WSJ : How Travel Will Change Post-Pandemic: 10 Expert Predictions

How Travel Will Change Post-Pandemic: 10 Expert Predictions
We asked industry pros where we’ll be traveling in years to come and how hotels, flights, airports and even luggage will evolve—for the better. Plus: A look back at WSJ travel tips from the 2010s.

1. We’ll rethink Europe.

Expect a cooling of the romance with Europe’s capitals and new affection for less-crowded cities with strong cultural offerings. “I’d keep an eye on Lyon and Hamburg,” said UK-based travel writer Annie Fitzsimmons, who also predicts a rediscovery of less populated European islands. Among them: Germany’s 24-mile-long island of Sylt, a Teutonic Nantucket.

2. Alaska will beckon.

The pandemic’s searing impact will add a FOMO-like urgency to personal bucket lists. The fresh air appeal of Alaska and Montana will propel them into top spots, thinks Erin Francis-Cummings, CEO of travel data company Destination Analysts.

3. As will esoteric food.

Legions more food travelers will seek out the Faroe Islands, predicts TV producer Irene Wong, who travels the globe filming cooking shows. A windy island chain between Scotland and Iceland, it offers a unique cuisine centered on seafood, dairy and hardy root vegetables. “Any place that’s far and hard to get to is what gets people the most excited,” said Ms. Wong.

4. We’ll eye quick check-in.

“In 10 years your face could be your airplane ticket,” said Andrew O’Connor, vice president, airports and borders, at SITA, a Swiss-based information technology provider. Biometric software installed in terminal video cameras will recognize and match your features to your flight while assessing your security and health risks, allowing most travelers to stroll unimpeded from check-in to gate.

5. We’ll pay for hygiene.

Germophobic fliers might have the option to pay extra for “Hygiene Class,” a premium cabin that comes with a higher standard of cleanliness, according to Christopher Schaberg, author of “Airportness,” and, coming later this fall, “Grounded: Perpetual Flight…and Then the Pandemic.” Though the air filters shared equally with economy will still do the real work to prevent illness, these higher-priced seats will come with more frequent sanitization and scented sprays.

6. We’ll cruise the Arctic.

As pleasure ships steam past the pandemic and implement new health protocols, expect to see new destinations. Cruise industry specialist Clare Weeden sees massive growth in trips through Canada’s Northwest Passage from passengers eager to view polar bears and other Arctic species before they vanish.

7. Alterna-tours will rule.

City tour offerings with minority perspectives will flourish, predicts cultural travel consultant Norie Quintos. Black Panther Party tours in Oakland and explorations of Brooklyn’s Hasidic Jewish neighborhoods will increase in number. “Tours that make people think will only grow in popularity,” said Ms. Quintos.

8. We’ll tip robot-maids.

Hotels will become airy places with AI behind the scenes, said Professor Stephani Robson of Cornell School of Hotel Administration. Open lobbies and guest rooms that allow the outside in will be the blueprint, with frump and fuss banished. Also booted: coffee makers and minibars. Anything hard to clean will be suspect in a post-pandemic-era room. Robots will be present but discreet, vacuuming hallways at 2 a.m.

9. Hover-bags will take off.

Roam Luggage CEO Larry Lein imagines jets of air replacing the wheels on roller bags. Built-in tracking systems would pair the bag with your phone so the hovering luggage would tail you as you walked.

10. Leopards will matter even more.

Peter Fearnhead, CEO of African Parks, a nonprofit that manages 18 national parks and reserves, said countries combining good governance with conservation will become tomorrow’s stars. Two Mr. Fearnhead singles out: Benin and Malawi. The former, in West Africa, is developing Pendjari and W National Parks that feature elephants and lions, while Malawi, in southeastern Africa, is priming reserves with rhinos and leopards.

Barrons : Europe Is Seeing a Second Virus Wave. These Strategists Think Stocks W

Europe Is Seeing a Second Virus Wave. These Strategists Think Stocks Will Continue to Rally.

Across Europe, the coronavirus has triggered volatility and uncertainty in equities, economic growth, and employment.

Governments racked up billions in debt propping up businesses, jobs, and industries. Central banks have stepped up with monetary-policy fixes, and recessions loom.

