North America Update: July 28
Keep an eye out for the next weekly update on Tuesday, August 4. Thanks for your readership!
- For more than a year, Congress and the federal government have targeted Big Tech and its business practices. On Wednesday, July 29, the CEOs of four of America’s biggest companies – Amazon, Apple, Facebook and Google – will appear at a House of Representatives antitrust subcommittee virtual hearing. Testifying will be Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai. It is the first joint congressional appearance by the CEOs of the four powerful tech companies, as well as the first-ever testimony before Congress by Mr. Bezos. While antitrust issues will be the focus of the hearing, members are likely to ask the CEOs questions on a broader set of technology, data, content and regulatory issues.
- The U.S. Federal Reserve will hold its monetary committee meetings today and Wednesday and issue its statement on the U.S. economy Wednesday afternoon. While economists do not expect interest rates to change or any new initiatives, markets will pay close attention to the Fed’s future guidance and updates to economic forecasts. Fed Chairman Jerome Powell will give his press conference at 2:30 pm ET.
- With a July 31 deadline approaching for Congress to reauthorize several economic stimulus programs, there is increasing frustration between Democrats and Republicans for what to include in the next stimulus bill and how much to spend on schools, state and local governments, and small business and hospitals. The Republican package is about $1 trillion, while Democrats want $3 trillion in new spending. As a result, Congress is now unlikely to finalize the passage of a bill before Friday evening. Instead, it may pass temporary measures to keep some programs in place, such as unemployment insurance and a continued moratorium on renter’s evictions while it works towards a more comprehensive initiative into next week.
- Canada’s major metropolitan areas have experienced a slight, but manageable, uptick in new cases over the last week. The spikes are attributed to bars, nightclubs and large public gatherings that do not abide by public health regulations.
- What makes this increase in cases unique from previous reporting is the trend toward more infections among young people in their 20s and 30s. In some cities, people under 40 attribute for nearly 60 percent of new cases.
- Last week, leaders from the European Union agreed on a €750 billion recovery fund after a five-day summit meeting. The agreement will allow the European Union to issue joint debt and provide grants and loans to member states to aid in economic recovery. The agreement followed five days of negotiations that pitted member states against each other. French President Emmanuel Macron hailed the agreement as a “historic change and a historic step for Europe.”
- After the ease of stay-at-home restrictions, several European countries, including France, Belgium, Germany and Spain, are seeing a significant increase in infections. This has led to the fear of the second wave of COVID-19. Belgium authorities have tightened restrictions and have warned that the country may have to enter another lockdown.
- The pandemic has re-shaped the meaning of corporate citizenship, with consumers expecting employers to respond to crises with practical, humane assistance and solutions.
- Consumers are holding corporations to higher corporate citizenship standards, as they believe that brands have the social responsibility of offering aid to communities. Failure to act in times of uncertainty could have dire consequences. According to research from Accenture, 43 percent of consumers are willing to walk away when disappointed by a brand’s words or actions on a social issue.
- Brands across the Asia Pacific region are pursuing new kinds of social purpose. Skin company SK-II repurposed production capacities of its plant in Japan to manufacture over 350,000 face masks for employees, essential workers, communities, and relief organizations nationwide. Korean conglomerate LOTTE has set aside $1 million to support communities suffering from COVID-19. Singapore-based ride-hailing provider Grab committed over $40 million to partner relief efforts and rolled out over 100 initiatives to mitigate the impact of the pandemic on drivers and delivery partners. Macau’s Galaxy Entertainment Group of integrated resorts has donated $25 million in financial contributions to provide care for frontline healthcare workers in mainland China and the local Macau economy.
- Mexico posted a record trade surplus in June as business activity began recovering from months of lockdown, but exports remained well below 2019 levels due to the ongoing ravages of COVID-19 in North America.
- In an effort to combat corruption and smuggling of drugs and precursor chemicals, the Mexican Government put the military in charge of customs at border crossings and seaports. The decision led to the resignation of the Secretary of Communication, Javier Jiménez Spriú, who feels the measure will affect the exchange of goods with other countries.
- Mexican President Andres Manuel Lopez Obrador presented a plan to overhaul the nation’s $266 billion pension system, seeking to have companies pay more toward employee retirement funds. The reform will help prevent a looming retirement crisis. The bill would focus on boosting pensions for low-income workers and increase them for employees overall by 40 percent.
- The outlook for Brazil’s economy improved for the fourth week in a row, with signs of recovery from the worst of the crisis lifting some of the heavy gloom that had built up in recent months. Brazil’s GDP will shrink 5.8 percent this year, according to the Central Bank, compared with a GDP fall of 5.95 percent forecast last week and 6.5 percent a month ago.
