Strome Business Minute with Dr. Jeff Tanner

The title of the band's fifth album, “Dance Fever,” refers to a 14th century ritual where groups of people burst into dance frenzies to the point of exhaustion or even death.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. The COVID caused recession has affected the Port of Virginia but really only in a mild way. While the number of ships calling on the Port has declined every year for the last 4 years. That’s really because the ships are getting bigger and carrying more cargo, necessitating fewer ships. Import volume and value, though, have declined 12 and 15 percent due to the recession. Export value, on the other hand, has held steady though volume has declined about 5.5 percent. Coal exported from Virginia is down over 13 percent. One piece of good news in all of this, though, is that employment recovered in maritime supply chain and logistics from a dip in May and is now back to nearly 250,000 jobs. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. We already discussed here the shrunken inventory of homes for sale in the 757, down to its lowest level in 15 years. New home construction can’t keep up with the demand due to labor shortages so the median price of homes has crept up as supply can’t keep up with demand. Strome real estate professor Walter D’Lima’s research shows that our market is representative of the national residential market. Overall, new listings for existing homes are down across the country, as demand is shifting from apartments to houses. But his study also shows that starter home owners are also trading up. But mid-priced owners aren’t trading up. Inventory of higher priced homes is way down and those prices have actually declined so now may be the time to move up. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. With interest rates so low, the mortgage refinance business has been going strong, up some eighty four percent. Fannie Mae and Freddie Mac, the two largest purchasers of mortgages, though, just slapped an additional half a percent fee on cash-out refinances, claiming the COVID-induced recession adds risk. The two government-sponsored organizations are forecasting an increase in losses on qualified loans due to recession-based defaults. Trade groups denounced the fee, which begins September 1, noting that borrowers who haven’t locked in their refinancing will have to pay the fee, expected to average fourteen hundred dollars. Still, a Zillow spokesperson told Barron’s that the refinance market is likely to remain hot and Forbes expects rates to fall even more. Lenders could choose to absorb the fee, so shop around and pay attention to the closing costs. This Strome Business Minute is presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. In June, Facebook committed one hundred million dollars to advance US-based Black businesses, artists, and nonprofits. Last week, they unveiled their plan to offer Black businesses up to forty million dollars or forty percent of the original commitment, as grants. The grants, for Black-owned businesses with fewer than fifty employees, are broken into twenty five hundred dollars in cash and fifteen hundred dollars in Facebook advertising credits and the program will be administered by Accenture. Facebook’s goal is to pump the cash out in a hurry, hoping to get all of the cash released by the end of August. The grant application process opens today and they plan to support ten thousand businesses before the program concludes. With Black-owned businesses closing at twice the rate of other small businesses, every bit helps. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. The Brookings Institute is publishing a weekly economic recovery matrix that reports a metro area’s performance across a dozen measures. For each measure, Brookings reports the actual value for that metro, color-coded by how it compares to other metros of a similar size. The measures include things like business closings, unemployment, commercial real estate vacancies, multifamily rent, and air travel. Our metro area is compared to 52 others with greater than one million in population. Compared to most in our class, we’re doing pretty well, much better than Richmond for example. We’re actually among the 5 strongest for variables like business travel, multifamily rent, and small business closings, and in the next tier for jobs change and job postings. Yes, things are down but much less than in other cities. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. When the COVID caused recession began, one segment that seemed unaffected was construction. Of course, commercial construction projects can take years and typically, though not always, continue on in spite of the economic downturn. The Association of Building Contractors, though, says that construction shrank thirty five percent last quarter, a little bit more than the overall economy. Supply chain disruption made it harder to get materials, some laborers left to take unemployment with the bonus, and other factors contributed to the decline. Hardest hit were retail and hospitality, and with the closing of so many businesses in those sectors, new space may not be needed, leading to postponements and cancellations. But data centers, fulfillment centers like the two Amazon is building here, healthcare and manufacturing may begin to pick up the slack. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner and this is a Strome Business Minute. I’m often asked how the stock market remains at record highs while the economy struggles. As we’ve discussed here, the stock market and economy are not the same thing – for one, when you buy stocks, you’re buying future earnings one to two years out. The market is betting on beating the pandemic, whether by a vaccine, herd immunity, or better treatment. For another reason, what you see as the market is really only a few stocks. The Dow Jones average, for example, is the average price of only thirty stocks and six of those propping up the entire market. Companies with a strong online presence are actually benefiting from the pandemic. But so are large companies are benefiting from the closure of smaller competitors who haven’t been able to weather the pandemic. Put it together, and the market stays strong. This Strome Business Minute is presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. According to Virginia Business Magazine, Virginia is home to 281 companies listed in the Inc 5000, comprised of the fastest growing companies in America. Other than growth, criteria for the list include that they must be private independent companies, not divisions or subsidiaries, and that they had to be at least one hundred thousand in revenue five years ago. Number one in Virginia is Sassy Jones, an online retailer of jewelry and accessories based in Richmond. We had one in the 757, Kern Technology Group in Virginia Beach, a government services provider primarily serving maritime and defense customers in developing new products and solutions. The company grew over 1,000 percent, placing them at number 407 on the list. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. ODU cancelled its football season last week, hoping to play a shortened spring season. The financial impact on the school will be tough but imagine the financial impact of the Pac 12 and the Big 10 dropping fall sports. Just in television advertising alone, companies spent an estimated one point seven billion last season. A T & T led the way spending seventy million dollars, followed by Allstate, Chic-Fil-A, and State Farm, each spending about thirty million. According to Kantar, a firm which tracks advertising spend, the national championship game alone brought in over ninety million. Fox and Disney will take the greatest hits, as they own ESPN and ABC, the two largest college football broadcasters but it puts more pressure on other Power Five conferences to play for the money. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, and this is a Strome Business Minute. Student loans have been put on hold for another 90 days by executive order. The CARES Act had originally included a provision suspending payments for 6 months, or through the end of September. Trump’s order suspends payments until the beginning of 2021. Interest will not accrue during the period. The COVID crisis isn’t the first time student debt has been suspended. Other times included natural disasters such as Hurricanes Harvey, Irma and Maria and the California wildfires. But did it help? In the three quarters following the suspension period, defaults and delinquencies increased significantly. Clearly, the economic conditions caused by those disasters were harder for some borrowers to overcome. For others, the pause simply delayed the inevitable. What we don’t know is how many avoided delinquency because of federal suspension. This Strome Business Minute is presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. This fall will be strange without high school football and baseball’s empty stands at the World Series. But at least we’ll have Pumpkin Spice. In fact, Dunkin is bringing it back one week early, today, with Pumpkin Spice coffee, donuts, and muffins. You can put COVID down as the cause but Dunkin has moved the introduction for the flavor one week earlier each year. Starbucks will maintain their late August start date, August twenty seven, for its pumpkin Spice Latte. While I don’t have sales numbers for Dunkin or Starbucks pumpkin products, overall the category has grown over fifteen percent in revenue and over seven percent in volume over the past few years, making this one of the most anticipated announcements each fall. Even Rover can get pumpkin flavored dog food. