with Brent D. Griffiths

As more than a dozen states move to cautiously reopen during the coronavirus pandemic, top CEOs are concerned they may be doing so too quickly. They fear another outbreak will rock the economy again, producing a "W-shaped" recovery.

Top CEOs worry that restarting nonessential businesses in certain states could be a bad idea if those states aren't prepared to conduct enough testing or contact tracing to quickly quash any new outbreaks of the disease.

Their real-time assessment even as President Trump offers assurances that it’s safe for states to reopen: Some corners of the country are still at least weeks away from being ready to do so safely.

That’s according to Rich Lesser, who as chief executive of the Boston Consulting Group has emerged as a sort of whisperer to fellow CEOs navigating the thicket of corporate and political quandaries brought on by the pandemic. Lesser and fellow corporate chiefs have been comparing notes on weekly Friday calls convened by the Business Roundtable, the lobbying group representing 182 CEOs of the biggest U.S. companies.

“The starting point for every conversation is how to keep people safe,” Lesser told me in a Friday interview. 

From there, though, the executives' top concern “is the scenario where we’ve shut the whole economy down, we open it back up, but because of the way it’s reopened — and the difficulty, frankly, this virus has presented; it’s a very tough thing to combat — things get out of control, and we need to bring the economy back down again, only to have to reopen a second time.”

That has put corporate captains in the arguably unexpected position of cautioning against a hasty economic restart even as some elected leaders lift restrictions and encourage businesses to reopen. CEOs fear a resurgence of the disease, beyond wreaking more economic havoc, would bring “second-order impacts societally and to consumer confidence,” Lesser says.

The disease will come back. The question is how leaders respond. 

Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, last week called it “inevitable” that the virus returns. Lesser, whose management consulting firm employs some 21,000 people around the world, acknowledges that. 

He says elected and business leaders have a responsibility “to spot it quickly” to head off a W-shaped recovery that involves a painful second onset of infections: “The difference between the W and a blip is the quality with which you test, contract trace, monitor, and put in all sorts of workplace and community procedures to reduce the rate of transmission.”

The country now is a patchwork of readiness. Some communities “are still for sure weeks away from being ready to start at all,” Lesser says. “Some are probably in a position to start, if they start very slowly and carefully and with procedures in place to do it with quality.” 

Malls, restaurants and movie theaters reopened in Houston on May 1 as Texas began to relax coronavirus restrictions put in place six weeks ago. (Spike Johnson/The Washington Post)
A backlash could be brewing.

Chief executives are confronting another category of concerns, as well. Washington’s multi-trillion-dollar economic intervention so far has succeeded in stabilizing the stock market even as companies lay off millions of workers. Such a pricey and uneven rescue is already stirring populist backlash in some quarters.

“We should expect that there would be a lot of anger across different communities, because people are feeling enormous pain and feeling like they were going about their business, leading good and productive lives, and this happened and created massive disruption and, for some, huge personal loss from a health standpoint,” Lesser says.

Some chief executives have canceled their own base salaries or cut them back considerably. And some publicly traded companies have suspended stock buybacks and dividend payments. Others have resisted. Lesser calls the matter “a critical board-level topic, but the answer won't be the same for every company,” depending on their sector and underlying strength. “For many companies, that would be important to signal that the company is putting first its ability to navigate a very difficult period.” Boston Consulting Group is privately held.

The crisis is already transforming the economy in ways that will far outlast the disease. 

Lesser predicts at his own firm, those changes will include allowing road-warrior consultants to cut back on travel.

Those miles logged exacerbate climate change while wearing on employees. “We thought it was going to be exceptionally difficult to make improvements, because our clients expected us to be with them all the time, and that was just how we operated,” Lesser says. “There's a high degree of optimism, not that we want to keep working this way from our homes, purely remotely. But we will be able to make meaningful changes in our work model that will be more sustainable from both vantage points: from the standpoint of climate and from the standpoint of career.”

Market movers

Stocks continue to rally as traders say they are flying blind.

Earnings outlooks are no longer the projections they once were: “As the pandemic disrupts industries from travel to manufacturing to retail, the only consensus is that those measures are doomed to fall,” the Wall Street Journal’s Karen Langley and Caitlin Ostroff report.

