Tuesday's economy & business stories

Bank CEOs brace for worsening economic scenario

JPMorgan CEO Jamie Dimon. Photo: J. Lawler Duggan/For The Washington Post via Getty Images

Wells Fargo swung to its first loss since the financial crisis — while JPMorgan Chase and Citigroup reported significantly lower profits from a year earlier — as the banks set aside billions of dollars more in the second quarter for loans that may go bad.

Why it matters: The cumulative $28 billion in loan loss provisions that banks have so far announced they’re reserving serves as a signal they’re preparing for a colossal wave of loan defaults as the economy slogs through a coronavirus-driven downturn.

Jul 14, 2020 - Health

Moderna's vaccine spurred immune system response to coronavirus

Moderna's stock rose 16% after hours on this news. Photo: Jakub Porzycki/NurPhoto via Getty Images

Healthy volunteers who took Moderna's coronavirus vaccine candidate appeared to generate an immune system response to the virus, and there were "no trial-limiting safety concerns," according to a new study published in the New England Journal of Medicine.

Why it matters: The phase one trial is still small and does not definitively determine how effective the vaccine is. But Anthony Fauci of the National Institutes of Health, which is running the trial, told the Wall Street Journal that these data make it "pretty clear that this vaccine is capable of inducing quite good [levels] of neutralizing antibodies."

A grim future for business travel

Illustration: Aïda Amer/Axios

Coronavirus lockdowns and the grand work-from-home experiment killed the business travel industry — and, just like everything else, it's not going back to normal anytime soon, if at all.

Why it matters: Traveling for work is a $1.5 trillion industry that encompasses transportation, hospitality and much more, and this moratorium is threatening countless firms and jobs.

Jul 14, 2020 - Podcasts

Behind the gun sales spike

Gun sales in America have surged since the coronavirus pandemic began, with 7.8 million background checks run for firearm purchases between March and June.

Axios Re:Cap digs into what's driving the sales, around 40% of which are by first-time buyers, with Wall Street Journal reporter Zusha Elinson.

Jul 14, 2020 - Health

Oscar Health CEO: Virtual health helped decrease ER overcrowding from COVID

Photo credit: Axios screenshot

Patients who used telehealth during the pandemic contributed to a decrease in emergency room visits by 40% nationwide, and by 80% among those 14 years old and younger, Mario Schlosser, co-founder and CEO of Oscar Health, said Tuesday at an Axios virtual event.

Why it matters: The decrease in ER visits showed many patients were regularly using telehealth services for non-emergencies. Virtual health care visits could become a default for check-ups, prescription refills and behavioral health even after the pandemic subsides, Schlosser added.

L.A.-based Triller waits in the wings as more companies ban TikTok

Illustration: Aïda Amer/Axios

TikTok has helped China's ByteDance become the world's most valuable "unicorn" company, but its shiny horn is beginning to get some serious scuff marks.

Driving the news: Wells Fargo yesterday told employees to delete TikTok from company devices. This is similar to what Amazon did last Friday, except Wells Fargo didn't then backtrack and claim to have made "a mistake."

Swedish oat milk company Oatly valued at $2 billion after Blackstone investment

The firm's unofficial mascot "Mr. Stone" holding Oatly. Source: The Blackstone Group holiday video.

Oatly, a Swedish oat milk company, raised $200 million in growth equity funding led by The Blackstone Group at around a $2 billion valuation.

Why it matters: Alt-milk predated alt-meat, and now seems poised to follow it into the public markets.

Project Origin is watermarking media to fight fake news ahead of the election

Illustration: Caresse Haaser, Rebecca Zisser/Axios

An international coalition of news and tech companies, including the AP, The Washington Post, Facebook and others, is partnering with a different coalition led by the BBC, CBC/Radio-Canada, Microsoft and The New York Times called Project Origin to fight fake news during the U.S. election.

How it works: The project aims to place digital watermarks on media originating from authentic content creators. The watermark will degrade when content has been manipulated. The verification system will be deployed in the month leading up to the U.S. election.

Competitors ready to pounce on TikTok bans

Illustration: Aïda Amer/Axios

Growing security and privacy concerns over Chinese-owned short-video app TikTok have given a lift to alternatives like Byte and Dubsmash, which have seen spikes in downloads from smartphone users recently, according to data from SensorTower.

Why it matters: If TikTok's meteoric rise in popularity among U.S. youth gets slowed by rising tensions with China, or ended by a threatened ban by the Trump administration, American teens will still have to get their hits of meme-laden video somewhere.

YouTube and Facebook live stream duopoly challenged by upstarts

Data: Magid; Chart: Naema Ahmed/Axios

YouTube Live and Facebook Live are being increasingly challenged by upstarts, including Twitch, Twitter and Snapchat.

Why it matters: Three years ago, a survey from TV analysis company Magid found that consumers cited YouTube Live and Facebook Live most often as the platforms they use to stream live video.

