fortune--2020-03-17--Apple’s store closures are dramatic—but experts say they’ll barely nibble at its bottom line

Most major companies would take a massive financial hit if they closed almost all of their stores around the world for a few weeks. Not so for Apple. In response to the COVID-19 pandemic, the company has turned over the closed sign until March 27 for all its retail stores outside of mainland China, but experts Fortune spoke to didn’t seem concerned for the company’s health.
Apple generates between 20% and 30% of its revenue from its brick-and-mortar stores, experts say. But the company relies more on its retail stores for educating its shoppers on the company’s hardware and software than it does selling them gear. The stores also serve as the epicenter of the Apple’s repair activities, facilitated by its Genius Bar.
“Closing the stores will obviously have a short-term impact on retail revenue,” eMarketer retail analyst Andrew Lipsman says. But at least a portion of lost revenue will shift online as buyers get their Apple gear over the Internet instead, he adds.
A year ago, during the fiscal quarter ended in March, Apple generated $58 billion in revenue, making its share from the retail stores between $11 billion and $17 billion.
Trying to approximate those figures for this year, when coronavirus is wreaking havoc, will be difficult. Wedbush analyst Dan Ives believes the store closures will reduce Apple’s revenue this quarter by just about 5%.
Loup Ventures analyst Gene Munster thinks a large share of Apple’s anticipated retail store sales will shift online, and the net effect will be a 1% drop in revenue because of the closures. Under that scenario, Apple might only take a $100 million bite.
Most importantly, the experts say, the iPhone-maker won’t need to dip into its massive cash reserves to blunt its revenue shortfall. “They will be profitable and continue to generate cash” during the closure, Ives says.
Munster agrees, but even if the store closures don’t affect Apple’s business, it could affect shareholders.
“This will likely temper any increases to the company’s annual increase to its dividend,” Munster says. Ives believes Apple may use its cash to buy shares from investors to buoy its stock, which is down to $242 a share—a significant drop from its $319 share price just a month ago.
Ultimately, the experts say Apple closed its stores to protect its employees and customers, not to blunt slowdowns in its supply chain.
“I think the decision to close stores was an act of leadership on Apple’s part,” Lipsman says. “When companies like Apple and Nike make this decision, others will follow suit.”
Ives says he “loudly applauds” Apple’s decision, and sees it as the company “putting their employees and customers ahead of selling iPhones.”
Looking ahead, analysts agree Apple will move past the impact COVID-19 is having on its business. They say Apple’s profitability and cash reserves help it weather disruptions better than many other companies.
And when COVID-19 becomes a less disruptive force in daily life, they expect Apple to get back to business as usual.
“In short,” Lipsman says, “[Apple will] be fine.”
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fortune--2020-03-16--If Bitcoin is a ‘safe haven’ why does it tank in times of trouble?

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

When the going gets rough—stocks falling, interest rates in decline, debts mounting—investors look to “safe haven” assets, like gold, that are supposed to retain value while the rest of the world burns up. Cryptocurrency investors argue Bitcoin should hold a similar place in the financial firmament: a reliable fallback in times of crisis. It’s digital gold, they say.
But at this moment, when safe haven assets should be holding up, Bitcoin is sputtering. The cryptocurrency had its single worst performing day in seven years on Thursday when its price dropped from nearly $8,000 to below $6,000. Early Friday, its price plunged again, to below $4,000, before rebounding somewhat above $5,000. On Monday, it fell back below that threshold.
Why is Bitcoin getting thwomped right when many people expect it to perform best? Here’s how cryptocurrency investors explain the contradiction.
What’s the youth in trying
Bitcoin is still, little more than a decade old, young. “Bitcoin wants to be digital gold when it grows up,” says Wences Casares, CEO of Xapo, a digital wallet startup, and board member of the Facebook-corralled Libra Association, “but it is a toddler.” How long the adolescence will last is anyone’s guess.
With youth comes an element of danger. Linda Xie, managing director of Scalar Capital, a cryptocurrency investment firm, considers Bitcoin to be somewhat schizophrenic. “I think Bitcoin acts as both a safe haven and speculative risk asset,” effectively a gamble, she says, paradoxically. Xie says she believes that “in the long run it will be more widely perceived as a safe haven,” but that time has yet to come.
The present-day peril of investing in the digital coin is obvious. “Bitcoin is certainly a risk asset,” says Ari Paul, the chief investment officer at the cryptocurrency investing firm Blocktower Capital, “albeit a lower correlated one than most,” meaning it generally does not move with the stock market.
The recent market rout may call that supposed lower correlation into question.
Ride together, die together
Last week Bitcoin and the rest of the incumbent financial system swung low together. That’s semi-unusual for the cryptocurrency’s history.
For much of its existence, Bitcoin’s performance has been mostly uncorrelated to the stock market, as the below chart, provided by CoinMetrics, a cryptocurrency market research firm, shows. When compared against the S&P 500, a common stock market index, Bitcoin’s correlation oscillates near the zero mark—meaning it is largely its own beast. (On the vertical axis: Zero means uncorrelated, “1” means correlated.)
Screenshot of Bitcoin-S&P 500 correlation chart via CoinMetrics, crypto-market tracker
Is the recent tie-up an anomaly? “While some folks suggest that the last 45 days discredits the prior five years, I don’t think that’s a reasonable view,” says Kyle Samani, managing partner at MultiCoin Capital, another cryptocurrency investing firm. Samani notes that even yields on U.S. government treasuries have been fluctuating wildly lately, which is significant since the federal bonds are also generally considered a kind of safe haven.
Most times, Bitcoin marches to its own idiosyncratic tune. (Stampedes, really.) Like real estate versus equities, Bitcoin behaves uniquely. But when sudden, recession-worthy jolts rock the system, everything can change.
No risk, no reward
Despite Bitcoin’s growing pains, cryptocurrency investors remain optimistic about the future of their digital gold.
Boosters still see the precious metal as a useful point of comparison. MultiCoin’s Samani believes history will repeat itself. “In 2008, gold dipped ~32% before rallying,” he says. “I’m expecting a similar trajectory for Bitcoin in the coming months.”
Screenshot of spot gold market prices via TradingView, a market-tracker
BlockTower’s Paul expects similar performance—with a difference. “Bitcoin has been and will likely continue to be more volatile in both directions” than gold, he says. “It’s already sold off more than gold did in 2008, and I expect it’s eventual rally to be substantially more parabolic,” meaning its price chart will feature an even steeper upside gain.
Yeah, right
Skeptics dismiss these rosy forecasts as wishful thinking.
Peter Schiff, a goldbug investor and CEO of Euro Pacific Capital, disagrees with any comparison of Bitcoin to his beloved bullion. Bitcoin is “nothing. It’s a way for people to gamble. It’s a lottery ticket on a pipe dream,” Schiff says. (Schiff proudly notes that a group of cryptocurrency fans recently awarded him the title of “most clueless Bitcoin no-coiner,” crypto-speak for someone who pooh-poohs cryptocurrency.)
Guess who won the Scammy Award for the most clueless Bitcoin nocoiner? The nominees were @paulkrugman, @Nouriel, @WarrenBuffett, and yours truly. https://t.co/6XdDglGW7B — Peter Schiff (@PeterSchiff) March 4, 2020
“The name of the game is to get out, but its investors have to sucker people in to have somebody to sell to,” Schiff says.
Havens and haven-nots
People buy and sell assets for any number of reasons, and basing one’s investment decisions on a single, simple narrative is a mistake. No bet is a sure bet—even for a supposed safe haven.
When investors need money, and need it quickly, they’ll sell anything. Not even gold can escape as the ballast that gets tossed overboard when a sinking ship requires buoyancy. Bullion dove in 2008; it dipped 4% on Monday amid the market-wide sell-off too.
If Bitcoin is, one day, become a safe haven, it will be on the merits of its inability to be confiscated by governments, say some investors. “It’s a ‘safe haven; in terms of it being seizure resistant, not in terms of price stability,” Paul says. “It may eventually become a safe haven in purchasing power, but certainly not today.”
Dan McArdle, a cofounder of Messari, a cryptocurrency market tracker, elucidated the thesis in a Twitter thread a couple years ago. Bitcoin is not disaster-proof, he said. “It’s value over the long haul stems from inflation resistance, being able to function as money if confidence in fiat is lost, & inability for banks/govs to seize it.”
1/ Figure I should get out ahead of this issue:
Bitcoin is a hedge against inflation & loss of confidence in fiat, NOT a hedge against a typical recession. — Dan McArdle (@robustus) June 22, 2018
Bitcoin may be a haven, but it’s by no means a safe one—at least not yet. “While many in the Bitcoin industry have been hailing Bitcoin as a new safe haven, at this point it seems clear that proponents of this status have probably gotten a bit ahead of themselves,” says Chris Bendiksen, head of research at CoinShares, a digital asset investment firm. “To be clear, this does not mean that Bitcoin is somehow forever barred from attaining such status, but it seems clear that this status has yet to be established.”
Bitcoin may one day grow up. In the meantime, better to play it safe, and, for anyone determined to get involved with it, treat cryptocurrency like a game of chance.
You could lose whatever you invest.


fortune--2020-03-16--Close to retirement and panicking about the market crash? Here’s how to avoid locking in losses

