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| You Have to Pay to Give Oil Away | You Have to Pay to Give Oil Away |
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| Our next DealBook Debrief call is about the fallout for the retail industry, which has been hit particularly hard by the pandemic. We’ll be joined by Vanessa Friedman, The Times’s fashion director and chief fashion critic, to discuss how the fashion and luxury industries are coping, and the possible lasting effects. We hope you’ll join us on Thursday, April 23, at 11 a.m. Eastern — R.S.V.P. here. (Want this in your inbox each morning? Sign up here.) | Our next DealBook Debrief call is about the fallout for the retail industry, which has been hit particularly hard by the pandemic. We’ll be joined by Vanessa Friedman, The Times’s fashion director and chief fashion critic, to discuss how the fashion and luxury industries are coping, and the possible lasting effects. We hope you’ll join us on Thursday, April 23, at 11 a.m. Eastern — R.S.V.P. here. (Want this in your inbox each morning? Sign up here.) |
| “Crude costs money again” is a strange headline for strange times. The price of a barrel of oil for delivery in May dropped below zero yesterday: West Texas Intermediate crude, the U.S. benchmark, closed at around -$38. It bounced back above zero, briefly, in early trading today, before falling back into negative territory. Market watchers are trying to make sense of it all. | “Crude costs money again” is a strange headline for strange times. The price of a barrel of oil for delivery in May dropped below zero yesterday: West Texas Intermediate crude, the U.S. benchmark, closed at around -$38. It bounced back above zero, briefly, in early trading today, before falling back into negative territory. Market watchers are trying to make sense of it all. |
| Technical factors explain some of the decline. The soon-to-expire May contract went negative on thin volumes, while the more heavily traded June contract has remained above zero. In essence, traders don’t want to be stuck taking delivery of any oil now — storage is nearly full and demand is nonexistent — but they think that production cuts and a gradual reopening of the economy will make oil worth something in the future. | Technical factors explain some of the decline. The soon-to-expire May contract went negative on thin volumes, while the more heavily traded June contract has remained above zero. In essence, traders don’t want to be stuck taking delivery of any oil now — storage is nearly full and demand is nonexistent — but they think that production cuts and a gradual reopening of the economy will make oil worth something in the future. |
| The ugly economics of the industry are also to blame. The production cuts that major oil powers agreed on this month aren’t enough to offset the steep drop in demand with much of the global economy in lockdown — so much so that Saudi Arabia and other OPEC members may start cutting a few weeks ahead of schedule, The Wall Street Journal reports. | The ugly economics of the industry are also to blame. The production cuts that major oil powers agreed on this month aren’t enough to offset the steep drop in demand with much of the global economy in lockdown — so much so that Saudi Arabia and other OPEC members may start cutting a few weeks ahead of schedule, The Wall Street Journal reports. |
| • The battered U.S. energy industry is now worth around $700 billion in total market capitalization, roughly half the market value of Microsoft, according to the Bespoke Investment Group. | • The battered U.S. energy industry is now worth around $700 billion in total market capitalization, roughly half the market value of Microsoft, according to the Bespoke Investment Group. |
| Could it happen again? Analysts at ING think so: “It is likely that storage this time next month will be even more of an issue, given the surplus environment, and so in the absence of a meaningful demand recovery, negative prices could return for June.” | Could it happen again? Analysts at ING think so: “It is likely that storage this time next month will be even more of an issue, given the surplus environment, and so in the absence of a meaningful demand recovery, negative prices could return for June.” |
| The federal government’s small-business rescue fund, the Payroll Protection Program, is out of money. When it was up and running, getting a loan from a designated first-come-first-served program was a matter of luck and connections. | The federal government’s small-business rescue fund, the Payroll Protection Program, is out of money. When it was up and running, getting a loan from a designated first-come-first-served program was a matter of luck and connections. |
| A customer’s bank mattered a great deal. Some lenders took days to set up their systems to gain access to the fund. Banks often gave priority to existing customers and, data shows, to bigger ones, including over 80 publicly traded companies. | A customer’s bank mattered a great deal. Some lenders took days to set up their systems to gain access to the fund. Banks often gave priority to existing customers and, data shows, to bigger ones, including over 80 publicly traded companies. |
| • That has led businesses to sue banks like JPMorgan Chase and Bank of America, accusing them of favoring bigger customers. | • That has led businesses to sue banks like JPMorgan Chase and Bank of America, accusing them of favoring bigger customers. |
