fortune--2020-07-13--Earnings season is expected to be a dud. Stocks are taking off

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Good morning, Bull Sheeters. It’s a strong start to the trading week with Asian and European equities gaining ground, and U.S. futures edging higher as well. Investors are in a risk-on mood as we turn our attention to Q2 corporate results. The forecast for earnings season is hardly a bullish one, but it should prove to be a bit of a welcome distraction from the coronavirus crisis.
Let’s see where investors are putting their money.
Markets update
Asia
The major Asia indexes are in the green in afternoon trade. After its sizzling eight-day rally was snapped on Friday, the Shanghai Composite Index is up 1.8%.
is up 1.8%. Huawei is trying to convince Britain not to kick it out of its 5G rollout plans for at least another five years, the Sunday Times reports.
is trying to convince Britain not to kick it out of its plans for at least another five years, the Sunday Times reports. India’s coronavirus crisis is worsening, but tech observers are seeing a fascinating adaptation occurring in everyday life: digital payments are soaring.
Europe
The European bourses jumped in early trade with Germany’s DAX up 1.2% at the open.
jumped in early trade with up at the open. It’s a big earnings week in Europe with financials, auto and consumer product stocks on the calendar, an important first glimpse into the virus’ impact on Q2 business.
in Europe with financials, auto and consumer product stocks on the calendar, an important first glimpse into the virus’ impact on Q2 business. Credit Suisse is mulling hundreds of job cuts, the Swiss press reported this weekend, as the coronavirus throws the banking giant’s restructuring plans into disarray.
U.S.
For the second time in the past three weeks, the major averages each notched a week of gains , with airlines and financials closing strongly on Friday.
each notched , with and closing strongly on Friday. Tesla has cut the price tag of its Model Y . But don’t worry about Elon Musk’s finances. He added $6.1 billion to his personal wealth on Friday after the stock soared 11% .
. But don’t worry about Elon Musk’s finances. He added to his personal wealth on Friday after the stock soared . The big banks (including JPMorgan Chase tomorrow), airlines and Netflix are all scheduled to report Q2 results this week. According to FactSet, investors should brace for an earnings decline of 43.8% for S&P 500 firms, the worst set of numbers since 2008.
Elsewhere
Gold is up.
is up. The dollar is flat.
is flat. Crude is down as traders expect producers to ask for a tapering of supply cuts at this week’s OPEC meeting.
***
A blue autumn?
Let’s talk politics. Election Day is a mere 113 days out, and Wall Street is increasingly weighing the odds of what a Democrat or Republican in the White House—and controlling Congress—will mean for your portfolio.
But first, let’s check in on those always-reliable polls. This morning, Real Clear Politics’ polls average showed Joe Biden with a 9-point lead. The PredictIt betting-odds site shows an even bigger margin for Biden. (News flash: President Donald Trump is not having a good pandemic.)
So, let’s assume (gulp) the pollsters, pundits and oddsmakers are correct in their thinking that there will be a Democrat in the White House. Time to liquidate your equities portfolio, stockpile gold and move the family to an off-shore hideout? Erm, no.
Nobody’s really freaking out about the prospect of a Joe Biden presidency as the odds improve in his favor. JPMorgan says it might even be good for stocks. UBS concurs. Yes, a Democrat in the White House is more likely to result in a hike of the corporate tax rate and tighter regulatory oversight of health care, finance, and energy sectors, but that’s no reason to bail on risky assets like stocks, the analysts say.
What’s more, the data (and history books) show that a Democrat in the White House is both good for the economy and good for the stocks markets. In fact, going back to 1950, Democrat presidents have a better track record of growing the economy than their GOP rivals. And a Dem in charge has been a pretty good indicator for stocks too, as the following table from LPL Research shows.
And, yes, I have to note right here: past-performance is no indicator of future results. But the past performance makes you wonder why Wall Street over the years has been so fearful of the prospect of Democrats in charge.
I wrote about this for an article that appeared on Fortune.com over the weekend. There are a lot more data points, including a fascinating chart about the Dow performance under presidents going all the way back to President William McKinley. Again, the Dems (at least, lately) have a big advantage over the GOP.
Surprised? I was.
Take a look at the article, and let me know what you think.
***
Postscript
When I was a kid, my brothers and I were crazy about Sergio Leone’s Spaghetti Westerns, particularly the ones starring Clint Eastwood. The gunfights. The snarls. The whole bad-assery of it kept us riveted, hand pistols drawn at the screen.
But what made the films such classics was Ennio Morricone’s soundtrack. That piercing coyote-howl from The Good, The Bad and The Ugly goes down in the discussion of greatest movie scores of all times.
So I, like much of Italy, was really saddened by the news last week that, Morricone, the maestro, had died at 91. Italy is a land of musical geniuses. Verdi, Puccini and Rossini make up the composer trinity, with Morricone not that far below them.
In the days following his death, spontaneous tributes broke out across the country. From humble town squares to the grand piazzas of Rome, musicians took out their instruments and played the maestro’s songs that influenced them most.
A few years ago, I blagged a few tickets to see Morricone at a concert held inside the Vatican. He shuffled onto the stage and directed the orchestra in a few songs, before handing over the reins to a younger conductor.
In a sign that I’m getting old and losing my edge, I’ve come to prefer Morricone’s mellower, more melodic pieces. Probably top of the list is “Gabriel’s Oboe,” from The Mission. The Yo-yo Ma version is a stunner, but the one that really blew me away was a performance (being Italy, it was a free concert) I heard one hot summer evening in a hilltop town in the middle of nowhere, in Central Italy.
We were at a 13th century church that had been turned into an impromptu concert hall. The kids were four-years-old. They were hot, and cranky. There were no seats, and so somebody directed my wife and I and the girls to sit right next to the musicians. I was close enough to hand one a water bottle without needing to get up out of my seat.
When the oboist hit those first stirring notes of “Gabriel’s Oboe,” the whole place went in a trance. Better yet, the kids were mesmerized. It was one of those (many) moments I was just lost in the beauty of this place.
I have many Morricone memories. That’s the one I’ll most cherish.
Buonanotte, maestro.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
The economy in 8 charts. How's the U.S. economy doing? Is it rebounding at a pace to justify this two-month bull run? Fortune's data whiz, Lance Lambert, takes you into the state of the world's biggest economy in eight eye-popping charts.
"Zero chance." Those are the odds of a V-shaped recovery, a Moody's economist recently told Fortune. So if America's economic rebound isn't going to be a quick and painless one, what shape will it take? Fortune's Anne Sraders details what needs to happen for the U.S. economy to reach pre-COVID levels.
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Market candy
It's not your imagination
I interviewed the historian François Hartog, who, over his lengthy career, has probably written more about our perception of time than any other giant of academia. We spoke about life under lockdown—all those Zoom calls and work/schooling-from home commitments—and how it's messing with our relationship to the present and the future... So, it's not just you. Not sure if there's any comfort in that.


fortune--2020-07-13--TikTok is becoming inaccessible in more markets. Tech-savvy users are finding workarounds

On the COVID-19 front , the U.S. has had a massive leadership failure

Hong Kong’s small community of TikTok users were thrown last week when the short video platform announced it was withdrawing from the region amid concerns over a new national security law that grants authorities significant power over user data and prompted several U.S. tech companies to temporarily suspend data-sharing processes.
In the three days between the announcement that TikTok was leaving Hong Kong and its disappearance from app stores, Hong Kong users flooded the platform with videos expressing their shock and exhorting their followers to add them on other social media. Since then though, existing TikTok users in Hong Kong have discovered a workaround that enables them to circumvent the platform’s location-based restriction and access the app.
TikTok is owned by a Chinese tech company, Beijing-based ByteDance. Its ownership, and the numerous claims of political censorship and data sharing with the Chinese government—charges the app denies—have made TikTok a flashpoint for tensions between China and other countries. India, TikTok’s largest market, banned the app in June, and now the U.S. and Australia are considering similar measures.
TikTok’s voluntary withdrawal from Hong Kong in the wake of the national security law is seen by many as part of an effort by TikTok to distance itself from ByteDance and assuage concerns that it shares user data with the Chinese government.
Hong Kong is an unprofitable market for TikTok with relatively few users—150,000 as of last August, compared with 30 million users in the U.S. and at least 81 million in India.
On July 9, users in Hong Kong who had previously downloaded the app opened it to find a pop-up message bidding them farewell.
“Thank you for the time you’ve spent on TikTok and giving us the opportunity to bring a little bit of joy into your life! We regret to inform you that we have discontinued operating TikTok in Hong Kong,” the message read.
The TikTok app now displays this pop-up notification when users in Hong Kong open it. Naomi Xu Elegant
According to TikTok’s privacy policy for regions outside the U.S. and Europe, the app collects information that includes a user’s IP address, mobile carrier, time zone settings, and either the “region” selected in the app’s settings or, if the user opts in, GPS data.
TikTok seems to restrict access to the app based on a user’s phone SIM card and IP address. Virtual private networks (VPNs), which reroute a user’s Internet activity to other locations, circumvent the latter by giving users an IP address outside Hong Kong. Hong Kong carrier SIM cards also appear to preclude access to TikTok. Users hoping to access the app in Hong Kong must remove their Hong Kong SIM cards, turn on a VPN, and then connect to Wi-Fi.
Hong Kong users have also discovered that inserting a non–Hong Kong SIM card skirts the restrictions, even without a VPN.
TikTok representatives did not immediately respond to an emailed request for comment.
One user in mainland China, where TikTok is also unavailable, told Fortune they can access the app in mainland China using the same method of SIM card removal and VPN activation. The person asked not to be identified because they did not want to be publicly known to be circumventing Internet restrictions.
TikTok users in India, where use of the app is also restricted, have also managed to gain access by removing their local SIM card and turning on a VPN, according to Reddit users discussing the subject.
The workarounds shed light on how TikTok is carrying out its withdrawal from Hong Kong and the shortcomings of government efforts to ban the app.
TikTok announced it was leaving Hong Kong on July 6. By July 9, it was gone from Apple and Android app stores, and the “user notice” farewell message was popping up on Hong Kong users’ screens. In the days since, Hong Kong–based users continue to post videos on the app, though it’s not clear by what means. Some dance in the city’s parks, Hong Kong’s distinctive skyline behind them; others upload lip-synch videos and ask viewers to follow them for more.


