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MarketWatch First Take: Cisco says pandemic worse than dot-com crash and recession, but earnings are faring just fine

Cisco Systems Inc. described the current economic conditions caused by the global pandemic as worse than the dot-com crash of 2000 and the Great Recession of 2008, but so far is it faring better than expected.

“Despite the challenging environment we are all operating in, we delivered a solid quarter and financial performance in the midst of the greatest financial crisis of our lifetime,” Cisco CSCO, -2.93% Chief Executive Chuck Robbins told analysts on the company’s fiscal third-quarter conference call.

The networking giant reported earnings and revenue better than Wall Street’s revised expectations for the quarter Wednesday. Cisco’s revenue of $12 billion was down 8% from the year-ago period, but slightly better than consensus estimates of $11.9 billion, and adjusted profits of 79 cents a share were even better than expectations of 71 cents a share.

And while most companies during this pandemic have pulled guidance or declined to give guidance for the rest of the year, Cisco also surprised investors by giving a forecast for the next quarter, saying that it expects revenue to decline between a range of 8.5% and 11.5% year-over-year, and adjusted earnings in a range of 72 to 74 cents a share. Its shares tacked on nearly 3% in after-hours trading.

“I still think there is a lot of volatility out there,” Chief Financial Officer Kelly Kramer told MarketWatch in a brief interview, when asked how the company was able to give guidance while others are deferring. “I think it’s a balanced guide.”

When asked if the fiscal fourth quarter could be the company’s bottom for the year, Kramer said it was too hard to call this the bottom because COVID-19 still lurks. “It depends on if there is a secondary outbreak, God only knows what happens. I think it’s way too early to call.”

As expected, the company has been seeing huge demand for its WebEx videoconferencing software, with so many people working from home — including Cisco, where 95% of its workforce are not going into the office. How many of the free trials will convert to subscriptions is a question, but Kramer said she has baked in potential additional subscribers and revenue from WebEx into Q4.

Robbins also said that Cisco has helped thousands of customers get hundreds of thousands of employees around the world up and running with virtual private network (VPN) connections. He also said that some CEOs are looking at their company’s IT infrastructure and trying to use this time to fix and modernize their infrastructure.

“This crisis has highlighted the importance of having highly resilient globally scalable infrastructure technologies to keep the world running and this is what we build,” he said. Later in the call he said some CEOs are saying: “‘I will never be this unprepared for something like this again,’ and if there’s a wave two coming in the fall, many of them may say we need to work on a lot of this right now. I don’t know that yet, but we think there could be.”

The company also said it was still early days for its $2.5 billion financing program to help customers to say how it will affect the next quarter. Kramer said since the program only just launched at the end of April, there would be a small impact on the fourth quarter, adding that the interest is coming from smaller commercial customers, health-care systems and a lot of small colleges.

Robbins told investors that he believes demand for Cisco’s products “will be strong when we emerge from this situation.” Investors, too, appear to be impressed by its current resiliency and appear to be hoping that this quarter is the bottom for COVID-19 as well as Cisco’s revenue declines.

‘All the days are blurring together’: How to battle burnout and find a healthy work-life balance during the pandemic

Vanessa Bohns is one of the fortunate Americans who can work from home, but the blurring of lines between work and home life sometimes takes its toll.

“I, for one, feel burned out by constant Zoom ZM, +3.78% meetings all day, so having Saturday and Sunday without them feels like a real break to me,” Bohns said. She also needs to set boundaries with co-workers: “When colleagues have suggested meeting over the weekend, I always ask to find another time,” she said. “It may feel like all the days are blurring together, but that doesn’t mean that we should operate as if every day is basically a work day now.”

‘I, for one, feel burned out by constant Zoom meetings all day, so having Saturday and Sunday without them feels like a real break to me.’

— Vanessa Bohns

Bohns, an associate professor of organizational behavior at Cornell University’s ILR School, said it helps to forgo checking email for set amounts of time. These times will vary depending on the person, she added.

“For example, I often have to respond to emails at odd hours because I have small kids at home,” she told MarketWatch in an email. “But setting a period of time where you’re not allowed to work or check your work email, that is carved out for yourself, is key for recharging.”

Bohns says she avoids scheduling evening and weekend meetings, and recommended preserving traditional weekends to the extent possible. She is not alone: American workers were already vulnerable to burnout before the COVID-19 pandemic hit. Confined to home with additional domestic responsibilities and increasingly fluid work-life boundaries, they face even greater stress and exhaustion.

With stay-at-home restrictions in many areas to slow the spread of coronavirus, “all of these things are intensified now,” Bohns said.

Don’t miss:‘Not everyone that owes back child support is a deadbeat.’ Is it fair for the government to withhold a stimulus check for falling behind? Should there be exceptions?

Workers nationwide are feeling the pressure to always be available. Forty-one percent of employees say they feel burned out from their work, 45% say they feel emotionally drained from their work, and 44% say they feel “used up at the end of their work day,” according to a survey of 1,099 U.S. workers conducted in mid-April by the Society for Human Resource Management (SHRM). Meanwhile, 23% report often feeling “down, depressed or hopeless.”

Women in particular are “maxing out and burning out” during this public-health crisis, the result of their taking on more housework and care-giving responsibilities than men, Facebook FB, -2.38% chief operating officer Sheryl Sandberg and her LeanIn.org co-founder, Rachel Thomas, wrote in a recent Fortune op-ed. Women are also more likely than men to report experiencing sleep issues and physical symptoms of severe anxiety, according to recent LeanIn.org and SurveyMonkey research they cited.

