fortune--2020-06-04--Everything to know about rubber bullets and their risks

Time after time during the current civil unrest, police have fired on demonstrators and journalists using ammunition intended to reduce injury: rubber bullets, beanbag rounds, and pepper balls. Although so-called less-lethal weapons often succeeded in dispersing protesters, they also sometimes left their targets injured, in some cases seriously.
The widespread use of these weapons highlights a changing reality in policing. Increasingly, law enforcement is adding less-lethal ammunition to their stockpile of armaments.
Spending on such ammunition is expected to grow from $823 million in 2018 to $1.1 billion by 2023, or nearly 6% annually, according to research firm Markets and Markets. Producers include both smaller companies, such as U.S.-based Safariland Group, which market less-lethal weapons for self-defense; and defense conglomerates like Germany’s Rheinmetall and Singapore’s ST Engineering, which sell primarily to law enforcement.
That growth is driven, at least in part, by government and law enforcement agencies’ desire to maintain order and stop crime without killing or maiming people. But according to Geoffrey Alpert, a University of South Carolina criminologist who specializes in crowd control, recent events have highlighted the inherent risks.
“[These weapons] used to be called ‘nonlethal,’ then it changed to ‘less-lethal,’” says Alpert. “Because they can still kill someone.”
Not just “rubber bullets”
While “rubber bullet” is frequently used as a blanket term for all less-lethal ammunition, it’s inaccurate. Rubber bullets are alternative ammunition used in standard firearms, often consisting of metal coated in rubber or plastic. The technology was first developed by the U.K.’s Ministry of Defense in the early 1970s for use during the Troubles in Northern Ireland.
But the design of rubber bullets means they’re still dangerous. According to Tommy Teach, CEO of less-lethal weapons maker Bruzer, rubber bullets’ small size means they concentrate force in a smaller area, making them more likely to break skin and damage bones or organs. A 1975 study found that of 90 people struck by rubber bullets, 17 had “permanent disabilities or deformities,” and one was killed.
Experts generally agree that there are safer alternatives for subduing people. Baton rounds are relatively soft 40mm rounds, whose larger size reduces the chance of permanent injury by spreading force over a wider surface. Pepper balls, also referred to as “ferret rounds,” break on impact and spread pepper or other temporarily debilitating substances. These rounds are larger than rubber bullets, but still dangerous.
It was reportedly a pepper ball that struck and blinded freelance news photographer Linda Tirado in one eye during recent protests in Minneapolis. The outcome could have been much worse: In 2004, student journalist Victoria Snelgrove was killed when she was shot in the eye with a pepper ball by police responding to riots following a Boston Red Sox playoff win.
Finally, beanbag rounds can be fired from standard shotguns, and often cause dramatic bruising. But their size is supposed to reduce the chance of permanent injury or death. (Tear gas, which has been widely used by police in the past week, is not generally considered part of this category.)
According to Teach, who trains police to use less-lethal weapons, many departments have moved toward these alternatives and away from rubber bullets. Recent reports, though, have claimed rubber bullets are still being used, and tracking which weapons individual police departments use is difficult.
Less-lethal in the U.S. and worldwide
Though they were on fierce display over the past week in protests nationwide, less-lethal weapons have actually been adopted for routine use more widely elsewhere in the world. “Only about 10% of U.S. officers carry nonlethal weapons only,” says Bryan Ganz, CEO of less-lethal weapons maker Byrna Technologies. “In the rest of the world it’s almost reversed.”
Police in the U.K., for instance, rarely carry conventional firearms at all. Markets and Markets projects that most of the growth in the less-lethal category will be outside the U.S., particularly in the Asia-Pacific region.
Ganz attributes this partly to the fact that U.S. citizens are themselves much more likely to be armed than those in other countries. But, based on his efforts to market his company’s products to U.S. police, Ganz also blames structural and cultural factors.
“There are over 18,500 separate agencies in the United States, and they each make their own purchasing decisions,” says Ganz, thus slowing the adoption of new technology. Police attitudes also vary widely. “Some of the bigger, more sophisticated agencies have adopted less-lethal to a much larger degree, but you don’t see it very often with these smaller agencies,” Ganz notes.
There are also signs of rapid growth in the U.S. market for non-police use of less-lethal weapons. Frustrated by the fragmentation of the law enforcement market, Ganz ultimately decided to shift Byrna Technologies to producing a weapon for the civilian market. That has proved a small success: Ganz says sales totaled $250,000 in 2018, rising to $924,000 in 2019. For just the second quarter of 2020, Byrna said revenue was $1.1 million.
According to Ganz, his products appeal to customers who want to defend themselves, but who may be uncomfortable with the life-or-death stakes of a standard firearm. With a less-lethal weapon, he says: “I know I’m not going to hesitate. And if I make a mistake, it’s not going to be a fatal mistake.”
Several companies that produce less-lethal arms used by police declined to comment.
Dangerous if misused
But the recent spate of serious injuries highlights police misusing less-lethal weapons. Video evidence points to less-lethal rounds being fired “indiscriminately” into crowds of demonstrators. Instead, Ganz says, the current policing consensus is that targeting and incapacitating specific instigators of unruly crowds is more effective for dispersing them.
Further, less-lethal impact ammunition such as beanbags or baton rounds are intended to hit a target’s legs or chest, and are more likely to cause serious injury when aimed at the head or neck. Pepper rounds of the sort that blinded Linda Tirado don’t have to strike a target directly at all, but can incapacitate someone if they rupture and release their contents nearby. Ganz blames lax police training for such lapses.
“There’s a lot of work to be done in clearly articulating the appropriate use of these tools,” agrees Ed McGuire, professor of criminology at Arizona State University. “Because they’re being used right now in ways that are unconscionable and unconstitutional.” McGuire specifically cites instances when crowds have not been given clear orders to disperse, and the time and means of egress to do so, before being fired on.
McGuire believes that some departments will soon learn those lessons the hard way, predicting that “many, many federal civil rights lawsuits will emerge from the events of the last few days, and those lawsuits will be successful.”
Despite that, Ganz believes recent events could be a catalyst to fuel further adoption of less-lethal options, particularly in the U.S.
“These riots are the response not just to the tragic death of George Floyd,” says the CEO, “but of numerous encounters with the police that end up with a fatality. So it may be this is the spark that gets communities to look more at less-lethal, so we can look more like the rest of the world.”


fortune--2020-06-04--John Boyega’s Black Lives Matter speech draws support from Jordan Peele, Mark Hamill, and more

After the tragedy of George Floyd ’ s death , where do A.I .
and policing go from here ?

Jordan Peele, Mark Hamill, JJ Abrams, and Olivia Wilde are among celebrities throwing their support behind actor John Boyega after he spoke during a Black Lives Matter protest in London’s Hyde Park Wednesday.
“Black lives have always mattered. We have always been important. We have always meant something. We have always succeeded regardless. And now is the time,” Boyega said to the crowd that had gathered around him. “I ain’t waiting.”
Boyega’s speech was made amid protests that have erupted around the world after George Floyd, a black man, died in police custody last week. While only one officer, Derek Chauvin, initially faced charges after he pressed his knee into Floyd’s neck for nearly nine minutes, the remaining officers have also been charged with aiding and abetting second-degree murder. Chauvin’s third-degree murder charge was upgraded to second-degree murder.
“I need you to understand how painful it is to be reminded every day that your race means nothing,” Boyega said, while calling for maintaining “peaceful” and “organized” protests. “We are a visible representation of our support for George Floyd. We are a visible representation of our support for Sandra Bland. We are a visible representation of our support for Trayvon Martin.”
Boyega also issued a message directed at black men.
“Black men—black men, we need to take care of our black women. We need to take care of them,” he said. “They are our hearts. They are our future. We cannot demonize our own. We are the pillars of our family. Imagine this: A nation that is set up with individual families that are thriving, that are healthy, that communicate, that raise their children in love have a better rate of becoming better human beings. And that’s what we need to create. Black men, it starts with you.”
At one point, Boyega, who has also been speaking out candidly on social media, said: “Look, I don’t know if I’m going to have a career after this, but fuck that.”
A number of actors and directors took to Twitter to show their support of Boyega, with Jordan Peele stating, “We got you, John.” Matthew A. Cherry spoke out in solidarity, while calling on “non-black creators to affirm that they have his back as well.” Olivia Wilde was among those who retweeted Cherry, saying she would be “honored” to work with Boyega.
Boyega, perhaps best known for playing Finn in the most recent Star Wars trilogy, also received support from those affiliated with the franchise, including Mark Hamill and directors JJ Abrams and Rian Johnson. The official Star Wars Twitter account chimed in as well, calling him a hero and noting that “Lucasfilm stands with John Boyega.”


fortune--2020-06-04--‘Action had to be taken:’ ECB stuns the markets with a new €600 billion spending plan