Barron’s asked a trio of European experts to forecast how the remainder of the year will pan out for investors. Three big uncertainties hold the key to growth—coronavirus, the global economic recovery, and the U.S. presidential election.

Coronavirus. The risk of a second wave is real but Roland Kaloyan, head of European strategy at Société Générale, says that “governments, corporates, and households have developed learning strategies to reduce the risks: social distancing, mask wearing, work-from-home.

“The downside should be more limited compared to the first wave. Also because fiscal and monetary policy are at work.” A vaccine would be a relief for sectors like travel and leisure, he says.

Politicians seem to have little appetite for renewed lockdowns and there are signs that the disease is becoming less deadly. Andreas Bruckner, European equity strategist at Bank of America, also thinks the European recovery will not be derailed by rising virus numbers.

Second waves elsewhere in the U.S., Hong Kong, and Japan “have rolled over after two months, as rising cases make people more cautious,” he says, noting Europe’s second wave has almost reached its eighth week.

Recovery. Cyclical indicators such as GDP will influence the shape of the recovery. Whether it is V-shaped, a swoosh, or a square root will be key for equity markets, says Kaloyan.

Improving economic growth has led the Stoxx Europe 600 index to rise more than 30% since mid-March. European cyclicals—companies selling consumer items bought more during boom times—outperformed defensive stocks that are typically havens in tough times by 25%. This indicates signs of confidence.

“This rally is set to continue,” with a nearly 15% gain in the Stoxx Europe 600 to 420 in November, Bruckner says. The index is currently at about 363. He also sees a further 10% gain for cyclicals versus defensives.

Bruckner thinks the macro recovery hasn’t been priced into European equities. A key indicator is the euro-area composite purchasing managers index (PMI), which charts new orders. This has risen by almost 40 points to a level of 51 in August as the reopening of economies lifted economic activity in Europe.

But European equities have flatlined since June. “They continue to discount a PMI well below 50,” says Bruckner. “We expect the PMI to continue rising to the typical recovery level of 58 over the coming months.

U.S. election. A victory by President Donald Trump is seen as a continuation of current policies, says Kaloyan, warning that former Vice President Joe Biden winning could raise a lot of questions particularly on the fiscal front. “The reopening debate of the U.S. health-care system could be again a source of stress for European health-care names,” Kaloyan says.

Binky Chadha, chief global strategist at Deutsche Bank, says he’s not worried about the effects of a rising euro in terms of the dollar from current levels because capital inflows into Europe are more important.

“While U.S. presidential elections have historically been associated with flat-to-down S&P 500 in the run-up, followed by a strong rally after to year end, we have concerns there may not be a quick and clear resolution this time around,” he says.

Barrons : Yes, It’s a Stock Market Bubble. That Doesn’t Mean Trouble for Investo

Yes, It’s a Stock Market Bubble. That Doesn’t Mean Trouble for Investors Just Yet.

Every stock market bubble begins with a story, and make no mistake—this is a stock market bubble.

The story began easily enough, if not with “once upon a time.” A virus forced the country to shut down and accelerated the gains in a select few technology stocks that are uniquely capable of thriving with everyone stuck at home. A central bank took quick action to prevent financial markets from seizing up, pushing interest rates about as low as they could go. That helped lift the stocks of companies that are growing, including chiefly the aforementioned tech stocks, even if some have no profits. These stocks were among the first to rally once the stock market bottomed in March.

Now, get ready for the plot twist: Good investment ideas can stop being good ideas if the story goes on for too long. The tech trade—including tech companies that aren’t officially labeled as such—went too far before correcting suddenly in the past two weeks.

After gaining 75.7% from its March 23 low through Sept. 2, the tech-led Nasdaq Composite fell 10%, to 10,847.69, over three trading days, its swiftest correction on record.

The percentage of total stock trading attributed to retail investors, up from 25% in 2009
But one correction doesn’t mean that the story is over, or that the bubble is ready to burst. To the contrary, the forces that drove stocks such as Apple (ticker: AAPL) and Amazon.com (AMZN) to astonishing heights remain firmly in place. They include the companies’ continued growth, the Federal Reserve’s determination to do whatever it takes to keep the economy afloat, retail investors’ newfound interest in trading, and maybe even a bit of fiscal largess. Stocks will remain volatile, but the tech bubble will continue to inflate.

