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* * * * * * MONDAY, DECEMBER 14, 2020 ~ VOL. CCLXXVI NO. 140 WSJ.com HHHH $4 .00

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Tight Christmas Tree Supply
Means 8-Footer Can Fetch $2,000

i i i

Global shortage drives up prices from

U.S. to Hong Kong; ‘Charlie Brown tree’

This year, people are going
all out for Christmas. There’s
just one problem: finding a
Christmas tree.

On the streets of Hong
Kong, 8-foot Noble Firs are
selling for as much as $2,167
apiece, while in California
and New York shoppers
are paying more for
what they say are infe-
rior trees. And in the
U.K., retailers are
scrambling for more
trees.

The pandemic
means millions are

unable to travel over the holi-
day season, and are celebrat-
ing at home instead. That’s
produced a spike in demand
for trees.

Carla St. Germain, a 55-
year-old business owner in
Fargo, N.D., doesn’t normally
buy her tree until mid-Decem-
ber, but this year unseason-
ably warm weather made
her go a week earlier. It
was a good thing she did.

“When I pulled in on
the side street on the
side where I normally
get my tree, it was
completely empty,”
PleaseturntopageA6

BY LUCY CRAY

Green gold

service is suspected of being
behind the hacks of the U.S.
government networks—in
which some internal communi-
cations are believed to have
been stolen—and the operation
is related to a breach disclosed
last week of U.S.-based cyber-
security firm FireEye, one of
the people familiar with the
matter said.

The hacking operation ex-
posed as many as hundreds of
thousands of government and

ulators.
“They sure pushed it hard

and fast,” said Ms. Wood, who
wouldn’t rule out eventually
getting the shot. “I’m hoping
for the best for those who take
it.”

The Food and Drug Adminis-
tration granted an emergency
authorization on Friday, allow-
ing the companies to begin dis-
tributing the vaccine. Initial
doses will mostly go to the na-
tion’s health-care workers and
residents of long-term-care fa-
cilities—roughly 24 million peo-

PleaseturntopageA11

BY JARED S. HOPKINS
AND ARIAN CAMPO-FLORES

One Hurdle on Shot:
Convincing Skeptics

Trucks filled with Covid-19
vaccine vials pulled out of
Pfizer Inc.’s Kalamazoo, Mich.,
production plant on Sunday
morning, part of one of the
largest mass mobilizations
since the country’s factories
were repurposed to help fight
World War II.

The effort to vaccinate the
nation relies on chemists, fac-
tory workers, truck drivers, pi-
lots, data scientists, bureau-
crats, pharmacists and health-
care workers. It requires
ultracold freezers, dry ice,
needles, masks and swabs con-
verging simultaneously at
thousands of locations across

By Sarah Krouse,
Jared S. Hopkins and
AnnaWilde Mathews

the country.
To work, every one of the

many and complicated links of
the chain has to hold.

In the trucks that headed to
airports and distribution hubs,
specially designed containers
equipped with sensors moni-
tored location, temperature,
light exposure and unusual
jolting. Inside, dry ice sand-
wiched thousands of doses of
BNT162b2, the scientific name
of the Covid-19 vaccine.

“The biggest concern that I
have is not that we don’t
know what to do. We have
contingency plans in place for
just about everything,” said
Shawn Seamans, a senior ex-
ecutive in charge of the Covid
vaccine distribution program
at McKesson Corp., which is

PleaseturntopageA10

Pfizer Begins
Mass Shipping
Of Vaccines

Now that the first Covid-19
vaccine in the U.S. has been
cleared by federal regulators,
health authorities and re-
searchers face the daunting
task of persuading millions of
people such as Kathy Wood to
take the shots.

Ms. Wood, a 72-year-old res-
ident of Ogallala, Neb., is un-
easy about getting the vaccine
produced by Pfizer Inc. and
Germany’s BioNTech SE, in part
because of claims she said she
read online that vaccines could
alter a person’s DNA—a conten-
tion scientists say isn’t true. Al-
though her husband is willing
to take the shot, she is anxious
about its rapid development
and swift authorization by reg-

BRUSSELS—U.K. Prime Min-
ister Boris Johnson and top Eu-
ropean Union officials decided
not to pull the plug on Brexit
negotiations, with officials sig-
naling last-minute progress on
some of the issues that have
bedeviled the talks.

Officials on both sides on
Sunday said they were narrow-
ing differences over the ques-
tion that lies at the center of
their dispute: How much will
the U.K. be tied in the future to
EU norms as the price for a
tariff-free trade deal with its
largest trading partner? On
that question hangs trade
worth close to $900 billion a
year. The EU is seeking to make
sure it doesn’t have a major
competitor on its doorstep that
can slash regulation and have
special access to its market.

With time running short—a
deal has to be in place by Jan. 1
to prevent huge disruption to
trade and security coopera-
tion—officials said negotiators
appeared to be finding some
common ground, though they
cautioned much work needed

PleaseturntopageA12

BY LAURENCE NORMAN
AND STEPHEN FIDLER

U.K., EU
Indicate
Progress
On Talks

Affirm Holdings Inc. moved
its listing to January at the
earliest, The Wall Street Jour-
nal reported.

What seems to be vexing
IPO market participants is the
eye-popping recent first-day
trading gains of DoorDash,
Airbnb and others. While such
moves are great news for ex-
isting investors and those
lucky enough to get IPO allo-
cations, they also mean the
companies in question have
left big money on the table.

Roblox and Affirm are
studying potential moves that
would lessen any initial pop in
their shares, including selling
more stock and changing the
mix of shares to be sold by

PleaseturntopageA4

A frenzy in the market for
newly listed tech stocks hit an
unexpected speed bump over
the weekend.

After DoorDash Inc.’s stock
shot up 86% in its trading de-
but Wednesday and Airbnb
Inc.’s shares more than dou-
bled a day later, two compa-
nies that were set to join
them in the public markets
this month pressed pause on
their offerings.

Videogame company Rob-
lox Corp. postponed its initial
public offering until early
next year as it tries to make
sense of the market, while fi-
nancial-technology company

BY ELIOT BROWN AND
MAUREEN ARRELL

Stunning IPO Boom
Spurs Some to Pause

Shipments of Pfizer’s Covid-19 vaccine were loaded onto a UPS plane Sunday, top, in Lan-
sing, Mich. Bottom, boxes of the vaccine were prepared for transport at the Pfizer manu-
facturing plant in Portage, Mich. The vaccine is packed in specially designed containers
equipped with sensors to monitor location, temperature, light exposure and unusual jolting.

� Bipartisan group makes new
push for aid package............ A3

� States face vaccine demands
on limited resources.............. A8

� Caution chills Europe’s
Christmas spirit...................... A12

corporate networks to poten-
tial risk and alarmed national-
security officials in the Trump
administration as well as exec-
utives at FireEye, some of
whom view it as far more sig-
nificant than a routine case of
foreign cyber espionage, peo-
ple familiar with the matter
said.

While those familiar with
the hack couldn’t specify its
scope or the resulting damage,
several described it as among

the most potentially worri-
some cyberattacks in years, as
it may have allowed Russia to
access sensitive information
from government agencies, de-
fense contractors and other in-
dustries. One person familiar
with the matter said the cam-
paign was a “10” on a scale of
one to 10, in terms of its likely
severity and national-security
implications.