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. Sentara’s blockbuster merger with Cone Health in North Carolina will result in a healthcare system with eleven billion in assets. While Cone brings five hospitals compared to Sentara’s twelve, Cone officials are adamant that this is a merger, not an acquisition, and state the new company will maintain a regional headquarters in Greenville. But the merger can only result in efficiencies and lower overhead by consolidating back office functions. Both hospitals struggled in the first quarter, pre COVID, with Sentara actually posting a loss, performance which heightens the need for cost reductions. Cone has recovered but Sentara said last May that even if services reached normal levels, revenue would still be down millions this year, performance that will put the pressure on to lower operating costs particularly in the home office. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. Last week, we discussed the Justice Department’s probe into Facebook, Apple, Amazon and Google. The companies also just posted earnings for the last quarter, adding more fuel to the fire because most of their growth came from advertising revenue, the area of concern for the probe. Google’s sales actually declined for the first time in the company’s history, but less than expected at one point five percent. Facebook had a record quarter in user growth and revenue growth, with almost all of the revenue growth from advertising. Apple, however, also saw growth in its music streaming and iCloud services. Amazon was the biggest winner with a forty percent increase in revenue and a more than five billion dollar increase in profit. Overall tech stocks jumped on the blowout earnings, except Google which dropped slightly. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. The internet giants Facebook, Amazon, Apple, and Google are being investigated by the Justice Department for violation of antitrust laws. The company facing the strongest pressure is Google, and expectations are that the Justice Department will file suit against Google by the end of the year. The reason for the probe is potentially illegal tying contracts, which require a buyer to buy unwanted products in order to get the products really wanted. Google’s problem is that they bundle services into packages and you have no choice but to buy the full package. Companies that want the Google search engine and advertising services also have to buy YouTube and other services. This won’t change the creepy tracking we get on the internet, but unbundling would reduce costs to advertisers and perhaps consumers. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. ADP recently released payroll numbers, stating that 167,000 jobs were added to the private sector payrolls this past month, well below the 1.9 million that were expected based on a survey of economists by Econoday and a forecast of one million from Dow Jones. The wide variance in forecasts and the actual outcome point out the challenges in making any predictions in this turbulent economic time. Almost all of the new jobs were from service providers and mid-size companies actually lost twenty five thousand jobs. The government unemployment numbers will be released Friday, but ADP’s estimates have generally tracked government numbers fairly well, even though they are developed using different methods. The lack of job growth will certainly add urgency to stimulus talks. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. Tax policies of the political parties are fairly stable over time, with the Republicans favoring wealth creation over wages and the Democrats favoring wages over wealth. You see this in changes to capital gains taxes, estate taxes, and income taxes, but you also see it in property taxes and usage taxes, like gasoline. So who would the stock market prefer? Surprisingly, over the last twenty seven presidents and thirty eight terms of office, the market performed better under a new president than a second term president, regardless of party. Further, markets under Democrats tend to do better, and the markets like it best when the parties switch, especially from Republican to Democrat. But the Raymond James analysts who did this analysis say there really isn’t enough data to know with any certainty. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. Last Sunday at Fresh Market I noticed these signs all over touting their rating as one of the cleanest stores in America. Today, I got an email from American Airlines outlining their policies for safer flying. These two marketing strategies really have the same goal, to build consumer confidence that they can safely buy from both. Having a clean store or touchless ticketing is great but one problem is other people – those shoppers who defy mask orders. Cathy Lewis, host of W H R V’s Hearsay, set up the facebook page Mask- Friendly businesses in the 7 5 7 so you can find places to shop where people wear masks. Restoring consumer confidence in the safety of doing business is foundational to getting out of this economic crisis but it takes all of us. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. A lot of focus has been on the potential for a COVID vaccine. In fact, one economist likened the rush for a vaccine to the development of the atomic bomb, a race run by countries who want to be first. But a vaccine is only part of the story. Another part, and possibly more important if COVID acts like the flu and mutates every year, is effective treatment. And one of our local companies is on the forefront. Realta, the Norfolk based pharmaceutical development company, received FDA approval for first round studies of a treatment for the effects of the Corona virus. This treatment won’t eliminate COVID, but it does show the possibility of reducing the inflammation of the lungs that so often kills the patient, which, if it can do that, will save lives and that’s great news. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. If it feels like you’re spending more on groceries during COVID, it’s because you are. I compared grocery costs December to May using government monthly reports of prices for the same items. My analysis shows an annual average increase of eight percent. I compared thrifty baskets and luxury baskets for a family of four with pre-teen children. The luxury basket is rising faster, at almost twice the rate. But we’re also spending more when we have groceries delivered and spoiled produce is included, and it also feels worse because we’re eating out less or paying more for delivery. These findings, though, support those of IPSIS which did a global survey and found that consumers report spending more. But deflationary pressures in other areas of spending have helped soften the blow. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. I was on a call with several local business owners talking about the challenges facing our region’s ability to grow. While the world may have seemed pretty good pre-COVID, Hampton Roads was actually last in economic growth among region’s our size. One of the biggest limitations is finding talent – especially skilled trades for manufacturing. To address the issue, the Virginia Economic Development Partnership and the Virginia Community College System announced the Virginia Talent Accelerator, a program designed to recruit and train workers at no cost to qualified new and expanding companies so that they can expand jobs. The services are customized to the needs of the company and the jobs they are trying to fill. It doesn’t stop there, as they also offer ongoing organizational development support to create a culture that optimizes performance. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. COVID has hit people of color and their businesses disproportionately. One reason is personal finances. African-Americans are twice as likely to live in poverty, while Hispanic poverty is seventy percent higher which means they don’t have access to health care and are more likely to have underlying health issues. Home ownership is also lower due to credit problems. Similarly, black owned businesses were much more likely to be denied PPP loans because they could not meet the minimum credit requirements. Bank On Hampton Roads is one program designed to help families build financial health. They’ve got a full slate of virtual classes as well as personal coaches who volunteer to help individuals achieve their goals. Bank On is free, go to w w w dot bankon h r dot org to sign up or volunteer. This Strome Business Minute is presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. The economic recovery appears stalled out as many indicators of economic health flattened over the past month or so. For example, weekly reports of new unemployment claims show no improvement, whether you look at regular unemployment claims or those made possible by the Pandemic Unemployment Assistance program, which helps those who were self-employed. Similarly, Gross Domestic Product, a measure of the total productivity of our country, is lower for last quarter compared to the previous quarter. But measures of confidence were slowly creeping up through June. Consumer confidence, business confidence, purchasing managers index – didn’t matter, all were inching back up to normal levels before the COVID surge began shutting things back down. But its really a tale of two economies - some industries are as busy as ever while some, like travel, are on hold. This Strome Business Minute is presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner and this is a Strome Business Minute. One University of Georgia and two Notre Dame professors recently found that CEOs who were hired and paid at an above market rate outperformed those paid at or below market rates, with market rates weighted by company size and industry. Controlling for a number of other factors, these CEOs had a significant positive impact on their company for their entire tenure. The study focused only on the largest fifteen hundred US firms, according to Fortune magazine. What’s also interesting is that those paid below market also performed lower than the average. Given that the average annual compensation for this group was more than twelve million dollars last year and only a small difference in company performance can mean millions in stock price changes, hiring the right CEO is important. If pay is any indication, boards are making good decisions. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

