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A sign urges visitors to wear face masks at the entrance to an empty shopping mall in Beijing. Photo: Greg Baker/AFP via Getty Images.
Foxconn employees are being told to return to work in the Chinese cities of Shenzhen and Zhengzhou, but as of Monday only about 10% of them had done so, Reuters reported.
Why it matters: It was supposed to be liftoff day in China — the day the country reopened after closures from the Lunar New Year holiday were extended because of the novel coronavirus outbreak.
What's happening: Authorities have locked down the region in central China around Wuhan, the epicenter of the outbreak, and plants for companies like Apple as well as Volkswagen, Qualcomm and Under Armour remain closed even in areas outside of that region.
Between the lines: Apple and other multinational companies have a finite inventory of finished goods to sell, says DataTrek Research co-founder Nicholas Colas, estimating Apple's supply at "just 25–30 days" before it starts running out of iPhones if suppliers remain closed.
The big picture: The coronavirus death toll has risen to more than 1,000 in China with the total number of cases now above 42,000.
Traffic at U.S. ports is expected to drop significantly in February as China's slow return from the Lunar New Year holiday continues to put a damper on the global shipping industry.
By the numbers: February is forecast to decline 12.9% year over year and March is expected to decline 9.5%, according to the Global Port Tracker report released yesterday.
What they're saying: “Projecting container volume for the next year has become even more challenging with the outbreak of the coronavirus in China and its spread,” Hackett Associates founder Ben Hackett said.
Fed chair Jerome Powell will appear before the House Financial Services Committee today and the Senate Banking Committee on Wednesday. ECB president Christine Lagarde and BoE governor Mark Carney also are expected to speak today. (Bloomberg)
A judge is expected to rule in favor of the merger between T-Mobile and Sprint today. (NYT)
Four members of China’s military were indicted by the U.S. government for the Equifax hack that affected nearly 150 million Americans and stole trade secrets from the credit-reporting agency. (WSJ)
A Los Angeles federal judge denied a request by Uber, Postmates, and two drivers to halt enforcement of California's new law that classifies most workers as employees rather than independent contractors. (Axios)
With 64% of S&P 500 companies having reported Q4 2019 results, last quarter’s earnings growth is on pace to be slightly positive (+0.7%) for the first time since Q4 2018. (FactSet)
Tech companies are seeing significantly more funding before they go public.
What's new: Data from CB Insights shows that in the last eight years, the median amount of funding raised has jumped by more than four times to just under $300 million as of early December.
Microsoft again became the most valuable U.S. company on Monday as its stock rose to another record high. Microsoft regained the designation after more than three months in second place, trailing Apple.
Details: The company's stock rose 2.6% to boost its market capitalization to $1.435 trillion. The last time Microsoft was the most valuable U.S. company at the market's close was Oct. 30. Prior to that, Microsoft was the most valuable for 127-straight sessions, from April 18 through Oct. 17, according to MarketWatch.
Supply chains, even for companies outside of China, are in motion already as businesses rethink their strategies in a new global environment.
Driving the news: A new survey of analysts who cover more than 3,000 companies from Bank of America Securities is finding a "tectonic shift in global supply chains."
What's happening: Companies say tariffs and the U.S.-China trade war have helped prompt this reassessment, but it's largely based on automation, which has made the labor-cost benefit of outsourcing and offshoring less attractive.
Watch this space: Many companies said they were considering locations in India and Southeast Asia, but companies in about half of all global sectors in North America declared an intent to "reshore" or move business back to North America.
What it means: The shift could mean bigger investments by North American companies at home rather than abroad, including increased spending on automation and manufacturing that "would have multiplier effects on the broader economy and be beneficial for financial services that cater to them."
Worries are beginning to grow about China's stimulus efforts as the government has pushed new measures designed to offset the impact of the coronavirus.
The latest: Chinese regulators ordered banks to lower interest rates and allow late repayment of loans to help small and midsize companies, but there are worries the program may be ill-advised.
Of note: China’s fiscal revenues rose just 3.8% in 2019, the slowest growth pace since 1987, largely as a result of wide-ranging tax cuts in response to the country's economic slowdown. That followed 6.2% growth the year prior, according to South China Morning Post.
Why it matters: China has been working to reduce its debt for years as part of a “structural deleveraging” campaign, but had to reverse course as the trade war and now the coronavirus outbreak are pushing the government to increase spending.
In 1903, Maggie Walker convinced a local group to bring together about $9,400 to open the St. Luke Penny Savings Bank, becoming the first black woman and first woman of any race to preside over a savings institution. She served as the bank's president.