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Good morning.
How quickly will business recover from the business lockdown? We’ve got new data from a Fortune survey of CEOs, done last week in collaboration with Deloitte, that sheds light on the question. Half of the CEOs believe their revenues will have returned to, or exceeded, pre-crisis levels by January. And more than half–58%–say their employment levels will have returned to, or exceeded, pre-crisis levels by January. Not bad.
Of course, that still leaves almost half of the CEOs who expect their recovery to take longer. Another 20% of CEOs expect revenues to recover by June of 2021, and an additional 15% see revenue recovery by January of 2022. By June of 2022, all but 4% believe their revenues will have recovered, while all but 14% believe their employment levels will have recovered. So it’s not exactly a V–maybe more of a “square root” recovery.
The survey also provides compelling evidence that this economic downturn has been unique in modern times in that it 1) prompted an increase in investment, and 2) accelerated technological innovation. Some 77% of CEOs say that their company’s “digital transformation was accelerated during the crisis.” And a roughly equal percentage said the pandemic “created significant new opportunities for our company.” Moreover, significant percentages said they increased investment in workplace safety (50%), IT infrastructure (40%), innovation (36%) and consumer/end-user experience (35%). Only 16% said they didn’t increase investment in any area.
You can read more on the survey here. News below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Bolton book
A new book from former national security adviser John Bolton has provided scores of claims about President Trump. Among them: Trump offered to kill investigations as favors to dictators; he asked Xi Jinping to buy U.S. agricultural products to aid Trump's re-election chances in key states; and he told Xi that building concentration camps for Uighurs was "exactly the right thing to do." Trump denies the allegations. Fortune
Online platforms
The Justice Department wants to roll back key legal protections for online platforms, in particular the civil immunity that shields Facebook should unlawful behavior take place over its service and it's seen as complicit. This would open the platforms up to lawsuits from people allegedly harmed by online fraud, for example. That is, if the changes get passed by Congress—and this might not be the year for that. Wall Street Journal
Digital tax
The U.S., which has responded angrily to countries such as France that have unilaterally introduced "digital taxes" on the local revenues of Big Tech firms, has abruptly pulled out of OECD talks to reach international agreement on the subject. Its allies are furious. France had agreed to suspend its tax so the OECD could reach an agreement, but is now threatening to revive the plan. French Finance Minister Bruno Le Maire: "Whatever happens, we will apply a tax on digital giants in 2020 because it is a question of justice." Bloomberg
Green recovery
The International Energy Agency has released a $3 trillion plan for governments to make a green recovery from the coronavirus pandemic. IEA executive director Fatih Birol: "As they design economic recovery plans, policymakers are having to make enormously consequential decisions in a very short space of time. These decisions will shape economic and energy infrastructure for decades to come and will almost certainly determine whether the world has a chance of meeting its long-term energy and climate goals." CNBC
AROUND THE WATER COOLER
Wall Street vs AOC
Blackstone's Stephen Schwarzman and Goldman Sachs's David Solomon are among the Wall Street power players who are pouring money into the campaign of former CNBC journalist Michelle Caruso-Cabrera to unseat Alexandria Ocasio-Cortez in New York's 14th congressional district primary. Although MCC has raised just over $2 million for her Democratic primary campaign (the election takes place next week), AOC has raised $10.5 million in small donations. Financial Times
Juneteenth statement
Historians say it's a powerful statement for companies to make tomorrow a holiday for employees. Juneteenth celebrates the end of slavery, and for companies such as Twitter, Mastercard and Target to make it a day off carries real resonance. Historian Tamika Nunley notes that the original Juneteenth proclamation says "the connection heretofore existing between [former masters and slaves] becomes that between employer and hired labor"—so it's fitting for employers to make a statement. Fortune
Brexit opinion
Former Australian prime minister Kevin Rudd has made a lacerating assessment of the British idea that striking trade deals with Commonwealth countries can make up for leaving the EU: "I’m struck…with the number of times Australia, Canada, New Zealand and India have been advanced by the Brexiteers in the public debate as magical alternatives to Britain’s current trade and investment relationship with the European Union…This is the nuttiest of the many nutty arguments that have emerged from the Land of Hope and Glory set now masquerading as the authentic standard-bearers of British patriotism. It’s utter bollocks." Guardian
Shape up
Obesity and related conditions such as type 2 diabetes and cancer are pre-existing conditions that can raise the likelihood of severe illness or death in the COVID-19 pandemic. So policymakers in Europe are considering how much they should move to tackle the continent's obesity problem—some say it would be a good start to get the EU to recognize obesity as a chronic disease, as the WHO has already done. Politico
This edition of CEO Daily was edited by David Meyer.
