Before the event, Mr. Keighley said in an interview that he wanted to strike a balance between using his platform for good and maintaining the upbeat vibe of an awards show.

“Are we going to use our platform to take companies to task publicly inside the show? It’s always something worth thinking about,” he said, “but it’s not a referendum on the industry.”

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The floor of the New York Stock Exchange (NYSE) is seen after the close of trading in New York, U.S., March 18, 2020. REUTERS/Lucas Jackson

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NEW YORK, Nov 26 (Reuters) – COVID-19 has resurfaced as a worry for investors and a potential driver of big market moves after a new variant triggered alarm, long after the threat had receded in Wall Street’s eyes.

Worries about a new strain of the virus, named Omicron and classified by the World Health Organization as a variant of concern, slammed markets worldwide and dealt the S&P 500 index its biggest one-day percentage loss in nine months. The moves came a day after the U.S. Thanksgiving holiday when thin volume likely exacerbated the moves.

With little known about the new variant, longer term implications for U.S. assets were unclear. At least, investors said signs that the new strain is spreading and questions over its resistance to vaccines could weigh on the so-called reopening trade that has lifted markets at various times this year.

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The new strain may also complicate the outlook for how aggressively the Federal Reserve normalizes monetary policy to fight inflation.

“Markets were celebrating the end of the pandemic. Slam. It isn’t over,” said David Kotok, chairman and chief investment officer at Cumberland Advisors. “All policy issues, meaning monetary policy, business trajectories, GDP growth estimates, leisure and hospitality recovery, the list goes on, are on hold.”

The S&P 500 fell by a third as pandemic fears mushroomed in early 2020, but has more than doubled in value since then, though the pandemic’s ebb and flow has driven sometimes-violent rotations in the types of stocks investors favor. The index is up more than 22% this year.

Before Friday, broader vaccine availability and advances in treatments made markets potentially less sensitive to COVID-19. The virus had dropped to a distant fifth in a list of so-called “tail risks” to the market in a recent survey of fund managers by BofA Global Research, with inflation and central bank hikes taking the top spots.

On Friday, however, technology and growth stocks that had prospered during last year’s so-called stay-at-home trade soared, including Zoom Communications (ZM.O), Netflix Inc (NFLX.O) and Peloton (PTON.O).

At the same time, stocks that had rallied this year on bets of economic reopening may suffer if virus fears grow. Energy, financials and other economically sensitive stocks tumbled on Friday, as did those of many travel-related companies such as airlines and hotels.

The new Omicron coronavirus variant spread further around the world on Sunday, with 13 cases found in the Netherlands and two each in Denmark and Australia, even as more countries tried to seal themselves off by imposing travel restrictions.

First discovered in South Africa, the new variant has now also been detected in Britain, Germany, Italy, the Netherlands, Denmark, Belgium, Botswana, Israel, Australia and Hong Kong. read more

Friday’s swings also sent the Cboe Volatility Index (.VIX), known as Wall Street’s fear gauge, soaring and options investors scrambling to hedge their portfolios against further market swings. read more

Reuters Graphics

Andrew Thrasher, portfolio manager for The Financial Enhancement Group, had been concerned that recent gains in a handful of technology stocks with large weightings in the S&P 500, including Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O), were masking weakness in the broader market.

“This set the kindling for sellers to push markets lower and the latest COVID news appears to have stoked that bearish flame,” he said.

Some investors said the latest COVID-19 related weakness could be a chance to buy stocks at comparatively lower levels, expecting the market to continue rapidly recovering from dips, a pattern that has marked its march to record highs this year.

“We’ve had numerous days when economic optimism collapses. Each of these optimism collapses were a good buying opportunity,” wrote Bill Smead, founder of Smead Capital Management, in a note to investors. Among the stocks he recommended were Occidental Petroleum (OXY.N) and Macerich Co (MAC.N), down 7.2% and 5.2% respectively on Friday.

One of several wild cards is whether virus-driven economic uncertainty will slow the Federal Reserve’s plans to normalize monetary policy, just as it has started unwinding its $120 billion a month bond buying program.

Futures on the U.S. federal funds rate, which track short-term interest rate expectations, on Friday showed investors rolling back their view of a sooner-than-expected rate increase.

Investors will be watching Fed Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen’s appearance before Congress to discuss the government’s COVID response on Nov. 30 as well as U.S. employment numbers, due out next Friday.

