Job trouble? Wave of rehiring after economy reopened to fade in July after viral spiral

The engine of the U.S. economy may have gotten clogged again — no thanks to the recent acceleration in coronavirus cases. That’s bad news for Americans hoping to return to their old jobs.

Just how much damage has been done will become more evident this week, especially from the U.S. employment report for July due next Friday. The number of jobs regained last month is unlikely to match the huge increases in May and June that totaled a combined 7.5 million.

Wall Street

economists predict the U.S. added about 1.5 million jobs in July.

Even that estimate may be inflated though by seasonal changes in educational employment at the state and local level, Morgan Stanley contends. Private-sector jobs could increase by less than one million, the investment bank calculated.

See: MarketWatch Economic Calendar

Whatever the case, a much smaller increase in hiring or rehiring in July would bode ill for the U.S. recovery from the coronavirus pandemic. The government last week reported that gross domestic product sank a whopping 32.9% in the second quarter on an annualized basis, the biggest decline since World War Two.

Read: Economy suffers titanic 32.9% plunge in 2nd quarter, points to drawn-out recovery

Also:‘A massive welfare economy’ – federal aid prevents even steeper GDP collapse

“The big question hovering over next week’s employment report is whether the two-month surge in job gains stopped in July,” says David Donabedian, chief investment officer of CIBC Private Wealth Management. He thinks that’s exactly what happened.

It will be hard for the economy to make up a lot of lost ground in the third quarter unless hiring snaps back even faster.

See:MarketWatch Coronavirus Recovery Tracker

The U.S. lost a record 22 million jobs in March and April, according to Labor Department data. So far the economy has recovered less than one-third of those jobs.

The weekly tally of jobless claims, meanwhile, showed an even higher 30 million unemployed people were collecting benefits as of mid-July, representing about one in five Americans who said they were working before the pandemic, according to a Labor Department survey of households.

Robert Frick, corporate economist at Navy Federal Credit Union, said many people who expect to return to work are going to find they have no jobs or businesses to which they can return, a “grim reminder” of how much long-term damage the pandemic has caused.

“In the long run we are going to see a sobering slowdown in job growth,” he said.

The still-high level of unemployment, the viral spiral, and the uncertainty over whether Washington will provide more financial aid has understandably made Americans feel less confidence. On Friday Congressional lawmakers were still at odds on the next relief package with many benefits set to expire at the end of July.

A variety of measures that monitor consumer attitudes show a clear deterioration in July that’s likely to bleed over into August. That will make a recovery even harder.

Read:Consumer confidence wanes in July and points to rockier economic recovery

And:Consumer sentiment falls as coronavirus cases rise and federal aid set to expire

The news might not all be negative next week, however.

Manufacturers — auto makers in particular — have shown more resilience than the service side of the economy. The closely followed ISM manufacturing survey could show improvement for the third straight month.

The housing industry has also snapped back faster than expected amid a surge in home sales. Prospective buyers with secure jobs are taking advantage of record-low interest rates to buy new homes, a trend that may have been fueled by people fleeing the closed spaces of cities with a high number of coronavirus cases.

Even that potential bit of good news, however, has been overshadowed by the broader damage to the economy from the latest spike in coronavirus cases in many American states.

A full recovery can’t take root and blossom, economists say, until the disease is brought under control.

See: Pandemic will continue for some time, experts tell Congress as U.S. case tally nears 4.5 million

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Kids under age 5 may carry a much higher coronavirus viral load than older children and adults: study

A small study is raising questions about whether young children could be coronavirus super spreaders, even as the country deliberates how to reopen schools in the coming weeks.

But how contagious are kids? And could reopening schools lead to more community outbreaks if children (and teachers) become exposed to COVID-19 in classrooms, and then spread the virus to their families? A small Chicago study published in JAMA Pediatrics this week is renewing such questions, as it suggests that small children infected with COVID-19 carry at least as much of the virus as adults do — if not much, much more.