For an investment bubble to occur, there has to be a widespread belief that a new paradigm has taken hold requiring an adjustment in valuations far beyond what previous fundamentals would imply. This belief needs to engage the imagination of investors beyond Wall Street, and there must be plenty of capital available to chase stock prices higher. The Covid-19 crisis has unlocked all three prerequisites


Consider how the world has changed in the past six months. Social distancing is now the rule, and working from home is encouraged, when possible. Movie theaters are half-empty, and attending school now means opening a laptop at home for many students.

Companies that bring us a taste of our previous lives—such as Zoom Video Communications (ZM) and Peloton Interactive (PTON)—have seen their share prices soar. Shares of tech titans Apple, Microsoft (MSFT), Amazon, Alphabet (GOOGL), and Facebook (FB) have risen because the businesses are growing far more than most, and investors know that bigger is better in today’s world.

At the same time, near-zero interest rates have encouraged investors to pay up for growth, while some retail investors, starved for something to bet on in the absence of professional sports, have turned their attention to stocks, trading through online brokers like it’s 1999.

As a result, Apple, Amazon, Microsoft, Alphabet, and Facebook now account for nearly a quarter of the value of the S&P 500 index, a level of concentration rarely seen in the benchmark. And that might understate the influence of Big Tech. Add Amazon and the S&P Information Technology and Communication Services sectors constitute 45% of the benchmark index, according to J.P. Morgan data, compared with 40% during the dot-com bubble.

Even as the biggest tech names have seen market caps swell, some formerly small companies have graduated to the big leagues. Zoom, for one, jumped 41% in a single day after reporting sales that more than quadrupled the previous year’s
Zoom Stock Soars Higher and Higher. Buyer Beware.
A lack of meaningful guidance makes valuing the shares difficult
Continue reading, a consequence of the video service’s widespread adoption beyond a business audience. Zoom stock, having zoomed 465% in 2020, is now worth more than $100 billion. Peloton has a market cap of $25 billion after gaining 209% this year, as its stationary bikes replaced gym memberships.


Zoom trades for 50 times 2020 sales, and Peloton, 9.3 times. Both are priced as if future growth is unlimited—a risky bet, especially if the postvirus world looks not all that different from the previrus world. “New-era thinking is everywhere,” says Rosenberg Research’s David Rosenberg. “But there are no ‘new eras.’ ”

That may be, but it still doesn’t mean the bubble is in danger of popping soon—not so long as retail investors keep piling into the market. Retail trading now accounts for 44% of the total, says Jefferies strategist Steven DeSanctis, up from 25% in 2009. Retail investors have been particularly enamored of companies that aren’t covered by Wall Street and have little or no earnings, including Eastman Kodak (KODK), Workhorse Group (WKHS), and Overstock.com (OSTK).

That points to another strange aspect of the current market—the existence of multiple bubbles. The one defined by the Nasdaq 100 gets the most attention, but the run-up in shares of companies that have sought bankruptcy protection, such as Hertz Global Holdings (HTZ) and J.C. Penney (JCPNQ), and electric-vehicle stocks like Nikola (NKLA) and Tesla (TSLA), also merits the bubble label.

Behind the scenes, meanwhile, the Fed is operating the bubble-making machinery. It has pumped trillions of dollars into the economy, expanding its own balance sheet to more than $7 trillion from $4.1 trillion at the start of 2020. This time around, its asset purchases have included not only Treasuries and mortgage-backed securities but also investment-grade and high-yield bonds. All of this demand has served to lower interest rates to near zero.


The Fed typically has burst past bubbles, including the dot-com bubble of the late 1990s and the housing bubble of the mid-2000s, by raising interest rates. Don’t count on that now, or at least not yet. Fed Chairman Jerome Powell has effectively promised to keep rates low for years, which means there should be plenty of cash sloshing around to keep the bubble growing.

Perhaps the biggest reason to keep betting on tech—and the stock market—is that things aren’t nearly as frothy now as they were during, say, the dot-com bubble. Even in August, the market never reached the sustained frenzy that characterized the late 1990s, when the major indexes went parabolic and stayed that way for months, says Katie Stockton, managing partner of Fairlead Strategies. Stockton thinks the market’s recent pullback will create another buying opportunity, “A bubble would be characterized by prolonged upside momentum,” she says. “The market doesn’t have that.”