The Commerce Department
PleaseturntopageA6

WASHINGTON—Multiple
federal government agencies,
including the Treasury and
Commerce departments, have
had some of their computer
systems breached as part of a
global cyber espionage cam-
paign believed to be the work
of the Russian government, ac-
cording to officials and people
familiar with the matter.

Russia’s foreign intelligence

BY DUSTIN VOLZ

U.S. Agencies Hacked, Russia Blamed

Meet our new, easy-to-use
trading platform: thinkorswim®Web.

ADVERTISEMENT

Learn more on page R18.

CONTENTS
Arts in Review... A15
Business News....... B3
Crossword.............. A16
Heard on Street... B10
Markets............... B9-10
Opinion.............. A17-19

Outlook....................... A2
Personal Journal A13-14
Sports........................ A16
Technology............... B4
U.S. News........... A2-11
Weather................... A16
World News... A12,20

s 2020 Dow Jones & Company, Inc.
All Rights Reserved

>

What’s
News

� Pfizer began shipping
vials of Covid-19 vaccine,
part of one of the largest
mass mobilizations since
American factories were
repurposed to help fight
World War II. A1, A10-A11
� Health authorities and
researchers face the daunt-
ing task of persuading mil-
lions of people skeptical of
vaccines to take the shots. A1
�Multiple U.S. government
agencies have had some of
their computer systems
breached as part of a cyber
espionage campaign be-
lieved to be the work of the
Russian government. A1
� The U.K.’s Johnson and
top EU officials decided not to
pull the plug on Brexit negoti-
ations, with officials signaling
progress on some issues that
have bedeviled the talks. A1
� A group of lawmakers
made a last-minute push to
craft a bipartisan coronavi-
rus aid proposal, as leader-
ship in both parties indi-
cated they might drop the
most contentious issues
and pass a narrower bill. A3
� Iran’s execution of a dissi-
dent journalist has strained
Tehran’s relationship with
Europe just when expecta-
tions were being raised of a
diplomatic opening between
Iran and the West. A12
� Died: John le Carré, 89,
master spy writer. A14

Valuations of recentIPOs are at their high-
est levels since the dot-com
bubble, relative to the com-
panies’ revenue, sparking
concerns among investors
about the level of froth. A1
� AstraZeneca agreed to
buy Boston-based Alexion
for $39 billion, a move
that would bolster the
British drug giant’s foot-
print in rare diseases. B1
�A small but prominent ros-
ter of tech firms and inves-
tors is leaving the San Fran-
cisco Bay area as the hub has
strained to absorb the torrid
growth of the tech sector. B1
� Elliott has built a signifi-
cant stake in Public Storage
and privately nominated
six directors to the self-
storage giant’s board. B3
� Indian workers broke
windows and overturned
cars at the office of a fac-
tory that makes iPhones.
Labor leaders said the
workers were upset about
wages and hours. A20
� TV networks feeling the
strains of disappointing
NFL ratings are being
forced to restructure deals
with advertisers to make up
for smaller audiences. B2

Business&Finance

World-Wide

JOURNAL REPORT
C-Suite Strategies:

2020’s Best-Managed
Companies. R1-18

Page 2

A2 | Monday, December 14, 2020 THEWALL STREET JOURNAL.

U.S. NEWS

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how officials weigh the bal-
ance of risks: What are the
worse-than-expected out-
comes? What are the better-
than-expected ones? Which
are more likely to material-
ize? And how easy or difficult
would it be for policy makers
to respond to either?

Since the pandemic hit,
the dangers of worse-than-
expected outcomes have
loomed very large—for exam-
ple, a rerun of the financial
crisis that gripped Wall
Street in March. Alternately,
the virus could so badly crip-
ple the operation of many lei-
sure, hospitality and enter-
tainment businesses that it
delivers a one-two punch to
the banking system from
business bankruptcies and
defaults on commercial-prop-
erty debt. Vaccines increase
the likelihood that worst-case
scenarios may be avoided.

Pfizer said on Nov. 9 that
its vaccine had proven more
than 90% effective in protect-
ing people from Covid-19, a
much-better-than-anticipated
result. The announcement
was made days after Fed offi-

public-health conditions.
Elevated personal saving

rates, an aggressive response
from fiscal and monetary pol-
icy, and the noneconomic
forces that drove the current
downturn suggest there is a
“tightly coiled spring of pent-
up demand” that could yield
“a sharp rebound as broad
vaccine distribution is
achieved,” said Kristina
Hooper, chief global market
strategist at Invesco.

“I would expect this recov-
ery to be far more robust and
less anemic than what we
saw in the global financial
crisis,” said Ms. Hooper.

The Fed’s economists al-
ready made important
changes to their outlook at
last month’s meeting. They
judged the savings cushion
many households had
amassed would be enough to
maintain overall spending
even though political grid-
lock prompted them to erase
previously anticipated fed-
eral-aid spending from their
forecast.

The Fed slashed its short-
term benchmark interest rate

THE OUTLOOK | By Nick Timiraos

Fed Has New Reason for Optimism
Federal Re-

serve officials
have some-
thing new to
talk about at
their policy

meeting this week: good
news.

This might sound a little
absurd. Covid-19 infections,
hospitalizations and deaths
are hitting records. States
and localities are imposing
new restrictions on dining
and other activities. Claims
for unemployment benefits
are rising, and the jobless
rate fell in November for the
wrong reasons—more work-
ers stopped seeking jobs.

But last week’s emergency
authorization by the U.S.
Food and Drug Administra-
tion of a coronavirus vaccine
developed by Pfizer Inc. and
BioNTech SE, plus a second
candidate from Moderna Inc.
also under review, is a poten-
tial economic game-changer
because it could reduce un-
certainty for households,
businesses and policy makers.

“There is a bridge to some-
where now. You’re no longer
just putting fingers in a dike
that’s about to burst,” said
Diane Swonk, chief economist
at accounting firm Grant
Thornton. “We still have a lot
of wounds to dress. But now
you can see an end date, and
it’s likely to happen in 2021.”

F ed officials face an eco-nomic outlook with lit-tle precedent. Economic
growth is at risk of slowing
further in the next few
months and then revving up.
How to navigate these devel-
opments will be the focus of
the central bankers’ two-day
meeting that concludes
Wednesday.

Central-bank policy deci-
sions are guided not just by a
baseline forecast but also by

to near zero in March and in
September officials provided
more assurance they will be
in no hurry to raise rates.
Since June, the Fed also has
been buying $120 billion a
month in Treasury and mort-
gage debt to hold down long-
term yields.

S ome analysts think Fedofficials will take a stepthis week to provide
more stimulus by increasing
the share of long-term Trea-
sury securities they purchase.

No Fed officials have pub-
licly advocated doing so at
this meeting. Instead, in re-
cent remarks, they have fo-
cused on the issue of clarify-
ing how long their bond
purchases could continue,
just as they provided guid-
ance on their rate plans in
September. “We need to have
an approach that can adapt
or change to the economic
environment,” said New York
Fed President John Williams
in a Nov. 24 interview.

Several officials have said
they don’t think they need
to change the asset-buying
program now to deliver
more economic stimulus.
Vaccines could be an impor-
tant reason why.

Serious hardship still looms
for millions of households,
and vaccine delivery is fraught
with logistical burdens. Fed
officials still have their eyes
firmly on dangers of long-
term scarring to the economy
from extended jobless spells
and business failures.

But increased confidence
that there is light at the end
of the tunnel—and that it
isn’t an oncoming train—
could improve how hiring and
purchasing managers and
bank credit officers look
ahead to 2021.