“Before the coronavirus crisis hit in the U.S., many women already worked a ‘double shift,’ doing their jobs, then returning to a home where they were responsible for the majority of child care and domestic work,” Sandberg and Thomas wrote. “Now, homeschooling kids and caring for sick or elderly relatives during the pandemic is creating a ‘double-double shift.’ It’s pushing women to the breaking point.”

Sheryl Sandberg, the chief operating officer of Facebook, says ‘homeschooling kids and caring for sick or elderly relatives during the pandemic is creating a “double-double shift.”’

AFP/Getty Images

What is burnout?

Burnout, an occupational phenomenon defined as “a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed,” is marked by exhaustion or energy depletion; heightened mental distance or negative or cynical feelings related to a job, and “reduced professional efficacy,” according to the World Health Organization.

“Burnout is essentially feeling exhausted and overwhelmed by work, often to the point where you stop caring and start to disengage,” Bohns said. “It can be caused by, among other things, feeling ‘on’ all the time, the pressure to be the ideal worker, and the difficulty so many of us have maintaining work-life balance, even in the best of times.”

Now, she added, “people are finding it even harder to ‘log off’ from remote work.” “People are worried about layoffs and furloughs, and so feel even more pressure to demonstrate their value to the company, or prove they are an ideal worker,” Bohns said. “And as we shift to doing all of our living and working at home — many of us with partners and children — work-life boundaries are blurred more than ever.”

The current situation also leaves us with fewer outlets for recovery and rejuvenation, such as blowing off steam at the gym or meeting up with friends, said Nancy Rothbard, a professor of management at the University of Pennsylvania’s Wharton School. Workers now lack certain natural boundaries they once had between work and life, and even those accustomed to remote work can’t currently seek a change of scenery at a cafe or coworking space, she said.

“We have a lot of additional restrictions on us,” she said. “It’s a very different type of challenge than a normal work-from-home challenge.”

If you’re struggling to set boundaries, preserve your energy and mental health, and make time to recharge during this time, here are some expert-recommended strategies that might work for you:

Designate times, places and devices to not associate with work

For Rothbard, using different devices during different blocks of time helps to differentiate between “home time” and “work time,” she said. She generally tries to use her computer for work during the day, and use her iPad AAPL, -1.20% if she needs to look something up during the evening. Some people looking to create work-life boundaries also find it helpful to “wall themselves off” and set up a separate, dedicated workspace, Rothbard added.

Take care of yourself

“Self-care right now is essential,” said Lori Whatley, a clinical psychologist who specializes in the impacts of digital device usage. Make sure you’re getting enough sleep, staying hydrated, exercising and engaging with other people regularly, even if it’s only by text, she said.

Practicing mindfulness, she added, “is one of the very best tools we can have in our tool box to ease anxiety over the things we cannot accept.” Whatley recommends the meditation and relaxation app Calm. For more meditation apps, check out MarketWatch’s 2018 roundup.

Stop working when your work day ends

Make a plan and stick to it, Rothbard said: If you plan to work until 6 p.m., stop working at 6 p.m.. “If you’re really, really on a roll, fine — you can deviate from that,” she said. “But if you’re in a situation where you feel like you haven’t gotten enough done but you’re really dragging, you want to stop. You want to take a break.”

If you’re keeping normal work hours right now, follow the typical guidance on unplugging during the evening, Bohns said, such as setting your phone to not ping you for work emails and sleeping with your phone and laptop in a different room. When you get a chance to go for a walk or take a long bath, she added, leave your phone elsewhere.

“It’s a little harder for people whose work hours have had to shift, for example, because of child care. Sometimes the most productive time for those individuals is in the evening when the kids are asleep,” she said. “Nonetheless, carving out some of your evening, or some time during nap time, or a child’s allocated screen time, for yourself is key.”

if you’re a remote worker who puts on work clothes to feel more productive, changing out of those clothes at the end of the day can help you ‘turn off.’

If your job involves meeting deadlines, be proactive about scheduling in breaks. “In order to take enough breaks to keep your energy up, you have to plan that out,” Rothbard said. “Otherwise, you’re going to run out of time and you’re going to be up against the wall. Constantly chasing the deadline is another way to burn out.”

And if you’re a remote worker who puts on work clothes to feel more productive, changing out of those clothes at the end of the day can help you “turn off,” Bohns said. “It’s a physical signal that something has changed, you’re no longer in work mode, and that mode actually feels physically different,” she said.

Make each day a little different from the last

Humans enjoy structure, but we can also modify parts of our daily routine “so it’s not just trudging through one identical day after another,” Whatley said. Even small changes can make a significant difference, she said: Try swapping your coffee for green tea one day, she said, or instead of eating your usual 4 p.m. apple, try an orange.

‘Vary the walk you do, vary the TV show that you watch, vary the book you’re reading.’

Plan out variation in your social interactions too, Rothbard suggested: Maybe you can connect with an old college friend tomorrow, a work friend the next day, and a family member the day after that. “Vary the walk you do, vary the TV show that you watch, vary the book you’re reading,” she added. “Those are really good ways to build in variety and combat the monotony of the everyday experience in this more limited work-from-home world.”

For Bohns, having things to look forward to in the week ahead goes hand in hand with supporting local restaurants still offering takeout. “We’ve made plans to, say, have lattes and bagels delivered for breakfast on Wednesday, or order from our favorite pizza place on Friday,” she said. “Planning ahead like that allows for the anticipation, and it’s also a nice incentive to keep track of the days, as you count down to that latte from your favorite coffee shop.”

