☕️ Cash flow positive

Public companies could have their worst quarter since 2008... July 13, 2020 [View Online]( | [Sign Up]( [Daily Brew]( TOGETHER WITH [Quick Base]( Good morning. We’ve got something really exciting to share with you today. Morning Brew is pivoting from newsletters to… Games. Not really, but we did create [online Mad LibzÂ](for you to play with your coworkers. It’s an embarrassing amount of fun—we’ve been playing at Morning Brew and can't stop laughing. [Try it out](. MARKETS YTD PERFORMANCE NASDAQ 10,617.44 + 18.33% S&P 3,185.04 - 1.42% DJIA 26,075.30 - 8.63% GOLD 1,801.80 + 18.54% 10-YR 0.645% - 127.50 bps OIL 40.59 - 33.69% *As of market close - Energy: The Saudis have seen enough—they’re pressing OPEC and allies to [increase oil production]( in August as demand for fuel bounces back from pandemic lows. Members will talk it out on Wednesday via videochat. - COVID-19 updates: Yesterday, Florida reported the [largest daily increase]( in infections of any state since the pandemic began (more than 15,000 new cases). Former FDA Commissioner Scott Gottlieb said he expects the "[apex](" of cases in the South to hit in two to three weeks. EARNINGS [Q2 Earnings WIll Be Mysterious]( [The Scooby-Doo gang searching for clues] Giphy This week, we’ll enter an earnings season that some newsletter writers would call unprecedented if they couldn’t think of another word to describe it. Companies will share how they performed in the second quarter—the three months that featured a coordinated global shutdown of the economy and a reopening attempt that’s going better in some countries than in others. High-level: S&P company earnings are projected to [decline 44%]( in Q2, which would be the largest drop since the financial crisis (when they fell 67% in Q4 of 2008). All 11 sectors of the index are expected to post negative earnings. Here’s the but... Earnings projections in the coronavirus era are about as useless as rinsing a dish before you put it in the dishwasher. More than 180 S&P companies have [pulled earnings guidance](, leaving analysts scrambling to figure out ways to determine whether a company hit its goals, given the circumstances. So unprecedented times calls for unprecedented financial metrics. - “Investment pros everywhere are concocting homegrown methodologies and bespoke formulas to help them gauge a company’s health,” [writes Bloomberg](, whether that’s parsing an exec’s words or evaluating dining trends. - Traditional financial measures like earnings per share are likely to be ignored in favor of broader narratives about companies’ experiences with closing and reopening. First up? As always, it’s the banks. Investment banking should be a bright spot given the surge in trading activity that followed the market crash. - At one point, daily equity trading volumes in the U.S. increased 90%, [per the FT](. - JPMorgan predicts a 50% annual increase in markets revenue in Q2. What won’t be bright spots: M&A fees, earnings from lending and interest, and larger reserves set aside for loan losses. Zoom out: Bank stocks significantly trail the S&P 500, which is down only 1.4% this year. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Analysts%20Prepare%20for%20Q2%20Earnings%20Releases%20Without%20Much%20Guidance:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 EDUCATION [A Back-to-School Public Health Conundrum]( This week’s Friday Puzzle is early. As back-to-school season approaches... - The U.S.’ working parents [are overwhelmed]( and need the flexibility typically provided by schools, especially as some workplaces return to the office. - But COVID-19 cases are still rising in most states, and it may not be safe to send kids back to school. There’s no easy solve, but the workforce desperately needs one Yesterday, Education Secretary Betsy DeVos [pushed for schools]( to reopen, stressing that “kids cannot afford to not continue learning.” She added that schools that don’t reopen should not get federal funding, a policy President Trump has also suggested. - Public health experts such as former FDA Commissioner Scott Gottlieb and Dr. Tom Inglesby of Johns Hopkins said the administration [shouldn’t be pressuring schools]( when safety is unclear. Congressional Democrats oppose the reopening push, too. House Speaker Nancy Pelosi said the administration is [being reckless]( in its aggressive approach. When Congress returns next week, No.1 on the to-fight-about list is another coronavirus relief bill, which may include measures to help schools. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Officials%20Debate%20Whether%20to%20Reopen%20Schools%20in%20the%20Fall:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 COWORKING [WeWork: From Punching Bag to Profitable]( [WeWork cleanup] Francis Scialabba In [an interview]( with the FT published yesterday, WeWork Executive Chairman Marcelo Claure said the beleaguered coworking company is on track to earn its cash flow positive badge next year. WeWork has been on a journey. Last fall, WeWork had Brew writers exhausting We-[insert verb here] puns by [melting down]( after an IPO filing revealed sketchy accounting practices and governance. In November, main investor SoftBank stepped in with a $5+ billion bailout. - Claure said he turned the ship around by 1) slashing jobs 2) renegotiating leases and 3) selling assets. So...by making it a smaller ship. WeWork had to adjust for COVID-19, too Some tenants refused to pay or tried to wriggle out of leases. But Claure said revenue has held steady—and that the Great Workplace Revolution has even benefited WeWork. Some companies (including Microsoft, Citigroup, and TikTok owner ByteDance) are turning to WeWork facilities as satellite offices closer to employees’ homes, while some remote workers are using WeWork for shorter slices of the workweek. �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=WeWork%20to%20Be%20Cash%20Flow%20Positive%20in%202021,%20Says%20Chairman:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 SPONSORED BY QUICK BASE [Beware: Extreme Efficiency May Occur](#) [Quick Base]( Nobody warned us exactly how efficient we would be by using [Quick Base](. Whether it's tracking customers, sales opportunities, projects, and so much more, Quick Base lets you manage processes more efficiently. Our increased efficiency has resulted in a lot of spare time and new hobbies...like taking leisurely lunches, going on long walks, and cultivating luscious house plants. We’re even using Quick Base to [track the progress]( of our hobbies. The results? Our lunches are more leisurely, our walks are longer, and our plants? You guessed it—so much more luscious. In [Quick Base](, you don't need any code to build awesomely powerful software solutions for your business, which is great because we can barely turn on our computers. And you can turn all the workflows you’re managing in unwieldy spreadsheets—or *gasp* on paper—into an app in just minutes. Don’t say we didn’t warn you. [Request a personalized demo to see how Quick Base can power your processes](. MUSIC [At Least You Don't Have to Leave Your Tailgate]( [Brad Paisley concert ] Kevin Mazur/Getty Images for Live Nation Country star Brad Paisley resisted the urge to stage dive while performing at Live Nation’s first drive-in concert series, “Live From the Drive-In” in St. Louis Friday night. A [review]( by the St. Louis Post-Dispatch: - “Paisley, in his first live show since March, came off especially earnest and thankful for fans who ventured out to see him.” - “Applause seemed off in this setting, so horn honking was a big deal.” �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=Paisley%20Performs%20in%20St.%20Louis%20Parking%20Lot%20As%20Part%20of%20Live%20Nation%20Series:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 CALENDAR [The Week Ahead]( We'll learn a lot about COVID-19's effects on the economy this week, from company earnings to important data like June retail sales. Monday: PepsiCo earnings Tuesday: Consumer Price Index for June; earnings (Wells Fargo, JPMorgan, Citigroup, Delta); Bastille Day Wednesday: TAX DAY; NBCUniversal’s Peacock streaming service launches nationally; earnings (Goldman Sachs, PNC, UnitedHealth Group, U.S. Bancorp, BNY Mellon) Thursday: June retail sales; earnings (Bank of America, Morgan Stanley, Netflix, Truist Financial, Johnson & Johnson, Abbott Laboratories, Domino’s Pizza) Friday: Housing starts; BlackRock earnings; World Emoji Day �  �  �  mailto:?subject=Check%20out%20this%20story%20from%20Morning%20Brew!&body=The%20Week%20Ahead:%20July%2013:%200A%0AWant%20more%20great%20content%3F%20Subscribe%20to%20Daily%20Brew%E2%80%94Delivering%20the%20latest%20business%20news%20from%20Wall%20St.%20to%20Silicon%20Valley,%20daily.