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* * * * * * * * SATURDAY/SUNDAY, AUGUST 22 - 23, 2020 ~ VOL. CCLXXVI NO. 45 WSJ.com HHHH $5 .00

How Trump
Has Changed the

Republicans

REVIEW WSJ
A Patio You Can
Use All Winter

OFF DUTY

THEWALL STREET JOURNALWEEKEND

CaliforniaWages Desperate Battle Against Raging Fires

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FURNACE: Major wildfires continued to plague California on Friday, many of them around the heavily populated San
Francisco Bay Area. One of the nearly 12,000 firefighters deployed across the state doused flames in Boulder Creek. A3

When nursing homes began barring visi-
tors to keep the coronavirus out, Jack Eccles
decided to move in.

Hillcrest Convalescent Center in Durham,
N.C., had turned him away on March 12
when he arrived as usual to spend much of
the day with his wife, Gerry, who suffers
from Alzheimer’s disease.

So he returned the next day with a suit-
case of clothes, books, medications and his
computer. Hillcrest had agreed to rent him a
single room in its assisted-living area so
that he could care for Gerry, who is 91.

Dr. Eccles, who is 93 and a longtime Bap-
tist pastor, remains under lockdown at Hill-

BY ANNA WILDE MATHEWS

Runners Are Still Racing
Marathons—In Local Parking Lots

i i i

Lonely virtual races replace in-person
events; no crowds or porta-potties

Gordon Flett, a diehard run-
ner, is joining road races almost
every weekend this summer in
his hometown of Winnipeg,
Canada. Absent
are the usual
cheering specta-
tors, the water
stations—even
the other run-
ners.

The coronavi-
rus and restric-
tions on large
gatherings has
canceled in-per-
son running events, from

neighborhood 5Ks to the presti-
gious Boston Marathon, and
prompted many to transition to
“virtual races.” Participants run
when and where they want
within certain dates. They typi-

cally track their
own times, then
send race orga-
nizers the infor-
mation. In return,
they get medals
in the mail that
they celebrate
with other run-
ners in online fo-
rums.

For a recent
PleaseturntopageA9

BY JENNIFER LEVITZ

All downhill from here

ROLL CALL
Why there still aren’t
enough paper towels

in stores. B1

crest. For five months, he hasn’t left and has
rarely seen the sun—the window in his room
faces a brick wall.

He isn’t allowed to walk around the 154-
bed facility, except to Gerry’s room, where
he feeds her, and sometimes to the lobby,
where he can see family members through
the windows. Hillcrest sometimes feels like
a prison, he says, but he won’t move out and
leave Gerry until it reopens to visitors.

“We’re married. I want to be with her.
She took care of me for 70 years, and now
it’s my turn,” he says.

The coronavirus cut a deadly swath
PleaseturntopageA6

Billions for Virus Fight
Remain on Sidelines

Billions of dollars in federal
funds earmarked for boosting
nationwide Covid-19 testing
remain unspent months after
Congress made the money
available, according to the U.S.
Department of Health and Hu-
man Services.

In April, Congress allocated
roughly $25 billion for federal
agencies and states to expand
testing, develop contact-trac-
ing initiatives and broaden
disease surveillance.

According to HHS data,
only about 10% to 15% of that
total has been drawn down,
meaning the cash has been
spent or committed to various

BY SCOTT PATTERSON
AND SARAH KROUSE

and remote learning—can’t
work full-time for partial pay.

They also indicate an econ-
omy cleaving to two tracks: one
where the livelihoods of white-
collar professionals in certain
industries have remained
largely intact, and another for
lower-income workers, many of
whom work service jobs in
hard-hit industries such as
hospitality, travel and retail.
Millions of them have lost jobs,

PleaseturntopageA8

cording to an analysis by con-
sulting firm Compensation Ad-
visory Partners.

Now, a number of compa-
nies, including Walt Disney Co.,
General Motors Co. and Yelp
Inc., are restoring executive
and some white-collar worker
salaries to previous levels,
while others are paring earlier
pay cuts. At many firms, the
moves reflect an acknowledg-
ment that stressed-out work-
ers—many juggling child care

In the first weeks of the pan-
demic, companies contending
with government-ordered lock-
downs, plummeting orders and
closed stores reasoned that cut-
ting pay could stave off greater
job losses. Many targeted
higher-level executives’ com-
pensation as a sign of solidarity
with furloughed workers earn-
ing much less. By mid-July,
roughly a quarter of major pub-
lic companies reduced pay for
CEOs and other executives, ac-

Some companies are begin-
ning to restore cuts they made
to managers’ salaries and bo-
nuses in the early, bewildering
days of the pandemic shut-
downs, a sign that some indus-
tries—and their white-collar
workers—are benefiting from
glimmers of a recovery while
millions of others continue to
endure job and income losses.

BY PATRICK THOMAS
AND CHIP CUTTER

Companies Start Rescinding
Managers’ Pandemic Pay Cuts

Home sales surged in July,
signaling how the pandemic is
reshaping where and how
Americans want to live during
a period of social distancing
and working from home.

Home buyers who were re-
luctant to venture out in March
and April when much of the
country was under lockdown
have returned in force since
late spring. With the effects of
coronavirus showing little signs
of abating, many home shop-
pers have new priorities for a
place to live, or are accelerating
existing plans, brokers and
economists say.

Buyers are ready to move
farther from cities, now that
many workers aren’t commut-
ing every day. The pandemic
has spurred some households
to live closer to family, or
somewhere that offers more
space with so much time spent
at home, according to people in
the industry.

“People that were in condo-
miniums are looking for town-
homes, and people in town-
homes are looking for single-
families,” said Bob Chew, a

PleaseturntopageA2

BY NICOLE FRIEDMAN

Home
Sales
Reach
Lofty
Heights
Pandemic, millennials
revamp market in a
rare bright spot for
the U.S. economy

When a Nursing Home Shut
Down, a HusbandMoved In
93-year-old Jack Eccles didn’t want to leave his wife on her own

‘I want to be with her,’ Jack says of Gerry, who has Alzheimer’s.

A
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E
A
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E
F
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JO

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A
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EXCHANGE

� Nursing homes need more help, panel says... A6

� U.S. recovery gains steam
while others sputter.............. A2

� Stock-market gains are going
to fewer people......................... B1

efforts. The funds for various
testing initiatives were part of
the Paycheck Protection Pro-
gram and Health Care En-
hancement Act.

The Trump administration
has taken a state-led approach
to testing Americans for
Covid-19, dispatching funds
and helping states procure the
swabs and reagents they need
to facilitate testing. The strat-
egy, federal officials say, helps
states identify and cater to
their specific needs.

Of the $25 billion, some
$10.25 billion was sent to
states and U.S. territories in

PleaseturntopageA7

� New infections decrease from
highs in July............................... A7

� Home sales surged in
July, signaling how much
the pandemic is reshaping
where and how Americans
want to live during a pe-
riod of social distancing
and working from home. A1
�The U.S. economy gained
momentum this month as
firms shook off the effects
of the downturn, though
recoveries elsewhere
slowed, surveys of purchas-
ing managers indicated. A2
� Some companies are be-
ginning to restore cuts they
made to managers’ salaries
and bonuses in the early days
of pandemic shutdowns.A1
� JeffWilke, a close lieuten-
ant of Amazon founder Jeff
Bezos who helped build what
began as a small online book-
seller into a tech titan, is re-
tiring from the company. B1
� David Pecker is step-
ping down as chief execu-
tive of American Media,
publisher of the National
Enquirer, ending an era for
the supermarket tabloid. B3
� Palantir privately dis-
closed to investors the extent
of its steep and stubborn
losses ahead of a long-de-
layed public listing planned
for as soonasnextmonth.B10
�The S&P 500 and Nasdaq
closed at records, rising
0.3% and 0.4%, respec-
tively, while the Dow in-
dustrials advanced 0.7%. B11

What’s
News

CONTENTS
Books..................... C7-12
Business News...... B3
Food......................... D6-7
Heard on Street...B12
Obituaries............... A10
Opinion............... A11-13

Sports....................... A14
Style & Fashion D2-3
Travel........................... D4
U.S. News.... A2-3,5-7
Weather................... A14
Wknd Investor....... B5
World News....... A8-9

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

>

Billions of dollars in fed-eral funds earmarked
for boosting nationwide
Covid-19 testing remain un-
spent months after Con-
gress made the money avail-
able, according to HHS. A1
� Nursing homes need an
aggressive federal approach
to the Covid-19 crisis, ac-
cording to recommendations
from a panel convened by
the Trump administration.A6
� The postmaster general
defended his efforts to make
the USPS runmore efficiently
and said the service could
handle an expected surge in
mailed ballots this fall. A5
�KremlincriticNavalnywas
being taken to Germany for
treatment. His supporters al-
legehewaspoisoned, but doc-
tors in Russia said they didn’t
find toxins in his system. A8
�Nearly 12,000 firefighters
across California were bat-
tling major wildfires,
many of them around the
heavily populated San
Francisco Bay Area. A3
� Libya’s two rival gov-
ernments declared a
cease-fire in the country’s
civil war on Friday, easing
months of tensions. A9
� Actress Lori Loughlin
and her husband, fashion-
designer Mossimo Giannulli,
were sentenced to prison for
their roles in the college-ad-
missions cheating scandal.A3

World-Wide

Business&Finance

NOONAN
The Democrats

Miss the Meaning A13

Page 2

A2 | Saturday/Sunday, August 22 - 23, 2020 * * * * THEWALL STREET JOURNAL.