Don’t overwork yourself (and don’t be afraid ask for help)

More than one in five respondents to the SHRM survey said that the pandemic had threatened some aspects of their jobs, including personal opportunities, pay and benefits, job security and safe working conditions, “to a great or very great extent.”

‘Try to avoid preoccupation with how other people live their lives — especially as viewed through the incomplete lens of social media.’

But “these are the exact circumstances that can lead someone to feel pressure to work all the time to demonstrate their value, or to refrain from asking for help when they need it because they are worried about admitting any weakness,” Bohns said.

“Preventing burnout by ensuring you give yourself time to disconnect is consistent with maintaining productivity,” she said. “Burnout is the enemy of productivity, so working all the time isn’t good for either.” If you require extra flexibility to avoid burnout, she added, “you shouldn’t be afraid to ask for it for fear of being judged harshly.”

Avoid comparing yourself to coworkers

Your coworkers might seem to have their act together, and even find time to bake bread and learn a new language on the weekends, said Cathleen Swody, an industrial/organizational psychologist and partner at the consulting firm Thrive Leadership. But try to avoid preoccupation with how other people live their lives — especially as viewed through the incomplete lens of social media — and focus on what’s doable for you and within your control, she said.

Find ways to make progress

During work time, focus on your major priorities rather than on busy work — tackling “the really big stuff that’s going to give us a sense of achievement,” Swody said. Off the clock, take up a small hobby or project (or even a puzzle) that helps you feel like you’re working toward an accomplishment or new skill. “Progress is so good for our brains,” she said. “It tells us we’re moving forward.”

The Moneyist: ‘I owe child support from my first marriage and did not receive a stimulus check. Does Trump not realize I have another family to take care of?’

Dear Moneyist,

I owe back child support for a son from my first marriage, and so I have not received a stimulus check. Does President Trump not realize I now have another family to take care of? They need me now. If I can’t feed my family, I will do what I can to make that happen. If that means taking food from stores without paying, I will. This system is not equitable.

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The CARES Act has allocated money to get people through this period of economic uncertainty, and withholding checks now does not take into account the unprecedented circumstances in which millions of hard-working families are living. Millions of people likely owe back taxes and are overdue on their student loans, yet they are forgiven and receive $1,200 stimulus checks.

I am not the only person in this position. What do you believe is fair?

J.M. in Texas

Dear J.M.,

There are a few non sequiturs in your letter. Some people have complained of being punished for doing the right thing. You are, by your own account, being penalized for doing the wrong thing. More than 30 million people have filed for unemployment benefits in recent weeks due to the economic effects of the nationwide lockdowns due to the coronavirus pandemic. I agree: It’s not fair on children who have to live with the stress of seeing their parents come under financial strain.

I understand that you need to support your family. Your family should not have to suffer during this difficult time. Let me rephrase that. Your families should not have to suffer. You have two families to support, after all, not one. You don’t get to pick and choose what children deserve your help at a time when millions of families are struggling, at least not in the eyes of the law. Thus, the federal government has intervened to make sure you fulfill your legal and your moral obligations.

Also see: I received my ex-husband’s $1,200 stimulus check because we filed joint taxes in 2018. Should I give him the money or return it to the IRS?

If you had supported your first child, the system would support you now. Why did you not pay your child support? Did you lose your job and do everything in your power to get another one to support both of your families? Did your business go under because of the pandemic? Of course, there are often extenuating circumstances where parents are simply unable to pay and, perhaps, don’t have an emergency fund for all eventualities. But if your instinct now is to steal, it gives me pause.

Of course, there are often extenuating circumstances. But you have not given me a valid reason, or any reason for that matter, why you have not paid child support.

Most of these EICs are being split 50/50 between two households. That seems fair. “If you are married filing jointly, and you filed an injured spouse claim with your 2019 tax return (or 2018 tax return if you haven’t filed your 2019 tax return), half of the total payment will be sent to each spouse and your spouse’s payment will be offset only for past-due child support,” according to the Internal Revenue Service. “There is no need to file another injured spouse claim for the payment.”

Those parents listed on the Treasury Offset list for unpaid child support are liable, like you, to have their economic impact payment reduced or withheld. “Federal law requires child-support agencies to have procedures to collect past due child support from federal tax refunds,” according to Ken Paxton, the Attorney General of Texas. “In the federal stimulus bill, the CARES Act, Congress did not exempt the stimulus rebate payments from federal offsets for child-support arrears.”

Dispatches from a pandemic:Letter from New York: ‘New Yorkers wear colorful homemade masks, while nurses wear garbage bags’

In some cases the government has mistakenly withheld stimulus money from injured parties in child-support cases. The IRS said it’s working with the Bureau of Fiscal Service, the Department of Health and Human Services and the Office of Child Support Enforcement to resolve this as soon as possible. Those parents who are owed child support and have not received their money may, indeed, feel rightly justified in holding their former spouses and the government responsible.

You have not given me any valid reason, or any reason for that matter, why you have not paid child support. Instead, you lay the blame at the feet of the government. While no government is perfect, directing your anger at everyone else seems too simple a conclusion. In almost every situation, we all have to take some share — however large or small — of the responsibility. There’s an old saying: “When you take ‘bla, bla, bla’ out of ‘blame,’ you are left with ‘me.’

The time has come to take accountability for your own actions, my friend.

Read readers’ responses to this letter: ‘Not everyone that owes back child support is a deadbeat.’ Is it fair for President Trump to garnish stimulus checks of fathers who are behind on payments?