Dr. Taylor Heald-Sargent, a pediatric infectious diseases specialist at Lurie Children’s Hospital of Chicago, analyzed 145 nasal swabs from patients with mild to moderate cases of COVID-19 within a week of showing symptoms. Her team tested for the genetic pieces of the virus (RNA) in the samples. And they found that older children and adults had similar amounts of the viral genetic material, which can be extrapolated to measure how much live virus they carried. (Live viral cultures are used in research settings, not clinical settings like this one, which is why they went this route.)

The most alarming finding, however, was that kids under 5 had significantly more of the viral genetic material in their noses — 10 to 100 times more, in fact, compared to older children and adults.

“People thought maybe [young children] can’t get infected, and that is not the case. They definitely do get infected,” Heald-Sargent told MarketWatch. “And once they get infected, they have rip-roaring amounts of virus.”

There are some caveats to keep in mind with this report -— namely that it was a small study, and it wasn’t looking at samples of live virus, but rather the genetic material that the virus leaves behind.

The study also did not measure transmissibility, and so these findings do not prove that children are more contagious. But it does provide more evidence that kids can indeed become infected with COVID-19, which suggests that it is also possible for them to spread it.

“There has been some suspicion that kids may actually not transmit it to adults, which would be a good thing, but I do not think we can hold out that hope,” Dr. Sunil Sood, a pediatric infectious disease specialist from Northwell Health’s Southside Hospital who was not part of the study, told MarketWatch.

“I see no biological reason why they wouldn’t be contagious,” he continued. “Why would this virus be different from other respiratory viruses — even coronaviruses that cause common colds? Kids transmit them to other kids and adults commonly, so why would this virus be any different?”

Of course, this virus has proven to be different at almost every turn — from its growing laundry list of symptoms to how many asymptomatic patients could be unknowingly carrying the virus — which has helped make it so difficult to bring under control.

“It’s so confusing,” Heald-Sargent said. “We’re learning more every day, so it’s hard to weigh each piece of data on its own. You have to take it collectively.”

Her paper is consistent with research that has come out of France and Germany. A recent study of 47 COVID-19 infected children between the ages of 1 and 11 in Germany found that even asymptomatic kids had viral loads on par with those of adults — if not higher. And a French study also found that children without symptoms appear to have COVID-19 viral loads similar to those of children with symptoms.

And in May, another JAMA study found that children age 4 and under are largely responsible for spreading respiratory syncytial virus (commonly called RSV) in adults over 65. “We know for sure that kids spread RSV,” Sood told MarketWatch. While it’s predominantly found in younger kids, he noted that it can cause severe cases of pneumonia in seniors.

“So what I think our paper adds [to the discussion of kids and coronavirus] is this answer to whether children can get infected. They can,” Heald-Sargent said. “We don’t know that they’re spreading it, but we need to be cautious. It doesn’t mean schools can’t open; we just need to be safe about it.”

“This paper should reinforce to any skeptical parents that kids need to wear masks so that they are less likely to transmit the virus to others,” Sood added. “They may have a high virus count in their noses, even without being very sick themselves.”

The CDC states on its site that children do not appear to be at higher risk for COVID-19 than adults, based on available evidence. But it does caution that “the more people children interact with, and the longer that interaction, the higher the risk of COVID-19 spread.”

To keep families safe, the CDC suggests practicing good hygiene, such as: washing hands often; cleaning and disinfecting high-touch surfaces daily; and laundering clothes and plush toys as needed. It also recommends practicing social distancing with kids: avoiding people who are sick, sneezing or coughing; keeping at least six feet away from other people outside of your household; and having kids ages 2 and up wear cloth face masks in public settings where it is difficult to follow social distancing. Its guidelines for reopening schools also include encouraging mask wearing, spreading desks at least three feet apart and canceling group activities like choirs and assemblies.

The CDC has also stated that “decisions about how to open and run schools safely should be made based on local needs and conditions.”

Follow MarketWatch’s coronavirus coverage here.

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Fauci says that in his 40 years of dealing with viral outbreaks, he’s never seen anything like COVID-19

There’s one thing about COVID-19 that makes it highly effective in traveling from host to host.

Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases for three decades and one of the leading experts on pandemics in the U.S. for the last four decades, said SARS-Cov-2 is proving to be a unique and peculiar virus, one that he has not seen the like of before.

