Good morning! Was this email forwarded to you? (Today's Smart Brevity count: 1,198 words, 4.5 minutes.)
🚨 Situational awareness: Retailer J. Crew filed for Chapter 11 bankruptcy protection this morning. (Axios)
🎙 "There are still many great surviving talents: Stevie Winwood. Another great talent is Stevie Wonder. Another one is Eric Clapton. Another one is Phil Collins. Eminem, Kanye West I like all those people." See who said it and why it matters at the bottom.
Illustration: Sarah Grillo/Axios
There's no doubt April's U.S. jobs report will reveal unprecedented losses after 30.3 million people filed unemployment claims in just six weeks and more than 3 million more are expected to have filed last week.
Why it matters: The monthly Bureau of Labor Statistics (BLS) nonfarm payrolls report uses a combination of household surveys and employer records to more accurately assess the state of U.S. unemployment.
What to watch: Among the big questions analysts will be looking to answer are how many workers not counted as employed are still tied to an employer, how successful were the government's efforts at mitigating the economic shock, and how were those who remained employed affected?
Between the lines: A Gallup poll taken April 13–19 found 10% of Americans were temporarily laid off from work as a result of the coronavirus, and an additional 2% said they had permanently lost their job. A total of 26% said they had lost income and 15% reported reductions in hours.
The intrigue: The CARES Act's Paycheck Protection Program was designed to keep workers tied to their employers. But small business owners have complained that the program is poorly designed, and because of increased unemployment eligibility and benefits from the government, it could worsen relationships.
The big picture: A separate Gallup poll of 540 adults from April 1–12 found that 25% of employed Americans think they are likely to be laid off in the next year.
The European Union will need more than a trillion euros to rebuild its economy, according to European Commission President Ursula von der Leyen, and will present a formal proposal for the fund by Thursday. (WSJ)
Republican senators want to wait a bit before passing the next coronavirus stimulus package, and are miles away from Democrats ahead of the next stage of talks. (Axios)
Hedge fund Elliott Management is financing a high-stakes patent lawsuit by interactive-video company Eko against Quibi, the new streaming service founded by Jeffrey Katzenberg. (WSJ)
Argentina's economy minister argues in an op-ed that the country simply cannot afford to pay back its debts, perhaps setting the stage for other emerging markets to contest debt obligations. (FT)
Thanks to solid reports from tech giants like Amazon and Microsoft, expected first quarter earnings are now on pace to decline by less than they were last week — the first week in which expectations improved since Q1 earnings season began.
By the numbers: With 55% of S&P 500 companies having posted first-quarter results, earnings are projected to fall 13.7% year over year, compared to an estimated 16.1% decline last week. Disney, General Motors, Tyson Foods and CVS among the big names expected to report this week, according to FactSet.
Between the lines: Dispersion — the difference between the highest analyst estimates and the lowest — has never been higher, which makes estimates particularly difficult to interpret, analysts note.
Yes, but: Even though it's on pace to be the worst earnings quarter since Q2 2009, the first quarter may turn out to be the best earnings look this year.
Warren Buffett, CEO of Berkshire Hathaway, told shareholders on Saturday that the company sold 16 times more in stocks than it purchased during April, including dumping $6 billion in airline stock — the company's entire equity position in U.S. airlines.
Why it matters: Long an advocate for buy-and-hold investing and being opportunistic during downturns, Buffett's actions are in stark contrast to the general mood of the market, which has seen stocks rally by around 30% since March 23.
Between the lines: Buffett remained positive on the overall growth and trajectory of the U.S. as a whole but cautioned that the timeframe for his bet on an American comeback was decades, not months or even years, N.Y. Times' Andrew Ross Sorkin writes.
What's happening: Buffett said he hadn’t made any purchases recently and couldn't even recall the paltry new pickups Berkshire had made, suggesting they were picks made by Berkshire investment managers Todd Combs and Ted Weschler.
The bottom line: As Sorkin notes, that's a far cry from his outlook during the 2008 financial crisis when he wrote an op-ed in the New York Times a month after Lehman Brothers filed for bankruptcy: “In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary. So … I’ve been buying American stocks.”
"Three months after Vietnam detected its first case of coronavirus, the Southeast Asian country appears to have beaten back the virus, at least for now," Niharika Mandhana and Lam Le write for WSJ.
Why it matters: Already growing as a hub for global manufacturing, companies looking to diversify their supply chains or be less reliant on China could increasingly look to Vietnam thanks to its fast recovery.
How it works: "Aggressive testing and quarantining appear to be the keys to Vietnam’s success. It has conducted more than 780 tests per confirmed case, a higher figure than New Zealand or Taiwan, showing a vast proportion of its tests are coming back negative."
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Quote: "There are still many great surviving talents: Stevie Winwood. Another great talent is Stevie Wonder. Another one is Eric Clapton. Another one is Phil Collins. Eminem, Kanye West I like all those people."
Why it matters: Ahmet Ertegun, the son of a Turkish diplomat, started Atlantic Records with $10,000 he borrowed from his dentist. He went on to discover and/or produce Ray Charles, Aretha Franklin, the Rolling Stones, Otis Redding and countless others.