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com Want to read more?Follow Quentin Fottrell on Twitterand read more of his columns here

Would you like to sign up to an email alert when a new Moneyist column has been published? If so, click on this link.

Hello there, MarketWatchers. Check out the Moneyist private Facebook FB, -2.38% group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Wall Street Journal: Abbott’s coronavirus test misses many positive cases, researchers say

Researchers reported a device manufactured by Abbott Laboratories widely used to swiftly detect coronavirus, including among senior White House officials, missed nearly half of the positive cases detected by another common test.

The researchers at NYU Langone Health in New York City compared the Abbott ID Now to another device, finding that it missed 48% of positive cases the other machine detected. The NYU study hasn’t been peer-reviewed and was posted online Tuesday ahead of formal publication.

Medical experts say what are known as false negatives could lead people infected with the virus to unknowingly spread the virus. At the White House, where President Donald Trump, Vice President Pence and other senior officials are regularly tested using the device, that risk was highlighted when two aides tested positive last week.

The Abbott ABT, -1.74% device can produce test results in less than 15 minutes. That fast turnaround attracted attention from Trump and other officials as testing backlogs swelled in March.

Abbott said “it is unclear if the samples were tested correctly in this study.” The company said it has distributed about 1.8 million ID Now tests, and the reported rate of false negatives to Abbott is 0.02%.

An expanded version of this report appears on WSJ.com.

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Visa sees ‘massive’ digital acceleration with millions trying e-commerce for the first time

The COVID-19 outbreak is bringing more people into the digital fray and providing a further tailwind to e-commerce growth.

In Latin America alone, 13 million Visa Inc. V, -1.16% cardholders made e-commerce transactions for the first time ever during the March quarter, the company’s Chief Product Officer Jack Forestell told MarketWatch. That represented about two in 10 active Visa cardholders in the region.

“We’re seeing a massive acceleration toward e-commerce adoption,” Forestell said, as the pandemic serves as a catalyst for trends that were already budding in the payments industry.

The momentum isn’t limited to Latin America. Visa saw an 18% rise in U.S. digital commerce spending during the month of April, excluding the travel category, as face-to-face transactions fell 45%.

Read: Visa to delay U.S. interchange and fee changes, gas station requirement until April 2021

While e-commerce adoption had been on the rise prior to the pandemic, Forestell sees opportunities to improve the digital shopping experience now that more people are relying on the internet to get what they need during the crisis.

One priority is a reduction in chargebacks, which occur when card payments get reversed. “As we’ve seen large-scale cancellations in travel and entertainment, there’s a lot of potential for confusion between buyer and seller into how those resolve,” Forestell explained. He said that the company has created a special dispute-monitoring program amid the coronavirus outbreak that works with sellers and financial institutions to understand the terms of transactions at a time when Visa has seen a significant bump in disputes.

Visa is also looking to simplify the guest-checkout process, which Forestell said requires that users enter information into 23 fields during the average transaction. The company has converted 10,000 merchants that were using its Visa Checkout button over to a new click-to-pay button that’s being used universally by the credit-card industry to speed up online checkout and validate buyer identities.

Ultimately, Forestell is optimistic that there will still be a shift toward digital payments even after more businesses are able to reopen their physical locations. Already, he said, face-to-face commerce has been getting an electronic spin through curbside pickup options in which “transactions happen in the physical world but the payments themselves are happening in a remote way.”

See also: Visa sees ‘significant deterioration’ in spending but some areas are showing improvement

Beyond that, Visa expects further growth of “touchless commerce” as more people consider tap-to-pay transactions. Usage of tap payments in the U.S. rose 150% in March relative to a year earlier, Forestell said. The country is seeing even bigger contactless growth rates in the U.S. than in many other regions because the U.S. is farther behind in terms of adoption. In the rest of the world, Visa sees 60% of face-to-face transactions occur via tap payments.

Don’t miss: PayPal and Square see improvements in April, but Square has a longer road ahead

Visa shares have fallen 15% over the past three months, though they’re up 4.8% over a one-month span. The Dow Jones Industrial Average DJIA, -2.17%, of which Visa is a component, has lost 21% over the past three months and 2.9% in the past 30 days.

CityWatch: House stimulus bill could send $34 billion to New York state

House Democrats have introduced a stimulus bill that would include $1 trillion for cash-strapped states and local governments, including $17 billion for hard-hit New York City and $34 billion to New York state, Mayor Bill de Blasio said on Wednesday.

“Finally, we see the beginning of an answer in Washington, D.C.,” de Blasio said at his daily briefing. “This is the biggest health-care crisis, the greatest challenge that we’ve faced in terms of health care in a century in this city, in this nation. The biggest economic crisis since the Great Depression, and they’re both happening at once.”

In total, the $3 trillion legislation would roughly double federal stimulus in the wake of the pandemic and would lay the framework for negotiations with the Republican-led Senate. 

The bill, on which the House is expected to vote on Friday, proposes sending $375 million in federal funds to local and county governments and $500 billion to states — stimulus to which some powerful Republicans in Washington, including the president himself, have said they’re opposed. 

Cities and states across the country are facing steep budget shortfalls as shutdowns have cut off vital tax revenue streams. That’s been felt acutely in New York City, the nation’s epicenter for the virus, where the number of confirmed cases approaches 200,000 and more than 15,000 people have died (more than 20,000 if probable COVID deaths are included). 

