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Jumpy investors grapple with a dreaded record-high—in coronavirus cases



Good morning. So much for COVID fading out by summer. From Australia to California, spikes in new coronavirus cases pushed investors to sell, sell, sell yesterday. But the mood is lifting, as are stocks.

Let’s see where the bulls are putting their money.

Markets update


  • In afternoon trade, the Asia indexes are mixed. Tokyo was down; Shanghai was up a tick.
  • The IMF added to yesterday’s markets gloom when it slashed its global growth outlook for 2020. Again. “We are definitely not out of the woods,” said the group’s chief economist.
  • Trade tensions and geopolitics have spooked investors of late. They won’t like this then: the Pentagon has drawn up a list of Chinese companies it says have ties to the Chinese military, the FT reports. Huawei makes the list, as does China Telecom and China Mobile, both U.S.-listed.


  • The European bourses fell for a second straight day out of the gates, only to recover, and climb. Germany’s DAX led the indexes higher, up 1% two hours into the trading session.
  • Bayer took off, up 2.6% at the open after announcing a $10.9 billion plea deal (the full tab is more than $12 billion) to settle three-quarters of the Roundup weedkiller cancer claims in the states.
  • Budget airline EasyJet plans to raise £450 million in a rights issue. It needs the funds to weather the worst of the coronavirus downturn, but the move may run into turbulence from company founder and main shareholder Stelios Haji-Ioannou.


  • The Dow, S&P 500 and Nasdaq each fell by more than 2% yesterday, the worst trading session since June 11. The futures are flat, though off their lows.
  • Seven states reported new records for coronavirus cases as America’s COVID-19 crisis takes a worrying turn. The spikes are forcing companies to rethink reopenings. Apple closed seven stores in Houston and Walt Disney said it will push back the planned reopening of its California theme parks beyond July 17.
  • That Q-word again. Quarantine. Beginning just a few hours ago, New York imposed two-week quarantine orders on travelers coming in from 9 states. Fail to comply, and you get hit with a fine. New Jersey and Connecticut also have similar plans in the works.


  • Gold is down.
  • The dollar is up, slightly.
  • Crude is falling again in choppy trade. As I write, Brent is below $40/barrel, a big two-day drop.

“Not out of the woods”

As is her style, Gita Gopinath, chief economist at the International Monetary Fund, did not mince her words yesterday. “We are definitely not out of the woods. We have not escaped the great lockdown,” she said in a video conference call. “This is a crisis like no other and will have a recovery like no other.”

The IMF did something unusual yesterday, slashing its current year global growth forecast for the second time in the past two months. And it wasn’t a mere tweak. They basically tore up the old forecast, and replaced it with a far gloomier one.

Here’s what they now see for the U.S. and global economy this year and next:

Let’s start at the top. The IMF now sees the U.S. GDP contracting by 8% this year; in April, they were predicting a more mild 5.9% 2020 hit. Global GDP will now fall by 4.9% this year, and will grow by a less impressive 5.4% next year. Again, these are not mild tweaks.

The impact on the labor market is worth noting, too, a fitting theme today as the latest batch of U.S. jobless claims are due out in a few hours. According to the IMF, the lockdowns in Q2 alone created a massive global decline in work hours, the equivalent to the loss of about 300 million full-time jobs, CNBC notes.

The IMF seems to be paying more attention to jobs as a downward drag on the recovery than most other forecasters. And other forecasters are calling them out on it.

In an investors note this morning, Paul Donovan of UBS pointed out that the IMF has a track record of seeing things glass-half-empty. “The IMF has been too pessimistic on growth in 27 of the past 30 years,” he wrote. “It tends to be significantly too pessimistic when there are big structural changes.”

Even still, the IMF numbers added to investors’ gloom yesterday, which has lingered into today’s choppy trading session.


Have a nice day, everyone. I’ll see you here tomorrow.

Bernhard Warner

A note from my Fortune colleagues on a timely new initiative:

Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here.

As always, you can write to or reply to this email with suggestions and feedback.

