Jul 3, 2020

Axios AM

By Mike Allen
Mike Allen

🎆 Happy Fourth of July Observed! It's a perfect time to text or call someone you love, or who needs love, but isn't in your daily mix.

  • I've had a few readers write to say they're thanking one person a day as a random act of kindness — I love that idea! And I appreciate making your cut ...

Today's Smart Brevity™ count: 1,098 words ... 4 minutes.

1 big thing: Markets swell as the economy shrinks

Illustration: Eniola Odetunde/Axios

The economy is sputtering, but the markets are thriving — a highly unusual event that shows how the coronavirus has thrown all bets off, managing editor Jennifer Kingson writes from New York.

  • Wall Street ended June with the best quarterly performance since 1998 — an upswing you never get when the economy is in this precarious shape.

The disconnect between the economy and the stock markets is "extreme," Vikram Mansharamani, a Harvard lecturer who specializes in financial bubbles and business disruption, tells Axios.

  • "Markets are not supposed to become inefficient," Mansharamani says. "This is not supposed to exist, according to some academics."

Reasons the stock market has risen:

  • The Federal Reserve flooded the markets with as much cash as possible.
  • Congress passed extensive relief programs.
  • Investors remain flush with cash.
  • Expectations are that a vaccine will emerge.

But the real economy matters most:

  • U.S. GDP plunged 5% in the first quarter, personal income decreased 4.2% in May and consumer confidence — while higher in June than in March, April or May — is well below pre-crisis levels.
  • Only half of Americans own stocks, whether directly or through 401(k)s.

Thought bubble from Axios' Felix Salmon: The S&P 500 and other big indices comprise the world's biggest companies, with massive balance sheets and easy access to liquidity.

  • The virus has effectively wiped out their small-business competition. So the giants now have the field to themselves and get to carve it up.

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2. Jobs rise but virus surges
Graphic: AP

President Trump took a victory lap in the White House press room with the release of yesterday's unexpectedly rosy jobs report:

  • "Today’s announcement proves that our economy is roaring back," he crowed, amid uncontrolled virus surges in the three most populous states.
  • "We have some areas where we’re putting out the flames or the fires, and that’s working out well."

Trump predicted "a fantastic third quarter ... the likes of which nobody has ever seen before, in my opinion," then said the quiet part out loud:

  • "And the good thing is the numbers will be coming out just prior to the election, so people will be able to see those numbers."

The catch: Axios' Courtenay Brown notes that the labor market was showing more signs of recovery when the survey ended than now because of growing virus case counts that are pushing states to roll back reopenings.

3. Nike pulls gear, FedEx asks for Redskins name change

Photo: Mark Tenally/AP

If you search "Redskins" on Nike.com, you find that all official team gear has been removed, CBS Sports points out.

  • Nike even stripped Washington from its sidebar list of teams, making it look like the NFL has 31 teams, NBC Sports noticed.

And FedEx, named sponsor of the Redskins' stadium, released a statement that says in full: “We have communicated to the team in Washington our request that they change the team name.“

  • The context, from NFL.com: "FedEx paid $205 million in 1998 to the Redskins for the team's stadium naming rights in a deal that runs through 2025. FedEx founder, chairman and CEO Frederick Smith also is a team minority owner."

Between the lines: Nike and FedEx were two of the companies we told you about yesterday who received letters, signed by 87 investors and shareholders, demanding the brands to cut ties with the Redskins.

Via Nike.com

The bottom line, from the WashPost's Liz Clarke: "If prominent Redskins sponsors feel sufficient pressure to dissociate from the team, [Dan] Snyder's bottom line would take a significant hit."

⚡Breaking moments ago: The team announces a "thorough review" of the name.

4. Pics du jour: Down the Shore

Busy beach this week in Manasquan in Monmouth County, N.J. Photo: Wayne Parry/AP

Large crowds are expected at the Jersey Shore for the holiday weekend, AP's Wayne Parry writes from Belmar:

  • New Jersey's casinos have reopened, along with amusement rides and water parks. Beaches are open, though at reduced occupancy levels. Restaurants can offer limited outdoor dining, and stores and shopping malls have reopened.
Flags line the beach in Belmar, N.J. Photo: Wayne Parry/AP
5. Biden's holiday ad gives his definition of success
Biden for President via YouTube

A Joe Biden ad debuting over this holiday weekend, "Taught Me," says his parents taught him "that success means looking at your child, and realizing they turned out better than you."

  • Why it matters: The ad is part of Biden's effort to leverage his experience as what the campaign calls "a core strength," at a time President Trump is arguing, as he put in Tulsa, that Biden's record "can be summed up as four decades of betrayal, calamity, and failure. He never did anything."

The Biden campaign says the minute-long digital ad is part of a paid-media blitz in battleground states, highlighting Biden's "leadership experience and core values." Two others:

  • "That's a President" is basically Joe Biden as Tom Cruise.
  • "Proud" depicts Biden as "a proud military father who sent a son to Iraq ... American leadership isn't just about an example of our power, but the power of our example. ... So as long as they're fighting, he is, too."

The ads will run on YouTube, Hulu, and other streaming platforms in Pennsylvania, Wisconsin, Michigan, North Carolina, Florida, and Arizona.

  • The campaign says: "While our digital ads may have different looks and feels across platforms, they all ladder up to our campaign's central themes that we know resonate with voters, especially right now during times of crisis."
6. 🎧 What we're listening to: America's galloping news deserts
Graphic from "News Deserts and Ghost Newspapers," by UNC's Hussman School of Journalism and Media

Our morning podcast, "Axios Today," is up with a bonus holiday edition — our first audio Deep Dive.

  • Host Niala Boodhoo explores the "extinction-level crisis" in local news, with guests who include Sara Fischer and UNC's Penelope Muse Abernathy, the nation's top expert on news deserts, and author of a new report last week.

With a little fife-and-drum music to go!

7. 📺 Remembering Hugh Downs' 15,000 hours on TV
Hugh Downs hosts NBC's "Today" show on March 10, 1966. Photo: Jack Kanthal/AP

"Good evening. I'm Hugh Downs. And this is '20/20.'"

  • A line from my childhood — part of the rhythm and music of news that drew me into this ride of a lifetime.

Hugh Downs — an omnipresent broadcaster whose career on NBC, ABC and PBS spanned more than half a century — died at 99 in Scottsdale, per ABC.

  • Downs became a friendly and familiar face during his 15,000 hours "on television between the 1950s and 1990s, during which he worked on NBC's 'Today' and 'Tonight' shows, the game show 'Concentration,' '20/20,' PBS' 'Over Easy' and 'Live from Lincoln Center,' as well as on dozens of commercials."

Fun fact, from AP's David Bauder:

  • "The Guinness Book of World Records" said Downs had logged the most hours in front of a TV camera, until Regis Philbin passed him in 2004.

🥊 As Hugh Downs would say: "We're in touch. So you be in touch!"

8. Hope this is your holiday
Photo: Glyn Kirk/AFP via Getty Images

Slackliner Sandor Nagy practices this week on the beach in Boscombe, on the south coast of England.

Mike Allen

📱 Have a great holiday, and thanks for reading Axios AM. Please invite your friends to sign up here.