Hotels, a significant source of tax revenue for the city, are now either closed or voluntarily housing frontline workers and convalescing patients. 

Meanwhile, nonessential business closures and mass layoffs — grounding to a halt entire segments of the city’s economy, from Broadway theaters to fine dining — have dried up revenue from sales, business and personal income taxes. Even parking tickets, which provide more than $500 million a year to government coffers, have declined steeply. Last month, the city issued only 54,000 parking tickets, down 92% from April of last year, according to a spokeswoman for the NYPD. 

See: With New York City offices still closed, companies consider downsizing—or heading for the suburbs

As a result, the city expects $7.4 billion in lost revenue in fiscal years 2020 and 2021, the mayor has said. 

“We’ve taken a huge financial hit, and it only gets worse all the time,” de Blasio said on Wednesday. The federal infusion would be used to “to stabilize this city government, to make sure that we can pay the bills and keep our public servants at the front line doing the great work they do and build for a future when our economy actually comes back strong.” 

Federal stimulus has also fallen short on aiding New York City’s small businesses, a minority of which have received funding through two emergency loan programs through the Small Business Administration, community surveys have shown. 

The New York City Council took matters into its own hands by passing a slate of small business relief measures on Wednesday. They include a cap on how much apps like Seamless and Grubhub can charge in delivery fees, waiving sidewalk cafe fees and fining landlords who threaten commercial tenants with eviction.

Besides direct aid to state and local governments, the latest stimulus bill also proposes funding a number of agencies and services that would benefit New Yorkers, and proposes another round of $1,200 checks direct to individuals.

The legislation calls for an additional $10 billion in funding for food stamps and a $4 billion infusion for Section Eight public housing. The bill would also extend through the rest of the year beefed up unemployment checks, which an earlier stimulus package increased by $600 per week.

Don’t miss: Mortgage delinquencies caused by the coronavirus will exceed Great Recession levels, according to this forecast

Though the House could pass the $3 trillion package on Friday, it could be weeks before negotiations begin with Senate Republicans. De Blasio acknowledged it would be an uphill battle, particularly for Senate Minority Leader Chuck Schumer, who represents New York. 

“We know it’ll be a fight, but we also know that cities and states all over the country, it doesn’t matter if you’re a red state or blue state,” de Blasio said, “you’re in the Heartland and you’re on the coast, everyone’s going through this.”

New York Gov. Andrew Cuomo has repeatedly implored federal lawmakers to send aid to state governments, and at one point addressed Senate Majority Leader Mitch McConnell directly over comments the Kentucky senator made equating such stimulus to bailing out “blue states.”

President Donald Trump has left reopening plans as well as large-scale containment efforts, including testing and tracing, up to the states. Cuomo said it makes sense for state governments to coordinate their own reopening but they need financial assistance to do it. 

“We need help to make this happen and we need help from Washington,” the governor said on Wednesday. Without help to make budgets whole, he asked, “who gets cut?” 

“Police, firefighters, schools and local government,” he said. “The very people we call essential workers and heroes.” 

Other developments: 

• New York state’s health department will host a public webinar Thursday with health-care providers to discuss a rare inflammatory disease affecting children exposed to COVID-19. The state is investigating more than 100 cases of mostly school-aged children presenting symptoms similar to toxic shock syndrome and Kawasaki disease. 


See: New York turns attention to testing children

North Country, a rural part of upstate New York, will join three other regions of the state that will phase in reopening, including construction, manufacturing and retail with curbside pickup on Friday. 


More than 400 people with suspected cases of the coronavirus walked into hospitals across the state on Tuesday, a slight uptick from the previous day but a sliver of the daily hospitalizations recorded at the peak last month. The state also recorded 166 deaths on Tuesday.  

The Wall Street Journal: U.S. regulators won’t approve Chinese firm’s N95 masks, potentially scuttling $1 billion California deal

U.S. authorities denied initial regulatory approval for N95 masks from BYD Co., a Chinese company that had secured huge orders for the protective gear including a $1 billion deal with authorities in California.

Authorities in the U.S. and around the globe have been scrambling to secure N95 masks to protect health-care workers and others from the new coronavirus, which has sickened millions and caused hundreds of thousands of deaths.

BYD 002594, -0.23% , an electric-vehicle company that includes Warren Buffett as an investor, has been racing to transform itself into one of the world’s leading mask makers in light of the demand. The company has won giant contracts for its masks from customers in the U.S., Canada, and Asia.

The National Institute for Occupational Safety and Health said in a statement Wednesday that it had denied approval for BYD’s masks for a number of factors. Niosh said the specifics behind the decision were confidential, but noted that the agency told BYD earlier this month that an on-site assessment of its factories in China yielded a “not acceptable” rating.

An expanded version of this report appears on WSJ.com:

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CityWatch: With New York City offices still closed, companies consider downsizing—or heading for the suburbs

New York City’s nonessential workers have already spent close to two months working from home (if they’re working at all), and the state of Manhattan’s office market shows it.

After the sector’s strongest year since 2001 last year, according to data from Colliers International, leasing activity for Manhattan office spaces plunged by 50% quarter-over-quarter in the first three months of the year, even before the COVID-19 pandemic fully took hold in the city. Leasing dropped from 3.5 million total square feet in January to a little over 1 million square feet by March as the virus arrived in the city and lockdown orders were put into place, and in April it was 62% below the average leasing volume seen in 2019. 