I’m Jeff Tanner and this is a Strome Business Minute. With COVID, we’ve seen the acceptance of tele-medicine grow rapidly. At the same time, however, the country’s three largest pharmacy retailers, Walgreens, CVS, and Walmart, have either just inked deals to build primary care centers at their stores or are already building their own network of care centers. Walgreens partnered with VillageMD and plans to open five hundred plus locations in thirty markets over five years, with more than half in underserved areas. Walmart already delivers healthcare in some stores and is now building heathcare super centers offering everything from dental to mental health and basic healthcare. They also opened a health insurance company last week and acquired a patient medication tracking platform called CareZone. CVS, who acquired Aetna insurance two years ago, operates eleven hundred Minute Clinics. What they haven’t done is acquire a virtual healthcare provider…yet. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. Baseball is trying to hold a sixty game season, much shorter than normal, while hockey is moving to Canada for its remaining playoffs. What has the fallout been for sponsors? While many sponsors are trying to renegotiate their deals with teams in light of shortened or cancelled seasons, sports sponsorship researcher and consultant Kirk Wakefield notes that fans are fans three hundred and sixty five days a year, not just for sixty or twenty four games. They visit team websites, they listen to podcasts, and most importantly, they buy the team’s sponsors’ stuff. In fact, his research has documented that while the cost of many sponsorships seems astronomical, the returns can be so high as to be unbelievable. And so far, even in the pandemic, sponsors for consumer goods continue to benefit. This has been a Strome Business Minute, presented by the Strome College of Business, at Old Dominion University.