U.S. NEWS

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case evidence didn’t include
these details from a Justice
Department report.

Notice to readers
Wall Street Journal staff

fatal shooting in which Mr.
Wilson shot Mr. Brown at least
six and at most eight times. A
U.S. News article July 31 about
the St. Louis County prosecu-
tor’s re-examination of the

After an initial struggle at
Ferguson, Mo., police officer
Darren Wilson’s car on Aug. 9,
2014, Michael Brown fled, and
Mr. Wilson gave chase. A sec-
ond confrontation led to the

CORRECTIONS� AMPLIFICATIONS

justed for inflation, NAR said.
Some economists warn that

the recession and high unem-
ployment could damp home-
buying interest later on.

Still, buying surveys suggest
demand looks strong in the
near term. About 40% of home
buyers polled by Realtor.com in
June said they are looking to
buy a home sooner because of
Covid-19, while only 15% said
the pandemic slowed down
their timeline. (News Corp, par-
ent of The Wall Street Journal,
operates Realtor.com.)

which make up about 10% of
the market, have also roared
back this summer.

Home sales can have positive
knock-on effects for the econ-
omy, as consumers spend more
on goods and renovations.

The strong demand and a
shortage of supply pushed the
median home price to new
highs, which could make houses
less affordable for some first-
time buyers. The median exist-
ing-home price rose 8.5% from
a year earlier to $304,100, a re-
cord high nominally and ad-

Compared with the last time
sales were this high, in 2006,
lending standards are tighter
and the supply of homes for sale
is much lower, Mr. Yun said.

Demand is so robust that
68% of houses that sold in July
were on the market for less
than a month, NAR said. Bro-
kerage Redfin Corp. said more
than half its offers in July faced
at least one competing bid.

In many cities, agents say in-
ventory can barely keep pace
with demand. There were 1.5
million homes for sale at the
end of July, down 21.1% from
July 2019, according to NAR.

Rachel Crawford and her
husband had already planned to
move to a different state to be
closer to family. After they
listed their house in Fall City,
Wash., in July, it received mul-
tiple offers and sold within a
month. They then had to make
offers on multiple homes in
Parker, Colo., before they had
one accepted.

Brittani Baynard and Sam
Krueger decided to spend
money they’d saved for their
wedding to buy a four-bedroom
home in Madison, Wis., in June.
They had planned to buy a
house in the next two years,
but the pandemic made them
want to move sooner out of
their apartment into more
space for Ms. Baynard’s 8-year-
old daughter, she said.

Fearing another phase of the
pandemic, Ms. Baynard said, “I
want us all to be comfortable.”

In Billings, Mont., buyers are
coming from as far away as
Texas and New York. Some are
buying houses without seeing
them in person, said Deb
Parker, president of the Billings
Association of Realtors.

“It makes for a very compet-
itive market, that’s for sure,”
she said. “If they can sell some-
place where the values are
much higher, they can come in
and pay cash for a house in
Montana.”

break, pent-up demand is push-
ing the market even higher.
Homes typically go under con-
tract a month or two before
closing, so July figures largely
reflect purchase decisions
made in May or June.

“The housing market is actu-
ally past the recovery phase
and is now in a booming stage,”
said Lawrence Yun, chief econ-
omist at NAR. “New demand
has been created because of the
pandemic, with the work-from-
home flexibility.”

First-time buyers accounted
for 34% of sales in July, NAR
said, a category that includes
many millennial buyers.

This group, who range from
their mid-20s to their late 30s,
are a growing presence in the
housing market. Older millenni-
als who delayed getting married
and having children are now
reaching those milestones,
which increases homeowner-
ship demand. Younger millenni-
als entering their 30s are start-
ing to buy homes more actively.

The housing market offers
one of the few signs of strength
in the U.S. economy, which has
sputtered under the pandemic.
Housing starts soared 22.6% in
July from June, well above ex-
pectations. New-home sales,

Commerce Department said.
Economists surveyed by The
Wall Street Journal earlier this
month expected an 18.3% an-
nualized pace of increase in
the third quarter.

Other indicators suggest
the U.S. economy remains vul-
nerable. New applications for
jobless benefits rose last week,
the Labor Department re-
ported Thursday. Payroll gains
slowed in July from June.
More pain could be on the way
as several companies, includ-
ing Boeing Co., have an-
nounced job cuts.

The Federal Reserve said
last week that industrial pro-
duction was still 8.2% below
its level a year ago. Restaurant

lost momentum or gone into a
bit of a reverse but they don’t
seem to have materialized.
The economy seems to be
powering ahead.”

Economists warned that the
unusual economic environ-
ment—a sharp and deep con-
traction in the spring caused
by a global pandemic—makes
it harder to interpret recent
data. For instance, Mr. Pearce
said, because the PMI numbers
measure only month-to-month
change, they don’t show how
much ground the U.S. still
needs to make up.

U.S. output fell at an annu-
alized rate of 32.9% in the sec-
ond quarter, the worst con-
traction on record, the

chain had been recovering,
driven largely by cooped-up
leisure travelers eager to get
out of the house. “I am no
more optimistic about the vi-
rus than I was a month ago,”
he told analysts last week.

In Europe, IHS Markit’s
composite PMI for the euro-
zone fell to 51.6 in August
from 54.9 in July, indicating
its expansion slowed.

This comes as infections are
again surging in Europe, hit-
ting the services sector partic-
ularly hard, including the tour-
ism industry at what is usually
its busiest time of the year.

Those affected have been
much younger on average than
during the first wave of the

reservations are about 50% of
where they were a year ago,
according to OpenTable, an
improvement from April and
May, when they had almost
completely frozen up.

A rise in demand drove the
August expansion, IHS Markit
said, thanks to returning cus-
tomers, new marketing cam-
paigns and the easing of lock-
downs overseas, which helped
boost exports. Survey respon-
dents said they remained opti-
mistic about the next 12
months although they ex-
pressed concerns about the
pandemic.

Arne Sorenson, chief execu-
tive of Marriott International
Inc., said business at the hotel

pandemic, and hospitalizations
have been much lower. Ac-
cording to economists, that
makes it less likely that gov-
ernments will revert to wide-
spread lockdowns, which
would likely send the eurozone
economy back into contrac-
tion.

In contrast with the ser-
vices sector, some of Europe’s
factories reported strong
growth in August, with Ger-
man businesses citing a pickup
in orders from China. How-
ever, their French counter-
parts saw growth slow
sharply.

The eurozone’s economy
contracted more sharply than
the U.S. in the second quarter,
reflecting that the European
lockdowns were more restric-
tive and longer-lasting.

Eurozone policy makers had
hoped that by getting a firmer
grip on the virus, the currency
area’s economy would see a
stronger rebound during the
remainder of the year and into
2021. If the surveys are backed
up by other data in recording
a slower-than-expected expan-
sion, the European Central
Bank is more likely to provide
additional stimulus in the
coming months.

The IHS Markit survey indi-
cated that Japan’s economy
contracted again this month,
with the composite PMI un-
changed at 44.9 in August.

for two years and then says
you can’t come in, what do
you do?”

In some instances, a pro-
gram’s method of data collec-
tion didn’t change, but its
base of operations did.

The Office of Employment
and Unemployment Statistics
collects about a quarter of the
monthly jobs-report data by
phone, with 350 employees
placing calls from four re-
gional data-collection centers.

THE NUMBERS | By Jo Craven McGinty

Government Data Collection Takes a Hit
Numerous

sets of govern-
ment data
used by pri-
vate busi-
nesses, public

agencies and policy makers
are collected in person.

So what happens when a
pandemic hits, and govern-
ment workers can no longer
visit homes and businesses to
retrieve the information?

Before Covid-19 shut down
the economy, 65% of the Com-
modities and Services Survey
and 50% of the Housing Sur-
vey were done in person, ac-
cording to Jay Mousa, associ-
ate commissioner for field
operations at the Bureau of
Labor Statistics. Both are com-
ponents of the Consumer Price
Index, the most important
measure of inflation.

About 90% of the Producer
Price Index, 69% of the initial
enrollment of the Interna-
tional Price Program, 51% of
the Occupational Require-
ments Survey and 35% of the
initial enrollment of the Na-
tional Compensation Survey
are also typically conducted
in person.

The BLS data sets—which

are just a sample of those af-
fected by the new coronavi-
rus—provide critical informa-
tion about the economy, and,
in some cases, inform other
government programs.

The CPI, for example, helps
establish tax brackets, Social
Security payments, poverty
thresholds and eligibility re-
quirements for food stamps
and school lunch programs.