There are risks, however. Wolfe Research strategist Chris Senyek cites a possible deterioration in the economy, an increase in Covid-19 cases, and Congress’ failure to pass another fiscal-relief package. The November election, too, could derail stocks. On the other hand, if the economy grows faster than expected, investors could bail on tech to buy more-cyclical issues.

How to handle a bubblicious market depends in part on one’s time frame. A money manager judged quarterly has little choice but to hang on and try to time the top. That could mean buying Apple, habitually underweighted in large-cap growth and core funds, notes Wells Fargo strategist Chris Harvey.

Finding a middle ground between growth and value is another option, says Credit Suisse strategist Jonathan Golub. He highlights companies with growth rates a touch lower—and stocks much cheaper—than Zoom. Aspen Technology (AZPN) is growing sales by nearly 20% a year, but trades for 24.6 times earnings after gaining just 2.2% this year. Qualcomm (QCOM) is growing by nearly 30% a year, but trades for 16.9 times earnings.

Economically sensitive stocks could be a good bet for investors with a longer time horizon, says MKM Partners strategist Michael Darda, who expects them to outperform over one to three years. He predicts that a strong economic recovery will follow the Covid-19 crisis. “If you assume that we beat this virus, and have a multiyear holding timeline, how could you not prefer reopening trades over the lockdown stocks that have led so far this year?” he asks.

But that’s a whole different story.

FT : Grandmaster Bernard Arnault looks to the Tiffany endgame

Grandmaster Bernard Arnault looks to the Tiffany endgame
The takeover is still in play after US jeweller’s decision to take legal action to force LVMH to complete

An avid chess player, who enjoys teaching his grandchildren, LVMH chief executive Bernard Arnault is embroiled in one of the most taxing games of his long career.

In his effort to secure — and then tear up — a $16.6bn deal to acquire Tiffany, the US jeweller, the 71-year-old Mr Arnault has deployed a range of chess tactics: decoys, deflections, pins and interference.

Struck last November and originally scheduled to complete before now, Paris-based LVMH said this week the acquisition was no longer possible after the French government intervened to block it, supposedly as part of a trade battle with the US.

But no one thinks that is the end.

“The checkmate move to bring this game to a close will take some time to be played,” said Mario Ortelli, managing partner at Ortelli & Co, an adviser for the luxury industry.

“Tiffany is not an asset that Bernard Arnault does not want. It’s an asset that he does not want at this price.”

The richest man in France, Mr Arnault has risked sparking a political scandal, accused of soliciting government help to get out of the deal, although LVMH has formally denied the allegations. 


Tiffany has hit back by suing LVMH in the US state of Delaware to force it to complete the takeover as planned at $135 per share, or pay damages.

LVMH plans a countersuit to claim that Tiffany, famed for its diamond engagement rings packaged in robin egg blue boxes, mismanaged the pandemic thus invalidating the takeover agreement.

A whirlwind romance
The largest ever takeover in the luxury sector was agreed in very different circumstances last year. Mr Arnault hailed the brand as an “American icon” that would slot perfectly into the LVMH portfolio “to thrive for centuries to come”.

To secure the prize, LVMH raised its bid from $120 per share to $135, a 37 per cent premium to Tiffany's undisturbed share price at the time and on par with its record peak. 

Strategically, the marriage made sense because LVMH needed to bulk up in watches and jewellery. Such “hard luxury” goods accounted for only 8 per cent of LVMH sales and 6.5 per cent of operating profits last year, while most of its profits came from “soft luxury” goods, such as Louis Vuitton handbags and apparel. 

Before Covid-19 hit, “hard luxury” had been expanding faster, growing at a compound annual rate of 6 per cent from 2010 to 2019, according to Bain. But now sales of luxury goods are set to contract up to 35 per cent this year and fine jewellery by 7 per cent with a recovery not expected before 2023. And Mr Arnault has buyer’s remorse. 

Known as “the wolf in cashmere” for his hardball dealmaking tactics, Mr Arnault began manoeuvring over the summer to find ways to renegotiate.

He quickly ran into a wall of resistance from Tiffany, which argued that the merger agreement between them obliged LVMH to respect the original terms. 