fortune--2020-07-13--The world’s wealthy are worried they wouldn’t survive another pandemic

The fallout from coronavirus has provoked fears among the world’s wealthy, with the majority planning to curtail travel and move closer to family in a world they see permanently altered by the pandemic.
More than half of respondents in a survey of wealthy investors by UBS Group AG said they feared not having enough liquidity in the event of another pandemic, while a similar percentage expressed worry about leaving sufficient money to their heirs.
The crisis “feels very personal,” said Bonnie Park, head of wealth planning for UBS in the Americas. “In the U.S. specifically, 82% of investors feel their lives have changed permanently.”
To be sure, the poor and working classes have borne the brunt of the economic fallout from Covid-19, which has triggered the worst economic contraction since the Great Depression and resulted in tens of millions of layoffs. Of the wealthy investors surveyed, 70% said they’d been financially affected by the pandemic, with 36% of those describing the impact as “significant.”
Younger investors indicated they were disproportionately affected by Covid turmoil. More than 70% of wealthy millennials said their finances were impacted by the pandemic and a similar percentage said they anticipated having to work longer to make up for the losses, compared with just 34% of Baby Boomers. Millennials were also twice as likely as boomers to have extended financial support to family and friends.
Buying Opportunity
Despite any damage to their net worth, most wealthy investors see the recent volatility in the equity markets as a buying opportunity.
“We saw some investors shift out of equities and 60% of them regret that,” said Jeff Scott, UBS’s head of client research. “Better to stick with your plan than be reactive in the market.”
Investments aside, wealthy people are expecting to make permanent changes to their lifestyles in the wake of the coronavirus. More than two-thirds are prepared to work remotely, while 70% anticipate traveling less in the future and just over half are planning to move closer to family.
Wealthy Europeans expressed stronger sentiment toward moving away from cities to less populated areas than those in the U.S., with more than half saying they desired such a move compared with 30% of rich Americans.


fortune--2020-07-13--Global IT spending forecast to fall 7% amid COVID-19 cuts

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Global spending on information technology will fall 7.3% this year to $3.5 trillion as the coronavirus pandemic curtails economic activity, research firm Gartner forecast Monday.
It is the first annual decline in worldwide spending—on everything from mobile phones to cloud—caused by poor economic fundamentals since 2009 during the global financial crisis, Gartner vice president John-David Lovelock said. Spending experienced a steeper decline in 2015, but that was largely due to the U.S. dollar’s sharp rise against other major currencies.
IT spending is poised to bounce back modestly next year, in a pattern Lovelock describes as “a Nike swoop,” but will not exceed 2019 levels until at least 2023. Some categories of IT spending, such as purchases of devices—everything from laptops to mobile phones to printers—probably reached a high-water mark in 2018 that they may never hit again, he said.
Gartner is predicting that this category of IT spending will be the worst hit this year, crashing more than 16%, on top of a 0.3% decline last year. It forecasts that spending will recover 6.2% in 2021.
When it comes to consumer hardware devices, the issue is not simply tied to economies frozen by the pandemic. The segment has, in many ways, become a victim of its own success and is now facing strong ongoing headwinds owing to the high global penetration rates these technologies have already achieved.
“Most people who want a cell phone have one; most people that want or need a laptop have one,” he said.
The result is the market is almost entirely made up of spending on upgrades and replacements, purchases that are easy to delay when budgets get tight. In addition, the latest versions of these products are so capable that users are finding they don’t need to upgrade them as often as in the past.
And while many large corporations are reporting that the pandemic is causing them to accelerate their “digital transformation” plans, investing more in cloud-based technologies and artificial intelligence, Lovelock said that the increases in spending on these relatively niche areas are not enough to make up for the widespread curtailment of more run-of-the-mill IT spending. The reduction in staff—through layoffs and furloughs—is also allowing many firms to reduce overall technology spending significantly, he said.
Gartner forecasts that spending on data center systems will fall 10.6% this year after having barely grown in 2019. It is then projecting a 6.2% increase in 2021.
Enterprise software, which had been a strong performer in 2019, growing 11.7%, will suffer a 5.7% decline this year, the firm projects. But it should recover about 7.4% next year, Gartner says.
IT services, which account for more than $1 trillion of total spending, is expected to fall 6.8% this year, after having gained almost 5% last year. It will then recover 5.5% in 2021, according to the research firm.
Finally Gartner forecasts that communications services, the largest IT spending category, amounting to more than $1.3 trillion, will slip 3.3% and recover about 3% in 2021.
But these broad categories mask significant long-term trends, some of which have indeed been given a massive boost from the pandemic. For instance, spending on desktop-as-a-service, a cloud-based solution that allows workers to have a virtual desktop and files that they can immediately call up on any device anywhere in the world, is expected to double this year, Lovelock said.
The movement of computing functions away from on-premises servers and into the cloud is also continuing. Lovelock notes that in 2008, the vast majority of computing power was in the form of servers that companies owned themselves. By 2024, Gartner projects that 60% of all the world’s computing power will exist in data centers run by a handful of large cloud computing providers.


fortune--2020-07-13--Thailand advances one of the first coronavirus vaccines developed outside rich nations

Thailand is starting the clinical stage for its own Covid-19 vaccine after both monkeys and mice generated satisfactory antibodies against the virus following injections, according to scientists in the study.
“We hope that the vaccine could generate neutralizing antibodies in humans seen in monkeys and mice,” Kiat Ruxrungtham, head researcher at Chulalongkorn University’s Center of Excellence in Vaccine Research and Development, said at a briefing on Sunday in Bangkok. If the trials are successful, Thailand could have its vaccine by the second half of 2021, he said.
The Thai study will begin its human trials as early as September and will be among the first done outside high-income countries. Globally, 160 vaccines are being studied for Covid-19, of which 21 are at the clinical evaluation stage, according to the World Health Organization.
Access to life-saving vaccines is a perennial issue in poorer countries. The economic turmoil of the pandemic has raised the stakes, and the worry is that countries will compete for scarce supplies, seeking to protect their own populations. The Oslo-based Coalition for Epidemic Preparedness Innovations, WHO and the non-profit vaccine alliance Gavi are among those seeking equitable distribution.
The first stage of Thai clinical trials will enroll about 100 volunteers separated in two groups, one for people aged 18 to 60 and the other for 60- to 80-year-olds, Kiat said. The focus of the first stage, which will take about two months, is on determining the safety and appropriate dosage for human use. The recruitment for volunteers is expected to start in September.
The second stage, likely to begin in December, will involve 500 to 1,000 people. The vaccine may get emergency-use authorization from the Food and Drug Administration and skip the third and final stage, which would use more than 10,000 volunteers in countries with an ongoing outbreak, according to Kiat.
The Chulalongkorn University vaccine employs new mRNA technology that’s similar to that of a project led by Cambridge, Massachusetts-based Moderna Inc. The technique is cost-effective and ideal for large-scale production. Thailand also has several other Covid-19 vaccine studies underway using a variety of methods.
The production of 10,000 doses for the vaccine trials will start next week. Once the trials have completed all stages, Thailand will start output, with the potential to boost supplies for distribution to neighboring nations and other low- or middle-income economies.


fortune--2020-07-13--India’s coronavirus outbreak is accomplishing what demonetization could not