“It’s fair to say the CPI
touches the fabric of nearly
every social program that has
been instituted by the federal
government,” said Michael
Horrigan, president of the
W.E. Upjohn Institute for Em-
ployment Research and a 30-
year veteran of the BLS who
previously ran the agency’s
price and unemployment pro-
grams.

T o keep the data currentwhile coping with tem-porary business clo-
sures and stay-at-home or-
ders, the BLS and other
agencies adjusted the way
they collect information, in
some cases shifting in-person
visits to telephone calls or for
the first time culling material
from alternative sources such

as credit cards and company
websites.

“This has in a way liber-
ated some of the creative
minds in the Census Bureau,
the Bureau of Labor Statistics
and the Bureau of Economic
Analysis to find new ways of
either keeping their custom-
ary series going despite new
challenges or coming up with
new products that are di-
rected at identifying what’s
going on in the economy in
these extraordinary times,”
said Ken Simonson, chief
economist at Associated Gen-
eral Contractors of America
and previously a member of
the BLS Data Users and Cen-
sus Bureau Scientific advisory
committees.

This isn’t the first time gov-
ernment agencies have been
faced with roadblocks to data
collection, but the difference
during the pandemic has been
the length and scope of the in-
terruption.

“Hurricanes come up the
East Coast and knock out a
bunch of establishments for a
week or two,” Mr. Horrigan
said. “The Covid-19 pandemic
is obviously more widespread.
If a store owner lets you in

“We had to shift everybody
to remote work,” said Nicholas
Johnson, a supervisory econo-
mist in the office. “We had
never done that before.”

Workers were sent home
and issued laptops and cell-
phones to use remotely.

“The plan is to return to
normal operation at the data-
collection centers, but we’ve
made a permanent decision to
keep all staff telework-ready
moving forward,” Mr. John-
son said.

B ut perhaps the mostsignificant disruptionhas been to the decen-
nial census, which aims to
count every person living in
the U.S.

Among other things, the
numbers are used to divvy up
seats in the U.S. House, re-
draw voting districts and allo-
cate $1.5 trillion of federal
money annually.

After an initial period of
self-reporting, the Census Bu-
reau expected to complete the
head count with enumerators
going door to door from May
through July. But the pan-
demic delayed the operation
for three months.

The majority of census of-
fices began follow-up work on
Aug. 9, and to make up for lost
time, planned to stay in the
field through October while
asking for a four-month exten-
sion to provide apportionment
and redistricting data.

Instead, the agency was
told to finish data collection
by Sept. 30 and meet its nor-
mal deadlines, submitting ap-
portionment numbers by the
end of December and redis-
tricting figures by the end of
March 2021. At this point, the
self-response rate is at
around 64%, although resi-
dents can still respond by
phone, mail, or online.

“They’re already up against
it,” said John Thompson, a
former director of the Census
Bureau. “If we stop there, the
undercount will be enormous.”

Without a full and accurate
count, the precision of gov-
ernment surveys whose sam-
ple frameworks, population
controls and statistical
weighting are based on the
census will be diminished.

And that would be a blow
to many of the data-collection
programs that have otherwise
rallied during the pandemic.

Percentage of survey
conducted in person

Source: Bureau of Labor Statistics
*Initiation phase only

Producer Price Index

International Price Program*

Commodities and Services Survey

Occupational Requirements Survey

Housing Survey

National Compensation Survey*

90%

69

65

51

50

35

The U.S. economy picked up
momentum this month as
companies shook off the ef-
fects of the pandemic-induced
downturn, though recoveries
in other parts of the world
slowed, according to new sur-
veys of purchasing managers.

The data released Friday
suggest U.S. firms are seeing
demand return as they reopen
from the lockdowns imposed
in the spring and early sum-
mer. They also indicate the
economy has so far managed
to weather July’s sharp rise in
new infections and business
closures that threatened to
knock the recovery off course.

Data firm IHS Markit said
its composite purchasing-man-
agers index, a measure of
manufacturing and services
activity, rose to 54.7 from 50.3
in July, an 18-month high, with
both sectors seeing a big in-
crease. A reading above 50 is a
sign of expansion while a
reading below 50 is a sign of
contraction.

The index of manufacturing
output was up to 53.6 from
50.9 in July. The services activ-
ity index rose to 54.8 from 50.

“It’s solid,” said Michael
Pearce, senior U.S. economist
at Capital Economics. “We’ve
had a few reasons to worry
that the recovery might have

BY DAVID HARRISON
AND PAUL HANNON

U.S. Recovery Gains SteamWhile Others Sputter

2018 '19 '20

10

20

30

40

50

60
U.K.

U.S.

Eurozone

Japan

Composite output indexes, which reflect activity across the
manufacturing and service sectors, showedmixed fortunes
acrossmajor economies in August.

Composite purchasingmanagers output indexes

Sources: IHS Markit (Eurozone, U.S.); IHS Markit/CIPS (U.K.); au Jibun Bank (Japan)
Note: Readings below 50 indicate contraction, above, expansion.

group leader at Berkshire Hath-
away HomeServices PenFed Re-
alty in Ellicott City, Md. “People
are at home, and the more time
they spend in the home, they
realize, ‘I want some different
features in my home.’ ”

The July sales numbers were
among the strongest the hous-
ing market has ever seen. Sales
of previously owned homes
jumped 24.7% from a month
earlier to a seasonally adjusted
annual rate of 5.86 million, the
National Association of Real-
tors said Friday. That was the
strongest monthly gain ever re-
corded, going back to 1968. It
was also the highest sales pace
since December 2006.

Mortgage rates that hovered
near all-time lows helped the
housing market break out of a
long slump heading into 2020.
Now, after a sharp decline in
the early spring due to the out-

ContinuedfromPageOne

Housing
Market
Sees Surge

Europe Rolls Back
Tariffs on Lobsters

The Trump administration
and European Union agreed
Friday to a limited tariff roll-
back, providing relief to Ameri-
can lobster exports and to a
range of European items.

The reductions were an-
nounced in a joint statement
from U.S. Trade Representative
Robert Lighthizer and EU Trade
Commissioner Phil Hogan. They
would be the first negotiated
tariff reductions in more than

two decades.
The EU will drop tariffs on

U.S. live and frozen lobsters. The
American lobster industry has
found itself struggling because
the EU reached a free-trade
agreement with Canada that re-
duced lobster tariffs. With no
comparable agreement with the
U.S., European imports of Cana-
dian lobsters were soaring.

“The elimination of the EU
tariff on U.S. lobster products
is a significant achievement,”
said Annie Tselikis, the execu-
tive director of the Maine Lob-
ster Dealer’s Association.

—Josh Zumbrun

Sales of previously owned homes jumped 24.7% from a month
earlier last month. A pending home sale in Bexley, Ohio, in June.

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THEWALL STREET JOURNAL. * * * * Saturday/Sunday, August 22 - 23, 2020 | B11

Index performance this past week

Source: FactSet

3

–2

–1

0

1

2

%

Mon. Tues. Wed. Thurs. Fri.

DowJones Industrial Average

S&P 500

Nasdaq Composite

of both parties to rein in expec-
tations, stock investors appear
to be counting on further stim-
ulus. Many analysts and inves-
tors agree financial markets
would likely face another reck-
oning without an extension.

Economists credit those pay-
ments with much of the recent
pickup in retail sales and cau-
tion that consumer spending is
expected to moderate in August
because many Americans will
have less disposable income.
Consumer spending reflects
more than two-thirds of U.S.
economic output.

Meanwhile, even many fami-
lies with savings don’t have
enough money to provide real
security during the pandemic.
The median savings account
balance for families headed by
an individual between 56 and
61 years old is just $21,000, ac-
cording to the Economic Policy
Institute. That balance is even

lower among younger families.
Amaris Brown, a 26-year-old

Boston resident, heads one of
those. With a job at a nonprofit
day care that pays $36,000 a
year, he was supporting his
partner, a full-time nursing stu-
dent, and an 8-year-old son.

When the pandemic hit, he
took a leave of absence to stay
at home with his son—and
eventually left the job perma-
nently because of child-care
challenges. He has been looking
for remote work but hasn’t
found anything. They missed
August’s rent and expect to
miss September’s too. They
don’t own any stock. They have
no savings or other invest-
ments to fall back on.

“I’m scared to death,” Mr.
Brown said. “I don’t know how
I’m going to pay my rent.”

Boston imposed an eviction
moratorium that is set to ex-
pire Oct. 17. A federal morato-

rium on evictions that covered
properties with federally in-
sured mortgages expired last
month. Millions of Americans
who have missed rent pay-
ments could be at risk of being
evicted in the coming months,
economists estimate.

In Florida, Ms. Biesecker and
her family moved in with her
in-laws to save money. She and
her husband received $2,900
from the federal government’s
stimulus program that they
spent on food and other neces-
sities. They managed to save
some of that money, too.

One of her editing clients re-
turned in July, and she has
made a little bit of money sell-
ing hand-sewn masks online.
Friends have helped where they
can with other expenses, but
having to rely on “other poor
people” is frustrating, she said.
“It’s like screaming into a void
that swallows you.”

The movement has become more popular over the past decade.
Harvard students in 2017 blocked the entrance to a campus building.