‘I’ve been dealing with viral outbreaks for the last 40 years. I’ve never seen a single virus — that is, one pathogen — have a range where 20% to 40% of the people have no symptoms.’

— Dr. Anthony Fauci, National Institute of Allergy and Infectious Diseases

He told U.S. lawmakers this month that COVID-19, the disease caused by the novel coronavirus, has taken him by surprise, particularly in one singular way that helped lead to one of the biggest public health crises in a generation.

“I’ve been dealing with viral outbreaks for the last 40 years. I’ve never seen a single virus — that is, one pathogen — have a range where 20% to 40% of the people have no symptoms,” he told a House Committee on Energy and Commerce hearing on the Trump administration’s response to the novel coronavirus pandemic.

The World Health Organization currently estimates that 16% of people with COVID-19 are asymptomatic and can transmit the coronavirus, while other data show that 40% of coronavirus transmission is due to carriers not displaying symptoms of the illness. As a result, public health officials have advised people to keep a distance of 6 feet from one another.

This week, Fauci said the virus may be mutating to become more transmissible. “We don’t have a connection between whether an individual does worse with this or not. It just seems that the virus replicates better and may be more transmissible. But this is still at the stage of trying to confirm that,” he said in an interview with the Journal of the American Medical Association on Thursday that the virus may be mutating to become more transmissible, with high viral loads.

COVID-19 has already proven extremely infectious. A recent University of California, San Francisco, study found that there’s a high load of SARS-CoV-2 shedding in the upper respiratory tract, even among pre-symptomatic patients, “which distinguishes it from SARS-CoV-1, where replication occurs mainly in the lower respiratory tract.” Such a viral load makes symptom-based detection of infection less effective in the case of SARS CoV-2, it said.

Fauci dismissed criticism that federal authorities had created a serious misstep by telling the public not to wear masks during the early days of the pandemic, only to reverse that decision later on. The Centers for Disease Control and Prevention, the White House and even the World Health Organization all reversed their positions on the efficacy of wearing masks over time.

‘There was a paucity of equipment [needed by] our health-care providers, who put themselves daily in harm’s way of taking care of people who are ill.’

— Anthony Fauci pushing back on criticism that federal authorities misled the public on the effectiveness of wearing masks

“OK, we’re going to play that game,” Fauci said when questioned about the seemingly sudden U-turn in public-health policy. “I don’t regret that because — let me explain to you what happened. At that time, there was a paucity of equipment that our health-care providers needed, who put themselves daily in harm’s way of taking care of people who are ill.”

After two months of obfuscation over the efficacy of face masks, during which New York City became the epicenter of the pandemic in the U.S., and one month after the WHO declared the COVID-19 outbreak a pandemic, U.S. federal authorities said all Americans should, after all, wear face coverings in public settings. Fauci has said he was hopeful that a coronavirus vaccine could be developed by early 2021.

But earlier this week, Fauci said many states have reopened too quickly, and people are not abiding by rules of social distancing. “What we saw were a lot of people who maybe felt that because they think they are invulnerable, and we know many young people are not because they’re getting [this] serious disease; therefore they’re getting infected has nothing at all to do with anyone else when, in fact, it does,” Fauci he told CNN.

Also see:U.S. new coronavirus cases hit all-time high of 57,497 — as COVID-19 surges in Florida, Arizona, California and Texas

In states where coronavirus spread is surging, like Arizona, Texas, Florida and California, he said, “20% to 40% of the people who are infected don’t have any symptoms, so the standard, classic paradigm of identification, isolation, contact tracing doesn’t work no matter how good you are, because you don’t know who you’re tracing.”

Florida reported 11,458 new cases Saturday, the highest number of daily cases since the pandemic began, only second to the daily peak of 11,571 in New York last April. It confirmed nearly 190,052 cases, up from 178,594 cases the day before, which do not account include those who are asymptomatic or pre-symptomatic, and 3,702, up from 3,684 the day before, deaths from the virus. Unlike officials in California and Texas, however, Florida Gov. Ron DeSantis, a Republican, has said the state will not delay its reopening plans, and said the rise is mostly due to young people.