For the Fed, that counts as
good news.

Source: Labor Department via St. Louis Fed (payrolls); Diane Swonk, Grant Thornton LLP (GDP)

*Seasonally adjusted †GDP figures are seasonally adjusted annual rates adjusted for inflation.
‡Base case assumes herd immunity achieved in Q3 2021. **Delayed scenario assumes immunity achieved in Q4 2021.

RECESSION

2018 ’19 ’20

130

135

140

145

150

155million

Total nonfarmpayrolls*

Employment rebounded strongly this summer, but gains have slowed recently. Thewidespread
delivery of an effective coronavirus vaccine by the third quarter of 2021 could return U.S. gross
domestic product to its pre-pandemic level by the end of next year, according to one forecast.

2020 ’21 ’22 ’23

17

18

19

20

$21 trillion

Pre-pandemic level

2009-19
growth
trend

Actual GDP

Base-case
scenario‡

Delayed
vaccination
scenario**

U.S. gross domestic product†

ECONOMIC
CALENDAR

TUESDAY: China’s growth mo-
mentum likely remained strong in
November, with economists ex-
pecting gauges of domestic con-
sumption and investment to gain
steam. Retail sales, fixed-asset
investment and industrial output
figures will all shed more light on
the pace of the country’s rebound.

U.S. industrial production is
expected to increase in November
on the back of strong demand for
autos. Overall output, however,
will likely remain below pre-pan-
demic levels, underscoring the
economy’s incomplete rebound
from this spring’s downturn.

WEDNESDAY: Surveys of pur-
chasing managers are expected
to indicate the eurozone’s econ-
omy contracted in the early weeks
of December as high rates of cor-
onavirus infection curtailed activ-
ity in the services sectors, while
pointing to a continued expansion
in the U.S., albeit at a slower pace
than in recent months.

U.S. retail sales could rise for
the seventh consecutive month in
November. Demand for goods has
been strong through the pandemic
but new Covid-19 restrictions
might hold back restaurant sales,
the lone measure of service-sector
activity in the monthly report.

The Federal Reserve releases
a policy statement and economic
projections, and Chairman Jerome
Powell holds a press conference.
Economists aren’t looking for ma-
jor policy moves, but Fed officials
are likely to unveil new guidance
about how long they expect to
continue their current asset-pur-
chase program.

THURSDAY: Jobless claims, a
proxy for layoffs, are expected to
ease slightly in the week ended
Dec. 12.

cials’ November meeting.
“The economy should

come bouncing back pretty
powerfully in the second half
of next year. The Fed should
be fairly confident about that.
That’s different,” said William
Dudley, former president of
the New York Fed.

“The risk characterization
has improved,” said Chicago

Fed President Charles Evans
on Dec. 4. “It is possible that
things are going to change in
a meaningful way earlier next
year than I was previously
expecting.”

The current downturn has
been like no other. Forecast-
ers at the Fed and on Wall
Street have been surprised by
the strength of the rebound
in the face of deteriorating

Vaccines increase
the likelihood that
worst-case scenarios
may be avoided.

NAVY

Search Ends for Sailor
Who Fell Overboard

The Navy called off search
and rescue efforts for a 20-year-
old sailor who reportedly fell
overboard last week from the
USS Theodore Roosevelt.

The Navy said it ended the
effort at sunset Saturday after
it searched more than 607
square nautical miles for more
than 55 hours off the coast of
Southern California. The Navy
has declared the man deceased.

The search started Thursday
morning after a lookout spotted
what appeared to be a person in
the water, a statement from the
San Diego-based Third Fleet
said. Three helicopters and a

boat were launched in response,
and one sailor was unaccounted
for during a command-wide
muster, the statement said.

—Associated Press

TEXAS

Former El Paso Mayor
Wins the Office Again

El Paso residents have elected
a new mayor, handing a defeat to
incumbent Mayor Dee Margo in
favor of his predecessor, Oscar
Leeser, in a runoff race.

Mr. Leeser, who was mayor
of the West Texas city on the
Mexican border from 2013
through 2017, won with 82% of
the vote, according to El Paso
County’s unofficial tally. He fin-
ished first among six mayoral

candidates in November, but
with less than 50%, forcing Sat-
urday’s runoff.

Mr. Leeser pledged Saturday
night to bring together the city
that has been battered in recent
years by overcrowded migrants
at the border, a mass shooting
at a Walmart and the economic
and health crises brought on by
the coronavirus.

Mayoral races in El Paso are
nonpartisan, but Mr. Margo, a
businessman and former state
legislator, identifies as a Republi-
can. Mr. Leeser, president of a
car dealership, is a Democrat.

Mr. Margo said in a conces-
sion speech that he believes no
mayor has had to deal with the
array of calamity he has faced in
the past two years.

—Associated Press

The first name of Jon Hall,
a principal at design firm
GGLO, was incorrectly given as
John in a Future of Everything
article on Friday about future
home designs.

Notice to readers
Wall Street Journal staff

members are working re-
motely during the pandemic.
For the foreseeable future,
please send reader comments
only by email or phone, using
the contacts below, not via
U.S. Mail.

CORRECTIONS�
AMPLIFICATIONS

Readers can alert The Wall Street
Journal to any errors in news articles
by emailing [email protected] or

by calling 888-410-2667.

U.S.WATCH

MASSACHUSETTS

Dedicated Bus Lane
Set for Tobin Bridge

The Tobin Bridge is getting a
dedicated bus lane to see if it
helps ease crowding and speed
up commutes, state transporta-
tion officials say.

The 1.1-mile southbound bus
lane on the bridge is expected to
open for use on Monday, accord-
ing to a statement from the
Massachusetts Bay Transporta-
tion Authority and the state
Transportation Department.

The pilot project will last a
year, with the bus lane’s perfor-
mance analyzed for travel time,
operations, crowding, ridership
and overall traffic safety.

—Associated Press

NEW YORK · 697 FIFTH AVENUE BETWEEN 54TH & 55TH STREET · 212 396 1735
LAS VEGAS · THE FORUM SHOPS AT CAESARS PALACE · 702 369 1735

COLLECTION

Women

Page 23

B2 | Monday, December 14, 2020 * * * * THEWALL STREET JOURNAL.

sify a portfolio that had be-
come heavily focused on cancer
drugs and into one of the phar-
maceutical industry’s most dy-
namic areas—the market for
therapies for rare diseases.

Rare-disease drugs are at-
tractive to drugmakers because
they don’t need large sales
forces and can charge high
prices that health insurers are
typically willing to pay because
they only have one or two mem-
bers requiring the treatment.

Other big drugmakers have
paid up to enter the rare-dis-
ease drugs market. Most re-
cently, in 2018, Takeda Pharma-
ceutical Co. agreed to buy Shire
for $62 billion. In 2017, Johnson
& Johnson agreed to buy Acte-
lion for $30 billion.

Still, Soliris’s patent protec-
tion is waning, and the drug
faces potential competition that
could undercut sales. In June,
Alexion reached a legal settle-
ment with Amgen Inc. to delay
its launch of a copycat drug un-

$1.4 billion.
The companies have been

talking for several months, said
AstraZeneca Chief Executive
Pascal Soriot. Dr. Soriot said
that the disruption should be
minimal for AstraZeneca’s work
rolling out a global Covid-19
vaccine, adding that for a deal
this attractive, “You do it when
the opportunity arises.”