I’m Jeff Tanner, dean of the Strome College of Business, and this is a Strome Business Minute. Massachusetts-based Moderna announced a successful early stage trial for its COVID vaccine, causing stock prices in the NASDAQ-traded pharma to jump more than sixteen percent on the news overnight. The trial was on forty five patients, all of whom maintained COVID antibodies following two injections. The company is beginning large scale trials next week that will test the vaccine on thirty thousand people world-wide. It requires two doses one month apart. Moderna is one of more than a hundred companies working to develop a vaccine but Moderna has been the fastest, the first to also have something ready even for a preliminary trial. If successful, the vaccine would go into production with three hundred million for early next year. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. The federal government rescinded regulations that prohibit international students from taking a fully online schedule. The regulations meant that if a University pivoted mid-term to online only, those students have to leave without finishing the term. However, they failed to recognize the financial impact these students have on local economies. According to the US Department of Commerce, foreign students contributed forty five billion dollars to the US economy in twenty eighteen. At Michigan State, international students support an estimated 4700 non-university jobs by living, shopping, and eating there. In Boston, the economic impact of international students is $1.6 billion. And that doesn’t include the impact of profitable higher tuition, as they pay the full rate. Exporting American education is big business, and rescinding those prohibitions is a big economic boost. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, and this is a Strome Business Minute. Hotels and related tourism businesses make up a large part of our local economy. The good news is that we’re doing better than pretty much everyone else in the country. In fact, our hotels were the only properties in the country averaging over sixty percent occupancy in any major region last week, off only six percent from last year. In addition, hotel revenues are higher in Hampton Roads than anywhere else in Virginia. In the July fourth holiday week, Northern Virginia revenues were down fifty five percent compared to last year but down only twenty seven percent here. So why is revenue down so much more than occupancy? Because prices have fallen. The average cost of a room is down twenty percent to just under ninety five dollars a night but is on the upswing. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, dean of the Strome College of Business, and this is a Strome Business Minute. While driving up the Eastern Shore, I thought that with the COVID virus and the quality of car sound systems, it was time for drive-in movie theaters to make a comeback. Walmart and the Tribeca film festival people, agree, announcing a partnership to show movies in one hundred and sixty Walmart parking lots beginning next month and running through October. That represents a 50 percent increase in the number of drive-in theaters across the US, with six of the old school style in Virginia. There’s no word yet on what movies Walmart will show or where they will set up theaters but there will be concessions! Walmart has a lot of real estate to optimize and if the movies do well, they may become a permanent fixture. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

