Supreme Court, Credit Suisse ouster reveal COVID-19 mandate chaos: Morning Brief

Top news and what to watch in the markets on Tuesday, January 18, 2021. Read More...

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Tuesday, January 18, 2021

COVID-inspired chaos is the order of the day

Over the weekend, Credit Suisse forced out its chairman, Antonio Horta-Osorio, after less than a year on the job.

Unlike the usual shenanigans associated with defenestrating a top executive (i.e. fraud, misuse of power or sexual impropriety), however, the latest imbroglio is one tailor made for the COVID-19 era. It is also emblematic of how fraught and divisive COVID-19 rules have become for workers and corporate leaders.

A Credit Suisse probe found that the Portuguese native used a private aircraft contracted by the bank to combine personal and work trips, which discomfited some board members, according to a Wall Street Journal report. As far as allegations of corporate malfeasance go, that angle seems fairly typical.

But this is where the story gets messy: the inquiry found that Horta-Osorio had breached COVID-19 quarantine rules in the U.K. and Switzerland since he began his tenure at the bank, raising questions about his judgment and credibility at a time when the bank is struggling to overcome several operational scandals.

The ouster underscored how, two full years into the pandemic, businesses and citizens are still struggling to navigate a patchwork of pandemic-era protocols ostensibly meant to prevent infections.

Credit Suisse’s latest woes are a noteworthy example of how increasingly chaotic pandemic policy is now ensnaring the C-suite. And as the Omicron wave crests, federal guidance and vaccine mandates partially blocked by last week’s Supreme Court decision offer little hope for clarity.

And increasingly, conventional COVID-19 orthodoxy is being exposed as contradictory, arbitrary, or shaped by political or business expediency (take the CDC’s controversial guidance on quarantines and cruise ships, the latter covered recently by Yahoo Finance’s Dani Romero).

Pandemic-era requirements have proven theatrical at best and ineffectual at worst — and have the ancillary effect of exacerbating tight labor conditions. Businesses that were hoping for direction from the high court are now forced to reap the whirlwind of the pandemonium that’s come to define COVID-19 protocols.

“Over a third of companies were waiting for [federal government] guidance before making any definitive policy decisions on vaccines,” Andrew Challenger, senior vice president of global outplacement and business and executive coaching firm Challenger, Gray & Christmas, said last week.

“Now that large companies are not required to get their workers vaccinated or tested, employers will have to grapple with whether and how to impose their own rules, outbreaks that lead to absences, and pushback from workers who have COVID concerns,” he added.

Challenger Gray data broadly reflected national divisions and confusion over how to navigate the virus-mottled landscape.

Over 34% of employers surveyed are awaiting federal guidance on vaccinations, while 25% are requiring inoculation or regular testing — like at JPMorgan Chase (JPM), where CEO Jamie Dimon is taking a hard line against unvaccinated employees by threatening to fire them. Some 40% of businesses, however, are not imposing mandates, Challenger Gray found.

Last week, U.S. Labor Secretary Marty Walsh told Yahoo Finance in an interview that most companies “have stepped up… But even with or without what the [emergency temporary standard] says, it’s still going to be the responsibility to work with employers to make sure that workplaces are safe for their workers.”

Yet as The New York Times pointed out recently, the gray area is likely to be exploited by big companies like Walmart (WMT) and Amazon (AMZN), which have yet to make declarative requirements for staff. In the beleaguered retail sector battered by staffing shortages and weak foot traffic, Macy’s (M) told The Times that the company was “evaluating” its vaccination policy in light of the Supreme Court decision.

“Employers are rightly concerned about an exodus of talent, as workers flee to other opportunities or leave positions that do not meet their needs,” Challenger said. “While many are concerned vaccine mandates create yet another hurdle to attracting and retaining workers, others see it as a selling point.”

By Javier E. David, editor at Yahoo Finance. Follow him at @Teflongeek

What to watch today

Economy

8:30 a.m. ET: Empire Manufacturing, January (25 expected, 31.9 prior)
10:00 a.m. ET: NAHB Housing Market Index, January (84 expected, 84 prior)
4:00 p.m. ET: Net Long-Term TIC Flows, November ($7.1 billion prior)
4:00 p.m. ET: Total Net TIC Flows, November ($143 billion prior)

Earnings

Pre-market

5:45 a.m. ET: Truist Financial (TFC) is expected to report adjusted earnings of $1.21 per share on revenue of $5.583 billion
6:30 a.m. ET: Bank of New York Mellon (BK) is expected to report adjusted earnings of $1.01 per share on revenue of $3.979 billion
6:45 a.m. ET: PNC Bank (PNC) is expected to report adjusted earnings of $3.50 per share on revenue of $5.151 billion
7:30 a.m. ET: Goldman Sachs (GS) is expected to report adjusted earnings of $11.65 per share on revenue of $12.010 billion

Post-market

J.B. Hunt Transport (JBHT) is expected to report adjusted earnings of $2.02 per share on revenue of $3.289 billion
4:00 p.m. ET: Interactive Brokers (IBKR) is expected to report adjusted earnings of 83 cents per share on revenue of $669.8 million

Politics

President Biden is in Washington and will receive his weekly economic briefing at 11:15 a.m. ET behind closed doors.
The Senate meets at 12:00 p.m. ET to begin the multi-day process of considering voting rights legislation. The effort is set to fall well short of the 60 votes needed to advance.