“There’s been a great deal of speculation about how this challenge to the market is going to impact us, and if it will look like previous recessions,” said Colliers International head of research Frank Wallach. Though availability rates at the end of April were “very close to market equilibrium,” Wallach said, “there have been plenty of rumors about sublet space that may or may not return, and you read about unemployment numbers and companies laying off staff.”

Add to this the news that companies like Twitter TWTR, -3.49% are considering to let some employees work from home permanently, a shake-up in work culture that could have significant and long-lasting effects on the city’s office market.

Though the death of the office is unlikely, businesses may well need to downsize, find ways to spread workers further out in the spaces they have, and keep others working from home (or at offices outside the city) — all of which is likely to drive down prices in a market that, prior to the pandemic, had been near a 20-year peak.

Read more: The cafeteria — and other parts of office life — will change dramatically after coronavirus

Satellite offices in the suburbs

One compromise currently being considered for some companies with many employees based outside the city: Opening up satellite offices, which would allow for more in-person team interactions without forcing a critical mass of employees to commute into the city before it’s safe to do so.

“I’ve had a few clients reach out asking if it makes sense to scale down their New York City offices from 10,000 square feet to 3,000 square feet, then have satellite offices in Westchester, Connecticut, Long Island,” said Compass broker Andrew Feldman. “It’s not that they’re going to lower the amount of square footage they have overall, they’re just going to divvy it up into different places to keep people from having to take public transport, but will still have their Manhattan space to have meetings with clients.”

Many large companies with headquarters in the city already make use of suburban spaces, and while offices in these areas are notably cheaper than their Manhattan counterparts, they’re also in shorter supply. “The office stock in places like the Westchester suburbs is limited,” said Teresa Marziano, a salesperson with Houlihan Lawrence in Westchester. Areas like Stamford [in Connecticut] offer more options, she said, “but there’s still not a lot of vacancy.”

And for now, few companies seem ready to make this type of move. 

“Satellite offices are something that everyone in our world is anticipating and is speculating will happen,” said director of research and analysis Nicole LaRusso for CBRE, a commercial real estate firm. “Right now I’ve seen very little concrete evidence that it’s actually happening. I’m only aware of three New York City-based firms that are actively looking in suburban locations. Maybe it’s just a little too soon.”

Moves outside the city that do take place may also well be short-lived. After 9/11, Wallach said, a large number of commercial tenants backfilled into spaces in the suburbs, only to return to the city once it was safe and feasible.  “For a lot of them, it was temporary and things got back to normal,” Wallach said. “Downtown (Manhattan) currently has the tightest availability it’s seen in years.”

Treating moves and renovations as a last resort 

Though business owners might be eyeing the need to downsize space or reconsider the nature of open-office plans that have become health hazards overnight, in a period of ongoing economic uncertainty, nearly everyone is looking to keep extra expenses to a minimum.

“Nobody’s rushing out to spend money,” Marziano said. “They’re going to want to optimize what they have today. So they’re looking at ways to improve the current conditions, whether that’s splitting up their workforce to have only 20% or 40% of prior attendance on any one day, or investing in technology, like density sensors to give people some comfort.”

Add to this the fact that office leases can last anywhere from five to 15 years, and the incentive for businesses to stay put in their current space is strong. 

“I only have a few clients right now that are definitely thinking about a move,” said Peter Gross, a New York City-based broker with Douglas Elliman Commercial. “Generally, the advice is that if you have the ability to wait it out a few months, now’s the time to do that, because the market is certainly going to turn in the tenant’s favor.”

Also see: As parts of the state get ready to reopen, New York City is likely to stay paused until June

While many landlords and commercial tenants are in a wait-and-see period right now, Gross said, “if companies do need to downsize, and they put their space on the market for sublease, that’s typically when you see discounts in rents, and landlord will have to adjust appropriately to be able to compete.”

Downward pressure on rents

While Manhattan office prices have yet to reflect the effects of the pandemic, lower prices are considered to be all but a given as landlords become increasingly eager to keep existing tenants in place.

“We feel pretty confident that pricing will go down, but how much and how long, there are no good indicators to tell us really what we should expect,” LaRusso said. “Landlords have not really responded yet in terms of pricing, and I don’t think they necessarily will until we see a lot of additional space.” 

Asking rents fell by 28% in the 2001 recession and 35% after the 2008 crash, according to Colliers, and though the nature of the current downturn is different, experts do expect it to have an effect. “I think there will be an inevitable pressure on pricing because there will just be lower employment across the board,” Marziano said.

For now, the market is still somewhat bolstered by high demand. Despite the steep drop-off in leasing activity, Wallach said, “I’ve spoken to landlords for over 100 buildings since the start of the second quarter, and nearly 100% of asking rents have held stable.”

How long they’ll hold stable is largely dependent on how long the current crisis lasts, and how much the bottom lines of the city’s office tenants suffer as a result.

“A very likely scenario we could have is people going to the landlord and saying, ‘We can’t afford to keep all this space,’” Feldman said. “And landlords will want to work with them because vacancy is going to be a scary thing for the foreseeable future.”

The pricing effects may be uneven across buildings, however, as amenities that allow for better health conditions and ease of social distancing become more in demand. “The pressure on prices will be greater for those buildings that don’t have state of the art access systems and ventilation systems,” Marziano said.

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Treating market turbulence as temporary

Even with expected price drops and potential downsizing, neither Manhattan’s office market nor the broader culture of how office space is used are necessarily poised for seismic shake-ups.

“It’s really too soon to decide what the long term-impacts are going to be on offices,” LaRusso said. “In the future, when there’s widespread testing, it’s not clear why we would want or need to radically alter the way we use office space.”