The European Central Bank intensified its response to the “unprecedented contraction” facing the euro area with a bigger-than-anticipated increase to its emergency bond-buying program.
At a virtual meeting on Thursday, President Christine Lagarde and colleagues decided to expand the amount of purchases by 600 billion euros ($675 billion) to 1.35 trillion euros, and extended their duration until at least the end of June 2021. The vast majority of economists surveyed by Bloomberg last week expected a boost of 500 billion euros.
Italian bonds rallied, with the yield on 10-year debt compared with the German equivalent set to narrow the most since mid-May. The euro reversed losses. European equities initially climbed on the announcement before falling back in late trade.
“Action had to be taken,” Lagarde said in a press conference. While there are nascent signs of the downturn bottoming out, “the improvement has so far been tepid.”
She revealed sweeping downward revisions to the ECB’s projections for growth and inflation in the region. In 2020, the bloc will likely see a contraction of 8.7% before rebounding by 5.2% in 2021. Under a more severe scenario with a strong resurgence of infections, output could shrink by as much as 12.6% this year.
Inflation, which Lagarde said is the ultimate justification for the ECB’s actions, will accelerate only slowly, and is seen averaging 1.3% by 2022—far below the goal of just under 2%.
The ECB action reflects how Europe is finally stepping up with powerful plans to drag the economy out of its worst recession in living memory. Germany announced a new 130 billion-euro fiscal package late Wednesday, the latest in a raft of national programs, and the European Union has proposed a 750 billion-euro joint recovery fund that leaders will discuss later this month.
It also shows Lagarde is determined to act preemptively—only about a third of the pandemic program had been spent before Thursday’s increase—to keep markets calm, building on the strategy of her predecessor Mario Draghi. She got off to a shaky start in the pandemic when she inadvertently suggested she might not step in to calm bond volatility in stressed economies such as Italy.
“This is a bit of an economics-policy fireworks—last night the German government with an enormous fiscal stimulus package, and now the ECB,” Carsten Brzeski, chief euro-region economist at ING, told Bloomberg Television. “This is huge.”
The ECB’s purchases should keep a lid on borrowing costs for governments for some time. The central bank said buying will be conducted in a “flexible manner over time, across asset classes and among jurisdictions.” The proceeds from maturing bonds will be reinvested at least until the end of 2022.
“The large expansion of the Pandemic Emergency Purchase Programme creates a huge reserve of fire power to stimulate the economy and prevent any countries in the euro area from being engulfed by a sovereign debt crisis,” said Bloomberg economists David Powell and Maeva Cousin.
The central bank had already sweetened the terms of its liquidity operations in April so that lenders keep extending credit to companies, many of which have seen their revenues eroded by the shutdowns to limit the spread of the virus. Policy makers have refrained from cutting interest rates further below zero amid opposition to negative rates from banks and some politicians.
Lagarde said policy makers didn’t discuss whether to include junk-rated debt in its asset purchases, aside from the exceptions currently being granted to Greek government bonds. She said the decision to act was unanimous, but the exact parameters ultimately decided were the result of a “broad consensus.”
She pushed back against concerns that scope for action could be limited after a German court ruling last month questioned the legality of an older, still-active bond-buying program, saying she’s “confident that a good solution will be found.”


fortune--2020-06-04--As major scooter companies struggle, upstarts seek inroads

Lockdowns have forced scooterers off the streets and pushed the likes of Bird and Uber to downsize or consolidate as revenues hit rock bottom.
But heartened by early signs from Asia show that bike sharing and scooter sharing may be the first of transportation companies to come back as consumers eschew tightly packed subways and buses, investors are forging on.
Now upstarts are trying to make inroads, seeing opportunities to grow as their larger competitors grapple with the coronavirus. On Thursday, Superpedestrian, a Boston-based maker of electric scooters, raised $15 million in funding led by Edison Partners as it plans to expand its fleet into four new cities in the next few weeks in the U.S. and Europe. In turn, Superpedestrian acquired Zagster, a fleet management firm, from Edison Partners.
“The Covid-19 dynamic cleared and leveled the playing field a little bit,” said Edison partner Daniel Herscovici to Term Sheet.
While the coronavirus has razed demand, Superpedestrian plans to continue to deploy, as it has only made a commercial push in one market, Fort Pierce, Fla.—an advantage as its larger peers are preoccupied with downsizing their heftier fleets.
The company builds its own scooters that it says can detect failures and quickly stop if a rider is attempting to enter a restricted city zone—making the scooters themselves cheaper and more friendly to city officials, says CEO Assaf Biderman. And with the acquisition of Zagster, the company also will have a charging crew of employees rather than gig-economy workers like Bird and Lime—giving it more control over its fleet.
Existing investors Spark Capital and General Catalyst also participated in the round.
Private markets get public: After a multi-year effort from the world of alternative assets, the U.S. Department of Labor said private equity could be included in defined contribution plans like 401(k) retirement savings plans and IRAs—a move that Evercore analysts say could unlock as much as $400 billion in capital. But whether those that manage those funds decide to add private equity to their offerings, given the asset class’ illiquidity and complex fee structure, is another question.
Finally, some PPP clarity: On Wednesday, the Senate passed a Paycheck Protection Program reform bill that received approval from the House last week. The new rules, now awaiting President Donald Trump’s signature, would allow small businesses to use 60% of the loan money on payroll instead of the previous 75%, and allow companies to spend the funds for six months versus two months, among other changes. The new bill comes as demand for PPP funding has dried up in part because of the uncertainty around the program and the coronavirus. While the first tranche of the PPP ran out in 14 days, much of the second still remains unspent, with some $150 billion still on the table. Read more.
VENTURE DEALS
- Jushuitan, a Chinese Saas company, raised as much as $100 million in Series C funding. Goldman Sachs China led the round. Read more.
- Cullinan Oncology, a Cambridge, Mass.-based oncology biotech, raised $98.5 million Series B financing. Investors including MPM Capital and F2 Ventures participated.
- Prilenia Therapeutics B.V., a Netherlands and Israel-based clinical stage biotech focused on neurodegenerative and neurodevelopmental disorders, raised $62.5 million in a Series A funding. Forbion led the round and was joined by investors including Morningside Venture Investments,Sectoral Asset Management, Talisman Capital Partners, and Genworks 2.
- Nanox, an Israeli medical imaging company, raised $51 million in funding. SK Telecom invested $20 million while other investors included Foxconn and FujiFilm.
- Tembici, a São Paulo, Brazil-based micro mobility startup operating Latin America, raised $47 million (R$270 million) in Series B funding. Valor Capital Group and Redpoint eventures led the round and were joined by investors including International Finance Corporation and Joá Investimentos.
- Inky, a College Park, Maryland-based anti-phising startup, raised $20 million in Series B funding. Insight Partners led the round. Read more.
- Keelvar, an Irish sourcing software company, raised $18 million in Series A funding. Elephant and Mosaic Ventures led the round, and were joined by investors including Paua Ventures.
- BRYTER, a London and Berlin-based platform for building business applications, raised $16 million in Series A funding. Dawn Capital and Accel led the round and were joined by investors including Notion Capital and Mike Chalfen.
- 1touch.io, a Stamford, Conn.-based provider of data discovery, privacy, and security solutions, raised $14 million in Series A funding. Investors National Grid Partners, Jerusalem Venture Partners, Connecticut Innovations, Mindset Ventures, and Ocean Azul Partners.
- Base Genomics, an Oxford, UK..-based epigenetics company, raised $11 million (£9 million) in seed funding. Oxford Sciences Innovation led the round.
- Lili, a New York-basd banking app for freelance workers, raised $10 million in seed funding. Group 11 led the round and was joined by investors including Foundation Capital, AltaIR Capital, Primary Venture Partners and Torch Capital.
- Anvil, a San Francisco-based paperwork automation platform, raised $5 million in Series A funding. Gradient Ventures led the round and was joined by investors including Citi Ventures, Menlo Ventures, Financial Venture Studio, and 122 West.
- Magic, a San Francisco-based startup building a decentralized blockchain-based identity solution, raised $4 million in seed funding led by Placeholder. Lightspeed Ventures, SV Angel, Social Capital, Cherubic Ventures, Volt Capital, Refactor Capital, Unusual Ventures, Naval Ravikant, Guillermo Rauch, and Roham Gharegozlou also participated. Read more.
- The Small Exchange, a Chicago-based futures exchange offering smaller products aimed toward retail customers, raised $4 million in funding from Interactive Brokers and Phillip Capital Group.
- PAIRIN, a Denver-based workforce program company, raised $2.1 million in its first tranche of Series A funding. New Markets Venture Partners led the round and was joined by investors including New U Venture Partners, JFFLabs, and return investors Village Capital, ZOMA Foundation, and Independent Spectrum.
PRIVATE EQUITY
- TPG is in talks to acquire Goal.com, the world’s largest soccer news website, from DAZN Group for $125 million. Read more.
- Effectual, backed by Catalyst Investors and Lumerity, acquired Five Talent, a Bend, Ore.-based technology consultancy firm. Financial terms weren't disclosed.
- BuildGroup invested $80 million in Benefitfocus (NASDAQ:BNFT), a technology platform for employers, health plans and consumers.
- Hub International, a portfolio company of Hellman & Friedman and Altas Partners, acquired Alberta-based benefits consultancy HB Consultants and Toronto-based JM Rose Insurance Agency. Financial terms weren't disclosed.
- Investment Management Corporation of Ontario and Stonepeak Infrastructure Partners invested in euNetworks Group, a Western European bandwidth infrastructure company. Financial terms weren't disclosed.
OTHERS
- Amazon is in early talks to buy a stake worth at least $2 billion in Bharti Airtel, an Indian mobile operator competing with Reliance Jio. Read more.
- Navisite acquisition of Privo, an Woburn, Mass.-based AWS consulting firm. Financial terms weren't disclosed.
- Royal Dutch Shell is considering raising more than $2 billion from the sale of a stake in the common facilities at its Queensland Curtis LNG plant in Australia, per Reuters. Read more.
- Total (NYSE: TOT) plans to acquire a 51% stake in SSE’s (LON:SSE) Seagreen 1 British offshore wind farm project for about $3.7 billion.
IPOs
- Unity, a San Francisco-based maker of graphics software for games, is preparing for an IPO that could come later this year. Read more.
- ZoomInfo Technologies, a Vancouver, Wash.-based platform for sales and marketing, raised $923 million in an IPO of 44.5 million shares priced at $21 apiece. It posted revenue of $293 million in 2019 and loss of $78 million. TA Associates and Carlyle back the firm. It plans to list on the Nasdaq as “ZI.” Read more.
EXITS
- Hippo agreed to acquire Spinnaker Insurance Company, a Bedminister, N.J.-based national property and casualty insurer. Investors including Arch Capital backed Spinnaker.
- NetApp (NASDAQ: NTAP) agreed to acquire Spot, a compute management and cost optimization company for public clouds. Spot’s investors included Highland Capital, Intel Capital and Vertex Ventures Israel.
- The Carlyle Group and T&D Holdings acquired a 76.6% stake in Fortitude Group Holdings, a reinsurer, from American International Group.
- GHO Capital Partners acquired X-Chem, a Waltham, Mass.-based provider of DNA-encoded library-based discovery services, from Carlyle and H&F. Financial terms weren't disclosed.
F+FS
- Meritech Capital Partners raised $800 million for its seventh fund. Read more.
- InvestEco Capital closed InvestEco Sustainable Food Fund III with $100 million in capital commitments.
- MassMutual Ventures raised $100 million for its third fund.
- Mercato Partners raised $90 million for its inaugural food and beverage fund, Savory.
PEOPLE
- Thomvest Ventures hired Ashish Kakran as a Principal.


