CEO Daily: The end of the 'V-shaped recovery'

July 2, 2020

Good morning.

Does anyone out there really still think we are going to have a V-shaped recovery? If so, they should fold now. The surge in COVID cases in Arizona, Florida, Texas, California, South Carolina—which together account for 37% of GDP—have put the final nail in a coffin that was already pretty well sealed. Read more details in Fortune Analytics, here.

But with many restaurants suspending their reopening, that means more good news for food delivery services, like Door Dash, Uber Eats and Grubhub. Uber is clearly betting food delivery is habit forming, which is why it is reportedly in talks to buy Postmates for $2.6 billion (having failed in its effort to take over Grubhub.)

The crystal ball gets hazier when looking further out—or as Nobel physicist Niels Bohr put it: "Prediction is very difficult, especially about the future." But there is mounting evidence that office work will never go back to where it was before the pandemic. PwC has a new survey out this week with some eye-opening factoids:

–The vast majority of office workers—83%—want to work from home at least one day a week, after the pandemic has passed.

–A majority of employers—55%—expect they will give workers that option.

–But interestingly, it's unclear whether more remote work means less demand for office space. While 30% of executives in the PwC study foresee the need for less space, 50% anticipate needing more, to allow for either prolonged demand for social distancing or company growth.

You can find the full study here. More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

'I'm all for masks'

U.S. President Donald Trump appeared to reverse course this week when he said he's "all for masks," but maintained that they need not be mandatory to curb COVID-19's spread. That came as new U.S. cases hit more than 50,000 per day, a new record, after Dr. Anthony Fauci told senators that the U.S. was on course to hit 100,000 cases per day under the current strategy. BBC

The vaccine race

Germany's BioNTech has yielded positive results on its COVID-19 vaccine, just as a clinical study with Pfizer in the U.S. showed people who received doses of their vaccine had "significantly elevated" antibodies within four weeks of the first injection. Meanwhile, the EU is in talks with Gilead Sciences to try and secure sources of remdesivir after the U.S. announced it had bought up most of the world's supply. FT

Bezos Bounce

Amazon CEO Jess Bezos' mammoth divorce settlement was just a blip. The executive's net worth has now risen to a record $171.6 billion, rising $56.7 billion this year alone, even as unemployment soared to stratospheric heights, heightening inequality across the country. Responding to critics, Amazon said earlier this week it would spend $500 million to give each of its front-line workers a $500 one time bonus. Lest you think that's generous, please refer to Bezos' net worth, above. Fortune

Putin stays

Unsurprisingly, early indications indicate Russian leader Vladimir Putin has secured the backing to remain in power until at least 2036, with three-quarters of the vote. But his referendum leaves another question: why did he bother with a show of votes at all? The constitutional amendments needed to clear his path to power was already in place. New York Times

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AROUND THE WATER COOLER

McDonalds hits pause

McDonalds is pausing its reopening program, as states and cities across the U.S. are reversing or halting plans for loosening COVID-19 restrictions. The chain will wait three weeks to reopen its dine-in option at its 14,000 U.S. restaurants, but will carry on with delivery and takeaway. WSJ

Europe or U.S.?

Which one will fare better in the post-pandemic recovery? After 2008, the U.S. bounced back faster through a flexible labor market, while the EU suffered a "double dip" recession and economic woes that came close to threatening its union. But this is a different crisis, writes Steven Erlanger, and the continental style may be better suited, with its stricter lockdowns and social welfare states, including government schemes to limit unemployment. New York Times

A delayed bloodbath

But speaking of those unemployment programs... the U.K.'s furlough scheme is coming to an end, bringing with it tens of thousands of layoffs across the retail and aviation sectors in recent days. The government's scheme largely prevented unemployment from skyrocketing to U.S. levels by committing to pay up to 80% of workers' salaries as long as companies kept them on the payroll. But it may have simply been putting off the inevitable. FT

Did Sweden get it wrong?

Europe's pandemic outlier, Sweden, has taken a comparably relaxed approach to COVID-19, eschewing lockdowns and keeping kids in school and restaurants open. But as its death toll has soared past its Nordic neighbors, the Swedes are starting to question whether this was the right approach, launching an investigation into its strategy. (The results won't be ready for years.) Meanwhile, the state epidemiologist has defended the Swedish way, saying that strict lockdowns are simply not sustainable over the long term. Fortune

This edition of CEO Daily was edited by Katherine Dunn.