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From: The Bloomberg Open
To: [REDACTED]
Subject: PPP puzzle
Date: Tue, 07 Jul 2020 11:09:20 +0000

Bloomberg

Good morning. Here's what you need to know to start your day.

• Venture capital firms deny seeking PPP loans.
• The Fed's Bostic warns the recovery is stalling.
• Ghislaine Maxwell arrives in New York for hearing.

Five Things You Need to Know

A handful of venture capital firms said they didn't seek bailouts or get money even though yesterday's list of PPP recipients showed otherwise. Index Ventures and Foundation Capital, both listed as having been approved for more than $1 million, are among those saying they never applied for funding. Andreessen Horowitz's loan in question went to a portfolio company for which it's the beneficial owner.

The list also included: Companies with ties to President Trump, more than 88,000 loans for religious organizations, a number of investment firms and some nonprofit groups that advocate against such massive government spending. Chinese companies including conglomerate HNA and affiliates of a state-owned defense giant were among recipients. Jacob Gottlieb, whose $8 billion hedge fund shut amid an insider trading scandal also appeared. And agriculture, forestry, fishing and hunting companies got at least $6.4 billion.

Virus latest: Novavax got a $1.6 billion U.S. award for vaccine development. Shares jumped 27% premarket. Atlanta Mayor Keisha Lance Bottoms said she tested positive. Texas cases rose 2.7%, pushing total infections above 200,000. Brazil's Jair Bolsonaro underwent another test after showing symptoms. The Australian state of Victoria announced a six-week lockdown across metropolitan Melbourne. Follow the developments with our Virus Update.

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Europe's economy will be hit more than previously estimated this year and take longer to recover, the European Commission said. It sees euro-area GDP slumping 8.7%, a percentage point deeper than it predicted in May, with risks high and mainly to the downside. Forecasts for France, Italy and Spain were lowered to contractions of more than 10%, while Germany was upgraded a tad to -6.3%.

U.S. futures fell with shares in Europe and Asia. Treasuries and the dollar rose. Oil and gold declined. The Aussie slipped after Melbourne was locked down. All Stoxx Europe 600 industry groups declined and Bayer slid after its plan for handling future Roundup cancer claims hit a snag. In Asia, Chinese stocks powered ahead for a sixth day.

Map of the Day

Keystone XL hit a roadblock. The Supreme Court voted to bar U.S. construction on the oil-sands pipe, dealing a blow to Trump's bid to proceed and to Canadian producers wanting to move more oil across the border. Most work will be delayed to next year, unless Joe Biden wins the election that is. He's vowed to veto the project.

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What to Keep an Eye On

The U.S. rebound is at risk of stalling because of the Sun Belt infection spike, Fed official Raphael Bostic said. High-frequency data showed a leveling off of business openings and mobility, the Atlanta Fed chief told the FT. The trajectory will be "a bit bumpier than it might otherwise."

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The U.S. may ban TikTok. Michael Pompeo told Fox he's looking at a ban on Chinese social media apps, specifically TikTok. The company will remove its app from Hong Kong stores in coming days, the first internet service to exit the city after China enacted new national security laws. Its pullout may benefit Beijing by removing a forum pro-democracy protesters use to post videos.

Tech industry concerns overshadowed Samsung's profit beat. Operating profit of 8.1 trillion won ($6.8 billion) beat consensus for 6.2 trillion won. Shares fell as the figures were helped by a one-time gain in the display business, which some analysts estimated was more than 1 trillion won in compensation from Apple for fewer-than-promised display orders, suggesting weakness in the sector.

Jeff Bezos, Mark Zuckerberg, Sundar Pichai and Tim Cook will testify to Congress on July 27. The appearances before a panel investigating competition in the tech industry may be virtual. It's Bezos's first time to testify. Zuckerberg and Sheryl Sandberg are set to meet civil rights leaders today, after major advertisers boycotted Facebook for not doing enough to combat racism and voter suppression.

Opinion

China's future credibility will be determined by how it treats Hong Kong, Bloomberg Opinion's editors write. Beijing may have imposed the national security law because its believes Western rivals are in disarray, or to distract from its weakened economy. Nations should oppose China's attempts to assert territorial claims by force, weaken international institutions and advance goals through intimidation.

This may be the time for investors who want to save the Brazilian Amazon, writes Clara Ferreira Marques for Bloomberg Opinion. They can support green incentives or threaten to divest with the promise to reinvest if behavior improves. Investors can't dictate government action, but they can point to portfolio risk and cause plenty of pain. Money talks.

What Everybody's Talking About

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The woman who called the police on a Black man watching birds in Central Park in May was charged with falsely reporting an incident, a misdemeanor. Amy Cooper, who's White, accused the bird watcher, Christian Cooper (no relation), of threatening to attack her after he asked her to keep her dog on a leash. A video of the encounter was posted to Facebook, where it went viral.

Ghislaine Maxwell, who's being held in a federal jail in New York, is likely to be formally charged and enter a plea on July 14. District Judge Alison Nathan proposed the hearing be held by videoconference. The former Jeffrey Epstein associate agreed to the remote hearing and the date in a letter to the judge.

By the Way

The Kansas City Chiefs locked in the NFL's most dynamic player for another decade. Quarterback Patrick Mahomes agreed to a 10-year extension worth up to $503 million, the AP reported. Mahomes, 24, took the Chiefs to their first Super Bowl title in 50 years. It's the richest contract in professional sports history, surpassing Mike Trout's $426.5 million deal with the Angels.

Photographer: Tom Pennington/Getty

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