The 757 just got a new transportation option to DC, called the ROX – or the Rapid Overland Express. The ROX is a luxury motor coach and, having traveled on something like this in Mexico, I’ve wondered for years why we haven’t seen something like it here. You have wifi, wide leather seats with a small tray table, a coach attendant, and a meal from Taste. The ROX makes the nonstop trip to DC in about three and a half hours from the Westin in Town Center, leaving at 8 and noon, with return trips at 1 and 6. An alternative to Amtrak or flying, it’s definitely a business traveler’s dream; the cost is about the same as mileage for driving yourself, plus you can work or watch streaming movies for free. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Employees with paid sick leave take an average of 5.2 days off a year. Those without paid sick leave only take 3 days. Either way, about 25 percent of sick days are taken to care for someone else. Sounds like an argument for not paying for sick leave. The problem is that those without sick leave are nearly twice as likely to go to work sick, whether it is with the Corona virus or another illness, which then spreads it at work. According to one study, younger workers are most likely to come to work sick because they can’t afford to miss. And many of them are in high customer contact jobs, in retail and restaurants. Now that Corona virus can shut a business down if one employee infects several other employees, maybe every company should offer paid sick leave. This has been a Strome Business Minute, presented by the Strome College of Business, at Old Dominion University.

College Athletics may be amateur sports but it’s also a business, and the pandemic appears to be wreaking havoc. Old Dominion dropped wrestling earlier this year, taking the wrestling community by surprise but all sports are facing cuts across the country. Tennis has been the hardest hit, the only sport nationally with more than four universities dropping the program. With nearly two-thirds coming from other countries, tennis is more international than any sport, even soccer, which means fewer alumni who donate and that may be a reason why it’s dropped so much often. Tim Cass, USTA general manager, argues that programs should engage their communities with youth and adult tournaments and after-school programs, to generate the support they need. But the truth is college sports are expensive and the pandemic an easy excuse to stop the bleeding. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