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Few long-term investors ever enjoy going through a bear market like the current one we’re dealing with. Not only are stocks more than 20% off all-time highs that were seen just last month, but the whipsaws in volatility from day-to-day are enough to make your head spin.
But how you feel about living through a bear market also has a lot to do with where you fall in your investing life cycle.
If you’re a young person who has little experience dealing with market crashed and economic turmoil, this is a trial by fire. But young investors also have the most to gain from falling stock prices. Those who are just starting out on their investment journeys have many decades ahead of them to save and invest their capital.
Young investors should pray for bear markets because it allows them to buy more shares at lower prices. Human capital is your biggest asset as a newbie investor, meaning your future earnings potential should allow you to save money over time and allow compounding to do the heavy lifting for you.
Read: How to prepare your personal finances for a coronavirus recession
Those who are further along on their investment journey who are either retired or fast approaching retirement don’t have the luxury of leaning on human capital. Financial assets are typically the main holdings for this group, who don’t have nearly as long to wait out bear markets or slowly put capital to work over many years.
Lower stock prices are scary for older investors because they are at the point where they must begin drawing down their portfolios for living expenses. So how should older investors feel about their portfolios now that stocks are well off their highs and potentially heading lower?
Here are some things to remember if you’re retired or approaching retirement when it comes to your portfolio:
Diversification is key
Stock-picking is sexier but asset allocation will always be the most important decision you will make as an investor in determining your risk profile. This decision is paramount for retirees and balance can make all the difference.
While you don’t have as much time as those just starting out in the markets, retirees could potentially have two to three decades in retirement to invest their money. This means you must balance out the need for current income with the need for future growth.
The simplest hedge against a falling stock market is holding some of your assets in high-quality bonds or cash. Since reaching all-time highs in late-February, the S&P 500 is down close to 20% through last Friday. In that same time, 7-10 year U.S. treasuries (as proxied by the IEF ETF) are up more than 12%.
Bonds don’t pay as much interest as they once did but they still provide a hedge against falling stock prices as investors rush to one of the safest, high-quality assets available.
Always think in terms of spending first
The asset allocation can’t be made without first understanding what your spending levels will be and if other sources of income are available. The typical rule of thumb for a safe withdrawal rate from your portfolio is 4% of the value, increased each year by a reasonable inflation rate. This is not bulletproof but it’s a decent starting point to put your portfolio’s spending power into perspective.
Assuming you kept 40% of your portfolio in bonds or cash equivalents, that would give you 10 years’ worth of your first year of spending in assets that can protect you during a bear market. Those assets also allow you to rebalance into the pain by buying stocks are lower levels.
How much you keep in cash or bonds depends on how flexible you can be in regards to your spending. Lifestyle creep could be a bigger problem than a bear market if you have no clue where your money goes or potential ways to cut back during a crisis. Having a handle on your personal finances can help dictate portfolio decisions in terms of how much risk is necessary to take depending on your spending habits.
Give yourself more time
A bear market at the outset of retirement can make things more challenging than a rip-roaring bull market but there are ways to prepare yourself for the current scenario.
The average bear market since World War II has seen the S&P 500 fall roughly 29% and last for 331 days from peak-to-trough, on average. The average breakeven for stocks to recoup all lost gains from the bottom of a bear market in that time was just shy of 17 months, on average. So the average bear market took nearly a year to play out and then another year and a half to recover.
So a minimum of at least 3 years’ worth of spending cash in high-quality bonds or cash would give you enough coverage so you don’t have to panic-sell stocks at the worst time. Those approaching retirement could at a minimum begin funneling some of their savings in their later years into a safe savings account to cover their first year or two of expenses in retirement.
Of course, this doesn’t help those who have retired but didn’t take this into account but are living through the current bear market. One of the best returns you can get on retirement income is delaying social security payments until you’re 70 years of age. For those who were using that strategy but are now staring big stock market losses in the face, taking social security early could be an option.
You have to run the numbers to ensure this makes sense for your particular set of circumstances but this could offer investors some breathing room to avoid locking in stock market losses.
Life would be much easier if the stock market cooperated and didn’t throw you a curveball right when you need your financial assets the most. Your portfolio decisions as it pertains to asset allocation can help but you must get your personal finances and spending habits in order to give yourself enough options to wait out a stock market route.
Ben Carlson, CFA is the Director of Institutional Asset Management at Ritholtz Wealth Management. He may own securities or assets discussed in this piece.
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fortune--2020-03-17--How much will coronavirus hurt the economy? These new estimates are terrifying

The first U.S. coronavirus vaccine trials have begun

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Things are bad. But according to upcoming economic data estimates, they could get a lot worse.
While markets have sold off at record levels (the S&P 500 was down around 30% from its high as of Monday), the rapid decline into a bear market hasn’t left much time for economic data to play into it. To those like Matt Miskin, co-chief investment strategist at John Hancock Investment Management, “It’s going to get dire before we start getting better.”
In fact, following widespread closures of bars, restaurants, and the dislocation of other business activities and supply chains, stats like jobs data for March are still forthcoming—and the estimates are sobering.
Former Trump administration economist Kevin Hassett warned Monday that the U.S. could see up to 1 million jobs lost in March—telling CNN that “You’re looking at one of the biggest negative job numbers we’ve ever seen.” However, others like Russell Price, chief economist at Ameriprise, disagree, telling CNN companies will likely be “cautious about cutting workers if they think this will be a short-term phenomenon.”
Yet for those like Morgan Stanley Wealth Management’s chief investment officer Lisa Shalett, the main data piece markets don’t know how to “calibrate” is the impact to unemployment data. The number of workers who have already been furloughed or impacted by the outbreak could likely produce “eye-popping” unemployment data—in the hundreds of thousands or even 1 million jobs lost for March, Shalett notes. “That is going to be a critical piece of this,” she tells Fortune.
Still, the fallout of coronavirus’ impact on the economy is just starting to show in data. On Monday, a regional manufacturing index, the Empire State manufacturing index, read at its lowest level since 2009—down to negative 21.5 in March (down 34.4 points from the previous month). According to Miskin, that index is “the tip of the iceberg of this deluge of data that’s likely to come in more negative,” he tells Fortune.
That negative data will start showing up in the manufacturing and non-manufacturing ISM data, says Mike Ryan, UBS chief investment strategist for Wealth Management Americas, who anticipates readings to plunge into the mid-40s (February readings were 50.1 for manufacturing and 57.3 for non-manufacturing. Readings under 50 suggest contractionary conditions). The Markit (flash) manufacturing and services PMIs are due next Tuesday—two key previews of how badly economic activity may be hurt. Ryan surmises: “Is the worst economic data yet to come? Absolutely. Could we see further downside? Yes, of course.”
Weekly jobless claims, which will be reported on Thursday, are estimated to come in at around 220,000, up from 211,000 (for the week ending March 7)—but still operate on a lag, when coronavirus hadn’t reached its current impact in the U.S.
GDP, meanwhile, will almost certainly be negative in the 2nd quarter, experts say, with some estimating -2% to -5% GDP. John Hancock’s Miskin says he’s even estimating GDP could be as low as -10% in the 2nd quarter, noting “Our base case is that we do see a recession this year.”
Consumer spending has been (and will be) a key metric to watch, but is likely to be a pain point in coming months, as attempts to buoy the economy through fiscal policy amid widespread quarantines due to coronavirus could be a “more challenging event for policy makers to address than any really in recent history,” notes Miskin, because “If you get an extra paycheck, it’s not like you’re going to go out and spend it immediately—you’re not leaving your house.”
But how will markets respond?
Goldman Sachs is predicting the S&P 500 might see a midyear trough at 2,000—41% down from its all-time high. And John Hancock’s Miskin says that 10% to 15% more downside isn’t something that should be surprising. However, UBS’ Ryan says markets are likely pricing in the bad news, and don’t necessarily need good news to find a support level—instead, understanding the policy response from the administration and the actual economic fallout should give investors a better idea of what the downside is, and therefore more certainty.
And for Morgan Stanley’s Shalett, markets have largely already priced in both a recession and weak ISM and PMI numbers (she says they’re likely expecting readings in the low 40s)—and the bottom could be somewhere around 10% below Thursday’s 2,300 mark for the S&P 500.
But until we’re able to see the data roll in, investors are still largely in the dark about how bad the fallout might be.
“It’s more imperative now than ever … to use [your] own eyes and look around, because it is difficult—every economic data point is now lagging pretty significantly, and you really just have to do the calculus. If you close restaurants, all these social events … that has a massive impact to economic activity, and it’s not just in the U.S.,” Miskin says.
As markets wait with baited breath for the latest slew of data (and a potential fiscal package), UBS’s Ryan puts it in perspective:
“I remember I was sitting at a trading desk during the ‘87 stock market crash, I was there in ‘89, I was in research in ‘98 and 2000 and 2001 and 2008 and 2009—I’ve seen multiple market events, … no two play out exactly the same way,” Ryan recounts to Fortune. What’s different about this one, says Ryan, is how fast markets have been drawn down. “This has now become the most significant event that we’re discussing not just locally, but globally.”
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—How to prepare your personal finances for a coronavirus recession
—The Fed made a bold move to calm shaky markets. But is it enough?
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—Dormant PayPal Credit accounts are coming back to hurt credit scores
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: What’s causing the looming recession
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fortune--2020-03-17--Trump pushes for massive aid from Congress, checks to public

