Red Line
What You Need To Know
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The World
US private payrolls dropped by 20.2 million in April, the worst job loss in the history of ADP report. The biggest losses came in services and hospitality along with trade, transportation and utilities as well as construction. (CNBC)
President Trump’s latest red line for the next phase of coronavirus legislation — a payroll tax cut for workers — has few fans in Congress even among Republicans, further complicating the path toward a new rescue package as House Democrats rush to release their own plan. (Washington Post)
U.S. services businesses saw their steepest drop in activity in April since the last recession. The Institute for Supply Management’s nonmanufacturing index fell to 41.8 in April, down from 52.5 in March. IHS Markit said its U.S. services index saw its sharpest one-month decline since the survey began in October 2009. (Wall Street Journal)
Cliff dive:
China could cut U.S. debt holdings in response to U.S. officials reportedly considering cancelling all or part of the US$1.1 trillion debt owed to China, a so-called ‘nuclear option.’ (South China Morning Post)
U.S. rearms to nullify China’s missile supremacy in Pacific: The U.S. is rolling out new weapons and strategy in a bid to close a wide missile gap with China. (Reuters)
Nearly a fifth of Wendy’s U.S. restaurants are out of beef. Kroger is limiting the amount of ground beef and pork that customers can buy. And Costco has placed a three-product cap on purchases of fresh beef, poultry and pork. (CNBC, New York Times)
Tyson Foods will resume limited production at its largest U.S. pork plant this week. (Reuters)
The coronavirus crisis threatens the stability of the euro area and risks exacerbating economic and social divisions within the EU, the European Commission warned, predicting an economic production collapse and the biggest recession in bloc history. (Financial Times)
North Korea appears to be building facilities that can be used to assemble ballistic missiles — next to an underground facility whose likely size is also large enough to easily accommodate all known North Korean ballistic missiles and their associated launchers and support vehicles. (CSIS)
South Korea's spy agency does not believe that North Korean leader Kim Jong Un had heart surgery last month and has determined that his three-week absence from public view was probably linked to fears over the coronavirus pandemic. (Washington Post)
Iranian President Hassan Rouhani threatened a “crushing response” if the United States goes ahead with plans to extend an embargo on Iranian trade of conventional arms, which the United Nations is set to lift in October. (Reuters)
Top MBA programs are split on whether accepted students can skip the fall, facing big tuition losses and trouble filling classes if masses of students defer. Meanwhile, the University of California could reopen just one-third to one-half of dorm rooms this fall. (Wall Street Journal, Los Angeles Times)
Researchers found that age-specific shelter in place policies may be just as effective as population-wide shelter in place policies — as long as everyone not sheltering in place also practices safe physical distancing. (Harvard Medical School, MIT)
Economy
Weekly mortgage applications show a homebuying recovery, as interest rates set another record low. New home mortgage applications rose for the third straight week, up 7% compared with a week earlier. (CNBC)
The U.S. Treasury Department will launch a long-planned 20-year bond and increase securities auction sizes across a range of maturities to raise cash to meet record government borrowing needs. (Reuters)
The Fed is propping up companies it had warned banks not to touch, as indebtedness will be measured using adjusted earnings. (Bloomberg)
Private equity numbers may be better than they initially appear. (Private Equity News)
Non-Chinese investors are shifting into yuan-denominated government debt at a record rate as they seek a safe haven amid the coronavirus pandemic. The shift bears signs of longer-term recalibration of global finance. (Deutsche Welle)
Technology
Many Americans heading back to the factory and the office will notice that their every move is being watched or recorded. (Wall Street Journal)
Airbnb is planning to lay off 1,900 employees, or around 25% of its workforce, with revenue expected to be less than half what it was in 2019. Uber will cut about 3,700 full-time jobs, and its CEO will forgo his base salary for the remainder of the year. (The Information, Reuters)
Twitter is testing a new feature where users who use “harmful” language will see a prompt suggesting that they self-edit before posting a reply. (TechCrunch)
Stanford researchers moved one step closer toward enabling electric cars to recharge themselves wirelessly as they drive. Engineers have demonstrated a practical way to use magnetism to transmit electricity wirelessly to recharge electric cars, robots or even drones. (Stanford News)
Instacart wasn’t ready to become an essential service overnight. (Bloomberg Businessweek)
Smart Links
One in 6 high school seniors may take a gap year. (Hechinger Report)
Study finds stronger links between automation and inequality. (MIT News)
Pickup trucks outsell sedans in U.S. for the first time ever. (Bloomberg)
Why did news outlets report Kim Jong Un was on his deathbed? (Washington Post)
An excellent graphical guide explains the race for coronavirus vaccines. (Nature)
Good News
Daniel Radcliffe, who played Harry Potter in movies, kicked off a star-studded relay-reading of the J.K. Rowling book that started it all: “The Sorcerer’s Stone.” (Wizarding World)
An 11-year-old wrote her mail carrier a thank you letter. Then the wild ride began. (Twitter)
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