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emerging-markets index funds,
a move that could pit students
and administrators against
their endowments.

Although index constituents
are often public, endowments
don’t usually make all their
fund investments public.

The State Department
doesn’t have authority to force
institutions to divest from Chi-
nese stocks but has influence
over what kinds of entities and
businesses could be put on the
U.S. export blacklist.

The department cited Chi-
nese human-rights violations
and the threat of delisting Chi-
nese stocks as reasons for
avoiding Chinese investments.

“The boards of your institu-
tion’s endowment funds have a
moral obligation, and perhaps
even a fiduciary duty, to ensure
that your institution has clean
investments and clean endow-
ment funds,” Mr. Krach wrote.

The State Department
called alumni of at least one
Ivy League university to press
the issue, a person familiar
with the matter said.

Many in the endowment
world greeted the letter with

shock.
The rise of index funds that

track broad market indexes
has transformed investing
over the past decade. The
multi-trillion-dollar industry
has diverted money from stock
pickers and reduced costs for
everyone from regular individ-
uals to the biggest pensions to
enter new markets.

Most U.S. universities in-
vest through fund managers
and index funds, making it
practically more difficult for
universities to divest from the
world’s second-largest econ-
omy. Institutions would be un-
willing to sell their shares
across index funds at a loss to
pare back Chinese exposure.

“It’s way too early to know
if U.S. universities will follow
the directive or ignore it,” said
Phil Orlando, chief equity-mar-
ket strategist at Federated
Hermes. “I think this was the
first domino to fall, and other
dominoes will fall in coming
days and weeks.”

A growing chorus from
Washington has linked Chinese
stocks to human-rights viola-
tions, such as China’s treat-

ment of the Muslim ethnic
group the Uighurs. As a result,
investments in China could ex-
pose institutions to new head-
line risks. In recent years, the
largest asset managers and
pensions have touted a
tougher stance against compa-
nies that contribute to social
issues such as forced labor.

In a speech this year, Secre-
tary of State Mike Pompeo
highlighted public pension
funds with stock in companies

he said were aiding China’s mil-
itary and surveilling minorities
in China. House Rep. Jim Banks
(R., Ind.) introduced a bill seek-
ing to block U.S. investors from
funding companies with ties to
China’s military.

In the letter, Mr. Krach
warned colleges that Chinese
companies listed on U.S. stock
exchanges posed investment
risks because they faced the
possibility of being delisted.
His office at the foreign-affairs
agency steers policies related
to economic growth.

U.S. regulators have long
been unable to inspect the fi-
nancial audits of Chinese com-
panies that sell shares in U.S.
markets. Under a plan recom-
mended by the Trump admin-
istration, Chinese firms listed
on the New York Stock Ex-
change and Nasdaq Stock Mar-
ket would have to comply with
U.S. audit requirements by
2022—or give up their listings
on those exchanges.

“The boards of U.S. univer-
sity endowments would be
prudent to divest from PRC
firms’ stocks in the likely out-
come that enhanced listing

standards lead to a wholesale
delisting of PRC firms from
U.S. exchanges by the end of
next year,” according to the
letter, which was earlier re-
ported by Bloomberg.

The three largest emerging
market exchange-traded funds
that track indexes have some
40% exposure to China, ac-
cording to research firm
CFRA. Their exposure to China
has grown over the past three
years as index creators FTSE
Russell and MSCI Inc. have
added China A Shares to the
indexes these ETFs track, said
Todd Rosenbluth, CFRA’s head
of fund research.

Chinese stocks appreciated
more than other economies’,
boosting China’s weighting in
the portfolios of institutions
with indexed exposure to broad
emerging markets, he said.

As U.S.-China relations have
soured, the Trump administra-
tion has clashed with Beijing
over the coronavirus outbreak
and its treatment of Hong
Kong. The president faces
pressure to show he is being
tough on China as an election
nears, some strategists say.

A State Department official
this week urged university en-
dowments to divest them-
selves of Chinese stocks and
disclose Chinese assets held in
their index funds.

China’s growing prominence
in emerging-markets indexes
has steered more money from
U.S. institutions into China,
putting many endowments at
odds with the Trump adminis-
tration’s increasingly confron-
tational stance toward Beijing.

“Studies have shown that
the majority of the U.S. uni-
versity endowment fund port-
folios own PRC stocks listed
on American exchanges either
directly or indirectly through
emerging markets index
funds,” wrote Keith Krach, the
undersecretary of state for
economic growth, energy and
the environment, in a Tuesday
letter, referring to the People’s
Republic of China.

Mr. Krach asked the schools
to tell their campus communi-
ties about their investments in
China as well as any Chinese
stocks they hold in those

BY DAWN LIM

U.S. Presses Universities on China Assets

The letter came from Keith
Krach of the State Department.

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S&P 500 Tops High, Extends Streak

the Board will do all we can
to help Harvard navigate
them as thoughtfully as possi-
ble.”

A spokeswoman for Yale
couldn’t immediately be
reached for comment.

The divestment movement
has grown more popular over
the past decade before accel-
erating in the past year, gain-
ing traction at schools includ-
ing the University of
Michigan, Cornell University
and Georgetown University.
Increased awareness of cli-
mate change and the steep
decline in many traditional
energy investments has
helped fuel the movement.

Shares of Exxon Mobil
Corp. and Chevron Corp. have
fallen by about 40% and 30%,
respectively, this year, com-
pared with a 5% gain in the
S&P 500 index, and some Wall
Street analysts say major oil
firms might have to consider
the once-unthinkable step of
cutting their dividends.

Mr. Toweh was one of five
candidates that the group,
called Harvard Forward, en-
tered in the election by solic-
iting petition signatures from
the school’s alumni. Profes-
sional soccer player Margaret
“Midge” Purce and lawyer
Thea Sebastian also won
spots.

The school’s official alumni
organization nominated eight
candidates, two of whom were
also elected.

The last time a protest or-
ganization successfully ran
petition candidates for Har-
vard’s governing body was in
1989 when Archbishop Des-
mond Tutu ran on a platform
for divestment from apartheid
South Africa.

The race for seats was sur-
rounded by some controversy
this month when members of
the Harvard Alumni Associa-
tion wrote an open letter al-
leging that Harvard Forward,
which accepts contributions,
was trying to buy the elec-
tion.

The group received dona-
tions from thousands of
alumni, with an average size
of $200 and a median size of
about $20, according to a
Harvard Forward statement.

BY MATT WIRZ

Harvard Board Adds
Backers of Fossil
Fuel Divestment

An activist group of Har-
vard University alumni op-
posed to the fossil fuel indus-
try won three of the five seats
on the college’s Board of
Overseers up for election this
year.

The victory is part of the
group’s campaign to force
Harvard’s $40 billion endow-
ment to end its investments
in oil-and-gas companies.

The election results could
embolden similar movements
at other U.S. universities,
which are increasingly decid-
ing to pull their money out of
fossil fuels.

An organization at Yale
University that is affiliated
with the Harvard activists is
running a candidate for a seat
on its board of trustees to put
pressure on the university’s
roughly $30 billion endow-
ment.

“This win proves that
alumni want Harvard to be a
leader in the fight against the
climate crisis,” said Jayson

Toweh, an Environmental Pro-
tection Agency program ana-
lyst and Harvard alumnus
who won one of the seats.

Harvard and Yale run two
of the largest university en-
dowments, and investment
managers at campuses across
the country view them as
bellwethers.

Harvard’s Board of Over-
seers doesn’t supervise the
school’s endowment but takes
part in appointing members
to the Harvard Corporation,
which oversees managers of
the endowment.

“All of us on the Board
welcome this year’s new over-
seers,” said R. Martin Chávez,
president of the Board of
Overseers. “These are ex-
traordinary times, posing ex-
traordinary challenges, and

The election results
could embolden
similar movements
at other universities.

said Mike Lewis, head of U.S.
equities cash trading at Bar-
clays PLC. “There’s not a lot of
places to put your money if
you need returns.”

Notably, though the broader
market has shot up since
March, not all stocks and sec-
tors have rallied. The diver-
gence between the stock mar-
ket’s haves and have-nots has
grown clearer recently, as
companies benefiting from a
shift to working from home
during the pandemic have
notched gains while many oth-
ers have floundered.

That was on display Friday.
Shares of tech companies led
the way as they have for much
of the year. Apple shares
added $24.38, or 5.2% to

$497.48, continuing a winning
streak for the iPhone maker as
its market value surpassed $2
trillion earlier in the week.

Graphic-chip maker Nvidia
gained $21.70, or 4.5%, to
$507.34. The company posted
record sales in its latest quar-
ter, helped by strong demand
for online gaming and remote
computing services.

“It was a very reluctant
high,” said Anna Rathbun,
chief investment officer of
CBIZ Investment Advisory Ser-
vices, of the S&P 500’s record
this week. “There wasn’t a lot
of breadth behind it.”

Tesla shares, which have
become a favorite for momen-
tum-driven traders, jumped
over the $2,000 mark on

Thursday and advanced a fur-
ther 2.4% Friday to close at
$2,049.98. The electric-car
maker’s shares gained 24%
this week.