fortune--2020-06-04--Americans who don’t file taxes have until Oct. 15 to sign up for stimulus checks

If you don’t file federal income taxes, it’s not too late to sign up for a coronavirus stimulus check.
Non-filers have until Oct. 15 to submit their information to the government so that it can determine their eligibility for a direct stimulus payment, the IRS said Wednesday. They can do so through the online portal that the IRS launched in April allowing those who don’t file income taxes to apply for an “economic impact payment,” as it’s known.
While taxpayers and Social Security beneficiaries were automatically enrolled for stimulus checks—part of Congress’s $2.2 trillion coronavirus aid package—many low-income Americans who are eligible but do not file taxes have had to sign up themselves. Those include individuals who earn less than $12,000 per year and married couples who earn less than $24,400 combined—so long as they have a valid Social Security number and are not claimed as a dependent by another taxpayer.
Anyone who registers through the non-filers portal by the Oct. 15 deadline will receive their stimulus payment by the end of the year, according to the IRS. The agency added that it will be conducting an “extensive outreach and education effort” over the next several months to inform non-filers—including those who are homeless, in economically underserved communities, and in non-English language households—of their potential eligibility for a payment.
More than 159 million Americans have received nearly $267 billion worth of economic impact payments to date, per the IRS. Of those, roughly 120 million individuals received their payments via direct deposit, with 35 million receiving paper checks and 4 million payments being made in the form of prepaid debit cards.
With Congress said to be considering a followup stimulus package to aid American households and businesses through the coronavirus pandemic, it’s possible that a second round of direct payments could be on the way later this year.


fortune--2020-06-04--The digital transformation is no joke

The digital transformation is no joke

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
I’m in the pattern recognition game. Here are three topics that keep coming up in my virtual travels.
Communicating is everything. It’s a cliché that the key to good leadership in time of crisis can be summed up in three words: communicate, communicate, communicate. It’s true that good leaders are telling their subordinates the good, the bad, and the ugly right now. They’re giving honest assessments of where things stand, even if one of their assessments is: I don’t know. But they’re also showing empathy. They acknowledge that while they don’t necessarily have the answers to society’s ills or a clear understanding of what their organizations can do about them, they can listen, react, and adapt. This extends beyond leaders, of course. We all need to communicate as well as possible right now, even if it is merely to check in with someone who might appreciate the call (or the Zoom or the text or the email).
Talk to your peers. Repeatedly in recent days I’ve heard tales of top executives carving out time for regular meet-ups, typically over Zoom, with counterparts at other companies. This might be with competitors, maybe in small bunches, perhaps one-on-one. Call it group therapy or a virtual replication of the best aspects of a no-agenda happy hour. But chit-chatting and comparing notes with peers who aren’t colleagues is a great way to level set, to commiserate, to share best practices. I’ve informally done this in past weeks with some non-Fortune journalists I respect. The chats left me feeling more confident and less alone. I have a shelter-in-place advantage over many of my co-workers: I’ve been working 3,000 miles from HQ for 21 years now. I’m used to reaching out because the “water cooler” isn’t always available. What feels natural to me might be learned behavior for others.
Digital transformation is no joke. To the extent I pooh-poohed this buzzphrase before, it wasn’t because I didn’t believe in it, so much as that I distrust the odor of hype. The aroma has nearly vanished. Every business in the world is learning right now the importance of digital operations, from communicating to selling to business processes. In fact, another truism, that the pandemic is accelerating shifts that eventually would have happened anyway, has become obvious. The ramifications of digital transformation are massive and terrifying. Every worker, every leader, and every organization will be affected by it, and many will be left behind.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Disappearing from a screen near you. Snapchat is the latest social media platform to tussle with President Trump's more troubling posts. The company said Trump’s account will no longer appear on Snapchat’s Discover tab, where news sites, celebrities, and politicians are showcased. Trump’s account will, however, remain publicly accessible on the service.
Handwashing on the hour. In one of those stories that you know will have further developments, the organizers of the giant CES show say they plan to hold the conference in person in Las Vegas next January. The show will include new health protection measures such as sanitation stations and socially distanced audience seating. The news drew pushback from many reporters and analysts who usually attend. "There's a reason there's already a flu named after CES. Should probably cancel this one," tech YouTuber Marques Brownlee noted on Twitter.
In what business is there not humbug? This is one of those 'you have got to be kidding' stories. Former Enron CEO Jeffrey Skilling served his 14-year prison term for securities fraud, insider trading, etc. and got out last year. Now he's pitching investors on a startup called Veld that will create an online marketplace for oil and gas well ownership stakes.
Ground control to Major Tom. Personal electric aircraft startup Kitty Hawk is pivoting, or should we say making a barrel roll, away from its original plan to sell an easy-to-pilot one-seater flying car. Unable to find a market for the drone-like flyer, the company will now focus on a different project called Heaviside that looks and operates more like a traditional airplane. Speaking of abandoned projects, Dyson offered Autocar a peek at its canceled electric car project. The prototype looks very cool, that's for sure.
Do what you wanna do. So-called incognito mode in most browsers has always provided only limited privacy protection. Now a couple of Google users are suing the company in federal court, saying the privacy promises of incognito mode are a lie and seeking billions of dollars in damages. Google says it has always disclosed that the mode doesn't block all data collection methods.
FOOD FOR THOUGHT
The tumultuous events of 2020 have reminded many of the difficult history of 1968. Though not exactly parallel—COVID-19 is not the Vietnam war—we do have the juxtaposition of protests and violence in the streets against a pioneering space travel mission. Marina Koren writes in The Atlantic that the recent SpaceX launch will do about as much for unifying the country as the Apollo missions of the 60s: not much.
The SpaceX launch drew several million viewers. But as with many significant moments in America’s space program, it was a temporary spike. The launch soon gave way to more pressing headlines, and to experience America that day felt like witnessing two different universes. “I’m here in Cocoa Beach, Florida, looking at the juxtaposition of doing the most technologically advanced thing, sending people to space, but a man dies in police custody,” Leland Melvin, an African American NASA astronaut, said in an Instagram video last week from the Cape Canaveral area. Melvin, who flew aboard the space shuttle, had provided commentary on NASA’s official channel for the launch. “America, let’s get our crap together.”
IN CASE YOU MISSED IT
Why Zoom is leaving its free videoconferencing with weaker encryption By Robert Hackett
4 ways companies can thrive in the COVID-19 economy, according to philanthropy strategists By Jen Butte-Dahl and Denielle Sachs
5 companies to keep an eye on following the world’s largest cancer conference By Sy Mukherjee
How to reopen your business so it’s safe for both employees and customers By Rachel King
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
For several years, the Boston tech community has sought to become more inclusive through an initiative called Hack.Diversity that offers mentors and seeks internships for Black and Latinx people. Co-founder Jody Rose, currently president of the New England Venture Capital Association, has put a renewed focus on the program and attracted many donations this week with posts about her young children trying to understand George Floyd's death. The Boston Globe has a moving write up of Rose's experience.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-06-04--How Tractor Supply Co is using tech to deliver e-commerce to its rural customers and fuel a sales su

How Tractor Supply Co is using tech to deliver e-commerce to its rural customers and fuel a sales surge

Tractor Supply Co might be a retailer selling things like livestock feed, lawnmowers, chicken coops, and pet food to recreational farmers and ranchers in rural markets, but it has emerged as one of the most deft brick-and-mortar retailers using technology and e-commerce during the current pandemic.
That prowess has led Tractor Supply, No. 380 on the Fortune 500 with 2019 sales of $8.35 billion, to be one of the big retail winners from the COVID-19 outbreak.
Last week, the company said it expects sales in the quarter ending late this month to be up between 24% and 29%. While being deemed essential during the lockdowns was an advantage, Tractor Supply has helped itself by going all in on tech, building on some already solid foundations.
While the company already offered in-store pickup for online orders, in just a matter of days at the start of the pandemic, it launched curbside pickup, a contactless option for customers that has also been implemented by stores like Best Buy and PetSmart. Tractor Supply is also relaunching its website to improve both pickup options. Early in the COVID-19 crisis, it quickly gave employees better mobile devices that let them bust checkout lines by ringing up customers from anywhere in the store, a great option at a time when people don’t like lingering.
And under the leadership of its CEO since January, Hal Lawton, who had previously been the president of Macy’s after stints at eBay and Home Depot, Tractor Supply is about to launch its first mobile shopping app.
“We believe the strong will get strong during this period of time, and we’re committed to capitalizing on the opportunities that this crisis presents,” Lawton said on an investor call on Wednesday.
While some people might mistakenly believe think rural and exurban shoppers are less focused on fast e-commerce delivery than urban customers, Tractor Supply has made that a priority. Prior to the pandemic, Tractor Supply, which also operates PetSense, the third largest pet store chain, offered same-day delivery from 20% of its stores. Working with delivery service Roadie, the company ramped that up to the rest of its store fleet within three weeks, allowing Tractor Supply to compete effectively with Amazon and Chewy, not to mention Home Depot and Lowe’s.
Tractor Supply, founded in 1938 in Minot, North Dakota and now based near Nashville, has been handsomely rewarded by Wall Street for its strong performance. Shares are up 92% since U.S. lockdowns started in mid-March and are near all-time highs, giving it a market capitalization of $14 billion.
The company, whose namesake chain has 1,800 stores, also benefits from having a lot of choice, but not endless varieties within its product categories. That includes nearly 15,000 items, a fraction of what big box stores like Home Depot and Walmart offer. And Tractor Supply stores are typically about 15,000 square feet in size, comparable to a CVS or a Walgreens. That means they are easy to navigate for a quick in-and-out trip, something customers prize right now.
“It’s not intimidating like the other big boxes out there are,” said Lawton.


fortune--2020-06-04--Disney makes $5 million pledge to social justice organizations

