TRADE

The T Word Is Back

Uncertainty reigns at the top of the World Trade Organization, President Trump’s grumbling about China, and stocks are wobbling over trade concerns.

No, we didn’t get lazy and copy over a newsletter from last year—these things all happened yesterday. After getting tossed aside while everyone directs their attention to the you-know-what, trade news is back in the spotlight. And none of it is particularly good. 

The latest

Yesterday, WTO Director-General Roberto Azevêdo stepped down from his position more than a year ahead of schedule, citing personal reasons.

• The WTO is a 25-year-old organization that plays referee for countries that trade with one another. 

President Trump has been quite angry with this ref’s performance, arguing that most of the calls on unfair trade practices went China’s way. And he’s got allies on Capitol Hill: lawmakers have introduced two different pieces of legislation that would withdraw the U.S. from the WTO. Sen. Josh Hawley (R-MO) has said the group should be abolished altogether. 

Time to talk about the you-know-what

Because it has been absolutely devastating for global trade, which could drop by a record 27% in Q2, a UN organization said this week.

• The coronavirus has dealt a double whammy to trade flows, slamming both supply and demand. 

Meanwhile, the companies whose job it is to move boxes from one port to another are sitting on their butts just like the rest of us. Maersk, the Danish shipping giant, predicts container volumes will fall up to 25% in Q2. “Without a doubt it’s going to be the steepest ever drop in demand within a quarter” CEO Soren Skou said. 

Bottom line: After the U.S. and China signed a “phase one” trade deal in January, many analysts hoped 2020 would be a year of relative peace in global trade. But in a few months the coronavirus has caused more disruption to globalization than a trade war did in a year and a half. 

BELTWAY

Are You Richard Burr, Sir?

Yesterday, Sen. Richard Burr (R-NC) stepped down from his position as chairman of the Senate Intelligence Committee while a federal investigation into his stock sales continues. 

• On Wednesday, federal investigators took Burr’s cellphone from his Washington, D.C.,-area home, per the LA Times. 

What they’re investigating: In late January and early February, Burr was privy to briefings on the threat of the coronavirus pandemic and its potential economic costs. On Feb. 13, he sold shares totaling between $628,000 and $1.7 million. 

• According to the WSJ, the sale saved Burr and his wife at least $250,000 in losses. 
• Burr has denied wrongdoing, said the decision was based only on publicly reported information, and asked for a review by the Senate ethics panel. 

Zoom out: This indicates the FBI’s probe into illicit stock trades is escalating. For a search warrant to be executed on a sitting member of Congress, it has to be approved by a senior DOJ official and a judge.

INSURANCE

Insurance: Crisis Mode or Business as Usual?

The COVID-19 pandemic could cost the insurance industry $200+ billion, according to insurance marketplace Lloyd's of London. If you’re thinking “good riddance, I haven’t seen a penny,” check out these numbers: 

• $107 billion in underwriting losses
• $96 billion sapped from investment portfolios (money set aside to cover future claims)

Lloyd's itself expects to dole out up to $4.3 billion—payouts it says are comparable to losses sustained after 9/11 and a hurricane trio in 2017. 

But while Lloyd's says COVID-19 will be the worst economic disaster for the insurance industry, Axios's Felix Salmon countered with “Insurers are doing just fine.” His reasoning: 

• COVID-19 losses still haven’t hit “megacat” territory, and 2020 losses are still tracking behind the $144 billion the industry sustained in 2017.
• The point of insurance is to pay out during bad times. 

Plus, many insurance policies explicitly exclude pandemics. And while insurers face mounting claims for canceled events and workers comp, they’re saving in auto policies (less driving → fewer accidents) and health insurance (most elective surgeries are canceled/postponed).

SPONSORED BY THE MOTLEY FOOL

All About Baby Steps

You probably shouldn’t go on gut instinct when picking your first stocks.

Obscure baby names for your firstborn? Sure, go with what feels right. But deciding on which way to go in the stock market your first time around is different.

Here’s a solid place to start: The Motley Fool’s 10 starter stocks for new investors.

The Fool’s stock-savvy analysts vet these babies over the course of an entire year before making their official recommendation, so you can get some footing and start feeling confident about investing in the stock market.

Check out their .

JOBS

Decoding Unemployment Insurance

Almost 3 million U.S. workers filed for unemployment benefits last week, bringing the two-month total since COVID-19 lockdowns began to 36.5 million. If those claims formed a state, they’d be the second largest in the country behind California. 

Take a step back 

While the number of new claims has technically dropped six weeks running, weekly totals are still near record highs. Unemployment insurance was built as a safety net, but even with emergency aid it wasn’t prepared for this. 