| Much of the outrage is directed at big restaurant and hotel chains, which were allowed to request funds, depriving true mom-and-pop businesses of loan money. And it doesn’t help that a majority of successful applicants haven’t received their money, according to a new survey. | Much of the outrage is directed at big restaurant and hotel chains, which were allowed to request funds, depriving true mom-and-pop businesses of loan money. And it doesn’t help that a majority of successful applicants haven’t received their money, according to a new survey. |
| Congress is poised to replenish the fund with $300 billion, and could have a bill to vote on as soon as this afternoon. But the banking industry says this won’t be enough: Lenders expect the reopened program to burn through $50 billion per day. | Congress is poised to replenish the fund with $300 billion, and could have a bill to vote on as soon as this afternoon. But the banking industry says this won’t be enough: Lenders expect the reopened program to burn through $50 billion per day. |
| The first batch of states have laid out their plans to lift lockdowns, and all eyes are on them to see if they’re moving too early. | The first batch of states have laid out their plans to lift lockdowns, and all eyes are on them to see if they’re moving too early. |
| South Carolina will let some retailers open today, Georgia will permit gyms and hair salons to do so on Friday, and Tennessee won’t renew a lockdown order set to expire on April 30. All three states said they believed that infections had leveled off enough to let them reopen their economies. | South Carolina will let some retailers open today, Georgia will permit gyms and hair salons to do so on Friday, and Tennessee won’t renew a lockdown order set to expire on April 30. All three states said they believed that infections had leveled off enough to let them reopen their economies. |
| They’re doing so despite the debate over coronavirus testing. Other states are arguing that they can’t reopen because there isn’t enough screening for the virus. An official with the W.H.O. warned this morning that the lifting of lockdowns must be gradual to avoid a second wave of infections. | They’re doing so despite the debate over coronavirus testing. Other states are arguing that they can’t reopen because there isn’t enough screening for the virus. An official with the W.H.O. warned this morning that the lifting of lockdowns must be gradual to avoid a second wave of infections. |
| • Denmark, which has opened some schools and businesses, has pledged to test everyone with symptoms. | • Denmark, which has opened some schools and businesses, has pledged to test everyone with symptoms. |
| Steven Davidoff Solomon, a.k.a. “The Deal Professor,” is the faculty director at the Berkeley Center for Law, Business and the Economy | Steven Davidoff Solomon, a.k.a. “The Deal Professor,” is the faculty director at the Berkeley Center for Law, Business and the Economy |
| If past crises are any guide, the big technology companies are about to sidestep antitrust laws and get even bigger. | If past crises are any guide, the big technology companies are about to sidestep antitrust laws and get even bigger. |
| Consider last week’s decision by British regulators to allow Amazon’s investment in the London-based food delivery start-up Deliveroo. Amazon said last May that it was joining a $575 million fund-raising round, valuing Deliveroo at perhaps as much as $4 billion. Britain’s Competition and Markets Authority halted the deal because it thought it might be bad for competition. | Consider last week’s decision by British regulators to allow Amazon’s investment in the London-based food delivery start-up Deliveroo. Amazon said last May that it was joining a $575 million fund-raising round, valuing Deliveroo at perhaps as much as $4 billion. Britain’s Competition and Markets Authority halted the deal because it thought it might be bad for competition. |
| That was before the pandemic. | That was before the pandemic. |
| Deliveroo argued that, without Amazon’s money, it would have to shut down. The British antitrust authority backed down, saying that if Deliveroo went bust, it “could mean that some customers are cut off from online food delivery altogether, with others facing higher prices or a reduction in service quality.” | Deliveroo argued that, without Amazon’s money, it would have to shut down. The British antitrust authority backed down, saying that if Deliveroo went bust, it “could mean that some customers are cut off from online food delivery altogether, with others facing higher prices or a reduction in service quality.” |
| Expect this to be repeated elsewhere. In the U.S., big companies will take advantage of the so-called failing firm exemption to antitrust law. This doctrine, which dates from a 1930 Supreme Court case, allows otherwise anticompetitive deals to succeed when the target would probably fail without the deal and there is no other viable investment. American Airlines used it when buying TWA. | Expect this to be repeated elsewhere. In the U.S., big companies will take advantage of the so-called failing firm exemption to antitrust law. This doctrine, which dates from a 1930 Supreme Court case, allows otherwise anticompetitive deals to succeed when the target would probably fail without the deal and there is no other viable investment. American Airlines used it when buying TWA. |
| Consolidation is natural during troubled times. Recall how the biggest U.S. banks gobbled up failing competitors during the 2008 financial crisis. | Consolidation is natural during troubled times. Recall how the biggest U.S. banks gobbled up failing competitors during the 2008 financial crisis. |
