The Finance 202: Walmart’s new mask rule could prove a ‘tipping point.’ It highlights a failure of Washington leadership.

The developments represent the continuation of a Trump-era theme: big business moving into a void left by elected officials to provide leadership on an urgent public need. On issue after issue, from climate change to racial justice, corporate chiefs have been stepping up where the Trump administration has shied away. 

But their pandemic response also demonstrates the folly of relying on that model: The Trump administration could have imposed a national mask-wearing mandate back in early April, when the Centers for Disease Control and Prevention first recommended the practice. Instead, President Trump chose to politicize the issue, mocking Democratic rival Joe Biden and others for donning face-coverings. And now four months into a pandemic that has claimed more than 134,000 lives and swollen the jobless ranks to some 18 million people, the nation remains a patchwork of rules on the matter and other obvious steps to stop the spread of the virus.

There is already evidence that the announcement by the nation’s biggest employer — a retail staple of rural and exurban Republican strongholds — is turning the tide on what had become another front in a toxic partisan fight.

Hours after Walmart made its announcement, supermarket chain Kroger said it is following suit with a nationwide rule for shoppers in its stores that will take effect next week. Kohl’s, too, announced it will require shoppers to mask up in its 1,100 nationwide starting Monday.

And the National Retail Federation piggybacked on the Walmart announcement to encourage all retailers to adopt the policy, saying it hoped the news proves to be a “tipping point” on the matter. “Workers serving customers should not have to make a critical decision as to whether they should risk exposure to infection or lose their jobs because a minority of people refuse to wear masks in order to help stop the spread of the deadly coronavirus,” the trade association said in its statement.

General counsel for the federation, Stephanie Martz, suggested that Walmart’s market and cultural pull could have an outsize impact. “The more stores that are able to make announcements like this, the more it will help move the needle culturally and make it accepted that this is what you do when you shop in an enclosed space,” she said. “The fact that this has become politicized is really disappointing.”

Walmart wasn’t first into the breach. It joins a list of major retailers that have already imposed mask-wearing requirements, including Apple, AT&T, Costco, Dollar Tree, H-E-B, Starbucks and Verizon. And half the states now have adopted mandates, with Alabama the latest to announce one Wednesday. But Arizona and Florida, two epicenters of the pandemic’s resurgence, remain among the holdouts. In Georgia, another hotspot, Gov. Brian Kemp (R) issued an executive order Wednesday banning cites and counties from adopting their own face-covering requirements.

Trump donned a mask in public for the first time Saturday. But he continues to resist a federal mandate, and that is costing lives and dragging out the economic recovery. An analysis by Goldman Sachs economists last month found a federal mask requirement would cut the daily rise in cases by a full percentage point while salvaging roughly $1 trillion of economic activity. Findings by other public health researchers back up the firm’s conclusions.

CDC Director Robert Redfield said widespread use of the face coverings could bring the pandemic to heel in a matter of weeks:

Yet the Occupational Safety and Health Administration, the federal agency charged with enforcing workplace safety, has all but abandoned any effort to enforce standards as employees have returned to the job. “OSHA has received thousands of complaints from workers who say their employers have failed to take basic steps to mitigate infection risks in industries from health care to construction and beyond,” Eli Rosenberg writes. “Loren Sweatt, the Trump appointee who leads the agency, disclosed during congressional testimony in May that OSHA had issued a citation for only one of the complaints.”

On earnings calls this week, big bank executives emphasized the pandemic will continue to set the economy’s course. “The pandemic has a grip on the economy, and it doesn’t seem likely to loosen until vaccines are widely available,” Citigroup chief executive Michael Corbat told investors.

Given that widely-acknowledged state of affairs, it might have been reasonable to expect corporate leaders to embrace mask requirements earlier. But chief executives face their own set of pressures, from trying to meet investor demands for short-term returns to attempting to steer clear of partisan food-fights.

Email correspondence between business lobbyists and state officials unearthed by The Post’s Isaac Stanley-Becker reveal a different priority for industry leaders: A concerted and in many cases successful push to get states to reopen more quickly. “The sway of business interests extends beyond ‘safe harbor’ from coronavirus lawsuits, a central public cause of business groups that critics say invites risky behavior and constrains workers who get sick,” he wrote last week. “In Georgia, [Gov. Brian] Kemp’s top aides were also inundated by private appeals from corporations and conservative nonprofit organizations, email records show.”

