.K., U.S. and European countries to replicate Melbourne’s success in crushing new infections. Instead, authorities would likely opt for 2-3 week circuit breaker lockdowns to take the load off the public health system.
“A circuit-breaker just might help bring it back into line and allow it to be containable,” she said. “But unless you’ve gone very early” it’s very hard to bring new cases down to zero.
The lockdown may have quashed the virus for now, but it’s clear from outbreaks around the world that it can come back with a vengeance if not coupled with ongoing requirements such as mask-wearing, social distancing, temperature checks and a robust testing and contact-tracing regime. Such “living with the virus” elements are in place in countries such as Korea, Japan and China, which have been able to keep their cases under control.
“Australians need to have the conversation on what the new normal looks like so we can live alongside this virus without more lockdowns,” said Jennifer Westacott, CEO of the Business Council of Australia. “If mask-wearing and hand sanitizers are the new normal now, is everyone on board? The big question is whether individual Australians are ready to fully adjust their lives to the Covid era.”


fortune--2020-10-28--The state ballot measures the business community should watch in the 2020 election

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It’s not just politicians who will be on the ballot in November’s upcoming election. Across the country, state and local governments are giving Americans a chance to vote on hundreds of ballot measures—propositions, initiatives, and referendums that give citizens an opportunity to directly approve or reject laws that are being proposed in their communities.
Ballot measures can relate to a wide array of issues, from taxes and election rules to criminal justice policy and the legal status of certain substances and activities. Whatever the matter at hand, they’re one of the few avenues for what’s called direct or pure democracy in the United States—a way for Americans to have a direct say in the laws that govern their land, rather than relying on elected representatives to craft and enact them instead.
Of course, that’s not to say ballot measures are devoid of the special interest–fueled maneuvering that so characterizes our political process. To the contrary, they’re often a means by which interest groups across the spectrum manage to float policies that they would like to see adopted—with those groups often pouring millions of dollars into campaigning for, or against, their adoption. Just ask voters in California, where 12 statewide propositions are on the ballot this November; those measures have commanded more than $700 million in combined campaign contributions, resulting in an onslaught of advertising on TV, radio, online, and virtually anywhere else Californians care to look.
In the end, it’s up to the voters to carefully consider each question on the ballot, weigh up the pros and cons, and cast their vote (or not, if they so choose) as they see fit. In the meantime, here’s a look at some of the most notable, consequential—and, indeed, expensive—statewide ballot measures across the country in this fall’s election.
Proposition 22 (California)
Prop 22 has been inescapable for Californians this election season, and for good reason: Gig economy giants like Uber, Lyft, and DoorDash have driven most of the roughly $200 million in contributions supporting the measure—making it the most expensive ballot initiative in California history, and by far the most expensive in the country this year. (Opponents have poured $19 million into beating Prop 22, taking total funding to more than $218 million to date).
Why have those companies spent so much on making Prop 22 a reality? Because the measure is very much a product of their efforts to work around California state labor laws that require them to offer certain employment benefits—including overtime pay, health care coverage, and unemployment insurance—to their fleet of drivers. Prop 22 would exempt app-based transportation and delivery companies from having to do so, by instead allowing them to designate their drivers as “independent contractors”—an arrangement that supporters claim would give those employees added flexibility, while relieving employers of the burdensome costs associated with the state’s employment laws.
Despite the overwhelming financial advantage offered by the measure’s proponents, polls indicate that it’s a close race for Prop 22, which will need a majority of more than 50% of the vote to pass. The most recent poll conducted by the University of California at Berkeley’s Institute of Governmental Studies depicts a 46% to 42% advantage for “Yes” on Prop 22, with 12% of respondents undecided.
Marijuana legalization measures (recreational: Arizona, Montana, New Jersey, South Dakota; medical: Mississippi, South Dakota)
The recreational use of marijuana is now legal in 11 states plus the District of Columbia, while medical marijuana is permitted in 33 states plus D.C. Five states may potentially join their ranks this fall, should voters vote in favor of legalization.
Arizona, which legalized medical marijuana in 2010, could pass recreational use via Proposition 207. It is the second time in four years that voters in the state are considering a recreational cannabis measure, after a previous measure was defeated in 2016.
After passing medical marijuana in 2004, Montana voters will decide this fall on I-190, a ballot initiative that would legalize recreational use in the state. And New Jersey could become the first mid-Atlantic state to legalize recreational cannabis via Public Question 1; the state legalized medical use, albeit for a limited number of medical conditions, in 2010.
Elsewhere, voters in South Dakota will consider separate ballot measures that would legalize both recreational and medicinal cannabis use, while those in Mississippi will vote on a proposal to permit medical use in the state.
All of these marijuana ballot measures would see the states in question impose sizable taxes on the sale and distribution of cannabis in their jurisdiction—a potential boon for those states’ coffers, at a time when many budgets are strained owing to the economic impact of COVID-19.
Graduated income tax amendment (Illinois)
There’s only one statewide measure on the ballot in Illinois this fall—but it’s a major one that could potentially overhaul the state’s tax code.
The Illinois Allow for Graduated Income Tax Amendment would repeal a 50-year-old constitutional requirement that the state impose a flat personal income tax rate (currently 4.95% in Illinois), regardless of income. The measure, which is supported by Democratic Gov. J.B. Pritzker, would allow the state to enact legislation imposing a graduated income tax rate consisting of six tax brackets determined by income, similar to how federal income taxes are collected.
Support for and opposition against the ballot measure is heavily partisan, with Illinois Democrats mostly in favor and Republicans overwhelmingly against. That’s translated to donors opening up their pocketbooks in the hope of enacting or defeating the measure: More than $110 million has been contributed to the campaigns in favor and against the Graduated Income Tax Amendment, making it by far the most expensive ballot measure outside of California’s. While supporters have thus far outraised the opposition by around $10 million, opponents have had the help of Citadel hedge funder Ken Griffin, who has poured nearly $47 million of his own money into defeating the amendment.
“Right to Repair Law” Vehicle Data Access Requirement Initiative (Massachusetts)
This is a wonky one, but it essentially shapes up as a battle between independent automobile service providers in Massachusetts and major car manufacturers like General Motors, Toyota, and Ford.
Question 1, as it’s known, would require car manufacturers who sell vehicles with telematics systems—which electronically collect data about the vehicle’s functions—to equip those systems with a standardized open data platform. That would enable car owners and independent repair facilities to access the car’s mechanical data and electronically diagnose and repair any issues, rather than restricting that data to carmakers and their dealerships.
More than $50 million has been poured into both sides of the initiative—with the opposition, a coalition including the aforementioned automakers, narrowly outraising proponents who include Advance Auto Parts, O’Reilly Auto Parts, and AutoZone. The supporting Right to Repair Coalition claims the measure is about ensuring consumers have the right to take their vehicles to independent mechanics rather than having to rely on costlier dealerships, while the opposition Coalition for Safe and Secure Data is positioning the matter as a data privacy issue.
Proposition 23 (California)
Right next to Prop 22 on Californians’ ballots is Prop 23, also known as the Dialysis Clinic Requirements Initiative. The ballot measure would require kidney dialysis clinics in state to always have a licensed physician on-site during operation, report data on dialysis-related infections to regulators, obtain consent from the state before closing a clinic, and also prevent them from denying or discriminating against patients based on their source of payment or health care coverage.
Of the nearly $115 million in total contributions raised to date, the overwhelming majority (more than $105 million) has flowed to the opposition, with a huge chunk of that funding coming from dialysis care providers DaVita and Fresenius. Meanwhile, the proposition is very much backed by the powerful SEIU-UHW health care labor union, which two years ago proposed a separate California ballot initiative targeting dialysis clinics that was heavily defeated.
While Prop 23 promises added oversight of dialysis clinics and has garnered the support of the state’s Democratic Party, opponents claim the measure is unnecessary and would result in added red tape that would raise heath care costs and make it harder for tens of thousands of dialysis patients to get the care they need. SEIU-UHW has also been criticized for deploying the state’s ballot measure system to advance its own union organizing goals.
Minimum wage initiative (Florida)
If it passes, Florida Amendment 2 would see the Sunshine State incrementally increase its minimum wage—presently set at $8.56 an hour—to $15 an hour by 2026. The state’s minimum wage would first be raised to $10 an hour in September 2021 and gradually tick upward by $1 per year for the following five years.
Amendment 2 has drawn nearly $6 million in campaign contributions to date, with the vast majority ($5.3 million) raised in support of the measure—thanks in large part to the $4.2 million donated by Florida attorney John Morgan and his law firm. Opponents include numerous business and industry groups, including the Florida Home Builders Association and the Florida Restaurant and Lodging Association.