He and Mr. Dunoyer told re-
porters on a call Saturday that
AstraZeneca and Alexion don’t
overlap a great deal geographi-
cally, and Alexion’s roughly
3,000 employees will be fairly
simple to integrate.

AstraZeneca expects to have
regulatory approvals by the
third quarter, possibly sooner,
by which time they will be well
into the vaccine rollout, the ex-
ecutives said. “Our belief is that
by Q3 the world won’t have re-
turned to total normalcy, but
close enough,” Dr. Soriot said.

By agreeing to buy Alexion,
AstraZeneca is aiming to diver-

INDEX TO BUSINESSES
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A - C
AbbVie.......................B10
Adobe..........................B5
Affirm Holdings..........A1
Airbnb..........................A1
Alexion Pharmaceuticals
B1,B10

Alphabet....B4,B10,R1,R5
Amazon.comB2,B10,
R1,R2,R5

Apple..............A20,R1,R5
Arconic ........................B3
Ashmore Group.....B1,B9
AstraZeneca.........B1,B10
athenahealth...............B3
AT&T............................B4
BioNTech ...............A1,A2
BlackRock....................B9
Box...............................B4
Carnival .......................B3
Cboe Global MarketsB10
Charles Schwab..........B9
Clorox ..........................R2
CoinDesk ...................B10
Colgate-Palmolive
B3,B10

CryptoCompare .........B10
CubeSmart ..................B3
CVS Health ...............A11

D - G
Darden Restaurants ...B1
Denny's........................B1
Deutsche Lufthansa.A10
DoorDash ....................A1
Eaton Vance................B9
Elliott Management...B3
Extra Space Storage...B3
Exxon Mobil ..............B10
Facebook
B1,B2,B4,B5,B10,R2,R4
,R5

FedEx.................A4, A10,

Ferrellgas Partners.....B9

Fidelity Investments..B9

Foxconn Technology .A20

G
General Electric.....R4,R5

General Motors...........A4

Goldman Sachs......A4,B9

H - J
Hewlett Packard
Enterprise.................B1

Huntington Bancshares
B3

IHS Markit ..................B5

Johnson & Johnson....B3

M
Macy's.........................B1

McKesson....................A1

Messari......................B10

Microsoft..........B2,R1,R5

Moderna......................A2

Molson Coors..............R5

N
Netflix .......................B10

News Corp...................B4

Nike.............................B1

Norwegian Cruise Line
Holdings....................B3

Nvidia..........................B5

O
Occidental Petroleum.R5

Oracle ..........................B1

Owens Corning ...........R5

P
Park Place Technologies
B5

Pfizer.....................A1,A2

Philip Morris

International......R4, R5
Pluralsight...................B3
Procter & Gamble
B3,R4,R5

Public Storage.............B3

R
Robinhood Financial ...B9
Roblox .........................A1
Royal Caribbean Group
B3

S
Salesforce.com......B4,B5
Samsung ElectronicsA20
Slack Technologies .....B5
Snowflake...................A4
Social Finance.............B9
Spirit Airlines.............B1
Stripe...........................B4

T
TCF Financial...............B3
Tesla.....................B1,B10
3M.............................B10

U
Unilever.......................B3
United Parcel Service
A10

U.S. Steel....................B1

V
Verizon Communications
R5

Vista Equity................B3

W
Walgreens Boots
Alliance...................A11

Walt Disney..............B10
Webull Financial.......B10
Wellington Management
.................................. B9

Wistron.....................A20

INDEX TO PEOPLE

BUSINESS & FINANCE

Macy’s shares are up 8.5% in this month.

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mation technology sector, by
contrast, is lagging behind this
month, while highflying mega-
cap stocks Amazon.com Inc.,
Microsoft Corp. and Facebook
Inc. have suffered losses. The
tech sector continues to lead
the way in 2020 with a 35%
gain.

Small-cap companies often
have a less diversified range of
business and more volatile
earnings than larger corpora-
tions, making them more likely
to falter during an economic
downturn. The average market
capitalization of stocks in the
Russell 2000 is just under $3
billion, compared with $62.5
billion for constituents of the
S&P 500, according to data
from the index providers at
the end of November.

Many small stocks are
closely tied to the health of
the domestic economy. An-
other small-cap gauge, the
S&P Small Cap 600, derives
79% of its revenue from the
U.S., versus 60% for the S&P
500, according to FactSet esti-
mates. This exposure can
make smaller firms quick to
benefit as the economy accel-
erates.

“Small-cap stocks have his-
tory on their side at this point.
Generally coming out of reces-
sions they tend to outperform
large cap,” said Duke
Laflamme, chief investment
officer at Eaton Vance Wa-
terOak Advisors. “I don’t think
it’s any different this time
around.”

Adding to the appeal, small-

ContinuedfrompageB1

B

Birx, Deborah............R18

Brennan, David ...........B2

C

Campagna, Anthony...R5

Cleary, Rich.................R5

Coombs, Mark.............B1

Cotton, Tom..............R16

D

Dunoyer, Marc.............B2

F

Ferrell, James.............B9

First, Zachary..............R4

Fuhrmann, Sebastian
A12

G

Gopinath, Gita ..........R18

H

Hantson, Ludwig.........B2

Harris, Larry................B9

J

Jochim, Christina......A12

K

Kekul , Alexander....A12

Kotha, Suresh.............R4

L

Laflamme, Duke..........B2

Lam, Carrie................R14

M

Montera, Mariachiara
A12

Musk, Elon................R16

Muthukumar, Madhu..B9

N

Nadella, Satya ............R4

P

Prial, Nancy.................B2

S

Smith, Greg.................R5

Soriot, Pascal..............B2

Sullivan, Jake............R14

Sweet, Julie................R1

V

VanAmburg, David......R5

Vermillion, Michael.....R5

Villere, Lamar.............B1

W

Wartzman, Rick.....R1,R5

Z

Zucker, Jeff.................B4

cap stocks are looking inex-
pensive—at least compared
with their counterparts. A
BofA Global Research analysis
comparing valuations of the
Russell 2000 with those of the
large-cap Russell 1000 index
found the relative discount for
small-caps in recent months
was the largest since 2001.

That’s even though stocks
overall have grown pricier rel-
ative to their earnings. The
Russell 2000 traded at the end
of November at 18.1 times its
projected earnings over the
next 12 months, above an av-
erage since 1985 of 15.3, ac-
cording to BofA.

Some money managers say
they believe the relative dis-
count will help focus attention
on smaller companies, particu-
larly as an accelerating econ-
omy primes a wider range of
businesses for growth.

Nancy Prial, co-CEO and se-
nior portfolio manager at Es-
sex Investment Management,
said her firm has bought
shares of industrial and finan-
cial companies in the micro-,
small- and midcap categories
in recent months, while trim-
ming positions in work-from-
home stocks.

“We think that we are at
the beginning of a small-cap
cycle,” she said. “They’re un-
derowned, we believe they’re
underloved and as that valua-
tion discount narrows, that
will be an opportunity for
these sectors to really show
some strong outperfor-
mance.”

Small
Stocks
Surge

‘November was
frankly
unbelievable,’ says
Lamar Villere.

Directors of both companies
have approved the acquisition,
which they expect to close in
the third quarter of 2021. The
Alexion deal will be AstraZen-
eca’s last large acquisition for
the near term, said Chief Finan-
cial Officer Marc Dunoyer.