The crisis is “highlighting the value of political leadership,” says Harry W. Clark, who is advising both corporate and elected leaders on their covid-19 responses. “If you relied exclusively on epidemiologists, you would never reopen. And if you relied exclusively on business leaders, who are worried about The Street, you would open too early. Governors have to balance those interests and make difficult decisions” that won’t prove themselves for weeks.

Trump is losing ground to former vice president Joe Biden in the presidential race as voters sour on the president’s handling of the coronavirus, a new Wall Street Journal/ NBC News poll found.

“The coronavirus crisis continued to drag on Mr. Trump’s chances of winning re-election, with 37% of voters approving of his handling of the continuing outbreak and 59% disapproving,” the WSJ’s Andrew Restuccia writes of the survey, which found Biden extending his lead over Trump to 11 points, up from 7 points last month.

And the poll found an overwhelming majority of voters, including a majority of Trump supporters, reporting they wear masks in public now. More from Restuccia: “By more than 2-to-1, voters said they are more likely to vote for a candidate who is more focused on stopping the spread of the virus than on reopening businesses. Nearly three-quarters of voters said they always wear a mask while shopping, working or when they’re around people outside their homes, an 11-percentage-point increase from last month. The share of Trump supporters who say they always wear masks climbed 15 points since June, from 39% to 54%.”

Against that backdrop, Walmart’s move looks like less of a bold stroke and more of a lagging indicator. “The fact that Walmart is doing this now is proof of why you need the federal government to step in and set standards early on,” says Debbie Berkowitz, a program director with the National Employment Law Project, a pro-labor group. “We’re now four months into this pandemic… There are consequences when the federal government fails to step in where they should.”

PROGRAMMING NOTE: The Finance 202 is taking a break tomorrow. See you back here on Monday morning. 

More positive vaccine news and a blowout quarter for Goldman powered gains: “The Dow Jones Industrial Average closed 227.51 points higher, or 0.9 percent, at 26,870.10. It was the Dow’s fourth straight daily gain. The S&P 500 was up 0.9 percent at 3,226.56. The Nasdaq Composite gained 0.5 percent to end the day at 10,550.49. The Russell 2000 — which is made up of small-cap stocks — rallied 3.5 percent for its biggest one-day gain since early June,” CNBC’s Fred Imbert and Yun Li report.

“Data published by the New England Journal of Medicine showed Moderna’s coronavirus vaccine produced a ‘robust’ immune response, or neutralizing antibodies, in all 45 patients in its early stage human trial. The news sent Moderna shares up 6.9 percent.”

The S&P 500 is now down less than 1 percent on the year. 

Goldman keeps profits steady while rivals falter: “Goldman was buoyed by its Wall Street roots, seizing on a flood of corporate fundraising deals and torrid trading markets to post its second-highest quarterly revenue ever, at $13.3 billion. Those fees were slightly offset by higher reserves for future loan defaults in what is expected to be a sustained and deep recession,” the Wall Street Journal’s Liz Hoffman reports.

“The challenge now for Chief Executive David Solomon: not to learn the wrong lesson. Goldman hasn’t seen this kind of activity since 2010. Its ability then to wring profits from economic turmoil bolstered its mythical status as a Wall Street heavyweight and delayed its push into steadier businesses such as consumer banking and asset management that could help balance the firm when this crisis passes.”

Biggest banks gain $10 billion on Fed moves: “March presented the threat of a credit freeze along the lines of 2008. Instead, the Federal Reserve’s efforts to keep debt markets flowing have things looking more like 2009, with concerns about the U.S. economy abundant but times still great on Wall Street trading floors,” Bloomberg News’s Jennifer Surane and Steven Lubbers report.

“The Fed’s moves have meant a $10 billion windfall for the biggest U.S. banks as their bond traders seized on big market swings to set new records, and their bankers arranged a slew of debt deals for companies desperate to raise cash. That helped keep JPMorgan Chase & Co. and Citigroup Inc. profitable despite a surge in loan-loss provisions, and even delivered a surprise earnings increase at Goldman Sachs Group Inc. The market bonanza has for now eased fears about the type of bank capital concerns that fueled the last crisis and prompted government bailouts.” 