Investors held out hope that markets could stabilize. Jack Ablin, chief investment officer at Cresset Capital Management, said moves may have been exaggerated by lack of liquidity on Friday, with many participants out for the Thanksgiving holiday.

“My first reaction is anything we are going to see today is overdone,” Ablin said.

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Reporting by Saqib Iqbal Ahmed; Additional reporting by Chuck Mikolajczak, Megan Davies and Lewis Krauskopf; Writing by Ira Iosebashvili; Editing by Megan Davies, Richard Chang and Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

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Google Wants to Work With the Pentagon Again, Despite Employee Concerns

Three years after an employee revolt forced Google to abandon work on a Pentagon program that used artificial intelligence, the company is aggressively pursuing a major contract to provide its technology to the military.

The company’s plan to land the potentially lucrative contract, known as the Joint Warfighting Cloud Capability, could raise a furor among its outspoken work force and test the resolve of management to resist employee demands.

In 2018, thousands of Google employees signed a letter protesting the company’s involvement in Project Maven, a military program that uses artificial intelligence to interpret video images and could be used to refine the targeting of drone strikes. Google management caved and agreed to not renew the contract once it expired.

The outcry led Google to create guidelines for the ethical use of artificial intelligence, which prohibit the use of its technology for weapons or surveillance, and hastened a shake-up of its cloud computing business. Now, as Google positions cloud computing as a key part of its future, the bid for the new Pentagon contract could test the boundaries of those A.I. principles, which have set it apart from other tech giants that routinely seek military and intelligence work.

contract with Microsoft that was canceled this summer amid a lengthy legal battle with Amazon. Google did not compete against Microsoft for that contract after the uproar over Project Maven.

The Pentagon’s restart of its cloud computing project has given Google a chance to jump back into the bidding, and the company has raced to prepare a proposal to present to Defense officials, according to four people familiar with the matter who were not authorized to speak publicly. In September, Google’s cloud unit made it a priority, declaring an emergency “Code Yellow,” an internal designation of importance that allowed the company to pull engineers off other assignments and focus them on the military project, two of those people said.

On Tuesday, the Google cloud unit’s chief executive, Thomas Kurian, met with Charles Q. Brown, Jr., the chief of staff of the Air Force, and other top Pentagon officials to make the case for his company, two people said.

Google, in a written statement, said it is “firmly committed to serving our public sector customers” including the Defense Department, and that it “will evaluate any future bid opportunities accordingly.”

The contract replaces the now-scrapped Joint Enterprise Defense Infrastructure, or JEDI, the Pentagon cloud computing contract that was estimated to be worth $10 billion over 10 years. The exact size of the new contract is unknown, although it is half the duration and will be awarded to more than one company, not to a single provider like JEDI.

Project Maven in 2017 and prepared to bid for JEDI. Many Google employees believed Project Maven represented a potentially lethal use of artificial intelligence, and more than 4,000 workers signed a letter demanding that Google withdraw from the project.

Soon after, Google announced a set of ethical principles that would govern its use of artificial intelligence. Google would not allow its A.I. to be used for weapons or surveillance, said Sundar Pichai, its chief executive, but would continue to accept military contracts for cybersecurity and search-and-rescue.

weapons or those that direct injury.”

Lucy Suchman, a professor of anthropology of science and technology at Lancaster University whose research focuses on the use of technology in war, said that with so much money at stake, it is no surprise Google might waver on its commitment.

“It demonstrates the fragility of Google’s commitment to staying outside the major merger that’s happening between the D.O.D. and Silicon Valley,” Ms. Suchman said.

Google’s efforts come as its employees are already pushing the company to cancel a cloud computing contract with the Israeli military, called Project Nimbus, that provides Google’s services to government entities throughout Israel. In an open letter published last month by The Guardian, Google employees called on their employer to cancel the contract.

The Defense Department’s effort to transition to cloud technology has been mired in legal battles. The military operates on outdated computer systems and has spent billions of dollars on modernization. It turned to U.S. internet giants in the hope that the companies could quickly and securely move the Defense Department to the cloud.

awarded the JEDI contract to Microsoft. Amazon sued to block the contract, claiming that Microsoft did not have the technical capabilities to fulfill the military’s needs and that former President Donald J. Trump had improperly influenced the decision because of animosity toward Jeff Bezos, Amazon’s executive chairman and the owner of The Washington Post.