The tensions burst out into the open in June with a story in fashion trade publication WWD that reported concerns among LVMH’s board of directors about the deal. LVMH released a statement promising not to buy shares in Tiffany on the open market, a tactic some had speculated it could use to push down the price, but it pointedly omitted any commitment to the takeover.

The moves were designed to spook Tiffany and its investors but were little more than bluff, given the realities of the merger contract, people close to the situation told the Financial Times at the time. 

They added that LVMH’s only way out of the deal would be to go to the Delaware Chancery Court, where it would need to prove that Tiffany breached the merger agreement and that the pandemic was a “material adverse change”.

Things then quietened down until this week’s drama. On Tuesday, LVMH’s legal team told Tiffany that the French foreign minister, Jean-Yves Le Drian, had asked it to delay the closing of the Tiffany acquisition until January 6 to “support the steps taken vis-à-vis the American government’. 

The letter referred to a move by US president Donald Trump to implement customs duties by that date on certain French industries, including luxury goods, in reaction to France adopting a digital services tax. LVMH told Tiffany that it had to obey what it believed was a legal order from the government and therefore could not complete the acquisition before the merger agreement expired on November 24. French officials have disputed that the letter was a binding request and said LVMH was free to do what it wanted.

The gambit prompted Tiffany to file a lawsuit the next day accusing LVMH of purposely delaying matters and looking for a pretext to get out of the deal. Mr Arnault was blindsided by the decision of the US company to sue them ahead of the deal deadline, said people with direct knowledge of the matter. 


When LVMH shared the letter with Tiffany, it was done with the hope that the executives of the US group would sit down with them to find out a compromise to get the transaction completed, those people said. 

Tiffany’s strong language in the lawsuit and board chairman Roger Farah’s public accusation that LVMH was using “any available means in an attempt to avoid closing the transaction” have led LVMH to take a much harder line than originally planned, those people said.

LVMH has said it believes it can win in court. But Delaware judges have only rarely allowed a buyer to walk away from an agreed deal.

The outcome of the legal process is hard to predict, especially given the wild card of the pandemic and whether it will be considered a “material adverse change” affecting the merger agreement. LVMH has also advanced other arguments.

Losing the legal battle would be the worst outcome for Mr Arnault. Behind closed doors, the billionaire has made it clear to his inner circle that LVMH wants to reach a compromise despite the recent acrimony. 

Several people close to Mr Arnault said that if Tiffany is willing to renegotiate, LVMH would be prepared to sit down and find a way to complete the transaction at a lower price. 

Peter Schoenfeld, founder of US hedge fund P Schoenfeld Asset Management, who owns about $111m of Tiffany shares, said that LVMH was playing a risky game that reminded him of Mr Arnault’s failed effort to buy Gucci some 20 years ago. 

“There is an awful odour surrounding LVMH using a government letter to refuse to close its Tiffany transaction,” he said. “Delaware judges have historically had a sensitive nose to such behaviour and should easily see through this charade. These kinds of aggressive tactics backfired before and led LVMH to lose Gucci to a rival and may lead them to lose the iconic Tiffany brand as well.”

Tiffany also believes it will win in court, and that its business will thrive once the pandemic passes, said people familiar with the matter. But its recovery remains uncertain: the coronavirus has hit tourism, shopping malls and New York City, all of which are big sources of revenue.

Tiffany shares are now trading at around $114, a significant discount to the deal price and some 7 per cent lower than before LVMH said it wanted to pull out but still higher than a year ago — before the deal and before the pandemic. Flavio Cereda, analyst at Jefferies, said: “The share price is telling you that the market does not think this deal is dead.”

>>> US Close Dow +0.48% S&P +0.05% Nasdaq -0.60% Russell -0.70%

Closing Stock Market Summary

The S&P 500 increased 0.1% on this 19th anniversary of 9/11 but continued selling in the mega-caps limited the upside. The Dow Jones Industrial Average gained 0.5%, while the Nasdaq Composite (-0.6%) and Russell 2000 (-0.7%) closed lower.  

Similar to the days before, today's price action was technically-oriented given the absence of market-moving news and the losses in stocks like Apple (AAPL 112.00, -1.49, -1.3%), Amazon (AMZN 3116.22, -58.89, -1.9%), and Microsoft (MSFT 204.03, -1.34, -0.7%) on no specific corporate news. Apple shares fell 7.4% this week. 

