Aug 3, 2020

Axios AM

By Mike Allen
Mike Allen

🍿 "Axios on HBO" returns tonight, with Jonathan Swan pressing President Trump on the pandemic, Russian bounties (see a clip), the election and more.

  • See a preview here, then catch the whole delicious interview at 11 p.m. ET/PT on all HBO platforms. 

🚑 Tomorrow at 12:30 p.m. ET, health care reporter Caitlin Owens will host an Axios virtual event exploring hospitals' response to the pandemic.

1 big thing: The new school shopping

Illustration: Annelise Capossela/Axios

Back-to-school is the second-biggest shopping season, after the holidays. At a time when stores are already struggling, traditional sprees are expected to be smaller with students learning at home, Axios' Courtenay Brown reports.

Laptops are closing the gap for some merchants: The National Retail Federation forecasts a record-breaking back-to-school season because of more being spent on electronics for at-home learning.

  • But Michael Pachter, an analyst at investment firm Wedbush Securities, told MarketWatch that any uptick in demand for electronics will "be offset by those households with one or more parents laid off or unemployed because of the pandemic."

Jie Zhang, a retail management fellow at the University of Maryland's School of Business, said in a research note that Amazon, Walmart, Target, Best Buy and Apple are positioned to benefit from the online learning shift.

  • Traditional clothing stores will struggle.
  • Carter's, the kid apparel company, cut its back-to-school inventory.

The bottom line: The retail apocalypse is being accelerated by new realities caused by the pandemic, like virtual schooling. The result could be more dominance by the already biggest players that can quickly pivot.

  • Macy’s, which is struggling like other department stores, is using a new slogan: "No matter how we school, let’s be ready."
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🛍️ More retail woes ... Lord & Taylor, the oldest U.S. department store, known for its upscale fashions and extravagant holiday window displays, sought bankruptcy protection in Richmond yesterday, Bloomberg reported.

  • The company was founded in Manhattan by two English immigrants in 1826.
2. 36 of top 50 cities see double-digit rise in homicides

Shell casing markers litter the ground as police investigate a shooting in Chicago on July 21. At least 14 people were taken to hospitals. Photo: Scott Olson/Getty Images

"A Wall Street Journal analysis of crime statistics among the nation’s 50 largest cities found that reported homicides were up 24% so far this year, to 3,612," senior writer Jon Hilsenrath reports (subscription).

  • "Chicago, the worst-hit, has tallied more than one of every eight homicides."

Why it's happening, per The Journal: "Institutions that keep city communities safe have been destabilized by lockdown and protests against police. Lockdowns and recession also mean tensions are running high and streets have been emptied of eyes and ears. ... Some attribute the rise to an increase in gang violence."

  • The context: "The murder rate is still low compared with previous decades, and other types of serious crime [including robbery] have dropped in the past few months."
3. Scoop: Top CEOs have loud message for Congress

Illustration: Eniola Odetunde/Axios

With a new coronavirus relief measure stalled in Congress, CEOs of some of the world's biggest companies have banded together to send a message to Washington: Get money to small businesses now!

  • "By Labor Day, we foresee a wave of permanent closures if the right steps are not taken soon," warns the letter, organized by Howard Schultz and signed by more than 100 CEOs, including the heads of Salesforce, Alphabet, Facebook, Microsoft, Walmart, McDonald's, Disney, Quibi, IBM, Merck, Marriott, the Business Roundtable, the U.S. Chamber of Commerce and more.

Axios Markets editor Dion Rabouin writes that the letter to the top four congressional leaders lays out a recipe for a sizable small-business aid package.

The project, Schultz's first big public push since he suspended his run for president, calls for "federally guaranteed loans, at favorable terms, that will enable small businesses to transform and sustain themselves."

  • "Businesses should have flexibility in how loan funds are used."
  • "The hardest-hit businesses should be eligible for at least partial loan forgiveness."
  • "Relief needs to be delivered expeditiously. Building on the existing PPP infrastructure would be one way to quickly stand up a new loan program."
  • "These funds must flow to all small businesses in need, particularly those run by people of color, who have traditionally had less access to capital."