They say if your neighbor loses a job, it’s a recession. If you lose your job, it’s a depression. When I talk with business leaders, their view of the economy depends on what sector they’re in. And while the economy and the stock market are not one and the same thing, they are related. Shockingly good news on May’s employment numbers led to a stock price surge driven by individual investors. But those same investors grew skittish, fearing more lockdowns in the face of a COVID resurgence in states that tried to re-open too early, and stock prices fell. Those individuals shifted quickly to what Bloomberg analyst Mohamed El-Erian calls “stay at home” stocks, like Netflix and Amazon. Now, the hope is for a Fed action to prop up the market but the bigger needs are the virus and the economy. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Dominion Energy sold its gas pipeline business to Berkshire Hathaway, intending to focus on regulated energy lines in gas and electricity. The deal cleans up a strained balance sheet and also means the end of the Atlantic Coast Pipeline. The problem is that pipeline is needed to prevent lack of supply during periods of high use. Our naval bases bear the brunt because they’re the first to lose access during peak demand so some assets may leave for more stable supply and recruiting new ones is now less likely. The pipeline is also needed to attract and retain businesses. As a low-cost cleaner burning energy source, the gas would also offset the higher cost of wind and solar energy, for a competitive average cost. The stock fell ten percent on the news but will likely rebound as the investor mix changes. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

On Christmas Eve 1926, Wheaties, the Breakfast of Champions, became the first product ever advertised with a jingle. Changing the words to a popular song, it was broadcast on a Minneapolis radio station. The product was actually a mistake – it was created when hot wheat bran was spilled onto a hot stove. But it took nearly three years of trying before the company could make a flake that could withstand packaging and shipping. The slogan, Breakfast of Champions, led to using sports celebrities’ photos, with Lou Gehrig the first to grace the front of the box eight years later. By the end of the thirties, it became the dominant brand, with celebrities from all fields seeking a chance to be on the box, a tradition that continues today. A mistake, a song, and a picture became the dominant brand. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Boeing begins flying the seven thirty seven Max jet aircraft in the next week or so, testing to re-certify the plane as safe for commercial use. At least three days of flights will occur at the company’s test site outside of Seattle, enabling the company to gather thousands of data points to determine whether changes to the software that guides the plane’s anti-stall system have worked. The system was blamed for two horrible crashes that killed over three hundred passengers. Getting the plane back into production and service into will have a major impact on Boeing’s financial status, as well as the ability to survive for the hundreds of smaller companies that supply parts and systems for the plane. But with the virus reducing air passenger traffic, whether there will be demand for the new plane remains to be seen. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Beef substitutes Impossible Foods and Beyond Meat have really taken off this spring. Impossible’s first big breakthrough was at Burger King with the Impossible Whopper, followed by products sold through Starbucks, White Castle, Red Robin, and Little Ceasar’s, and grocery distribution through Kroger. Now the brand has partnered with Yelp, another company that has done well during COVID, to provide free Impossible breakfast sausage and free marketing help from Yelp services like Connect and Waitlist to top independently-owned diners across the country. Locally, Anchor Allies in Virginia Beach made the list of Yelp’s Top Thirty diners and will participate in the program. Beyond Meat took the opposite approach by gaining grocery distribution first, then restaurants. It’s now available at Dunkin, Carl’s Jr, and TGI Fridays. Yelp trend expert Tara Lewis says plant-based meats are a top trend at Yelp. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Facebook continues to lose major customers due to its unwillingness to regulate content. Beginning with North Face, the company has lost dozens of advertisers, including Coca Cola, Campbells Honda, Starbucks, Eddie Bauer, and Levis. While Facebook has announced policy changes, groups such as the Anti-Defamation League and the NAACP continue to press for boycotts. Only about one in four boycotts actually result in the desired change, but one study shows that boycotts cost companies about one hundred and twenty million in stock price value over the following two months. Most boycotts ask individual consumers to change their buying habits, who lose interest quickly. In this instance, however, Facebook’s largest customers are boycotting, not individuals, so we’ll see if the desired changes occur. We’ll also see if the boycotting brands are hurt or helped by their stance. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

This is a Strome Business Minute, presented by the Strome College of Business. If your dream is to produce the number one box office movie, it’s now a little easier than normal. In fact, two guys just did it with a movie that cost them nothing to make. Called Unsubscribed, the horror movie was made with all volunteer talent and lasts all of twenty nine minutes. Filmmaker Christian Nilsson and actor Erich Tabach created the movie, then rented out an entire theater. Apparently, there’s this practice where if you rent out a theater, you keep all of the revenue from ticket sales. So Nilsson and Tabach charged themselves over twenty five thousand dollars, which they got back, to sit and watch the movie over and over – three times in all. And that made it the number one movie at the box office on June 10th! This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