The COVID-19 pandemic, which was first identified in Wuhan, China in December, had infected 11,124,651 people globally and 2,808,003 in the U.S. as of Saturday. It had claimed at least 526,003 lives worldwide, 129,476 of which were in the U.S., according to Johns Hopkins University’s Center for Systems Science and Engineering. Thus far, New York has had the most deaths from COVID-19 in the U.S. (32,137), followed by New Jersey (15,164), Massachusetts (8,149), Illinois (7,005), Pennsylvania (6,746), California (6,318) and Michigan (6,215). Texas has reported 2,592 deaths.

The Dow Jones Industrial Index

and the S&P 500

ended higher at week’s end, after better-than-expected unemployment numbers amid a surge of coronavirus in states that have loosened restrictions.

How COVID-19 is transmitted

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A Viral Market Update XI: The Flexibility Premium

I must confess that when I started these updates in February, I did not expect to be doing them in July, but a crisis is as good a time as any, to learn new lessons and relearn old ones. As the virus makes a comeback, particularly in the United States, it is not surprising that markets reflect the uncertainty that we all feel about how the rest of the year will play out in both our personal and business lives, with mood rising and falling on positive and negative news stories. In this post, I will begin by updating the numbers for markets overall, and within the equity market, across regions, sectors and industries. I will then use the differences I see across companies to highlight flexibility in investing, operating, financing and cash return policies as the one quality that seems to be separating the winners from the losers in these last few months, and argue that this represents an acceleration of a longer-term shift towards more nimble and adaptable business models.

Market Update

If you have been reading all of my viral market updates during this crisis, I admire your fortitude, and I know that you will get a sense of deja vu, as you read this section, since I follow the same road map on each of them. I start, as always, by looking at US dollar returns on selected equity indices around the world:

Looking at the entire time period (2/14-6/26), US equity indices have done better than European equity indices, with a strong rebound from the lows of March 20 allowing for a complete recoupment of losses in the NASDAQ and an almost complete retracing for the S&P 500. Asian equities have diverged, with Japan and China performing better than India. As equities have seesawed, US treasury bonds have stabilized, after a steep drop in yields in the first four weeks of the crisis:

The treasury rates have settled in, at least for the moment, at close to zero at the short end of the maturity spectrum and at about 0.65-0.75% for the 10-year bonds and 1.2-1.4% for 30-year bonds. I know that there is a widely held view that it is the Fed that has engineered the rate drop, but note that much of the decline occurred before the Fed made its quantitative easing announcements in mid-March. I think that the Fed’s real impact has been on private lending, with its March 23rd announcement that it would operate as a backstop in corporate bond and lending markets. You can see the effects of that announcement on default spreads for corporate bonds, across ratings classes:

Note the climb in default spreads between February 14 and March 23, with investment grade (BBB) rated bonds almost tripling during that period, and the pull back in spreads since, to end at levels higher than on February 14, but well below the March 23rd levels. Mirroring the changes in the price of risk in the corporate bond markets, the price of risk in equity markets (measured with an implied equity risk premium) has been on a wild ride, rising dramatically between February 14 and March 23, before sliding down towards pre-crisis levels:

At one level, the fact that equity risk premiums are above 5% and well above historic norms (4.86% between 2000-2019 and 4.20% between 1960-2019) may seem comforting, but there is a disconcerting component to these expected values. The equity risk premium of 4.83% on February 14 was earned on top of a ten-year bond rate of 1.59%, yielding an expected return of 6.42% on equities, already low by historic standards. The equity risk premium of 5.23% on June 30 was earned over and above a ten-year bond rate of 0.66%, yielding an annual expected return of 5.89% on equities for the long term, a number well below the 7-8% that investors were pricing stocks to earn during much of the last decade. Paraphrasing Winston Churchill, equities don’t look good as an investment class, until you compare them to the alternatives.

Looking at oil and copper, the two economically-sensitive commodities that I have tracked through this crisis, the divergence between the two remains, with oil prices down almost 30% since February 14 and copper prices up 4.31% since that date:

Finally, I keep tabs on gold, a crisis investment of long standing, and bitcoin, a more recent entrant into the game.