How much will coronavirus hurt the economy ?
These new estimates are terrifying

In a massive federal effort Tuesday, President Donald Trump asked Congress to speed emergency checks to Americans, enlisted the military for MASH-like hospitals and implored ordinary people — particularly socially active millennials — to do their part by staying home to stop the spread of the coronavirus.
His proposed economic package alone could approach $1 trillion, a rescue initiative not seen since the Great Recession. Trump wants checks sent to the public within two weeks and is urging Congress to pass the eye-popping stimulus package in a matter of days.
As analysts warn the country is surely entering a recession, the government is grappling with an enormous political undertaking with echoes of the 2008 financial crisis.
At the Capitol, Senate Majority Leader Mitch McConnell vowed the Senate would not adjourn until the work was done.
“Obviously, we need to act,” McConnell said. “We’re not leaving town until we have constructed and passed another bill.”
But first, McConnell said, the Senate will vote on the House’s $100 billion package of sick pay, emergency food and free testing, putting it back on track for Trump’s signature — despite Republican objections. “Gag, and vote for it anyway,” he advised colleagues.
It was a signal of what the GOP leader called the “herculean” task ahead.
Senators gathered at an otherwise shut-down Capitol as Americans across the country were implored to heed advice and avoid crowds. Young adults, in particular, are being urged to quit going out because even seemingly healthy people can be spreading the virus that causes the COVID-19 illness.
Even so, presidential primary elections unfolded in Florida, Illinois and Arizona. Ohio’s was called off hours before the polls were set to open.
After a savage drop at the start of the week, the stock market rose as Trump and aides sketched out elements of the economic rescue package at a briefing. Economists doubted that would be enough to stop millions of jobs losses, even if in the short term.
Bigger than the $700 billion 2008 bank bailout or the nearly $800 billion 2009 recovery act, the White House proposal aims to provide a massive tax cut for wage-earners, $50 billion for the airline industry and $250 billion for small businesses. Two people familiar with he package described it to The Associated Press on the condition of anonymity because they weren’t authorized to speak publicly.
The amount that would be sent out in checks Americans is not yet disclosed. The White House said it liked GOP Sen. Mitt Romney’s idea for $1,000 checks, though not necessarily at that sum and not for wealthier people.
“This is a very unique situation,” said Treasury Secretary Steve Mnuchin, exiting a private briefing of Senate Republicans. “We’ve put a proposal on that table that would attract a trillion dollars into the economy.”
One GOP leader, Sen. John Thune of South Dakota, told reporters afterward it “could be” up to $1 trillion.
Senate Democrats produced their own $750 billion proposal, which includes $400 billion to shore up hospitals and other emergency operations in response to the global pandemic and $350 billion to bolster the safety net with unemployment checks and other aid to Americans.
“The aid has to be workers first,” said Senate Minority Leader Chuck Schumer, not what happened in 2008, when the big banks took precedence. Schumer also said it’s time to call out the National Guard to provide security as communities reel from the crisis.
The slow-moving Congress is being asked to approve the far-reaching economic rescue as it tries to rise to the occasion of these fast times.
A roster of America’s big and small industries — airlines, hotels, retailers and even casinos — lined up for hoped-for aid.
For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia.
The vast majority of people recover from the new virus. According to the World Health Organization, people with mild illness recover in about two weeks, while those with more severe illness may take three to six weeks to recover.
Still, health officials are urging Americans to stay home to prevent an onslaught of cases that could overwhelm hospitals as happened in Italy, among the countries hardest hit.
As Congress considered aid, the Pentagon on Tuesday said it would provide five million respirator masks and 2,000 specialized ventilators to federal health authorities. And Medicare was immediately expanding coverage for telemedicine nationwide to help seniors with health problems stay home to avoid infection.
More than two dozen Senate Democrats urged Trump to invoke the Korean War-era Defense Production Act to increase production of masks, ventilators and respirators, as well as expand hospital capacity to combat the coronavirus. Federal officials said the administration is working with the Army Corps of Engineers to see about erecting temporary hospitals, as is done in the military, to handle an expected surge of cases.
Schumer compared the government response needed to a wartime mobilization.
House Speaker Nancy Pelosi, who marshaled the earlier package through a bipartisan vote last week, fielded a call from Mnuchin on Tuesday morning and another from Federal Reserve Chairman Jerome Powell in the afternoon, encouraged by the Fed chairman’s perspective that Congress could think big with interest rates at nearly zero.
In the call with Mnuchin, she and Rep. Peter DeFazio, D-Ore., chairman of the House Transportation committee, “emphasized that protecting workers’ paychecks and benefits was their top priority, and that immediate action was needed,” said Pelosi spokesman Drew Hammill on Twitter.
The debate is sure to revive the sharp divisions over the costly bank bailout and economic recovery of the Obama and Bush eras.
Much about the proposed checks is not known, such as whether the amount would vary by the income of the recipient or whether everyone would get the same sum. Mnuchin said “it’s clear we don’t need to send people who make $1 million a year checks, OK?”
Economists from both parties endorsed mailing checks of at least $1,000 to all American households as the quickest way to offset the sharp slowdown in economic activity.
“We need to pay people to stay at home,” said Heidi Shierholz, a senior policy analyst at the Economic Policy Institute, a liberal think-tank. The group predicted that without a huge stimulus package, the U.S. economy could lose three million jobs by this summer.
Still, some GOP senators were skeptical about the massive aid on the table. “I’m going to be very leery of doing something like in 2008,” said Indiana Republican Sen. Mike Braun.
Angry senators from both parties, who were sent home when McConnell adjourned for the weekend, returned to a changed Washington, as Trump declared a state of emergency, the virus spread and the economy recoiled.
House lawmakers passed their bipartisan legislation and won’t be recalled until a new bill is ready.
Despite federal guidelines against so many people gathering, senators had no choice but to convene. Legislating cannot be done from home.
More must-read stories from Fortune:
—What the world’s biggest economies are doing to fight coronavirus and recession
—Will donors of color invest in white presidential candidates?
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—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: What happens to leftover campaign funds once a candidate drops out?
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fortune--2020-03-17--Stocks swing upward on coronavirus stimulus package hopes

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Another day brings another lurch, with the S&P 500 closing up 123.86 (5.2%), the Nasdaq gaining 424.70 (6.2%), and the Dow Jones Industrials closing up 831.37 (4.1%).
That came after an early morning swoon in the Dow, likely accelerated by Boeing shares which were down almost 21% mid-morning, then rebounded to close down 4.2%.
Overall, what seemed to push markets today was a pair of announcements from the White House and Federal Reserve.
Infographic by Nicolas Rapp
“A lot of times, the markets are going to do what they’re going to do,” said Scott Brown, chief economist of Raymond James. “Investors are going back and forth. Any little bit of good news or bad news is going to be exaggerated.”
“I think over the past weekend, markets were looking for a stimulus package,” said KC Mathews, executive vice president and chief investment officer at UMB Bank.
On Sunday, the Fed announced a surprise cut to 0% interest rates and an increase in purchasing Treasury and mortgage-backed bonds to help ease a growing liquidity problem in financial markets. But, “there was no word on fiscal policy,” Mathews said. “So, the market interpreted it as a partial package and there was the selloff [on Monday].”
Today brought the other half of the story investors wanted to hear. Treasury Secretary Steve Mnuchin said in a White House briefing this morning that the administration wants to get stimulus money to citizens “in the next two weeks.” There are no hard details yet on the package, but reports suggest that it could be anywhere from $850 billion to $1 trillion in size.
Then the Fed announced that it is restarting a commercial paper facility, last seen in the 2008 financial crisis, to help provide liquidity to corporations through backing short-term unsecured loans.
“When it comes together, you get positive days on the stock market,” Mathews said.
Then again, tomorrow could be completely different. “If news comes out tomorrow that the infection curve is continuing to steepen, then I think today’s news about the stimulus will take a back seat, like other recent attempts to prop up the economy,” said Dejan Ilijevski, president at Sabela Capital Markets.
In a way, what is happening now is just an exaggeration of an old dynamic. “With the stock market, it’s always greed and fear,” Brown said. “Except it’s a lot more greed and a lot more fear right now.”
More must-read stories from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The Fed made a bold move to calm shaky markets. But is it enough?
—Why return CEOs are usually bad news for a company’s stock
—Dormant PayPal Credit accounts are coming back to hurt credit scores
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: What’s causing the looming recession
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fortune--2020-03-17--Conference swag companies crushed by coronavirus cancellations: More hand sanitizer, please