In July, the Defense Department announced that it could no longer wait for the legal fight with Amazon to resolve. It scrapped the JEDI contract and said it would be replaced with the Joint Warfighting Cloud Capability.

The Pentagon also noted that Amazon and Microsoft were the only companies that likely had the technology to meet its needs, but said it would conduct market research before ruling out other competitors. The Defense Department said it planned to reach out to Google, Oracle and IBM.

But Google executives believe they have the capability to compete for the new contract, and the company expects the Defense Department to tell it whether it will qualify to make a bid in the coming weeks, two people familiar with the matter said.

The Defense Department has previously said it hopes to award a contract by April.

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Companies Begin to Mandate Covid Vaccines for Employees

Some of the nation’s largest employers, for months reluctant to wade into the fraught issue of whether Covid-19 vaccinations should be mandatory for workers, have in recent days been compelled to act as infections have surged again.

On Tuesday, Tyson Foods told its 120,000 workers in offices, slaughterhouses and poultry plants across the country that they would need to be vaccinated by Nov. 1 as a “condition of employment.” And Microsoft, which employs roughly 100,000 people in the United States, said it would require proof of vaccination for all employees, vendors and guests to gain access to its offices.

Last week, Google said it would require employees who returned to the company’s offices to be vaccinated, while Disney announced a mandate for all salaried and nonunion hourly workers who work on site.

Other companies, including Walmart, the largest private employer in the United States, and Lyft and Uber, have taken a less forceful approach, mandating vaccines for white-collar workers but not for millions of frontline workers. Those moves essentially set up a divide between the employees who work in offices and employees who deal directly with the public and, collectively, have been more reluctant to get the shots.

different set of reasons that are not primarily political. They say many of their members are worried about potential health side effects or bristle at the idea of an employer’s interfering in what they regard as a personal health decision.

Marc Perrone, the president of the United Food and Commercial Workers union, representing 1.3 million employees in grocery chains such as Kroger and at large meatpacking plants, said he would not support employer mandates until the Food and Drug Administration gave full approval to the vaccine, which is being administered on an emergency basis.

“You can’t just say, ‘Accept the mandate or hit the door,’” Mr. Perrone said in an interview on Monday.

After Tyson announced its vaccine mandate on Tuesday, Mr. Perrone issued a statement that the union “will be meeting with Tyson in the coming weeks to discuss this vaccine mandate and to ensure that the rights of these workers are protected and this policy is fairly implemented.”

several meat plants became virus hot spots. Now, it is requiring its leadership team to be vaccinated by Sept. 24 and the rest of its office workers by Oct. 1. Frontline employees have until Nov. 1 to be fully inoculated, extra time the company is providing because there are “significantly more frontline team members than office workers who still need to be vaccinated,” a Tyson spokesman said.

Throughout the pandemic, companies have treaded carefully in carrying out public health measures while trying to avoid harm to their businesses.

Last year, when major retailers began requiring customers to wear masks, they quietly told their employees not to enforce the rule if a customer was adamant about not wearing one.

Companies like Walmart have tried a similarly tentative approach with vaccine requirements.

Walmart announced last week that it was requiring the roughly 17,000 workers in its Arkansas headquarters to be vaccinated but not those in stores and distribution centers, who make up the bulk of its 1.6 million U.S. employees.

In a statement, the retailer said the limited mandate would send a message to all workers that they should get vaccinated.

“We’re asking our leaders, which already have a higher vaccination rate, to make their example clear,” the company said. “We’re hoping that will influence even more of our frontline associates to become vaccinated.”

Lyft told their corporate employees last week that they would need to show proof they had been inoculated before returning to company offices.

Requiring vaccinations “is the most effective way to create a safe environment and give our team members peace of mind as we return to the office,” said Ashley Adams, a spokeswoman for Lyft.

But those mandates did not extend to the workers the companies contract with to drive millions of customers to and from their destinations. The drivers are being encouraged to be vaccinated, but neither Lyft or Uber has plans to require them.

Public health experts warn that limited mandates may reinforce the gaping divide between the nation’s high- and low-wage workers without furthering the public health goal of substantially increasing vaccination rates.

They also say it’s naïve to think that workers who resisted vaccines for ideological reasons would suddenly change their mind after seeing a company’s higher-paid executives receive the shots.