If this were a contest for a crisis asset, gold wins by a knockout, since bitcoin, at least during this crisis has moved with stocks, dropping more than 50% between February 14 and March 20 and rising more than 70% from its lows after March 20. It is possible that bitcoin can still live up to the promise of being a good currency, but it has not even come close to being one yet, and if you are a Bitcoin advocate, you have your work cut out for you.

Equities: An Overview

I stick with my practice of downloading the market capitalizations of all publicly traded companies in the world, and then computing aggregated changes in value by groupings. In my first grouping, I look at how equities have performed across the regions of the world:

Looking at percentage change in aggregate market capitalization between February 14 and June 26, global equities have lost 9.30% of their value ($8.4 trillion), but that is quite a comeback from the 29% loss ($26.3 trillion) recorded on March 20. Emerging markets in Africa, Latin America and Eastern Europe show far more damage than developed markets over the entire period (February 14-June 26), though the UK is an exception, down almost 20%. Breaking down the market action by sector:

If you were primarily invested in technology and healthcare, your reaction to the crisis might be “What crisis?”, since those sectors are now ahead of where they were on February 14, and consumer product companies (both discretionary and staple) are not far behind. Energy and real estate have lagged the market, as have utilities, but financials remains the worst performing sector. If you look at the last four columns, you can see that even in sectors that have held their own during this period, the recovery has been uneven, with more stocks down than up in every sector. Finally, I break down sectors into industries, and list the ten worst and best performing, in terms of market cap change from February 14 to June 26:

As in my prior week updates, there is a preponderance of infrastructure and financial services in the worst performing industry list, and a dominance of healthcare and technology on the best performing list. Education is a new entrant into the best performing list, perhaps reflecting the promise and potential of online education.

The Flexibility Story

As the market makes its way back from its lows, it remains an uneven one, with wide divergences between winners and losers, and in my earlier posts, I have looked for clues in the data. In my fourth post from March 23, I noted that heavily indebted companies have underperformed companies with lighter debt loads, and in my eighth post from May 13, I highlighted the fact that growth stocks are outperforming value stocks. In my last post from June 19, I used the concept of a corporate life cycle, and noted that younger companies seem to be doing much better than older companies. Others have noted that capital intensive businesses seem to have been worse affected during this crisis than capital-light businesses, and early in the crisis, buybacks were highlighted as a reason why some companies and sectors were doing worse than others. In fact, the new buzzword that business consultants are pushing is “resilience”, arguing that the resilient companies have weathered this crisis better than the rest of the market. While there is some truth in all of these contentions, I would argue that if there is one quality that ties together all of these seemingly disparate factors, it is flexibility, and this crisis has reaffirmed the value of flexibility.

Flexibility across the Business Model

Simply put, the flexibility of an organization measures the speed and cost with which it responds to changed circumstances, with more flexible firms adjusting faster and at lower cost than less flexible firms. That definition, though, encompasses a range of actions that stretch across every aspect of business, covering everything from how investments are made, to how the business is operated, to how it is funded, and finally to how much cash is returned to owners (in the form of dividends and buybacks).

a. Investment Flexibility

To grow, businesses have to reinvest and investment flexibility measures how much they have to reinvest to deliver a given growth rate, and how long it will take for the investment to pay off.

While it is true that companies that are in businesses that require heavy infrastructure investment (toll roads, telecommunications, automobiles) have low investment flexibility, and service and software firms generally have high investment flexibility, the divide is not necessarily on whether the investments are in tangible or intangible assets. Pharmaceutical companies, for instance, have low investment flexibility because they have to spend large amounts in R&D, with significant leakage (as some R&D will not pay off) and have to wait long periods before commercial success. Over the last decade, disruption in many businesses with a history of low investment flexibility has come from new entrants with business models that allow them to scale up quickly, with relatively low investment. Uber (NYSE:UBER) and Airbnb are examples of sharing economy companies that have had a decisive advantage this dimension over their established competitors. To see how this crisis has played out on the financial flexibility dimension, I classified all non-financial service companies listed globally, based upon the ratio of sales to invested capital, on the (questionable) assumption that invested capital (computed from the accounting balance sheet values of debt, equity and cash) measures reinvestment, into ten deciles:

Note that companies that can generate the most revenues per dollar of invested capital are signaling the highest investment flexibility and they have done far better during this crisis than firms that are in lowest decile of this measure. Some of this may be spurious correlation, but it is an interesting first take on how investment flexibility has been treated by the COVID-19 market.

b. Operating Flexibility

During the course of operations, businesses will be hit by shock that cause their revenues to unexpectedly increase or drop, and operating flexibility measures how those revenue changes flow through into operating profitability. The key to decoding this effect is to break down the operating expenses of a company into fixed and variable, with the latter moving up and down with revenues, while the former stays fixed:Companies with high fixed costs, as a percent of revenues, will see much more dramatic swings in operating income, as revenues change, than companies that have more flexible cost structures. It is not surprising, therefore, that airlines have wild swings in profitability from good years to bad ones, whereas online retailers and service businesses have more muted effects. To see how operating flexibility has played out in this market, I would have liked to have broken costs down into fixed and variable for all companies, but lacking clean accounting measures of either, I settled for gross profit margins, on the assumption that companies with high gross margins have far more flexibility in dealing with revenue shocks than companies with low margins. Breaking down companies based upon gross margin into deciles, here is what I find:

With a full admission that gross margin is a flawed measure of operating flexibility, companies with higher gross margins have done better than companies with lower gross margins, as this crisis has unfolded.

c. Financing Flexibility

As revenues go up and down, and operating income tracks those changes, financial flexibility measures how much net income (to equity investors) is altered, with firms with low financial flexibility showing much bigger swings in net income for a given change in operating income. The key drivers of financial flexibility are debt obligations and cash holdings, with the interest expenses on the former pushing up net income volatility, and the interest income from the latter dampening that volatility:If net debt, as a percent of cash flows or value, is the driver of financial flexibility, we can see how financial flexibility has played out in this crisis by breaking companies down into deciles based upon Net Debt as a multiple of EBITDA:

Companies with high net debt ratios have low financial flexibility and they have been damaged far more than companies with low net debt ratios. Note that the lowest decile of net debt ratios includes firms that have negative net debt, i.e., cash balances that exceed the debt, and they show an increase in market capitalizations between February 14 and June 26.

d. Cash Return Flexibility

The end game, when investing in publicly traded company stocks, is to collect cash flows from that investment, and companies have two choices when it comes to returning cash. The conventional approach has been to pay dividends, but over the last three decades, US companies in particular have turned to returning cash in the form of buybacks. Both dividends and buybacks have to be funded by cash flows to equity investors, and cash return flexibility measures how quickly companies can adjust their cash returns to reflect changes in cash flows to equity:Obviously, companies that return little or no cash, relative to their free cash flows to equity, are not only accumulating cash, but have far more cash return flexibility than companies that return a large proportion of their cash flows. Since dividends still remain the primary mechanism for returning cash across the world, I start by looking at dividend yield, classified into deciles, and looking at the market action in each decile for global companies:

Clearly non-dividend paying stocks and stocks with low dividend yields have done much better than companies with high dividend yields. Among companies that do return large portions of cash, those that return the bulk of their cash flows in the form of dividends have far less flexibility than those that buy back stock, mostly because dividends are sticky, since once they are initiated and set, companies are reluctant to change them. To examine whether the mode of cash return has been a factor in the market action, I break companies into four groups based upon whether they pay dividends and/or buy back stock:While companies that pay both dividends and buybacks have been worst affected and companies that use neither have performed the best over the period, isolating only companies that pay only dividends or buy back stock, companies that pay only dividends have underperformed companies that buy back only stock. While the results are only indicative, they do suggest that making buybacks the bogeyman in this crisis is not backed up by the evidence.