fortune--2020-10-29--This data scientist’s model shows Biden is still a 3-to-1 favorite to win—but he’s fading in the hom

This data scientist’s model shows Biden is still a 3-to-1 favorite to win—but he’s fading in the home stretch

When Congress is likely to make a deal to send more stimulus checks

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Don’t count Donald Trump out. His odds have improved substantially since bottoming after he blew the first debate and contracted COVID-19. That upward momentum is still in place, and if it continues at the same pace, the race could be too close to call by election eve.
Those are the findings of Thomas Miller, a Northwestern University data scientist who created a new methodology tailored to predicting the outcome of this presidential election. “Trump’s picked up since he got back on the trail doing his thing,” Miller told Fortune. “This is a very competitive race that’s tightening, but the media hasn’t picked up on it. You still hear lots of talk on TV about a landslide, with Biden taking Texas. That’s unlikely.”
Miller, director of the Northwestern data science program, created similar computer models to forecast the outcome of professional baseball games based on simulating individual matchups between batters and pitchers—every single at-bat is modeled, he says. “I play every game in its entirety before it happens, see who wins, and that’s how I establish the odds. Then I match those odds with those on the betting sites, and if there’s a major divergence, that’s the time to bet. I found that out of 15 games, maybe one or two are worth betting on.”
In August he started crunching data on the election. But instead of using the two most common tools—weighing the polling numbers or using such historical measures as how the economy is likely to shape the outcome—he based his predictions on the odds posted on America’s most prominent political gaming site, PredictIt. For Miller, the “prices” that political gamblers place on the candidates are a far more reliable guide than the preferences that respondents state in pollsters’ telephone surveys.
“These betting markets provide the best odds because when people put their own money into something, you can be sure that’s what they believe,” says Miller. “When Trump’s posted price is 40 cents and Biden’s is 60 cents, and you think Biden’s chances are better than 0.6, you’ll bet on Biden. That’s the beauty of an efficient political marketplace.” For Miller, the political futures sites best project “the wisdom of the crowd.”
Miller notes that the surveys ask people whom they’ll vote for, meaning whom they’d like to win: “PredictIt effectively asks, ‘Whom do you believe will win?’ That’s the better question.” He adds that polling results reflect opinions collected days before, and not the gaffe the candidate committed yesterday, or the big shift in support in the hours after a good or bad debate. “My results are out five days before the polls come out,” he adds. “I was five days in advance knowing the first presidential debate was won by Biden.” By the time they appear, polling results are already out of date.
Miller relies on PredictIt because the site takes bets on 56 separate jurisdictions awarded electoral votes: the 48 “winner-take-all” states, and seven districts in Nebraska and Maine, as well as the District of Columbia. Hence, he’s able to deploy real-time, minute-by-minute data from what are effectively 56 separate political markets. He notes that the PredictIt platform is highly liquid, since it boasts 100,000 bettors, and that it’s restricted to U.S. residents, many of whom are knowledgeable about the on-the-ground, bellwether trends in their counties and states.
The methodology, trademarked the Virtual Tout, updates the forecasts every hour on his website. (Or at Twitter at @virtualtout.) Miller distills the shifting odds in PredictIt’s mainly state-by-state markets into two principal data points: first, the number of electoral votes that the model forecasts Biden will win, and second, the former vice president’s chance of victory, shown as a percentage. Miller’s site shows a curve representing the trend in electoral votes. The curve rises when the PredictIt odds from the state betting windows, filtered through Miller’s methodology, move in Biden’s favor. The trajectory descends, as now, when Trump’s fortunes across the 56 markets improve.
Superimposed on the graph are important events, many of which cause an immediate spike or cratering in the candidates’ electoral count and odds of winning. In less than an hour, the methodology registers Biden’s bump from Trump’s angry outburst on 60 Minutes or Michelle Obama’s heartfelt video message. “Sometimes I haven’t been listening to the news, and I see the time series move dramatically, then I turn on the news to see what made it happen,” says Miller.
Let’s trace the events that in the first phase measured by Miller brought a big uptick in Biden’s fortunes. Miller launched the site in early August and found that Biden held an edge of 80% to 85% to Trump’s 20% to 15% during the entire month that encompassed both campaigns. By early September, Biden was holding that lead, and the model gave him around 310 electoral votes, 40 more than needed for victory. Starting with the first debate on Sept. 29, things got even worse for the President. “He blew the first debate,” says Miller. “A week later, he’s diagnosed with COVID-19. I could see Biden’s count jump by four votes within an hour of the announcement.” That reminded Americans of the plague threatening their health and the economy. On Oct. 6, as Trump languished in Walter Reed hospital, Biden’s numbers hit their high-water mark of 326 electoral votes and a 94% probability of taking the White House. A Biden landslide appeared to be building.
Then, the momentum shifted. The start of Trump’s comeback coincided with the vice presidential debate on Oct. 7. But in a comical episode that also shows the sensitivity of Miller’s model to passing changes in voters’ mood, Trump suffered a blip following the Saturday Night Live skit four days later. The SNL parody of the VP debate showed the famous fly sticking to Pence’s head, and Biden, who had been watching the face-off with wife Jill, jumping into a time machine to be transformed into the offending insect, recalling the metamorphosis in the movie The Fly. “From around midnight to 5 a.m., Biden gained a few votes,” says Miller. “It must have been the SNL skit. Six million people viewed it on YouTube. What else would move the needle in the middle of the night?”
The fly didn’t sting for long. On Oct. 12, Trump returned to barnstorming, hosting a signature raucous rally in Stanford, Fla. “The downward slope for Biden began,” says Miller. “Trump’s back on the trail. He’s recovered and acts, and looks, reborn.” The dueling town halls on Oct. 5 gave Biden a brief lift that quickly faded. “The second debate was regarded as a draw, but Trump’s momentum continued,” says Miller. Then Trump suffered what looked like a serious setback from his obstreperous performance in his 60 Minutes interview with Lesley Stahl. “Women viewers perceived that he was insulting a respected female journalist,” says Miller. “It’s as if he was saying, ‘I don’t care about you, you’re a woman.'” Biden gained around five electoral votes and benefited for two days. Then Trump’s gains got right back on the track they’d jumped after the Stahl debacle.
Miller says that when the Trump resurgence started, he expected it to be short-lived and thought that Biden would resume the 80%-plus odds and over 310 electoral votes he’d enjoyed from August through September. On Oct. 28, Trump’s chances improved as Biden’s slipped to 76.4% and 242 electoral votes. By mid-afternoon the next day, Biden had gained a bit to 78.7%. Miller still puts Biden’s odds of victory at 3-to-1, down from 4-to-1 a few weeks ago. “I would say the Democrats have the lead, but the Republican ticket is catching up, and this is by no means a landslide,” he says. “Trump can absolutely win, and everyone should be aware of that.”
But does the Biden uptick from Oct. 27 to 28 represent a new reversal that could propel the former VP to a victory? Don’t wait for the polls! You can take a virtual seat on this rollicking train ride, and experience every careening turn in real time, by getting your ticket from Tom Miller.