The coronavirus outbreak may finally accomplish what India’s shock demonetization four years ago failed to achieve: Use of digital payments is soaring for everything from groceries, electricity bills and cab fares.
The value of transactions on the Unified Payments Interface, a platform created by India’s largest banks in 2016, reached an all-time high last month as people feared to handle banknotes amid the pandemic. Electronic fund transfers from banks, which had dropped in April as economic activity slowed almost to a halt, have also rebounded.
“People who have never paid a bill online are paying online, people who have never bought groceries online are buying online,” said Nityanand Sharma, chief executive officer of Get Simpl Technologies Pvt Ltd., which allows people to order groceries and food online and pay every two weeks. “What would have taken five years has happened in the last three months.”
Prime Minister Narendra Modi’s government has long sought to push digital payments for India, where three in four consumer transactions are handled in cash. In November 2016, Modi suddenly invalidated most of the country’s high-value currency notes — a move aimed at curbing corruption that would also, he later noted, help encourage a move toward digital commerce.
Digital payments initially did surge as people struggled to get banknotes, but they reverted to cash as the amount of notes in circulation rose again. Now the pandemic, which has made people wary of close personal interactions, is giving online payments a fresh boost.
“This is a consumer-led move toward digital payments,” said Sharma, who has seen transactions on his platform double since April, “unlike demonetization, where there was no supply of currency.”
Sachin Raje, a 36-year-old Mumbai-based entrepreneur in the real-estate industry, is a recent convert to digital payments.
“I buy vegetables, milk, fruits and all kinds of daily requirements through online apps now, as I don’t want to take any risk with virus infection by exchanging cash,” he said.
Big Money
The Reserve Bank of India last year said it aimed to increase digital transactions to about 15% of gross domestic product by 2021, from nearly 10% at the time. The government is aiming for a billion digital transactions per day as the world’s fastest-growing smartphone market empowers consumers to transact at the click of a button.
Global tech giants such as Amazon.com Inc. and Alphabet Inc. are placing bets on India’s digital-payments market, which is forecast to quintuple to $1 trillion by 2023. To get a piece of that pie, they’re competing with Alibaba-backed local startup Paytm, and Facebook Inc.’s WhatsApp Pay — still in its testing stage in the country — among others. For now, the companies are racking up losses as they offer discounts and cashbacks to lure users.
Recent surveys suggest their time is coming. Three-quarters of Indian consumers reported greater use of digital payments since the virus outbreak, and 78% expect to continue increasing their use in the next six months — the highest figures among 11 nations surveyed — according to a recent report from Capgemini Research Institute. Another survey by Facebook and Boston Consulting Group showed a rise in online payments in India since late March after a nationwide lockdown to check the virus’s spread, and said there’s a strong likelihood the trend will continue over the next six months.
Cash Still King
India’s digital payments per capita have grown more than five times since 2015, to 22.4 transactions in the year ended March 2019, RBI figures show. That’s still far below China, which saw 96.7 cashless transactions per person in 2017.
And India is still a long way from shedding its traditional attachment to cash.
“While cashless transactions could now grow at a faster pace than would have been the case in a world without the virus, cash will continue to be the main method of payment for a long time yet,” said Darren Aw, an economist with Capital Economics Pte. in Singapore.
India is second only to China in terms of the volume of cash withdrawn from ATMs, according to the RBI, and currency in circulation — at 11.2% of gross domestic product — is higher than in most major economies.
One reason is that only a third of India’s population has Internet access, and those who do often face connectivity problems. In addition, some 20% of Indians have no bank account, which limits the extent of card transactions.
“Digital payments are largely an urban phenomenon,” said Rahul Bajoria, an economist with Barclays Bank Plc. in Mumbai. “The levels can sustain, but maybe the growth rates beyond a point will fizzle out.”
Essential Services
Still, even as overall digital payments declined during the first weeks of India’s lockdown, when most businesses shut, gains were seen for essential services that continued to operate — grocery, pharmacy, mobile top-ups and utility payments.
The virus has “quickened the pace of digital-payments adoption” even in small cities, and there’s a huge demand from merchants for contactless payment solutions, said Navtej Singh, chief executive officer for digital payments with Hitachi Payment Services Ltd. Unlike the days of demonetization, when organized retail got a bigger boost from digital transactions, small grocery shops stand to benefit now, he said.
“It just takes three seconds to complete a transaction, it’s hassle-free and every local vendor now has enabled online payments on their phones,” Mumbai entrepreneur Raje said. “I don’t even swipe my card now.”


fortune--2020-07-13--Washington Redskins’ preferred new name is tied up in a trademark fight

Washington won’t be the “Redskins” after Monday, according to multiple reports, as the NFL team associated with the nation’s capital will bow to mounting public pressure including from its biggest sponsors and drop the name.
Sports Business Journal first reported the Monday announcement plans, which were later confirmed by the Washington Post, WSJ and USA Today among others. SBJ and the Post both reported a new name wouldn’t be unveiled Monday because the team’s preferred replacement is involved in a trademark fight.
The global reckoning on race and equality issues since the death of George Floyd had renewed focus on the name and dark-skinned logo used by the team. While principal owner Dan Snyder had long resisted a change, this time the team’s sponsors made clear it had to go.
FedEx Corp., which holds the naming rights to the team’s stadium in Landover, Maryland, told the Redskins to make a change. Retailers including Walmart Inc., Target Corp., Amazon.com Inc. and Nike Inc. dropped Washington Redskins merchandise, casting out a team name that contains what many consider to be a racial slur against Native Americans. The National Football League said it would support a change.
The organization in a July 3 statement said it would conduct a review of the moniker. That review, according to the reports, is now complete.
Late Sunday, “Hail to the Redskins” trended on Twitter, with several fans who both supported and opposed the move saying they wanted to sing the team’s fight song one last time.


fortune--2020-07-13--It’s not easy being an aspiring lawyer taking the bar exams during a pandemic

In New York, future attorneys fret they are cramming for a two day exam that won’t take place. In Austin, Texas, law students discovered their test was cancelled only upon calling the exam venue. And in Arizona, 575 test takers are slated to file into the Phoenix Convention Center—even as COVID rages out of control throughout the state.
Welcome to the 2020 version of the bar exam, an ordeal that law school graduates have long confronted in order to join the legal profession, but which has taken on new levels of stress in the covid era.
The prospective lawyers are especially frustrated in light of what they perceive as a lack of transparency by the exam overseers or, in cases like Arizona, by a disregard for their safety. They have been sharing their frustrations in private social media forums, and sharing their experiences with @BarExamTracker—a Twitter account that has become a vital source of information about the exams.
“It’s not cool that the board of law examiner and states aren’t sharing information a timely matter,” says the law student behind the account, who would spoke on condition on anonymity as they feared retaliation from state regulatory bodies.
In an interview with Fortune, the law student recounted how many would-be test takers are exasperated because they have often made travel arrangements and studied for hundreds of hours for an exam that may not take place. The law student pointed in particular to the exam overseers in New York and New Jersey, who have refused to say a September test will be rescheduled—even though the public health situation appears to make that a foregone conclusion.
“Do you really think [Governor] Andrew Cuomo will allow 500 people to congregate inside this September?” they asked rhetorically.
Meanwhile, the law student’s concerns about identifying themselves does not appear unfounded. They noted that judges from state supreme courts (which oversee attorney licensing) have followed the Twitter account, and that some students have received an email warning that publicly criticizing the process could face scrutiny over their “character and fitness” to be lawyers.
In response to this pressure, would-be lawyers are pushing back by calling for “diploma privilege”—a right to become attorneys based on receiving a degree from an accredited law school. So far, their campaign has notched some victories as a few states, including Washington and Utah, have temporarily agreed to accept diploma privilege as a credential.
All of this has put pressure on the national gatekeeper to the legal profession, and organization known as the National Conference of Bar Examiners or NCBE.
The NCBE has angered many test takers by offering an online version of its test—but saying that those who pass it online can only use it for admittance into the state where they wrote it. Ordinarily, passing the NCBE’s test means a lawyer is entitled to practice in multiple states.
A spokesperson for the NBCE defended the body’s efforts to accommodate students during the COVID crisis.
“There is no major profession that uses an at-home remote or online licensure exam,” said the spokesperson by email. “Because of the high-stakes nature of professional licensing exams, in-person, proctored exams are the most fair and secure way to license recent graduates.”
Others disagree with the NCBE, not only on how to administer the test online, but on whether the bar exam should even exist in the first place. This includes Annemarie Bridy, a former law professor who now works as an attorney for a large tech company.
“It’s a deeply, deeply protectionist situation as they make a ton of money from credentialing,” she says. “The bar exam has outlived its credibility and its usefulness.”
Bridy notes that much of the exam remains focused on esoteric areas of law, while failing to include more contemporary subjects like intellectual property.
More broadly, she says, the bar exam is primarily a high stakes multiple choice test that may amount to a “hazing ritual” more than a means of deciding who is fit to practice law. Bridy also notes that schools and society in general are moving away from using such tests, and suggests that an outside body like the American Bar Association should review the NCBE’s quasi-monopoly over the process of licensing lawyers.
While the situation in some states is fluid, as more test overseers say they will revisit their plans for in-person tests, other states are going ahead with their exams as planned.
In the meantime, many would-be lawyers are continuing to sweat over their fate—and their Twitter feeds.


fortune--2020-07-14--Meet the millionaires who want to be taxed to pay for the coronavirus

Is it safe to take public transit during the coronavirus pandemic ?

Dozens of millionaires from the U.S. and six other countries have a message for their governments: “Tax us. Tax us. Tax us.”
Calling themselves the Millionaires for Humanity, more than 80 wealthy individuals — including Walt Disney Co. heiress Abigail Disney, former BlackRock Inc. managing director Morris Pearl, and Danish-Iranian entrepreneur Djaffar Shalchi — are petitioning for higher taxes on the rich to help pay for the billions in new government programs made necessary by the Covid-19 pandemic.
“Today, we, the undersigned millionaires and billionaires, ask our governments to raise taxes on people like us. Immediately. Substantially. Permanently,” according to the open letter. “We are not restocking grocery store shelves or delivering food door to door. But we do have money, lots of it. Money that is desperately needed now.”
Their missive, which comes ahead of this weekend’s Group of 20 meeting, isn’t the first such appeal. Even before the pandemic upended public finances, a cohort of 200 or so wealthy people calling themselves the Patriotic Millionaires — a group that include Disney and Pearl — were pressing for a more progressive tax system.
Some Patriotic Millionaires say they signed up because they feel a little guilty about being so rich when they were “born on third base.” Others find a sense of community in the group. Of the millionaires and billionaires that make up the group, Disney, whose grandfather and great-uncle founded Walt Disney Co., stands out for her family name and advocacy. She’s called for changes to pay at the company and has described the compensation package for Bob Iger, chief executive until this year, “insane.”
Critics of the group point out that the members of the group take advantage of the loopholes they’re trying to close. They also say they could willingly pay more tax.
“There are 10 to 12 million millionaires in this country and there are only 200 of us so what difference can we make?” said California-based member Karen Seal Stewart in an interview earlier this year.
In their open letter, the Millionaires for Humanity warn that the outbreak could push millions more people into poverty and strain already inadequate health-care systems, staffed largely by underpaid women. Charity isn’t the answer.
“Government leaders must take the responsibility for raising the funds we need and spending them fairly,” according to the letter. “We owe a huge debt to the people working on the front lines of this global battle. Most essential workers are grossly underpaid for the burden they carry.”