Disney made a $5 million pledge to nonprofit social justice organizations on Wednesday as demonstrations over the police killing of George Floyd continued across the country.
Civil rights organization the NAACP will receive $2 million of the total pledge. In a statement, Disney said the donation would “further their long-standing work promoting social justice by eliminating disparities and racial discrimination through their advocacy and education programs.”
Disney did not identify the other nonprofits that would stand to receive the remaining $3 million but said the organizations would be those that “advance social justice.”
“The killing of George Floyd has forced our nation to once again confront the long history of injustice that black people in America have suffered, and it is critical that we stand together, speak out, and do everything in our power to ensure that acts of racism and violence are never tolerated,” Bob Chapek, chief executive of Disney, said in a statement.
“This $5 million pledge will continue to support the efforts of nonprofit organizations such as the NAACP that have worked tirelessly to ensure equality and justice,” he added.
Disney joins a list of corporations donating to social justice organizations in the wake of Floyd’s death, including Facebook, Apple, and Google’s YouTube. Responses to some of the efforts have been mixed, with some critics pointing out that company donations represent a small portion of total revenues.
In November, Disney again confronted its complicated legacy of racist characterizations in some of its older animated titles. The launch of Disney+ prompted the company to label movies on the platform like Dumbo, Peter Pan, and The Jungle Book as having “outdated cultural depictions.” Song of the South, a 1946 Oscar-winning movie considered to have racist depictions of black people, was left off the streaming service altogether.


fortune--2020-06-04--Over 42.6 million Americans have filed for unemployment during the coronavirus pandemic

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Another 1.9 million Americans filed initial unemployment claims the week ending May 30, according to the U.S. Department of Labor. Since the start of the coronavirus shutdowns, a staggering 42.6 million jobless claims have been filed—greater than the combined population of America’s 22 smallest states.
That marks 11 straight week of unemployment claims above 1 million, a period of job-destruction without precedent in modern American economic history.
But the bigger economic story is that the overall number of Americans on unemployment insurance—known as continuing claims—climbed 649,000 to 21.5 million. The prior week it had fallen 4 million from its peak of 24.9 million the week ending May 9. Economists were hoping that continuing claims would fall again, however, the total number of Americans on unemployment is still down 3.4 million from its peak. That is a sign that employers are bringing workers back, and the economy has moved from contraction to growth. Moody’s Analytics chief economist Mark Zandi told Fortune yesterday that economic data points to the COVID-19 spurred recession ending in May, and that the economy is now in recovery.
Moving from the recession phase—at least two straight quarters of declining economic growth—and into the recovery phase doesn’t mean the economic storm has passed. It could take months or years to fully rebound to pre-pandemic levels.
Another report card on the labor market comes with Friday’s jobs report, which could see an unemployment rate near or even over 20% in May. But that May jobless rate will likely be the peak, Zandi forecasts, with it then falling in June, but staying above 10% until at least September.
The most jobless claims during the week ending May 30 were in California (230,461), Florida (206,494), and Georgia (148,095). The total number of Californians on the unemployment rolls rose a staggering 618,432 the week ending May 23—almost as mush as the entire 649,000 national increase that week. Meanwhile, Ohio and Michigan saw the biggest declines in the overall number of residents on the unemployment rolls, falling 88,494 and 69,911, respectively.
Americans currently on the unemployment rolls are receiving an additional $600 weekly in benefits on top of their state benefits. However, unless that additional federal money is extended, that extra $600 will stop after the end of July.


fortune--2020-06-04--Minneapolis officials estimate damage at $55 million

Officials in Minneapolis say the looting and property damage that following the death of George Floyd has caused at least $55 million in destruction.
Vandals damaged or set fire to at least 220 buildings in the city where Floyd died, but that number is expected to go up, city officials said.
Minneapolis Mayor Jacob Frey will ask for state and federal aid to help rebuild after the civil unrest. Until that happens, community members are pitching in to support Minneapolis neighborhoods.
More than $1 million has been raised to help businesses in north Minneapolis, WCCO-TV reported. The West Broadway Business and Area Coalition says it will announce how they plan to use the money in the coming weeks.
The violence follows the death of Floyd, a handcuffed black man who died May 25 after a white Minneapolis police officer pressed his knee into Floyd’s neck, ignoring Floyd’s cries that he couldn’t breathe.
Prosecutors upgraded charges against the officer, Derek Chauvin, to second-degree murder on Wednesday and charged three other officers with aiding and abetting in the case that has rocked the nation with protests over race and police brutality.


fortune--2020-06-04--4 steps corporate leaders can take toward genuine allyship

Good morning, Broadsheet readers! Atlanta Mayor Keisha Lance Bottoms reflects on being the mother of a black son, a Fortune investigation into the health risks of breast implants gets results, and tips on being a real ally in this moment. Have a healthy Thursday.
– 4 steps toward real corporate allyship. Yesterday, Fortune’s MPW community convened a discussion on racism and allyship as protests over the death of George Floyd and persistent racial injustice continued to roil the U.S. The business leaders and activists on the virtual conversation, hosted by Fortune‘s Ellen McGirt, proposed four ways companies should respond to the outcry and support their black employees right now. Emma has the full scoop here.
1. Focus on black belonging
“It’s incredibly important to focus on black belonging—the sense that your black team members feel a sense of solidarity from corporate leaders and everyone around them,” said Erin Thomas, head of diversity, inclusion, and belonging at freelancing platform Upwork. For a company trying to adequately respond to this societal movement, she said, everything else should come second right now.
2. Recognize your power
“The services we bring, our purchasing power, our voice in D.C.—we have not used any of that power to address the systemic injustice of racism in this country,” EY U.S. chair and Americas managing partner Kelly Grier said of her $36.4 billion firm. “That has to change.” She is working to help her company acknowledge the power of its privilege on an institutional level in the same way white people and non-black people of color are recognizing theirs as individuals.
3. Make room for mistakes
There’s little room for error for companies responding to this moment. However, leaders should make room for their non-black employees to make mistakes while having these discussions, the group agreed. At Cisco, managers are trying to support employees in having “imperfect conversations” about racism and discrimination, said chief people officer Fran Katsoudas.
4. Be authentic
Rote discussions of programs like diversity initiatives won’t cut it in this regard, said Crystal Ashby, CEO of the Executive Leadership Council. Diversity programs have their place, but they don’t necessarily provide companies with the right toolkit to respond to police brutality against black people, she said.
“This response can’t seem like a diversity program. This response can’t seem like something on a checklist. It can’t seem like they’re doing it for that reason or it’s no longer real,” said Ashby. Corporate America must ultimately remember: it’s not about them, she said. “This is not an issue about companies,” Ashby said. “This is an issue about people.”
This list is by no means complete. We’d like to hear from you about other steps that white and other non-black leaders and employees can take to make a true difference in supporting black friends and colleagues in this moment—and beyond. Email me at claire.zillman@fortune.com and we may share your suggestions in a future Broadsheet.
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- George and Gianna. Roxie Washington, the mother of George Floyd's 6-year-old daughter Gianna, delivered a heartbreaking speech at Minneapolis City Hall on Tuesday about Floyd's death by law enforcement. "He’ll never see her grow up," Washington said through tears. USA Today
- Mayor and mom. Atlanta Mayor Keisha Lance Bottoms wrote a piece headlined "The Police Report to Me, But I Knew I Couldn't Protect My Son." Even though Lance Bottoms oversees her city's police department, her son, she says, is like any black boy when he's walking the city's streets. New York Times
- From risks to results. Last month, Fortune's Maria Aspan published an investigation into the health risks of breast implants. Now pharmaceutical company Allergan, which was at the center of that investigation, is launching a new effort to track down tens of thousands of women who received implants that have since been linked to cancer and recalled. Fortune
- Plan Z. Exactly how will reopening businesses without childcare in place hurt women? Several mothers share their stories and expectations here. Virginia Dressler says she and her husband are "trying to come up with Plan A, Plan B, and Plan C." New York Times
MOVERS AND SHAKERS: PagerDuty hired Salesforce's Manjula Talreja as chief customer officer. Sumaiya Balbale joins Sequoia Capital as CMO. Luz Vega-Marquis, retiring president and CEO of the Marguerite Casey Foundation, will be succeeded by Carmen Rojas; Rhonda Carter is the foundation's new VP of culture and operations. Laurie Truitt, former VP of digital consumer marketing at Gannett, joins Time as VP, global consumer growth.
IN CASE YOU MISSED IT
- Onto the general. One of this week's notable primary results was a House race in New Mexico where Teresa Leger Fernandez beat former CIA officer Valerie Plame. Leger Fernandez says "it's clear" that voters in the Hispanic and Native American district "liked that I am a Latina, based in the land and respectful of the land." New York Times
- PM to PM. Since handing over leadership of the U.K. to Boris Johnson, Theresa May has kept a low profile. But the former prime minister criticized Johnson over the security implications of a no-deal Brexit and his coronavirus lockdown strategy in a House of Commons debate. Guardian
- Image-conscious. Washington Post fashion critic Robin Givhan weighed in on President Trump's church photo-op—specifically on Ivanka Trump's presence at the event. "If other members of the administration were trudging across the plaza to a kind of doomed publicity stunt, Ivanka looked as though she were just gliding through ... The handbag clasped in her right hand announced that she was not sticking around." Washington Post
- Kardashian kollection. Even though Forbes reporting last week implied that Coty Cosmetics may have overpaid for Kylie Cosmetics with a $600 million price tag, the company is all-in on the Kardashians. The brand is in talks with Kim Kardashian West for another beauty line. Bloomberg
ON MY RADAR
8 journalists on reporting while black, with the weight of history on their shoulders Glamour
California sues Education Secretary DeVos, saying she has failed to implement student loan forgiveness program CNBC
MIT elects first black woman student body president in its 159-year history CNN
PARTING WORDS
"I wanted us to just unite as human beings above all."
-Actor Keke Palmer on her viral plea for National Guardsmen to "march with us"


fortune--2020-06-04--Mounting unpaid bills show the coronavirus toll on Britain’s hospitality and auto sectors