Even now, commercial leases are still being signed, Wallach said, indicating the overall strength of the Manhattan market, as well as the fact that companies’ approaches to reopening offices are likely to vary.

Read: New York’s post-pandemic future is coming into view

“Just like the market is not at all homogenous, I think every company is grappling with the right way to go about [reopening], as is every landlord,” Wallach said. “Everybody’s on the same page, which is finding a way to have everybody come back, but also have everybody be safe.”

In One Chart: Why ‘the next big shoe to drop’ in the U.S. economy could hit by July

The last time a housing bubble popped in the United States, it took four years to play out. But things are moving fast during this pandemic — just look at the record-breaking action in the stock market — and if Wolf Richter has it right, pent-up supply could soon ravage home prices.

He used this chart to show how the typically red-hot Bay Area housing market, including Marin, Sonoma, Napa and Solano counties, has been grinding to a halt.

“This is supposed to be the spring selling season, and new listings are supposed to surge,” Richter explained in a post. “But sellers aren’t interested in having potentially infected people traipsing through their home; and they know that buyers are woefully absent, and it doesn’t make that much sense to list the home because previously listed homes are still languishing on the market.”

Here’s a chart of what the trend typically looks like vs. the current reality:

According to Thomas Stone, a Sonoma Country realtor quoted on the Wolf Street blog, there’s a very rough road ahead in the housing sector due to falling appraisals, a trickier loan market and a glut of vacation rentals that owners need to shed.

“The next big shoe to drop will be when appraisers call a declining market, probably in August but perhaps as early as July,” he said. “And this bleeds into the difficulties of getting a mortgage.”

A new report from Oxford Economics estimates that 15% of homeowners will fall behind on their monthly mortgage payments, which would mean delinquencies caused by the coronavirus pandemic would exceed the number seen during the Great Recession.

“The uncertainty in the mortgage market has contributed to a significant tightening of lending standards that may persist even once a recovery is underway,” Oxford Economics wrote.

Then there’s the big number of vacation rental houses in a completely dead Wine Country market — who’s planning trips this summer? — that may also provide a stiff headwind to the recovery.

“So there you have it,” Richter said, putting an exclamation point on his dire forecast. “A most splendid housing bubble and an equally splendid vacation-rental boom that were both caught at the peak in their most vulnerable state by The Virus that upended everything.”

The stock market has certainly been upended, with Dow Jones Industrial Average DJIA, -2.17% losing another 517 points in Wednesday’s session. The S&P 500 SPX, -1.74% and Nasdaq Composite COMP, -1.54% were also firmly lower.

Walt Disney World will start to reopen on May 20 — visitors should be ready for empty seats on Space Mountain and NO hugs from Cinderella

Walt Disney World and Disneyland closed over a month ago because of the coronavirus pandemic — and it’s not clear when they will reopen.

When Disney DIS, -1.56% does welcome visitors again though, those guests can expect to have their temperatures checked and see changes to some of their favorite attractions, experts said.

During the company’s second-quarter earnings call with analysts, Disney CEO Bob Chapek said “it’s too early to predict” when all of the company’s theme parks will resume operations. Currently, all of the company’s theme parks around the world are closed — parks in China and Hong Kong closed backed in January, while the Tokyo parks shuttered in February and the U.S. and Paris parks closed in March.

‘We’re going to actually open up far below that just to have our training wheels on with our new procedures and processes to make sure we don’t have any lines backing up either as guests entering into the park or as they wade through the park.’

— Disney CEO Bob Chapek

However, that shutdown is ending. The first of Disney’s closed theme parks, Shanghai Disneyland, resumed welcoming visitors on May 11. “We are seeing encouraging signs of a gradual return to some semblance of normalcy in China,” Chapek said during the earnings call.

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Separately, Disney posted a blog late Tuesday written by its chief medical officer, Pamela Hymel, outlining the company’s approach to reopening its parks, providing some hints as to what guests can expect when they visit Disneyland in Anaheim, Calif. or Walt Disney World in Orlando, Fla. in the future.

Here’s what Americans need to know about what their future Disney vacations could look like:

Disney won’t open every part of its resorts at once

In the U.S., the parks will likely follow Shanghai Disneyland’s model, and parts of the Walt Disney World and Disneyland resorts — such as the hotels and restaurants — will open before the theme parks, where the rides are.

As Chapek indicated on the Disney earnings call, the food and beverage area at the Shanghai park, called Disneytown, has already reopened before the actual theme park did. In her blog post, Hymel also pointed to the likelihood of a “phased reopening.”

That’s already the model in place at Walt Disney World. Disney Springs, the shopping and dining section of the Florida theme park complex, will begin a phased reopening on May 20. A small number of shops and restaurants that are owned by third-parties will open during that phase.

Employees and guests at Disney Springs will be expected to wear face coverings, and there will be limits on capacity, parking and operating hours, Disney said.

The full reopening at Walt Disney World, though, may depend on when air travel picks up. “Walt Disney World is a larger, more profitable park, but most of the guests are from outside Florida. So I suspect they’ll want to see air travel pick back up before reopening,” said Don Munsil, co-owner of travel website MouseSavers.com.

‘Walt Disney World is a larger, more profitable park, but most of the guests are from outside Florida. So I suspect they’ll want to see air travel pick back up before reopening.’

— Don Munsil, co-owner of travel website MouseSavers.com

Disney’s crowds will probably be much smaller

There will probably be far fewer visitors in the parks when they reopen — and not just because people may be wary of mingling with crowds of strangers at a theme park in the wake of the coronavirus outbreak.