Between the lines: Neither the House's HEROES Act nor the latest version of Senate Republicans' HEALS Act include significant funding for small businesses besides the PPP extension.

The last word: "Tens of millions of Americans have already lost their jobs in this pandemic. ... By year end, the domino effect of lost jobs — as well as the lost services and lost products that small businesses provide — could be catastrophic."

4. "Thanks for flying SpaceX"

Photo: Bill Ingalls/NASA via AP

NASA astronauts Doug Hurley and Bob Behnken splashed down in the Gulf of Mexico after a historic flight to and from the International Space Station, powered by SpaceX, Axios' Miriam Kramer writes.

  • Why it matters: The landing, the first splashdown by U.S. astronauts in 45 years, begins a new NASA phase tied to partnerships with private companies.

A SpaceX mission controller told the Crew Dragon: "Welcome back to Planet Earth, and thanks for flying SpaceX."

Photo: NASA TV via AP
5. TikTok gets reprieve

Illustration: Sarah Grillo/Axios

President Trump gave Microsoft 45 days to negotiate an acquisition of TikTok, following a Sunday conversation with CEO Satya Nadella, Reuters scoops.

  • Why it matters: In the short run, 100 million U.S. users won't lose access to the service. Trump had said Friday night that he planned to ban the Beijing-based app.

Microsoft said in a statement disclosing the call with Trump:

Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.
6. What Biden means for tech

Illustration: Eniola Odetunde/Axios

A Joe Biden presidency would put the tech industry on stabler ground than it's had with President Trump, writes Axios tech editor Kyle Daly.

  • Although Biden is unlikely to rein in those Democrats who are itching to regulate the big platforms, he'll almost certainly first have other, bigger priorities.

What to expect ...

  1. Any early tech policy initiatives will be wrapped up in crisis response, like closing the "digital divide" for those without high-speed internet.
  2. Don't expect an aggressive tech policy agenda during the campaign, as it could distract from the referendum on Trump.
  3. Once in office, Biden would take cues from the party — which could mean getting more aggressive against the industry.

Go deeper.

7. Natural-gas projects stall

Illustration: Annelise Capossela/Axios

The Trump administration recently touted its approval of America’s first West Coast terminal to export liquefied natural gas, but political and business hurdles mean it probably won't be built, Axios' Amy Harder writes in her "Harder Line" column.

  • Why it matters: The southern Oregon project's problems embody the struggles facing a once-promising sector that's now straining under the weight of the pandemic and more.

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8. Fox viewers tune out John Lewis funeral

From Brian Stelter's weekly "Reliable Sources" show on CNN, this fascinating window into cable-news viewing patterns, keyed to the 11 a.m. funeral for Rep. John Lewis:

Screenshot via CNN
9. The most-watched man in summer TV
David Muir. Photo: ABC News

A quirk of the shutdown era, going back to March, has been the resurgence of evening news shows.

With no Olympics, and "60 Minutes" and other shows in summer reruns, ABC's "World News Tonight with David Muir" — for weeks — has been the most watched show on all of television.

  • "NBC Nightly News with Lester Holt" also has at times averaged more viewers than any program in prime time TV, AP reported from Nielsen data.

This isn't a chart of news shows — this is a chart of all TV:

Graphic: Van Scott/ABC News. Source: Nielsen total viewers, July 2 to July 29 (Total Day and Live + Same Day data stream)
10. 1 smile to go: Jeans = out. Stretchy = in

Photo: Joe Raedle/Getty Images

Amid the homebound lifestyle of the pandemic, "jeans have been usurped by more comfortable — and stretchier — options," writes WashPost's Abha Bhattarai.

  • "Denim sales have fallen by double digits in the past three months," and things are even worse for "super premium" jeans — which can cost more than $200 — and saw sales drop more than 40%.

One big reason: "[W]ith many stores and fitting rooms still closed, it’s easier to buy a pair of sweatpants online."

Mike Allen

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