Monday, July 13, 2020

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July 13, 2020 View Online | Sign Up
TOGETHER WITH
Quick Base
Good morning. We’ve got something really exciting to share with you today. Morning Brew is pivoting from newsletters to…
Games. Not really, but we did create online Mad Libz for you to play with your coworkers. It’s an embarrassing amount of fun—we’ve been playing at Morning Brew and can't stop laughing. 

MARKETS YTD PERFORMANCE


NASDAQ
10,617.44
+ 18.33%
S&P
3,185.04
- 1.42%
DJIA
26,075.30
- 8.63%
GOLD
1,801.80
+ 18.54%
10-YR
0.645%
- 127.50 bps
OIL
40.59
- 33.69%
*As of market close
  • Energy: The Saudis have seen enough—they’re pressing OPEC and allies to increase oil production in August as demand for fuel bounces back from pandemic lows. Members will talk it out on Wednesday via videochat. 
  • COVID-19 updates: Yesterday, Florida reported the largest daily increase in infections of any state since the pandemic began (more than 15,000 new cases). Former FDA Commissioner Scott Gottlieb said he expects the "apex" of cases in the South to hit in two to three weeks. 
Giphy
This week, we’ll enter an earnings season that some newsletter writers would call unprecedented if they couldn’t think of another word to describe it. 
Companies will share how they performed in the second quarter—the three months that featured a coordinated global shutdown of the economy and a reopening attempt that’s going better in some countries than in others. 
High-level: S&P company earnings are projected to decline 44% in Q2, which would be the largest drop since the financial crisis (when they fell 67% in Q4 of 2008). All 11 sectors of the index are expected to post negative earnings. 

Here’s the but...

Earnings projections in the coronavirus era are about as useless as rinsing a dish before you put it in the dishwasher. More than 180 S&P companies have pulled earnings guidance, leaving analysts scrambling to figure out ways to determine whether a company hit its goals, given the circumstances. 
So unprecedented times calls for unprecedented financial metrics.
  • “Investment pros everywhere are concocting homegrown methodologies and bespoke formulas to help them gauge a company’s health,” writes Bloomberg, whether that’s parsing an exec’s words or evaluating dining trends. 
  • Traditional financial measures like earnings per share are likely to be ignored in favor of broader narratives about companies’ experiences with closing and reopening. 

First up? 

As always, it’s the banks. Investment banking should be a bright spot given the surge in trading activity that followed the market crash.
  • At one point, daily equity trading volumes in the U.S. increased 90%, per the FT.
  • JPMorgan predicts a 50% annual increase in markets revenue in Q2.
What won’t be bright spots: M&A fees, earnings from lending and interest, and larger reserves set aside for loan losses.
Zoom out: Bank stocks significantly trail the S&P 500, which is down only 1.4% this year.
        

EDUCATION

A Back-to-School Public Health Conundrum

This week’s Friday Puzzle is early. As back-to-school season approaches...
  • The U.S.’ working parents are overwhelmed and need the flexibility typically provided by schools, especially as some workplaces return to the office. 
  • But COVID-19 cases are still rising in most states, and it may not be safe to send kids back to school.

There’s no easy solve, but the workforce desperately needs one

Yesterday, Education Secretary Betsy DeVos pushed for schools to reopen, stressing that “kids cannot afford to not continue learning.” She added that schools that don’t reopen should not get federal funding, a policy President Trump has also suggested. 
  • Public health experts such as former FDA Commissioner Scott Gottlieb and Dr. Tom Inglesby of Johns Hopkins said the administration shouldn’t be pressuring schools when safety is unclear. 
Congressional Democrats oppose the reopening push, too. House Speaker Nancy Pelosi said the administration is being reckless in its aggressive approach. When Congress returns next week, No.1 on the to-fight-about list is another coronavirus relief bill, which may include measures to help schools.
        
Francis Scialabba
In an interview with the FT published yesterday, WeWork Executive Chairman Marcelo Claure said the beleaguered coworking company is on track to earn its cash flow positive badge next year. 
WeWork has been on a journey. Last fall, WeWork had Brew writers exhausting We-[insert verb here] puns by melting down after an IPO filing revealed sketchy accounting practices and governance. In November, main investor SoftBank stepped in with a $5+ billion bailout. 
  • Claure said he turned the ship around by 1) slashing jobs 2) renegotiating leases and 3) selling assets. So...by making it a smaller ship. 

WeWork had to adjust for COVID-19, too 

Some tenants refused to pay or tried to wriggle out of leases. But Claure said revenue has held steady—and that the Great Workplace Revolution has even benefited WeWork. 
Some companies (including Microsoft, Citigroup, and TikTok owner ByteDance) are turning to WeWork facilities as satellite offices closer to employees’ homes, while some remote workers are using WeWork for shorter slices of the workweek. 
        