fortune--2020-07-14--Here’s a first look at the new Ford Bronco

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Whether you associate it with the outdoors and adventure, or a notorious low-speed police chase, the Ford Bronco is an American motoring icon. But the last Bronco rolled off the line 24 years ago and was replaced in the Ford lineup by larger SUVs like the Explorer and the Expedition. In that time, nostalgia for the two-door off-roader has only increased, and sensing that it could build a worthy competitor to the perennially popular Jeep Wrangler, Ford has brought the Bronco back.
The new Bronco, unveiled today, is actually a family of three different cars made up of the classic two-door version, a new four-door version, and a SUV variant called the Bronco Sport.
Preproduction versions of the all-new 2021 Bronco family of all-4×4 rugged SUVs include the Bronco Sport in Rapid Red Metallic, the Bronco two-door in Cyber Orange Metallic, and the Bronco four-door in Cactus Gray.
The design of the new Bronco family is inspired by the first generation Bronco built from 1966 to 1977. In fact, Ford’s designers started by taking the first-gen Bronco into their studio and creating a digital scan to serve as a reference.
“Similar to the first-generation model, Bronco’s square proportions, short overhangs, and wide stance are optimized for off-road adventure,” said Bronco chief designer Paul Wraith. “The side profile features a flat, no-nonsense surface with clear-cut edges and robustly flared fenders. Large, open wheel wells are a modular design with a quick-release attachment for simple customization.”
Ford has clearly thought a lot about customization with the new Bronco, offering it in no less than seven different trim levels and 10 paint colors, with other options available to choose from.
The two-door and four-door Bronco come standard with a four-cylinder 2.3-liter EcoBoost engine that’s good for 270 horsepower and 310 foot-pound of torque, and can be upgraded to a 2.7-liter EcoBoost V-6 that puts out 310 horsepower and 400 foot-pound of torque. The Bronco Sport comes with a 1.5-liter displacement EcoBoost that can be optioned to 2 liters.
Fans of gadgets and gizmos won’t be disappointed. The new Bronco’s four-wheel drive is managed by something Ford calls the Terrain Management System, which features seven “G.O.A.T.” modes to adapt the car to different surfaces: Normal, Eco, Sport, and Slippery and Sand, with Baja, Mud/Ruts, and Rock Crawl for off-road driving.
MSRP for the base two-door Bronco is $29,995, including $1,495 destination and delivery. Reservations for Bronco two- and four-door models can be made now for $100 at ford.com.
With more than 200 factory-backed accessories available at launch, this 2021 Bronco two-door prototype shows how owners can personalize their SUV to get more out of their outdoor experiences. (Aftermarket accessories shown not available for sale. Prototype not representative of production vehicle.)
Trail sights on the front fenders serve as tie-downs, reminiscent of the first-generation Bronco. (Aftermarket accessories shown not available for sale. Prototype not representative of production vehicle.)
Modular doors on this prototype vehicle are among the Ford accessories available for Bronco two- and four-door models. (Aftermarket accessories shown not available for sale. Prototype not representative of production vehicle.)
The four-door 2021 Bronco will have available removable modular roof sections—left and right front panels, a full-width center panel, and a rear section. Roof panels on both two- and four-door models can easily be removed by unlocking the latches from the interior to provide the largest overall open-top view in its class, to take in the sunshine or to gaze at the stars at night. (Prototype not representative of production vehicle.)
Every Bronco comes with class-exclusive frameless doors that make them easier to remove than what competitors offer. On four-door 2021 Bronco models, all doors can be stored on board with protective door bags. Rear quarter windows are also removable, as shown on this four-door Bronco prototype. All have exclusive cowl-mounted mirrors to maintain side-view visibility when the doors are removed. (Prototype not representative of production vehicle.)
All 2021 Bronco two- and four-door models offer a swing-out tailgate for easier access to the cargo area, as shown on this four-door Bronco prototype. (Prototype not representative of production vehicle.)
The all-new Bronco Sport Badlands series in Rapid Red Metallic Tinted Clearcoat. (Preproduction model pictured.)
Prototype version, not representative of production model, of the all-new 2021 Bronco interior highlighted by an available 12-inch SYNC® 4 system, optional leather-trim seating, console-mounted transmission shifter/selector, and G.O.A.T. Modes™ control knob. (Static display on private property with aftermarket accessories not available for sale.)
Customization details include an available leather-wrapped shift lever for the class-exclusive seven-speed manual transmission, as well as grab handles in this prototype version of the 2021 Bronco. (Not representative of production model. Static display on private property with aftermarket accessories not available for sale.)
Preproduction versions of the 2021 Bronco include Bronco two-door in Cyber Orange Metallic Tri-Coat and Bronco four-door in Cactus Gray.


fortune--2020-07-13--More than 100,000 California mail-in ballots were rejected because of mistakes

More than 100,000 mail-in ballots were rejected by California election officials during the March presidential primary, according to data obtained by The Associated Press that highlights a glaring gap in the state’s effort to ensure every vote is counted.
With the coronavirus pandemic raging, California is part of a growing number of states increasing mail-in balloting to avoid crowds at polling places. President Donald Trump is among those questioning the integrity of vote-by-mail elections while supporters say they are just as reliable as polling places and offer greater flexibility for voters.
But while polling places include workers who can assist people who have questions about filling out ballots, a voter doesn’t have support at home and so problems can arise.
The California secretary of state’s election data obtained by the AP showed 102,428 mail-in ballots were disqualified in the state’s 58 counties, about 1.5% of the nearly 7 million mail-in ballots returned. That percentage is the highest in a primary since 2014, and the overall number is the highest in a statewide election since 2010.
Two years ago, the national average of rejected mail ballots in the general election was about 1.4% and in the 2016 presidential election year it was 1%, according to a U.S. Election Assistance Commission study.
The most common problem, by far, in California was missing the deadline for the ballot to be mailed and arrive. To count in the election, ballots must be postmarked on or before Election Day and received within three days afterward. Statewide, 70,330 ballots missed those marks.
Another 27,525 either didn’t have a signature, or the signature didn’t match the one on record for the voter.
Kim Alexander, president of the nonpartisan California Voter Foundation that seeks to improve elections, called the uncounted figure discouraging.
“The only thing worse than people not voting is people attempting to vote and having their ballot uncounted,” she said. The tally of nullified votes “can make a difference in a close contest.”
The data didn’t break down the uncounted ballots by party registration. While the overall number was large in March, if it’s the same in November it’s unlikely to affect the presidential race — Trump lost to Democrat Hillary Clinton in 2016 by 4.3 million votes.
But there are expected to be at least several tightly contested U.S. House races where a relatively few votes could tip the balance. In 2018, Democrat TJ Cox upset Republican David Valadao by less than 1,000 votes in a Central Valley district. They have a rematch in November.
Local races sometimes are decided by a handful of votes.
California traditionally has offered mail-in voting only to those who request ballots. Over time the number has grown to represent more than half of all cast ballots. In response to the coronavirus outbreak, Democratic Gov. Gavin Newsom in June signed a law requiring county election officials to mail a ballot to all the state’s nearly 21 million registered voters for the November election.
He called mail-in voting safe and secure, pointing to a series of studies that found no evidence of significant fraud. States across the political spectrum rely solely on mail ballots, including Colorado, Utah and Washington.
In preparation for November, the state is launching a ballot-tracking tool that will quickly alert voters if they need to take action, such as adding a missing signature. Another change: The state is extending the window for mail ballots to arrive to 17 days after Election Day.
Even though he voted by mail this year, Trump has called mail-in voting “a terrible thing” prone to abuse, warning without evidence that “you get thousands and thousands of people sitting in somebody’s living room, signing ballots all over the place.”
With the COVID-19 pandemic prompting many states to pursue near-universal mail voting to minimize health risks that come with indoor crowds, national Republicans and Democrats have argued over the safety and security of votes traveling through the U.S. Postal Service.
Washington’s Republican Secretary of State, Kim Wyman, is among those who see it as a safe system. So does Alex Padilla, California’s Democratic secretary of state, who says there is “no safer … way to exercise your right to vote than from the safety and convenience of your own home.”
Research by Alexander’s group has found that an average of nearly two of every 100 mail-in ballots were voided in statewide elections between 2010 and 2018. However, over that time, the rate of disqualification has improved, dropping from over 140,000 ballots, or 2.9% in the 2010 general election, to 84,825 ballots, or 1%, in 2018.
Last March, the highest rejection rate in California was in San Francisco, where 9,407 ballots, or nearly 5% of the total, were set aside, mostly because they did not arrive on time. By contrast, in rural Plumas County northeast of Sacramento, all of the 8,207 mail-in ballots received were accepted.
In Los Angeles County, nearly 2,800 ballots were nullified because the voter forgot to sign it, then couldn’t be found to fix the error. Statewide, that careless mistake spiked nearly 13,000 ballots.
More than 1,000 ballots were disqualified in Fresno County because the signature didn’t match the one on file with election officials. The same problem nixed over 1,300 ballots in San Diego County — and over 14,000 statewide. In some of those cases, voting experts say, a family member might have signed for others in the household, which is illegal.
Some voters apparently filled out their ballots then left them on the kitchen table: In more than 800 instances, envelopes were returned to election officials without the marked ballot inside.
Orange County Registrar of Voters Neal Kelley said ultimately a voter has the responsibility to fill out the ballot correctly and get it in the mail on time. Sometimes, “it’s just a product of voters forgetting,” Kelley said.