This article is part of a Fortune Special Report: Business in the Coronavirus Economy—a look at the impact of the pandemic on more than 50 industries.
As word of coronavirus first started to spread, the first hit to businesses came in late February with the cancellation of major conferences. Fast forward a couple of weeks to Monday afternoon and President Trump upped the ante, saying gatherings of more than ten people should be limited. In the meantime, business as usual for companies both large and small has come to a screeching halt.
When the first wave of coronavirus hit the economy, the $25.8 billion promotional products industry got soaked. Big conferences are massive money-making opportunities for firms that print everything from corporate branded stress balls, to hats, to miniature bottles of hand sanitizer bearing a company’s logo. Canceling conferences drained the lifeblood from swag companies, firms that now sit at the bleeding edge of a hemorrhaging economy.
“We had been working with some of the big conferences—all multi-million dollar projects for us—and they were canceled,” says John Alagem, president of New York City based swag company Harper + Scott.
For promotional orders, the typical turnaround time is 11 days on average, says the Advertising Specialty Institute’s Annual Supplier State of the Industry Report. But for every one in three orders, clients require a delivery time of just five days, the trade group for promotional products says. That means that after conferences such as SXSW canceled cancelled with little notice, many swag companies were left without work.
Alagem said one thing that clients love about his company is the fact they are set up to manufacture with a short lead time. There’s no need to put in an order months in advance—but that now has Harper + Scott waiting to see what will happen next. One of the company’s clients that recently canceled its order now plans to move its conference online. Alagem said his company is discussing ways to get their swag bags to participants at home.
“What we are working with them on is creating a gift to send to these thousands of people around the world, to make them feel they were a part of the experience,” he says. “That has been a positive.”
Timothy M. Andrews, president and chief executive officer of the Advertising Specialty Institute, tells Fortune that some companies are finding creative ways to still generate business.
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“The promo industry is nothing if not creative,” he says. “One member suggests sending registered participants at a canceled event branded tissues with messaging suggesting it ‘blows’ that the event was canceled.”
Yet while many companies are pausing their orders, one product is hotter than ever: Miniature bottles of hand sanitizer have become like liquid gold.
Andrews says one of the promotional industry’s hand sanitizer manufacturers can’t currently offer rush orders, but it isn’t limiting quantities on its orders—though massive requests may be capped. Other suppliers, meanwhile, say they’re out of stock and are advising clients to check back in a few weeks.
Llorenç Sola, Vistaprint’s general manager of promotional products, tells Fortune it’s too early to comment on the longer-term impact of coronavirus on its business, as its customers tend to plan events and tradeshows several months ahead of time. “Many of our Vistaprint customers are small businesses with a primarily local reach, so they have been less impacted by the cancellation of larger events that draw in an international crowd,” he says. “The decreased local activity in communities will likely be more impactful.”
Harper+Scott’s Alagem says during the downtime, the company is planning for what its clients might need after the COVID-19 pandemic clears. Every industry is hurting right now, he notes, and offering some fun gift with purchase might help get people back in the door.
“If people aren’t going to malls or retail shops, their companies are going to have to try to welcome people back,” he says. “Everyone is kind of waiting it out, day-by-day, to see what happens.”
More must-read stories from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The 100 greatest designs of modern times
—How mainland China’s closest neighbors have kept coronavirus cases so low
—Dormant PayPal Credit accounts are coming back to hurt credit scores
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The greatest designs of modern times
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-17--The first U.S. coronavirus vaccine trials have begun

Happy Tuesday, readers.
As states and the federal government take more aggressive measures to fight the coronavirus outbreak, Boston-based Moderna is advancing in the race to create a vaccine against the pathogen.
The National Institutes of Health (NIH) announced that Moderna’s experimental mRNA-1273, which was developed in collaboration with the NIH’s National Institute of Allergy and Infectious Diseases (NIAID), has entered phase one clinical trials at the Kaiser Permanente Washington Health Research Institute (KPWHRI) in Seattle.
Government officials had telegraphed the launch of these studies, the first coronavirus vaccine trials in the U.S., on Monday. 45 healthy adult volunteers aged 18 to 45 will be enrolled in the trial over the next six weeks, according to the NIH.
Phase one trials are, as you might suspect, the earliest stage of the clinical process. They’re meant to prove that a treatment will actually be safe for a human before it advances to later-stage studies to establish efficacy in a wider population.
“The study is evaluating different doses of the experimental vaccine for safety and its ability to induce an immune response in participants,” wrote the NIH in a statement.
Moderna’s rise in this moment is striking given that some in the biotech community have been reluctant to embrace the technology platform at the firm’s heart. So-called “mRNA” tech, which uses messenger RNA to tell cells to express a certain protein that then leads to an immune response, theoretically helps build up immunity to a virus. But given how early such technologies are in the development process, there’s been skepticism in some corners of the biotech world about its promise.
The question is, can Moderna turn that narrative around?
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
Looking for more detail on coronavirus? Fortune has a new pop-up newsletter. The aptly named Outbreak will keep you up to date on the latest news surrounding the coronavirus outbreak and its impact on business and commerce globally. Sign up here.
DIGITAL HEALTH
The IT strains of coronavirus. Have you had internet frustrations while working from home? I know I have. But it's still been possible, even with intermittent online breakages, to manage the situation. Not all businesses are so lucky, as my colleague Kate Jacobson notes. "Those struggling the most with remote issues right now are small businesses who can’t afford a strong IT support staff to implement these systems, and local and state governments with outdated equipment," she writes. (Fortune)
Trump administration ramps up telemedicine push. The Trump administration is expanding access to telemedicine services in a bid to keep elderly patients who are most at risk of contracting and falling seriously ill from coronavirus from visiting the hospital. “Medicare patients can now visit any doctor by phone or videoconference at no additional cost, including with commonly used services like FaceTime and Skype,” said President Donald Trump during a press briefing on Tuesday. The relative lack of Medicare coverage for telehealth has been a major barrier to seniors accessing such services—a reality that's been criticized given the challenges the population may have traveling to a hospital. (STAT News)
INDICATIONS
Sanofi, Regeneron want to teach an old drug new tricks. Speaking of coronavirus treatments, Sanofi and partner Regeneron want to repurpose their arthritis medicine Kevzara to try and tackle the virus. The companies say that patients with severe forms of COVID-19 had positive reactions to the drug, and that they would commence a mid-to-late stage clinical trial for those who had been hospitalized with the respiratory condition. (FiercePharma)
THE BIG PICTURE
The ventilatory supply chain problem. My colleague Naomi Xu Elegant has a detailed report on the ventilator shortage plaguing the U.S. and other nations as they grapple with the coronavirus. These ventilators are an absolutely critical part of treatment for the sickest patients in the ICU (after all, it is a respiratory disease). "ICU ventilators are bulky and expensive, so hospitals usually don't have a surplus," Naomi writes—and they don't come cheap, either. Check out her full explainer here. (Fortune)
Kaiser Permanente pledges $1 million to tackle COVID-19 among the homeless. This current pandemic will clearly affect the disadvantaged, the sick, the elderly, and the poor to a disproportionate degree. For the nation's homeless, it will be a catastrophe. Not only will there be fewer people outside to offer donations or supplies—but these are people who will constantly be exposed to the elements and have the least access to the health care system. Nonprofit health system Kaiser Permanente is trying to tackle that disparity with a $1 million partnership with the National Health Care for the Homeless Council. "Given the elevated risk faced by people living on the streets or in shelters at this time, we are making it a priority to support outreach, prevention, and treatment for this community," said Kaiser chief health officer Bechara Choucair in a statement.
REQUIRED READING
Online grocers struggle to meet the surge in demand, by Jeremy Kahn
IRS defers 2020 tax payments by 90 days, by Chris Morris
Accenture CEO Julie Sweet on her company's rapid-fire transformation, by Clifton Leaf
Lockheed Martin CEO, Fortune's Most Powerful Woman, will step down, by Jen Wieczner
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fortune--2020-03-17--E-learning companies are seizing the moment—but experts say online classes don’t work

This article is part of a Fortune Special Report: Business in the Coronavirus Economy—a look at the impact of the pandemic on more than 50 industries.
On a normal day, Kojo Hakam would be in a classroom teaching Mandarin to middle schoolers in the Portland public school system. But these aren’t normal days: The entire state of Oregon has shuttered its public schools to help fight the spread of the coronavirus. Thirty-three U.S. states have also closed their schools, along with more than 1,000 universities from the University of California to Harvard. Globally, classes have been cancelled from Japan to Colombia so far, with more certainly to come.
Like many others, some Portland schools will transition to online learning. But Hakam still isn’t quite sure how well that will work for his classes. “There are a lot of things you can’t replace,” he says. “Face-to-face interaction and peer-to-peer interaction—it’s very student-centered teaching.”
Hakam is better off than some teachers. Both he and his students are already experienced with some online tools, such as using Google Classroom to turn in homework. Many other educators—and even entire school districts caught in the coronavirus pandemic—will be using e-learning tools for the first time. According to a survey, more than 16% of college faculty haven’t used basic distance-learning tools at all over the past year, and another 12% say they’re not very proficient with them.
But in the absence of brick-and-mortar schools, online learning companies are stepping up. The startup Coursera is providing free course materials to universities worldwide through July 2020. Higher-ed publisher Wiley is making its WileyPLUS online learning platform and other resources free for the remainder of the spring term. A raft of other e-learning services, including Amesite, Cengage, and Study.com, are also making free resources available.
The obvious hope is that some educators using these tools during the crisis will continue using them after it’s over. “I don’t want to be excited about a global tragedy,” says Matthew Leavy, a vice president at Wiley. “But I think this is an opportunity to demonstrate the value of online learning.”
An impersonal touch
Ed-tech companies may be looking for a silver lining in the coronavirus economy, but long term it’s widespread adoption that they’re seeking. However, in conversations with nearly a dozen teachers and education experts, Fortune found widespread uncertainty about the consequences of a rushed transition to online learning. A fundamental issue cited by a significant amount of research is whether delivering an education entirely online can ever be as effective as classroom instruction.
“Students were worse off, especially students starting off the semester poorly prepared, academically,” says Eric Taylor, a professor at Harvard’s Graduate School of Education who coauthored a 2017 study of online college classes. Taylor’s research found students in a virtual classroom got worse grades and were more likely to drop out than those receiving in-person instruction. Taylor notes that the study looked at carefully designed online offerings, while the millions of students about to go online due to coronavirus are more likely to receive fairly improvised programs.
There’s also reason for concern in the secondary and elementary school context. A 2016 study by the University of Chicago compared the results of struggling ninth-grade algebra students who took remedial classes online and in person. Children assigned randomly to the online version had lower test scores, worse grades, and a more negative attitude about math than those assigned to classrooms. A 2019 study out of George Mason University and Skidmore College also found that fully online courses left students less prepared than in-person classes and were rarely worth the investment.
But the amount of research into online learning outcomes is substantial, with some studies showing positive effects under certain conditions. Susan Grajek, vice president for communities and research at ed-tech professional organization Educause, argues that in studies showing disappointing results, “we often find that the full range of opportunities offered by online learning have not been utilized.” And Wylie’s Leavy points out that online learning is more “globally accessible both in reach and affordability” than traditional classroom learning. In other words, at the very least, online courses are better than no classes at all.
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Key to understanding the possible problems of online learning is bandwidth. All forms of communication—not just Internet cables—have limits on how fast information can be transmitted. In-person interaction, thanks to cues like facial expression and eye contact, is more interactive and information-rich than online education. Noticing when a student needs extra help is easier in a classroom than on an online discussion board, notes Hakam.
In addition to physical cues, online learning also lacks a social scene, which may not seem important but is vital in schools. “That’s why students sit in the same place most days,” says Dan Faltesek, coordinator of the New Media Communications program at Oregon State University. “They see their friends. But with online classes, there’s no emotional engagement… There’s so little bandwidth that they drift apart.”
These shortcomings put more pressure on teachers, says Faltesek, who has developed online courses and teaches them regularly. Teachers are “going to be doing the work of adding bandwidth to every communication,” he says, partly through “much more intensive one-on-one communication with every student.”
The bottom line for teachers, he says: “It is harder.”
Education’s crash diet
The problems described by experts may become even more prominent in a rushed transition to online learning, the likes of which tens of millions of students are now experiencing. “The analogy that comes to mind is going on a crash diet, versus making careful, incremental adjustments,” says Grajek of Educause. “Suddenly, we’re making this big shift.”
Just as crash diets risk a variety of harmful side effects, a rushed transition to e-learning could have the contrary effect of producing frustration and disappointment for teachers and students using distance-learning tools for the first time. That would be bad news for the educational technology sector overall, which attracted a record $1.9 billion in venture capital in 2019. Coursera alone has raised more than $313 million in venture funding and was reportedly valued at north of $1 billion in April 2019. Wiley is publicly traded and currently valued at more than $1.8 billion.
As mature and full of potential as these efforts have become, this moment will truly put online education to the test. “My advice would be, adjust your expectations downward,” Grajek cautions. “We’re all going to be less productive and more distracted in these coming months than we ever were.”
Meanwhile Faltesek sees the benefits of online tools—particularly for making education more affordable and accessible—but he thinks the crisis is more likely to expose the limits of online learning than to trigger a long-term exodus from the classroom.
“This is a moment when we’ll see the value of human connection,” he says, “for cultivating human reflectivity, and human thought.”
More must-read stories from Fortune:
—Inside Xerox’s audacious quest to buy much bigger rival HP
—How A.I. is aiding the coronavirus fight
—How early GPS gadget maker Garmin mapped out success against big tech
—Dormant PayPal Credit accounts are coming back to hurt credit scores
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-17--Mental health in the time of coronavirus

