Outage

MARKETS

• Stocks: Investors went bargain hunting after last week’s epic sell-off. They think central banks will step in to keep the coronavirus from hamstringing entire economies.
• 2020: Is there any industry consolidating faster than the Democratic presidential field? Sen. Amy Klobuchar dropped out yesterday as the more moderate Dems try to form a firewall against Sen. Bernie
• Sanders. 14 states and one U.S. territory vote in Super Tuesday today.
  Manufacturing: We have to follow up on yesterday’s discussion of the ISM Manufacturing Report. The index dipped to 50.1 in February due to coronavirus-related bottlenecks. So the sector’s growing, but...barely.

C-SUITE

Management Icon Jack Welch Dies at 84

We weren't expecting to lead with two obituaries to start off the week, but famed GE boss Jack Welch has died, leaving behind a complex legacy in corporate America.

Working without boundaries

Before the cult of the Silicon Valley founder, there was the cult of Jack Welch. He joined GE in 1960 then worked his way up to the top job in 1981. Over the next 20 years, Welch turned GE into a $410 billion conglomerate spanning tech, financial services, energy, healthcare, and media.

Welch unwound decades of bureaucracy and created a "boundaryless" organization that encouraged new ideas. In 1999, Fortune named him "Manager of the Century."

How’d he do it? Welch cut inefficiencies like a baker cuts bread, taking a "fix it, close it, or sell it" approach to departments and people.

• In his first 10 years in charge, he eliminated 170,000 jobs, earning the nickname "Neutron Jack" after the neutron bomb, which leaves buildings standing but wipes out everyone in them.

Welch retired on Sept. 7, 2001. Four days later, his successor Jeffrey Immelt was left steering GE through a national crisis. Immelt was also left handling the fallout from Welch's more questionable decisions, like building out GE Capital (which nearly dragged the whole company down in 2008).

• Today, GE's worth

Big picture: Welch later acknowledged his relentless pursuit of shareholder value was problematic, and argued a company's main constituencies should be employees, customers, and products.

Training the next generation

At GE, Welch famously prioritized leadership development. Internal programs, including retreats to GE's Crotonville campus, were a launching pad for hand-picked protégés and high-achievers to receive executive coaching.

Bottom line: For Welch, GE had to be first or second—or nothing. The unforgiving management style he used to achieve that inspired a generation of execs who now head their own Fortune 500 companies.

MARKETS

Robinhood Stock Blocks Investors

What's worse than going to a Super Bowl party while on Whole30? Trying to buy stocks on Robinhood while the Dow is having one of its best days in history.

The no-fee investing app suffered a "systemwide outage" yesterday, blocking many users from joining the market's mega-rally.

The diagnosis?

• Early reports speculate the app was hit by intense volume. Robinhood is popular among younger traders who may have been trying to "buy the dip" following last week's market rout.
• But others suggested that Robinhood was offline because its code didn’t account for Leap Year. Which would be crazy considering we wrote about that exact issue on Saturday.

Either way, we do not envy Robinhood's social media team, which spent yesterday responding to irate users feeling market FOMO.

Zoom out: Robinhood successfully disrupted the brokerage industry with its no-fee model. But it didn't show up when it mattered yesterday.

ENVIRONMENT

The One Good Thing About Economic Slowdowns

Less air pollution. NASA and the European Space Agency said their pollution monitoring satellites found “significant decreases” in nitrogen dioxide over China. That's "at least partly related to the economic slowdown" from the coronavirus outbreak.

• Nitrogen dioxide (NO2) is a gas released by cars and power plants.
• Researchers said this drop-off was without precedent. Pollution fell in Beijing around the 2008 Olympics, but that was localized and temporary.

The economic data backs it up: The official gauge of China’s manufacturing sector nosedived to its lowest level on record in February.

TECH

In Tech We Trust?

The Verge released the results of its second Tech Trust Survey yesterday. Our big takeaways:

Bezos has a fan club. Amazon had the highest favorability rating out of all tech brands (91%). And 81% said they'd be disappointed if Amazon disappeared, second only to Google.

Twitter who? 33% said they'd be disappointed if Twitter was wiped off the face of the planet. 43% trust Twitter with their information...only slightly more than last-place Facebook.

Speaking of Facebook, 72% said the company has too much power. And when asked their top reasons for not using Facebook, "not interested in the content" was No. 2.

More people need to read the Brew. Just 38% of respondents knew that Facebook owns Instagram, 29% knew it owns WhatsApp, and 12% knew Amazon owns Twitch.

Bottom line: Maybe the techlash is overrated. Google, Microsoft, Amazon, and Apple—the four largest U.S. tech companies by market cap—were rated as having the most positive impact on society.

ECONOMY

Nothing Cuts Deeper Than Monetary Policy

Welcome to Day 2 of our weeklong series explaining the main events on the economic calendar. Today we’re traveling Down Under to learn more about central bank meetings.

Who’s meeting: Earlier today, Australia’s central bank, the Reserve Bank of Australia, gathered for a lively debate on monetary policy over vegemite finger sammies. Central banks are the orchestra conductors for economies around the world. In the U.S., the Fed's goal is to stabilize inflation and maximize employment.

• Australia's got it down pat. The country hasn’t had a recession in 29 years.

How central banks do it: During their meetings, central banks make decisions on the target interest rate—the guideline banks use when setting bank-to-bank lending rates. When central banks reduce the target rate, it becomes less expensive to borrow money.

• Banks feel it first, but eventually interest rate cuts trickle down to regular folks through lower mortgage rates and lower interest rates on savings accounts.
• A central bank raising rates does just the opposite: It slows down an economy that’s too hot to handle.

Big picture: Current rates are historically low across developed economies. Fresh cuts to deal with the economic impact of the coronavirus could leave central banks with less ammo if downturns get worse.

WHAT ELSE IS BREWING

• Waymo, the autonomous vehicle division of Google parent Alphabet, raised $2.3 billion from outside investors.
• The Trump administration ordered Chinese state media companies operating in the U.S. to cut their Chinese staff by roughly 40%.
• The Supreme Court said it would hear a legal challenge to Obamacare in its next term beginning in October.
• The Recording Academy fired CEO Deborah Dugan after investigations found “consistent management deficiencies and failures.” Dugan previously called the organization a “boys’ club”
• MSNBC's Chris Matthews is retiring following a series of controversies over his comments about Sen. Bernie Sanders, African American lawmakers, and female coworkers.

MAPPING SUPER TUESDAY

Today is Super Tuesday, when 14 states hold nominating contests to pick a presidential candidate. In the Democratic race, 34% of all delegates are up for grabs.

Here’s our question: Can you identify the Super Tuesday states? They’re the ones highlighted in the map below.

MAPPING SUPER TUESDAY ANSWERS