• Republicans scale back convention: “The Republican Party will hold a scaled-back convention in Jacksonville, Fla., next month that includes a mix of outdoor and indoor venues, according to a letter sent to delegates,” Josh Dawsey reports. “The Thursday letter from Republican National Committee Chairwoman Ronna McDaniel, obtained by The Washington Post, said admittance will be limited to only regular delegates for the first three days of the convention — or about 2,500 people. For the final day, when the president attends, delegates will get a guest, and alternate delegates can also attend — or 6,000 to 7,000 people.”
• Virginia adopts nation’s first coronavirus workplace safety rules: “The state’s safety and health codes board voted 9-2 to adopt what is called an ‘emergency temporary standard,’ which will require businesses to implement safety measures to protect people from being infected with the coronavirus at work. Companies could face financial penalties of up to $130,000 if they are found to have violated the policies,” Eli Rosenberg reports.
• Consumer appetite for cars, homes bolsters economy: “Consumers have continued spending on big-ticket items such as vehicles and homes during the pandemic, helping support the U.S. economy as it battles a surge in cases and renewed business shutdowns,” the Wall Street Journal’s Sarah Chaney reports.
• At the lodckdown’s worst, 10 states had less than 50 percent of people working: “Nevada was one of 10 states where less than half their populations were working in May amid economic lockdowns of most non-essential businesses. Hawaii, Michigan, Florida, Mississippi, West Virginia, California, Louisiana, New York and New Mexico also had less than half of the population employed,” Bloomberg News’s Alexandre Tanzi reports.

• Online shopping is taking a toll on retailers: “Margins for the hardest-hit nonessential retailers — including mall-based clothing chains — on average are this year likely to be about half what they were in 2019, according to credit ratings agency S&P Global. The shift to e-commerce probably erased a couple of percentage points from company margins, Sarah Wyeth, senior director for retail and restaurants said,” Reuters reports.
• UnitedHealth profits surge amid cancellations: “UnitedHealth Group Inc. saw profits rise sharply because of savings from surgeries, hospital stays and doctor visits canceled amid the pandemic, but the company said that health care returned to near-normal levels in recent weeks,” WSJ’s Anna Wilde Mathews and Dave Sebastian report. “The company said it expected higher health-care costs in the second half of the year, as people seek deferred care. UnitedHealth also said testing and treatment expenses tied to Covid-19 would continue into 2021.”
• Chipotle says it will add as many as 10,000 employees: “Chipotle expects more than 60 percent of new stores that it opens will include drive-through lanes, which are strictly for picking up orders placed in advance online. The company said restaurants with what it calls ‘Chipotlanes’ require more staff than its traditional restaurants,” Micah Maidenberg reports.
• American Airlines warns it could furlough 25,000 workers this fall. “The airline also urged employees to take new extended leaves that can last up to two years or early retirement packages to get as many people off payroll as possible before having to involuntarily cut their jobs,” CNBC’s Leslie Josephs reports. “American’s revenue in June was down more than 80% than a year ago, CEO Doug Parker and President Robert Isom said in a note to staff.”

• India reports record death toll as cases surge: “The third-worst coronavirus outbreak in the world is growing even more dire. India reported a record 606 deaths on Thursday, along with 32,695 new infections. The number of cases detected since the pandemic began is rapidly approaching 1 million, though shortfalls in testing mean that number is widely thought to be an undercount,” Antonia Farzan reports.

Beijing says it’s growing while the rest of the world is contracting: “China’s economy has recovered rapidly from its coronavirus shutdowns and has started to grow again, figures showed, leading analysts here to crow that the country was best-in-class among major economies at dealing with the pandemic,” Anna Fifield reports this morning from Beijing.

“This was clearly a dig at the United States — where the virus continues to spread aggressively and the economy is suffering — though China’s statistics are often thought to be massaged for political reasons. Indeed, President Xi Jinping said in a letter released Thursday that China was dealing with the epidemic and making progress on his top two economic goals. China is ‘striving for a decisive victory in building a moderately prosperous society in all respects and eradicating poverty,’ Xi wrote, according to the state-run Xinhua News Agency.”