- Despite the COVID-19 pandemic, Brazil continues to record a positive trade balance. In June the surplus was $7.46 billion – the best trade balance for June since records started in 1989. This is largely due to agriculture, which grew 23.8 percent this year, compared with the same period last year.
- Brazil has surpassed 2 million cases of coronavirus. Brazil will be included in Phase 3 of the clinical trials for the COVID-19 Vaccination. At least 14,000 Brazilians will be tested.
INSIGHTS & INTEL:
- On Monday, U.S. manufacturing orders for durable goods (those lasting at least three years) rose in June by 7.3 percent, an increase for the second straight month after historic declines in early spring. Orders for new cars and trucks rose 86 percent last month as automakers made up for lost ground after being hit earlier in the year by the pandemic, forcing manufacturers to temporarily close assembly plants. The momentum may be hard to sustain in the wake of more coronavirus cases and tighter government restrictions.
- On Thursday, preliminary data on the U.S. economy’s second-quarter GDP will be made public – indicating how deep the recession hit when the pandemic closed down large segments of the economy. Economists polled by MarketWatch expect a Q2 contraction at a seasonally adjusted annual rate of 33 percent – the highest level in U.S. history. However, economists think the economy began to rebound in May and June as the lockdown of businesses ended and there will be a rebound of growth in Q3 ending on September 30.
- Data on U.S. consumer spending and consumer sentiment will be made public on Friday. Last month’s data showed an improvement in consumer confidence, but that data was before some states and localities began to address a resurgence in COVID-19 cases.
Below are summaries of interesting business responses to COVID-19 in recent days.
- Hitachi will donate 100 million yen ($1M USD) to The Hitachi Global Foundation to support research on the Novel Coronavirus (COVID-19) and other infectious diseases, and will also solicit donations from Hitachi executive officers and corporate officers to the Hitachi Global Foundation.
- Robin Hood Foundation announced they have awarded more than 500 COVID-19 relief grants in support of the highest-need communities across all five boroughs of New York City. In 19 weeks, Robin Hood has distributed $35.5 million in support of 432 frontline nonprofit organizations with a focus on funding cash assistance, emergency support, and food distribution.
- The United States Olympic and Paralympic Committee (USOPC) announced a new fund to support athletes facing financial hardship due to the COVID-19 pandemic and the postponement of the 2020 Tokyo Games.
- The Oprah Winfrey Charitable Foundation is donating $3 millon to provide up to 200 scholarships for South Los Angeles area residents laid off or furloughed by the COVID-19 pandemic. (NBC Los Angeles)
- The Brees Dream Foundation donated $5 million to the Ochsner Health System to create community health centers in underserved communities across New Orleans and Baton Rouge, according to an announcement by Ochsner.
- Prince William and Kate’s Royal Foundation announced a £1.8 million ($2.3M USD) fund for a series of charities, to help provide more mental health support to frontline workers who may have been impacted by their work during the pandemic.
- McDonald’s became the latest major chain to step in and require masks in its U.S. stores, even in places where authorities don’t. The chain follows Walmart, Starbucks, Chipotle and major U.S. airlines in introducing mask requirements that go beyond local safety guidelines.
- Pinterest shared some insights on how the coronavirus pandemic has skewed wedding-related searches on its platform and how marketers in different sectors can help fill in the gaps.
- New York Times said it would acquire Serial Productions, the maker of the hit podcast “Serial,” a deal that aims to further the newspaper’s podcasting ambitions.
- New Virtual Programming: Top conveners such as Axios, Washington Post, FORTUNE, Techonomy, and Economist announced new virtual events on topics related to COVID-19 such as how small businesses have pivoted during the pandemic, the path forward for K-12 schools, reinventing the hospital and delivery of healthcare, and global travel post-COVID-19, as well as broader topics, such as how to keep AI ethical in the wake of rapidly developed technology.
- TIME100 Summit: The second annual 2020 TIME100 Summit and Gala will not convene in-person this year. The event was originally scheduled to take place in April and postponed to September. Details on the next TIME100 Summit will be released in the near future.
- NFL: The NFL and NFLPA reached an agreement on the 2020 season. Key points include the elimination of preseason games, an extended acclimation period for the players, and an opt-out clause.
- MLB: Following the announcement of 14 positive COVID-19 cases on the Miami Marlins roster, the MLB postponed two games going into week two of their return to play.
- Disney: Disney and the Disney-owned Fox Searchlight released a revised theatrical release calendar as a result of COVID-19’s impact on the film industry. Of note, Mulan and French Dispatch were both indefinitely postponed.
For more information about how we are helping clients solve in this uncertain time, please contact:
- Micho Spring, Chair, Global Corporate Practice, firstname.lastname@example.org
- Pam Jenkins, President, Global Public Affairs, email@example.com