This is the web version of raceAhead, Fortune’s daily newsletter on race, culture, and inclusive leadership. To get it delivered daily to your inbox, sign up here.
While quarantine is by far the best tool for quickly limiting the spread of an infectious disease, it comes at a high price.
Sandro Galea, a physician, epidemiologist, author, and Robert A. Knox Professor at Boston University School of Public Health, says that the scars of quarantine will last long after the virus is contained.
While COVID-19 is the first epidemic of the social media age, there’s nothing high tech about the stress of isolation. Citing a study of the aftermath of SARS control in Toronto, Galea says these findings are a harbinger of things to come. “We found among quarantined persons a high prevalence of psychological distress, including symptoms of depression and post-traumatic stress disorder (PTSD),” he writes in Psychology Today. This will be the next task facing the medical and public health communities. “A key takeaway: Even if we can halt the physical spread of a disease through the expeditious use of quarantine and social distancing, we will still have to contend with its mental health effects in the long-term.”
When thinking about already vulnerable communities, Galea’s work becomes even more compelling.
In another study published this past January, he and his colleagues found significant upticks in depression and post-traumatic stress symptoms in communities who participated in protests, riots, and resistance efforts—the types of communities who are now disproportionately more likely to bear the long-term economic impact of quarantine and social distancing.
These are also typically the communities who were already chronically under-resourced and deeply stressed. And as research shows, the cognitive toll of being poor leads to a scarcity mindset and bad decision-making, which results in more stress and bad health.
It now feels like a triple-whammy of mental health problems coming down the pike.
This is one reason why cash payments, like a universal basic income—or the temporary program inexplicably proposed by Senator Mitt Romney—have become popular ideas. While more research is needed, cash payments do appear to relieve psychological distress, particularly in the short term.
Even if the rationale is an economic one, anything to minimize stress would be a welcome fix.
“Every American adult should immediately receive $1,000 to help ensure families and workers can meet their short-term obligations and increase spending in the economy,” Romney said in a press release yesterday. “Congress took similar action during the 2001 and 2008 recessions. While expansions of paid leave, unemployment insurance, and SNAP benefits are crucial, the check will help fill the gaps for Americans that may not quickly navigate different government options.”
Now, it looks like the Trump administration is ready to move on the cash scheme, more here.
Needless to say, former presidential candidate Andrew Yang, who centered his campaign on a universal basic income, is “pumped” that the idea has gained traction.
“Putting money into people’s hands is the obvious thing to do in this situation,” he tweeted. “I hope Congress wakes up to this before it’s too late. Every day is enormous at this point.”
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On Point
Anxious about coronavirus? You’re definitely not alone, say therapists Here are some good tips to get you through some of the tough times of isolation—even if you're already on top of things, it’s smart to review them to make them even more intentional. If you can talk to a therapist online, do. Being able to see someone makes a difference, so absolutely schedule a video call with family and friends. And do limit the amount of news to the amount you can handle. But number four really got my attention: Be extra gentle with yourself. After all, this is actually a scary time. “When the world is being hard on us for good reason, it can be even easier to be hard on ourselves,” online therapist Allison Hart tells HuffPost.
HuffPost
Don’t count the Census out… just yet One of the other overlooked problems in the COVID-19 pipeline will be making sure the U.S. Census is completed this year. It’s already been a bumpy start, reports the Associated Press (AP), but the Census Bureau is working hard to hire the temporary workers they need to pull off the national headcount. But life under the coronavirus is a mixed bag. On one hand, it reveals a pool of laid-off workers newly available to hire as census takers, but whether anyone will feel comfortable traveling door-to-door during an epidemic is a big unknown. There’s a lot at stake. “Falling short could threaten the count in some parts of the country, which in turn could lead to underrepresentation in Congress and less federal funding,” says AP.
AP News
The Wing gets clipped again Here’s a tough but necessary read about the Wing, the feminist co-working space/movement/utopia, whose overhyped vision of fashionable female empowerment fell short. “Like the women’s clubs, consciousness-raising groups, feminist bookstores, and lesbian separatist womyn’s lands that came before it, the Wing’s organizing structure gestures at radical potential,” says Amanda Hess, setting up the brutal analysis to follow. But its biggest failures seem to be found in the lived experiences of its employees, who were promised equal status—including meaningful networking—in a new women’s world. “As the company rapidly expanded and new members flooded into crowded spaces, a chasm opened between members and the staff,” says Mull, based on interviews with 26 current and former Wing employees, “I was treated like a human kitty-litter box,” says one. Another says: “We were ‘the help.’”
New York Times
On Background
Bring John Legend into your home! Legend is one of many artists who is offering live free concerts or other entertaining moments on the social media platforms of their choice. Chris Martin of Coldplay delighted fans yesterday, as did Keith Urban—whose wife Nicole Kidman sang backup. Historians will note with uncharacteristic benevolence how little acts of creative generosity made a terrible time more tolerable. For more announcements, follow #TogetherAtHome on both Instagram and Twitter.
The Loop
Bring Fiona the hippo into your home! Museums are doing their part to keep you enriched and entertained, improvising livestreamed programming and otherwise sharing their world. The Cincinnati Zoo, home of sweet Fiona, now offers “Home Safaris” live via Facebook every weekday, and the Shedd Aquarium in Chicago delighted online fans yesterday when they let the penguins wander through the empty exhibit halls to “meet” the other animals who live there. “Wellington [a penguin] seemed most interested in the fishes in Amazon Rising!” they tweeted. “The black-barred silver dollars also seemed interested in their unusual visitor.” Awww.
Samantha Irby’s excellent adventure in television writing Irby was inexplicably tapped from her carbo-based Midwest lifestyle to join the writer’s room for Shrill, the book-to-Hulu series written and created by comedian and author Lindy West. Come for the hilarious anthropological insights. “I’m a Fat Bitch from the Midwest and I love accidentally running into minor celebrities with my cart in the wheatgrass aisle,” she begins. But the really good stuff happens later on, when she actually makes a mark on the life of protagonist Annie, lovingly described by Irby as a fat, single woman in a dead-end relationship with a dead-end job to match—and who deserves better from the world. Her contribution was a scene where Annie gets to actually see people who look like her, and who are enjoying their bodies and their lives. “It has always been obvious in regards to race, but with size I guess I’d never really thought about it that much because, well, that’s just the way things have always been.” Enjoy.
The Guardian
Tamara El-Waylly produces raceAhead and manages the op-ed program.
Quote
“Poverty is bleak and cuts off your long-term brain. It’s why you see people with four different babydaddies instead of one. You grab a bit of connection wherever you can to survive. You have no idea how strong the pull to feel worthwhile is. It’s more basic than food… Whatever happens in a month is probably going to be just about as indifferent as whatever happened today or last week. None of it matters. We don’t plan long term because if we do we’ll just get our hearts broken. It’s best not to hope. You just take what you can get as you spot it.”
—KillerGibsons, an anonymous Gawker commenter, October 2013. Hat-tip: Derek Johnson, The Atlantic.


