Hadas: Covid gives monetary extremists false hope 27 May 2020 Those who fear rising prices think anti-pandemic stimulus will surely unleash uncontrolled inflation. Deflation-worriers are just as certain that the global demand shock means their old enemy is lurking. Both disasters are possible, but policy and habit point to price stability.
Corona Capital: Hockey, HBO, Minority businesses 27 May 2020 Concise views on the pandemic’s corporate and financial fallout: A plan to get pucks back on the ice offers a sporting template. Meanwhile, HBO’s streaming service may have missed its moment, and a survey shows minority-owned businesses have mixed feelings about life after Covid.
Europe has way out of Covid corporate debt trap 27 May 2020 Germany, Britain and France have approved $140 bln in state-backed loans to firms. As that number rises, so does the risk of a damaging debt overhang. Linking repayments to profit, so that some companies pay nothing, would help forestall that growth-sapping scenario.
Apply political-capital discount to Abe’s cash 27 May 2020 Japan’s prime minister is prepping $930 bln of fresh stimulus. Funds are critical as the economy staggers, but the crisis also offers a golden chance to ram through overdue changes for Japan Inc. Alas, Abe’s sinking popularity hobbles his ability to do much more than spend.
Latin America puts new spin on airline distress 26 May 2020 The region’s largest carrier, Latam Airlines, has filed for bankruptcy protection weeks after rival Avianca did. It can’t bank on government bailouts and has hefty dollar liabilities, amplifying the shock of having to ground planes. The future looks a lot smaller.
Hertz is a study in financial comorbidities 26 May 2020 The car-hire company’s heavy debts crushed it when Covid-19 curtailed travel. Other businesses with overengineered balance sheets have similarly come unstuck. It’s not that Hertz could have seen this coming – but the system has quickly switched to favoring flexibility over risk.
The Exchange: Vaccine optimist 26 May 2020 Lloyd Minor, the dean of Stanford’s school of medicine, tells Rob Cox that research into the coronavirus shows promising signs for the discovery of a vaccine. Just the same, the world needs to better prepare for pandemics, and medicine is at the cusp of extraordinary change.
Vegan boom is heading for a meat-fuelled bust 26 May 2020 Sales of animal product-free food soared in May, bumping up shares in the likes of Beyond Meat. Viral outbreaks at slaughterhouses suggest vegan supply chains are more durable. But as beef giant Tyson cuts prices and a slump looms, appetite for pricier foods could wane.
Corona Capital: Texas bank merger 26 May 2020 Concise views on the pandemic’s corporate and financial fallout: Texas Capital and Independent Bank ditched their almost $3 bln deal as Covid-19 played havoc with oil-and-gas loans. It is, at least, a mutual decision.
Sanofi finds M&A cure to CEO foot-in-mouth disease 26 May 2020 The French drugmaker is selling a $13 bln stake in biotech Regeneron. CEO Paul Hudson, recently chastised for saying America would get first dibs on a Covid-19 vaccine, now has a pristine balance sheet to do deals and invest. It helps Sanofi’s growth problem, and public image.
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.
China guts growth goal for greater good 22 May 2020 Beijing has ditched its annual GDP target for the first time. This relieves officials from making up for slumping demand by juicing industrial overcapacity with sloppy credit, and puts employment into focus. What’s good for China will be mixed news for trading partners.
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.
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.
Viewsroom: Reopening after the pandemic 21 May 2020 Major economies like Italy and Switzerland are attempting to return to normal, but with notable differences, as columnists in both countries discuss. And Sharon Lam in Hong Kong talks about the future of leisure and business travel with Global Editor Rob Cox.