| This time around, it’s deal teams at tech companies who are hatching M.&A. plans as the economic downturn takes its toll. They’ll be aided by outdated antitrust laws that assess whether an acquisition “lessens competition” in deciding whether it should be blocked. That test fails to measure bigness as a rule, allowing Facebook to acquire Instagram or Amazon to buy Whole Foods because antitrust regulators ignore the network effects. | This time around, it’s deal teams at tech companies who are hatching M.&A. plans as the economic downturn takes its toll. They’ll be aided by outdated antitrust laws that assess whether an acquisition “lessens competition” in deciding whether it should be blocked. That test fails to measure bigness as a rule, allowing Facebook to acquire Instagram or Amazon to buy Whole Foods because antitrust regulators ignore the network effects. |
| And with Washington consumed with saving the economy, don’t expect the pre-pandemic debates about breaking up tech companies or updating antitrust laws to get very far. | And with Washington consumed with saving the economy, don’t expect the pre-pandemic debates about breaking up tech companies or updating antitrust laws to get very far. |
| In pleading for help for his Virgin Atlantic airline, Mr. Branson argued that his wealth wasn’t as huge as people think — a reminder that billionaires may have wealth, but not necessarily cash. | In pleading for help for his Virgin Atlantic airline, Mr. Branson argued that his wealth wasn’t as huge as people think — a reminder that billionaires may have wealth, but not necessarily cash. |
| Updated June 22, 2020 | Updated June 22, 2020 |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| Mr. Branson offered to borrow against his private island in the British Virgin Islands to help raise cash for Virgin Atlantic, he wrote in a blog post yesterday pleading for financial support from the British government. | |
| • Another Virgin Group holding, Virgin Australia, filed for administration this morning after being denied a bailout. | |
| He also argued that he couldn’t tap his personal fortune — estimated earlier this year at about $4.4 billion — because his net worth was largely tied up in holdings of the Virgin Group, rather than sitting in a bank account. It’s a reminder that the riches of many billionaires are tied to stock and investments. | He also argued that he couldn’t tap his personal fortune — estimated earlier this year at about $4.4 billion — because his net worth was largely tied up in holdings of the Virgin Group, rather than sitting in a bank account. It’s a reminder that the riches of many billionaires are tied to stock and investments. |
| • Take a look at the movements in the Bloomberg Billionaires Index, which is updated each day. The net worth of moguls whose wealth is tied up in sectors that have been hit hard by the coronavirus — like Bernard Arnault in luxury goods and Sheldon Adelson in entertainment — has dropped sharply this year, while that of Amazon’s Jeff Bezos and Walmart’s Walton clan have surged. | • Take a look at the movements in the Bloomberg Billionaires Index, which is updated each day. The net worth of moguls whose wealth is tied up in sectors that have been hit hard by the coronavirus — like Bernard Arnault in luxury goods and Sheldon Adelson in entertainment — has dropped sharply this year, while that of Amazon’s Jeff Bezos and Walmart’s Walton clan have surged. |
| Deals | Deals |
| • No deal worth more than $1 billion was announced last week, for the first time in 15 years. (Reuters) | • No deal worth more than $1 billion was announced last week, for the first time in 15 years. (Reuters) |
| • KKR reportedly plans to rebrand a struggling credit fund as a vehicle for finding coronavirus-era bargains. (Bloomberg) | • KKR reportedly plans to rebrand a struggling credit fund as a vehicle for finding coronavirus-era bargains. (Bloomberg) |
| Politics and policy | Politics and policy |
| • President Trump said that he planned to temporarily suspend immigration to the U.S., calling it an effort to protect American jobs. (NYT) | • President Trump said that he planned to temporarily suspend immigration to the U.S., calling it an effort to protect American jobs. (NYT) |
| • The British government’s rescue fund for start-ups requires a private co-investment and charges 8 percent interest. (The Register) | • The British government’s rescue fund for start-ups requires a private co-investment and charges 8 percent interest. (The Register) |
| Tech | Tech |
| • Zoom’s security woes were well known to business partners like Dropbox. (NYT) | • Zoom’s security woes were well known to business partners like Dropbox. (NYT) |
| • Uber is starting two package delivery services, as its ride-hailing business falters. (The Verge) | • Uber is starting two package delivery services, as its ride-hailing business falters. (The Verge) |
| Best of the rest | Best of the rest |
| • Many boards are cutting executives’ salary but increasing their stock awards. (WSJ) | • Many boards are cutting executives’ salary but increasing their stock awards. (WSJ) |
| • Ikea is stocking up on baby-related products in anticipation of increased demand eight months from now. (Reuters) | • Ikea is stocking up on baby-related products in anticipation of increased demand eight months from now. (Reuters) |
| We’d love your feedback. Please email thoughts and suggestions to dealbook@nytimes.com. | We’d love your feedback. Please email thoughts and suggestions to dealbook@nytimes.com. |