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Good morning. David Meyer here in Berlin, filling in for Alan.
This morning’s extraordinary New York Times front page really says it all—the sudden spike in U.S. unemployment claims, numbering almost 3.3 million, takes up the right side of the page while historical claims levels to the left provide ample space for the articles above them. What we are witnessing is quite literally off the charts, and economists say this is just the start.
News from China is not particularly comforting, either. Although factories there are firing up and people are leaving the confines of their homes, demand for Chinese products has dried up due to the situation elsewhere. As China Beige Book CEO Leland Miller told the Wall Street Journal: “There are clearly firms going back to work, workers are returning, lights are going on. But the data is actually still getting worse through March, across almost everything we tracked…They may be back, but they’re not back to growth.”
Meanwhile, the U.S. now has more reported coronavirus cases than China has had, casting further doubt on President Donald Trump’s claim that the nation can be brought back to work “pretty quickly”.
Nevertheless, as we head into the weekend (I won’t ask if you have exciting plans) there are a few reasons to be cheerful. For one thing, the House of Representatives looks set to fast-track the emergency $2 trillion relief bill that Americans need—a fact that pleased the markets yesterday, though the rally appears to be over for now.
There have also been some promising diagnostic announcements in the last couple days. The U.S.’s Henry Schein and the U.K.’s Mologic both say they have developed pinprick tests that can tell doctors, within 15 and 10 minutes respectively, whether a person has already had COVID-19—Henry Schein’s system is available now, and Mologic’s is undergoing validation. Such antibody tests will be crucial to getting economies back up and running.
Germany’s Robert Bosch has also announced a rapid—as in 2.5 hours—test for current COVID-19 infections. The test runs on Bosch Healthcare Solutions’ existing Vivalytic analysis device, and was developed in just six weeks.
We are going to get through this. Don’t take it from me; listen to The Doctor. More news below.
Trump and Xi
President Trump and Xi had a good phone call in which they pledged cooperation in the pandemic fight. "China has been through much & has developed a strong understanding of the Virus. We are working closely together. Much respect!” Trump tweeted after the call. Notably, he seems to be refraining from his contentious designation of the coronavirus as the "Chinese virus". Fortune
The U.S. has indicted Venezuelan strongman Nicolas Maduro and members of his inner circle on narcoterrorism and money-laundering charges. The country's president—as still recognized by Russia, China and others—is now effectively an internationally wanted man, with a $15 million reward available to anyone supplying information leading to his capture or conviction. Attorney General William Barr: "Maduro and the other defendants expressly intended to flood the United States with cocaine in order to undermine the health and well-being of our nation." Washington Post
India's Tata Motors (a big deal in itself but known to many as Jaguar Land Rover's owner) is to separate its passenger vehicles business from its trucks-and-buses division. The aim is to make the cars business viable in the long term through "mutually beneficial strategic alliances"—times were already tough due to tightening emissions standards and the shift to electrification and autonomy, but "the recent outbreak of COVID-19 virus increases the challenges faced by the business," Tata said. Bloomberg
Singapore Airlines is trying to raise around $10.5 billion from its existing investors, in order to offset the coronavirus shock to its business. State-owned Temasek Holdings, the majority shareholder, is underwriting the fundraising. The carrier's share price sank as much as 10.5% on the news. Reuters
AROUND THE WATER COOLER
The British government has come under much criticism for not participating in an EU scheme to bulk-buy much-needed ventilators, particularly since a spokesman for Prime Minister Boris Johnson said this was because Brexit has occurred (though we are still in the transition period). Now the government has changed its tune, saying it isn't participating in the scheme because its invitation from the European Commission never arrived. The Commission said it's looking into the claim, but the U.K. was always able to join the EU's joint procurement efforts. Politico
Fortune Analytics and SurveyMonkey conducted a poll earlier this week to gauge views on the $2 trillion stimulus bill that's passing through the legislative process. The results suggest 85% of Americans favor the one-time cash payment, 82% support federal assistance to small businesses, and 76% worry that they or someone in their family will be exposed to the virus (a figure that's up from 50% a few weeks ago). SurveyMonkey
Skyrocketing demand for surgical masks has led to a bonanza for Shenzhen-listed Dawn Polymer, a maker of the melt-blown fabrics needed for that product. The company's share price rose 417% in the six weeks after January 20, when the virus's spread in China became apparent, and CEO Yu Xioaning and his wife Han Limei have reportedly seen a $1.9 billion increase in the value of their holdings. Financial Times
Conference Board vice president Gad Levanon has some advice for companies weighing up layoffs as a cost-cutting measure during the coronavirus crisis. For one thing, if this all blows over relatively quickly, a tight labor market and war for talent will probably follow soon. Also, "the risk is a cycle of self-fulfilling expectations. The more employers expect the crisis to be severe and long, the more they are likely to lay off workers and cut spending. That, in turn, would lower business and consumer confidence and worsen the crisis." Fortune
This edition of CEO Daily was edited by David Meyer.