fortune--2020-07-13--How electric car startup Fisker plans to take on Tesla

Star car designer Henrik Fisker hopes the second time’s the charm for his second electric car startup, Fisker Inc.
The man who made his reputation designing sexy cars for BMW and Aston Martin stumbled a decade ago with his first EV effort, Fisker Automotive, which ended up in bankruptcy. So for his new venture, he’s following a different strategy for both creating the car and financing it.
Instead of making a luxury electric sports car that costs $100,000, as he did in 2012, Fisker will sell a more popular design—an SUV—that starts at under $40,000. Also, instead of building the entire vehicle from scratch in his own factory, he plans to partner with other automakers for many parts and much of the assembly.
And, as Fisker announced on Monday, instead of trying to raise billions of dollars in multiple rounds of private financing, he plans to take the company public quickly. “Having done this before, I just don’t feel it’s a good idea to try and raise so much capital in private rounds,” Fisker tells Fortune. “One round can be delayed, for whatever reason, and that means your product launch gets delayed, which then means you need to raise more money. I just don’t feel this works.”
The company aims to raise $1 billion of backing using a shortcut that another upstart electric-car maker, Nikola, used to go public last month. Forgoing the traditional method of hiring a Wall Street investment bank to sell new shares, Fisker is merging with an already public special-purpose acquisition corporation called Spartan Energy Acquisition, which is backed by private equity firm Apollo Global Management.
The move comes amid a strong market for shares of electric-vehicle makers. Although the share price of some slid a bit on Monday, the stocks of companies like Tesla, Arcimoto, and Workhorse have still recorded large gains for the year. Tesla’s stock is up 258% in 2020 while electric-van maker Workhorse’s is up more than fivefold. Meanwhile, Arcimoto, which makes three-wheeled electric vehicles, has gained 234% this year.
Once the Spartan Energy deal closes, which is expected in the fourth quarter, Fisker says he will have all the money he needs to bring his first car—the all-electric SUV called the Fisker Ocean—to market. The company showed off a prototype last year and hopes to start production next year. Only a few deliveries are expected to be completed by the end of 2021. Most likely, those will go to celebrity customers like Game of Thrones actor Nikolaj Coster-Waldau, an investor in the company who wrote an article praising the upcoming car for its environmentally friendly features.
The bulk of deliveries will start in 2022 and 2023, Fisker says. Additionally, he says, the company will have some aggressive financial targets to meet: becoming profitable and cash flow positive in 2023.
The boast seems almost impossible for a startup carmaker, but Fisker says it’s possible to achieve because he is partnering or outsourcing with major carmakers worldwide on various aspects of production to speed up development and reduce costs.
Fisker says the company is in “late-stage discussions” with several carmakers and parts suppliers, though he won’t name names. The upstart will partner with others on the so-called skateboard, the bottom layer of an electric vehicle that includes the battery, motors, and wheels. The startup is in discussion with Volkswagen for the skateboard, according to an investor presentation filed with the Securities and Exchange Commission, The Verge reported on Monday.
Other parts Fisker plans to outsource include the steering rack, air conditioning system, and even autonomous driving hardware and software. And the company will lean on existing manufacturing capacity owned by others to build the cars. “It’s dumb for any EV startup to build their own plant,” he says citing 20% overcapacity in the global car industry today.
“You’ve got to give up your ego,” Fisker explains. “You can’t have a vertically integrated company where you do everything yourself…A lot of the hardware in vehicles is going to end up being a commodity, and therefore we are willing to share those parts with somebody else.”
Fisker’s cars will rely on their design to stand out in the increasingly crowded electric car market, in which some critics say market leader Tesla’s minimalist vehicles are boring. “Emotional design is going to be in the foreground of vehicle purchasing in the future,” Fisker says. “We’re going to be the leader in that, both inside and outside [vehicles] and also the entire user interface on the screens in the interior and how you communicate.”
The Karma, Fisker’s original car in 2012, drew raves for its looks but got mixed reviews—at best—for reliability and performance. Fisker admits that some risks that his first company took didn’t pay off. A key battery supplier went bankrupt, for instance. “We have a lot of fans, and most of those cars are still on the road,” Fisker says. “Every car brand will go through certain ups and downs and some negative reviews, specifically if they take risks and are an innovator.”
A big part of the marketing push to come will rely on the new car’s sustainability, with some parts made from recycled materials. “The auto industry, we have a lot to do, and our aim is to make the world’s most sustainable vehicle,” Fisker says. “It’s one of our brand pillars. We want to contribute to a cleaner world.”


fortune--2020-07-13--Is it safe to take public transit during the coronavirus pandemic?

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Mass transit systems around the world have taken unprecedented — and expensive — steps to curb the spread of the coronavirus, including New York shutting down its subways overnight and testing powerful ultraviolet lamps to disinfect seats, poles and floors.
The cleaning measures produced something commuters have not seen in a while, or possibly ever: thousands of freshly scrubbed cars that look, feel and even smell clean. But experts say those steps solve only part of the problem, and transit officials are studying more advanced methods that might someday automatically disinfect transit systems around the clock.
The Moscow Metro and a public bus company in Shanghai have experimented with germ-killing ultraviolet light. Agencies in Hungary and the Czech Republic have tried using ozone gas as a disinfectant. The public transit system in Dallas tested a “dry fogging” system, and Hong Kong used a robot that sprays a hydrogen peroxide solution, according to a survey by international engineering and professional services firm WSP.
In Chicago, rail cars are cleaned every day before starting service and are prowled at night by crews wearing backpack-style electrostatic sprayers that cover all interior surfaces with disinfectant.
All that cleaning does cut the threat of catching the virus, experts say, but the benefits are limited.
The virus transmits predominantly through droplets in the air — it’s “everywhere and could be nowhere,” said Robyn Gershon, a clinical professor of epidemiology at New York University.
Cleaning a train car at a maintenance yard overnight — or even several times during the day, as New York’s Metropolitan Transportation Authority does — might not help the transit employee or passenger stuck in close quarters with a coughing person.
Wearing a face mask “will protect us the most, having that control among ourselves,” Gershon said. “I think the rest of it is really more the illusion, and that’s not a small thing because it plays with our psyches.”
Patrick Warren, the MTA’s chief safety officer, said the authority’s aggressive cleaning and disinfecting began at a time when health officials were warning that the virus could easily be transmitted from hard surfaces — guidance that has since evolved to place more emphasis on airborne transmission.
“As goes the science, so goes what we are doing,” Warren said.
New York’s subway system normally serves more than 5 million riders a day, but ridership plunged more than 90 percent at the height of the pandemic. Combined with plummeting revenues at its toll bridges and tunnels, the MTA has projected the pandemic will cost the agency more than $10 billion through next year. The cleaning program will wind up costing hundreds of millions of dollars over what the MTA would normally spend, Chairman Pat Foye said this past spring.
Is it worth the price? A survey of 1,000 mass transit riders conducted by New York-based advocacy group Tri-State Transportation Campaign found that cleaning topped a list of actions people wanted before they would feel comfortable riding mass transit again.
“But to what extent are we now overspending, or veering too far into security theater?” Executive Director Nick Sifuentes asked recently.
Dr. David Brenner, director of the Center for Radiological Research at Columbia University Irving Medical Center, has assisted the MTA on its UV light pilot program. He called the cleaning “not an ideal solution, but it’s a solution that is available.”
“I think it does increase the public safety because instead of having a continuous buildup of the virus, you are going back to zero every day,” Brenner said. “A much better solution would be if you could continuously decontaminate the air throughout the course of the day.”
That possibility may be on the horizon. A 2018 study and another published this month, both of which Brenner contributed to, concluded that low levels of a certain type of ultraviolet light, called far-UVC light, can be circulated continuously in an enclosed space and kill some forms of human coronavirus as effectively as conventional UV light — without the harmful effects to human eyes and skin.
Far-UVC light could offer a whole new level of protection for passengers and transit employees, if it is also found to be effective against the virus that causes COVID-19. The MTA is exploring using the technology on its subways.
The MTA is already testing a different form of UV light to disinfect subway cars, but it can only be done at station yards when the cars are out of service because of the harmful effect on humans. The limited pilot program costs about $1 million. Officials have not said how much it would cost to expand to the whole system. Chicago Transit Authority officials are waiting for the results of New York’s pilot program to see if the light is an option for their transit system.
Fred Maxik, whose company, Healthe, makes far-UVC light systems that are being used in office buildings and schools, cautioned that far-UVC light is not necessarily a panacea for anxious subway riders.
“No technology we have today is going to be perfect. It’s going to have to be used in conjunction with other good behaviors,” he said. “But I think this is the best of what we’ve got.”
Warren called far-UVC “a great innovation” but added that the logistical challenges of installing it across a century-old subway system are formidable. He would not speculate on what the agency’s cleaning efforts might look like a year from now.
“That’s the equation that everyone wants the answer to, including us,” he said, explaining that the agency is weighing what methods are economical and effective. “If we can’t have a clean, disinfected system that the customers trust, we’re not going to get the customers to come back.”


fortune--2020-07-13--Trump administration shelved ‘redlining’ investigations into Bank of America and other lenders, repo

Trump administration shelved ‘redlining’ investigations into Bank of America and other lenders, report says

The Trump administration’s top banking regulator has sidelined at least half a dozen investigations into discriminatory lending practices by Bank of America and other banks across the U.S., according to a new report.
The Treasury Department’s Office of the Comptroller of the Currency reportedly closed no fewer than six investigations into banks found to have practiced “redlining” against minority borrowers—despite staff recommendations that fines or other penalties be imposed against those lenders, according to the report by ProPublica and The Capitol Forum.
In the case of Bank of America, OCC examiners found that the nation’s second-largest bank was offering disproportionately fewer loans to minority homebuyers in Philadelphia than it was to white people. But the investigation was met with complaints and resistance from Bank of America, and by September 2018, the OCC’s inquiry was effectively shelved with no sanctions against the bank.
Other banks examined by the OCC for discriminatory practices included Michigan-based Flagstar Bank; Colorado Federal Bank; Chicago-based MB Financial; Atlanta-based Cadence Bank; and Pennsylvania-based Fulton Bank. In each of these cases, OCC investigators found that the banks were treating minority borrowers unfairly—such as charging Black, Latino, and women customers more for mortgages, or holding them to a higher standard to qualify for certain loans.
Despite evidence of wrongdoing in each of these cases, the OCC pursued no actions against the offending banks. Representatives for the OCC and the banks involved declined to comment on the investigations to ProPublica and The Capitol Forum.
While the OCC has historically prioritized the interests of banks over those of bank customers, current and former OCC employees say the balance has shifted even further under the Trump administration, which has seemingly deprioritized civil rights enforcement as part of its overall deregulation of the banking sector.
“We have not always been the biggest defender of consumers,” one veteran OCC attorney told ProPublica and The Capitol Forum. “Lately, though, we are outright hostile.”
Despite the passage of legislation meant to combat and outlaw redlining—such as the Community Reinvestment Act of 1977—discriminatory practices persist across the financial services industry, including in the banking and insurance sectors.