fortune--2020-10-29--It may sound far-fetched, but businesses need to be ready for an election-related disaster

How can leaders prepare for the presidential election resulting in a disaster?
That possibility may sound unrealistic to many leaders. Yet it doesn’t sound so far-fetched to many top politicians and experts observing the run-up to the election. With many more mail-in ballots—which are much more vulnerable to legal challenges—than in previous elections, the counting might drag on for many weeks. It may well be accompanied by widespread civil disturbances, serious economic turmoil, and potentially a constitutional crisis.
Is a voice deep inside your gut whispering, “An election disaster has never happened before, and so it won’t happen now”? Maybe it’s the same voice you heard when reading articles at the beginning of this year about the need to prepare for COVID-19 turning into a pandemic?
That’s why the vast majority of companies weren’t prepared for the pandemic. Our brains have a disastrous tendency to underestimate greatly low-probability and high-impact disruptors, events you might have recently heard referred to as “black swans.”
This disastrous tendency comes from dangerous judgment errors that researchers in cognitive neuroscience and behavioral economics call cognitive biases. These mental blind spots impact all areas of our life, from health to politics to even shopping.
Three cognitive biases bear the biggest fault for our failure to face the truth about the possibility of an election disaster.
Normalcy bias refers to our brains assuming things will keep going as they have been—normally—and evaluate the near-term future based on our short-term past experience. As a result, we underestimate drastically both the likelihood and impact of a serious disruption, such as a constitutional crisis.
Another major problem, confirmation bias, describes our strong preference to look only for information that already supports our preexisting beliefs and gut feelings, and ignore data that doesn’t. That includes the possibility of a major election disaster.
When we make plans, we naturally believe that the future will go according to plan. That wrong-headed mental blind spot, the planning fallacy, results in us not preparing sufficiently for contingencies and problems. The planning fallacy applies especially black swan–type low-probability, high-impact events such as an election catastrophe.
To address these cognitive biases, you need to use probabilistic thinking. First, assign a probability to various election disaster scenarios.
What’s the probability that mail-in ballots will take a long time to be processed due to legal challenges and civil strife, say stretching at least until the Electoral College vote on Dec. 14? Given the serious, costly, and truly unprecedented preparations for the post-election counting battle by top politicians, I’d say no less than 30%.
After that, what’s the likelihood that the Electoral College vote will not be decisive due to legal challenges? Perhaps only half of that, so we’re at 15%.
At that point, the House of Representatives gets to decide the President. Yet both parties have ways of stalemating the process, potentially resulting in a full-blown constitutional crisis with no clear legal resolution. I’d put the likelihood of that at two-thirds of 15%, so 10%.
Now imagine what the future would look like if the civil strife and legal challenges lasted only through the Electoral College vote. What kind of problems might come up for you as a leader and how can you solve them? (My firm, Disaster Avoidance Experts, advises organizations on how to prepare for unexpected crises, and therefore I could benefit financially from organizations following the advice outlined in this article.)
Revisit your business continuity plan: The large majority of organizations were seriously underprepared for the pandemic, for example. If you’re not working all virtually now, prepare if at all possible to go to all-virtual work. If you can’t, get extra security for your office ahead of potential civil strife.
Let your employees know about the significant possibility of an election disaster, and encourage them to prepare themselves as needed. Remind them of any opportunities you provide for access to mental health resources, such as through an employee assistance program. Prepare your office for a number of your employees suffering a serious disruption in their work; make sure that the more important positions have employees cross-trained to provide backups just in case.
If you manufacture products, see where you might need to take steps to protect your supply chains. If you provide services, reassure your clients about the steps you will take to protect your services from interruptions.
How many resources would you require to address potential problems? Add them up, and multiply them by 30%. Then, go on to use those resources to prepare for this possibility.
Next, consider what problems you might face, and what resources you might need, if the Electoral College vote is indecisive, and this situation goes into early January. Multiple these resources by 15%. Finally, evaluate the problems and resources needed if the House voting ends in an impasse and a constitutional crisis, and multiply these by 10%.
Using this approach, you distribute your plans and resources across the different possibilities in accordance with your chosen evaluations. By doing so, you’re essentially buying insurance to protect yourself from an election disaster.
Gleb Tsipursky is CEO of the risk management and strategy consulting firm Disaster Avoidance Experts and author of Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters.