States team up in push for electric heavy vehicles

16th Street Mall busses in Denver. Photo: RJ Sangosti/MediaNews Group/The Denver Post via Getty Images

A new pact to speed deployment of zero-emission trucks, vans, buses and other big vehicles that move lots of people and objects around was unveiled by 15 states plus D.C. this morning.

Why it matters: The new "memorandum of understanding" is non-binding, but it sets aggressive targets, and provides a template for working together on emissions from industries that often operate across state lines.

Exclusive: The N.Y. Times doubles down on TV and film ambitions

Illustration: Aïda Amer/Axios

One of the country's oldest and most established media companies is starting to look more like a Hollywood studio than a traditional newspaper.

Driving the news: The New York Times has 10 scripted TV show projects in development, as well as 3 feature documentaries coming out this year and several other documentary projects in development and production, executives tell Axios.

IMG partners with Wave.tv to distribute sports rights on social

Illustration: Aïda Amer/Axios

Global entertainment giant IMG Media is partnering up to give social media sports video company Wave.tv broad access to its sports licensing rights, executives tell Axios.

Why it matters: The deal speaks to a new generation of sports programming for younger people on social media who are avid sports fans but don't like sitting through long games on traditional TV.

Electric vehicle companies are reeling in cash without producing a car

Illustration: Sarah Grillo/Axios

These are heady days for electric vehicle companies, with a lack of actual car production becoming a popular norm.

Why it matters: The capital infusion is the latest in a busy stretch of deals and market moves that suggest private investors and equity markets see big potential in technologies that now represent a tiny slice of the global vehicle fleet.

Upstarts challenge YouTube and Facebook's live-video dominance

Data: Magid; Chart: Naema Ahmed/Axios

Three years ago, a survey from TV analysis company Magid found that consumers cited YouTube Live and Facebook Live most often as theplatforms they use to stream live video, Today, that live video duopoly is being challenged by upstarts, including Twitter, Snapchat and Twitch.

Atlanta and N.Y. Fed Q2 GDP forecasts diverge

Data: Atlanta Fed, N.Y. Fed; Chart: Axios Visuals

The New York and Atlanta Fed's GDP forecasts for the second quarter have diverged wildly since late May.

The state of play: The spread has come largely since late May as the Atlanta Fed's indicator pushed expectations for the quarter to below -40% after bad retail sales, industrial production and manufacturing data. The N.Y. Fed's metric remained elevated. Similarly, late May readings of personal income and outlays and a series of advanced economic indicators sent the Atlanta Fed's GDP forecast below -50%, while the N.Y. Fed's forecast fell only as low as -35.5%.

The myth of closing the racial wealth gap through "stronger families"

Reproduced from Zaw e. al, 2017, "Women, Race & Wealth"; Note: "With children" refers to households with children under 18; Chart: Axios Visuals

In proposing fixes for the racial wealth gap in the U.S., public figures can conflate the effects of inequality with causes, researchers say.

What's happening: Often the increased rate of Black single motherhood or "Black family disorganization" is referenced as a reason for the gap in wealth accumulation.

Americans lost trust in the Fed as stocks rose to new highs

Data: Axios/Ipsos poll; Note: 1,063 U.S. adults were surveyed in July with a ±3.1% margin of error; Chart: Andrew Witherspoon/Axios

The number of Americans who say they have a great deal or fair amount of trust in the Federal Reserve fell to 41% in the latest Axios-Ipsos Coronavirus Index.

Why it matters: The results show that as the stock market rose to new highs and credit markets have shown significantly improved functioning over the past two months, Americans' trust in the Fed declined.

PPP was not enough for small businesses

Illustration: Sarah Grillo/Axios

The Paycheck Protection Program (PPP) has left much to be desired for needy small businesses around the U.S., and the overwhelming majority of recipients are about to exhaust their funding and may start laying off employees.

Why it matters: The PPP has been derided by some economists and researchers as inefficient and ineffective, but a new Goldman Sachs survey shows that even for the businesses and employees it helped, it has not been enough.

Buildings are getting tested for coronavirus, too

Illustration: Eniola Odetunde/Axios

Testing buildings — not just people — could be an important way to stop the spread of the coronavirus.

Why it matters: People won't feel safe returning to schools, offices, bars and restaurants unless they can be assured they won't be infected by coronavirus particles lingering in the air — or being pumped through the buildings' air ducts. One day, even office furniture lined with plants could be used to clean air in cubicles.

Jul 14, 2020 - Health

Quest reports longer waits for coronavirus tests results

Photo: John Tlumacki/The Boston Globe via Getty Images

Quest Diagnostics said its average turnaround time for a COVID-19 test is now at "seven or more days," up from four to five days at the end of June. Its testing backlog is getting worse because of the high demand in parts of the country where infection is spreading.

Why it matters: Long backlogs make testing less useful — public health officials need to know what their local situation is like now, not what it was like a week ago. Delays are especially problematic if people who are infected continue to go about their lives while they wait for their results.