fortune--2020-07-13--The S&P 500 touches highest level since the economic crisis began, but 2 indicators could point to a

The S&P 500 touches highest level since the economic crisis began, but 2 indicators could point to a pullback

The S&P 500 has stormed back from the depths of the crisis in March, briefly trading in the green year-to-date (but still down from Feb. 19 highs), before closing down below the milestone mark on Monday.
“Today’s move is a bit of a breakout—we’ve been in a consolidation phase really ever since June 11, which was the day we ended that 7% pullback. We’ve really been going sideways until today,” Randy Frederick, Charles Schwab’s vice president of trading and derivatives, tells Fortune.
But for those watching the options market and volatility like Frederick, two indicators are a potential cause for concern.
The VIX, an index that tracks volatility and fear on the Street, is currently over 30—which Frederick calls nearing “high anxiety zone.” At the 30 level today, “there’s definitely some growing concern out there, perhaps about this overly-optimistic climate that seems to be out there,” he suggests. In fact, when the VIX and the markets rise together on the same day (which “doesn’t happen very often”), it can mean a downward move for stocks later in the day, Frederick says. “Today was a classic example, and it’s been right almost every time for the 7 or 8 times it’s happened.”
But Frederick sees reason to believe there may be more big swings (and perhaps even a pullback) in the near future.
“We have this sort of bifurcated list of indicators—several of them are pointing to extreme optimism,” Frederick says. Volume put/call ratios and open interest put/call ratios (for equities options) are “all pointing to pretty high optimism—the kind of optimism we saw back in January and February. That could be good and bad,” he says. (Those put/call ratios are also similar to what we saw in early June, right before the last pullback (where markets contracted about 7%), he notes.) In the short term, the market usually goes up if they are optimistic, but “there’s a point where, if they’re too optimistic and they stay there too long, then it becomes a contrarian indicator. I don’t think we’re quite there yet, but we may be there by the end of the week,” Frederick suggests.
To be sure, some of that bullishness in the ratios is likely being driven by retail investors, says Frederick, but overall “there’s no denying that they do have a very bullish slant to them at the moment.”
On the flipside, volatility inching higher than normal (tracked by the VIX) is a bearish indicator. With higher levels of anxiety on the Street, “it tends to cause things to move sharply one way or the other,” Frederick suggests.
With stocks having traded above that 3,200-mark and valuations getting very expensive, Frederick believes a 5% pullback in the coming weeks is “very realistic.”
Virus, earnings, vaccines, oh my!
Investors got some news on the vaccine front on Monday when the Food and Drug Administration “fast-tracked” pharma giant Pfizer and German company BioNTech SE’s two possible coronavirus vaccines, the companies said Monday.
Yet the headline for this week for investors is the start of the 2nd quarter earnings season—and across the board, the Street is expecting earnings to be terrible (as Fortune reported, Goldman Sachs is predicting an earnings decline of 60% for the quarter). Yet if companies report stronger earnings than expected, surprises to the upside should be enough to give stocks a boost: “That’s going to drive those stocks higher without a doubt,” Frederick says. After all, earnings are a lagging indicator, and the markets have been nothing if not far-sighted in recent months.
One thing that pulled stocks down in the final minutes of trading Monday? California Gov. Gavin Newsom announced on Twitter the state would be reimposing some restrictions, including on indoor restaurants and movie theaters as cases in the sate (and across the country) continue to spike. The S&P 500 closed down nearly 1% at 3,155.22.
Despite it all, Frederick points to a consistent truth of the market: “If people are buying now as they have been ever since mid March, it’s because they continually believe the future is going to be brighter.”


fortune--2020-07-13--Stocks of electric-vehicle makers tumble back to earth

In a rapid turn of fortune, the stock prices of electric-vehicle makers including market leader Tesla stumbled to losses on Monday afternoon after hitting record-high levels earlier in the day.
The sudden swerve came despite no specific news about the sector, which has been red-hot in the stock market for weeks, but followed the overall market’s afternoon downturn after California announced new measures to fight COVID-19.
Initially, Tesla’s share price peaked at $1,794.99, reflecting a 16% gain and an all-time high. The jump came after the company set the date for a new battery tech announcement and an analyst who had recommended selling the stock switched his opinion to “hold.”
But by the closing bell, Tesla had dropped to $1,497.06, down 3%. Still, Tesla’s shares have gained 60% over the past month and 258% in 2020.
The same was true for another early Monday leader, electric-van maker Workhorse Group. The company said it had received a positive executive order for its C-Series electric delivery trucks from the California Air Resources Board, a step toward gaining acceptance in the state’s zero-emission subsidy program. In early trading, the shares hit $17.68, a 16% gain on the day, though it wasn’t an all-time high.
But by the close, Workhorse shares slumped to $15.44, gaining just 2% on the day. The share price has still more than quadrupled over the past month and fivefold on the year.
Other recently hot electric-vehicle maker stocks also dropped.
Shares of Chinese EV maker Nio lost 8%, sliding to $13.84 after reaching an all-time high of $16.44 earlier in the day. The stock is still up 79% in the past month and 244% this year.
Chinese electric-scooter maker Niu lost 6% after hitting an all-time high earlier. It’s up 32% over the past month and 148% this year. Meanwhile, U.S. upstart electric-car maker Nikola, which went public in June by merging with a special purpose acquisition company, lost 1%, dropping to $53.95. That’s well off its all-time high of $79.73 from a few weeks ago; the stock is actually down 20% over the past month.
Some previously hot EV stocks had a bad day on Monday from the start. Three-wheeled EV maker Arcimoto, which sold $10 million worth of new shares to investors last week, crumbled 24% on Monday to $5.38. It’s still up 73% over the past month. And Canadian startup ElectraMeccanica Vehicles lost 18%, sliding to $3.60. It’s now up 112% in the past month.


fortune--2020-07-13--3 coronavirus stocks jump on vaccine news

Happy Monday, readers. I hope you had a wonderful weekend.
A trio of companies developing coronavirus vaccines saw their stocks jump on a mix of good news.
The most prominent of the group is Pfizer, which is aligned with German biotech BioNTech on a number of vaccine candidates. On Monday, the firms announced that two of those experimental COVID vaccines had been granted Food and Drug Administration (FDA) fast-track designation, which speeds up the regulatory process for a drug candidate. Pfizer stock promptly jumped 5% in Monday trading, a massive advance for a company with nearly $200 billion in market value. Shares of the much smaller BioNTech shot up 15%.
“We look forward to continue working closely with the FDA throughout the clinical development of this program, Project Lightspeed, to evaluate the safety and efficacy of these vaccine candidates,” said Peter Honig, Pfizer’s senior vice president of regulatory affairs, in a statement.
These vaccine candidates rely on an mRNA technology platform, which uses an essential biological building block in order to induce cells to create other biological materials (typically proteins) that can help guard against pathogens like the coronavirus.
Which brings us to the third company which saw a hefty market cap boost, albeit for a different reason. The bitoech startup Moderna Therapeutics, which doesn’t have any approved treatments yet but is one of the leaders in the COVID-19 vaccine space, spiked nearly 20% after Jeffries analyst Michael Yee projected that the treatment could bring in more than $5 billion in annual sales.
“We believe the Street will be surprised to the upside if the Covid-19 vaccine works, gets approved by early 2021, and there are multi-billion dollars of purchase orders from USA and around the world,” he wrote in an investor note.
The flipside, as Yee himself admits, is that those are a whole lot of “ifs.”
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Nearly 275,000 affected by Houston-based medical billing data breach. As if Houston didn't have enough problems grappling with the coronavirus, Becker's Health IT reports that hackers have hit Benefit Recovery Specialists, a health care billing agency, with malware. The attack has reportedly exposed personal health information for nearly 275,000 people who the firm is now contacting. That information includes names, dates of birth, and for some people affected by the attack, even some Social Security numbers. (Becker's Health IT)
INDICATIONS
A coronavirus vaccine may not be a one-and-done deal. Multiple companies are in the rush to find a COVID vaccine. But a vaccine is only as good as the immunity it confers, which happens through the process of creating antibodies. And new (although yet-to-be peer reviewed) research from the U.K. suggests that COVID-19 infections can recur in patients who have already recovered, suggesting that antibodies may not confer long-lasting immunity. It's still far too early to come to that definitive conclusion, but if it holds true, it could mean that COVID is something more akin to seasonal illnesses such as flu or the common cold (albeit significantly more burdensome to patients and health systems). (Fortune)
THE BIG PICTURE
Patients are being forced to delay care as cases surge. The delay of so-called "elective" medical procedures as hospital systems are overwhelmed during the pandemic isn't a new phenomenon. (To be clear, many of these elective services are still pretty serious procedures.) But as this outbreak continues to surge across the U.S., tragic stories of people putting off care have surfaced. Reuters reports on some of those tales and statistics from the Centers for Disease Control (CDC) finding that "patients seeking care for heart attacks dropped by 23% and stroke care by 20%." (Reuters)
REQUIRED READING
What I learned when I trained to be a coronavirus contact tracer, by Wyndham Robertson
Why slashing product prices is usually a horrible idea, by Geoff Colvin
Is it time for your business to hire a chief public health officer? by Erika Fry
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fortune--2020-07-13--Why COVID-19 hasn’t stopped digital transformation at midsize companies