fortune--2020-10-28--Spotify draws fire over Alex Jones’s claims in Joe Rogan podcast

Spotify is drawing heat for a podcast from Joe Rogan in which the popular host discusses conspiracy theories with right-wing rabble-rouser Alex Jones.
The service declined to remove the episode of “The Joe Rogan Experience” after listeners complained that Jones exaggerated the risks of giving children the polio vaccine and that masks don’t help stop the spread of coronavirus, among other things. Spotify has taken down content from Jones before for violating its policies about “hate content.”
Spotify doesn’t ban specific guests, chief legal officer Horacio Gutierrez said in an email to some Spotify employees. The company also weighs the context of commentary made on Spotify shows, according to a person with knowledge of the communication, who asked not to be identified discussing an internal matter.
“Not all of you will agree with every piece of content on our platform,” Gutierrez wrote. BuzzFeed News first reported on the email.
Even before coming onto Spotify last month, Rogan’s podcast had been controversial. The Jones incident will add to a wider public discussion about how stringently technology companies should the vet the content users put on their platforms. Spotify says on its website it bans material that “promotes, advocates, or incites hatred or violence against a group or individual” based on certain characteristics, but doesn’t say it removes material simply because it’s false.
Controversial host
While Rogan recently signed a deal worth up to $100 million to make his podcast exclusively available on Spotify, the episode can also be found on Google’s YouTube, which also bans hate speech but doesn’t bar individual creators, and on Apple. YouTube and Apple didn’t respond to a requests for comment.
The discussion between Jones and Rogan covered a range topics, including accused sex-trafficker Ghislaine Maxwell, a New York Post story about a laptop allegedly owned by the son of Democratic presidential candidate Joe Biden, and the coronavirus. At some points, Rogan pushed back on Jones’s arguments, such as when he claimed that 100% of children getting one type of polio vaccine are sickened with the disease, and his past pronouncements that the 2012 Sandy Hook school massacre was a hoax.
“I’ve told you before, what you really need on your show is, like, a legit journalist who’s right next to you with a laptop going: ‘Alex, hold on, hold on. Just slow down,’” Rogan said.
Jones said in response: “I’m not trying to make stuff up 99% of the time.”


fortune--2020-10-28--We don’t know enough about COVID antibodies to count on them

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One of the biggest outstanding questions about the coronavirus, and one which could well determine the course of the pandemic, is the role that antibodies play in immunity.
By now you’ve probably heard plenty about antibodies in the context of immunity and developing a COVID vaccine. These Y-shaped proteins form because of an immune response to a pathogen or other hostile biological material. They may be personalized to sites on an individual virus called antigens, to which they attach and help prevent infection.
As with many viruses, antibodies form during the course of a COVID case and should offer protection against against a second coronavirus infection. But it’s still unclear just how potent these antibodies are and whether or not they may provide stronger immunity for some people more than others. And that raises the question of whether or not you can contract COVID-19 twice.
One central mystery that may take years to answer is how long COVID antibodies last. First off, antibodies don’t always behave the same everyone. Some may form powerful antibodies with staying power; others whose body’s so-called adaptive immune system produces weaker ones may face a much more brutal fight with COVID and be at a higher risk for reinfection. Human biology can react in unpredictable ways to new adversaries.
Then there’s the type of pathogen that the novel coronavirus is itself. Coronaviruses encompass a broad class of bugs which can include everything from some types of the common cold to SARS and MERS. There is to date no cure or vaccine for the common cold since there is such a variety of strains. There also aren’t any commercially available ones for SARS or MERS—or any coronaviruses for that matter.
Part of the reason for that is both the SARS and MERS outbreaks cause milder disease than COVID-19, and the former were contained relatively quickly. Patients who contracted SARS during that outbreak were found that have protective antibodies for an average of two years.
That doesn’t seem to be the case with the novel coronavirus—at least for certain COVID patients. In those who suffer from a mild case, antibody levels may be cut in half in just over two months, according to one study in the New England Journal of Medicine.
Another new analysis by Imperial College London scientists released this week examined antibody levels among the British population. The report found that antibody prevalence dropped sharply and quickly in the study population: from 6% in late June to 4.4% in late September.
“This very large study has shown that the proportion of people with detectable antibodies is falling over time,” said Helen Ward, one of the lead study authors.
But there’s another twist: Those falling antibody levels don’t necessarily mean you’ll be reinfected with COVID. “We don’t yet know whether this will leave these people at risk of reinfection with the virus that causes COVID-19, but it is essential that everyone continues to follow guidance to reduce the risk to themselves and others,” she said.
Other studies have shown there is a non-zero number of people who have been reinfected after recovering from COVID. A Lancet report published two weeks ago examined the case of a 25-year-old man from Washoe County in Nevada who contracted COVID-19 once in April and again at the end of May.
“The degree of protective immunity conferred by infection with severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) is currently unknown. As such, the possibility of reinfection with SARS-CoV-2 is not well understood,” wrote the authors from the University of Nevada and Nevada State Public Health Library.
To date, as the Centers for Disease Control (CDC) puts it, “confirmed and suspected cases of reinfection of the virus that causes COVID-19 have been reported, but remain rare.”
Experts stress that the mere presence of coronavirus antibodies is no reason to assume you’ll have long-lasting immunity or protect others from infection. The latter point throws a big wrench into proponents of a “herd immunity” approach wherein you simply let enough people get infected and become immune.
At the end of the day, it is still be important to wash your hands, wear a mask, socially distance, and be generally responsible—antibodies or otherwise.


fortune--2020-10-28--Who is Ryan Smith, new owner of the Utah Jazz?

