The roller coaster ride may not be over
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I caught up yesterday with Jim Loree, CEO of Stanley Black & Decker, who has been on a roller coaster ride recently that makes Cedar Point seem tame. The $24 billion market cap company saw sales nosedive after the pandemic hit, and its stock followed suit, losing more than half its value. “We were at the edge of the abyss,” he says.
But then in late April, the company started to see U.S. tool sales by way of Home Depot, Lowes and Amazon shoot up, with growth numbers “we’ve never seen in our lifetime.” What happened? “There’s been a reimagination or a reconnection with the home,” he says. “That works extremely well for our tool business. It also works well for the outdoor business.” He expects much of that to continue. “I think this reconnection with the home is going to be a semi-permanent sort of change.”
Loree added a note of caution that I’m hearing increasingly from U.S.-based CEOs. “I have an ominous sense about what is happening in the U.S., in terms of a second wave, or a continuation of the first wave,” he said. The roller coaster ride may not be over.
By the way, Loree mentioned the $600 unemployment benefit “has not helped” his efforts to keep his factories up and running and fully staffed in the U.S. “Some employees can make more money by staying home.” That’s the subject of a hot debate in Congress this week. Fortune’s Lance Lambert breaks it down, here.
More news below.
The EU's top court has struck down the U.S.-EU Privacy Shield deal, which gave American companies an easy way to legally handle Europeans' personal data. Big companies can still use an alternative mechanism, but even that may not work for them soon—unless the U.S. reforms its privacy and surveillance laws, its tech industry may soon find it extremely hard to serve EU users. Fortune
Twitter got hacked, bigtime. The attackers were able to commandeer the accounts of everyone from Joe Biden and Jeff Bezos to Apple and Uber—and they used that access to pump out messages urging people to send cryptocurrency to a certain address, for which those people would receive double the money in return. The scam netted over $100,000 in a few hours. Fortune
China's economy is growing again—Q2 was 3.2% up on the year before. It's the first major economy to do so since the pandemic struck. Sequentially, it was an 11.5% rebound; Q1 had of course seen a 6.8% contraction due to China's earlier-than-the-rest-of-us shutdown. Manufacturing has been slowly recovering, and exports and imports finally started growing last month too. Fortune
Apple's almost-$15 billion Irish back-tax bill has been cancelled, for now. One of the EU's highest courts yesterday annulled a 2016 European Commission decision that said Ireland had given Apple illegal state aid by allowing its Irish subsidiaries to pay a very low effective tax rate. The court said the Commission hadn't proven Ireland gave Apple any special advantage. The Commission can now appeal, though—and it's also trying to stop EU countries from heavily undercutting their peers on the tax front. Fortune
AROUND THE WATER COOLER
Tencent's WeChat has gained an ecommerce feature that lets merchants build virtual shops in the messaging app without the need for outside developers. It's a challenge to rivals Alibaba and JD.com. Merchants won't have to pay service charges, so the move could attract smaller businesses (Alibaba's platforms charge fees.) CNBC
The Wirecard scandal continues to deepen. Now it has emerged that former CEO Markus Braun borrowed around $40 million from the payment group's banking arm in January, causing major board ructions and prompting a review from Bafin, Germany's financial regulator (which, in the wake of the Wirecard collapse, is now itself under scrutiny.) Braun's lawyer says he repaid the loan in March. Financial Times
Sanofi CEO Paul Hudson writes for Fortune that, when the COVID-19 pandemic has truly passed, the pharma industry must invent a "new normal" that capitalizes on the accelerated drug development and approval processes we are witnessing now. Hudson: "The pandemic has proven beyond a doubt that as an industry, we can move together at unprecedented speed." Fortune
What would have happened if the CARES Act and other stimulus measures had not been passed, parceling out assistance as the pandemic gathered speed in the U.S.? Bank of America asked that question and reckons the S&P 500 would have plummeted to 1,720 (it's now above 3,200.) There would obviously have been a huge impact on jobs and public health, too. Fortune
This edition of CEO Daily was edited by David Meyer.