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No time for optimism

February 7, 2020, 10:11 AM UTC

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Good morning.

I don’t mean to spoil a good party, but it’s beyond me why the U.S. stock market hit record highs yesterday. Traders seem to be whistling right past the coronavirus graveyard. What are they thinking? China has basically shut down for the month of February, and I doubt March will be much better. The official death count continues to rise—it’s now at 636—and the infection count is at 31,000. The New York Times quoted one Chinese official as saying the outbreak has led to “wartime conditions” in the country. The economic fallout from closing down one of the world’s two largest economies shouldn’t be underestimated.

A couple of pieces in Fortune on the topic this morning. One is this story by Grady McGregor, looking at the wet markets that seem to be the source of China’s exotic infectious disease problem. Another is this story by Jeremy Kahn on how AI could speed up efforts to find a treatment for the disease.

And then there’s this: the Chinese doctor who raised an early alarm on social media about the disease—and who said he was subsequently reprimanded by police for ‘rumor mongering’—died early this morning of the disease. He was 34.

You can follow Fortune’s coverage of the spreading virus here.

And if you are wondering whether tech-powered health care will make these sorts of outbreaks easier to fight in the future, you might consider joining us at Fortune Brainstorm Health, being held April 21-22 in Marina del Rey, Calif.—registration here. This is Fortune editor-in-chief Clifton Leaf’s baby, and he has put together a spectacular program that includes the chief executives of Amgen, Ancestry, Baxter International, Bristol-Myers Squibb, Cardinal Health, Centene, Cisco, GE Healthcare, IBM Watson Health, Google Health, among others.

I’ll be there. Let me know if you want to join.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

Credit Suisse

Tidjane Thiam has quit as CEO of Credit Suisse, after former COO Pierre-Olivier Bouée was implicated in two spying operations—one involving a former wealth management chief who had left for rival UBS, and one involving Credit Suisse's former HR chief. Thiam, who is being replaced next week by Thomas Gottstein: "I had no knowledge of the observation of two former colleagues. It undoubtedly disturbed Credit Suisse and caused anxiety and hurt. I regret that this happened and it should never have taken place." CNN

Cannabis woes

One of the darlings of the nascent Canadian marijuana sector is in trouble. Aurora Cannabis CEO Terry Booth is stepping down and the company is to cut nearly a fifth of its jobs—along with the valuation of some of its assets in South America and Europe. CFO Glen Ibbott: "We believe that the long-term opportunity for Aurora remains very compelling, despite a slower-than-anticipated rate of industry growth in the near-term." MarketWatch

SoftBank stake

Activist investor Elliott Management has reportedly built up a stake of over $2.5 billion in the tech conglomerate and is pushing for improvements to its corporate governance—including better management of SoftBank's $100 billion Vision Fund. According to the Journal, discussions between Elliott and SoftBank's management have thus far been cooperative. WSJ

Data flows

The U.K.'s enthusiasm for surveillance and its intelligence-sharing with the U.S. could pose a major problem after this year. The European Commission has to decide if the U.K.'s privacy rules are adequate, in order to allow the free flow of personal data from the bloc—and at least one EU regulator sees big problems ahead. Fortune

AROUND THE WATER COOLER

Trump vs Johnson

U.S. President Donald Trump reportedly tore into British Prime Minister Boris Johnson over the U.K.'s decision not to ban Huawei from its 5G networks. Words such as "apoplectic" and "livid" are being used to describe Trump's tone on a phone call with his counterpart, and British officials were apparently surprised at his tone. Good luck with that trade deal! Financial Times

Tesla investment

Is Tesla a good investment at this point? As Fortune's Shawn Tully writes, the firm's lofty market cap "dictates the height of all future bars it must surmount to deliver a decent return… Tesla will need an Olympian pole vault of a jump, the kind usually achieved only by the best of tech, to reach those heights." Fortune

Starlink spinoff

Speaking of Elon Musk firms, SpaceX is reportedly planning to spin off its space Internet business, Starlink—and may even take it public. The Starlink constellation already includes almost 300 satellites, and the plan is to have 12,000 in the sky by mid-year, around which point SpaceX can start offering connectivity. Bloomberg

Thai baht

Last year, the Thai baht was Asia's strongest currency. Now it's one of the worst-performing in the region, thanks to the coronavirus outbreak. Economists say the Thai economy is over-reliant on Chinese tourism and exports, both of which have been hit by the outbreak. CNBC

This edition of CEO Daily was edited by David Meyer.