China, U.S. clash on who organized Hong Kong meeting: “China and the U.S. gave differing accounts of a meeting between a senior Chinese official and the U.S. ambassador, as the two countries sparred over Hong Kong,” the Associated Press’s Ken Moritsugu reports.

“A statement from the Chinese side Wednesday said that Vice Foreign Minister Zheng Zeguang had summoned U.S. Ambassador Terry Branstad to protest recent U.S. moves including a law to sanction officials who undermine local autonomy in Hong Kong. A statement posted on the U.S. Embassy website Thursday said Branstad had met Zheng the previous day to express deep American concern about Chinese decisions that erode fundamental freedoms in Hong Kong.”

Trump leans against sanctions on Chinese officials for now: “Trump’s private decision to refrain from further restrictions — which he made before signing the Hong Kong Autonomy Act on Tuesday — contrasts with the combative public tone he has struck for weeks with China over issues from the pandemic to trade to Hong Kong’s political freedoms,” Bloomberg News’s Jennifer Jacobs and Saleha Mohsin report.

“The new law calls for sanctions against ‘primary offenders’ undermining Hong Kong’s autonomy but doesn’t require the administration to act immediately. Trump’s team had already created a list of Chinese officials, including Hong Kong Chief Executive Carrie Lam and Vice Premier Han Zheng, before Trump decided against the move. … The president can still decide to move forward with the penalties even if he doesn’t do so now.” 

It’s a major blow to the E.U.’s antitrust efforts: “Apple won a major victory against European efforts to force it to pay higher taxes, after a European Union appeals court overturned a massive judgment against the tech giant and said that E.U. antitrust regulators erred in imposing a 13 billion euro ($14.8 billion) bill for back taxes,” Michael Birnbaum reports from Brussels.

“The ruling, which is likely to be appealed by the European Commission, was a major boost to Apple and the Irish government. Both said they did nothing wrong and have denied the E.U. allegations that Apple received preferential tax treatment from the Irish government.” 

Biden, Bezos, other billionaires and top companies were targeted: “Joe Biden, Elon Musk, Jeff Bezos and other high-profile Twitter account holders were the targets of a widespread hack to offer fake bitcoin deals in one of the most pronounced security breaches on a social media site,” Rachel Lerman, Cat Zakrzewski and Joseph Marks report.

“Accounts for former president Barack Obama, Microsoft co-founder Bill Gates, musician Kanye West and both Uber and Apple also posted similar tweets, all instructing people to send cryptocurrency to the same bitcoin address. The tweets were removed throughout the afternoon, shortly after being posted … The attack also partially shut down the network. Twitter said in a tweet on Wednesday afternoon that some users weren’t able to tweet while it was addressing the incident. Users with the check mark indicating that their accounts were verified by Twitter reported that they weren’t able to tweet.”

• The company’s shares fell more than 3 percent after hours, CNBC’s Kif Leswing reports.

CEO Jack Dorsey later posted an apology, as the company said an investigation into what happened is underway:

Billionaire investor George Soros was among those fueling the Democratic candidate’s second-quarter cash bump. “Among the top contributors to the two new committees raising money for Biden and the national and state Democratic parties were some of the most well-known Democratic donors,” Michelle Ye Hee Lee and Anu Narayanswamy report.

“They include: billionaire investor George Soros ($500,000), Facebook co-founder Dustin Moskovitz ($620,600), billionaire hedge fund founder and former presidential candidate Tom Steyer ($360,000), billionaire entrepreneur and former Secretary of Commerce Susan Pritzker ($300,000), and Kathryn Murdoch ($615,000), co-founder and president of the Quadrivium Foundation and daughter-in-law of Rupert Murdoch, the conservative media mogul. Kathryn Murdoch is increasingly giving to Democrats this cycle, including $1 million to help Senate Democrats.”

The U.S. coronavirus response is distinguishing itself the wrong way internationally. 

• The Labor Department releases weekly jobless claims.
• Netflix, Johnson & Johnson, Domino’s Pizza, Abbot Laboratories, Bank of America, Charles Schwab and J.B. Hunt Transport Services are among the notable companies reporting their earnings.