Coronavirus

Corona Capital: U.S. recession, Grubhub, Airlines

8 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: U.S. falls into a recession, Grubhub looks for leverage, airlines have optimistic investors.

European banks are priced for zombie status

8 Jun 2020

Despite a sharp rally, lenders from BNP to Barclays on average trade at just two-thirds of tangible book value. Bad debt would have to be implausibly high to justify such valuations. A better explanation is that investors fear the deadening effect of perpetual low interest rates.

Pandemic boosts Chinese biotech cred

8 Jun 2020

Little-known firms like $5 bln CanSino are among the front runners to develop a Covid-19 vaccine. Most are working with foreign governments and companies, underscoring China’s rising industry status. These upstarts will go global even with rising geopolitical tensions.

Cox: Trans-ocean travel has zombie apocalypse vibe

5 Jun 2020

A flight this week from Zurich to JFK reveals empty airplanes, airports devoid of people, limited services and a glimpse into the emerging protocols that surely await when more normal travel flows resume. It’s unsettling in a plague-times way, but surprisingly hassle free.

U.S. jobs surprise mixes hope with division

5 Jun 2020

The unemployment rate unexpectedly fell in May despite continuing lockdowns. That revives hopes of a V-shaped recovery and makes roaring stock markets look less out of touch. But 21 mln Americans are still out of work, with minorities in a protest-hit country faring worst.

Corona Capital: Marijuana

5 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Cannabis retailers in California miss out on pandemic surge in vices.

Airline shares’ relief rally fails safety check

5 Jun 2020

Groups like IAG and easyJet are soaring on hopes that the worst of the crisis is over. Rising air passenger traffic is welcome given the sector’s near-death experience. But with empty seats and cut-price tickets, getting planes in the sky does not mean a return to profits.

Chancellor: A catastrophic failure of risk control

5 Jun 2020

Dependency on risk models may be leading policymakers astray in handling the pandemic, just as such models did ahead of the financial crisis. If “risk societies” are to prosper, they must apply large doses of common sense to avoid the groupthink that hinders smart decisions.

U.S. testing firms aren’t having a great pandemic

4 Jun 2020

With no vaccine, finding Covid-19 cases is key. But it’s not lucrative. Extra revenue is being offset by falls in other tests for Quest and rival lab companies and in unrelated businesses for test makers like Abbott. There's little time to cash in and plenty of competition.

BlackRock is becoming the new, old Goldman Sachs

4 Jun 2020

Before and during the financial crisis, Goldman seemed to have a finger in every pie. Now it’s as if Larry Fink’s asset manager, wielding $7 trillion of investor cash, is slipping into that role. For all BlackRock's efforts, brickbats and more regulation could follow.

Corona Capital: ZoomInfo IPO, U.S. trade

4 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: ZoomInfo goes public with a big pop despite Covid-19; and America’s goods-trade deficit with Europe will test Washington’s mood.

Argentina risks stumbling at the finish line

3 Jun 2020

The nine-time defaulter and its creditors are nearing a $65 bln restructuring deal. It might not seem fair for Argentina to give more ground, especially when it has IMF support. It can’t risk being frozen out of global capital markets, though. Playing tough could backfire.

Tiffany share drop offers LVMH a bargaining chip

3 Jun 2020

Fears that Bernard Arnault may pull his $16.2 bln bid amid U.S. unrest have hit the jeweler’s shares. The French billionaire may see an opportunity to renegotiate, but it’s not without risk. Buying Tiffany shares on the market would be a less aggressive way to meet a similar end.

Even Zoom’s lockdown boom needed Amazon delivery

3 Jun 2020

The $60 bln videoconferencing service had an astonishing first fiscal quarter as revenue surged 169% and profit rocketed. Zoom’s ability to rent thousands more servers daily from Jeff Bezos' company shows the flexibility and earnings leverage possible from operating in the cloud.

Europe’s frenzied mall openings hide harsh reality

3 Jun 2020

Shares in landlords like Unibail-Rodamco-Westfield and Klepierre jumped after they reopened shopping centres. Queues outside IKEA suggest pent-up demand. But fewer shoppers and shorter visits will mean lower retail rents. Investors appear to be pricing in a 50% decline.

Fintech superstars face brutal financial comedown

3 Jun 2020

Digital banks like Chime and Monzo have millions of customers but are tackling their first big crisis with scant revenue. Online lenders from Kabbage to Klarna face rising defaults, less new business, and funding concerns. Valuations, business models, even survival, look shaky.

Corona Capital: Crisis loans, Jet fighting

3 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Bank customers are no longer making a dash for cash, loan drawdowns suggest. Meanwhile, a U.S. block on Chinese passenger flights suggests domestic battles haven’t dimmed President Trump’s desire to make China pay.

Once in a lifetime is our hopeful prediction

2 Jun 2020

Humanity either learns key lessons from the pandemic, corrects course and becomes a more resilient species. Or it tears further apart and expands the divisions in society that predated Covid-19. In a new e-book on what will change, Breakingviews takes the more optimistic view.

E-book: Once in a Lifetime?

2 Jun 2020

Humanity either learns key lessons from the pandemic, corrects course and becomes a more resilient species. Or it tears further apart and expands the divisions in society that predated Covid-19. In a new e-book on what will change, Breakingviews takes the more optimistic view.

Corona Capital: Bank fears, Payments M&A, Coal

2 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: A new U.S. regulator wants cities to reopen to prevent bank robberies. Western Union may bid for struggling rival MoneyGram. And the pandemic is hastening the decline of U.S. coal.