fortune--2020-03-17--Why e-commerce won’t save retailers from the coronavirus

With stores from Nordstrom and Apple to Hollister and Coach closed until at least late March, and tens of millions of Americans spending far more time at their computers, it’s tempting to think e-commerce can simply pick up the slack for brick-and-mortar chains.
But that would ignore factors like an almost certain sharp economic downturn as nervous consumers digest headlines of layoffs and a swooning stock market; how much traditional retailers have come to rely on their stores to support digital sales; and the wide discrepancy of e-commerce readiness among retailers.
“E-commerce is no savior,” warned Neil Saunders, managing director of GlobalData Retail. And brick-and-mortar retailers are likely to face many additional closings, and soon—Mall of America, the biggest in the country, said Tuesday it was closing for two weeks. Bloomberg News on Tuesday reported that foot traffic to U.S. retailers fell 31% in the week ended March 13, before deeper restrictions were imposed. New Jersey on Tuesday ordered all indoor malls closed.
According to the U.S. Department of Commerce, online and catalogue sales represented 17% of total retail spending (excluding restaurant and car expenses) last month. So for all of the hoopla about the growth in e-commerce, the vast majority of retail happens in physical stores. (Still, Amazon said this week it was hiring another 100,000 workers to help it with the surge and on Tuesday said it would halt shipments from marketplace sellers to its warehouses.)
After years of false starts, many retailers finally figured out how to compete with Amazon: use those stores as additional distribution centers, places to return items and fully integrate the digital and the physical in terms of planning and merchandise buying.
Walmart and Target have each spent billions retrofitting stores to enable drive-up online order pick-up and allow them to ship items from their stores that dot the country. Nordstrom, which gets 35% of sales online, uses a growing network of small local stores to make it easier to retrieve an order, or return something without having to go to a big department store.
And it’s paying off handsomely for the most tech savvy retailers: Target said that 80% of its online sales growth over the holidays came from same-day services enabled by order pickup in the store or at a drive-up spot right outside one. About half of Kohl’s online orders during the holidays are picked up at a store. And Walmart uses its store merchandise to fill most online grocery orders, something that has kept it head of Amazon on that front.
The biggest benefit to these retailers: the heavy use of stores for order pickup and shipping, and product returns cuts down on shipping costs and quickens delivery. Target said recently that the “economics” or the profitability” for online orders was about the same as it is for in-store sales. But for chains that don’t use stores as widely or effectively, said Saunders, “online is nowhere near as profitable.”
Lucky for Walmart and Target, because they have in-store pharmacies (at Target, they are CVS pharmacy locations) and sell food, they are set to remain open during the crisis.
But Nordstrom, which late Monday said it was closing all its stores for two weeks, and retailers like Gap Inc., which has a $4 billion online business and is also shutting all locations for the time being, will lose key nodes in their e-commerce, hurting their ability to hang on to sales.
Still, companies with a robust e-commerce offerings, which Customer Growth Partners president Craig Johnson defined as having at least 20% of sales come from their online presence, will fare the best in the currently turmoil.
That includes names such as Macy’s, Home Depot, Kohl’s, Nordstrom, and Williams-Sonoma. But he warned, even the best-in-class chains might be lucky to keep perhaps 40% of store sales lost during a closing.
So the coronavirus crisis is likely to deepen the gap between retail’s online winners and its losers. That means those with data-rich loyalty programs that are well connected to apps and the retailer’s web site are best equipped to offer shoppers what they really want, or suggest appropriate deals or services. “They know their best customers, they communicate with them,” said Johnson.
Put dark stores to work
One way to mitigate the coming pain would be to use stores that are otherwise closed as e-commerce order pick-up spots. That would be akin to what many U.S. restaurants are starting to do: allowing people to pick up to-go orders but not to sit down and dine.
“They could operate the stores but not open them to customers, so have them be dark stores,” said Forrester analyst Sucharita Kodali. (Chains including Walmart, Target, Best Buy, and Home Depot have, for the most part, standalone stores, giving them most leeway to use them just for pickup if they do end up closing any stores.)
The analysts agree that retailers still playing catch up on e-commerce will be the biggest losers. J.C. Penney, which is already dealing with an exodus of shoppers and dwindling sales, recently hired a new chief digital officer to finally modernize its site. That leaves the retailer challenged if the company has to operate stores at reduced hours or close them.
CGP’s Johnson predict online sales as a percentage of total U.S. retail sales will quickly rise to 20% because of this crisis. But that just means retailers with good sites will lose the least. (Some of that increase will simply be the mathematical result of a lower denominator as retail sales fall, as they likely will at least during the current quarter.) E-commerce laggards will fall further behind.
“If you’re below 10[%] to 20%, you’re behind the eight ball” he said.
More must-read stories from Fortune:
—How the founder of Jersey Mike’s started a billion-dollar business
—1 in 3 Americans were stocking up before coronavirus was ruled a pandemic
—Gap Inc pegs coronavirus losses at $100 million and counting
—Why Dollar General thinks coronavirus can help business
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The greatest designs of modern times
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-03-17--U.K. government promises to do ‘whatever it takes’ to protect economy from coronavirus as it pledges

U.K. government promises to do ‘whatever it takes’ to protect economy from coronavirus as it pledges billions in loans

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The British government became the latest European government to pledge billions of dollars on Tuesday to fight the economic fallout of the spread of coronavirus, as millions across the continent went into lockdown.
On Tuesday evening, Prime Minister Boris Johnson and Chancellor Rishi Sunak pledged 330 billion pounds ($400 billion) in government-backed loans and guarantees to shield businesses from the knock-on effects of attempting to manage the spread of the coronavirus, while promising to go “further and faster” in the coming days to provide support.
“We must act like a wartime government and do whatever it takes to support our economy,” Johnson said. “We must support millions of businesses and tens of millions of families and individuals through the coming months. And to do that the government machine must and will respond with a profound sense of urgency.”
The pledges come alongside other measures including three-month mortgage holidays for homeowners; 10,000 pound ($12,000) grants for small businesses; and plans to specifically support the aviation industry.
The chancellor also said the government had told insurance companies to “step up to the plate” and provide insurance payouts to businesses that are forced to temporarily shut down, after pubs and restaurants complained that the government’s “advice” on Monday that people should not go out for a drink or a meal—rather than a legal order—were forcing them out of business without being able to claim insurance.
Tuesday’s pledge followed a 30 billion pound ($36 billion) package the government committed to just last week in its budget announcement, including refunding small businesses for the cost of paying sick pay to people with coronavirus, and helping small companies via tax breaks and loans. The package included an extra 5 billion pounds ($6 billion) for the state-run National Health Service and 18 billion pounds ($22 billion) in fiscal stimulus, alongside interest rate cuts by the Bank of England.
However, the latest wave of support largely comes in the form of loans—only smaller businesses so far were to be provided with grants—and stopped short of providing security for freelancers and those without permanent contracts.
The announcement makes the U.K. only the latest European nation to make vast economic pledges to manage the economic cost of subduing the virus. Italy, the European country hit hardest by the virus, last week committed 25 billion euros ($28 billion) to cushion the impact of the crisis.
The government of Germany, the continent’s largest economy, has pledged 550 billion euros ($603 billion) in government-backed loans and guarantees, while France on Tuesday added a further 47 billion euros ($52 billion) in support for small businesses, restaurants, and the tourism industry, alongside a 500 billion ($547 billion) economic package promised on Monday.
The pledges came as the virus’ spread accelerated across Europe. As of Tuesday, there were 61,098 cases and 2,740 deaths across the broader European economic zone, including the EU, Norway, Switzerland, and the U.K., according to the European Centre for Disease Prevention and Control. Nearly half of those cases were in Italy, which also had nearly 80% of the deaths.
In the U.K. alone, positive cases as of Tuesday morning had reached 1,950, according to the Department of Health and Social Care, with at least 55 deaths as of Monday. However, the U.K. has largely stopped testing for the virus outside of hospitals, so the true number of cases is believed to be much higher.
On Monday, the U.K. government announced extended social distancing guidance, advising companies to allow employees to work from home and avoid unnecessary contact with others. However the country had not yet taken the same measures as many of its neighbors, and as of Tuesday, schools remained open.
More coronavirus coverage from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The coronavirus could upend America’s business relationships to China
—The best Twitters to follow for reliable information on the coronavirus outbreak
—3 months before the coronavirus, a war game showed we weren’t ready
—How mainland China’s closest neighbors have kept coronavirus cases so low
—How A.I. is aiding the coronavirus fight—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The race is on to create a coronavirus antiviral drug and vaccine
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-17--What is a recession? Will coronavirus cause one? All of your questions, answered