The difference today was that their losses were offset by relative strength in the cyclical sectors, namely industrials (+1.4%), materials (+1.3%), and financials (+0.8%). Still, when Apple and Amazon are down more than 1.0%, there must be more winners than losers to make a meaningful difference. 

There were more of the latter on Friday, as declining issues outpaced advancing issues at the NYSE and Nasdaq. The information technology (-0.8%), consumer discretionary (-0.3%), and communication services (-0.3%) sectors ended the day in negative territory due to their exposure to the mega-cap stocks. 

Interestingly, the S&P 500 was down as much as 0.9% intraday and fell below its 50-day moving average (3322). A broad rebound in the afternoon, however, helped the benchmark index turn positive and close above the key technical level. 

Shares of Oracle (ORCL 57.00, -0.33, -0.6%), Peloton (PTON 84.04, -3.71, -4.2%), and Kroger (KR 34.37, -0.37, -1.1%) finished lower following their earnings reports. Note, ORCL shares were up as much as 7.9%, and PTON shares were up as much as 11.8%. 

U.S. Treasuries finished on a higher note. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield declined two basis points to 0.67%. The U.S. Dollar Index declined 0.1% to 93.28. WTI crude futures increased 0.2%, or $0.07, to $37.34/bbl.

Reviewing Friday's economic data:

  • Total CPI increased 0.4% m/m in August (consensus +0.3%) while core CPI, which excludes food and energy, also rose 0.4% (Briefing.com consensus +0.2%). The gains in August left total CPI up 1.3% yr/yr and core CPI up 1.7% yr/yr.
    • The key takeaway from the report, which featured the largest increase in the index for used cars and trucks (+5.4%) since March 1969, is that the increase in the all items index was broad-based; nonetheless, annual inflation rates are still running well below 2.0%, so there is still more noise than bothersome policy signal in the August report.
  • The Treasury Budget showed a $200.1 bln deficit in August. The budget data is not seasonally adjusted, so the August deficit cannot be compared to the July deficit of $63.0 bln. The deficit in August 2019 was $200.3 bln.
    • The key takeaway from the report is that while outlays and receipts showed little yr/yr change in August, the year-to-date deficit climbed above $3 trillion.

There are no notable economic reports scheduled for Monday.

  • Nasdaq Composite +21.0% YTD
  • S&P 500 +3.4% YTD
  • Dow Jones Industrial Average -3.1% YTD
  • Russell 2000 -10.3% YTD

FT : Altice Europe: private line

Altice Europe: private line
The board has recommended Patrick Drahi’s offer to minority shareholders. That does not make it an attractive offer, though

For all the hand-wringing about the shrinking of public equity markets, there is evidence that private investors pay more for the same assets. That forms the basis for the €2.5bn valued minority buyout at Altice Europe by its owner Patrick Drahi announced on Friday. His proposed bid price of €4.11 lifted the Dutch-listed share price by a quarter on the day. Even so, this bid looks opportunistic.

Here is why. Before today, the shares had more than halved from February’s peak. The cash bid, a 23.8 per cent premium to the previous day’s close, comes from Next Private, Mr Drahi’s holding vehicle. It will be hard to contest. And the owner of Sotheby’s will not want any auctions. He controls well over three-quarters of the shares and the board has recommended the offer to minority shareholders. That does not make it an attractive offer, though. It is a long way from the estimated fair value of €5.7 per share by Russell Waller at telecom specialists New Street Research.

Mr Drahi can be said to have made a decent effort to raise the value of Altice Europe. He cut costs — a must when net debt exceeds forward ebitda by more than six times. He sold off stakes in both the Portuguese and French fibre units to hint at the latent value hidden within the larger group.

Even so, its enterprise valuation as a multiple of ebitda, at 6 times before this bid, trailed by over a quarter those of both its local rival Iliad as well as that of Spanish peer MasMovil. The latter was bought by private equity in early June. Meanwhile, telecom towers group Cellnex, also Spanish, trades over four times higher on the same valuation ratio.

As a result Mr Drahi’s model of bringing private equity techniques to public markets did not deliver his hoped-for returns. Public market investor stinginess, in telecoms at least, should mean more buyouts follow.