SPONSORED BY QUICK BASE

Beware: Extreme Efficiency May Occur

Quick Base
Nobody warned us exactly how efficient we would be by using Quick Base. Whether it's tracking customers, sales opportunities, projects, and so much more, Quick Base lets you manage processes more efficiently. 
Our increased efficiency has resulted in a lot of spare time and new hobbies...like taking leisurely lunches, going on long walks, and cultivating luscious house plants. 
We’re even using Quick Base to track the progress of our hobbies. The results? Our lunches are more leisurely, our walks are longer, and our plants? You guessed it—so much more luscious. 
In Quick Base, you don't need any code to build awesomely powerful software solutions for your business, which is great because we can barely turn on our computers. And you can turn all the workflows you’re managing in unwieldy spreadsheets—or *gasp* on paper—into an app in just minutes.
Don’t say we didn’t warn you. 
Kevin Mazur/Getty Images for Live Nation
Country star Brad Paisley resisted the urge to stage dive while performing at Live Nation’s first drive-in concert series, “Live From the Drive-In” in St. Louis Friday night. A review by the St. Louis Post-Dispatch: 
  • “Paisley, in his first live show since March, came off especially earnest and thankful for fans who ventured out to see him.”
  • “Applause seemed off in this setting, so horn honking was a big deal.”
        

CALENDAR

The Week Ahead

We'll learn a lot about COVID-19's effects on the economy this week, from company earnings to important data like June retail sales. 
Monday: PepsiCo earnings
Tuesday: Consumer Price Index for June; earnings (Wells Fargo, JPMorgan, Citigroup, Delta); Bastille Day 
Wednesday: TAX DAY; NBCUniversal’s Peacock streaming service launches nationally; earnings (Goldman Sachs, PNC, UnitedHealth Group, U.S. Bancorp, BNY Mellon)
Thursday: June retail sales; earnings (Bank of America, Morgan Stanley, Netflix, Truist Financial, Johnson & Johnson, Abbott Laboratories, Domino’s Pizza)
Friday: Housing starts; BlackRock earnings; World Emoji Day
        

GAMES

Mad Libz

As great as WIS (working in sweatpants) is, it’s okay to admit you miss hanging out with your coworkers and just...talking about everyday things.
To recreate some of that fun, Morning Brew built an online Mad Libz game to help you connect. You can choose from various situations—including “company party shenanigans”—to form a story that simultaneously makes no sense and all the sense in the world.
Try out the game, then get your entire office playing.

WHAT ELSE IS BREWING

  • Three senior execs at Ubisoft, the French developer of videogames like Assassin’s Creed, resigned following an investigation into allegations of misconduct. 
  • White House adviser Peter Navarro said President Trump will likely take more action against Chinese-owned apps WeChat and TikTok. 
  • Qualcomm will invest $97 million into Reliance Jio Platforms, becoming yet another U.S. player to grab a stake in India’s telecom superstar.
  • NBA whisperer Adrian “Woj” Wojnarowski was suspended without pay by ESPN over an f-bomb he sent to Sen. Josh Hawley in an email.
  • The Washington Redskins will announce today they'll retire the team's nickname, per Sports Business Journal.
  • Deal deals deals: Analog Devices is close to acquiring Maxim Integrated Products, and MultiPlan will go public via a merger with special purpose acquisition company Churchill Capital in a deal worth about $11 billion.

SPONSORED BY CISCO WEBEX

Cisco WebEx

Liberal boycott of Goya foods backfires


According to Bob Unanue, the CEO of food company Goya, “We’re all truly blessed at the same time to have a leader like President Trump, who is a builder.” Unanue hails from a Hispanic background, yet his support for the president has inspired a boycott of his company from the globalist, neo-Jacobin liberal camp.
Unanue has told the media, “We were part of a commission called the White House Hispanic Prosperity Initiative and they called on us to be there to see how we could help opportunities within the economic and educational realm for prosperity among Hispanics and among the United States.”

Goya foods seeing record sales thanks to boycott

America’s Hispanic population is larger than that of any country in the world except for Mexico.
Temper-tantrum liberals who use minorities as instruments to inflate their own sense of self-righteousness are boycotting Goya, America’s largest Hispanic-owned food company. As one of the many signs that Americans are getting sick of the liberal brow-beating, Goya products are flying off the shelves as ordinary people decide to take their burritos with a side of MAGA.
Many of those trying out Goya’s product line for the first time are non-Hispanic Americans lending support to a company whose leadership has the cojones to defy the globalist Jacobins.
Goya has a strong reputation in charity, as it donates heavily to soup kitchens and homeless shelters across America.

Goya CEO refuses to apologize for supporting the president


Unanue was speaking at a White House event during which Trump, who must be a racist if bought & paid for shills on network news say so, signed an executive order called the White House Hispanic Prosperity Initiative. The aim is to “improve access by Hispanic Americans to education and economic opportunities.”
The boycott of Goya appears to be at least partly inspired by the company’s competitors, like Uncle Tacos, but, as mentioned, the ploy is failing.
Having previously met Obama at the White House, Unanue called the boycott a “suppression of speech . . . So, you’re allowed to talk good or to praise one president, but you’re not allowed to aid in economic and educational prosperity? And you make a positive comment and all of a sudden, it is not acceptable.” He is refusing to apologize for praising Trump’s economic policy and said he would not turn down future invitations to the Trump White House. Why would he, more liberal tears mean more free
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