More than half of all invoices from British restaurants, bars, and hotels aren’t being paid, as newly released data shows the terrible toll the coronavirus pandemic continues to wreak across Europe.
In the U.K., businesses in the hospitality sector remain shuttered by law, despite gradual easing of restrictions in other parts of the economy. The British government has said the earliest such companies might be able to open their doors is July 1, depending on infection rates.
Even then, the businesses will have to implement social distancing measures. The new figures raise doubts about how many of these businesses will ultimately survive.
Kate Nicholls, the chief executive officer of industry trade association UKHospitality, has recently praised the U.K. government’s decision to extend its job retention and furlough payment programs. But she has pressed the government to provide hospitality businesses more help to cover a mounting backlog of debt, including rent and other unpaid bills.
Without such help, she warned that “a very difficult spring would become a disastrous summer” for the sector.
Autos, agriculture, and manufacturing
The data also points to deep trouble in the British auto sector, with car dealerships and repair garages seeing an 80% increase in the number of unpaid bills since the COVID-19 pandemic began. Car dealerships had been shuttered by British lockdown rules but were allowed to reopen this week.
Other sectors experiencing big jumps in delinquent invoices include agriculture, a worrying sign for the U.K.’s food security, and industrial manufacturing. In both cases the number of unpaid bills has climbed more than 50% since the World Health Organization declared a pandemic on March 11.
The stark new figures come from Sidetrade, a Paris-based software company that helps businesses with customer engagement and cash management. They back up a string of bleak reports this week. In a survey conducted by the Office of National Statistics, 42% of businesses said they had less than six months of cash reserves remaining, and fully 79% had applied for government help to pay workers’ salaries.
The British auto sector has experienced some of its worst months in history, with just 4,321 new cars sold in April and 20,247 sold in May, according to figures from the Society of Motor Manufacturers and Traders (SMMT). Those sales levels are more than 90% lower than the same months in 2019.
Unsurprisingly, both auto manufacturers and dealerships are shedding jobs. Luxury carmaker Aston Martin, which had been struggling even before the coronavirus, said Thursday that it will lay off 500 staffers, while auto dealership group Lookers announced a restructuring that might see as many as 1,500 job losses.
“This week’s reopening of dealerships is a pivotal moment for the entire industry and the thousands of people whose jobs depend on it,” Mike Hawes, the chief executive officer of the SMMT, said in a statement.
The Sidetrade numbers did offer a ray of hope that the easing of restrictions in the U.K. and elsewhere in Europe is enabling at least some cash to flow back to businesses. While about 42% of invoices across the U.K., France, Belgium, Spain, Italy, and the Netherlands were more than 10 days past due on May 23, the latest figure available, this is down from a high of 59% on May 2. (And much improved from when Fortune reported on Sidetrade’s numbers in late April.)
The U.K., which has not moved as far in reopening its economy as other European countries, remains in the worst shape of the economies tracked by Sidetrade, with more than 38% of all invoices overdue, although that is down from a high of 42%.
“The U.K. has seen a slight improvement in customer-supplier relations. This is the first positive effect of lockdown exit,” Sidetrade said in a statement.
The few British industries that have had the least payment deterioration from the coronavirus pandemic are the health care and life sciences sector and construction. Both have seen the number of unpaid invoices rise just 7% during the pandemic, according to Sidetrade.
Italy and the Netherlands are in the best shape, with just about 18% of bills unpaid in both. France is the only country where late payments have not declined consistently since early May, according to the Sidetrade data. There, over 36.5% of invoices were delinquent as of May 23, up from 35% on May 2.


fortune--2020-06-04--‘A mockery of our Constitution:’ defense chiefs clash with Trump as protests crisis deepens

Donald Trump faced a direct challenge to his leadership from his current and former defense secretaries, who issued a pair of rare public dissents questioning the president’s threat to use military force against rolling, nationwide protests over police brutality.
Defense Secretary Mark Esper said in a news conference on Wednesday that he did not support invoking the 1807 Insurrection Act to quell protests using the military, saying National Guard troops are sufficient. Esper said active-duty troops should be a last resort, angering White House officials and Trump for what they regarded as a matter of breaking rank.
Trump confronted Esper later that day in the Oval Office during a meeting with Vice President Mike Pence, Attorney General William Barr and General Mark Milley, head of the Joint Chiefs of Staff. The president privately asked advisers whether Esper could still be effective in his position, according to two people familiar with the matter. But Trump’s pique at Esper seemed to blow over, one of the people said.
The standoff, however, was soon overshadowed by a scathing denunciation from Esper’s predecessor, James Mattis.
Mattis said in a statement that he was “angry and appalled” by the events of the past week, criticizing Trump for allowing protesters to be violently dispersed from Lafayette Square in front of the White House before he walked to a historic church to hold a Bible in front of cameras. It was an abuse of power that made a “mockery of our Constitution,” Mattis said.
The double-barreled rebuke from his current and former defense chiefs elevates the pressure on Trump as he falters in handling a pair of crises: a raging pandemic that has killed more than 100,000 Americans, and protests over a painful legacy of racial inequality, injustice and police brutality following the killing of an unarmed black man at the hands of law enforcement in Minneapolis.
With Trump’s poll numbers sinking, his re-election challenger, Joe Biden, is attempting to seize on the president’s struggle to confront those challenges just five months before voters cast ballots. Mattis’s criticism echoed attacks leveled on Trump by Biden, but the former defense chief’s key role in the president’s original national security cabinet gives him a standing few outsiders could ever claim.
“Donald Trump is the first president in my lifetime who does not try to unite the American people—does not even pretend to try,” Mattis, a retired Marine general, wrote in his statement.
“Instead he tries to divide us. We are witnessing the consequences of three years of this deliberate effort. We are witnessing the consequences of three years without mature leadership,” he wrote. “We can unite without him, drawing on the strengths inherent in our civil society. This will not be easy, as the past few days have shown, but we owe it to our fellow citizens; to past generations that bled to defend our promise; and to our children.”
Trump lashed out in a pair of tweets mocking Mattis’s military service and his nicknames, calling him “the world’s most overrated General.”
Probably the only thing Barack Obama & I have in common is that we both had the honor of firing Jim Mattis, the world’s most overrated General. I asked for his letter of resignation, & felt great about it. His nickname was “Chaos”, which I didn’t like, & changed to “Mad Dog”… — Donald J. Trump (@realDonaldTrump) June 4, 2020
The sharply worded and unprecedented rebuke from Mattis only adds to the pressure on the president, who this week threatened to dispatch active duty troops to quash protests and drew widespread condemnation after the clearing of Lafayette Square.
Esper Criticism
The president made no public appearances on Wednesday, as the White House was further fortified with law enforcement personnel brought to Washington by the Bureau of Prisons. Trump gave a pair of interviews to friendly media figures, including his former press secretary Sean Spicer, that touched only briefly on the crisis gripping the nation.
He downplayed the protests and again reiterated his pledge to send in troops, in particular to New York City. In a briefing for reporters, White House Press Secretary Kayleigh McEnany would not directly say that Esper retained Trump’s confidence.
The current defense secretary drew Mattis’s ire as well. Without naming Esper, Mattis cited military jargon the defense secretary and other top officials had used in describing plans to confront protesters.
“We must reject any thinking of our cities as a ‘battlespace’ that our uniformed military is called upon to ‘dominate.”’ Mattis wrote. “We know that we are better than the abuse of executive authority that we witnessed in Lafayette Park. We must reject and hold accountable those in office who would make a mockery of our Constitution.”
Lincoln Comparison
While Trump has condemned Minneapolis police for the death of the unarmed black man, George Floyd, which set off the protests last week, he has not responded to broader demands to address racial injustice and reform U.S. policing. Instead, Trump has demanded governors “dominate” protesters in the streets and has compared himself favorably to Abraham Lincoln, saying he’s the only president who may have done more for black Americans than him.
Mattis stepped down 18 months ago after Trump abruptly announced on Twitter that he wanted to pull troops from Syria, but he was a hugely influential member of the president’s first national security cabinet.
Trump was so eager to unveil his nomination of Mattis after the 2016 election that he announced the plans at a campaign-style rally. He introduced the former head of U.S. Central Command by a moniker — “Mad Dog” — and called him “one of the most effective generals that we’ve had in many, many decades.”
It remains to be seen if Mattis’s rebuke will have lasting political repercussions, but it strikes at the heart of what the president has pitched as one of his strengths: his fulsome praise of the military as part of his “America First” approach to the world, even while he frequently criticizes the national security establishment for allegedly trying to undermine his administration.
Resignation Letter
Despite Trump’s praise of Mattis when he took office, by the end of the defense chief’s tenure their relationship was shattered. Upon his departure, Mattis issued a blunt resignation letter that amounted to a rebuke of Trump’s “America First” mantra.
“We must do everything possible to advance an international order that is most conducive to our security, prosperity and values, and we are strengthened in this effort by the solidarity of our alliances,” Mattis wrote at the time. “Because you have the right to have a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position.”
Days later, Trump lashed out at Mattis, saying “What’s he done for me?” Singling out the U.S. quagmire in Afghanistan, Trump added, “How has he done in Afghanistan? Not too good.”
‘I’ll Take Care of It’
Wednesday’s events unfolded in rapid fashion. Mattis’s scathing statement landed as Trump renewed his threat to send in the military to quash protests during an interview with Spicer, now a host for NewsMax TV, a conservative outlet. Trump called ongoing protests in New York a “disaster.”
“And we could help them a lot, they have to ask,” Trump told Spicer. “If they don’t get it straightened out soon, I’ll take care of it.”
At the same time, protesters continued to wind through the streets of Washington demanding justice for Floyd, who died after an officer knelt on his neck for more than eight minutes. The officer has since been charged with murder, and three other officers who stood by as Floyd died were charged Wednesday as accomplices.
Photos of the Washington demonstration on Wednesday showed protesters laying down on Pennsylvania Avenue, which runs between the White House and Capitol Hill and in front of Trump’s hotel. They lay down for eight minutes.


fortune--2020-06-05--The soda market is popping with new contenders. Will they stay or fizzle out?

