Catch 19

MARKETS

• Economy: It was a split-screen kind of day. Retail sales boomed a record 17.7% in May, a reassuring sign following April’s 14.7% collapse. However, Fed Chair Jerome Powell said there was “significant uncertainty” about an economic recovery during testimony on Capitol Hill. He also called the pandemic "a real inequality-increaser.”
• Markets: Investors chose to focus on the positive news, sending the major indexes climbing for their third straight day of gains.
• Nation: President Trump signed an executive order on police reform, but said he strongly opposed proposals to defund or dismantle police departments.

TECH

Contact Tracing Apps Find Themselves in a Catch 19

To help stop the spread of COVID-19, contact tracing apps need to track people. There’s just one problem: To help stop the spread of COVID-19, contact tracing apps need to track people.

New this week

Italy’s app, released Monday, is built on software developed by Apple and Google for public health agencies. But it has fewer users than even Quibi. With 2.7 million downloads, the app is still far away from the 60% adoption threshold experts believe is needed to forestall a second wave of infections.

Germany’s app launched yesterday, weeks late due to disagreements about data protection. It’s also got an uphill road: In a survey, nearly 40% of Germans said they wouldn’t download it.

A major issue is privacy

What do Norway, Bahrain, and Kuwait have in common? Their apps were at the top of Amnesty International’s list of most concerning COVID-19 surveillance tools.

• Norway suspended its app Monday after a data protection watchdog issued a warning last week.
• The Gulf states of Bahrain and Kuwait used a similar architecture. Bahrain had users register with national ID numbers and, at one point, linked the app to a TV show.

Don’t forget India, which requires train passengers, people who live in high-risk areas, and office workers to download its contact tracing app. The app collects personal info such as names, phone numbers, age, and gender.

Big picture: Critics feel these measures go beyond what’s necessary for public health and violate users’ privacy.

Bring it home

Contact tracing in the U.S. is patchy, since the federal government left efforts up to individual states. Some states that previously said they’d create apps have ditched plans...including California, Apple and Google's home state.

• At least three states do plan on using the Apple/Google framework for an app.
• And while there’s no shortage of third-party tracing apps, they’re proving tough to vet.

Looking ahead...it’s too early to make a judgment on contact tracing apps. They could gain momentum if they’re required to enter sports games, schools, or offices.

RESTAURANTS

Today’s Special Is Outside

As more areas lift lockdown restrictions, the U.S.’ battered restaurant industry is tentatively wading back into business. But the waters are rough.

• Many local governments are imposing strict capacity limits. Plus, owners have no way of gauging consumers’ willingness to grab a bite, which makes it almost impossible to predict revenue.
• With their unusually high failure rates, it’s tough for restaurants to lock down financing. And when they do, it can come with interest rates in the 25% neighborhood.

Just the act of reopening a location is expensive, potentially reaching into five figures.

One solution? Al fresco dining

Several city governments have waived fees and accelerated permitting processes so that restaurants can bring tables out on patios and sidewalks—even streets and parking lots.

• This spring, outdoor seating increased 10x compared to last year, according to OpenTable.

But moving tables outside means flies in your milkshake and otherwise less-than-ideal circumstances. Dropping fees will lead to less revenue for city governments, and with coronavirus cases climbing in 22 states as of Saturday, restaurants could be forced back into hibernation.

LEGAL

PG&E: “We Did It”

Yesterday, in a proceeding livestreamed via YouTube from a California courtroom, PG&E CEO Bill Johnson said “guilty, your honor” 84 times to a judge. Each time represented one victim of Northern California’s Camp Fire, set off by PG&E equipment in 2018.

That means PG&E legally acknowledged that its faulty electrical grid was to blame for the devastation, an ultra-unusual move for a company. The utility, California’s largest, pleaded guilty to 84 counts of involuntary manslaughter and one count of illegally setting a fire.

• It agreed to pay the maximum fine of $3.5 million, plus $500,000 for the cost of the investigation.

Zoom out: This is only one of several battles PG&E is dealing with. Its current bankruptcy deal includes a $13.5 billion payout to victims, and the California Public Utilities Commission fined it nearly $2 billion for its negligence.

INFRASTRUCTURE

Big Crane Energy

When the first two cups of coffee don’t do the trick, go straight for the Red Bull. The White House is reportedly drafting a $1 trillion infrastructure proposal to rev up the economy.

According to those reports, most of that would go to classic infrastructure projects—roads and bridges—but about a quarter would be set aside for 21st century information highways: rural broadband and 5G wireless networks (here's what they are).

• The administration may reportedly try piggybacking the proposal on a current infrastructure funding law, which needs renewal before Sept. 30, or packaging it in a new round of pandemic relief.

Still, with that price tag the administration could find opposition on Capitol Hill after multiple rounds of emergency pandemic funds racked up a huge bill.

Big picture: Depending on which economist you ask, we’re in a recession, out of one, or waiting for the worst to come. The government’s busy looking for ways to boost output, and massive infrastructure spending could mark a shift from the "relief" phase to the "stimulus" part.

ROBOTICS

Mom, Can We Keep Him?

your business is wanting for a headless, tailless robotic “dog,” have we got the pack of hounds for you. Boston Dynamics’s internet-famous Spot is now available for general sale. Up until yesterday, the firm only leased Spots to select clients in an “Early Adopter Program,” but now any U.S. business with $74,500 to spare can buy one.

• Spot is a highly sophisticated robot that knows how to hold the door, pull a rickshaw, moonwalk, and treat fire hydrants with respect. Boston Dynamics claims it's the most advanced mobile robot in the world.

Why do businesses need a robot best friend? Commercial customers will delegate tasks to Spot that are either dangerous or mind-numbingly boring for a human. Boston Dynamics lead robotics engineer Zack Jackowski gave The Verge an example of carrying a camera around a factory 40x/day and taking the same photo each time.

But for everything it can do, Spot can’t yet scale a) ladders or b) the coronavirus pandemic. Boston Dynamics is working on improvements in teleoperations that allow potential customers to demo Spot from afar.

WHAT ELSE IS BREWING

• Dexamethasone, a widely available and cheap steroid, cut the risk of death in severely ill coronavirus patients, an Oxford University study found.
• The European Commission opened two antitrust investigations into Apple Pay and Apple’s App Store.
• U.S. bank profits fell 70% in Q1, per the FDIC.
• AT&T and Hilton revealed major job cuts.
• U.S. ad spend will “only” decline 13% this year, per GroupM. The financial crisis caused a 16% dip in 2009.
• The MLB's labor fight has turned very ugly, and the 2020 season is in doubt.

NATIONAL PARK TRIVIA

Let’s see how familiar you are with our country’s national parks. We’ll give you a famous attraction or feature of a national park, you have to name the park. If you get 5/5 you are contractually obligated to name your next child John Muir.

1. El Capitan
2. Mount Desert Island
3. Angels Landing
4. Clingmans Dome
5. Hidden Lake

Extra credit: California has the most national parks; which state has the second-most?

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NATIONAL PARKS TRIVIA ANSWER


1. Yosemite
2. Acadia
3. Zion (Angels Landing is the freakiest hike—don't do it if you value your life)
4. Great Smoky Mountains
5. Glacier

Extra credit: Alaska