%20 GAMES [Mad Libz](  As great as WIS (working in sweatpants) is, it’s okay to admit you miss hanging out with your coworkers and just...talking about everyday things. To recreate some of that fun, Morning Brew built an online [Mad Libz]( game to help you connect. You can choose from various situations—including “company party shenanigans”—to form a story that simultaneously makes no sense and all the sense in the world. [Try out the game](, then get your entire office playing. WHAT ELSE IS BREWING - [Three senior execs]( at Ubisoft, the French developer of videogames like Assassin’s Creed, resigned following an investigation into allegations of misconduct. - [White House adviser Peter Navarro]( said President Trump will likely take more action against Chinese-owned apps WeChat and TikTok. - [Qualcomm]( will invest $97 million into Reliance Jio Platforms, becoming yet another U.S. player to grab a stake in India’s telecom superstar. - [NBA whisperer]( Adrian “Woj” Wojnarowski was suspended without pay by ESPN over an f-bomb he sent to Sen. Josh Hawley in an email. - [The Washington Redskins]( will announce today they'll retire the team's nickname, per Sports Business Journal. - [Deal deals deals](: Analog Devices is close to acquiring Maxim Integrated Products, and [MultiPlan]( will go public via a merger with special purpose acquisition company Churchill Capital in a deal worth about $11 billion. SPONSORED BY CISCO WEBEX [Cisco WebEx]( We’re livin’ our best virtual existence. With [Webex](, we are collaborating like never before and securely connecting with our team—no matter where we are. Webex provides simple and reliable video communication tools that allow your team to connect and collaborate securely from business meetings to virtual happy hours. [Get Webex today, it's free](. BREW'S BETS Learn more about investing: WSJ columnist Jason Zweig has an [entire website]( devoted to blogs, resources, and books around investing. His first column came out 12 years ago yesterday and it remains relevant today. Productivity course: Join the Brew and entrepreneur Nir Eyal for a 2-week workshop helping you prioritize your time and become a less distracted, more productive person. Due to high demand, we've extended the registration deadline. [Sign up now to reserve your seat](. Boost your mornings: We know a good newsletter when we see one, and The Newsette consistently delivers. You'll get news, tips, and interviews that will inspire you to win the day in under five minutes. [Check it out here](. Hodgepodge of interesting stories: The [tricky math]( of herd immunity. Why so many people in China pick “[weird](” English names for themselves. And [19th-century gay marriages](. FROM THE CREW [Start Talking](#) On Mondays, we'll present some of the thorniest business topics of the day, give you a jumping-off point with resources, and encourage you to debate it with friends, family, and coworkers. Today’s topic: Let's run it back to one of our stories—should schools reopen? - When schools are reopening and what that may look like. ([The Cut]() - Lessons from reopening schools abroad. ([NPR](, [WaPo]() - Teachers are being forced to choose between health and their jobs. ([Time]() - Why one epidemiologist thinks schools should reopen. ([Vox]() - Students need schools to reopen, but it’s going to take $$$. ([NYT Editorial Board]() - Nonmedical vaccine exemptions and school liability could complicate things further. ([Education Dive]() BREW CROSSWORD We got a really fun one for you this week. The sample clue: What LeBron and others are living right now (10 letters). [Play the Brew Crossword here](. SHARE THE BREW You only need 5 more referrals to receive Morning Brew stickers. In the wise words of a certain Jedi master: “Sticker or no sticker, there is no point in having a laptop if it doesn’t have a Brew sticker on it.” Or something like that. [Click here to get free swag.]( Hit the button below to learn more and access your rewards hub. [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=4904f90a](             Written by [Eliza Carter]( and [Neal Freyman]( Was this email forwarded to you? Sign up [here](. WANT MORE BREW?  Retail newsletter → [Retail Brew](  Tech newsletter → [Emerging Tech Brew](  Marketing newsletter → [Marketing Brew](  Quarantine newsletter → [The Essentials](  Business podcast → [Business Casual]( [ADVERTISE]( // [CAREERS]( // [SHOP]( Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright ©2020 Morning Brew. 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