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The NBA’s Utah Jazz has been owned for close to 35 years by Utah businessman Larry H. Miller or his family. But in a move that stunned locals, the Miller family announced today that it would sell a controlling stake in the team to Ryan Smith, cofounder of tech company Qualtrics.
So who is the new owner of the Utah Jazz?
Here are the high points: Smith is young (42), loves basketball, and has signaled a strong commitment to social justice, particularly racial justice issues. And of course, he’s very wealthy.
Prior Jazz owner Miller was born in Salt Lake City and built a business empire starting with car dealerships, then expanding to a television station and movie theaters before purchasing the Jazz in 1985. The price tag was reportedly $22 million for 100% of the Jazz. Miller died in 2009 and passed control of the Jazz to his family.
The contrasts between Miller and Smith start with that price tag: Smith’s takeover of the Jazz will cost him a reported $1.66 billion. It’s not entirely clear how large Smith’s stake will be, though the team was recently estimated to be worth $1.55 billion by Forbes. However much he got, Smith paid nearly 30 times what Miller paid for the entire team, in inflation-adjusted terms.
Smith can afford the markup. He cofounded Qualtrics with his brother and father, a marketing professor at Brigham Young University, in 2002. In 2018 the company was sold to German business software giant SAP for $8 billion, though it remains an independently run unit, and Smith still serves as CEO. The founders’ share of that payday was estimated at $3 billion, and Forbes now estimates Ryan Smith’s personal net worth at $1.3 billion.
What exactly did SAP buy? Qualtrics started off by offering customer surveys online but has expanded considerably. It’s now best known for its “customer experience management” software, which brings together a variety of data sources, including surveys, social media chatter, and direct customer feedback. The software is meant to track both broad sentiment about a company’s products and services, and specific customer interactions, such as repair or refund requests. One of Qualtrics’ closer competitors is Salesforce, which draws on a similarly broad array of data sources to help companies manage sales and customer relationships.
As Fortune detailed when we named him to our 40 Under 40 list in 2016, Smith is a lifelong Utah resident and, like the majority of Utah residents, a Mormon. He’s been a major booster of the local business community, helping found a coalition of central Utah tech businesses called Silicon Slopes.
Smith has been notably active on social justice causes. In June, at the height of Black Lives Matter protests, Smith announced he would personally match donations by Qualtrics employees to legal defense funds for the movement. In a 2017 Forbes profile, he strategizes with fellow founders about how to attract more diversity to Utah.
Those commitments should serve Smith well as an NBA owner, given recent collisions between sport and politics that included a brief NBA player strike in August in response to police shootings of African-Americans. They also mark something of a contrast with Miller, who in 2005 raised the ire of activists by refusing to show Ang Lee’s Brokeback Mountain at theaters he owned because it depicted a gay relationship.
Smith also clearly loves basketball. He has a court in his basement, as well as in the lobby of Qualtrics’ headquarters building in Orem, Utah. Smith’s Twitter feed is sports-heavy, and he has partnered with the Jazz before, including a sponsorship this year that helped raise $25 million for cancer research.


fortune--2020-10-28--The stock market’s ‘presidential predictor’ just started signaling that Joe Biden will win the elect

The stock market’s ‘presidential predictor’ just started signaling that Joe Biden will win the election

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For market watchers, this week’s stock rout—in which the S&P 500 has fallen 5.6% in three days—comes with additional significance: It could determine whether Donald Trump or Joe Biden will win the election.
For almost a century, the so-called Presidential Predictor, as dubbed by Sam Stovall—a well-known S&P analyst and the chief investment strategist for CFRA—has correctly determined the presidential election winner with only one exception, an 88% success rate.
It works like this: If the S&P 500 rises from August through October, the incumbent party (in this case, Republican—Trump) is reelected to the White House. If the S&P 500 falls over the three-month stretch, the Oval Office flips to the opposing party (in this case, Democrat—Joe Biden).
This year, for much of that period, stocks have soared to new highs, predicting a Trump reelection; as recently as mid-October, the S&P 500 Predictor was up 7.5%.
But that changed Wednesday as stocks plunged further. Now the S&P 500 is down over the critical time frame, albeit ever so slightly—by just 0.09 (such a small difference that the percentage change is basically flat), to 3,271.03.
That number will be the level to watch over the next couple of days: Because the Presidential Predictor counts the stock market’s performance only through October, Friday is the last day that matters for the indicator. Should the S&P 500 remain where it is or fall further over the rest of this week, the stock market predicts that Biden will become President.
“The next two days will be key!” Stovall noted in an email.
Stock market analysts believe the reason for the pattern is that investors dislike uncertainty: A change in control of the White House comes with uncertainty around new policies and legislation. The more likely that change becomes, the more uncertainty there is, which makes investors sell stocks.
Still, the metric isn’t perfect. In 1956, despite the S&P 500’s fall in the August-through-October period, Dwight D. Eisenhower won reelection to the presidency. The Presidential Predictor has not failed since then.


fortune--2020-10-28--The Dow has fallen 7% in the past 9 days. Is that a bad sign for Trump?

On the face of it, markets tumbling less than a week before the election doesn’t look like a good thing.
The Dow has fallen over 7% in the past nine trading days, with Nov. 3 just around the corner (the S&P 500 has followed suit, dropping roughly 6%). While spiking coronavirus cases and a lack of a stimulus deal are certainly driving some investor angst, does a pre-Election Day sell-off bode ill for Trump’s re-election?
“All else equal, a weaker stock market could certainly help Biden,” LPL’s Jeff Buchbinder tells Fortune. “On the margin [it’s] a little bit worse for President Trump based on history.”
Though pre-election drops of this magnitude aren’t unheard of, they are rare. The S&P 500 and Dow both fell over 3% on Wednesday, and according to LPL’s Ryan Detrick, “Only twice did the S&P 500 fall 3% or more within 6 trading sessions of the presidential election. 1932 and 2008. The incumbent party lost both times,” he wrote in a tweet Wednesday.
Detrick adds, “before [the] 2016 [election], the Dow fell 9 days in a row and the incumbent party obviously lost, so that time played out poorly for the party in power,” he told Fortune via email.
What perhaps has stronger historical precedent is a slightly longer time horizon: Buchbinder notes that in 20 out of the past 23 elections, it boded well for the incumbent when the S&P 500 was up three months before the election, while stocks trading down tended to favor the challenger. Stocks have traded roughly flat since three months ago, but turned lower on Wednesday: The Dow is down around 0.5% since August 3, while the S&P 500 is trading about 0.7% lower.
“Maybe from that perspective you could call it a mixed bag” for Trump, Buchbinder says, though the now-negative three-month trend would suggest a Biden victory.
Buchbinder points out that “stocks that tend to be favored more by Democrats than Republicans continue to do pretty well on a relative basis, potentially signaling Biden.”
Indeed, according to a recent J.P. Morgan report, stocks in a so-called “Biden basket” (names that would do well under his administration) are outperforming those in a “Trump basket” by around 66% since December 2019. “Recently markets have been saying, ‘Biden’s the favorite,’ but we’ll see where it goes from here,” LPL’s Buchbinder adds.
Still, some argue that the contest between the two candidates is closer than pollsters and perhaps even markets had anticipated in recent weeks: According to some A.I. analysis, the race is tight, and Buchbinder notes “we could get more volatility if the polls tighten and more people start to worry about a contested outcome—that’s something to watch.”
To be sure, there’s hardly anything typical about this year, and some historical patterns have been broken (as a small example, Oct. 28 is historically the best day of the year for stocks—a trend that certainly hasn’t held up in 2020).
Despite the recent selloff, continued virus worries, and overall investor angst, Buchbinder remains optimistic: “The combination of [future] stimulus, getting the pandemic under control and moving past it, and clarity on the election, we think, can push stocks higher between now and year-end and into 2021.”