AstraZeneca has reinvented
itself in recent years as a can-
cer-drug powerhouse. It had
suffered years of shrinking rev-
enue as blockbusters in its
portfolio were hit by generic
competition when patents ex-
pired.

AstraZeneca said its cash-
and-stock agreement amounts
to $175 an Alexion share, based
on the one-month average
value of AstraZeneca’s U.S.-
traded American depositary re-
ceipts. The offer is split be-
tween $60 in cash and 2.1243
American depositary shares.
That represents a 40% pre-
mium to Alexion’s one-month
share-price average, AstraZen-
eca said. Alexion’s shares
closed Friday at $120.98.

The acquisition terms pro-
vide that Alexion will be liable
to pay a breakup fee of as much
as $1.2 billion to AstraZeneca in
certain instances that lead to
the deal not being completed.
AstraZeneca will be required to
pay Alexion a breakup fee of

ContinuedfrompageB1

til 2025.
The delay gives Alexion cru-

cial breathing room to per-
suade doctors to switch their
patients onto a new drug called
Ultomiris that is protected from
U.S. competition until at least
2030. The company says the
advantages of Ultomiris over
Soliris include less frequent
shots and a lower price. The av-
erage annual cost of Soliris is
about $600,000, and $458,000
for Ultomiris, an Alexion
spokeswoman said.

Soliris sales are expected to
be $4.2 billion globally this
year, according to FactSet; Ul-
tomiris sales are projected to
be $1.1 billion.

In 2016, Alexion’s chief exec-
utive and chief financial officer
were forced to step down dur-
ing a company investigation
into improper sale and account-
ing practices. David Brennan, a
former AstraZeneca chief exec-
utive on Alexion’s board, took
over on an interim basis.

Ludwig Hantson took the
helm of Alexion in 2017, prom-
ising to revamp the company’s
business culture and soon be-
gan cutting costs through
workforce reductions and par-
ing down its R&D pipeline.

The deal comes as AstraZen-
eca has suffered setbacks in its
Covid-19 vaccine development.
It has faced criticism over dis-
closures around an early clini-
cal-trial dosing mistake and a
range of recent vaccine-effec-
tiveness results that confused
outside researchers, some of
whom called for more data be-
fore authorization of the shot.

—Jonathan D. Rockoff
contributed to this article.

AstraZeneca
To Acquire
Alexion

A pro football game on a
Wednesday afternoon is rare.
Advertisers getting a pricing
discount for NFL games is also
usually unheard of.

But it’s happening.
TV networks are feeling the

strains of disappointing NFL
ratings, as they are forced to
restructure deals with adver-
tisers to make up for the
smaller audience, and their
opportunity to make money
off remaining games during
the lucrative holiday season
narrows.

NBC made the unusual
move of lowering the price it
charged advertisers that al-
ready had committed to run in
a Baltimore Ravens vs. Pitts-
burgh Steelers game planned
for Thanksgiving night after a
Covid-19 outbreak on the Ra-
vens forced the game’s post-
ponement to the following
Wednesday.

Some networks also have
considered letting advertisers
pay less for commercials dur-
ing NFL games and other pro-
gramming than they originally
pledged.

Meanwhile, a large amount
of the remaining commercial
time available in games is be-
ing given to marketers as com-
pensation for the underperfor-
mance so far, leaving little ad
time that can be sold in the fi-
nal quarter of the season. Such
so-called make-good commer-
cials are given if a network un-
derdelivers on the audience it
promised an advertiser.

NFL games provide TV’s

most in-demand and expensive
ad inventory, because they reg-
ularly gather the largest live
audiences at a time of increas-
ing audience fragmentation.

But this year, NFL ratings
have taken a hit as pandemic-
related postponements have
pushed some games to less de-
sirable times and the corona-
virus has sidelined some star
players. Unexpected competi-
tion from other sports leagues
whose seasons were delayed
from earlier in the year also
has taken a toll on ratings.

Last NFL season, not in-
cluding the playoffs, networks
that broadcast the games gen-
erated $3.6 billion in TV ad
revenue, according to Kantar.

NBC was perhaps the hard-
est-hit this Thanksgiving, typi-
cally a big day for NFL viewer-
ship. The Ravens-Steelers
game, which originally cost
advertisers an average of $1
million for 30 seconds of com-
mercial time, drew only 11 mil-
lion viewers, almost a 50% de-
cline from the audience for
last year’s Thanksgiving game
on NBC.

Some Thanksgiving adver-
tisers that appeared in the
NBC game on Wednesday
didn’t pay at all, instead ac-
cepting the commercial time
as a make-good for games ear-
lier in the season that deliv-
ered disappointing ratings, ac-
cording to people familiar
with the matter.

“We’ve worked with every
one of our partners individu-
ally to find what works best
for them,” an NBC Sports
spokesman said in an email.
“We will have delivery solu-
tions for all of our NFL adver-
tisers this season.”

CBS said it isn’t adjusting
ad pricing for its NFL broad-
casts and continues to trans-
act selectively in the scatter
market.

Networks tend to over-
promise and underdeliver
when they sell advertising,
since they can usually easily
make up for any ratings short-
falls with make-goods. Even
with make-goods factored in,
there typically is still plenty
of valuable inventory avail-
able for last-minute buyers in
what is known as the scatter
market.

This year, that is harder to
do with sports advertising be-
cause so many events and
games have been canceled or
postponed. The end result is
that there isn’t enough com-
mercial inventory to cover

make-good requirements and
avoid a pileup of IOUs, accord-
ing to ad and media execu-
tives.

Adding to the challenge is
that while sports ratings are
down, entertainment program-
ming is experiencing far
greater declines, which means
networks often can’t make up
for the sports shortfalls by
putting advertisers into their
prime-time schedules.

Through the first 13 weeks
of the season, TV and digital
NFL ratings were down 7%
across the broadcast and cable
networks that carry games, ac-
cording to Nielsen data. View-
ership among men in the
18-49 and 25-54 age categories
that advertisers target during
games was more significantly
affected.

While NFL ratings are
down, the games are still at-

tracting millions of viewers
and providing a bright spot in
an otherwise gloomy TV ad
market.

And the demand is there
from marketers. This year,
since much of the remaining
inventory is being used for
make-goods, some brands vy-
ing for an available NFL com-
mercial spot are being asked
to pay premiums as much as
50% over what they would pay
before the season, when they
tend to get better rates, said
one ad buyer. It is a significant
increase over past years’ scat-
ter-market premiums.

Much of the ratings drop is
attributed to the 2020 presi-
dential election coverage si-
phoning away viewers and
the pandemic’s wreaking
havoc on the league. Aside
from reschedulings and some
sidelined stars, the league has
faced a backlash from some
fans over its social justice ef-
forts, including its embrace of
Black Lives Matter. These fac-
tors are compounded by the
secular decline of traditional
TV viewing, in which ratings
have been eroded by the up-
tick in ad-free streaming ser-
vices.

In one more wrinkle, the
networks would have liked the
option to use NFL inventory
for make-goods after other
sports’ own ratings struggles.

But NFL ratings would have
had to be up 15% to make up
for underdelivery in other
sports, including baseball and
college football, said Michael
Law, president of Dentsu’s me-
dia-buying group Amplifi.

Since that didn’t happen,
networks have been more cre-
ative with make-goods, in
some cases considering pric-
ing adjustments often referred
to as cash back, as well as dig-
ital inventory and sponsorship
opportunities, he said.