Implications and Conclusion

During this crisis, markets have rewarded flexible companies, a continuation of a trend that predate the crisis to the last one. If the last decade has been a disruptive one, that disruption has been largely driven by companies that have not only built flexible structures, but also used that flexibility to gain competitive advantages over their status quo competitors. As companies get pushed to increase flexibility, it is worth noting that this quest comes with costs, and these trade offs have to be acknowledged:

  1. Compressed Corporate Life Cycle: Earlier in this post, I argued that one of the benefits of having high investment flexibility is that companies can scale up faster; Uber and Airbnb have been able to go from start ups to large companies (at least in terms of operations and value) in very short time periods. However, the same forces that allow these companies to scale up faster also create business models which are more difficult to defend against new competitors, leading to shorter periods of maturity and more speedy decline, with important consequences.

  2. Losses on the upside: With operating and financial flexibility, the trade off is much simpler, since companies with greater operating and financial flexibility will be more protected on the downside, but at the expense of giving up some of the upside. Having large fixed costs and/or high net debt will result in bigger losses when times are bad, but it will also create larger profits on the upside.

  3. Social costs: As new business models are built to have motor flexibility, some of the actions that increase flexibility come with costs that are borne by society, rather than the company. For instance, Uber’s business model of treating drivers as independent contractors rather than employees gives the company a more flexible cost structure, but it does pass on the costs of providing a safety net (healthcare and pensions) to society. As a society, we need to debate whether the benefits we gain by having a more nimble economy outweigh the social costs.

YouTube Video


  1. Market data (June 26, 2020)

  2. Regional breakdown – Market Changes and Pricing (June 26, 2020)

  3. Country breakdown – Market Changes and Pricing (June 26, 2020)

  4. Sector breakdown – Market Changes and Pricing (June 26, 2020)

  5. Industry breakdown – Market Changes and Pricing (June 26, 2020)

  6. Investing Flexibility (Sales to Cap) breakdown: Market Changes and Pricing (June 26, 2020)

  7. Operating Flexibility (Gross Margin) breakdown: Market Changes and Pricing (June 26, 2020)

  8. Financing Flexibility (Net Debt Ratio) breakdown: Market Changes and Pricing (June 26, 2020)

  9. Cash Return Flexibility (Dividend Yield) breakdown: Market Changes and Pricing (June 26, 2020)

Viral Market Update Posts

  1. A Viral Market Meltdown: Fear or Fundamentals?

  2. A Viral Market Meltdown II: Pricing or Valuing? Investing or Trading?

  3. A Viral Market Meltdown III: Clues in the Market Debris

  4. A Viral Market Meltdown IV: Investing for a post-virus Economy

  5. A Viral Market Meltdown V: Back to Basics

  6. A Viral Market Meltdown VI: The Price of Risk

  7. A Viral Market Meltdown VII: Market Multiples

  8. A Viral Market Meltdown VIII: Value vs Growth, Active vs Passive, Small Cap vs Large!

  9. A Viral Market Meltdown IX: A Do-it-Yourself S&P 500 Valuation

  10. A Viral Market Meltdown X: A Corporate Life Cycle Perspective

  11. A Viral Market Meltdown XI: The Flexibility Premium

Original Post

Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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Who is Deborah Birx — the doctor whose reaction when Trump suggested people inject disinfectants has gone viral?

In fact, Dr. Deborah L. Birx, 64, is a world-renowned global health official and a retired U.S. Army physician who was instrumental in HIV/AIDS vaccine research, and whose career has spanned three decades. And ever since Vice President Mike Pence appointed her as the response coordinator for the White House Coronavirus Task Force — one of two women on the team — she’s been on national TV almost daily, often alongside Dr. Anthony Fauci, the nation’s top infectious-disease expert.

Birx has been a scene stealer before — such as when she warned younger Americans that they were not immune to COVID-19, stating, “millennials are the key” to stopping the spread of the virus.

But her body language as President Trump suggested bright-light treatments and disinfectants to fight the coronavirus on Thursday — sitting still, taking a deep breath, blinking, setting her face still and then staring at the ground — went viral on Twitter

on Friday. Some criticized her for not standing up and refuting the president’s comments immediately.

