A Ford-VW tie-up would solve a ton of problems 22 May 2020 The two rivals’ souped-up electric and autonomous collaboration won’t solve their respective geographic weaknesses. A merger would. It’d also create value and give Ford’s underperforming boss a graceful exit. The biggest sticking point is the firms’ convoluted ownership.
Still time to make U.S. airlines pay their way 22 May 2020 Germany’s tough bailout of Lufthansa makes the U.S. government look a soft touch. True, it doesn’t make sense to punish an industry for problems not of its own making. But assuming more bailouts may be needed, there could be a chance for Uncle Sam to get more for the taxpayer.
Alibaba may be China’s secret stimulus weapon 22 May 2020 The e-commerce firm is benefiting as millions of shoppers turn online - quarterly sales rose 22% to $16 bln. But overall domestic demand is weak and Alibaba has been handing out subsidies to kickstart businesses. That makes the $569 bln giant ideally suited to revive consumption.
Bard bailout won’t keep all the world a stage 22 May 2020 Shakespeare’s Globe theater in London is asking for state aid to avoid closing its doors for good. It’ll likely get it to avoid the lousy symbolism. But live theater – including the more commercial variety on Broadway – needs more than a quick fix, or it may be curtains.
Luxury will fly only when travellers do 22 May 2020 Burberry and its fashion rivals face a summer of discontent. European stores are starting to reopen, and more bling is being sold in mainland China. But purchases by tourists won’t rebound for a while. Rising inventory is a sign that the current season is partly lost.
Corona Capital: Tech laggards, MAC fight 22 May 2020 Concise views on the pandemic’s corporate and financial fallout: Troubled firms HPE, Dell and IBM are facing even more challenges while chipmaker Nvidia gathers strength. Plus: A judge denied to fast-track payment firm Wex’s MAC fight.
Morgan Stanley gets closer to real Reliance prize 22 May 2020 Deals are flowing fast as Mukesh Ambani rejigs his empire. The U.S. bank has helped raise $10 bln for the tech unit from Facebook, KKR and others. It wasn’t on a bigger deal inked with Aramco but that’s less important, especially with the $70 bln Jio unit’s IPO on the horizon.
Financial myopia could be healed by virus 21 May 2020 Apple, Airbus and Asahi are among many companies withdrawing forecasts during the pandemic. It’s a good time to reconsider campaigns by JPMorgan boss Jamie Dimon and others to end quarterly profit guidance. Covid-19 should help refocus attention on the longer-term.
Bank watchdog Otting leaves loose ends dangling 21 May 2020 The outgoing OCC head revamped community lending rules without first getting fellow U.S. regulators on board. Despite good intentions, that’s not how glacial bank reform usually works. Lenders are now grappling with inconsistent rules. The mess will be left for others to resolve.
New data will track reopening in real time 21 May 2020 Plenty of financial-market information is available instantaneously, but economic metrics can be months out of date. In the ongoing pandemic, that has proved too slow. Novel sources like Klaviyo's online spending tracker and TomTom's traffic flows may have staying power.
Energy’s titans will experience a dead cat bounce 21 May 2020 The virus-led crude price crash is upending petrostates and oil majors alike. Incumbent leaders with storage capacity and low costs might seem to be the winners as smaller competitors flounder. But they’ll fall victim to the longer-term behavioural shifts prompted by Covid-19.
Telemedicine may be U.S. healthcare’s new normal 21 May 2020 Online doctor visits are surging. It’s a safe and convenient alternative to going in person, insurers incentivize it, and restrictive rules are easing. While virtual visits are usually cheaper, though, increased uptake could push up total healthcare spending.
Regulators will owe banks a favour post-pandemic 21 May 2020 In contrast to 2008, lenders have so far helped cushion Covid-19’s economic blow, while central banks have propped up financial markets. The crisis highlights banks’ value as steady providers of credit. That will lead to some looser rules - and possibly a green light for M&A.
Lufthansa rescue gives taxpayers first-class seats 21 May 2020 The German flag carrier will get a 9 bln euro bailout, including new shares and non-voting stock. The government gets a 25% stake on the cheap, and a more generous payout than other investors. Shareholders can at least be grateful that politicians are staying out of the cockpit.
Soccer stars’ wallets will carry the Covid burden 21 May 2020 England’s top league wants to follow Germany by restarting games. That would help teams minimise lost sales, which may be up to $1.3 bln. Still, the world’s biggest sport will be far less lucrative after the virus. Player wage cuts may be the only way to ensure clubs’ viability.
Corona Capital: Perpetual WFH, Macy’s 21 May 2020 Concise views on the pandemic’s corporate and financial fallout: Facebook and its peers consider making working from home the new normal, while Macy’s gives an insight into a corner of the retail market that was struggling even before the pandemic.
Moscow finds oil and vodka make a poor cocktail 21 May 2020 The former owners of Yukos, the energy group founded by Vladimir Putin foe Mikhail Khodorkovsky, are going after the Kremlin by grabbing trademarks for brands like Stolichnaya. These won’t make up for their lost $57 bln but may give aggrieved investors some negotiating leverage.
Xiaomi making the most of the crisis 21 May 2020 Rolling out a 5G model during China's lockdown paid off for the online-savvy handset maker. First-quarter sales increased 14% from a year earlier, to $7 bln. Serious setbacks for rival Huawei and virus-powered interest in home gadgets should help sustain the impressive growth.
J&J talc is a dry run for pandemic product risk 20 May 2020 The U.S. firm will stop selling talcum powder in the U.S. amid what it calls misinformation about its safety. That’s no big loss. But avoiding lawsuits can also deter companies from taking risks that aid the common good. Vaccines are an example, but the line isn’t always clear.
Corona Capital: China on Wall Street, Wind power 20 May 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. senators want Chinese firms to share their audited accounts – or face being kicked off American stock exchanges. Plus: why wind energy is the key to an economic and social, as well as environmental, resurgence.