BY ALEXANDRA BRUELL
AND JOE FLINT

NFL Ad Deals Scrambled
Ratings drop prompts
networks to give back
time as compensation
to commercial buyers

The planned Thanksgiving night game between the Ravens and Steelers was postponed to a less desirable Wednesday time slot.

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7%
Decline in ratings for NFL
games compared with 2019

Alexion would give AstraZeneca a foothold in rare-disease drugs.

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Page 24

THEWALL STREET JOURNAL. * * * * * Monday, December 14, 2020 | B3

and development for oral care.
Early in the pandemic, scien-

tists from Cardiff University in
Wales and other institutions
called for more research into
the potential role of mouthwash
in fighting Covid-19. Previous
studies, they said, had shown
that ingredients commonly
found in mouthwashes could de-

The coronavirus pandemic
has halted cruises in much of
the world and idled the fleets
of Carnival Corp., Royal Ca-
ribbean Group and Norwegian
Cruise Line Holdings Ltd.

The operators are promis-
ing to resume sailing in the
U.S. in 2021, but health offi-
cials want them to clear cer-
tain requirements first. Here is
what to know:

When will cruise ships sail
again in the U.S.?

Major cruise lines keep
pushing back their restart
dates as coronavirus cases
continue rising in the U.S.

Carnival’s flagship line, Car-
nival Cruise Line, has paused
all cruises through the end of
February. In November, it said
it planned to restart sailing
first in Miami and Port Canav-
eral, Fla., to be followed by
Galveston, Texas. The com-
pany also owns Aida, Costa,
Cunard, Holland America, P&O,
Princess and Seabourn lines.
Sailing suspensions vary by
line and ship, with some idled
as far back as 2022.

Royal Caribbean has sus-
pended U.S. and most global
sailings through Feb. 28. Cer-
tain sailings have been pushed
further into 2021.

The company operates its
namesake line, Celebrity
Cruises, Silversea, Azamara,
TUI Cruises and Hapag-Lloyd
Cruises.

Norwegian has paused all

voyages through Feb. 28 on its
namesake line and through
March 31 on Oceania Cruises
and Regent Seven Seas Cruises.

Is it safe to go on a cruise?
The Centers for Disease

Control and Prevention dis-
courages cruise travel, includ-
ing river cruises, around the
world. In November, the
agency raised its assessment
of the risk of cruise travel to
“very high” as the U.S. and
other parts of the world saw a
resurgence in Covid-19 cases.

Some in the cruise industry
disagree. Norwegian Chief Ex-
ecutive Frank Del Rio told The
Wall Street Journal in Septem-
ber that protocols proposed by
the industry would result in a
safer environment “than if
you’re sitting 4 inches away
from someone on a crowded
airplane on a four-hour flight.”

What happened when cruise
operators restarted sailing
outside the U.S.?

In early December, Royal
Caribbean’s pilot “cruise to no-
where” sailing out of Singapore
turned back after a few days at
sea after an 83-year-old pas-
senger initially tested positive
for Covid-19. The result turned
out to be a false positive.

In November, seven passen-
gers and two crew members
tested positive on a SeaDream
Yacht Club vessel during a trip
that set sail from Barbados,
leading the Norwegian opera-
tor to scrap sailings for the
rest of the year.

BY DAVE SEBASTIAN

Conditions to Be Met
Before Cruises Restart

BUSINESS NEWS

Major cruise lines have been pushing back their restart dates.

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Huntington, TCF Set Deal

washes dissolve the outer pro-
tective layer of virus particles,
preventing them from attaching
to cells and infecting them.

But based on tests so far
they can’t definitively say how
long the benefit would last or
what impact coughing would
have. That makes it hard to
judge how useful oral-hygiene
products could be in curbing
transmission.

Unilever said an October
lab-based study it commis-
sioned found mouthwash con-
taining cetylpyridinium chlo-
ride, or CPC—an ingredient
used by dentists for its anti-
bacterial properties—reduced
SARS-CoV-2 particles by 99.9%
after 30 seconds of rinsing.

“While we are clear that this
is not a cure or proven way to
prevent the transmission of
coronavirus, the results are
very promising,” said Glyn Rob-
erts, Unilever’s head of research

activate other viruses. Mouth-
wash makers say sales have
risen this year amid broader de-
mand for hygiene products.

Angela Rasmussen, an asso-
ciate research scientist at Co-
lumbia University’s Center of
Infection and Immunity who
reviewed the results of the
study commissioned by Uni-
lever, said the findings were
promising but results from hu-
man trials are needed.

Meanwhile, Unilever is
launching mouthwash with
CPC in a string of new mar-
kets, from Italy and France to
India and Indonesia.

Colgate, the world’s largest
toothpaste maker, said its lab
tests, conducted by Rutgers
New Jersey Medical School,
also showed some kinds of
toothpaste, mouthwash and
mouth spray can virtually
eliminate the virus that causes
Covid-19.

Wash your hands, wear a
mask and don’t forget to gar-
gle with mouthwash.

That is the message Uni-
lever PLC and Colgate-Pal-
molive Co. are carefully start-
ing to push after research they
commissioned showed that
certain types of mouthwash
and toothpaste could poten-
tially help deactivate the virus
that causes Covid-19.

Now, Unilever is launching
mouthwash brands in new
markets, while Colgate has
shared the results of its study
with dentists.

Reducing virus particles in
the mouth could help fight
against the pandemic, the com-
panies said, because Covid-19
can be spread through droplets
generated when an infected per-
son coughs, sneezes or speaks.
Both companies said the mouth-

BY SAABIRA CHAUDHURI

Mouthwash Touted as a Virus Killer

Colgate and Unilever research
suggested the health benefit.

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Huntington Bancshares Inc.
agreed to merge with TCF Fi-
nancial Corp. in the latest in a
recent string of regional-bank
tie-ups.

The companies on Sunday
announced an all-stock deal. It
would be one of the larger re-
cent bank combinations, valu-
ing Detroit-based TCF at nearly
$6 billion, or about an 11% pre-
mium. Columbus, Ohio-based
Huntington has a market value
of $13 billion.

Together, the banks would
have about $170 billion in as-
sets, with a network of
branches that stretches from
Pennsylvania to Arizona and is
especially concentrated in Mid-
western states such as Illinois
and Michigan.

The deal, if completed,
would vault Huntington closer
to its fiercest in-state competi-
tors, Fifth Third Bancorp and
Key Corp., which have about
$200 billion and $170 billion in
assets, respectively.

TCF’s nine-state network
would add about 475 new
branches and five states where
Huntington lacks a physical
presence. Huntington’s 839
branches are spread across
seven states.

The combined company will
have two headquarters——one
for its larger commercial seg-
ment in Detroit, and one for its
consumer business in Colum-
bus, Huntington Chief Execu-
tive Steve Steinour said. He will
remain CEO while TFC’s execu-
tive chairman, Gary Torgow,
will remain chairman. Talks be-
tween the men, who have
known each other for decades,
began in October and pro-
gressed quickly, Mr. Steinour
said.

Huntington has a reputation
as an acquisition hound. It
bought fellow Ohio bank First-

Merit Corp. in 2016 in a deal
that significantly strengthened
its Midwestern presence. TCF
is no stranger to deal making
either.

The merger comes less than
two years after it closed on a
deal with Chemical Financial
Corp. that roughly doubled its
size.

Bank deals have picked up
pace this year, especially
among regional banks that
have been seeking scale to bet-
ter compete with larger com-
petitors such as JPMorgan
Chase & Co. and Bank of Amer-
ica Corp.

