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Good morning.
Keep an eye on your bank account. You may find cash moving out faster than it is moving in. Fortune’s Jeremy Kahn wrote yesterday about some interesting data tracked by Sidetrade, a Paris-based software company that uses A.I. to help businesses manage their cash. It looked at 28.5 million B2B transactions and found the amount of payments more than 10 days overdue has grown 56% in France, 52% in Spain and 82% in Italy since the WHO declared a pandemic on March 11.
Mark Sheldon, Sidetrade’s CTO, called the leap in unpaid bills “unprecedented.” Expect the same to happen elsewhere. You can read more in Jeremy’s story here.
Meanwhile, Pitney Bowes turns 100 years old today. The Stamford company, which started making postage meters in April 1920, enjoyed a stock boom at the end of the millennium, and has struggled since. It was number 354 on the Fortune 500 in 2000; last year, it was 659. But surviving for a century is itself no small feat.
More news below. And check out Phil Wahba’s story on how Home Depot and Lowe’s are managing the pandemic, which hit at their busiest time of the year.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
European trouble
IHS Markit's purchasing managers' index reading for France this month was a shocking 11.2—a Reuters poll showed expectations of 26.0; anything below 50 marks contraction. Equally shocking was Germany's April PMI of 17.1, where analysts had expected 31.0. Across the Eurozone, the April figure was a miserable 13.5 (the most pessimistic polled analyst expected 18.0). The reading for the U.K. was a dismal 12.9, and economists expect a quarterly GDP fall there in excess of 7%. Reuters
Cancellation test
Can buyers now walk away from M&A agreements struck before the coronavirus crisis hit? A good question, and for that reason all eyes will be on private-equity firm Sycamore Partners as it tries to scrap its deal to take over L Brands' Victoria's Secret chain. Sycamore has asked a court to let it out of the agreement, based on the fact that L Brands shuttered its U.S. stores in March, furloughing workers and skipping April rent payments—the PE firm says these were violations of the proposed transaction. L Brands' share price fell 15% on the news. Wall Street Journal
Vaccine trials
There are now six candidates for a COVID-19 vaccine undergoing testing, according to the World Health Organization. The WHO added three candidates to its list today. All are in Phase I or Phase II clinical trials; now let's see which make it to Phase III trials, regulatory review, and Phase IV trials. Experts say a successful vaccine is 12-18 months away at the very least. Fortune
Oil price
Oil prices have been recovering, with Brent up 7% to $21.80 and WTI up 10.2% to $15.20 at the time of writing. Analysts attribute the gains to President Trump's tweeted threats to Iran, in which he said the U.S. Navy would "shoot down and destroy any and all Iranian gunboats if they harass our ships at sea." But stoking up geopolitical tensions will only provide limited support for prices, some warn, given the current glut in the market. Financial Times
AROUND THE WATER COOLER
Successful cities
How come Seattle and San Francisco have managed to weather the crisis better than many other U.S. cities? As Fortune's Adam Lashinsky and Erica Fry explained in an online discussion yesterday, much of the success is down to effective local government policies. In Seattle, for example, coordination with business leaders proved essential. Fortune
Airline bailouts
European airlines have applied for $13.8 billion in emergency government support since the start of the coronavirus crisis, but without environmental conditions attached. Across Europe, it is only Austria that has demanded that bailout cash must be linked to climate targets. Meanwhile, Ryanair boss Michael O'Leary insists his airline won't resume operations if it has to leave middle seats unfilled as a social-distancing measure. He said the measure would stop Ryanair making money, and was "kind of an idiotic idea that doesn't achieve anything anyway." Guardian
Zoom backlash
More big companies are shunning the Zoom videoconferencing app over security concerns, including Daimler, Ericsson, NXP Semiconductors and Bank of America. India has even initiated a public content to develop a secure homegrown alternative. Bloomberg reports on an internal Daimler memo that warns of "various security gaps and data protection problems." Daimler, Ericsson and NXP are all using Microsoft Teams instead. Fortune
Keeping momentum
Sanofi CEO Paul Hudson writes for Fortune that the way to ensure the world is never again caught off guard, as it was with the current coronavirus wave, is to maintain current research momentum—and to forget about a return to normalcy until we have a vaccine. Fortune
This edition of CEO Daily was edited by David Meyer.