Investors continued to parse
mixed economic data. Housing
has been a bright spot, giving
a boost to home builders. New
data released Friday showed
that sales of previously owned
homes surged in July as low
interest rates and a desire for
more space helped home-buyer
demand.

Home-construction compa-
nies PulteGroup added 2.5%,
while Lennar gained about
3.2%. New Home jumped 2%.

Still, data Thursday showing
an unexpected increase in new
weekly applications for unem-
ployment benefits was a sign
the American labor market’s re-
covery may be cooling amid
continuing disruptions from the
coronavirus pandemic.

With government bonds of-
fering yields below expected in-
flation levels, investors in re-
cent months have been flooding
into risky asset classes includ-
ing stocks in a search for
higher returns. “More so than
ever before, equity markets
probably are not the best re-
flection of real economic condi-
tions in the U.S.,” said Derek
Halpenny, head of research for
global markets in the European
region at MUFG Bank.

The yield on the 10-year
Treasury note fell to 0.639%
this week from 0.708% last
week. Yields fall as bond
prices rise.

The S&P 500 notched a
fresh high Friday and logged a
fourth consecutive week of
gains, its longest winning
streak of the year.

Stocks drifted higher this
week during a quiet stretch of
trading, as investors tried to
reconcile uneven economic
signals with expectations of
further stimulus from govern-
ments and central banks.

The broad stock-market
gauge rose 11.65 points, or 0.3%,
to 3397.16, a record close. The
Dow Jones Industrial Average

advanced 190.60
points, or 0.7%, to
27930.33, pulled
higher by gains in

Apple shares. The Nasdaq Com-
posite added 46.85 points, or
0.4%, to 11311.80, a high.

The S&P 500 gained 0.7%
this week, while the Dow was
roughly unchanged. The tech-
heavy Nasdaq jumped 2.7%
this week.

Government stimulus has
powered the stock market’s re-
cent recovery, sending the S&P
500 to new heights this week.
The Federal Reserve’s latest
minutes showed that central
bankers think more government
support is needed to help the
economy. Some analysts said
they expect the record run for
stocks to continue, driven in
part by such stimulus.

“I don’t see anything that
stops the flow of funds into
U.S. equities in the near term,”

BY ANNA ISAAC
AND GUNJAN BANERJI

That share has grown over the
past decade, from 82.4% in
2009. The stock market has
surged over that period, with
the S&P 500 more than quadru-
pling from its low during the fi-
nancial crisis in March 2009.

“The middle class has essen-
tially been left out of the stock
market surge,” said Edward
Wolff, an economics professor
at New York University. “The
rich have taken off from the
rest of society.”

Although the stock market
has erased its losses suffered
during the pandemic, the econ-
omy appears to be telling a dif-
ferent story. It contracted at
the sharpest rate on record in
the second quarter, and the un-
employment rate remained
above 10% in July, after reach-
ing nearly 15% in April.

Government aid—particu-
larly a program that gave the
unemployed an extra $600 a
week on top of other jobless
benefits—helped ease some of
their pain, at least initially.

About 27 million workers re-
ceived the payments, which al-
lowed them to keep up with
mortgage and utility bills and
other financial obligations. The
program expired in July and
hasn’t yet been revived as Re-
publicans and Democrats hag-
gle over terms of a new deal.

Despite attempts by leaders

ContinuedfrompageB1

Stock Gains
Go to Fewer
People Now

The top 10% of earners owned 87% of all U.S. stocks outstanding in the first quarter of 2020.
The percentage of Americans saying they own stocks has fallen since the 2008 financial crisis.

Share of stocks held by each income group Share of Americans
who own stocks*

*Based on telephone polls most recently of 2,027 adults conducted March 13–20 and April 1–4, with a margin of error of ±3 percentage points
Sources: Federal Reserve (share by income group); Gallup (share of Americans)

70

45

50

55

60

65

%

2000 ’10 ’20

100

0

20

40

60

80

%

1990 2000 ’10 ’20
Bottom 50%

Next 40%

Next 9%

Percentile
Top 1%

RECESSION

FRIDAY’S
MARKETS

Page 26

B12 | Saturday/Sunday, August 22 - 23, 2020 * * * * THEWALL STREET JOURNAL.

Uber and Lyft Find Some
Cover, for Now at Least
A California court lets the companies stick to
the status quo as a ballot measure looms

Californians have a lot of prob-
lems right now. But for the mo-
ment, catching a ride isn’t one of
them.

Uber Technologies and Lyft
had both threatened to shut down
their services in the Golden State
by midnight Thursday if they
didn’t win a delay in having to
comply with a new state law re-
quiring them to classify their
drivers as employees. That delay
came through in the final hour of
the day’s trading, with a state ap-
peals court granting a conditional
reprieve to allow the companies
to operate as they have been until
the matter fully works through
the courts. Uber shares were up
6.8% by the closing bell, while
Lyft’s closed 5.8% higher.

The ruling still seems mixed
for the companies. Granting the
extension suggests at least some
recognition that both Uber and
Lyft have come to play an impor-
tant role in a state where even
the largest cities are underserved
by public transportation. At the
same time, both companies are
also now required to submit writ-
ten plans to the court about how
they will ultimately comply with
a state law passed last fall requir-
ing them to reclassify their inde-
pendent contractors as employees

should they lose their appeals.
At best, Thursday’s ruling kicks

the legal can down the road. To
counter the new state law, Uber,
Lyft and other gig-economy com-
panies are pushing a state ballot
measure set for November that
would allow them to keep their
current status—albeit with added
protections and benefits for con-
tractors, such as added pay to ac-
count for gas and health-care
subsidies for drivers who work 15
hours or more a week. John
Blackledge of Cowen wrote Thurs-
day that the latest ruling “essen-
tially lets the voters decide” how
Uber and Lyft will ultimately op-
erate.

Investors, though, have been
deciding for a while. Even before
the global pandemic, Uber and
Lyft shares were both generating
largely disappointing returns
since going public last year. Thus,
while the two ride-hailing provid-
ers argue that they are technol-
ogy platforms for others to mar-
ket their services, both stocks
now trade more like transporta-
tion companies—which is also
how the Global Industry Classifi-
cation Standard defines them.

California’s voters will soon
decide if they want to make that
official. —Dan Gallagher

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OVERHEARD
The directors of hot European

payments giant Adyen appear to
have too much of a good thing.

One day after the Dutch com-
pany reported slightly disappoint-
ing half-year results and reaffirmed
its growth targets, four of the
group’s directors sold 15% of their
shares to “diversify their portfo-
lios.” Fair enough, but why now?

The business seems sound.
Adyen has built a single interna-
tional payments platform that can
give customers new services or
geographies at the flick of a

switch. New merchants are signing
up and existing clients are buying
more. In the first half of this year
over 80% of its revenue growth
came from existing clients and
churn is under 1%.

It also promises earnings before
interest, tax, de-
preciation and
amortization
margins over
55% and net
revenue growth
in the mid-20s to low-30s. Pennies
earned on transactions at the likes
of Uber, Fiverr and eBay add up to
a nice chunk of change. It is hard
to find that sort of growth and
profitability anywhere.

But then maybe the directors
grasped that there is a price for
everything. Adyen’s shares have
roughly doubled in the past year
and tripled since its June 2018 IPO.
It is a rare breed: a scaled-up Euro-
pean tech stock with competitive

global growth
prospects.

One director
selling stock is
understand-
able—he might

need some cash for a small bun-
ker in New Zealand. But it is awk-
ward news for the company’s
mainly growth investors that four
insiders running the business
fancy other prospects.

HEARD ONTHESTREET
FINANCIAL ANALYSIS & COMMENTARY

Sports Betting Is No Sure Bet
Shares of the leading online sports betting companies have soared as investors

wager on the future of wagering. It may be time to cash in some chips.

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DraftKings did well as people stuck at home showed they were bored enough to bet on pretty much anything.

People wait for their rideshares to arrive at the San Diego Airport

Pitney Bowes Looks Poised to Deliver
This company has been mailing

it in for a long time, but it looks
like it might finally deliver.

Shareholders of Pitney Bowes
would be happy if the stock had
merely been dead money. A share
bought 20 years ago would be
worth 87% less today even as
shares in competitor Stamps.com
are worth 35 times as much.

A month ago Citron Research
issued a tweet that should have
widened that performance gap.
Noting that e-commerce has been
on fire during the Covid-19 pan-
demic, they speculated that red-
hot Shopify would buy
Stamps.com to bolt on an “essen-
tial tool” it couldn’t already pro-
vide small companies.

Stamps.com shares did rise, but
investors suddenly noticed dowdy
old Pitney Bowes, which cele-
brates its 100th anniversary next
month. The enthusiasm only con-
tinued 10 days later when Pitney
reported a loss for the second
quarter and suspended financial
guidance for the year. Its shares
are now up by 127% since Citron’s
tweet compared with a 23% gain
for Stamps.com.