“Many investors say they hesitate to jump back into the market when so much remains unclear, but they also fear missing out if stocks keep climbing. Just how far earnings will fall is a subject of great debate. … Meanwhile, more than 160 companies in the S&P 500 — from Target Corp. to Harley-Davidson Inc. to Molson Coors Beverage Co. — have withdrawn or suspended their financial guidance, according to Wells Fargo Securities."

Disney, Tyson and CVS are among the major companies reporting this week: “The weakest earnings season in more than a decade continues, with nearly 150 companies in the S&P 500 expected to report quarterly results this week, including big names in media and food,” WSJ’s Allison Prang reports.

“More than half of the S&P have already logged their results for the first three months of 2020, according to FactSet, and earnings are projected to fall 13.7 percent, year over year, as companies detail the impact of [the pandemic] on their operations. The estimate, based on those companies that have already reported and forecasts for those to come, would mark the largest such quarterly decline in earnings since the third quarter of 2009, FactSet said. Revenue growth is holding up better, projected to grow 0.7 percent year over year, said FactSet, which forecasts 148 companies in the S&P 500 giving quarterly updates this week.” 

Coronavirus fallout

In the U.S.:
  • At least 1,153,00 cases have been reported; 67,222 people have died.
  • Trump revises death toll predictions: He projected “that the U.S. toll may be as high as 100,000, up from his prior prediction of 65,000 — while emphasizing that he takes the novel coronavirus seriously and noting that three of his friends have died after contracting it,” Felicia Sonmez, Meryl Kornfield and Katie Mettler report.
  • Biden, Warren hammer Trump over lack of oversight: “Trump seems to think he can direct funding for the response to this crisis based on which politicians are nice to him, which states he’s trying to win in November and which businesses he wants to enrich — all without any accountability. We have a different view,” former vice president Joe Biden and Sen. Elizabeth Warren (D-Mass.) write in a joint op-ed for McClatchy newspapers.
  • New York Gov. Andrew M. Cuomo says PPE is a national security issue. “You have to be able to get masks and gowns and whatever medical equipment you need so this nation can run a health-care system in the middle of an emergency," Cuomo told reporters
Corporate impact: 
  • J. Crew files for bankruptcy. It's the first national retailer to do so during the pandemic, Abha Bhattarai reports. The company says it will continue all day-to-day operations. 
  • The Fed helped save Boeing, but didn’t spend a dime: “The Fed’s decision to use its near limitless balance sheet to purchase corporate bonds improved liquidity so much that it was a game changer for the company,” Bloomberg's Davide Scigliuzzo and Julie Johnsson report.
  • Buffett bails on airlines again: “Warren Buffett told investors Saturday that Berkshire Hathaway has sold its entire stakes in the four largest U.S. airlines," American, Delta, Southwest, and United, CNBC's Leslie Josephs reports.
  • But the Fed’s actions inadvertently blocked Buffett: “The famous investor’s reputation allowed him to serve as a lender of last resort during the 2008 financial crisis… But as panic about the virus and shutdowns assaulted equities in March and even began to freeze debt markets, the Federal Reserve beat him to the punch with an unprecedented set of emergency measures,” Bloomberg’s Katherine Chiglinsky reports.
  • Gilead CEO says company has donated supply of remdesivir: “Gilead Sciences’ coronavirus fighting drug will be in the hands of doctors and patients as early as this week, the biotechnology company’s CEO said …,” CNBC's Maggie Fitzgerald reports.
  • Roche wins nod for antibody test: “Roche has won emergency approval from the U.S. Food and Drug Administration for an antibody test to determine whether people have ever been infected with the coronavirus, the Swiss drugmaker said. Thomas Schinecker, Roche’s head of diagnostics, said the company aims to more than double production of tests from about 50 million a month to significantly more than 100 million a month by the end of the year,” Reuters's Aakriti Bhalla and John Miller report.
Around the world:
  • Italy emerges from world's longest lockdown: "Beginning [today], Italians will once again be able to visit their relatives, go for a run in the park and get takeout from their favorite restaurants. Roughly 4 million people who work in manufacturing and construction will return to work,” Antonia Farzan reports.
  • Global brands need Chinese comeback: “Companies from Lego AS to Domino’s Pizza Inc. say they are seeing a solid bounceback in China, at least compared with a month or two ago. But a full return to normal, much less growth, is proving harder because so many people have lost jobs and income, or want to save more,” WSJ’s Trefor Moss and Stella Yifan Xie report. (GM’s joint venture with SAIC Motor Corp is recovering.)
  • Lufthansa hopes to secure bailout soon: The airline “is negotiating a 10 billion euro bailout that would result in the government taking a 25.1 percent stake in the airline, weekly paper Der Spiegel said on Friday,” Reuters’s Ilona Wissenbach and Joseph Nasr report, citing a letter Lufthansa’s board sent staff in which it said talks with the German government will end soon.
  • Taiwan says WHO has yet to send invite to major meeting: “The assembly, which governs and sets policy for the WHO, is composed of health ministers from the organization’s 194 member states. Taiwan, however, is not a member. China claims the self-governed island as its own territory, and has effectively forced international organizations like the WHO to choose between recognizing Taiwan or keeping diplomatic ties with Beijing,” Teo Armus reports.