What is Genius Brands ?
The little-known stock rose over 2,000 % in the past month

It was the summer of 2017 while living at Cape Cod when the idea came to Ryan Fortwendel. This was during an explosion of sparkling water companies like LaCroix and Spindrift, and Fortwendel was an avid consumer of both. But he often felt the flavor profiles were a little flat or artificial. Fortwendel usually frequented a café that served hot brewed tea, dumped over ice, and topped off with sparkling water. He referred to it as “lightly brewed sparkling tea,” and that’s when he had his “aha moment,” which would eventually result in Minna sparkling tea.
Fortwendel isn’t the only one making the most of an idea that bubbled up over drinks. The market for newfangled sodas, flavored sparkling water, and similar chilled drinks is getting hotter by the month. Following a blueprint left by craft beer brewers (and even canned-wine brands that have emerged over the past five years), these beverage producers are trotting out highly stylized cans and bottles with an aesthetic almost certainly programmed to connect with consumers via social media. It’s not enough just to want to reach for a cold one; it has to fit into the customer’s entire Instagrammed lifestyle now too.
Sales for sparkling water brands were up by 23.4% year over year in May, while total soft drinks year-over-year dollar sales grew by 15.6%. Sales for zero-calorie sodas, especially, grew by 16.7% over the past year.
“At retail, assorted flavor soft drinks have posted an impressive 18.9% sales growth rate over the past year—followed by an increased affinity for ginger,” according to a Nielsen report in January. “Soft drinks sit at the crux between health-conscious abstaining and premium mixing. The onus is on U.S. retailers, suppliers, and manufacturers to maximize a sizable revenue opportunity, both this month and throughout the year.”
“We realized that the size of the seltzer category indicated the size of the need for an alternative to sodas,” says Marisa Zupan, CEO and cofounder of United Sodas of America. “And, based on our research, we found that people were ready for a bolder flavor profile.”
United Sodas of America describes itself as a premium direct-to-consumer brand, combining a nostalgic soda taste with unconventional flavor combinations such as extra peach, toasted coconut, and cherry pop. Courtesy of United Sodas of America
After a two-year process that included countless taste tests and developing proprietary flavors while utilizing only ingredients found in nature, United Sodas just launched last month. Zupan describes her soda as bolder than seltzer flavors, but not syrupy or overly sweet like some mainstream sodas.
“Everyone is a soda drinker at heart,” Zupan says. “People just didn’t have the right soda to drink anymore.”
From teas to tonics, emerging sparkling beverage makers have to be on the cutting edge to connect with health-conscious consumers.
“Every generation has a soda that defines them,” says Allison Ellsworth, cofounder of prebiotic soda Poppi. “In the 1960s, it was classic refreshment from Coke. In the 1980s, it was the diet craze with Diet Coke. In the 2000s, everything moved to zero with Coke Zero. Today, soda is as much about flavor as it is about functionality.”
Sparkling tea time
Envision your local Whole Foods. These days, there is always going to be an enormous wall of sparkling beverage options, from flavored water to soda. Sometimes LaCroix gets an entire entryway of boxes forming its own rainbow mountain of unsweetened sparkling water.
But sparkling tea is a tiny emerging category, Fortwendel says. “I knew that we had to have packaging that really popped off the shelf. That meant color and design had to stand out,” Fortwendel explains. The callout of “lightly brewed sparkling tea” in large font on the can, he continues, was intentional to catch consumers’ attention and have them know what the brand was about immediately.
Minna touts that its sparkling teas have no sugars or added sweeteners and are made using only organic and non-GMO ingredients. Courtesy of Minna
Fortwendel wanted to launch with three solid teas: a black tea, green tea, and rooibos tea, which is naturally decaffeinated. “Taste is very personal,” Fortwendel says. “We know that not every person will love every flavor, but we feel confident there is something for everyone.” Without hesitation, Fortwendel says the Lime Hibiscus Rooibos tea has been a standout seller. “The typical feedback is one of surprise and delight. Despite being an easy concept to understand—tea plus sparkling water equals sparkling tea—many consumers have never had a sparkling tea. People are often surprised by the crisp, light, refreshing profile, and quality of carbonation, which is quite high versus other sparkling teas on the market.”
Before launching Minna, Fortwendel worked in corporate at Marc Jacobs for eight years, and he feels fortunate to have learned so much about good design through that experience. “Conscious or unconscious, people are drawn to beautiful things. Minimal and simplified is often the answer,” he says. “I wanted to create packaging that made the consumer want to pick it up, and yes, possibly even make them happy.”
Fortwendel thinks Minna is a real standout, first, by flavor alone. “Our flavor profiles are perfectly balanced, not too strong, and with no tannin aftertaste,” he says. “The flavor has to be right to have return customers.” Minna uses only organic, non-GMO ingredients, with a simple ingredient listing.
And certainly, without a great flavor, there is no long tail to the business plan. But the aesthetic is critical to standing out not just on the store shelves but online too. Fortwendel wanted the packaging to reflect that minimalism, so he pulled inspiration from Art Deco designs—and even old Hermès illustrations—while referencing the beverage ingredients to create shapes that would pop off the can, giving the customer expectations visually for the flavor profile as well.
Instagram famous
Social media might look like the easiest way to build a loyal following, but as any aspiring influencer might have already learned, it’s harder than it looks.
“People spend more time on their phones and on social media than in front of a TV, igniting social media with the power to affect people,” says Jay Moskowitz, founder of Bimble, a THC-free but natural hemp-infused sparkling beverage. “Having said that, there is a glut of information flooding the social channels, and it is challenging to be heard over all the noise.”
Social media is certainly the easiest way for consumers to learn what Minna is about, Fortwendel says, and he’s aware that the branding grabs the attention of millennial and Generation Z consumers the most. “Minna is fun, it’s lighthearted, and on-trend with current cultural moments, but we also use the platform to show our consumer that we are extremely social mission focused,” he says. “We’ve seen posts on social media of children loving Minna, and my mother-in-law loves it in the evening or at parties as a Champagne alternative.”
CarryOn was developed by Ocean Spray Cranberries’ Lighthouse incubator, which was created by a farmer-owned cooperative last year to accelerate health and wellness-focused products. Courtesy of CarryOn
As a startup, social media is one of the easiest ways for CBD sparkling water maker CarryOn to put itself out there. “It is really important to us that we have a two-way discussion with our consumers,” says Josh Wiesman, codeveloper of CarryOn. “Sure, we can make announcements and run giveaways, but to us the most important part is listening.”
The brand was inspired by the belief that mental wellness should be just as second nature as physical fitness, nutrition, or skin care. “We feel strongly that mental wellness is a key piece of holistic health and self-care,” Wiesman says. “To that end, we saw a gap in the marketplace for a trustworthy sparkling water CBD beverage that tastes good, [has] clean ingredients, and also helps relieve stress and anxiety without unwanted side effects.”
CarryOn formally launched in May after a rapid-fire development phase in the preceding five months. “The pandemic pushed us to pivot, motivating us to find creative ways to go to market,” Wiesman says. “Now more than ever, we are leaning into our brand mission of normalizing the pursuit of mental well-being.”
Launched out of the Ocean Spray Lighthouse incubator—a program that itself took off only last October—CarryOn’s team says it took time and care to ensure the packaging and presentation reflected the time and care it took crafting the beverage inside, resulting in a font-heavy look on the slim cylinder cans.
CarryOn aims to offer more functional benefits by blending CBD with ingredients of choline, L-theanine, and vitamins C and E, while keeping its products under 10 calories and two grams of sugar per serving. The brand launched with two flavor profiles—“Elevate” and “Descend”—which are named as such to address how the customer wants to feel upon consumption. A sparkling grapefruit water, Elevate was crafted to keep one calm but sharp. With a smooth blueberry flavor, Descend was produced to provide relaxation with no impairment.
CarryOn launched in May 2020 with two flavor schemes: Both Elevate and Descend are only 10 calories per 11.5 fluid-ounce can, provide vitamins C and E, and have no added sugar. Courtesy of CarryOn
Wiesman says the team tested more than 100 different flavor profiles as a team and with consumers, while striving to produce a finishing taste that was refreshing and herbal but not overly sweet or heavy. “Our sparkling CBD waters are really light, which can be surprising to someone who prefers a juice or soda type experience,” Wiesman says. “Most people really enjoy the balance of aroma, flavor, and sparkling bubbles.”
Recess, also a CBD sparkling water brand that launched in October 2018, leans heavily on its social media audience for guidance.
“A key insight that has driven our brand strategy at Recess is that the most successful and enduring beverage brands that have come before us ultimately are marketing a feeling and are able to connect emotionally with consumers,” explains Ben Witte, CEO and founder of Recess. “Recess is a narrative-driven brand. Our tongue-in-cheek brand voice that we have developed over the past 18 months enables us to provide social commentary on the unique issues that millennials are going through at this time.”
“We are expanding and adding layers to the Recess brand world over time, and are evolving beyond being just a beverage brand to a new type of consumer wellness and lifestyle brand,” says Recess founder and CEO Ben Witte. Courtesy of Recess
Witte says the brand’s digital content speaks specifically to the creative community, including designers, artists, entrepreneurs, and musicians, among others. With this in mind, Recess has aspirations of growing beyond being just a soda jerk to a fully fledged lifestyle brand as the company has recently expanded to athleisure—a conveniently timed product launch while so many consumers have been working from home. Recess Realitywear will be featuring frequent drops of clothing, either designed in-house or in collaboration with other brands and creatives.
Sweet relief
