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The meaning of Juneteenth
Tomorrow, June 19, is Juneteenth, a holiday commemorating the end of slavery in the United States. African-Americans have celebrated it since the late 1800s. This year, the holiday has become a focus of companies’ response to the national reckoning on racial discrimination. Should employees get the day off? Should markets close? Should it be an official federal holiday?
C.E.O.s are debating their approach. In internal company discussions, some have suggested that Juneteenth replace Columbus Day, instead of being an additional day off. Others, problematically, have suggested that it could replace Martin Luther King Jr. Day.
• Closing stock exchanges for the day requires either a presidential declaration, something so far typically reserved for former presidents’ funerals, or an act of Congress.
Who’s doing what:
• Juneteenth is becoming a paid holiday at Nike, Mastercard, Target, Twitter and Uber, among others.
• Amazon and Google encouraged employees to cancel unnecessary meetings on the day. Google said this would “create space for learning and reflection,” while Amazon told employees to “take some time to reflect, learn and support each other.”
• G.M. will hold a moment of silence for 8 minutes and 46 seconds. That’s how long a Minneapolis police officer knelt on the neck of George Floyd, whose killing last month sparked nationwide protests.
• Capital One, Fifth Third, JPMorgan and U.S. Bank will close retail branches early.
The day feels “more timely and relevant than ever, a reminder that freedom is still long overdue,” Brianna Holt writes in a Times Op-Ed. “The importance of Juneteenth is finally receiving widespread recognition,” she adds, with a warning:
It’s also likely that this movement will lose its momentum as businesses begin to reopen and “normal life” makes its return. Whatever might come, I know where I’ll be on Friday: celebrating the continued fight that the brave and relentless people before me expect for my generation to carry on.
Here’s what’s happening
The U.S. walked away from talks over global tax coordination. The move risks an international trade war, if European countries now impose taxes on American internet companies and the U.S. retaliates with tariffs.
President Trump reportedly sought China’s help in winning re-election, according to the forthcoming tell-all book by John Bolton, his former national security adviser. Mr. Trump asked President Xi Jinping to buy agricultural products “to ensure he’d win” farm states, Mr. Bolton writes.
PepsiCo will change the name and image of its Aunt Jemima brand, acknowledging its racist roots. The owners of the similarly problematic Uncle Ben’s (Mars) and Mrs. Butterworth’s (ConAgra) said they were thinking.
Wall Street moguls are spending big to defeat Representative Alexandria Ocasio-Cortez in her Democratic primary, backing Michelle Caruso-Cabrera, a former CNBC anchor. Donors include Steve Schwarzman of Blackstone and David Solomon of Goldman Sachs.
What’s garbage and what’s gold? In a sign of the topsy-turvy markets, the Man Group assembled what it called a “garbage portfolio” of stocks from companies at the highest risk of default. It has sharply outperformed the broad market over the past two months, which the hedge fund says “give us some pause about the durability of the recovery.”
Not so fast, Hertz
The most-talked-about stock offering this year is the car rental company’s effort to sell up to $500 million worth of shares — while in bankruptcy protection. The plan came to a screeching halt yesterday.
Jay Clayton, the S.E.C. chairman, said the commission had “comments” on Hertz’s proposed offering. That’s an unusual, and ominous, public admonishment.
• A reminder: Hertz warned prospective buyers that bankruptcy restructuring was likely to make its common stock worthless. As The Times’s Jeff Sommer points out, the word “worthless” appears seven times in its offering document, “like a series of hazard lights set up along a long and dangerous road.”
Hertz has suspended the stock offering while it talks with the S.E.C.
It’s another sign that people are worried about speculative day traders, who are commonly believed to be behind the sharp swings in Hertz shares and other volatile stocks.
• Wall Street is fixated on Robinhood, the stock-trading app where many of these traders have congregated. (A site tracking Robinhood trades has become Wall Street’s new obsession.)
• In sobering news, a 20-year-old Robinhood user died by suicide after seeing a $730,000 negative balance in his account.
