Saturday, March 14, 2020

WORLD NEWS AND BREW

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  • What countries have not declared any known cases of coronavirus?
    What countries have not declared any known cases of coronavirus?
     
    March 14, 2020 Read in Browser
    TOGETHER WITH
    		Wise Bread
    Good Saturday morning. When you wash your hands today, make sure you sing “Happy Birthday” extra loud—we’re turning five! For nostalgia’s sake, let’s all read an excerpt from the Morning Brew’s first-ever newsletter (which was then a PDF called The Market Corner):
    • “Wheat futures decreased today as traders exited positions to book profits from a recent upswing resulting from expectations that Russian moves to limit wheat exports would boost demand for US supplies.” 
    • An update: Wheat futures fell for the third straight week. 
    And remember, our Brew socks + $5,000 giveaway is ending late Sunday night. See the bottom of the newsletter for details.

    MARKETS


    NASDAQ
    7,874.88
    + 9.35%
    S&P
    2,711.02
    + 9.29%
    DJIA
    23,185.62
    + 9.36%
    GOLD
    1,576.40
    - 0.87%
    10-YR
    0.981%
    + 18.70 bps
    OIL
    32.90
    + 4.44%
    *As of market close
    • On Capitol Hill: The House passed a major coronavirus relief package that includes free testing, support for food programs, and two weeks of paid sick leave. It'll head to the Senate next week. 
    • In the Rose Garden: President Trump declared the coronavirus pandemic a “national emergency” and freed up to $50 billion for state and local governments to respond to the crisis. 
    • Europe: Germany’s finance minister said the country is unleashing a “bazooka” to support the economy. “We’ll check later to see if we need additional smaller weapons,” he said. He can write for the Brew any day.
    Francis Scialabba
    One of the major criticisms of the U.S. government’s response to the coronavirus pandemic has been the woeful lack of testing capacity for the disease. Almost two months after the first U.S. case was announced, the NIH’s top infectious disease expert said, “The system is not really geared to what we need right now...it is a failing, let’s admit it.” 
    That’s slowly being remedied. Yesterday, the FDA gave emergency clearance to a coronavirus test developed by the Swiss diagnostics giant Roche. This thing is Speedy Gonzales:
    • It can test patients 10x faster than existing tests.
    • Using Roche's automated machines, it can produce results in 3.5 hours.
    • The most powerful system can test up to 4,128 patients a day.
    Roche Diagnostics CEO Thomas Schinecker said getting a new test developed and approved typically takes years. An “emergency team” started working on this one in January. 

    Other signs of life

    Yesterday, the Trump administration made a few other moves to ramp up testing. 
    First, someone is now finally in charge of the government's testing effort—the assistant secretary of health, Brett Giroir. Next, the Department of Health and Human Services said it was funding two companies, DiaSorin Molecular and Qiagen, to push them along in developing diagnostic tests.
    • The agency said these tests may be able to detect coronavirus in “approximately one hour.” 

    Looking ahead

    Dr. David Kessler, a former FDA commissioner, explained in the NYT yesterday that there are a few ways the private sector can help expand testing capacity: 
    • Delivery companies like FedEx, UPS, and Amazon can transfer specimens from mobile collection sites to labs.
    • Then, bring in the big guns: Apple, Microsoft, Google, and Salesforce can supply the data management systems to take those specimens and turn them into useful information. 
    Bottom line: “There’s no reason the testing infrastructure can’t be up and running in seven days so that every person in America who needs a test can be tested,” Kessler wrote.
            
    Giphy
    Monday was the worst day for stocks since the financial crisis. Thursday was the worst day for stocks since 1987. Friday was the best day for stocks since 2008. Great week for setting records, impossible week for anyone trying to keep track of markets.
    The one thing to remember: Volatility works in both directions.
    By Friday’s close, the Dow tallied a nearly 2,000-point gain and the S&P and Nasdaq surged, too. Still, the S&P fell more than 8% on the week and the Dow about 10%.
    But in these socially distant times, we take what we can get. While Friday was at least partially a response to just how savage Thursday trading was, there were other reasons for stability:
    • President Trump announced a plan of coronavirus action, including 50,000 new tests and relief for the energy sector.
    • Financial leaders around the world executed on equity-boosting strategies, from Norway and Canada cutting rates to Japan buying billions in government bonds to Italy and Spain banning some short-selling.
    Bottom line: You're lucky we didn't even talk about bitcoin. 
            