Recess did see an increase in online sales as soon as the COVID-19 pandemic became a reality across the country, with quarantine and shelter-in-place orders solidifying the “new normal.” While retail sales have dropped, weekly e-commerce sales were four times higher by the end of May compared to pre-COVID-19 in February, and Witte expects to accelerate those sales numbers with an improved website and e-commerce portal.
“Our team is working diligently to keep up orders, while taking every possible precaution possible to stay safe,” Witte says. “People are clearly looking for ways to stay calm, cool, and collected right now, and we’re happy to be able to offer something that can help.”
Poppi’s not-so-secret ingredient is apple cider vinegar, which the brand says delivers strengthened immunity, improved digestion, promotion of weight loss, and a refined complexion. Courtesy of Poppi
While available with select retailers across the U.S., online sales for prebiotic soda Poppi most definitely popped in the past few months. The brand’s Amazon sales are up 1,300% since March.
“From the beginning, Poppi has been a passion project and was initially funded between the cofounders’ life savings and a few credit cards,” says Ellsworth. After some early traction matched by borrowing money from friends and family (not to mention striking a deal on Shark Tank), Ellsworth says she has been fortunate to have partners who believe in and support the business. “With that said, we’ve been creative about driving growth while managing our cash burn through uncertain times around COVID-19.”
Ellsworth had always thought of herself as a healthy person. But a few years ago, she had to start traveling nonstop for work. While on the road—and seemingly out of nowhere—she started to experience a mix of different health issues. “I was feeling bloated all the time and was having allergic reactions to cosmetics and fragrances that I had been using my entire life,” Ellsworth recalls. She went to multiple doctors, but they couldn’t help.
Like many of us who turn to WebMD to self-diagnose, the DIY enthusiast in Ellsworth also prompted her to turn to the Internet to find a solution. (Except in this case, Ellsworth would eventually turn her medical enigma into a business proposition.) She read up on the benefits of apple cider vinegar, in particular, for gut health, immunity, and better complexion. She started drinking a shot of ACV daily, and within two weeks, she says, all of her symptoms subsided. To say the least, Ellsworth says, the discovery was life-changing.
There was only one issue: Apple cider vinegar tastes horrible on its own. Ellsworth knew that if she was going to continue with her new regimen, she had to make it an enjoyable experience. While that may have been overwhelming to some, Ellsworth says she loved the product development phase. The goal was simple: Keep it healthy and make it taste amazing. After a few weeks of development, with her husband, Stephen, as the guinea pig, Ellsworth started giving out samples to friends and neighbors. Once she got positive responses, Ellsworth knew she was onto something, so she and her husband bottled it up and started selling it at the local farmers’ market in 2015.
Poppi is a prebiotic soda that appeared on ABC’s “Shark Tank.” Courtesy of Poppi
The big break came just three weeks in when a local forager from Whole Foods stopped by her booth. After breaking into the shelf set in the local Whole Foods region, Ellsworth and her husband quit their jobs to built their own manufacturing facility from the ground up, eventually leading to a $400,000 Shark Tank investment in December 2018. (The couple returned to the show in April of this year to deliver an update that Poppi is on course to become the entrepreneurial reality show’s first billion-dollar company.)
One of the reasons Ellsworth was excited to partner with Coca-Cola’s chief marketing officer Rohan Oza on Shark Tank was because of his track record. “He kept telling us the product was lights-out, but our old packaging didn’t communicate that,” Ellsworth says. One of the first things Oza did was introduce Poppi’s cofounders to a creative agency. Nearly immediately, it was decided that Poppi should strive to be “the modern soda for the next generation,” and that had to start with the packaging—optimized especially for Generation Z and millennial shoppers.
Nevertheless, the most important design aspect had to communicate great taste, so the team created pop-art-inspired fruit illustrations that looked cool but also cued bold flavors. The team used vibrant, contemporary graphics and incorporated super bright, contrasting colors that would not only scream off of the shelf, but would capture the happy, fun, playful personality core to the brand. “We want people to want to share, post, and pin Poppi, all day, every day,” Ellsworth says. “Poppi is made for the ’gram.”
What’s in a name?
However, one roadblock for some new beverage purveyors might be in the name. Soda still carries the reputation of being overly sugary, full of fructose corn syrup, and full of empty categories. It’s no surprise, then, that some brands might want to disassociate themselves with the term “soda” altogether.
Sunwink proclaims to be “the first-ever sparking herbal tonic beverage.” With a flavor profile somewhere between sparkling tea and lightly sweetened soda, Sunwink’s flavors are rooted in plant and herbal profiles, such as Hibiscus Mint Unwind and Turmeric Cleanse.
Eliza Ganesh cofounded Sunwink in 2019 after being diagnosed with an autoimmune disease. “I fell in love with using herbs to help with anxiety and my immune system,” the Sunwink CEO says. “My goal was to make an easy and accessible way for people to connect with plant-based wellness every day.” Ganesh met Jordan Schenck, a former head of marketing for Impossible Foods, and together they developed the vegan, non-GMO sparkling beverage.
“We are here to bring the world drinks with purpose,” Schenck says. “We believe that the beverage industry lacks purpose-driven brands that truly look to create connection and inclusivity with our planet and one another.”
All Sunwink sparkling herbal tonics are made with whole plants, are vegan and non-GMO, and have no added flavors. Courtesy of Sunwink
Ganesh stresses that Sunwink strives to use “the cleanest ingredients” possible, with proprietary recipes vetted by a clinical herbalist. Sunwink also makes a point of not incorporating artificial flavors or sweeteners or citric acid, which have been said to harm digestion.
Among Sunwink’s most popular flavors have been Detox Ginger, touted to promote better digestion, and the mood-boosting Lemon Rose. “People love to drink Detox Ginger after meals as a digestif or for bloating,” Ganesh explains. “Lemon Rose has also been incredibly popular as a nonalcoholic option or even as a mixer.”
Also opting for the simple description of “sparkling drink” rather than soda, Bimble’s Moskowitz says customers have also used the beverage as a mixer for cocktails, although it is not marketed as one. Packaged in an old-school glass bottle, Bimble uses no preservatives or artificial coloring, and the company currently produces two flavors. Grapefruit basil and mint were the ingredients the cofounders loved most for the company’s first flavor, while blueberry lemon ginger offers a spicy kick for those who enjoy the heat of ginger.
“We wanted refreshing but complex flavor profiles in our drink,” Moskowitz says. “This is a beverage for a sophisticated palate, and since hemp extracts naturally taste awful, we wanted to create something that though bitter has the ability to deliver flavor balancing the bitterness.”
Bimble is a preservative-free sparkling beverage, containing 25 milligrams of THC-free, broad spectrum hemp extract. Courtesy of Bimble
Moskowitz left his high-pressure career as a bond trader on Wall Street to become a beekeeper in Vermont, which in 2018 eventually led him to develop a CBD beverage intended to serve as a safer remedy to life’s stressors, while supporting the vital beekeeping community. He was already involved in the cannabis investment world in his finance career, and it was during this period that he began discovering and studying the world of cannabis. A premium, flavored, sparkling beverage seemed like a perfect delivery method for the otherwise awful-tasting CBD. When he reached the point of architecting the brand, Moskowitz’s wife and Bimble cofounder, Janet Silverstein, jumped in with her experience as a film and TV producer.
Initially, Bimble was packaged in a clear bottle with black lettering, which was meant to reflect the company’s all-business New York City origins. The duo then decided they wanted each flavor to have its own color for easier identification, while incorporating honeycomb graphics in the background, inspired by the brand’s use of sustainably sourced raw honey to sweeten the drink. The bee icon in the circles hint to that aspect of the branding as well. “We are beekeepers, and each bottle purchased supports the beekeeping community,” Moskowitz says. “After a career of watching people unwind at the end of a tough day by seeking the comfort provided by holding a bottle or glass, it was important to us that Bimble came in a glass bottle.”
Bimble’s target audience, according to Moskowitz, falls between the ages of 30 and 50—consumers with responsibilities such as careers, finances, politics, families (especially aging parents), who need to have a healthy way of destressing without worrying about not being able to function the next day or even that day itself.
“We like to think of our customer as the astute stoner,” Moskowitz quips, adding that person might be “willing to experiment with new products, searching for healthy alternatives, and are astute enough to look past the flash and read the label before putting something in their bodies.”
Even with the hemp extract, it actually shouldn’t come as much of a surprise that raw honey is the true hero ingredient for Bimble. “We source our raw honey from an apiary where we’ve gotten bees for our own yard,” Moskowitz says.
The pandemic has forced many producers to rethink the classic beverage industry distribution model. “Without the availability of demos and merchandising, we had to conceive of new ways to get Bimble in people’s hands,” Moskowitz says. “Then a funny thing happened. We realized we can do good while shipping out samples.” Bimble shipped free cases of its fizzy beverages to frontline health care workers in New York City, and it launched a program to support mental health, encouraging and destigmatizing therapy. Moskowitz says they plan to continue to develop purpose-driven programs that serve the dual purpose of contributing to society while building its brand.
Outside of a small early friends-and-family fundraising, Bimble is primarily self-funded. The brand started bottling on March 3—just in time for the pandemic to take root in the United States and disrupt the financial markets. “Our plan was to rebrand and reformulate, improve what was already the best CBD drink on the market, and then focus on a proper capital raise,” Moskowitz says.
So the cofounders regrouped, now focusing on e-commerce and building out its marketing effort. “Making lemonade out of lemons, we have been able to punch above our weight and take advantage of suddenly available talent that we wouldn’t have been able to touch pre-pandemic.”