In Shanghai, the park is imposing “limits on attendance using an advanced reservation and entry system,” Chapek noted. The Chinese government has limited how many people can enter the park to 30% of its normal operating capacity, Chapek said. The park’s normal capacity is 80,000 people a day; 30% of that is 24,000. But Chapek said the park would welcome even fewer visitors to start.

“We’re going to actually open up far below that just to have our training wheels on with our new procedures and processes to make sure we don’t have any lines backing up either as guests entering into the park or as they wade through the park,” Chapek said later on the call.

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But travel experts noted it’s not clear how a reservation system would work in the U.S. Most people who buy normal tickets to the theme parks have to set a date they will visit because Disney adjusts the prices depending on the popularity of a given day. But both Disneyland and Walt Disney World have a large base of annual passholders who are theoretically allowed visit on any given day.

Guests with booked hotel stays could have a leg up. “I’d assume Walt Disney World will give automatic park admittance to resort guests when those do reopen,” said Tom Corless, founder of travel site WDW News Today.

Masks and temperature checks could become part of the Disney theme park experience

Shanghai Disneyland is implementing government-required health and prevention protocols, which Chapek said include “the use of masks, temperature screenings and other contact tracing and early detection systems.” The park has also taken other precautions, such as placing placards in queues for rides to encourage guests to maintain one-meter distance from one another.

Indeed, not only are guests at Shanghai Disneyland required to wear masks, but employees are, too. The one exception are so-called “face characters” — the employees dressed up like princes and princesses whose faces are exposed. So you won’t see Cinderella wearing a mask, but little kids probably won’t be able to go up and get her autograph either, because characters will practice social distancing and keep away from guests, Chapek said.

“We’ll follow guidance from the government and the medical community regarding enhanced screening procedures and prevention measures, including those related to personal protective equipment (PPE), such as face coverings,” Hymel said in her blog post.

The first wave of Disney World employees has begun returning to work to prepare the resort for its phased reopening, a union official told The Hollywood Reporter. Other precautions that guests will see include plexiglass barriers at cash registers, and visitors will now swipe their own credit cards when making purchases.

Lines for Disneyland and Walt Disney World rides and attractions may go virtual

Social distancing will be the name of the game inside the parks, but that’s difficult when it comes to guests waiting in long lines to ride popular attractions.

Before coronavirus, Disney had experimented with virtual queues for some of its most popular attractions, including the new Star Wars rides. This crowd-control strategy could become more of the norm. “We’re also exploring ways to use technology to aid us in these efforts, like with our Play Disney Parks App and through virtual queues at Disneyland and Walt Disney World,” Hymel wrote.

FastPasses could replace normal lines for rides, depending on social distancing requirements.

Traditional lines where people stand in one spot for hours could also be replaced with Disney’s FastPass system, through which theme park guests reserve a time to come back and ride an attraction later in the day. The waiting areas for rides themselves might also be reconfigured so guests aren’t standing on top of one another, Munsil said.

Also see: This mother took her family on a $2,200 vacation to Disney World — for free

Disney’s rides themselves might be different

On popular attractions like Pirates of the Caribbean and Jungle Cruise, located at Magic Kingdom in Florida and Disneyland in California, multiple parties will typically board the same boat and ride together.

That could change under social distancing rules, Munsil predicted. “They aren’t going to want to seat unrelated people next to each other or facing directly across an aisle, and that severely limits boat capacity,” he said.

Plus, in between groups, Disney employees may be required to re-sanitize ride vehicles. And that could mean longer waits than visitors are used to, even with fewer people in the parks.

Some attractions may see even bigger changes. Rides or movies that require people to wear 3D glasses could switch to a 2D experience, because people may not be keen on wearing a pair of glasses someone else has worn even if they are sanitized, The Orlando Sentinel reported.

There could be discounts at Disneyland or Walt Disney World in the future

It remains to be seen how eager people will be to visit theme parks as the coronavirus outbreak winds down — particularly amid concerns about a possible second-wave of coronavirus infections.

If the past serves as a guide, then Disney could offer discounts or promotions to gin up attendance. That’s what the company did in the wake of the 2008 recession. “We made a conscious decision to put in place promotions that would drive attendance,” Bob Iger, who was then Disney’s CEO and is now the company’s executive chairman, said back in 2009. “This strategy has had a predictable impact on margins, but it also had the intended effect of bringing people to our parks.”

One of the promotions that Disney used back in 2009, as an example: Guests were allowed to enter the parks for free on their birthdays, with a valid photo ID, according to Disney Food Blog.

“We’ve already seen a special vacation offer for those whose trips were affected by the closures,” Disney Food Blog wrote. “Sure, this is a great way to make disgruntled guests feel better, but it’s also a pretty strong encouragement to actually rebook and spend your money at Disney parks.”

But Disney executives suggested that filling the parks may not be too much of a challenge. “Our hypothesis is, because of pent-up demand, that if we open up at something less than 50% of our standard capacity that we’re probably not going to have trouble filling it,” Chapek said.

Some observers added that the smaller crowds could end up being a selling point with people considering a Disney vacation.

“I think if they do open at first at 50% or lower capacity, I can see that as being a real draw for some folks,” Munsil said. “Some people would pay extra to be able to go to a half-full park.”

Disney shares were up over 3% in Thursday morning trading, while the S&P 500 SPX, -1.74% and Dow Jones Industrial Average DJIA, -2.17% rose by smaller amounts.

This story has been updated.