    ENERGY

    This Doesn't Look Like an Occident

    Occidental Petroleum will adopt a “poison pill” to ward off hostile takeover bids, because Advil only gets you so far when shares have dropped about 60% this month.
    The details: The poison pill plan came one day after the OG activist investor Carl Icahn upped his Occidental stake to nearly 10% in a mission to fire the oil producer’s board.
    • The poison pill is a nifty corporate maneuver that makes the acquisition target's shares seem unattractive for a potential buyer. It’s a defensive tactic, like bolting the back door and shutting the blinds. 
    But for Icahn, the front door’s wide open. Oil prices are collapsing thanks to coronavirus and the Saudi/Russia price war...which started in part by targeting U.S. shale producers. In spectacularly bad timing, Occidental bet big on U.S. shale with a $37 billion acquisition of Anadarko Petroleum last year.
    Icahn thinks the deal’s grounds for removal. With Occidental now worth less than one-third the price it paid for Anadarko, Icahn has quadrupled his investment and accused the company’s leadership of brokering “one of the worst disasters in financial history.”
            

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    MISC

    ICYMI

    Elon Musk being interviewed
    Steve Jurvetson from Menlo Park, USA, Elon Musk at TED 2017, CC BY 2.0
    Our weekly hub for non-coronavirus related news... 
    A billionaire CEO looks for a new facility: It’s not Bezos, but Elon Musk, who tweeted on Tuesday he’s “scouting locations for Cybertruck Gigafactory. Will be Central USA.” Using the same strategy in 2014, Musk got a $1.3 billion incentive package from Nevada, Bloomberg notes. 
    Turmoil in U.S. Soccer: Carlos Cordeiro resigned as president of the U.S. Soccer Federation Thursday night. He was under pressure all week after legal filings claimed the women’s soccer team had “fewer responsibilities than their male colleagues.” Cindy Parlow Cone will take his place and become the federation’s first woman president in its 107-year history.
    Modell’s goes bankrupt: The sporting goods retailer filed for Chapter 11 Wednesday. The company was founded in 1889, but back then Princeton was the best team in college football and Amazon and Walmart didn’t exist. Also, you’ll get a kick out of this: The CEO blamed lower jersey sales on the NY Jets and Giants being terrible.
            

    FOOD/MATHEMATICS

    Happy Pi Day!

    A man cheering on a baking pie
    Giphy
    If you're bored this weekend...and we assume you might be, you can memorize pi to 1,000 decimal places.
    1,000 digits of pi
    For more dessert: The best visualization of pi we've seen.

    WHAT ELSE IS BREWING

    • Bill Gates is leaving Microsoft's board.
    • Warren Buffett said he’ll hold a significantly scaled-down Berkshire Hathaway shareholders meeting in Omaha. 
    • Apple’s big developer conference is moving to an online-only format. 
    • Delta dramatically cut its passenger-carrying capacity by 40%. 
    • Grubhub is temporarily suspending commission fees for independent restaurants.
    • The Pentagon is reconsidering the giant cloud computing contract it awarded Microsoft after Amazon’s weeks of complaining finally got to the generals.
    • Social Distancing: The dos and don'ts.

    BREW'S BETS

    • The S&P is down -25.53% for the month. And the worst might be yet to come. Now is the most important time to start diversifying into something like art, which has the lowest correlation factor to equities according to Citi. Learn why 88% of all fund managers recommend investing in art by signing up for Masterworks.*
    • This skincare super duo has us glowing. Meet the PM Power Couple from Onekind. Get your hands on this anti-aging serum & night cream duo—packed with ingredients like squalane and retinol—and turn back the clock while you sleep. Take $20 off with code GLOWGETTER20.*
    • Weekend conversation starters entertainment recs: because you'll probably need #QuarantineAndChill activities more than talking points…
    *This is a sponsored post

    SATURDAY HEADLINES

    Saturday Headlines is the comfort food of Morning Brew—warm, relatable, and often overcooked. We've compiled four headlines from the week's news. Three are real, but one is made up. Can you spot the fake? 
    1. “Toilet paper hoarding boosts bidet sales”
    2. “Tahiti approved as Olympic surfing venue for 2024 Paris Games”
    3. “A scientific meeting on coronaviruses was canceled due to coronavirus”
    4. “MeWork: Meet the Atlanta entrepreneur renting out desks to stranded work-from-homers”

    GIVEAWAY
    Last chance: If you get 5 referrals by tomorrow at midnight, you'll earn:
    1. A brand new pair of Brew socks
    2. A chance that when you open that package of socks, there’s a golden ticket worth $5,000 in there.
    You'll get an email on Monday if you qualify.*
    Click here to get free swag.
    Hit the button below to start sharing.
    Share to Win
    Or copy & paste your referral link to others:
    morningbrew.com/daily/r/?kid=a17a7110
    *See the terms and conditions of the giveaway here.

    SATURDAY HEADLINES ANSWER

    We made up MeWork. But that is a good idea...
                  
    Written by Neal Freyman and Kinsey Grant
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