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Special Edition: The Latest on the Coronavirus Pandemic |
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By CFO Journal and WSJ Pro Staff |
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Good evening. The coronavirus pandemic sparked unprecedented economic and financial gyrations Monday, putting businesses across the world on edge. Here’s the latest on the unfolding crisis, and what professionals across a range of industries can do to help steer their companies through the turmoil. Here's where things stand: Stocks lost more than 12% of their value, with the Dow falling 3,000 points. Turmoil in the credit markets is just as profound. The Federal Reserve's moves to calm the markets are not working and investors are pushing for more action. Schools are closed for nearly 30 million children across the U.S.; the Bay area of northern California is on lockdown; The Trump administration announced new guidelines encouraging the public to end discretionary travel and to avoid gatherings of more than 10 people; the European Union moves to restrict travel into the bloc. |
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| The Scramble for Cash Begins |
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| EP Energy Chief Executive Russell Parker. PHOTO: EDDIE SEAL/BLOOMBERG NEWS |
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Apollo Global Management Inc. and other firms are backing off a commitment to finance shale driller EP Energy Corp.’s exit from chapter 11, people familiar with the matter said, the second major bankruptcy deal to falter over the turmoil in U.S. energy markets. Shares in alternative asset managers, including Blackstone Group Inc., Carlyle Group Inc. and Apollo Global Management Inc. have been hit by a broad market selloff, with the stocks down 25%, 28% and 22%, respectively, from the March 6 close as of Monday afternoon, writes William Louch from WSJ Pro Private Equity. Finance executives, mostly at Fortune 1000 companies, are concerned that the pandemic could lead to a global economic downturn, disrupting their businesses, reports Mark Maurer for CFO Journal. Companies around the world are drawing down their credit lines, saying it's a precautionary measure and not because they are facing liquidity strains. Startups too are facing falling valuations and a potential struggle to raise money just to stay in business. |
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Y Combinator, the prominent Silicon Valley startup accelerator, held its first online Demo Day online Monday. The twice-yearly event is typically a popular San Francisco event for top venture capitalists to see some of the industry's best new startups pitch for venture funding. Now, amidst a “shelter in place” order, that has all moved online in what is an early test of changes in the venture capital and startup world. The 197 companies in this batch come from 32 countries in areas ranging from remote work tools to artificial intelligence to biotech to consumer tech. Y Combinator partners expect funding to continue for these startups, but it will be worth watching as an indicator of activity in the startup world. --Tomio Geron, WSJ Pro Venture Capital |
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$50 Billion | Amount in financial assistance U.S. airlines are looking to obtain from the federal government, more than three times the size of the industry's bailout following the Sept. 11 attacks. |
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| Pro Tips on Enterprise Technology |
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The Department of Homeland Security’s cybersecurity group offers a guide for protecting supply chains and critical infrastructure, as well as combating threats to corporate networks. One strong theme: Do more, say more. That is, companies should increase system and network monitoring to receive early detection and alerts on abnormal activity. Security chiefs should overcommunicate information about how newly remote workers can contact technology support staff for help. For more, go to the guide, “Risk Management for Novel Coronavirus (COVID-19),” which include tips for avoiding phishing and social-engineering schemes, both of which are prevalent as the pandemic spreads. -- From Kim Nash, WSJ Pro Cybersecurity |
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| XtalPi researchers created this 3-D image of a part of the new coronavirus, in pink, attaching to human receptors. PHOTO: XTALPI INC. |
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The challenge of finding a drug that works among the thousands of potential candidates is one that artificial intelligence may be well placed to solve, writes Enterprise Technology Editor Steven Rosenbush. XtalPi, a pharmaceutical-technology company that has offices in Shenzhen and Cambridge, Mass. and investors including Tencent and Sequoia China, is trying to winnow down the field. Lipeng Lai, the company’s co-founder and head of AI research, said it has narrowed a list of about 2,900 approved drugs to a 38, using AI to make predictions about how they would perform against the virus. |
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Brands around the world should understand the lessons of China’s experience with the coronavirus, the research and advisory firm Gartner said in a new report. They include: Strengthening the brand by emphasizing cause marketing over traditional messages. Marketers including LVMH and Estée Lauder did when they made donations to fight the virus and publicized their moves on Weibo, Gartner said. Prioritizing digital growth platforms. The L'Oréal Group saw successful sales in February because it ended offline advertising and shifted online, especially to targeted or personalized mobile ads on short video app Douyin and on Alibaba e-commerce platform Taobao. “Brands should prioritize the platforms where consumers are spending the most time for activations and media investment,” Gartner wrote, noting that time online in China rose 20% during life under quarantine. --Nat Ives, CMO Today. |
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“To be as effective at controlling this virus as China, US states need to sever all links with Washington State and New York, restrict air and train travel across most of the country – as well as close down all schools,” | — Charlie Robertson, global chief economist of Renaissance Capital, in a Monday note to clients. |
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| The Fed, led by Chairman Jerome Powell, on Sunday cut its benchmark interest rate to near zero and unveiled other measures as it seeks to stabilize markets. PHOTO: JACQUELYN MARTIN/ASSOCIATED PRESS |
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The Fed is officially spent, Greg Ip writes in his WSJ column after the central bank’s latest mega-stimulus. Saving the U.S. economy now depends largely on fiscal policy, he writes. The rate cuts won’t halt the pandemic or reopen restaurants, but they will, at the margin, help. The biggest U.S. banks put share buybacks on hold Sunday and pledged to put their capital to use helping consumers and businesses struggling with the rapid economic slowdown caused by the novel coronavirus outbreak. Congress is under pressure to relax some of the provisions in the 2017 tax law. To help pay for cutting the corporate tax rate, the law curtailed deductions for net operating losses and interest. The changes to loss deductions, in particular, make it harder for companies to use today’s losses against past profits and claim quick refunds for cash infusions. |
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