Give it away now
Small businesses that turned to the Paycheck Protection Program have been worried that while the loans are designed to convert into grants, even a small misstep could force them to pay back. A new tweak — one of many to the troubled $660 billion program — largely allays those fears.
The Small Business Administration eased a requirement that borrowers rehire all the workers they had laid off, The Times’s Stacy Cowley reports. Now, they simply need to affirm that lockdown measures stopped them operating “at the same level of business activity.”
“This gives those borrowers flexibility,” Albert Campo, an accountant who has helped pandemic loan applicants, said. “If you’re at 50 percent capacity, you can’t bring back your whole staff and pay them all. You just can’t.”
• There is still $130 billion available in the program, which is scheduled to stop lending at the end of this month.
But the program has many other flaws, The Wall Street Journal details in a post-mortem: It “failed to take into account the near-countless varieties of small business, which employ nearly half of U.S. private-sector workers, and how best to help them, according to economists, business owners and bankers.”
💵 Need help with money matters during the pandemic? Our colleagues Ron Lieber and Tara Siegel Bernard have a new information hub with tips on stimulus checks, unemployment insurance, mortgage and utility bills and more.
‘White capital flows to predominantly white institutions’
Reed Hastings of Netflix and his wife, Patty Quillin, have announced the largest ever individual donation to historically black colleges and universities, or H.B.C.U.s. They are giving $120 million to the United Negro College Fund, Spelman College and Morehouse College, Andrew writes.
It highlights the disparity in endowments at top universities. “H.B.C.U.s have a tremendous record, yet are disadvantaged when it comes to giving,” Mr. Hastings and Ms. Quillin said in a statement. “Generally, white capital flows to predominantly white institutions, perpetuating capital isolation,” they added, urging others to give to these colleges and help “reverse generations of inequity in our country.” (It also doesn’t help that black enrollment in M.B.A. programs, an important pipeline for corporate leadership positions, has stagnated for a decade.)
• The most prominent H.B.C.U.s have endowments that are hundreds of millions of dollars (Spelman’s is around $390 million), a fraction of Ivy League universities’ (Harvard’s tops $40 billion).
The largest donations to schools come from alumni. “The reality is that our alumni have done quite well. But I don’t think we have any billionaires,” David Thomas, the president of Morehouse, told Andrew. “Here, it’s really about developing and cultivating relationships.”
• Last year, the financier Robert F. Smith donated $34 million to pay off the debts of Morehouse’s graduating class, one of the biggest individual H.B.C.U. donations at the time. (Mr. Smith attended Cornell and Columbia.) Responding to the donation by Mr. Hastings and Ms. Quillin, he said:
Addressing social and economic justice requires investments like this to create a systemic, permanent capital base that starts to level the playing field. This is how we break the cycle of disinvestment and replace it with a virtuous cycle of opportunity and community building.
The speed read
• BP raised $12 billion in a bond sale, a day after taking a write-down of up to $17.5 billion to account for dwindling demand for oil. (Reuters)
• The 10 biggest private equity firms have spent more than $40 billion on deals since March, taking advantage of the pandemic to hunt for investment opportunities. (FT)
• Shares in JD.com, the Chinese e-commerce giant, rose over 3 percent in their first day of trading in Hong Kong. (WSJ)
Politics and policy
• The E.U. unveiled proposals to block government-backed Chinese companies from investing in key assets. (NYT)
• The U.S. federal government has largely gone quiet on coronavirus measures, leaving state and local authorities to respond to a surge in cases. (NYT)
• The Justice Department proposed sweeping changes to the legal protections that shield internet companies from liability for content posted on their platforms. (Politico)
• EBay’s former C.E.O., Devin Wenig, and public relations chief, Steven Wymer, are reportedly the unnamed executives in an indictment about the cyberstalking of newsletter writers. (Bloomberg)
Best of the rest
• America’s banks are running out of coins. (NYT)
• “It is too soon to restore C.E.O.s to pre-Covid pay.” (FT)
• Instead of a pandemic baby boom, there are signs of a coronavirus baby bust. (Brookings)
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