How it works:

• Unemployment programs are joint ventures between the federal government (which sets guidelines) and states (which set the rules). 
• Employers pay state and federal unemployment insurance taxes, and states give out the benefits to unemployed workers. 

Zoom out: State unemployment insurance programs were left in tatters after the Great Recession, when a sudden spike in long-term unemployment depleted trust funds and forced many to borrow from the federal government. Heading into the COVID-19 crisis, most states had never fully recovered. 

So where does that leave us? .

GAMES

Magnus Carlsen Launches a Queen’s Gambit

Question: What do you do when you’re the best in the world at something? 

Answer: Create more competitions of that thing. 

Magnus Carlsen, world chess champ fresh off his victory in the most lucrative online chess tournament in history (the Magnus Carlsen Invitational, which he organized himself), has decided to keep the intense-focus party going. He’s adding three more tournaments plus a grand final with combined prize money of $1 million, the highest ever for online chess. 

• The next tournament will kick off on May 19 and the final will end Aug. 20.

Big picture: Chess is one of the few competitions that can easily be shifted online, and the Invitational was the first online chess tournament to be broadcast on TV. Carlsen said he hopes to boost the game’s popularity by promoting it while almost all live sports are on hiatus. (Is chess a sport? Debate.)

Carlsen is drawing outside the lines. He’s organizing these tournaments outside the purview of Fide, the world chess body, though Fide says it supports his activities. 

QUIZ

Quiz, Eh?

Still apologizing to Canada for fudging our tribute to Wayne Gretzky and his illustrious career with the Flames *takes swig of maple syrup*. It's the Brew’s Weekly News Quiz.

1. Which company am I? I was launched in 2018 as a joint venture between JPMorgan, Amazon, and Berkshire Hathaway. My official goal is to improve U.S. healthcare. My CEO stepped down this week.

2. Twitter announced a new work from home policy this week. How long can most employees wait before coming back into the office? 

1. After the July 4 weekend
2. September
3. 2021
4. Forever

3. Which state plans to generate half of its energy from renewable sources by 2030? Its latest development: a $1 billion project capable of powering 260,000 homes that was approved this week.

4. Every four years, the reward bitcoin miners can collect for helping to generate new tokens is cut by 50%. This major event in cryptocurrency happened on Monday—what's it called? You can collect 6.25 bitcoins (worth ~$61,000) for a correct answer. 

5. Who tweeted this about defying lockdown orders: “If anyone is arrested, I ask that it only be me.”

Or, you can keep scrolling for the answers. 

WHAT ELSE IS BREWING

• OpenTable projects one in four U.S. restaurants will go out of business as a result of coronavirus-related lockdowns.
• A coalition of privacy groups said TikTok is collecting personal info on kids without parents’ consent, violating privacy law. 
• Delta is retiring its fleet of Boeing 777s. 
• Lower-income workers have been hit the hardest by coronavirus job losses, a new Fed survey revealed.
• More layoffs: GM’s self-driving Cruise unit is laying off nearly 8% of staff. Business news site Quartz is cutting about 40% of staff.

BREW'S BETS

No, we’re still not a coffee company—but the Brew does love their brew. And when we heard about the delicious beans at YES PLZ, we knew it was love at first $5 off our first order. Get quality beans delivered to your door.*

When the “new normal” gets old. Mitto’s survey results highlight how consumers actually feel about brand messaging during COVID-19—and what conversations they want to have next. Get insights from 7K global consumers .*

McDonald's anniversary content: On this day 80 years ago, the first McDonald’s opened its doors. We suggest marking the occasion by watching McMillion$ or The Founder, taking a tour of menus around the world, checking out this Lego build, and learning about the Big Mac index aka an economist's best friend. 

What it’s like to fly right now: Read one traveler’s detailed account of arriving in Hong Kong this week.

Not sure how to spend your time? Check out The Essentials, our newsletter that gives you specially curated ideas for ways to stay productive, healthy, and entertained while working from home. . 

^{*This is sponsored advertising content}

FRIDAY PUZZLE

Which answer in the list is the correct answer to this question?

1. All of the below
2. None of the below
3. All of the above
4. One of the above
5. None of the above
6. None of the above

ANSWERS

Friday puzzle: 5 ("None of the above") is the correct answer (Source).

Quiz: 

1. The healthcare company's name is Haven.
2. Most Twitter employees can work from home forever.
3. Nevada plans to generate half its electricity from renewables. 
4. Monday's crypto event was called bitcoin halving. 
5. Elon Musk tweeted that when he announced Tesla factories were reopening.