With larger budgets to de-
velop flashy apps and support a
wide network of branches, big
national banks have been add-
ing customers and expanding
into regions that were once
dominated by regional banks.
Consolidating allows banks to
eliminate overlapping costs for
things like regulatory compli-
ance and digital investment
that often weigh on earnings.

Low interest rates are par-
ticularly tough on regional

banks, which rely more on
lending profits than their larger
counterparts. Net interest mar-
gin, or the difference between
what a bank pays its depositors
and earns from lending, hit a
record low for commercial
banks in the third quarter.

First Citizens Bancshares
Inc. agreed to buy CIT Group
Inc. in October in a deal that
would create a bank with about
$100 billion in assets. In No-
vember, PNC Financial Services
Group Inc. agreed to buy the
U.S. arm of Spain’s BBVA for
$11.6 billion, a combination that
would create the fifth-largest
U.S. retail bank, with more than
$550 billion in assets.

Two larger regional banks,
BB&T and SunTrust, merged
last year to become Truist Fi-
nancial Corp., the largest bank
deal since the financial crisis
ushered in stricter regulations.

“This merger is an ideal op-
portunity; it bolsters both of
us,” Mr. Steinour said in an in-
terview. “We’ll be able to do
things together that neither of
us could do independently.”

BY CARA LOMBARDO
AND ORLA MCCAFFREY

Ohio bank to acquire
Detroit lender for
nearly $6 billion in
latest regional merger

after TheWall Street Journal re-
ported on the talks. Public Stor-
age also announced the retire-
ments of three of its longest-
serving board members and
named three new members.

Public Storage, recognizable
by its bright orange logo, is a
Glendale, Calif., real-estate in-
vestment trust that specializes
in developing, owning and oper-
ating self-storage units. Founded
in 1972, it was one of the earliest
major self-storage companies
but has been under pressure as
competition from the likes of
Extra Space Storage Inc. and
CubeSmart heats up.

Elliott submitted its nomina-
tions to Public Storage within
the past few weeks, ahead of the
Dec. 12 close of the four-week
window to do so, the people
said. Elliott’s six nominations ac-
count for a minority of Public
Storage’s 13-person board.

Elliott has shied away from
proxy fights in recent years after
bruising public clashes with
companies

ElliottManagementCorp. has
built a significant stake inPublic
Storage andprivately nominated
sixdirectors to the self-storagegi-
ant’s board, according to people
familiar with thematter.

Representatives of Elliott and
Public Storage, which has a mar-
ket value of $38 billion, have
had multiple discussions in re-
cent weeks about changes that
could be made at the company,
the people said.

It couldn’t be learned exactly
what Elliott is pushing for Public
Storage’s management to do to
boost its stock price, which has
stumbled in the past few years
after a decadeslong march up-
ward. The company’s shares are
up around 3% this year, com-
pared with a roughly 13% rise in
the S&P 500.

Public Storage on Sunday
confirmed that Elliott Manage-
ment had submitted the names
of six nominees and had been in
discussions with the company

BY CARA LOMBARDO

Elliott Takes Stake
In Public Storage

to reach employees and stu-
dents remotely.

In March, Vista rival Thoma
Bravo LP took education-soft-
ware company Instructure Inc.
private in a roughly $2 billion
deal. Based in Austin, Texas,
Vista is a pioneer in software
investing and manages more
than $73 billion in assets across
multiple strategies.

A deal for Pluralsight would
be the latest evidence that the
firm is plowing ahead after
Chief Executive Robert Smith
admitted to criminal tax eva-
sion in October and agreed to
pay $139 million as part of a
nonprosecution agreement.

Brian Sheth, Vista’s co-
founder, president and lead
deal-maker, left the firm in the
wake of the settlement last
month.

Private-equity firm Vista
Equity Partners agreed to buy
educational-software maker
Pluralsight Inc., according to
people familiar with the matter.

The deal values Pluralsight
at $20.26 a share, or $3.5 bil-
lion including debt, the compa-
nies said.

Farmington, Utah-based Plu-
ralsight is a cloud-based online-
education platform for software
developers that sells to both
businesses and individuals.

Private-equity firms like
Vista were already focused on
business-software providers,
with their recurring-revenue
models, before the pandemic
increased interest in companies
whose offerings make it easier

BY CARA LOMBARDO
AND MIRIAM GOTTFRIED

Vista Equity to Buy
Software Company

Page 46

THEWALL STREET JOURNAL. Monday, December 14, 2020 | R17

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What does the increasingly strained
relationship between the U.S. and

China mean for American business

leaders? Matt Murray, The Wall

Street Journal’s editor in chief, asked

U.S. Secretary of State Mike Pompeo

about that at the CEO Council sum-

mit. Edited excerpts follow.

WSJ: The U.S.-China relationship has
grown a bit chillier in the last few

years for many reasons. How do you

assess the relationship now?

MR. POMPEO: In the end, the deci-

sion about the relationship between

our two countries is largely going to

hinge on the direction of travel of

General Secretary Xi Jinping and the

leadership of the Chinese Communist

Party. In these past years they have

chosen a direction of travel that has

been increasingly aggressive.

Whether that’s at home with

their own people and what’s happen-

ing in Xinjiang, or whether it’s

abroad in the South China Sea, or is-

sues of trade, economics, there is a

different China than 10 or 15 or 20

years ago because of decisions the

Chinese Communist Party has made.

And that forced the U.S. to take real

action, serious action.

WSJ: What should the role of U.S.
multinational corporations be at this

moment?

MR. POMPEO: It can’t be the case
that whether it’s at the World Trade

Organization or elsewhere, that

there is one set of rules for just

about every nation and then another

set for China.

Business leaders ought to be ac-

tively engaged in making sure that

the rules apply equally, whether that’s

investment rules applying reciprocally

between foreign direct investment

here in the U.S. and American compa-

nies that want to invest in China, or

whether it’s the massive human-

rights violations taking place in China.

I’ve watched our businesses. They

care deeply about their employees.

They care deeply about their cus-

tomers. They want to make sure

that they aren’t doing anything to

harm them. I think every business

leader who is operating internation-

ally understands that it is important

to make sure: a) that you aren’t con-

tributing to massive human-rights

violations; and b) that you are oper-

ating in a way that, even if it has a

short-term cost to your own busi-

ness, fundamentally works toward

making sure that the opportunities

for freedom-loving nations, for rules-

abiding nations, continue to exist,

and that you aren’t helping to under-

write authoritarian regimes that

want to take away the very free-

doms that have led you and your

company to be successful.

I can’t tell you how many CEOs

have come into my office and qui-

etly, because they do business there,

told me that the Chinese Communist

Party is stealing from them..

Secretary of State
Pompeo says rules must
apply equally

What the U.S.
Should Do
About China

A
nthony Fauci says he thinks
everyone in the U.S. who is will-

ing to be vaccinated could be by

early summer. There are, of

course, hurdles, the U.S. govern-

ment’s top infectious-disease

expert told Wall Street Journal

reporter Jonathan D. Rockoff at the CEO

Council summit. Edited excerpts follow.

WSJ: As we wait for vaccinations to begin,
what do we need more of, or what should we

do differently, to protect against Covid-19?

DR. FAUCI: We have to have a uniformity of

purpose. We know clearly

that uniform wearing of

masks, physical distancing,

avoiding of crowds—particu-

larly indoors—washing hands

frequently, all seem simple in

the backdrop of the enormity

of the problem we’re facing.

