ECONOMY

Small Businesses Shake It Off

One year ago, just weeks into lockdowns and stay-at-home orders, economists warned of the potential closures of millions of businesses across the country. But preliminary data from the first 12 months of the pandemic shows those predictions fell flatter than our bet on skinny jeans never going out of style. 

Fewer than 200,000 business establishments closed from March 2020 to February 2021 on top of the roughly 600,000 businesses that typically turnover in a given year, according to a new Federal Reserve report. 

• Important distinction: An estimated 130,000 of those "excess" closures were businesses going under (as opposed to just closing one of their locations).

Unsurprisingly, personal services were the hardest hit—about half of the excess failures were businesses like barber shops and nail salons. But some categories, including carry-out restaurants, grocery stores, and outdoor recreation, saw fewer failures than a normal year. 

Zoom out: 200,000 excess closures certainly had devastating consequences for owners and employees, but the unemployment impact was less than you might expect. Business exits are typically higher among firms with five or fewer workers, and the majority of the US' 26 million small businesses are sole proprietorships. 

But this isn't over 

The full scope of business damage won't be known for years, and surveys continue to show many are still struggling under burdens of unpaid loans and back rent. 

The impact of closures also hasn't been felt evenly, Fed surveys show. Firms owned by people of color experienced larger declines in sales and more difficulty accessing capital. If requests for pandemic aid were granted, they were less likely than white-owned businesses to get the amount requested. 

Big picture: The Fed report offers an upbeat view of business resiliency during Covid and evidence that PPP and other aid programs prevented more permanent damage. "Not only are things less bad than we thought, but they are less bad by an order of magnitude," MIT Sloan Prof. Scott Stern told the WSJ.

SPORTS

European Soccer's Civil War

Yesterday, a group of 12 elite European soccer clubs unveiled a breakaway competition called the Super League, a plan that could lead to the biggest shakeup in the sport since Zlatan Ibrahimović brought back the man bun.

Who's in? To start, six clubs from England's Premier League, including Liverpool and Manchester United, and six more from Spain and Italy. The ultimate goal is to have 15 permanent teams in a "closed" structure more in line with US sports leagues.

And what do they want? More money. Super League teams would get $400+ million each just for participating, a sum more than 4x what they'd earn from winning the current top European competition, the Champions League. 

The response from existing soccer leadership: Imagine an announcer saying the word "goooooal" for 30 seconds, but replace that with "nooooo." UEFA, European soccer's governing body and the organization that runs the Champions League, called it a "cynical project," and even UK Prime Minister Boris Johnson and French President Emmanuel Macron denounced it. 

Looking ahead...a battle royale for the soul of European soccer. 

GEOPOLITICS

Friends With Climate Benefits

The US and China don't agree on much—trade, aggressions in the South China Sea, where to set the thermostat. But in a joint statement Saturday, the world's two largest economies said they'd work together to combat climate change. 

If you're looking for specifics, this is not the statement for you. But the countries did agree to take "concrete actions" this decade to reduce emissions in line with the goals of the Paris Agreement, which commits countries to limit warming to "well below" two degrees Celsius relative to the preindustrial era.

• That won't happen without buy-in from the US and China. The countries are No. 1 and No. 2 on the World's Top Emitters list, together contributing almost half of the fossil fuel emissions that warm the planet. 

Zoom out: Compared to his predecessor, President Biden is taking a U-turn with an aggressive plan to tackle climate change. However, he has largely maintained the same antagonistic tone toward the Chinese government.

Looking ahead...later this week, the US will announce new carbon emissions targets before hosting 40 world leaders at a virtual climate summit. Chinese President Xi Jinping is a "maybe." 

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FITNESS

Safety Agency Tells Peloton Users to Look Before You Run

Peloton is in a war of words with US regulators over the safety of one of its core products.

On Saturday, the Consumer Product Safety Commission said customers of Peloton's Tread+ treadmill should not use it around small children or pets because they could get trapped underneath the machine.

• The agency cited 39 incidents involving the Tread+, including the death of a child that Peloton acknowledged last month. 
• It's not clear whether Peloton's treadmill is more dangerous than other treadmills.

The company pushed back against the report, calling it "inaccurate and misleading." Peloton said there is "no reason to stop using the Tread+, as long as all warnings and safety instructions are followed." 

Zoom out: Peloton's biggest problem last year was making enough equipment to fulfill elevated demand for its connected fitness products. But 2021 has gone much differently—its stock price has fallen more than 20% and it's drawing the unwanted attention of regulators. 

GRAB BAG

Key Performance Indicators

Stat: In 2012, venture capitalist Garry Tan wrote a $300,000 seed-stage check to a new crypto exchange called Coinbase. When Coinbase went public via direct listing last week, Tan's initial investment ($1.3 million in total) was valued at $680 million.

Quote: "Our patient could die at any moment."

Doctors for Russian dissident Alexei Navalny, who is 20 days into a hunger strike in Russian prison, say he could die within days if he does not receive medical treatment. Navalny's team has called for mass protests across Russia on Wednesday.

Read: Some businesses kept their promise to withhold PAC donations from lawmakers who voted to overturn election results...others didn't. (Popular Information)

CALENDAR

The Week Ahead

Vaccines: Dr. Fauci said a decision on resuming J&J's paused Covid-19 vaccine will come by Friday. He told Face the Nation that he wouldn't be surprised if there were a "resumption in some form."

Earnings: Close your eyes and picture the most prototypical companies in "Corporate America"—those are the ones reporting earnings this week: AT&T, P&G, Johnson & Johnson, Verizon, Intel, Coca-Cola, IBM, and Netflix. Big banks have set a high bar. 

Earthy things: Earth Day is Thursday, and so is the release date of a new PBS documentary on activist Greta Thunberg. 4/20 is on...4/20 (Tuesday).

Everything else: 

• Today, closing arguments begin in the trial over the killing of George Floyd.
• On Thursday, SpaceX is planning to send four astronauts to the International Space Station.
• Wait—the Oscars are on Sunday? 

WHAT ELSE IS BREWING

• Two men were killed in Texas on Saturday when their Tesla crashed and caught fire. Officials believe "no one" was driving the vehicle at the time of impact.
• Investor Keith Gill, aka Roaring Kitty, doubled down on his GameStop stake to 200,000 shares worth $31 million at Friday's close. Apparently he likes the stock.
• Charles Geschke, cofounder of Adobe Inc. and one of the developers behind the PDF, died Friday at 81. 
• Clubhouse closed another funding round at a reported $4 billion valuation.
• Swiss billionaire Hansjörg Wyss, a top bidder for Tribune Publishing, has dropped out. This could deal a blow to Tribune's attempt to avoid a takeover by hedge fund Alden Global Capital, its largest shareholder.

BREW'S BETS

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Not sure what to cook for lunch today? Here are two 15-minute recipes from Yotam Ottolenghi.

Dive back into the week:

• Shallow dive: Blockbuster stores over 30 years
• Medium dive: The top five regrets of the dying 
• Deep dive: Why the days are long but the years are short
• Cannonball: How to become insanely well connected

GAMES

Guess the Stock Chart

Sector: Auto

Google Finance

ANSWER

That's Nikola, the EV startup whose big gains since going public last year have effectively been erased.