The latest on the federal response

White House says third round of PPP may be needed.

Demand continues to soar for the small-business loan program: “The Trump administration announced Sunday that 2.2 million small-business loans worth $175 billion have been made in the second round of [the program],” CNN’s Devan Cole and Kevin Bohn report.

“Treasury Secretary Steve Mnuchin and Small Business Administration Administrator Jovita Carranza said in a joint statement that the average size of a loan made under the second iteration of the program, which began [April 27], was $79,000. Larry Kudlow, the White House's top economic adviser, said in an interview Sunday with CNN’s Jake Tapper that the administration might consider getting additional money for the program for more loans.”

Hotel group will return money after scrutiny: “The publicly traded Ashford Group, which runs 130 hotels, said it met all requirements to apply for the loans but will return them because ‘recently changed rules and inconsistent federal guidance’ have put the company at risk,” Jeanne Whalen reports.

“Ashford Group’s companies used more than 100 filings to seek $126 million total and received $76 million, according to a Washington Post review of securities filings. That made it one of the largest known recipients of the funds.” 

A top White House economic adviser developed his own covid-19 model.

Kevin Hasset's projection undershot the pandemic's severity: “A small team led by [Hassett] — a former chairman of Trump’s Council of Economic Advisers with no background in infectious diseases — quietly built an econometric model to guide response operations,” Philip Rucker, Josh Dawsey, Yasmeen Abutaleb, Robert Costa and Lena H. Sun report in a behind-the-scenes account of Trump's push to reopen the economy over the last month. 

“Many White House aides interpreted the analysis as predicting that the daily death count would peak in mid-April before dropping off substantially, and that there would be far fewer fatalities than initially foreseen, according to six people briefed on it. Although Hassett denied that he ever projected the number of dead, other senior administration officials said his presentations characterized the count as lower than commonly forecast — and that it was embraced inside the West Wing by the president’s son-in-law, Jared Kushner, and other powerful aides helping to oversee the government’s pandemic response."

  • Pence's chief of staff also wielded a heavy hand toward reopening: “Marc Short, chief of staff to Vice President Pence, exerted significant influence over the coronavirus task force... Short also is one of the White House’s most vocal skeptics of how bad the pandemic would be. He repeatedly questioned the data being shared with Trump, and in internal discussions said he did not believe the death toll would ever get to 60,000 and that the administration was overreacting, damaging the economy and the president’s chances for reelection, according to people who have heard his arguments.”

Money on the Hill

White House and Congress continue to clash over liability protections. 

Congressional leaders are gearing up for a big fight: Senate Majority Leader Mitch McConnell (R-Ky.), with the apparent backing of White House officials, continues to push for the protections. “Democratic leaders have declared they will oppose such blanket protections, putting Washington’s power brokers on opposite sides of a major issue that could have sweeping implications for health care and the economy in the coming months,” Erica Werner and Tom Hamburger report.

“The battle has unleashed a frenzy of lobbying, with major industry groups, technology firms, insurers, manufacturers, labor unions, and plaintiffs lawyers all squaring off. … Key GOP senators are circulating drafts of legislation to set up legal protections they say would give businesses the confidence to reopen without worrying about lawsuits.”

  • Lawmakers have debated for years over legal liability and tort reform: “Powerful business lobbies like the Chamber of Commerce, the National Association of Manufacturers and the insurance industry are now lobbying heavily in support of liability shields for businesses, while trial lawyer associations, unions and groups representing plaintiffs and consumers are pressuring Democrats to oppose any such measures.”