Read more:Trump suggests disinfectant as treatment for coronavirus ‘by injection inside or almost a cleaning’ — later says he was speaking ‘sarcastically’

Others set the clip to the theme music from HBO’s

“Curb Your Enthusiasm,” or joked about her facial expression. “You can see Dr. Birx’s soul leave her body,” snarked one tweet.

The president has since responded that he was asking the questions “sarcastically,” and the White House press office accused the media of taking his comments “out of context.”

Related: Chris Cuomo satirizes Trump’s disinfectant-injection suggestion: ‘Take two shots of Windex, swallow this lightbulb, and call me in the morning’

For those curious to learn more about Birx, however, here are five things to know about the ambassador-at-large’s 30-year career, and her current role as the federal coronavirus response coordinator.

She was always a science buff

Birx grew up in Pennsylvania, where she and her two older brothers converted the backyard shed into a makeshift lab. Their most notable invention: a satellite-dish antenna that they moved around on roller skates, the Society for Science & the Public reported. When Birx was a junior at Carlisle High School in Pennsylvania, she competed in the 1973 International Science and Engineering Fair in San Diego. Her project on paleobotany in the Carboniferous period scored the trophy for girls grand champion, plus a chance to compete in the Army and Navy’s International Science and Engineering Fair (which she won). She eventually put herself through medical school at the Hershey School of Medicine at Penn State, the Hill reported.

She has a military background

Birx trained in internal medicine and clinical immunology at the Walter Reed Army Medical Center and the National Institutes of Health, according to her biography on the Department of State website. She began her government career as a military-trained clinician in immunology, mainly researching HIV/AIDS vaccines, in 1985. She attained the rank of colonel, and as Col. Birx received two prestigious U.S. Meritorious Service Medals and the Legion of Merit Award. She was named the director of the U.S. Military HIV Research Program at the Walter Reed Army Institute of Research, serving from 1996 to 2005. And she led “one of the most influential HIV vaccine trials in history,” her bio states.

She’s worked closely with three U.S. presidents — and was dogged in getting George W. Bush’s attention

When Bush announced his President’s Emergency Plan for AIDS Relief (PEPFAR) in 2003, Birx flew back from Kenya and waited outside of the then-director of the Office of National AIDS Policy’s town house for almost a week to get a meeting with him. She had been working on HIV vaccine research in Africa for almost six years at that point. So she showed him a 180-slide PowerPoint presentation “until he agreed … to let the Army also be part of PEPFAR,” she told a George W. Bush Presidential Center podcast in September. “I was not leaving his office, and so I wore him down.”

Birx was later appointed ambassador-at-large and global AIDS coordinator by President Barack Obama, and she has overseen PEPFAR at the State Department for the past six years. Now she is also aiding the government response to the coronavirus under the Trump administration. Vice President Pence has described her as his “right arm” in that role.

Her signature scarves have built a following

As Birx tends to wear patterned silk scarves during the daily White House coronavirus briefings, viewers have taken note, and even fashion cues, the Wall Street Journal reported. Instagram

accounts dedicated to her neckwear have sprung up, including @deborahbirxscarves and @deborahbirxscarfqueen. Some followers have posted pictures of themselves sporting similar scarves to hers on Twitter:

Why was Birx sporting scarves even before people started using them as makeshift face masks during the pandemic? Turns out, it’s one of her tips for packing lightly and sticking to just one carry-on bag when traveling for work. “I take relatively plain dresses, black and other colors, that you can then change the scarves on, and through that it looks like it’s a totally different outfit,” she told the Strategerist podcast last year.

She throws one heck of a Christmas party

Birx takes a hands-on approach to all of her work, including her annual Christmas Eve party. The Washington Post revealed in a lengthy profile that she hosts a 24-hour buffet for almost 100 people in her home on Christmas Eve every year, and that she and a deputy cook all of the food themselves. “It’s important that I do this myself,” she said. “We do this to show love.”

The Post profile also notes that she graduated from high school at 16, got married and graduated from college at 20, finished medical school at 23 and had her daughters shortly after — so she’s juggled work and home responsibilities through her entire career. On weekends in the 1980s, “Birx’s older daughter would sit on the floor of the lab, playing with the colored caps of sample tubes, while Birx cultured HIV.”

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