Some would view that as a cue
to take profits, but a look at the
two companies shows that it is
Pitney that still holds more prom-
ise, either as a takeover candidate
or as a going concern. Even after
those recent gains, its enterprise
value is less than two-thirds that
of Stamps.com and its multiple of
enterprise value to earnings be-
fore interest, tax, depreciation and

amortization is less than a third
as high.

The distinction is about much
more than valuation, though. Pit-
ney has long been known as “the
mail company,” being joined at
the hip with the U.S. Postal Ser-
vice. It leases and services postal
meters and presorts mail for
commercial clients, processing 17
billion pieces annually. But re-
cently package processing over-
took mail as its largest business
and in 2017 it launched its ship-
ping API (application program-
ming interface), which is nearly
identical to Stamps.com’s label
printing service.

And, while Pitney’s quarterly re-

sults looked awful at the top and
bottom lines, a closer examination
shows that its revenue from e-
commerce is surging. It is in some
ways a more capable partner than
Stamps.com. Pitney historically
made much of its revenue from
postal meters and related supplies
such as ink, not from shipping la-
bels printed at home by small
businesses. Its supply business
took a huge hit during lockdowns,
but global e-commerce sales
surged by 41% year over year.

Pitney made a big investment in
two huge warehouses just before
the pandemic began that allowed
it to handle the surge and is able
to handle a full range of services
related to package delivery and,
crucially, returns. And it is no lon-
ger tied to the Postal Service, be-
ing fully integrated with private
package delivery firms such as
United Parcel Service, much like
Stamps.com. Finally, it also has a
state chartered bank that it is us-
ing to extend financial services to
its clients.

With its e-commerce business
having ramped up so quickly, it
isn’t yet at scale and lost money
last quarter, but it eventually
could earn something like $150
million annually before taxes given
margins in the business. For a
company that, even after its surge,
has a market value of barely $1
billion, that is meaningful.

The market has woken up to
the potential at Pitney Bowes and
there might be more to come.

—Spencer Jakab

Delivery Delay
Pitney Bowes’ 2Q segment revenue,
change from previous year

Source: the company

Business services

Rentals

Financing

Support services

Supplies

Equipment sales

27%

1

–8

–11

–30

–32

Ping pong, anyone?
A deal that seemingly hit the tri-

fecta in December had investors
worried that it wouldn’t win, place
or show after the pandemic hit. Late
last year, a blank-check company
worth $400 million announced that
it would issue shares and enter into
a $3.3 billion three-way combination
with daily fantasy sports specialist
DraftKings and gambling technol-
ogy company SBTech, renaming the
combined company DraftKings. Its
shares surged.

But on March 12, the day that
premerger DraftKings revealed its
first-quarter results, the only news
that mattered was that the annual
March Madness basketball tourna-
ment, the most gambled upon
event in U.S. sports, had just been
canceled. Shares of the acquirer
fell sharply that day, capping a
three-day, 34% slide. DraftKings
scrambled to find events its clients
might wager on such as Korean
baseball, the Nathan’s hot dog eat-
ing contest and, yes, table tennis.

The deal closed anyway and by
June shareholders had made more
than four times their money. Even
after some recent profit-taking,
the combined market value of
three companies in or getting into
online sports betting—DraftKings,
FanDuel-owner Flutter Entertain-
ment, and Penn National Gaming—
has risen from $6 billion in mid-
March to about $45 billion—more
than the combined values of ca-
sino giants Las Vegas Sands and
Wynn Resorts.

It turns out that people stuck at
home, perhaps encouraged by
“house money” in the form of stim-
ulus checks, were bored enough to
bet on almost anything. This gam-
bling instinct has affected the eq-
uity market as well, as people try
their hand at stock picking through
retail brokers such as Robinhood.

Still, it is probably a good time
to take some chips off the table.
That isn’t because more sports
may be canceled in the near term:
It is future seasons, not the pres-
ent, that really matter. The future
is being shaped by a 2018 Supreme
Court decision that struck down a
1992 federal limit on sports bet-
ting to four states. In addition to
the 40-plus states that allow daily
fantasy sports, nine now have legal

sports betting and three have iG-
aming, or online casino betting. A
DraftKings customer can use a sin-
gle online wallet for all three in a
state such as New Jersey.

DraftKings estimates that the
total addressable U.S. market for
online betting and gaming could
be $40 billion annually. Flutter
says online represents just 12% of
the gambling market globally and
is growing at 10% a year.

DraftKings and Flutter’s Fan-
Duel compete furiously and don’t
actually earn any money yet—they
even tried to merge but were sued
by the Federal Trade Commission
in 2017. But that was when they
were all about daily fantasy sports.
Now their name recognition, tech-
nological savvy and cross-selling
ability have made them formidable

competitors in far more lucrative
online sports betting and gaming.
If investors believe that the two
companies can remain as domi-
nant as they are today as more
states open up to iGaming then

they should let their bets ride.
The odds are long, though.

DraftKings and Flutter have plenty
of financial firepower, with the for-
mer sitting on $1.2 billion in net
cash while the latter is subsidized

by profitable international betting
divisions. But deep-pocketed U.S.
casino operators are angling for a
bigger piece of the action.

DraftKings portrays itself as a
turn-of-the century Amazon.com,
the upstart that buried the likes
of Sears and Barnes & Noble by
being better at technology while
not being weighed down by bricks
and mortar like traditional casi-
nos. That analogy isn’t quite
right, though. Unlike a huge, ex-
isting retail market full of dino-
saurs, this is a nascent industry
still not legal for most Americans.
The tech can also be outsourced.
Now that SBTech is part of Draft-
Kings, its current sports book
technology provider Kambi will go
its own way as soon as September
2021. And European competitors

have plenty of tech savvy. British
online gambling giant bet365 is
now making an aggressive entry
into U.S. iGaming.

A big advantage that DraftKings
and FanDuel have is an existing
app on the smartphones of cus-
tomers who, however the courts
legally characterize fantasy
sports, already were effectively
gambling. Yet their mostly young,
male audience has little overlap
with the older, often female cus-
tomers who pump quarters into
physical slot machines and could
become serious iGamers. Mean-
while, others are gunning for their
new sports-betting customers.
Penn National, which mainly oper-
ates physical casinos, is launching
an online sports book next month
with popular podcast network
Barstool Sports and also has
snagged 10% of the Pennsylvania
iGaming market.

In what might prove to be a fu-
rious and expensive fight for mar-
ket share, DraftKings and Flutter
should survive. A state-by-state
regulatory thicket could limit the
U.S. market to a small group of
dominant players. But the stock
market is treating the fantasy
sports pioneers like they’ve al-
ready lifted the trophy in a win-
ner-take-all league.

—Spencer Jakab

SlamDunk
Share-price performance

Source: FactSet

300

–100

0

100

200

%

J F M A M J J A

Flutter Entertainment
DraftKings PennNational Gaming

The U.S. market for
online betting and
gaming could reach
$40 billion annually.

Page 49

THEWALL STREET JOURNAL. * * * * Saturday/Sunday, August 22 - 23, 2020 | D9

How to
Camp If
You’re Not
A Pack Rat
Not all ‘essential’

equipment deserves a

permanent spot in

your garage

RENT THIS / BUY THAT

SOMETIMES THOUGH, you want to
be able to answer the call of the wild
on the first ring; for that, it helps to
have equipment that’s still useful
when it’s not out in the woods.

Osprey’s Farpoint Travel Pack 55
($180, osprey.com) combines a 40-
liter backpack with sleeping pad
straps and a removable 15-liter
daypack, compact enough to be
practical for year-round use.

Therm-a-Rest’s new NeoAir Topo
Luxe Sleeping Pad (from $145, ther-
marest.com) clocks in at just under
a pound and a half, but inflates to 4
inches thick—cushy enough to serve
as an air mattress for unexpected
guests, but insulated enough to keep
you cozy outdoors, even when the
ground turns cool. Anyone can eas-
ily carry Big Agnes’s simple, 5-
pound, three-person, three-season

Salt Creek SL3 tent ($350, big-
agnes.com) on short backpacking
treks, while occasional car campers
can set it up without frustration.

And because one can’t live on
campfire toasted marshmallows
alone, consider the GasOne Spyder
($50, gasone.com), an 8,000 BTU
single burner butane stove that
folds down into a thermos-sized
package. Deployed tentside, it

treats you to morning coffee or an
evening pot of chili. And given its
stylish design (it comes in shades of
orange or blue reminiscent of the
classic Ford GT), you won’t hesitate
to break it out back in civilization
when your stove is full come
Thanksgiving and you need a spare
burner. Then you can regale your
pod with tales of your camping ad-
ventures. —Matthew Kronsberg

Buy

FOR FAIRWEATHER campers, buy-
ing—not to mention storing and
maintaining—a suite of camping
gear for those two glorious week-
ends under the stars each year is a
questionable investment. Rather
than hitting up your more outdoorsy
friends for loaner gear, look to
outfitters like Arrive Outdoors
and Xscape Pod, which offer on-
line rentals and express delivery
of high-end, fastidiously maintained
backpacking and car-camping gear.