“Ultimately we want to ensure that they really have the broadest reach,” Dr. Kirsten Bibbins-Domingo, the vice dean for population health and health equity at the University of California, San Francisco, said of company directives. “Failing to do that, I think, will only cause others to be more suspicious of these types of mandates.”

Legally, companies are likely to be on solid ground if they mandate vaccines. Last year, the Equal Employment Opportunity Commission said employers could require immunization, though companies that do could still face lawsuits.

George W. Ingham, a partner at the law firm Hogan Lovells, said companies with mandates would potentially have to make difficult decisions.

“They are going to have to fire high performers and low performers who refuse vaccines,” he said. “They have to be consistent.” Reasons an employee could be exempted include religious beliefs or a disability, though the process of sorting those out on an individual basis promises to be an arduous one.

Companies may also have to contend with pushback from state governments. Ten states have passed legislation limiting the ability to require vaccines for students, employees or the public, according to the National Conference of State Legislatures.

Disney is among the few big companies pursuing a broad vaccine mandate for their work forces, even in the face of pushback from some employees.

In addition to mandating vaccines for nonunion workers who are on-site, Disney said all new hires — union and nonunion — would be required to be fully vaccinated before starting their jobs. Nonunion hourly workers include theme park guest-relations staff, in-park photographers, executive assistants and some seasonal theme park employees.

It was the furthest that Disney could go without a sign-off from the dozen unions that represent the bulk of its employees. Walt Disney World in Florida, for instance, has more than 65,000 workers; roughly 38,000 are union members.

Disney is now seeking union approval for the mandate both in Florida and in California, where tens of thousands of workers at the Disneyland Resort in Anaheim are unionized. Most of the leaders of Disney’s unions appear to be in favor of a mandate — as long as accommodations can be worked out for those refusing the vaccine for medical, religious or other acceptable reasons.

“Vaccinations are safe and effective and the best line of defense to protect workers, frontline or otherwise,” Eric Clinton, the president of UNITE HERE Local 362, which represents roughly 8,000 attraction workers and custodians at Disney World, said in a phone interview.

Mr. Clinton declined to comment on any pushback from his membership, but another union leader at Disney World, speaking on the condition of anonymity so he could speak candidly, said “a fair number” of his members were up in arms over Disney-mandated vaccinations, citing personal choice and fear of the vaccine.

“The company has probably done a calculation and decided that some people will unfortunately quit rather than protect themselves, and so be it,” the person said.

Lananh Nguyen contributed reporting.

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Bill Gates Can Remove Melinda French Gates From Foundation in Two Years

Bill Gates and Melinda French Gates have at times referred to the foundation they established together as their “fourth child.” If over the next two years they can’t find a way to work together following their planned divorce, Mr. Gates will get full custody.

That was one of the most important takeaways from a series of announcements about the future of the world’s largest charitable foundation made on Wednesday by its chief executive, Mark Suzman, overshadowing an injection of $15 billion in resources that will be added to the $50 billion previously amassed in its endowment over two decades.

“They have agreed that if after two years either one of them decides that they cannot continue to work together, Melinda will resign as co-chair and trustee,” Mr. Suzman said in a message on Wednesday to employees of the Bill and Melinda Gates Foundation. If that happened, he added, Ms. French Gates “would receive personal resources from Bill for her philanthropic work” separate from the foundation’s endowment.

The money at stake underscores the strange mix of public significance — in global health, poverty reduction and gender equality, among other important areas — and private affairs that attends any move made by the first couple of philanthropy, even after the announcement of their split. The foundation plans to add trustees outside their close circle, a step toward better governance that philanthropy experts had urged for years.

announced their divorce in May, Mr. Gates and Ms. French Gates noted the importance of the work done by the foundation they had built and said they “continue to share a belief in that mission.” In the announcement on Wednesday, each echoed those sentiments.

“These new resources and the evolution of the foundation’s governance will sustain this ambitious mission and vital work for years to come,” Mr. Gates said in a statement.

Ms. French Gates emphasized the importance of expanding the board. “These governance changes bring more diverse perspectives and experience to the foundation’s leadership,” she said in a statement. “I believe deeply in the foundation’s mission and remain fully committed as co-chair to its work.”

In the immediate aftermath of the divorce announcement, it was unclear how they would share control of the institution. Wednesday’s announcement indicated that if they cannot work out their differences, it is the Microsoft co-founder Mr. Gates who will maintain control, as he essentially buys his ex-wife out of the foundation.