fortune--2020-10-28--4 key moments from the Senate’s showdown with Big Tech CEOs

For more than three hours on Wednesday, Democrat and Republican senators took jabs at Facebook, Twitter, and Google, saying that they disseminate misinformation, spark violence, and suppress conservative voices.
The Senate Committee on Commerce, Science, and Transportation explored whether Section 230, a law that protects Internet companies from being held liable for what users post, gives Big Tech companies too much immunity. Lawmakers from both parties agree that the law should be changed or even revoked, though they differ about why.
Democrats repeatedly criticized the companies for failing to remove harmful information on their services. Meanwhile, Republicans hammered the companies for allegedly suppressing conservative views and influencing elections.
“You think that people don’t trust you,” said Sen. Ron Johnson, a Republican from Wisconsin. “I agree with that. We don’t trust you.”
Facebook CEO Mark Zuckerberg, Alphabet CEO Sundar Pichai, and Twitter CEO Jack Dorsey spent the hearing trying to defend themselves from the attacks. Time and again, they said they’re at war against harmful content, that they are politically neutral, and that they’re working to safeguard the presidential election.
Here are the highlights from the hearing:
Heated exchanges
The hearing was marked by intense exchanges between lawmakers expressing their frustration and executives trying to be as inoffensive as possible.
Sen. Cory Gardner, a Colorado Republican, took Dorsey to task for allowing Iran’s Ayatollah Ali Khamenei tweets questioning the Holocaust to remain untouched on Twitter while the service routinely flags President Trump’s tweets.
Republican Texas Sen. Ted Cruz criticized Twitter for blocking a New York Post article that suggested Biden had ties to corruption in the Ukraine while allowing a New York Times story about Trump’s taxes to remain. One day after the Post article about Biden was published, Twitter reversed its stance on blocking it. But Cruz also asked Dorsey point-blank whether Twitter has the ability to influence elections.
Dorsey responded by saying, “No, we are one part of a spectrum of communication channels people have.” Cruz snapped back, “Mr. Dorsey, I find your opening answers absurd on their face.”
Democratic Sen. Amy Klobuchar, from Minnesota, said she was concerned about Google’s “defiant” response to the Justice Department’s antitrust lawsuit against it. She also questioned Zuckerberg about Facebook’s alleged interest in pushing divisive content to users because it provokes them to spend more time on the platform.
Zuckerberg disagreed with Klobuchar’s characterization, saying Facebook shows users content that it thinks will be meaningful to them like “when your cousin had her baby.” Klobuchar stopped Zuckerberg mid-sentence, saying she’s not talking about cousins and babies but rather the “corrosive” content like conspiracy theories.
Beyond Section 230
Though the hearing was supposed to focus on Section 230, senators often veered off topic to discuss other issues including data privacy, antitrust, and political ads.
The CEOs of Twitter, Google, and Facebook all said they continue to see foreign and domestic actors trying to interfere with the U.S. election, contrary to President Trump’s minimizing or dismissing the problem. The CEOs added that they have coordinated with the rest of the tech industry and law enforcement to identify and remove such posts.
“One of the threats the FBI has alerted our companies and the public to was the possibility of a hack-and-leak operation in the days or weeks leading up to this election,” Zuckerberg said. “That if a trove of documents appeared, that we should view that with suspicion that it might be part of a foreign manipulation attempt.”
Tech troubles
The virtual hearing about the tech industry ended up being marred by tech hiccups. Even the tech CEO had troubles.
Zuckerberg went AWOL from the opening statements because of a technical snafu that ended up delaying the hearing for a few minutes while the CEO tried to fix the problem. After Zuckerberg appeared, and explained he had trouble connecting, Sen. Roger Wicker, the Republican chairman of the committee, joked, “I know the feeling, Mr. Zuckerberg.”
Later, Democratic Sen. Richard Blumenthal’s audio was muted halfway through a sentence. Wicker alerted Blumenthal to the issue, and the hearing briefly paused until he was unmuted.
Low moments
Some lawmakers used the hearing to go off in odd tangents.
For example, Republican Sen. Marsha Blackburn of Tennessee asked Pichai if Google still employed software engineer Blake Lemoine. In leaked internal emails, the Google employee likened Blackburn to a “terrorist” and a “violent thug” in her approach to certain political issues. “He has had very unkind things to say about me,” said Blackburn, implying that he should be fired and later suggesting that Internet companies unfairly censor conservative voices.
In another odd moment, Sen. Johnson became frustrated with Dorsey because Twitter did not remove a tweet that contained a lie about Johnson strangling his neighbor’s dog. The author admitted in the tweet that the dog strangling was false, likely to show how misinformation can be spread.
“That could definitely impact my ability to get reelected,” he complained in complete seriousness about the tweet.


fortune--2020-10-28--USPS ordered by judge to step up delivery of election mail

Postmaster General Louis DeJoy was ordered to immediately expand mail delivery with extra trips and later deliveries after the U.S. Postal Service failed to improve performance less than a week before the election.
U.S. District Judge Emmet Sullivan in Washington late Tuesday granted an emergency request to enforce and monitor compliance with an earlier injunction he ordered. The ruling is a victory for civil rights groups and Democratic-led states that alleged in several lawsuits that the changes were undermining the election to the benefit of President Donald Trump.
“USPS personnel are instructed to perform late and extra trips to the maximum extent necessary to increase on-time mail deliveries, particularly for election mail,” Sullivan said. “To be clear, late and extra trips should be performed to the same or greater degree than they were performed prior to July 2020 when doing so would increase on-time mail deliveries.”
On-time delivery of First Class mail dropped to 69.8% on Tuesday, down more than 6 percentage points from previous days, the USPS said in a court filing Wednesday.
Mail delivery has taken on a new urgency amid a surge in the use of mail-in ballots during the pandemic and Republican efforts to block the counting of ballots that arrive after Election Day, even if they’re mailed on time. And conservative justices on the U.S. Supreme Court signaled this week that counting any ballots that arrive after Election Day could lead to “charges of a rigged election.”
“DeJoy has either been unable or unwilling to fix what he broke within the Postal Service and to get our mail delivery back to what it was before he started on the job,” Rep. Gerald E. Connolly, the Democratic chairman of the Subcommittee on Government Operations, said in an emailed statement. “With serious delays in performance continuing, particularly in certain urban areas, I urge any American who has not yet voted to do so in person or by delivering their ballot to properly designated election offices or drop boxes.”
Sullivan gave DeJoy until Thursday to distribute guidance to USPS leadership across the country with state-specific ballot-receipt deadlines and remind them of the need to “ensure that completed ballots reach the appropriate election official by the state’s designated deadline.”
Sullivan ordered DeJoy to issue a one-page notice advising managers to rescind July guidance limiting the use of late and extra delivery trips. The USPS has argued that it was complying with the earlier injunction and that data showing a sharp drop in the use of overtime and late trips had nothing to do with election mail. The judge said he wants to be updated daily by the USPS on its use of late trips.
USPS spokesman Dave Partenheimer said in a statement Wednesday that the Postal Service is complying with the court order and taking its legal obligations “very seriously.”
“We are deploying extraordinary measures — expedited handling, extra deliveries and special pickups — consistent with practices used in past elections to accelerate the delivery of ballots to its intended destination,” Partenheimer said.