As the COVID-19 pandemic rages across the country, causing serious or fatal illness, uncertainty, and job loss for millions of Americans, it is also infecting business income statements, stanching cash flow, and threatening balance sheets. The National Center for the Middle Market (NCMM) is tracking the pandemic’s effect on midsize companies. These are the 200,000 or so American businesses that collectively account for a third of private sector GDP and employment, and that historically have produced the fastest growth and created the largest number of new jobs—about 60% of net new private sector jobs in the past decade.
Most companies, of course, have been hurt by the pandemic; a few have gained, because their products or services suddenly became more in demand. But where is COVID-19 affecting midsize companies most—and where least? The answer is important, because the impact of COVID-19 on these companies, and what they do to respond and recover, will have an outsize effect on national prosperity. We went to find out.
In June, the NCMM—part of the Ohio State University Fisher College of Business—surveyed financial decision-makers at 1,000 middle market companies in all industries and from coast to coast. This survey is part of the NCMM’s regular Middle Market Indicator, a pulse check we have been conducting since 2012 that tracks growth, employment, investment and innovation, confidence, and other results, sentiments, and forecasts. The June survey asked a special set of questions about the pandemic’s path. We published some highlights here, and on July 22 will release the full Middle Market Indicator. There’s a wealth of information and insight in the full data set.
One discovery: Amid falling revenue and employment, capital spending cuts, growth initiatives put on hold, tight cash, and disrupted operations, middle market companies are maintaining and even slightly accelerating their digital transformation.
The data below summarize these findings, showing the difference between positive and negative impact for a selection of company activities and initiatives. For example, 57% of middle market companies have seen revenue fall, while 21% brought in more, a difference of 36 points. By a 31-point margin, companies are more likely to have seen a negative than a positive effect on growth initiatives.
Immediate impact of COVID-19 on various middle market company activities and initiatives
Positive impact % No impact % Negative impact % Net of + and – Revenue 21 22 57 -36 Supply chain 15 37 47 -32 Growth initiatives 21 28 52 -31 Demand 26 21 54 -28 Business operations 19 25 46 -27 Capital spending 16 42 42 -26 Employment 20 35 45 -25 Hours 19 38 43 -24 Working capital/cash 18 40 42 -24 Access to capital 18 53 29 -11 Digital transformation 27 48 25 +2
Digital transformation stands out: Alone on this list, it hasn’t been negatively affected; indeed, by a small (probably statistically insignificant) margin, middle market executives are giving digital transformation a forward push.
Explanations for this exception to the rule aren’t hard to find. The case for digital transformation is especially strong for middle market companies. Digitally transformed marketing and sales can help them find, serve, and market to customers on a more equal footing with large competitors; digitalized operations improve efficiency and cut costs; and cloud computing, digital platforms, and other services can enable them to scale and grow with much less capital than before.
In stressful times, all those benefits and more come into play. We know of one warehousing company that in the past three months digitized its entire inventory system to keep operating with minimal staff. A San Diego life sciences company, Equillium, is conducting clinical trials using telemedicine so as not to require patients to travel to overstressed hospitals for tests. In New York, Baldor, a restaurant food supplier, has redesigned its website, logistics, and service offerings to open a new direct-to-consumer delivery service. All of them expect these changes to be permanent—and each has the potential not just to shore up the business, but to transform it.
As these and similar efforts take hold, we’ll see a post-COVID landscape that’s not back to normal and not a new normal: It’ll be a new different. More than eight out of 10 middle market companies say it is likely that they will make significant and long-lasting changes in how they organize work and how they interact with customers. Digitalization will play an outsize role in shaping those changes.
Thomas A. Stewart is executive director of the National Center for the Middle Market at the Ohio State University Fisher College of Business.


fortune--2020-07-13--What to know about the Jennifer Lopez–Alex Rodriguez bid for the New York Mets

Who will buy the New York Mets?
After 18 years of control by real estate developer Fred Wilpon, the Amazins are on the block—and the twists and turns to see the sale through are as dramatic as some of the MLB team’s bids for the postseason.
The latest development: NFL players have entered the fray. Brian Urlacher (retired; formerly of the Chicago Bears), Travis Kelce (active; Kansas City Chiefs), and DeMarco Murray (retired; formerly of the Dallas Cowboys, among others) are part of a group of investors that have joined Bronx-born pop star Jennifer Lopez and retired New York Yankee Alex Rodriguez in a first-round bid to buy the Mets, according to an ESPN report.
The magic number? A reported $1.7 billion. (JPMorgan Chase is working their side of the deal.)
The sporting supergroup—which also includes Joe Thomas (retired; Cleveland Browns), Bradley Beal (active; Washington Wizards), Mason Plumlee (active; Denver Nuggets)—isn’t the only suitor in the mix. Hedge fund billionaire Steve Cohen has offered $2 billion, according to a Fox Business report, which is much closer to the number that Mets COO Jeff Wilpon reportedly has in mind.
All are said to await the input of MLB commissioner Rob Manfred, who admittedly has been busy trying to salvage the league’s now-shortened 2020 season.
Last year Cohen reportedly made a bid for 80% of the Mets that valued the club at $2.6 billion, but the deal didn’t make it to the finish line. (What should you know about Long Island native Cohen, who is no stranger to Fortune’s pages? Glad you asked.) New Jersey Devils and Philadelphia 76ers owners Josh Harris and David Blitzer also made a Mets bid last week, according to the New York Daily News, though the figure remains unknown.
The Mets last won a World Series (over the Boston Red Sox) in 1986, but there have been recent bids at greatness. The club won the National League pennant in 2015 (losing the World Series to the Kansas City Royals) and secured a Wild Card berth in 2016 (losing to the San Francisco Giants). The ball club—one of Fortune’s 101 Great Things About America this year—had a winning record last season but failed to make the playoffs.
It also appears to be a bit of a moment for athlete investors. Chicago Bulls legend Michael Jordan picked up a stake in the Miami Marlins baseball team in 2018. Last year Houston Rockets star James Harden acquired stakes in both the Houston Dynamo and Dash, the men’s and women’s pro soccer teams, respectively. International soccer star David Beckham recently kicked off the inaugural season of his MLS team Inter Miami, rights which he obtained as part of his own 2007 Los Angeles Galaxy contract. And just last month New Jersey Nets star Kevin Durant became a minority owner of the Philadelphia Union soccer team.


fortune--2020-07-13--On the back of a multimillion dollar round, Robinhood raises $320 million more to set a $8.6 billion

On the back of a multimillion dollar round, Robinhood raises $320 million more to set a $8.6 billion valuation

Investors are adding hundreds of millions more to Robinhood’s coffers as the pandemic ushers in new customers.
On Monday, the stock-trading app announced that it had raised yet another $320 million from new and existing investors, bumping its valuation up to $8.6 billion. New investors include TSG Consumer Partners and IVP.
The fresh funding comes via subsequent closings of a $280 million Series F round led by Sequoia Capital which valued the firm at $8.3 billion in May. At the time, co-CEO Vlad Tenev noted that Robinhood experienced a surge as new investors flocked to the platform amid the market’s coronavirus-induced ups and downs: Robinhood added 3 million funded accounts between the start of the year and early May, he said.
While Robinhood’s team declined to comment on the most recent raise, two months later, the app’s name is perhaps more visible than ever as the pandemic has led to strange moves in the public markets in part thanks to retail investors that were once seen as marginal and unlikely to shift the market.
For instance: Shares of Hertz, the car-rental company, soared in June after it filed for Chapter 11 protection in June, a move that many attributed to nonprofessional players willing to take more iffy trades, including those on Robinhood. It was hardly a move a typical investment advisor would have condoned, but some retail investors appeared to make quite a bit off of the bet.
Now Robinhood is confronting a core issue as it grows: What level of freedom does it give to its pool of inexperienced traders, and what guardrails does it put in place? The platform grew explosively in part by pitching “investing for everyone”—yet the stock market is not common knowledge for all.
A 20-year-old Robinhood trader by the name of Alex Kearns committed suicide in June, citing massive trading debts and a negative trading balance of over $730,000 wracked up through options trading on the platform. While the suicide ultimately appeared to be the result of a terrible misunderstanding over the amount of Kearns’ actual debt, Tenev and Co-CEO Baiju Bhatt wrote in light of the death that they were “considering additional criteria and education for customers” seeking certain kinds of more complex options trading, and planned to add additional educational content for customers.
“It is not lost upon us that our company and our service have become synonymous with retail investing in America, and that this has led to millions of new investors making their first investments through Robinhood,” the duo wrote in June. “We recognize this profound responsibility, and we don’t take it lightly.”


fortune--2020-07-13--Hong Kong Disneyland and additional venues to close amid new coronavirus safety measures