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The rapidly spreading coronavirus threatens the health of world economies, too. The odds of a U.S. recession within the next year are at the highest level since the end of the last downturn in 2009. Germany, the economic engine of Europe, and the U.K. were both on the precipice of a downturn even before the virus struck, with 0% growth in the fourth quarter of 2019. China, the world’s second-largest economy and the place where the pandemic originated, is likely to have contracted in the first quarter for the first time in decades amid production halts and quarantine measures, ultimately weighing on the global economy.
Here’s what you need to know about recessions:
1. What is a recession?
The dictionary definition is a period when economic output contracts for two straight quarters. The National Bureau of Economic Research’s Business Cycle Dating Committee, which makes the official U.S. determination, uses a different approach, considering factors such as inflation-adjusted GDP, employment, industrial production and income. The International Monetary Fund, in designating recessions on a global scale, looks at several indicators including a decline in inflation-adjusted per-capita GDP that’s backed up by weakness in industrial production, trade, capital flows, oil consumption and unemployment.
2. Is a recession inevitable?
Eventually, yes—recessions follow expansions, and vice versa. The real questions are when the recession hits, how long it lasts and how severe it is.
3. What causes a recession?
The so-called Great Moderation, a roughly 25-year period of relative stability around the globe beginning in the mid-1980s, spawned the view that modern-day recessions don’t happen without an unexpected economic shock like a sharp increase in oil prices—a cause of U.S. downturns of the 1970s and 1980s—or accumulated imbalances like the massive buildup in the subprime-lending industry that preceded the Great Recession of 2007-2009. A global pandemic that stifles travel, shutters businesses, cancels sports events and sends stock markets into freefall certainly has the potential to be that kind of economic shock.
Read: How to prepare your personal finances for a coronavirus recession
4. Will the coronavirus cause a global recession?
Economists at Goldman Sachs Group Inc. and Morgan Stanley believe so, and the debate is shifting to how long and deep the slump will be. The economies of Japan, Germany, France and Italy were already shrinking or stalled before the virus outbreak, and as of March, China was on course for what could be its first quarterly contraction in decades. As the virus spreads, the threat grows of a phenomenon economists refer to as a feedback loop—a vicious cycle in which a country that starts to recover domestically then suffers diminished demand from abroad as other nations succumb, prolonging the downturn. The International Monetary Fund has counted only four global recessions tracing back to 1960, compared to the 11 counted in the U.S. since World War II by NBER.
5. Will coronavirus cause a U.S. recession?
An increasing number of economists believe the almost-11-year U.S. expansion is coming to an end, with many expecting the economy to contract in the second quarter, which ends on June 30. Uncertain times may lead to widespread hiring freezes and job losses—especially among those that work in transportation or the hospitality industry. All of that means the main engine of the U.S. economy, consumer spending, may crumble. Not everyone agrees. The U.S. Treasury secretary, Steven Mnuchin, said on March 15 that he expects the coronavirus pandemic will slow growth but not tip the U.S. economy into recession.
6. When will we know?
Even if we’re in a recession right now, an official declaration may be months away. NBER typically takes about a year to make the call on when a U.S. expansion ends and a recession begins. A recession could be obvious in the data and widely accepted as reality before any declaration, though.
7. What makes a recession mild or severe?
Its duration, for one thing. The 2007-2009 recession lasted 18 months, making it the longest since the Great Depression. The recession of 1980, by contrast, lasted just six months. Other measures of a recession’s severity are how much the economy contracts and how bad unemployment gets. The worst recessions tend to be those paired with some sort of collapse in the financial system, as happened in the U.S. in 1929 and 2008. Another driver of a recession’s severity is how broadly the economy suffers a contraction. The relatively short and mild 2001 recession, for instance, was largely confined to the tech sector, with modest fallout to the rest of the economy.
Read: What’s the difference between a recession and a depression? Here’s what history tells us.
8. Does a long expansion portend a severe recession?
Federal Reserve Bank of Cleveland researchers found little evidence that duration of an expansion influences how bad the subsequent recession. They did, however, find reason to think severe recessions (like the one that ended in 2009) spawn strong expansions.
9. When the next recession comes, will it be a bad one?
It’s impossible to know. On the positive side, should the coronavirus lead to a recession, American households are in a good spot. They’re carrying less debt and an increase in mortgage refinancing has put more cash in consumers’ pockets. Additionally, unlike the last U.S. recession, which stemmed from a systemic imbalance, the coronavirus is an economic shock. However, the magnitude of that shock is unknown. It could lead to no recession, a short and shallow recession or something much darker.
10. Can anything be done now to ease the next recession?
Central banks are already racing to stop a recession either by cutting interest rates, intervening in markets, buying corporate assets or helping banks to keep lending to businesses. The People’s Bank of China has injected billions into the economy, and the Bank of Japan boosted asset purchases to stabilize markets. The U.S. Federal Reserve cut its benchmark interest rate to near zero. But this time the onus may be on governments in part because central banks have used up a lot of their interest-rate ammunition over the last decade. “The response should be fiscal, first and foremost,” European Central Bank President Christine Lagarde said.
More coronavirus coverage from Fortune:
—The next Great Recession has already begun
—The coronavirus could upend America’s business relationships to China
—The best Twitters to follow for reliable information on the coronavirus outbreak
—3 months before the coronavirus, a war game showed we weren’t ready
—How mainland China’s closest neighbors have kept coronavirus cases so low
—How A.I. is aiding the coronavirus fight—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The race is on to create a coronavirus antiviral drug and vaccine
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-17--How Harvey Weinstein’s sentencing could change the entertainment industry

When the news broke that Harvey Weinstein was sentenced to 23 years in prison, Lili Bernard was on her way to the Echo Training Conference, which empowers trauma survivors and is led by one of the producer’s many victims, Louise Godbold. Bernard, herself a Bill Cosby survivor, couldn’t contain her joy over the punishment.
“I was driving and screaming! Literally screaming!” she tells Fortune. “At the conference, I had to read this Maya Angelou poem ‘Still I Rise’ and the first thing I said was, ‘Congratulations to my Weinstein survivor sisters.’ These women have become my friends and it’s this wonderful siblinghood of a very unfortunate commonality. That he was sentenced to 23 years, it’s not just a vindication for them. It’s the same thing I said when Cosby was convicted—it’s just a greater step in humanity because it’s showing that women’s voices are finally being believed, that we matter, that we’re worthy.”
Even with Weinstein likely spending the rest of his life in prison, advocates say there’s still a lot of work to be done in the entertainment industry to make it a safer, more equitable place for the vulnerable, whether they’re actresses, production assistants, or receptionists. Hollywood has already gone through a number of changes, and many more are on the horizon, due to organizations like Time’s Up and Women in Film, as well as Bernard and the large number of victims who’ve channeled their trauma and anger into activism and support.
Actors Lauren Young (left) and Jessica Mann walk out of the courthouse after movie mogul Harvey Weinstein was sentenced to 23 years in prison on March 11 in New York City. Roy Rochlin—Getty Images
As Melissa Silverstein, the founder and publisher of Women and Hollywood, puts it: “The progress that’s happening is on the backs of so many people who have been really, really hurt and it better be worth it. We need to continue to make progress in their spirit and honor.”
So how will Hollywood and the entertainment industry as a whole change after Weinstein’s sentence? No one is quite sure, but many are optimistic that the moment represents a turning point.
More victims will come forward
The most obvious, immediate result of the Weinstein sentence, according to advocates, is that more victims will be empowered to come forward with their stories and potentially press charges. Now, victims can see that rapists get substantial, appropriate punishments for their crimes, as opposed to cases like that of Brock Turner, the Stanford swimmer who was given six months in jail—and released after serving three—for the rape of Chanel Miller, an advocate who’s since written a book about the ordeal and her healing process.
“This is a light that will guide so many other survivors,” says Time’s Up’s executive director of entertainment Ngoc Nguyen. “They’ll be able to look back at this and say, ‘Truth does matter, justice has prevailed’ and there is now a roadmap for them to seek justice.”
Kirsten Schaffer, executive director of Women in Film, says her organization’s helpline, (855) WIF-LINE, saw an uptick in calls from people seeking assistance, either for pro bono legal advice or mental health services. The Time’s Up Legal Defense Fund also has a helpline, (202) 319-3053, which can help victims get both legal counseling and, after an application process, public relations support.
Adoption and enforcement of better workplace policies
As Silverstein points out, one of the many benefits of the recent string of high-profile cases has led more actresses to unite to discuss the myriad issues they faced. “They’d been isolated for so long from each other, deliberately,” she says. “It’s a business where people don’t go to an office every day, so people came together and they understood a little bit more about, ‘I’m paid this, he’s paid that.’”
The lack of a traditional workplace environment also means that employees often don’t have access to human resources assistance. “There’s been a movement in recent months to address the productions and production companies that don’t have full HR departments,” says Schaffer. “The Producers Guild launched a program where they provide training for independent projects and gig-economy people working on contract. That’s a thing that we can continue working on, making sure that those people have a place to go. That’s part of why we started our helpline—we knew there were a lot of women who didn’t feel comfortable turning to their HR department or didn’t have an HR department.”
More diversity in power at studios, on sets, in film festivals, and more
“At Time’s Up, we’ve never been about toppling just one person,” Nguyen says. “It’s about getting to the root of the problem and accelerating systemic change.”
To that end, the Weinstein sentence could be emblematic of a departure from the old, white bully executive and a signal that traditional power structures that propped him up in the first place need to continue changing. “It’s really looking at how do we change the pipeline to leadership and how have you changed the gatekeepers that are in the top roles now,” says Nguyen. “Some of the things that we’ve done for example one thing is the 4 Percent Challenge that tries to increase the number of female directors that are commissioned for projects. A lot of really key studios and networks came up and said, ‘We will agree to work with a female director within the next 18 months.’”
Nguyen attends the conversation with Time’s Up hosted at The Latinx House during the 2020 Sundance Film Festival on Jan. 25 in Park City, Utah. While discussing the Harvey Weinstein sentencing with Fortune, she said Time’s Up is “about getting to the root of the problem and accelerating systemic change.” Owen Hoffmann—Getty Images for The Latinx House
But this goes beyond the director’s chair. Time’s Up has done a study with USC Annenberg, Inclusion at Film Festivals, that shows diversity in festival boards increases the likelihood that underrepresented films are shown. They’re also working on an initiative to increase diversity among film critics and journalists, and they have a mentoring program called Who’s in the Room, which helps women who want to work in development and production. “It’s really looking the entire ecosystem,” Nguyen says.
Women in Film also has a simple, effective measure that’s helping increase gender equality all throughout productions—a literal seal of approval. “We run a program called ReFrame with the Sundance Institute where we issue a gender balance stamp to films and television shows,” Schaffer says. “Now people are calling to say, ‘I’m about to go into production and I want the ReFrame stamp. Can you take a look at our crew list and see if you think we’re going to get it?’ It’s starting to catch fire with the public as well—just like people want to buy food that has an organic stamp, they want to watch content that has the ReFrame stamp.”
New rules protecting actresses and children
There have been strides in getting intimacy coordinators on sets to choreograph scenes that involve nudity and sexuality, as well as making sure actresses know their rights when it comes to the ability to refuse to do nudity on set or at auditions. Bernard is working on this as part of a SAG-AFTRA sexual harassment committee alongside actors like Rosanna Arquette, Jennifer Beals, Mira Sorvino, Elliott Gould, Terry Crews, and Corey Feldman, among others. Getting these protections codified has been an eye-opening experience for the actress, who met Cosby in 1984 while guest-starring on his sitcom.
“We’re trying to change specific laws like the one about how casting directors were allowed to demand that the actress takes her top off,” she says. One that stood out to her was a provision in the SAG-AFTRA collective bargaining agreement that confusingly said, “Producer shall also have the right to double children of tender years (infants) in nude scenes (not in sex scenes).”
“I’m texting Mara Nasatir from Time’s Up like, ‘What does this mean?’ She said, ‘It means generally under the age of 4.’ I’m like ‘What the heck?!’ The Screen Actors Guild manual is saying it’s okay for a 5-year-old? The justice system catching up with modern culture, and we’re working really hard to help the Screen Actors Guild catch up with the justice system.”
More bystander reporting
Allyship is going to play a key role in protecting the more vulnerable and Bernard believes anyone witnessing criminal behavior, harassment, or bullying will feel more empowered to step in and say something. As she points out, Cosby threatened her with false accusation charges and a defamation lawsuit if she came forward, so she could only imagine what he’d do to a production assistant if they ever reported seeing him put drugs in someone’s drink.
Pictured: Bernard on NBC’s “Today” show on April 27, 2018. After Weinstein’s sentencing, she feels “bystanders will feel more empowered as well to speak out when they see an injustice happening.” Nathan Congleton—NBC via Getty Images
“Bystander culture is something that also needs to change in order for rape culture to shift even more quickly towards justice,” she says. “There are so many people who don’t say anything because they want to keep their jobs. Everybody has to eat, has children to feed, and rent or a mortgage to pay. But yeah, they’re people who know and they don’t say anything out of fear. Those people, those bystanders will feel more empowered as well to speak out when they see an injustice happening.”
Hiring blacklisted women
As Schaffer says, the Weinstein verdict and sentencing doesn’t erase the pain he’s inflicted and the damage he caused for many careers.
“There’s definitely a conversation going on—what has happened to the careers and lives of the women who were assaulted, especially those who spoke out? Who’s hiring them? Is there a stigma now that they have spoken out, even though he was convicted? There really needs to be a concerted effort to think about hiring them.”
Bernard agrees, saying that the damage Cosby did to her career isn’t easily overcome just because he’s in jail now and that entrenched reputations about “difficult” actresses need to be rethought. “When I told him that I was going to report him to the police, he told me would blacklist me. He said, ‘I will tell all of Hollywood that you are a no-good actor, that you’re a liar, that you’re a little whore trying to sleep your way to the top.’ So, now I represent that kind of actor whose career was derailed because of the sexual assault.”
More must-read stories from Fortune:
—As coronavirus spreads, is this weekend’s historically low box office Hollywood’s new normal?
—Don Cheadle on Black Monday, Wall Street in the Trump era, and hope about the climate change fight
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—How coronavirus is affecting the global concert industry, including SXSW and Coachella
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fortune--2020-03-17--Apple store closures extended to ‘until further notice’