fortune--2020-10-28--Lululemon announces expanded size range and sustainable fabrics in new good citizenship push

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Lululemon Athletica has begun to expand the sizes of the products it sells and is pledging to have all of its merchandise made from sustainable materials within a few years as part of a wide-ranging corporate citizenship push it unveiled on Wednesday.
The athletic wear company’s roadmap for hitting goals on matters such as pay equity, inclusiveness, and the environment, which bears the grammatically awkward tagline “be human. be well. be planet,” also includes pledges to use only renewable energy for its own operations by the end of 2021, reduce carbon emissions stemming from the production and transit of its goods by 2030, and cut half of the freshwater used in its manufacturing within a few years.
Lululemon joins the ranks of companies ranging from Clorox and Walmart to Target and Adidas, all of which have introduced similar social and environmental goals in recent years as a growing contingent of their consumers have demanded them.
The program also reflects how important Lululemon has become in the apparel industry: the Canadian brand practically invented the athleisure trend and last year saw its annual sales hit $4 billion, twice the total it posted four years earlier. In its most recent quarter, despite a pandemic that decimated most clothing sales, revenue rose 2% year-over-year as consumers have continued to snap up its pricey wares.
Lululemon CEO Calvin McDonald dismisses any suggestion that this initiative, in the works since before he took the reins two years ago, can be written off as marketing or corporate virtue signaling. Rather, he insists it will help guide the company, which how has 19,000 employees and 506 stores, as it continues its torrid trajectory—and motivate both staff and customers.
“This is part of our culture,” McDonald tells Fortune in an exclusive interview. “The value to the organization in doing this is it reinforces who we are, how we want to show up.”
One of the most attention-grabbing focuses of the program is likely to be the push to add more bigger sizes. This year, Lululemon has introduced sizes between 0 and 20 for its six most popular women’s items, and McDonald says the company will assess whether it would be beneficial to go even higher. Lululemon is now also offering size 14 bras, a 46″ waists in one of its popular men’s pants and says will add more online by late next year.
This from a company that needed years to live down 2013 comments by its founder and former CEO that its products were not meant for larger women.
But that was then, this is now. Under McDonald’s leadership, Lululemon has not just thrived, but also avoided the drama that plagued the company for years. (His predecessor left Lululemon in 2018 amid allegations of misconduct.) And McDonald, a former top Sephora executive, sees the size expansion as more than simply the right thing to do; it’s also a business opportunity to reach new customers.
“As a brand, who are we to determine the exclusive nature of the product purely based on size?” the CEO says. He adds: “Those are the people we want to recruit and our sizing was preventing us from recruiting people who have similar states of mind.”
Cognizant of the skepticism that corporate do-good pledges can sometimes arouse, McDonald says Lululemon is committing to providing annual updates and establishing timelines.
That includes the goal of 75% of materials used in its products be sustainable by 2025, and 100% by 2030. While that would of course help the environment, for Lululemon it offers the added benefit of giving the company a role in developing the fabrics of the future that customers will require. “We obsess over the innovation in our fabrics,” says McDonald. “We want to be leaders.”
One area where Lululemon is not a leader is the idea of circularity, a buzzword refering to the reuse and reselling of clothing. With so-called re-commerce booming, as evidenced by the fast growth of ThredUp, which has lined up partners such as Walmart, J.C. Penney and Macy’s in the re-commerce market, it’s clear this is something customers are gravitating toward. And it’s an idea that is going further mainstream: earlier this month, Levi Strauss said it was launching its first buy-back and resale program.
Now, Lululemon plans to start pilot resell projects next year with the goal of giving customers the option to resell or recycle any Lululemon garment by 2025.
All this, the company hopes, adds up to a corporation set up for what customers and workers expect of a company in this era. “It’s a purpose we all believe in,” says McDonald. “Having an ‘Impact Agenda’ supports that philosophy.”