This is a Strome Business Minute, presented by the Strome College of Business. If you’re listening to this in your car, what would you do if someone walked out in front of you? Everyone would swerve to miss the pedestrian, even if swerving put you in danger. Research shows that most people would still swerve and take the risk. As a driver, we feel responsible for those around us and try to protect them. But what if you are a passenger in a self-driving vehicle? Should your safety take precedence? Research by Laurian University professor Tripat Gill in the Journal of Consumer Research showed that more people preferred that the car try to save their life than that of the pedestrian, unless it was a child. The research further explains that this is one reason for slow acceptance of autonomous vehicles – the inability to distinguish moral hazards. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

This is a Strome Business Minute, presented by the Strome College of Business. Even though we’re officially in a recession, some economists are saying the bottom occurred in April and recovery began in May. In fact, the Citi Economic Surprise Index which measures how many economic data points are way off expectations, hit a new record high with positive data coming in much stronger than expected. Most startling was the most recent jobs report earlier this month which showed our economy gaining two point five million jobs instead of losing an anticipated eight million. While still way short of total unemployment, more good news on the job front should come soon due to the expiration of the unemployment bonus. May retail sales also rose at double the expected rate, suggesting the consumer is back. Assuming no national lockdowns, a long slow recovery seems to have begun. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Welcome to a Strome Business Minute, presented by the Strome College of Business. Colleges and universities will play an important role in rebuilding the economy according to Thomas Barkin, president of the Richmond Federal Reserve, and Steven Moret, president of the Virginia Chamber of Commerce. The two were part of a panel last Friday at Virginia Tech. As Barkin said, many old jobs won’t be available, at least not in the numbers they were before. Displaced Workers will need new skills, skills they can get from colleges. But with more than half a million Virginians without access to broadband, online education may not be possible. All of Virginia’s community colleges and universities, though, will be offering face to face classes this fall, so long as the state can remain open. But fall enrollment so far is down most places, Eastern Shore Community College being the exception. To learn more, visit odu.edu/business. This Strome Business Minute is presented by the Strome College of Business, Old Dominion University.

Welcome to a Strome Business Minute, presented by the Strome College of Business. Last week at this time, corporate responses to the racial protests felt different based on the donations to African American organizations. African Americans said otherwise, based on the lack of direct support for black-owned businesses. Aurora James, founder of Brother Vellies luxury fashion accessories, posted on social media that retailers should pledge fifteen percent of shelf space to black owned businesses, as that’s the percentage of the national population that is black. One luxury brand retailer, Sephora, agreed, and quickly realized that less than three percent of its vendors are black-owned. In an NPR interview, the CEO said a similar initiative to support women-owned businesses proved very successful, so perhaps real change will happen. To learn more, visit odu.edu/business. This Strome Business Minute is presented by the Strome College of Business, Old Dominion University.

Welcome to a Strome Business Minute, presented by the Strome College of Business. According to Goldman Sachs, the average investor has beaten the pros in the stock market during the pandemic. The portfolio of stocks purchased by individual investors since the bottom on March twenty third has returned sixty one percent, compared to a forty five percent return on stocks purchased by mutual funds, hedge funds and other pros. Individuals looking for value purchased stocks that were beat up the most by the pandemic, including Penn National Gaming, MGM Resorts, Royal Caribbean Cruise Lines and Marathon Oil. Also doing well for individuals were GoPro, Snap, and Tesla. Most of the gains were made on stocks purchased in mid May when both the virus news and economic news got a little better and the market began its climb, though now it seems to beaded back down. To learn more, visit odu.edu/business. This Strome Business Minute is presented by the Strome College of Business, Old Dominion University.

Welcome to a Strome Business Minute, presented by the Strome College of Business. No tombstone ever read, “I wish I’d spent more time at the office.” With permanent telework offered at Facebook and Twitter, one has to wonder whether anyone will go back to the office. But some local business leaders have told me that they’ve seen productivity declines during the lockdown and Amazon is steadfast in its plans to build a second headquarters of four million square feet. One factor against permanent telework is the lack of spontaneous conversations that lead to new ideas. Pre-COVID, Google tested how to set up their offices to encourage spontaneous conversations, especially between people who didn’t know each other, to generate innovations. Why? Because research shows spontaneous conversations between people who DON’T know each other beats brainstorming sessions or personal reflection for innovations. To learn more, visit odu.edu/business. This Strome Business Minute is presented by the Strome College of Business, Old Dominion University.