Apple has opened the door to extending a previously announced closure of most of its stores due to the coronavirus outbreak.
In an important change to its website on Tuesday, Apple said that its stores outside of mainland China “are closed until further notice” rather than until March 27, as the company had said on Saturday.
Apple did not immediately respond to a request for comment about the change.
On Saturday, Apple CEO Tim Cook said the store closures were intended to increase social distancing to keep both employees and customers safe.
The iPhone maker’s change in messaging may have been a response to the White House on Monday recommending a 15-day social-distancing period aimed at stopping the spread of COVID-19. Other countries, such as France and Italy, have taken drastic steps to blunt the virus’ impact.
Apple is shifting to the possibility that many countries won’t have COVID-19 under control by March 27, and that it will therefore have to keep stores closed longer.
Whatever the case, it’s unlikely that closing stores for a longer period will hurt Apple’s overall business more than is already case, analysts told Fortune on Monday. They predicted that many shoppers would shift their buying online, allowing Apple to still turn a profit rather than having to dip into its massive $200 billion cash hoard.
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—Inside Xerox’s audacious quest to buy much bigger rival HP
—How A.I. is aiding the coronavirus fight
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—Dormant PayPal Credit accounts are coming back to hurt credit scores
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-17--Working remotely causes strain on IT—and challenges work-from-home culture

Malcolm Gatewood hasn’t seen the floodgates open yet, but when they do, he says he’s ready.
Gatewood is a tier-three operations engineer at Cisco Systems, a global leader in IT, networking, and cybersolutions. In his role, he’s responsible for internal support of the company’s systems, and when the CEO announced employees could work from home last week, he saw the help desk tickets come through.
While they haven’t been overwhelming yet, as more people try to log on remotely, he knows more issues will arise.
“This is definitely a time we’re seeing an uptick in cases,” says Gatewood, who lives in North Carolina. “People who are used to coming into the office every day don’t normally work from home, and there are a lot of challenges there—other than just not being in your usual space.”
Companies across the U.S. have urged—and in some cases mandated—their employees work remotely. Some local and state governments have taken it a step further, shutting down office buildings and restaurants, issuing curfews, and asking all nonessential employees to stay home.
But as more employees log on from the comfort of their own home, it prompts some questions: How are IT professionals handling this? And what will this response dictate about corporate culture in general?
“Once employees know it’s possible to work from home, and they were productive and able to respond to their company’s needs, it’s going to be a different deal if companies try to pull that back,” says Burke Autrey, CEO of Fortium Partners, a technology consulting firm that works with C-suite executives. “It’s going to be hard to put that genie back in its bottle.”
Autrey says the executives he engages with have been highly concerned with technology problems related to working from home. Many companies don’t have the infrastructure to support a mass amount of people working remotely, and even less have the security to ensure they’re not being exposed.
Coupling that with employees who are inexperienced in working remotely could mean a recipe for disaster.
“This puts a tremendous amount of stress on the infrastructure and the people who support it, and it throws a lot of potential security issues in there too because of how quickly companies are doing this,” he notes. “IT professionals are being told, ‘Get it done, and get it done now.’”
In this day and age, it’s rare for companies to have no systems for remote work already set up. Greg Brainerd, owner of Braintek, a Houston-based full-service computer and networking company, says most business owners have some sort of technology that allows for remote access: VPNs, cloud-based services, applications like DropBox or Google Drive. After Hurricane Harvey in 2017, Brainerd says a lot of his clients moved to these types of systems because of a similar situation to COVID-19: Their offices were inaccessible, and their employees needed to work.
“We’ve definitely seen a big push over the years toward cloud technologies,” he notes. “We’ve stressed moving to a cloud-centric point of view.”
As companies are making that shift, so has Brainerd’s IT support staff. Typically, all of the work his IT people do is remote. They can monitor and access systems of their clients from anywhere with a secure Internet connection. Because they specialize in this type of remote work, Brainerd says it’s been relatively smooth since the pandemic hit.
He says he’s more worried about those businesses that don’t have any systems in place and hopes this will be a wake-up call. “Companies need to set up an alternative plan to say, ‘Hey, if this were to happen, what are we going to do?’”
Autrey agrees. Those struggling the most with remote issues right now are small businesses who can’t afford a strong IT support staff to implement these systems, and local and state governments with outdated equipment. Fortium Partners vowed to offer pro bono services to some of these companies struggling with their IT infrastructure in response to the outbreak.
“It goes without saying: There’s enough stress and anxiety in the world right now. We have to get through this together,” Autrey says.
No one knows how long this new remote work style will last, and the overall impact on business is still speculation. As for those logging in for remote work during this time of crisis, the IT people on the front lines have just one request.
“Please be nice to your IT folks,” says Gatewood.
More coronavirus coverage from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The coronavirus could upend America’s business relationships with China
—The best Twitter accounts to follow for reliable information on the coronavirus outbreak
—3 months before the coronavirus, a war game showed we weren’t ready
—How mainland China’s closest neighbors have kept coronavirus cases so low
—Couples are scrambling to prepare last-minute wedding alternatives
—How A.I. is aiding the coronavirus fight
—WATCH: The race is on to create a coronavirus antiviral drug and vaccine
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus and its impact on global business.