The Senate is set to return this week: “Business gets underway Monday evening with a vote to confirm a new inspector general for the Nuclear Regulatory Commission, while Senate committees will move ahead on more of [Trump’s] nominees, including a controversial pick for the influential U.S. Court of Appeals for the District of Columbia Circuit,” Mike DeBonis and Paul Kane report.

“The House, meanwhile, will continue to keep its distance from the Capitol, with only one committee scheduled as of Friday to hold an official hearing. Instead, lawmakers and staff are largely working from home as they try to craft the next trillion-dollar coronavirus relief package and monitor the trillions more that have been spent.” 

Campaign 2020

Poll finds Warren is voters’ top choice for VP.

This comes after a report that top Biden donors are pressuring him not to pick her: The senator from Massachusetts “also outpaces other possible picks by a wide margin as their first choice for the job: Warren at 36% first choice, to California Sen. Kamala Harris 19%, former Georgia gubernatorial candidate Stacey Abrams at 14%, and Minnesota Sen. Amy Klobuchar at 13%. No one else gets over 4%,” CBS Newss Anthony Salvanto, Jennifer De Pinto, Kabir Khanna and Fred Backus report.

  • Warren’s base: She “is the top pick among white Democrats and liberals by large margins. Warren is among the top picks for black Democrats, too, but they are more evenly split between Warren, Abrams and Harris. Warren is also among the top with moderate Democrats, for whom the top three picks are Warren, Klobuchar and Harris.”
  • What they’re looking for: “Economic expertise and crisis management skills are top qualities Democratic voters want to see in a vice-presidential pick for their party — even more so than executive or legislative experience — as concerns about the pandemic and the economy now become a lens through which voters see that selection process.”

Pocket change

Singer-run hedge fund will finance lawsuit against new streaming service.

Wall Street and Hollywood bigwigs are now on a collision course: “Hedge fund Elliott Management Corp. is financing a high-stakes patent lawsuit against Quibi, the new streaming service founded by entertainment veteran Jeffrey Katzenberg, according to people familiar with the situation …” WSJ’s Benjamin Mullin and Corrie Driebusch report.

“Elliott has agreed to fund a suit brought by interactive-video company Eko, which claims Quibi is violating its patents and has stolen trade secrets, the people said. As part of the financing, Elliott would end up with an equity stake, the people said. The size of the equity stake couldn’t be learned, though it is a substantial investment, the people said.”

Blue insurer to get nearly $2 billion in ACA payouts: “The Supreme Court’s decision that the federal government has to make good on a now-defunct Affordable Care Act program could mean big payouts for the insurance industry, including nearly $2 billion to one major Blue insurer, but it will likely be months before the money actually flows,” WSJ’s Anna Wilde Mathews reports.

“The decision clears insurers to seek roughly $12 billion in total, with potentially large windfalls for some companies, according to a new analysis by S&P Global Ratings. Health Care Service Corp., the parent of Blue Cross and Blue Shield plans in states including Illinois and Texas, could be in line to receive around $1.95 billion, the most of any insurer. Also high on the list: Humana Inc., at $611 million, Kaiser Permanente, with around $609 million, Highmark Health, with $568 million, and Intermountain Healthcare’s SelectHealth, at $443 million.” 



  • Tyson Foods, Wyndham Hotels & Resorts, Realty Income, Shake Shack, Avis Budget, Hertz Global, Loews, Texas Roadhouse and American International Group are among the notable companies reporting their earnings, per Kiplinger.


  • Walt Disney, Fiat Chrysler, Occidental Petroleum, Royal Caribbean, Cheesecake Factory, Allstate, Mattel, Beyond Meat, Marathon Petroleum, Wynn Resorts, Electronic Arts and DaVita are among the notable companies reporting their earnings


  • CVS Health, General Motors, Lyft, Wendy’s, GrubHub, T-Mobile US, Re/Max Holdings, Discovery, Peloton Interactive, Hyatt Hotels, New York Times,  Office Depot, and Papa John’s are among the notable companies reporting their earnings


  • The Labor Department releases weekly jobless claims
  • JetBlue Airways, Anheuser-Busch InBev, ViacomCBS, Hilton, Norwegian Cruise Line, Roku, Bristol-Myers Squibb, Raytheon Technologies, Denny's and YETI Holdings are among the notable companies reporting their earnings


The funnies

Bull session

The Blue Angels and the Thunderbirds staged a flyover above Washington, D.C., on May 2 to honor medical workers in their fight against the coronavirus. (The Washington Post)