But when you compare

comparable situations in

which one state, city, town,

or even country imple-

mented these measures,

they were able to either pre-

vent surges or turn around

the dynamics.

And yet, we don’t do that

uniformly. It’s extraordinarily

frustrating. We have not yet

seen the full effect of the

[Thanksgiving] traveling and

congregating. And then we’re

going to enter the Christmas

season with more traveling

and congregating at family

and social gatherings.

So we’re in for a very

challenging period.

And the only way we’re

going to counter that is by a

consistent, uniform implemen-

tation and an adherence to

public-health measures.

Trouble is, you go to differ-

ent parts of the country and

even when the outbreak is

clear and hospitals are on the

verge of being overrun, there

are a substantial proportion of

the people who still think that

this is not real, that it’s fake

news or that it’s a hoax. It’s

extraordinary. I’ve never really

seen anything like this. We’ve

got to overcome that and pull

together as a nation uniformly

with adhering to these public-

health measures.

WSJ: Does Washington need
to insist on masking, distanc-

ing and testing, and provide

more resources?

DR. FAUCI: We definitely
need to provide resources.

We know now that in

schools, the rate of infection

is less than what we would

have predicted. And the chil-

dren seem to be doing well.

But we’ve got to provide the

resources to teachers and

local communities to be able

to address contingencies

with regard to protecting

the health and welfare of

the children and the teach-

ers.

WSJ: When can CEOs ex-
pect their employees to have

been vaccinated?

DR. FAUCI: The only prioriti-
zation established and offi-

cially made public is priority

1A: health-care providers and

those in nursing homes and

extended-care facilities. After

that, you will likely see peo-

ple with critical jobs in soci-

ety, teachers, elderly, people

with underlying conditions.

You get to the general popu-

lation, people who are young,

relatively young, healthy and

have no underlying condi-

tions, likely by the end of

March, beginning of April.

If we’re efficient in that

and, this is the critical issue,

if we can convince the over-

whelming majority of the

U.S. population to take the

vaccine, when we get

through April, May, and June,

we could likely get most ev-

erybody and anybody who

can get vaccinated to be

vaccinated.

Fauci on Vaccination Timing

The government’s top infectious-
disease expert on the need for a
‘uniformity of purpose’


Anthony Fauci says ‘a
substantial proportion’ of
people still think that the
pandemic is not real.

‘In schools, the rate of
infection is less than what
we would have predicted.’

‘Business leaders ought
to be actively engaged
inmaking sure that the
rules apply equally.’

JOURNAL REPORT | CEO COUNCIL

Page 47

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Gita Gopinath is the In-
ternational Monetary

Fund’s chief economist.

With the pandemic heating

up, The Wall Street Jour-

nal’s Greg Ip asked her

about the outlook for the

world economy for the near

term and further out. Here

are edited excerpts:

WSJ: In the last IMF fore-
cast, you projected 4.4%

contraction in the global

economy this year, then a

bounce back of 5.2% next

year. Has that changed?

MS. GOPINATH: Since our
October projections, we’re

seeing third-quarter GDP

surprises on the upside for

many countries. But we’ve

also seen the very strong

second wave [of infec-

tions], along with partial

lockdowns. So we likely will

have downgrades for some

countries—we already have

one for the U.K.—and the

rest, including the U.S., are

likely to have an upgrade

for 2020.

So basically, the fourth

quarter of this year and the

first quarter of next year

will come in somewhat

weaker than many ex-

pected. But none of this is

as bad as what it was in

the spring. Overall, I think

the world economy is re-

covering.

WSJ: We hear about a K-
shaped recovery, with

people who are highly

paid and well-skilled doing

much better than those

who aren’t. Is the same

true of advanced vs.

emerging markets?

MS. GOPINATH: Indeed.
In terms of the challenge

for 2021, I

think it’s precisely this K

shape of the recovery. On

average, economies have

a lot of momentum, and

you should see them com-

ing back. But the distribu-

tion within and across

countries will take longer

to resolve.

We are seeing low-

skilled workers, young

workers, women being

much harder hit. Similarly, if

you look across countries,

there’s a divergence in

prospects. Per capita in-

comes in emerging and de-

veloping economies, exclud-

ing China, are being hit

much harder than in ad-

vanced economies.

We also know that vac-

cination is going to happen

at a much slower pace in

many emerging and devel-

oping economies compared

with advanced economies.

So a K-shaped recovery is

the big challenge of 2021.

A K-Shaped Recovery
The IMF’s chief
economist offers
her forecast

I
n the remaining months of
the Trump administration, Deb-

orah Birx, White House corona-

virus-response coordinator, has

crisscrossed the U.S. getting the

message out that masks and

social distancing do help pre-

vent spread of coronavirus. Dr. Birx

spoke last week at the CEO Council

summit with The Wall Street Jour-

nal’s Stefanie Ilgenfritz.

Edited excerpts follow.

WSJ: What is the Trump adminis-
tration planning to help curb the

current surge in these crucial next

weeks?

DR. BIRX: We know masks work,
physical distancing works. But if

we don’t change how we gather,

we’ll continue to have this surge

across the country.

People really need to under-

stand how much asymptomatic

spread there is, and that the ma-

jority of spread is from people

who don’t know they’re infected

being with others in close quar-

ters with their mask off. That’s

where transmission is occurring.

WSJ: Are we trying to improve
testing availability?

DR. BIRX: We’ve sent out, I think,
90 million antigen tests, asking

state governors and mayors to

use those tests in a new way.

To create new scenarios for

testing so that people can get

results immediately.

WSJ: You find the rapid antigen
tests, which have that trade-off of

speed versus accuracy, to be a le-

gitimate way to increase access

to testing?

DR. BIRX: Absolutely. It will be in
the high 80s, high 90s for what

we call sensitivity and specificity.

WSJ: Why do you wear a mask
indoors when you are away from

your home?

DR. BIRX: I wear a mask anytime
I’m outside of my household. And

I think this is critically important.

Understanding that anytime you

take that mask off, that you could

be transmitting the virus to oth-

ers, or you could be getting the

virus, is very critical.

This asymptomatic spread is

the majority of spread. Sick peo-

ple by and large go to bed. So

they may only spread for a couple

of days.

When you’re asymptomatic,

you’re spreading for at least

seven, eight, nine, 10 days, in pub-

lic, in private, not knowing.

WSJ: Some suggestions—masks,
social distancing—that you’ve

been sending out have not been

echoed perfectly by other mem-

bers of the current administration.

How do you address the confu-

sion that the public feels about

this? Especially people who don’t

believe that masks work.

DR. BIRX: Let’s be very clear. Vac-
cines are coming soon.

But it will take a while to vac-

cinate people in the U.S., and

[meanwhile] we know that the

only prevention we have is behav-

ioral change.

So, messages need to be criti-

cally consistent. I think we have

to be much more aggressive

about addressing the myths that

are out there.

Masks do not hurt you, they

help you. We know that they pro-

tect us as well as protect others.

Dr. Birx
On the
Surge
The White House
coordinator says the
asymptomatic spread
means people must
keep wearing masks

‘We have to be
much more
aggressive about
addressing the
myths.’

Deborah Birx, right, says ‘Masks do not hurt you, they help you.’

‘On average,
economies have
a lot of
momentum.’

JOURNAL REPORT | CEO COUNCIL

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