Arrive Outdoors focuses on dab-
blers “who may be considering a
camping or ski trip for the first time
and not be entirely sure what kind
of gear they’ll need,” said founder
Rachelle Snyder. Along with a la
carte options, Arrive offers complete
camping and backpacking sets for
one, two or four people, delivered

via FedEx. All of the gear in one of
Arrive’s camping setups, including a
Marmot Limestone tent, Nemo
sleeping bags and Yeti cooler would
set you back more than $1,000 re-
tail, but can be had for $130 a day
for four people. When you get home,
shake it out and send it back with
the prepaid shipping label.

Xscape Pod’s model is similar:
$229 gets a pair of backpackers a

three-day rental, including Osprey
65-liter packs, Big Agnes tents and
sleeping bags and MSR cooking
gear. While backpacking-gear rent-
als made up just 10% of Xscape Pod’s
business in 2019, that figure jumped
to more than 50% this year, said
CEO Nick Parrish: “We think this
speaks to the desire to not only get
outside, but to socially distance as
much as possible.”

Rent

GEAR & GADGETS

to fourth-graders. It can also host a
roll of drawing paper or tilt up for a
more ergonomic writing position.

You can improve on the kitchen
chair that left your child’s feet dan-
gling in the spring. Look for an ap-
propriately scaled seat that lets kids
support their posture with their
legs. For 5-year-olds and up, the
Lakeshore Learning Materials Flex-
Space Ergo Bounce Cantilever Chair
(from $119, lakeshorelearning.com)
comes in varied heights with a flexi-
ble frame to let students sit forward,
sideways and even bop up and
down, without destroying the floors.
“There’s a bit of a bounce which may
increase comfort,” said Dr. Felt.

Have a chair that’s the right size,
but too hard for kids to sit in with-
out squirming? The Gaiam Kids Bal-
ance Cushion Jr. ($20, gaiam.com) is
a 13-inch-wide, nubby, inflatable disc
that converts a static seat into an
active one, helping students focus
by creating an outlet for wiggling.

Fidgeting doesn’t have to be neg-
ative. It's been proven that move-
ment helps most kids maintain fo-
cus. Pick up fidget toys a la carte or
buy a pack like the National Autism
Resources Fidget Set ($50; national-
autismresources.com) with 13 differ-
ent kinds of sensory toys.

firm. If your child already nabs your
iPhone to take selfies, working with
a 10.2-inch iPad (from $329; ap-
ple.com)makes the most sense and
most kids find it more intuitive than
a mouse and keyboard. Bundled in
an operating system both you and
your kid already know, its front- and
rear-facing cameras let children in-
teract with teachers and classmates.
If you need a device with multiple
accounts—for sharing among multi-
ple students—the also-intuitive
Google Pixel Slate (from $499,
store.google.com) hosts separate
profiles that you can customize with
apps and parental controls.

Headphones can really help keep
the peace in a shared living/learning
space. For students 10 and younger,
or those who aren’t particularly
tech-savvy, stick with a traditional
plug-in headset—no Bluetooth set-
tings to fuss with. The child-sized
JBL JR300 ($25, jbl.com) is a light-
weight option with clear sound and
a cushioned on-ear design. For stu-
dents more comfortable with over-
the-ear models, try JLab’s Audio
JBuddies Studio kids headphones
($20, jlabaudio.com). Both JBL and
JLabs make Bluetooth versions for
older students who can handle pair-
ing devices, and are sufficiently re-

sponsible to keep them charged.
Skip the urge to paint the walls

surrounding the desk in “stimulat-
ing” colors, said Dr. Schenke. In-
stead, encourage students to deco-
rate with their own artwork and
projects—the sort of decoration
you’d normally see on parent-
teacher night. Another cue to take
from the classroom? Cubbies. They
keep the space tidy and help stu-
dents get into a routine and develop
responsibility when it comes to find-
ing and returning books and blocks.
The 3-foot-tall ECR4Kids 10 Cubby
School Storage Cabinet ($193, sta-
ples.com) is built on rolling casters,
making it easier to move aside dur-
ing dinner. Punch up the color by
filling it with bright bins.

A new school year is liable to
fuel anxiety in the best of times, for
both parents and students. But the
experts agree: Focus on making
sure your children’s social skills
keep developing and worry less
about the academics. “We know so-
cial-emotional skills are foundations
to learning,” said Dr. Schenke. Don’t
kick yourself, or teachers, if it’s dif-
ficult to adjust at first. A little sum-
mer hangover is inevitable, but
soon they’ll be the ones shushing
you while on a video call.

BY SAL VAGLICA

T
HIS SPRING, when
schools were closing
faster than dominoes
toppling, many parents
did their best to cobble

together a makeshift classroom at
the kitchen table. An old laptop.
Hand-me-down headphones. Broken
Crayolas. Now, as many states ex-
tend remote learning into fall, it’s
arguably worth it to invest in better
tech and intact crayons—the tools
your kids need to stay engaged with
classmates and the curriculum.

While you needn’t devote a home
office to remote learning, some sort
of dedicated space within parental
view helps foster the routine a real
classroom provides. “If your student
is prone to distraction they might
need a disciplinary eye cast over
them,” said Laurel Felt, Ph.D.,
founder of Our Powerful Play, which
helps families de-stress through co-
play. Like adults, when kids have an
ergonomic desk setup, they’ll feel
more comfortable and find it easier
to focus. Thanks to the four wing
nuts on the adjustable IKEA Flisati
($80, ikea.com), the desk can grow
as kids do, from 20 7/8 inches to 28
inches, accommodating most first-KA

G
A
N
M
CL

EO
D
(I
LL
U
ST

R
A
TI
O
N
)

IT’S IN THE BAG Above: Xscape Pods come
with all you need in the wild. Right: Arrive

Outdoors offers full kits and a la carte options

OWN IT Clockwise from left: Osprey’s Farpoint
Travel Pack 55; Therm-a-Rest NeoAir Topo Luxe

Sleeping Pad, Agnes Salt Creek SL3 tent.

How to set up your kids—and their ‘classroom’—for a smarter remote-learning experience

Make Your HomeWork

Before Covid-19, the unwritten
rule was to wait until your offspring
reached eighth grade before equip-
ping them with smartphones. Ex-
perts agree, however, that parents
should give older remote learners
greater latitude with text and video
chat—under supervision—to let
them interact with peers. For youn-
ger ones, parents may have to step

in to help set up virtual playdates.
“It can help ward off this sense of
mourning brought on by not seeing
classmates,” said Dr. Felt.

Many districts are supplying tab-
lets or laptops for remote learning,
but that doesn’t mean they’re easy
to use. For elementary-age students,
stick with a more familiar touch-
screen experience, said Katerina
Schenke, Ph.D., founder of Katalyst
Methods, an education research

Like adults, when kids
have an ergonomic desk
setup, they’ll feel more
comfortable and find it
easier to focus.

Curiosity Box These regularly
delivered arts-and-crafts kits

keep little minds and hands ac-

tive as kids learn to use their

natural creative skills. From
$279 for 12-month subscrip-
tion, curiosityboxkids.com

OwlCrate Jr. Each themed
reading box includes

a new novel, a few

shorter reads and

playful add-ons

like bookmarks,

buttons and toys.

$156 plus ship-
ping for 6 months,
owlcrate.com

MORE TO EXPLORE / KITS
FOR AFTER-SCHOOL HOURS

Little Passports With a vari-
ety of age-appropriate sub-

scription boxes, kids can learn

about dinosaurs, be introduced

to STEM skills or discover new

countries. From $191 for 12
months, littlepassports.com

Page 50

D10 | Saturday/Sunday, August 22 - 23, 2020 * * * * THEWALL STREET JOURNAL.

RUMBLE SEAT / DAN NEIL

CH
EV

R
O
LE

T

Base Price $58,900
Price, as Tested $82,925
Power and Drivetrain Naturally aspi-
rated 6.2-liter direct-injection OHV
V8; eight-speed twin-clutch transmis-
sion with manual-shift mode and
paddle shifters; rear-wheel drive
Horsepower/Torque 495 hp at 6,450
rpm/470 lb-ft at 5,150 rpm
Length/Width/Height/Wheelbase
182.3/76.1/48.6/107.2 inches
Curb Weight 3,622 pounds
0-60 mph 2.8 seconds
EPA Fuel Economy 15/27/19 mpg
Cargo Volume 4.0/8.6 cu. ft, frunk/
trunk

holeshot acceleration, delta-v is
proportional to the percentage of
vehicle weight that can be slung
over the rear wheels. With the en-
gine up front, the C7 was weight-
transfer limited. It could have had
a million horsepower and it
wouldn’t get any quicker.

Between its short-geared, launch-
perfecting DCT and the chassis’s
squat-thrust under load, the C8 is a
palpable 1.1 seconds quicker to 60
mph on its way to a ¼-mile ticket of
11.2 seconds, according to the brand.

For reference, MotorTrend found
that the Z51’s performance numbers
match those of current Porsche 911
Carrera S almost exactly.