fortune--2020-06-05--Friday feedback: Readers’ views on the corporate response to the George Floyd protests

The soda market is popping with new contenders .
Will they stay or fizzle out ?

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
It’s time for Friday feedback. Lots of response to my reports this week on CEO comments about the George Floyd killing and the reactions it has unleashed. A sampling:
“Lots of really eloquent and heartfelt statements which, without action, amount to the ‘thoughts and prayers’ we hear from our elected officials after gun violence. Nice but not particularly helpful. I’d be much more interested in hearing (and having Fortune give accounts of) the actions that these executives and their organizations are taking to help make our country a safer place for black people.”
–D.I.
“I just wanted to thank you for your piece this morning… Your leadership voice and platform is important on this issue with a mostly white and privileged audience. On my five boards, we are definitely talking about racial and social justice, which would have been unheard of at other times. And lest you think I’m throwing an empty compliment your way…I don’t always agree with your opinions, LOL, but I always applaud the strength of your convictions!”
–I.B.
“You are correct that much has changed since 1991; however, I don’t believe you can intimate that CEOs did not care about Rodney King. In 1991, CEOs did not have a forum to communicate with their customers and investors. Today every CEO can (and should) use Twitter, Facebook, Medium, etc. to communicate. The technology has changed.”
–X.P.
To be clear, I didn’t mean to suggest CEOs didn’t care about such things in the past. Just that they didn’t see it as their role to make public comments on them.
A few readers dinged me for focusing more on the protests than the violence associated with some of them.
“You guys have nerve calling today’s riots, looting, burning, and killing acts of protest. They’re acts of terror and nothing short of it.”
–B.Z.
And several took issue with my using the Lenin quote about there being “weeks when decades happen.” K.S. suggested I use this quote from Ayn Rand instead:
“Capitalism was the only system in history where wealth was not acquired by looting, but by production, not by force, but by trade, the only system that stood for man’s right to his own mind, to his work, to his life, to his happiness, to himself.”
Thanks to all for the spirited input. And apologies to newsletter readers for a typo; it was Cadre’s Ryan Williams who grew up in Baton Rouge, not George Floyd.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here.
TOP NEWS
Facebook labeling
Facebook has begun flagging up to its users content produced by media outlets that are—as Facebook sees it—under state control. The labels began appearing yesterday on posts and pages from certain Russian, Chinese and Iranian outlets. State-controlled outlets will also, from later this summer, be barred from buying advertising in the U.S. NPR
Estee Lauder
Employees at Estee Lauder Companies have called for the removal of board member Ronald Lauder over his donations to pro-Trump organizations, saying his continued involvement with the group was "damaging to our corporate values, our relationship with the Black community, our relationship with this company’s Black employees, and this company’s legacy." The company says he does not represent its views, and it had pledged to donate $1 million in support of the black community (the employees want this increased fivefold.) Bloomberg
Boyega speech
Disney's Lucasfilm and a host of other stars have supported actor John Boyega after he spoke at a London Black Lives Matter protest on Wednesday. "I need you to understand how painful it is to be reminded every day that your race means nothing," Boyega said, while also remarking that he wasn't sure if he would "have a career after this." "Lucasfilm stands with John Boyega," said the Star Wars maker. "We got you, John," tweeted actor and director Jordan Peele. Fortune
Net zero
The Energy & Climate Intelligence Unit, a British non-profit, calculates that more than half the world's GDP is now being generates in countries that have "net zero" carbon emissions targets for 2050 or earlier. Meanwhile, H&M and Rolls-Royce are among the companies backing the United Nations' new Race to Zero campaign, which involves the same target. And the OECD and the U.N. Development Programme are calling for coronavirus stimulus packages to be green. Oh, and the world just had its warmest May on record. ECIU
AROUND THE WATER COOLER
Corporate allyship
How can companies best support their black employees at this turbulent moment? Yesterday's Broadsheet newsletter delved into that question, based on the thoughts of Fortune's Most Powerful Women community, and here are some suggestions: focus on black belonging, recognize your power, make room for mistakes, and be authentic. Fortune
Asian markets
Certain Asian markets have had significant partial recoveries since the depths of March—South Korea's Kospi is up a hair under 50%, Australia's ASX 200 is up just over 36%, Thailand's SET Composite is up more than 45%, and Japan's Nikkei 225 is up almost 39%. However, analysts warn it is too soon to assume the world's economies are engaging in a V-shaped recovery. Pictet Asset Management's Luca Paolini: "Markets are pricing in a permanent decline in the cost of capital rather than focusing on income and earnings, which is boosting valuations." CNBC
Lockdown strength
South Africa had an unusually strict coronavirus lockdown that kicked in at a very early stage and was highly successful at suppressing the virus's spread. But extremely hardcore restrictions—people couldn't go for a walk or even buy booze—cannot last and, now that they are being gradually lifted, the country's COVID-19 stats are skyrocketing. A South African court has also ruled that the regulations were "unconstitutional and invalid" because many of them came with no clear justification. Guardian
Year in leadership
Fortune's Shawn Tully has a great rundown of last year's CEO appointments and the trends they show: although the number remains small (four), there's been a significant rise in hirings of female CEOs; global experience is becoming increasingly prized; so is technical knowledge; and boards favor insiders—unless a turnaround is needed. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-06-05--Global stocks soar ahead of a jobs report that could be historically grim

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Happy Friday, everyone. U.S. jobs numbers come out in a few hours. They will be brutal. But investors are looking beyond that, to stimulus measures and recovery data, sending global stocks higher.
Let’s see where they’re putting their money.
Markets update
Asia
The major indices are all in the green. Hong Kong’s Hang Seng is up about 1.6% in afternoon trade.
is up about in afternoon trade. Remember how the phase 1 China-U.S. trade deal was going to help out the American farmer? That promised $36.5 billion election-year boost is shriveling on the vine… UBS chief economist Paul Donovan, however, downplays the weak start, writing in a morning note to investors: “the reality is that both sides do not want to threaten the trade deal at the moment.”
China-U.S. trade deal was going to help out the American farmer? That promised election-year boost is shriveling on the vine… UBS chief economist Paul Donovan, however, downplays the weak start, writing in a morning note to investors: “the reality is that both sides do not want to threaten the trade deal at the moment.” “This is going to be a big year for IPOs,” predicts Charles Li. The CEO of Hong Kong Exchanges and Clearing believes the Trump Administration’s crackdown on U.S.-listed Chinese firms will lead to an explosion in new issuance by “returnees,” among others.
Europe
The European bourses climbed out of the gates, recouping some of yesterday’s losses. Milan and Frankfurt led the way with the DAX up 2% two hours into the session, looking to close out a huge week on a high note.
out of the gates, recouping some of yesterday’s losses. and led the way with the up two hours into the session, looking to close out a huge week on a high note. Investors are pleased with yesterday’s ECB decision to boost the PEPP asset-buying program by a surprise €600 billion , sending the euro and Italian bonds higher. (I’m going to hear about it from my father-in-law this weekend. Credetemi. Believe me.)
to boost the PEPP asset-buying program by a surprise , sending the and higher. (I’m going to hear about it from my father-in-law this weekend. Credetemi. Believe me.) Meanwhile, there’s been little to no progress in the latest post-Brexit trade deal talks. Still, the pound sterling and FTSE are climbing on Friday.
U.S.
The Dow , S&P 500 and Nasdaq futures are all pointing solidly higher. Of the trio, only the bluechip Dow closed in the green yesterday.
, and futures are all pointing solidly higher. Of the trio, only the bluechip Dow closed in the green yesterday. All eyes will be on the May jobs report , due out before the opening bell. The consensus is that the unemployment rate will have soared to anywhere between 16% and 22.5% . Not much of a consensus.
, due out before the opening bell. The consensus is that the will have soared to anywhere between and . Not much of a consensus. We keep returning to this question: why is Mr. Market ignoring a world in turmoil? The Journal‘s James Mackintosh breaks it down, noting it helps when the world’s biggest economies have committed to bailout packages that amount to 11% of their collective GDPs.
Elsewhere
Gold is down
is down The dollar too continues to fall.
too continues to fall. Crude is rebounding today despite OPEC discord over supply cuts. Brent is up nearly 2%, climbing above $40/gallon.
By the Numbers
42.6 million. As noted above, the May jobs report comes out in a few hours. The numbers will be bad, but won’t hardly tell the full picture. Yesterday’s report on jobless claims is a far more accurate indicator of the carnage in the labor markets, showing 42.6 million workers in the United States have now filed for unemployment benefits over the past 11 weeks. Yesterday’s tally of 1.9 million jobless claims was roughly 200,000 lower than the prior week, again more or less in line with analysts’ consensus. The nearly 43 million unemployed Americans means that just about one-quarter of eligible American workers are out of a job. And this does not include the millions of Americans on reduced-hours and reduced-pay. The jobs-destruction toll gets more troublesome every week despite the flattening curve:
9,741.97. Why dwell on bad news? Let’s go straight to the good stuff. Yesterday morning, roughly 90 minutes after the latest jobless claims numbers came out, the Nasdaq 100 touched a record high. It didn’t stay there; it closed a good 110 points off that high following choppy afternoon trade. Still, that brief milestone is well worth noting. The Nasdaq 100 is up nearly 39% since its March low, fueled by the Big 5—Microsoft, Amazon, Apple, Facebook and Google’s Alphabet. As Fortune has reported, the dichotomy between “winners” and “losers” has become even more apparent in this market. “Where there’s quite a bit of uncertainty, investors almost always…are on the hunt for growth and certainty—that’s the magic combination,” Wells Fargo Investment Institute’s senior global market strategist Sameer Samana recently told Fortune. In the meantime, let’s all marvel at this lovely “V.”
7.21 trillion. But not a penny more. The Fed balance sheet as of June 3 hit $7.21 trillion. What’s on the Fed’s shopping list every week? U.S. Treasurys, commercial paper, PPP assets, to name a few. The Fed balance sheet has been growing at a clip of about $50 billion per week. Why do we care? The central bank is dead-set on keeping the taps flowing so as to keep the credit markets running smoothly, which, in turn, is providing rocket fuel to the equities markets. A lot of markets observers are pointing to the rise in stocks and the Fed’s spending spree trending in line. The brilliant chaps at Market Ear point out:
***
Have a nice weekend, everyone. I’ll see you here on Monday.
Oh, and about next week: I’m taking Bull Sheet on the road come Monday. The Ministry of Get-out-of-town says it’s okay.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
A note from my Fortune colleagues on a timely new initiative:
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://docs.google.com/forms/d/e/1FAIpQLSeIHPCqUtls_HQxyGwn7sF1_ksLbrNe2-CJTEBBkA-kszFRZA/viewform?usp=sf_link
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
First in, first out? China was the first to lock down, the first to emerge from such restrictions, and it could be the first to recover to pre-pandemic levels. According to BlackRock analysts, the first meaningful green shoots of growth could happen by year-end. The No. 2 economy getting back on track is an important step for the global recovery.
Accounts un-payable. Businesses are still having problems getting paid, and that's having a ripple effect as they, in turn, can't pay their creditors. Fortune's Jeremy Kahn breaks it down by the numbers. If you know anybody who works in accounts payable, you should share with them this story.
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Market candy
Quote of the day
"Investors fleeing emerging markets see the S&P 500 Index as a safe haven, just as investors fled to the perceived safety of U.S. Treasury bonds during the 2008-2009 global financial crisis. This appears to reflect investors’ hopes that U.S. stocks won’t correct downward much, which could be a misplaced bet."
That's Diane Swonk, chief economist at Grant Thornton. She was one of six markets experts who took on the question from Foreign Policy: "Why are stocks soaring in the middle of a pandemic?"
... It's similar to the question I asked in yesterday's Bull Sheet. I got some great responses. I will share them next week.