fortune--2020-10-28--Millions of mailed ballots not yet returned in key states

Just days before the presidential election, millions of mail ballots have yet to be returned in key battleground states, and election officials warn that time is running out for voters who want to avoid a polling place on Election Day.
At least 35 million mail ballots had been returned or accepted as of early Wednesday, according to data collected by The Associated Press. That surpasses the 33.3 million total mail ballots returned during the 2016 election, according to the U.S. Election Assistance Commission.
Yet an estimated 1.9 million ballots were still outstanding in Florida, along with 962,000 in Nevada, 850,000 in Michigan and 1 million in Pennsylvania. In most states, the deadline for ballots to be received is Election Day.
“Don’t wait until Election Day,” Pennsylvania Gov. Tom Wolf implored voters this week. “Hand-delivering your own ballot now will give you the peace of mind that your vote will be counted, and your voice will be heard in this historic election.”
Combined with early, in-person voting, at least 71.5 million votes have already been cast, more than the total number of advance votes four years ago.
Many states made it easier to request a mailed ballot this year amid the coronavirus pandemic and concerns about crowded polling places on Election Day.
One challenge has been ensuring that voters who are not used to voting absentee return their ballots in time to be counted. Compounding concerns are mail delivery delays that have persisted across the country. Delivery data from the U.S. Postal Service does not offer much assurance that these ballots will reach their destinations if they have not already been mailed.
Throughout the fall, as ballots moved through the postal system, the agency has consistently missed its goal to have more than 95% of first-class mail delivered within five days. In the week that ended Oct. 16, the most recently available weekly figures, the Postal Service reported a national on-time delivery rate of 85.5%. Postal districts in many presidential battleground states failed to reach even that mark.
The district that covers the eastern part of Michigan, which includes Detroit and its suburbs, has had one of the country’s worst delivery rates — just 71.5% of first-class mail was on-time in mid-October.
Michigan’s top election official was among those warning it was too late to try to return a ballot in the mail. She urged voters to use an official drop box or to return their ballot in person at their local election office.
“We are too close to Election Day, and the right to vote is too important, to rely on the Postal Service to deliver absentee ballots on time,” Michigan Secretary State Jocelyn Benson said.
This year, Michigan has deployed hundreds of drop boxes across the state. The state’s ballot deadline is 8 p.m. Election Day.
The same deadline holds for Wisconsin, after the U.S. Supreme Court rebuffed a Democratic effort to extend it. In the state’s April primary, some 80,000 ballots arrived after Election Day.
Voters in the state appeared to be heeding the call to return ballots early, with only about 287,000 ballots outstanding out of some 1.8 million that were sent. That amounts to roughly 16% yet to be returned.
Nevada voters have more time to return their ballots, which are not due until Nov. 10 if postmarked by Election Day. There, an estimated 962,000 ballots were still outstanding as of Wednesday, although it’s unlikely all those will be returned because the state decided to send a ballot to all 1.7 million active registered voters in the state. Some voters will choose to show up at the polls or just not cast a ballot.
In Florida, 4 million of a record 6 million mail-in ballots requested had been returned as of Wednesday morning. The state was on pace to eclipse the return rate of 2016, when 81% of 3.3 million requested mail-in ballots were returned.
To be counted in Florida, ballots must be received by 7 p.m. Election Day.
“We are not necessarily concerned about the number of outstanding vote-by-mail ballots, other than trying to hammer home the message that postmarks will not count, and to get them in our office by Election Day,” said Danae Rivera-Marasco, spokeswoman for the Orange County supervisor of elections.
Some voters are still waiting to receive their ballots.
Abby Leafe, a registered Democrat who lives in suburban Philadelphia’s Bucks County, checked her mailbox Tuesday in vain for her ballot. She hopes to vote absentee but will go to the polls if she has to.
“Making sure we have free and fair elections is worth getting COVID for,” said Leafe, a 46-year-old market researcher from Newtown.
In Pennsylvania, the crush of mail-in votes is a record, more than 10 times the number received by counties in 2016′s presidential election.
The current deadline for ballots in Pennsylvania to be received is three days after the election, but last-minute litigation could move that deadline to Election Day.
In most states, voters who requested an absentee ballot but did not receive one in time or decided not to return it can still show up at their local polling place on Election Day and vote. In a few states, these voters could be required to cast a provisional ballot, which will be counted after the voter’s eligibility is confirmed and it’s determined that they did not already cast their absentee ballot.
Large numbers of voters showing up at polling places on Election Day after requesting an absentee ballot could trigger delays and long lines. The process for checking in will take longer, and casting a provisional ballot also is more involved.
“Everything that adds time to that process is going to have an exponential effect down the line,” said Lisa Schaefer, executive director of the County Commissioners Association of Pennsylvania, whose members administer elections. “So we certainly encourage anyone who’s applied for a mail-in ballot to use that ballot as a safe and secure way to vote.”


fortune--2020-10-28--LVMH could be nearing a deal to revive its bid for Tiffany & Co.

LVMH is nearing an agreement to revive its derailed purchase of Tiffany & Co., with the French luxury conglomerate poised to save about $425 million from the original price tag.
The French company has proposed a price of about $131.50 a share, down from the original $135, according to people familiar with the matter. Tiffany’s board will meet Wednesday to discuss the new terms, they said. The total cost of the original agreement was about $16 billion.
The two sides are still finalizing details of a compromise and the price could change, the people said. The talks could also fall apart, they said.
Bloomberg reported Tuesday that Tiffany is seeking around $132 a share as a compromise price, citing people familiar with the matter. The jeweler would also likely want a guarantee that LVMH wouldn’t back out of any revised deal, after the Louis Vuitton owner said in September it couldn’t complete the acquisition because of a French government request.
Tiffany shares erased losses Wednesday, rising 0.7% to $129.83 at 12:51 p.m. in New York. Representatives for the jeweler and LVMH declined to comment.
A compromise would end a year-long saga involving a bitter war of words, French government intervention and lawsuits in the U.S. By striking a new deal, the companies could avoid a courtroom battle that was set for January in Delaware.
The original deal’s closing date of Nov. 24 would not be met, however, according to a person familiar with the matter.
Adding Tiffany would give LVMH Chairman Bernard Arnault a major boost in the global jewelry market, letting the billionaire challenge Cartier owner Richemont for supremacy as the luxury industry begins to recover from a turbulent 2020. At LVMH, Tiffany would join a portfolio of high-end brands that include Dior, Givenchy and Bulgari.
The Wall Street Journal reported earlier that the companies are nearing a deal.
American icon
The relationship between Tiffany and LVMH started affably last year following a short courtship, with the jeweler hosting Arnault and his top brass at its New York flagship store. France’s wealthiest man spoke of Tiffany as an American icon and expressed his “intense respect and admiration” for the business.
The smiles faded soon after the coronavirus pandemic sparked worldwide economic turmoil and roiled the global luxury market. LVMH got a helping hand from the French government when its foreign minister sent a letter asking the company to delay the deal amid a trade dispute with the U.S.
That sparked a Tiffany lawsuit, followed by an LVMH counter-suit in which it accused the jeweler’s executives of mismanaging the business during the pandemic.
Tiffany persuaded a judge to fast-track its suit and the two sides reopened talks as the original closing date approached.


fortune--2020-10-28--SoFi gets green light to become a national bank

The U.S. Office of the Comptroller of the Currency (OCC) has granted conditional approval to lending and fintech company SoFi to receive a national bank charter, a designation that will allow it to receive deposits and make loans on its own.
Currently, SoFi licenses the charter from another bank to provide the legal backstop for its operation—a model used by many so-called challenger banks such as Chime, but one that undercuts its profits.
The process of obtaining a national bank charter is slow and costly, but is one to which other financial upstarts are turning. Online bank Varo received one in August while payment giant Square is in the process of obtaining one too.
For SoFi, which first made its name refinancing the student loans of lawyers and other high-earning professionals, the bank charter is part of a larger strategy to become a full-service financial institution. The company now offers everything from cryptocurrency to fraction shares of stock, and on Wednesday announced a credit card offering 2% back on purchases.
SoFi also appears to be on more stable footing than it was in 2018 when it endured a near crack-up following the departure of its founder amid a sexual harassment scandal and shrinking profits from its student-loan business. Since then, it has diversified its product offerings and obtained an important new revenue stream through the $1.2 billion acquisition of Galileo, a company that provides back-end services to many other digital banks.
SoFi’s conditional acquisition of a bank charter also comes as many challenger banks face headwinds amid fierce competition and a low interest rate environment—a situation that some analysts predict will result in consolidation or some banks simply disappearing.
While the OCC’s approval effectively paves the way for SoFi to become a national bank, the company must still wait for formal approval from the Federal Deposit Insurance Corporation and the Federal Reserve.
“We look forward to continuing to work with the OCC on the next steps of the application process, along with the Fed and FDIC,” said a SoFi spokesperson.