So how is C8 not perfect? The re-
flections of the tan leather interior
on the windshield made our tester
just about hazardous; something
must be done about that. In various
ways the car felt constrained, seem-
ingly in the effort to maintain head-
room for more potent variants. The
engine rev-limiter/fuel cutoff point
seems set artificially low (6,450
rpm). As I whomped through four
muffled, robotic upshifts, the Sting-
ray mechanism sounded like it was
short shifting, a wail interrupted.
While it has a fully adjustable sus-
pension, the Z51 comes out of the
box with some friendly and progres-
sive understeer dialed in.

I suppose the C8 could be accused
of excessive refinement, to the point
of not being recognizably a Cor-
vette. With the V8 behind its occu-
pants, so too is much of the aural
drama. An unprecedented, Lexus-
like sophistication inhabits the
adaptive suspension, the pillowed
upshifts, the muted cabin ambience.

But don’t worry: If you forget it’s
a Corvette, people will remind you.

I couldn’t be more swept
off my feet if GM’s CEO
Mary Barra knocked on
my door, offering to
mowmy lawn.

2020 Corvette Stingray:
America’s Supercar Remade

OMG. The 2020 Chevrolet Corvette
Stingray Z51 is fantastic. I don’t
think I can take many more sur-
prises this year.

The eighth generation of Amer-
ica’s Sports Car since 1953, and the
first to put the engine behind the
driver, the “C8” Stingray ($58,900
base price, $82,925, as tested) is
quick, it’s slick, it looks like my se-
cret anime avatar on the outside
and some impossible, blue-sky con-
cept car on the inside. The hand-
wrapped leather interior included in
the 3LT package ($11,950) rivals
anything in Lambo’s supply chain. I
couldn’t be more taken off my feet
if GM CEO Mary Barra knocked on
my door, offering to mow my lawn.

The C8 is not perfect; later on I’ll
say how. But first let’s celebrate the
W. A grateful nation says, Boo-yah.

It may strain diplomatic rela-
tions with Italy, however. Built on a
spaceframe of aluminum extrusions
and diecast chassis nodes;
shrouded with composite and alu-
minum body panels; poised over
aluminum double-A arms with coil-
over magnetic dampers; and cogged
with a dual-clutch transaxle (DCT),
the Stingray’s anatomy resembles
that of the Ferrari 488 GTB
($330,000). The 488 is more
power-dense and prettier, for sure.
But, taking all things in balance, the
Chevy beats the snot out of it.

Main Street seems to like it. On
Saturday, my neighbor rented an in-
flatable waterslide for his kid’s
birthday. By the time I parked the
Z51—a performance upgrade pack-
age that includes a throatier, two-
stage exhaust system—eight wet lit-
tle kids were dancing on the hot
asphalt around the car, eyes wide.

Throughout my week with the
Stingray—ours enameled in a stun-
ning tobacco-brown metallic with
black-and-tan interior—admirers
have engaged on the ontology of
Corvette-ness. More than a few have
mused that “It doesn’t look like a
Corvette to me,” offered as a compli-
ment or put-down. Dude, I can’t ac-
count for your a priori, but if that
doesn’t look like your idea of a Cor-
vette, it really ought to.

What folks are seeing is the
Stingray’s unfamiliar front-axle-to-
dash distance, i.e., the short hood.
In the C8 the seats, and the glass
canopy along with them, have
been moved forward 16.5 inches,
relative to the wheelbase.

This changes everything. Sitting
in the C7, the driver looks over the
instrument binnacle and past a long
hood. In the C8, one looks down
and out, with the roof pillars al-
most peripheral. The frunk lid falls
away like a waterslide; the pedals
are between the front wheels. The
difference in visibility might be

compared with moving from the pi-
lot’s seat to the nose-gunner posi-
tion in a B-17 Flying Fortress. How-
ever much quicker the C8 is around
a given road course, credit some
part to the driver being able to see
through the corners.

After years of taking grief for
chintzy interiors, the C8’s design
team, and their accountants, seem
out to prove something. It’s like a
leather-upholstered jigsaw puzzle
in there. The cabin gleams with
pewter-like accents framing the
switches, screens, and blade-thin
HVAC vents. The drive selector is
an elegant switchset reminiscent of
the Fisker Karma. The drive-mode
selector lives under its own, hand-
some leather hillock, a palm rest.
The high-rez touch screen and con-
nected digital UX is current, easy
to reach and read. Where has this
GM been all my life?

If you miss the old Corvette, have
a look at the engine bay, under the
transparency. See the red valve cov-
ers? That’s the latest version of the
GM’s smallblock V8, the LT2—a nat-
urally aspirated 6.2 liter, dry-sump
lubricated, pushrod-actuated firebox
with 4-into-1 exhaust manifolds like
a bundle of aluminum snakes. That
Klingon-forehead thing on top is the
capacious intake manifold with
equal-length runners. Because the
engine is now aft, the exhaust runs

are both shorter and straighter, re-
ducing back pressure. Between this
and that, the LT2’s output is
bumped 35 hp, to 495 hp (with the
Z51 exhaust) and 470 lb-ft of torque.

Of course, those few ponies do
not account for the C8’s leap in
quickness over C7, especially con-
sidering the new car weighs about
100 pounds more. What makes the
C8 quicker is its weight distribu-
tion, an ass-heavy 40/60, front/
rear, compared with the previous
ratio of about 50/50.

Here we arrive at the casus belli
of the entire program: 0-60 mph.
In the first critical milliseconds of

2020 CHEVROLET CORVETTE STINGRAY Z51 3LT

The Wall Street Journal is not compensated by retailers listed in its articles as outlets for products. Listed retailers frequently are not the sole retail outlets.

B
EN

K
O
N
K
O
L

THAT’S DEBATABLE

TIKTOK, A SKYROCKETING app
favored by Gen Z and designed to
showcase short-form mobile vid-
eos, has amassed 80 million active

users in the U.S. Still, many in the 30-and-over
crowd say they simply don’t have the time or
will for more social media. “That’s stress I
don’t need in my life,” said writer Louis Peitz-
man, 33, who has more than 68,000 Twitter
followers. “Instagram is soul-sucking enough.”

Especially viral TikToks—like pranks,
dance challenges and messy science experi-
ments—migrate to other social platforms
anyway. And earlier this month, Instagram
debuted Reels, a feature that lets you layer
sounds and other TikTok-like effects onto
15-second video snippets.

Emily Schuman, 37, the lifestyle blogger be-
hind Cupcakes and Cashmere, chose not to
move her content to TikTok, sticking with her
half-million Instagram followers. “TikTok feels
ageist,” she said, adding that a meme sealed
the deal for her. “It read, ‘If you’re old enough
to use eye cream, you’re too old for TikTok.’”

Many Boomers cite privacy concerns as rea-
son to shun the app, which was developed in
China and can access personal data—though
no more than other social platforms. Others
see downloading TikTok as a desperate at-
tempt to reclaim one’s youth. “Anyone over 30
dancing like a teenager looks stupid,” said en-
trepreneur Hannah Lockhart, 35. “Do the
world a favor and leave TikTok to the kids.”

The kids tend to agree. This spring, Maya
Lepadatu, 17—the force behind a TikTok mock-
ing millennials who use words like “adulting”
and love avocado toast—saw it go viral. In the
clip, she joked, “I personally do not want to be
associated with people who still think Harry
Potter movies are a personality trait.” Millen-
nials later lobbied a defense—on Twitter.

YES

VETTING PROCESS The long,
iconic hood may be gone, but

the mid-engine Z51 rivals the

speed of much pricier Ferraris.

GEAR & GADGETS

Can the Over-30 Crowd Safely Ignore TikTok?
WITH ITS SIMPLE interface and
algorithm that tailors content to
each user’s tastes, TikTok has be-
come a crucial time-killer for

Americans stuck at home. And, lately, the
app is particularly attracting older genera-
tions, who grew up posting selfies but
weren’t initially ready for the pivot to video.
According to Comscore, this spring TikTok
saw a steep increase among 35- to 44-year-
olds, while use among 18- to 24-year-olds
dropped. And today the #Over30 hashtag
has more than 7 billion views.

“TikTok aged up fast thanks to quarantine,”
said Evan Horowitz, 39, CEO of creative studio
Movers+Shakers, which spearheaded the most
viral U.S. campaign in TikTok’s history for e.l.f.
Cosmetics last year. “What’s also helped is
that it’s trendy to make a TikTok with your
parents or grandparents, so that has brought
them into the TikTok world at a faster rate.”

Dentist Tim McNeely, 47, initially joined the
app on a dare before rising to fame as the
“Dancing Dentist.” He now boasts 1.9 million
followers and said his practice has grown due
to TikTok. “In the beginning, there were com-
ments like, ‘We stan,’ which scared me,” he
said “I deleted the videos until my daughter
informed me that ‘stan’ is a compliment.”

TikTok fans see the app as an alternative
to Instagram’s polished aesthetic, Twitter’s
snark and Facebook’s overly mass sensibil-
ity. They describe the platform as raw and
authentic with something for users of all
ages, from recipes and fitness programs to
makeup tips and even therapy.

“Being a millennial on the app felt strange
at first because I landed just before the COVID
boom,” said TikTok star creator Brian Moller,
32. “But now it just feels like we’re all there
doing weird stuff together.”—Allison Duncan

NO

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