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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GlaxoSmithKline plc Just Beat EPS By 44%: Here’s What Analysts Think Will Happen Next



GlaxoSmithKline plc Just Beat EPS By 44%: Here's What Analysts Think Will Happen NextGlaxoSmithKline plc (LON:GSK) shareholders are probably feeling a little disappointed, since its shares fell 3.9% to…

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Why surveying the American public can help us change capitalism



The fallout from the COVID-19 pandemic has demonstrated the need for business leadership more clearly than ever. Americans increasingly trust business leaders to serve as societal leaders. And inequality and racial injustice have put a fine point on how urgent the challenge is. As a result, the stakeholder capitalism movement is gathering real momentum.

But changing capitalism isn’t easy. It needs new voices at the table, new narratives, and a better grasp of what value creation means. And it necessitates the development of new systems for defining what drives business success, for gathering data, and for measuring and reporting performance. 

JUST Capital has carved out a unique role in this transition by providing a credible and unbiased assessment of how America’s largest corporations are doing on the stakeholder criteria of greatest importance to the public, as well as the tools, products, and programs that actually drive change. 

As last Saturday’s Fortune op-ed illustrates, our approach is not without its critics. We welcome such feedback and see our strategy—like stakeholder capitalism itself—as a work in progress. One thing that’s abundantly clear is that building a stakeholder-led economy is not a competition. It’s a movement, with complementary parts, including CEOs and business leaders, investors, workers, civil society, policymakers, and more. 

The B Corp initiative championed by op-ed author Christopher Marquis is certainly an excellent option for any business wishing to commit to a stakeholder-based pathway. But the B Corp route doesn’t work for every company. Indeed, this is the point. No single initiative, organization, or project can upend shareholder primacy. It will take the entire ecosystem, working together, to drive real change. 

For our system to evolve, we first must rethink what business leadership means. Focusing on short-term returns to shareholders or measuring success solely on the P&L statement is clearly no longer enough. But how else might we measure it? To answer this, JUST Capital turns to the American people.

(Read, “In a time of crisis, Americans send a clear message to Corporate America: Focus on workers.”)

It’s vital that the public feels that stakeholder capitalism reflects their priorities because a movement isn’t credible without real people’s values. It isn’t a perfect science, but by partnering with the best public opinion research groups to reach a representative sampling of Americans, we feel confident that we are capturing many of the key issues. We rarely use polling to assess the efficacy of corporate practices. Instead, our polling ensures we stay rooted in the experiences of everyday people, rather than dealing in academic hypotheticals. 

Case in point: For the fifth year in a row, Americans said the most important action a company can take is to pay a fair and livable wage. With tens of millions of hardworking people still reliant on food stamps to feed their families, this makes sense. But without our survey work, it might not have been so apparent. This year, we’ve also used polling to get the public’s guidance on how companies should be responding to COVID-19, racial equity, and our democratic processes. 

When it comes to accurately measuring corporate stakeholder performance, the challenges are many and varied. 

One is getting to the truth on how companies are performing, as opposed to what they’re saying. For many of the issues we’re trying to measure, there is no definitive data source and no standardized way of reporting, which means you have to use proxies or estimates, to piece together the best possible analysis. We try to tell a balanced story, but it’s an inherently messy, inefficient process.

Another issue is relativity. Fundamentally, we’re assessing company performance relative to one another. We find the best players on the field, rather than assess where the field is going. Which is why the work of organizations like B Lab, which are working to move the whole field, is so valuable. Our work also doesn’t address every societal challenge. Overall, rankings are a blunt tool. The fact is that company stakeholder performance, like company financial performance, is uneven. 

Finally, there is the challenge of actually driving change. We see the work we do as a resource for the broader movement. It shed light on what companies actually did in the early days of COVID-19. It creates investment products that can drive capital toward companies that are better performers. It investigates the correlation between top performers and market performance. And it drives transparency and supports change, like advancing racial equity in the workplace. Recently we launched a new effort to ask CEOs to assess the financial health and security of their workers, because in this time, it’s no longer appropriate for CEOs to not have this information. 

Ultimately, we believe the market will drive toward corporate stakeholder performance, as more and more people seek to buy from, invest in, work for, and otherwise support those companies that do right by their stakeholders. But this can only happen with clarity on what we’re driving toward, and that’s the work of JUST Capital and others in the coming years.

Martin Whittaker is the CEO of JUST Capital. Alison Omens is the chief strategy officer of JUST Capital.

More opinion from Fortune:

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4 Key Benefits of Video Content



Convenience and timing play important roles if you and your business really want to stand out.

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