Mr. Suzman said he did not know how much Ms. French Gates would get if it came to that. But any payout would most likely be significant.

Ms. French Gates’s name since the divorce was announced. She pursues her own priorities through a separate organization known as Pivotal Ventures. Mr. Gates also has his own group, Gates Ventures.

Less than a year ago, the Gates Foundation was run by Mr. Gates, Ms. French Gates, his father and one of his closest friends, the billionaire investor Warren E. Buffett. It was a remarkable concentration of power for one of the most influential institutions in the world, a $50 billion private foundation that works in every corner of the globe.

The restructuring announced Wednesday could begin the process of making the Gates Foundation more responsive to the people its mission aims to help and loosen the grip on the reins that its founders have held for more than two decades.

“We’re trying to do this in a very careful and deliberate manner, thinking for the long term,” Mr. Suzman said in an interview.

In a larger sense, the planned changes at the Gates Foundation reflect the tensions within philanthropy as a whole — between the wishes of the wealthy, powerful donors who provide the millions and even billions of dollars and the nonprofits using those funds to feed, shelter and treat those in need.

“The problems with the governance predated the separation and divorce just as those problems are an issue with all family foundations,” said Rob Reich, co-director of the Center on Philanthropy and Civil Society at Stanford.

Two former senior Gates Foundation officials called for an expanded board in an article a few weeks after the divorce announcement, including “a chair who is not the foundation’s C.E.O., founder or a founder’s family member.”

“Given that founders receive a substantial tax benefit for their donations, the assets the board oversees should be regarded as belonging to the public, with the board being held accountable to a fiduciary standard of care,” wrote Alex Friedman, the former chief financial officer, and Julie Sunderland, the former director of the foundation’s Strategic Investment Fund.

The Gates Foundation is trying to fight Covid-19, eradicate polio and reshape the struggle for gender equality, even as its two co-chairs extricate themselves from a 27-year marriage. The foundation has more than 1,700 employees and makes grants in countries around the world. Since 2000, the foundation has made grants totaling more than $55 billion, much of it from Mr. Gates and Ms. French Gates, but tens of billions also came from Mr. Buffett, the chief executive of Berkshire Hathaway.

Yet, in significant ways, the future of such an influential institution, one that touches the lives of millions of people through its grant recipients, is being decided in a separation agreement between two billionaires.

Mr. Buffett’s announcement last month that he was stepping down as the third trustee of the foundation made clear that the divorce had set significant changes in motion. Mr. Suzman promised at the time that governance changes would be announced this month, with many observers anticipating that a new slate of independent trustees would be revealed.

Details on what that might look like remained few on Wednesday, with neither names of candidates for the board of trustees nor even the ultimate number of new trustees released. Mr. Gates and Ms. French Gates will approve changes to the foundation’s governance structures by the end of the year and the new trustees will be announced in January, according to the statement.

At the center of the impending changes stands Mr. Suzman, a 14-year veteran of the Gates Foundation, who was named chief executive just as the spread of Covid-19 in the United States was becoming apparent. Born in South Africa, the Harvard- and Oxford-educated Mr. Suzman served as a correspondent for The Financial Times in London, South Africa and Washington before going to work at the United Nations. He joined the foundation in 2007 to work on global development policy before claiming the top post last year.

Mr. Suzman said in an interview that he had heard that Mr. Gates and Ms. French Gates would be divorcing only about 24 hours before the news was announced. He said they had started talking about possible governance changes “almost right away” after that.

He said he was in regular contact with both. “I’m having three-way conversations with them,” Mr. Suzman said. “We’re having regular three-way email exchanges and other discussions.”

He noted that the hands-on leadership of Mr. Gates and Ms. French Gates meant the changes will take some time to enact.

“The degree and depth of engagement of our co-chairs and trustees goes significantly beyond what a traditional board does and how it does it,” he said in the interview. “So we’ll need some time to think through how we balance that with the people we bring on board.”

Mr. Suzman will work with Connie Collingsworth, the foundation’s chief operating officer and chief legal officer, to handle the process. The final decisions on both the new trustees and the changes to the foundation’s governance documents will be made by Mr. Gates and Ms. French Gates. It is a reminder that, at least for now, power remains concentrated in the former couple.

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