I’m Jeff Tanner and this is a Strome Business Minute, presented by the Strome College of Business. Move over Amazon. Here comes ASGN. Well, okay, not quite the size of Amazon but the relocation of ASGN corporate headquarters from California to Henrico County could be a sign of things to come as more companies flee the high cost of California, bringing 700 jobs to Virginia, including an expansion of its Virginia Beach operations to 147 employees. ASGN provides IT consulting services to commercial and government clients, and already has 4,000 employees across the state. The company will spend more than 12 million on two locations to provide room for the growth and the governor kicked in 900,000. The CEO told Virginia's business that this move brings the two largest divisions together, but you can't overlook that they also save a lot of money. This has been a Strome business minute, presented by the Strome College of Business at Old Dominion University

Welcome to a Strome Business Minute, presented by the Strome College of Business. Kroger joined Target and Starbucks in ending its two dollar an hour hero pay to workers for hazardous duty due to the Corona virus. Kroger employees responded by protesting across Virginia, holding drive-through rallies and standing outside stores with signs calling for return of the hero pay. Target and Starbucks employees, though, haven’t protested. Starbucks sales are expected to be down some three billion dollars so maybe their employees were cutting them some slack. Meanwhile Dollar Tree announced last week that it is extending its hero pay at least through the end of June. Like the others, Dollar Tree’s hero pay is two dollars per hour, and the company estimates that the total additional cost will be about fifteen million dollars, having already spent about one hundred and five million on hero pay so far. To learn more, visit odu.edu/business. This Strome Business Minute is presented by the Strome College of Business, Old Dominion University.

Welcome to a Strome Business Minute, presented by the Strome College of Business. Wow, what a rough couple of days on the stock market. After erasing just about all of the pandemic-related losses of the past ten weeks, the market was easily overpriced but as the media focuses on the apparent second wave of increased corona virus positive tests, investors got nervous and sold off, driving prices down. The Fed added to the worries on Wednesday by warning of high unemployment for some time to come. The Dow fell seven percent and the NASDAQ six yesterday. Some of the hardest hit were retailers, airlines and cruise lines, companies more likely to be hurt by a return to lockdown. What investors forgot is that many companies stopped forecasting earnings, afraid of the pandemic’s effects, and those that did guided to lower earnings, so this correction seems like it was probably overdue. To learn more, visit odu.edu/business. This Strome Business Minute is presented by the Strome College of Business, Old Dominion University.

Welcome to a Strome Business Minute, presented by the Strome College of Business. The Fortune 500 list was just issued by Fortune magazine, and as you might expect, there have been some changes. Walmart still holds on to the top position for the eighth year in a row but Amazon jumped past ExxonMobil and Apple to claim the second spot. CVS Pharmacy moved into fifth because of its purchase of Aetna, the insurance company. Walmart’s profit doubled last year but the fastest growing company in profit was internet equipment maker Cisco Systems. Cigna doubled revenues last year, the most of any company on the list. Walmart may have the largest revenues but the largest in terms of shareholder value or market cap is Microsoft – Walmart is seventh on that list. The biggest money loser in the 500 last year? That was Uber, followed by Pacific Gas & Electric. To learn more, visit odu.edu/business. This Strome Business Minute is presented by the Strome College of Business at Old Dominion University.

The protests over George Floyd’s death and the other recent deaths of African Americans feel very different this time. For one thing, businesses are taking tangible action. The most eye opening was Bank of America’s pledge of one billion, that’s billion with a b, over a four year period, to go to local programs to support economic mobility and access to healthcare. BOA, which also owns Merrill Lynch, also pledged an equal amount for loans to black-owned businesses. Other companies don’t have that much money to give but are giving what they can and are redoubling efforts to create inclusive work environments. Nike launched a For Once Don’t Do It campaign against racial intolerance. This time it feels different, in part because businesses have decided that statements alone are not enough. To learn more, visit odu.edu/business. This Strome Business Minute is presented by the Strome College of Business at Old Dominion University.