Hong Kong ordered gyms and bars to close for a week, restored strict limits on public gatherings and introduced fines for anyone refusing to wear a mask on public transport in a fresh bid to prevent the resurgent coronavirus from spiraling out of control.
The tougher measures, to take effect Wednesday, include drastically limiting the number of people gathering in public back to four, Chief Executive Carrie Lam said in a press conference on Monday. The limit had just been raised to 50 in mid-June. The city also confirmed its eighth coronavirus death.
Among other measures: Hong Kong will require all inbound travelers to pass a virus test before arriving; restaurants will be allowed to offer only takeout from 6 p.m. to 5 a.m.; and the number of patrons at a table at other times is limited to four. Amusement parks, gyms and 10 other types of venues are to close for seven days. Lam said the city will allow civil servants flexibility on working hours, and urged companies to let staff work from home.
People who refuse to wear a mask on public transport face a potential HK$5,000 ($645) fine.
As part of the clampdown, Hong Kong Disneyland will close on July 15. Hotels serving the resort will remain open, Walt Disney Co. said in a statement.
“They have put in place enhanced health and safety measures that reflect the guidance of health and government authorities, such as social-distancing measures and increased cleaning and sanitization,” the company said.
The former British colony reported 41 local coronavirus cases on Monday, another record daily high as the resurgence of infections looks set to grow into the city’s biggest wave yet. That brought the total to 1,522 cases in a city of more than 7 million people.
Of the 41 cases, 21 are related to previous clusters while 20 were of unknown origin, government officials said Monday.
The significant proportion of cases with unknown origins over the past few days suggests that hidden chains of transmission have been circulating in the Asian financial hub for some time as people returned to work and social activities.
Hong Kong is now facing a major setback in its virus containment fight. After reopening for less than two months, schools have been ordered into an “early summer holiday,” while restaurants and bars limit the number of patrons.
“A containment strategy alone may not be able to slow down the spread of infection at this stage,” Chuang Shuk-kwan, an official with the Department of Health, said on Monday. Senior government officials are “very concerned about the situation now.”
Chuang called for citizens to remain vigilant, and observe personal hygiene and social-distancing practices.
Events including Hong Kong’s week-long book fair and the champion awards dinner by the Jockey Club have been canceled, in a sobering reminder that the pandemic is far from over. Without an effective and widely distributed vaccine, cities are likely to continue in a state of limbo in which any easing of social distancing will lead to a spike of infection.


fortune--2020-07-13--Here’s a shocker: WeWork says it’s on track to be profitable by 2021

It would appear that rumors of WeWork’s demise have been greatly exaggerated.
That’s according to Marcelo Claure, the SoftBank executive who’s been charged with revitalizing the beleaguered shared office-space provider after its botched IPO last year. In an interview with the Financial Times on Sunday, Claure—who presently serves as WeWork’s chairman—said the company is on track to meet its goals of positive cash flow and profits by 2021.
“Everybody thought WeWork was mission impossible,” Claure told the FT. “And now, a year from now, you are going to see WeWork to basically be a profitable venture with an incredible diversity of assets.”
Claure attributed the firm’s abrupt turnaround to heavy cost cuts that saw WeWork shed 8,000 jobs—more than half its total workforce—as well as strong demand for the company’s flexible office spaces in the wake of the coronavirus pandemic. The likes of Mastercard, Microsoft, and Citigroup have signed new lease agreements with WeWork over the past month, with the goal of providing satellite offices for employees and spreading out workers beyond their main offices.
“We have companies like Facebook, Google, and Amazon who have told their employees that they can work from wherever they are,” according to Claure. “We have a lot of those employees who basically now come to a WeWork facility to use it one day a week, two days a week, three days a week.”
SoftBank—the Japanese private equity giant that drove WeWork’s valuation to an astronomical, ill-fated $47 billion—installed Claure as WeWork’s chairman in October, shortly after company cofounder and CEO Adam Neumann stepped down following the IPO debacle. Since then, WeWork has appointed real estate industry veteran Sandeep Mathrani as CEO, and has pursued a restructuring that has seen the company downsize its office portfolio and shed noncore assets.
Meanwhile, SoftBank and WeWork shareholders remain locked in litigation over SoftBank’s decision to pull out of a $3 billion stock buyout of WeWork, which would have seen shareholders like Neumann and venture capital firm Benchmark reap a windfall. SoftBank scrapped the deal in March as economic conditions deteriorated owing to the pandemic, claiming that certain stipulations had not been met.


fortune--2020-07-13--SiriusXM buys podcast business Stitcher for $325 million

SiriusXM is acquiring the podcast and Internet radio service Stitcher from E.W. Scripps Co. for $325 million, the companies announced Monday.
The move gives Sirius, a company mostly known for its satellite radio channels, a leg up in an increasingly competitive podcast industry. (Spotify has significantly expanded its podcast offerings with a number of acquisitions and exclusive deals; iHeartRadio and Apple are industry leaders in publishing and distribution.)
Stitcher offers a free podcast listening app in addition to a premium service for $4.99 a month with bonus content and ad-free listening. It also has a podcast network of its own with dozens of original shows, including Conan O’Brien Needs a Friend, Freakonomics Radio, and Literally! With Rob Lowe. Stitcher’s advertising unit, Midroll Media, distributes and sells advertising for roughly 250 shows, including WTF With Marc Maron and My Favorite Murder.
Sirius expanded outside its traditional revenue stream of satellite radio subscriptions in 2018 with the acquisition of Pandora for $3 billion. It followed that up in 2019 with a multiyear deal with Disney, enabling Sirius and Pandora to produce original podcasts with Marvel Entertainment.
“The addition of Stitcher is an important next step as we continue to develop and strengthen our offering in the fast-growing podcasting market,” Jim Meyer, chief executive of Sirius, said in a statement. “With Stitcher, we will expand our digital audio advertising presence and look to generate new ways for creators to find and connect with their audiences.”
The deal is expected to be finalized in the third quarter of this year.
Stitcher was purchased by Scripps in 2016 for $4.5 million. Scripps then went on to combine it with Midroll, which it had bought the year before for $50 million.


fortune--2020-07-13--What I learned when I trained to be a coronavirus contact tracer

When the coronavirus lockdown hit my home state of North Carolina in March, I had more free time than most Americans. I am a single woman and long retired from a 40-year working life, including almost 25 years as a reporter, writer, and editor at Fortune. With no children to school and only a few Zoom meetings on my calendar, I decided one day to sign up for a free online course in COVID-19 contact tracing from the Bloomberg School of Public Health at Johns Hopkins University.
This decision came after I had tackled household chores left unattended for several decades and also whittled down the book stack by my bed to a manageable height. A serious remaining to-do project was writing my own obituary, to relieve my siblings or their children of that chore when the time comes. The Bloomberg course offered a welcome detour around that plan. It was slated to last six hours, at the end of which, if I passed the final exam, I would be “certified” as having successfully completed the program. Presumably the credential would be useful for anyone seeking work in public health, but I was merely curious.
The point of contact tracing is to slow the spread of a disease, to break the chain so that one person can’t infect two-to-three others, which is the experts’ best guess of the average “reproductive number” or “R0” (pronounced “R naught”) for COVID-19. The course taught me that the R0 is “the number of people that one person will go on to infect if everyone they have contact with is susceptible to the disease.” (As an aside, the most startling fact I learned from the course is that for measles the R0 is 15!)
The trigger for contact tracing is someone getting a positive COVID-19 test result. The idea is to contact the infected person, known as the “case,” as quickly as possible, and to capture any information that could be used to stop the spread of the virus. The debriefing is typically done by telephone; the contact tracer calls and identifies himself as a worker in the local public health department. One mission is to find out whom the case has been in contact with since two days before symptoms first appeared, because that is the start date of possible spread. Another task is to be sure the case is isolating from others in the household, so that they are not infected, and to offer advice about how to find other living quarters if isolation is impossible.
The Bloomberg course suggests the case be told this first call could take about 20 minutes, but it’s easy to envision something much longer. If things work as they should, the case will have just learned of the positive test, may be frightened as well as sick, and may have his own questions that need answering before the contact tracer bores in. An example of a possible question for the case is: “Would you be willing to look at your calendar, or phone, or social media to help jog your memory about what you did this past week?”
To use another example from the course, say the case went to choir practice with five other choir members the day before symptoms appeared. The tracer needs to learn who the singers were, plus any other information such as phone numbers that the case can provide. Those could take a while to dig out, assuming they’re available. The contact tracer’s next calls go to all such contacts, imploring them to self-quarantine for 14 days.
An awkwardness of these later calls is that the tracer isn’t supposed to reveal details that would identify the person who is infected. So rather than say, “Last Saturday at choir practice, you came in contact with someone who has COVID,” the tracer would likely say, “Last Saturday you came in contact with someone who has COVID.”
The online teachers from the Bloomberg School are models of clear thinking and explanation. They use words anyone can understand. Probably the most exotic word in the curriculum is “rapport,” defined as “a feeling of mutual understanding, trust, and agreeableness between people”—all virtues running out of stock in today’s frazzled society. Nonetheless, the course teaches that establishing rapport with the infected person “is central to everything that contact tracers do.”
Extra layers of complications make establishing rapport tricky. The case may be an illegal immigrant, or someone who, for whatever reason, gets anxious dealing with “government.” In my state, Attorney General Josh Stein reports that phone scammers are taking advantage of the situation, calling people with news they have been infected and asking for personal information or money. His advice: “Be skeptical.”
It has probably dawned on most readers that the greatest obstacle to contact tracing may be the simple fact that people rarely answer strangers’ phone calls anymore. I did some canvassing during the recent presidential primary, and I’m guessing I reached three people for every hundred I tried. At least contact tracers should have the case’s valid phone number, since people who take the COVID-19 test are motivated to hear the results. And often those tested are told at the time to expect, and accept, calls from contact tracers if their tests are positive. Of course, there’s no assurance anyone will cooperate and plenty of evidence some will not: In recent well-publicized accounts, contact tracers in Florida and New York have encountered none-of-your-business blowback from young infected partygoers.
If I ever get around to writing that obituary, one thing it will not say is: “She was a contact tracer during the Great Coronavirus Pandemic of 2020.” This is a job for someone younger and more energetic. I did my share of investigative stories at Fortune, but now I am three years older than even Dr. Anthony Fauci, and this work is just too hard. Think dogged investigative journalism, with no prospect of a Pulitzer.
But the course also made me a believer in the importance of the job. Despite all the obstacles, contact tracing has been effective at checking the spread of other diseases such as tuberculosis and AIDS. And the method need not work perfectly to reduce the exponential progression of COVID-19. If just one of those presumably infected singers at choir practice, for example, can be taken out of circulation before infecting anyone else, the next six months could be spared hundreds of new cases. The more good people we have working for such big-time payoffs, the sooner our lives can return to normal.
Wyndham Robertson was the first female assistant managing editor of Fortune.