Southwest Airlines

is asking employees to accept wage cuts after the government paycheck protection program grants ran out.

Southwest’s approach is a little different than peers. United Airlines and

American Airlines

have announced plans to furlough 16,000 and 19,000 employees, respectively.

Southwest’s announcement shouldn’t come as a shock. The company has never laid off employees. It has never gone bust. It might be the most successful airline ever. Investors, just looking at financials, could be forgiven if they didn’t realize it was an airline.

Southwest pioneered low fares to stimulate demand along with point to point service from lesser-known airports. Americans are familiar with the culture. No assigned seats plus friendly, and funny, flight attendants. The culture extends beyond the cabin and to the way the company treats its employees.

Now Southwest wants to extend its no-layoff streak by asking employees to accept pay cuts. CEO Gary Kelly has committed to no salary through the end of 2021, and we suspect its employees will take the pay cut.

Still, it highlights the predicament airlines are in due to Covid, one that won’t go away until coronavirus does. Commercial air travel is at levels seen 50 years ago, and without more aid, more layoffs are likely to come—maybe even at Southwest.

Al Root

*** Join Barron’s today at 12 p.m. EDT for a live discussion with Health Care Roundtable members Abbie Celniker, partner at Third Rock Ventures, and Eli Casdin, CIO of Casdin Capital, to gain insight into how Covid-19 has sped up health care innovation in biotech, pharma, and life sciences companies, creating new opportunities for investors. Register here.


Trump Returns to White House as Significant Questions Remain

President Donald Trump left Walter Reed Medical Center Monday evening and returned to the White House, where he will continue to be attended by physicians around the clock. Upon his arrival, the president walked up to the White House’s balcony, removed his mask, gave a thumbs up, and saluted Marine One.

  • In a video posted on Twitter that night, Trump said he has “learned so much about coronavirus” and told Americans that they should not be afraid of the virus.

  • President Trump “exceeded all hospital discharge criteria,” White House physician Dr. Sean Conley said Monday afternoon. The president was fever-free on Monday, with normal heart, liver, and kidney function as well as blood oxygen levels, Dr. Conley said.

  • Dr. Conley did not answer reporters’ questions about when the president last tested negative for the virus, would not provide details about what the president’s lung scans showed, and declined to say whether the president had pneumonia.

  • The president continues to receive dexamethasone, the steroid that has shown to provide significant benefit to patients with severe cases of Covid-19. Trump received his fourth dose of the antiviral remdesivir before leaving and will receive his fifth and final dose outside the hospital.

  • On Monday, the Centers for Disease Control and Prevention acknowledged for the first time that small, aerosolized particles that float in the air could spread the coronavirus further than 6 feet, especially in enclosed spaces with poor ventilation.

What’s Next: Dr. Conley said he would not feel relief about the president’s condition until this coming Monday and it is unclear for how long President Trump will continue to be infectious.

—Ben Walsh


Schools in New York City Hot Spots Will Close

With Covid-19 infections rising in some New York City neighborhoods, Gov. Andrew Cuomo said Monday that schools in several parts of Brooklyn and Queens would shutter in-person classes on Tuesday and move to fully remote instruction.

  • Overruling Mayor Bill de Blasio, Gov. Cuomo said the state would not approve a plan to close nonessential businesses as well, because he felt ZIP Codes were an imprecise tool for targeting outbreaks.

  • The governor’s decision applies to nine of the city’s 146 ZIP Codes in parts of Far Rockaway and Kew Gardens in Queens, and Borough Park, Midwood, Gravesend, Bensonhurst, and Sheepshead Bay in Brooklyn.

  • De Blasio said that despite Cuomo not approving his plan to shutter nonessential businesses in hot spot neighborhoods, he would move ahead with it starting Wednesday.

  • Gov. Cuomo also said that the state would start enforcing mask orders with fines, one of a number of items where he and the mayor appear to disagree.

  • De Blasio said Monday afternoon that fines would only be handed out if a request to wear a mask wasn’t followed, while Cuomo said that people could be fined if they were seen on crowded streets without a mask.

What’s Next: This is the first time that any aspect of New York’s cautious and to-date successful reopening plan has been rolled back. With the mayor and governor giving conflicting guidance, businesses in affected neighborhoods now face uncertainty on whether they must close.

Ben Walsh


McDonald’s Collaborates With Reggaeton Star J Balvin on New Meal


is offering a new celebrity meal through Nov. 1.

  • The chain this week debuted the J Balvin Meal—a Big Mac, fries with ketchup, and an Oreo McFlurry for $6. The company says it’s the Grammy-nominated reggaeton artist’s signature order.

  • Last month, the Travis Scott Meal at McDonald’s lit up social media apps like TikTok and


    Users posted videos at the drive-thru ordering the meal—which was a $6 quarter-pounder with cheese, bacon and lettuce, and came with fries, BBQ sauce and a Sprite—while blasting Scott’s hit song “Astroworld” on the radio.

  • That buzz seemed to translate to sales. Wall Street analysts pointed to a noticeable bump in domestic foot traffic to U.S. McDonald’s locations around the time the meal was offered. Downloads on the company’s app, where deals associated with the meal were offered, also jumped.

What’s Next: The jury is still out as to whether celebrity meals are the next big thing or one-hit wonders. For now, McDonald’s investors will take any boost they can get, with Covid-19 hampering the usual breakfast rush.

—Connor Smith


Mnuchin and Pelosi Set to Continue Stimulus Talks

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke for about an hour Monday, talking through specific spending levels in each other’s plans for another round of stimulus, Pelosi’s office said. The two plan to speak again Tuesday.

  • President Trump has urged Mnuchin and others in recent days to get a deal done, after previously relenting and agreeing to support a much larger package than the White House had previously backed.

  • With Election Day fast approaching, policy makers have a limited amount of time to complete a deal before then, and the president’s Covid-19 infection and hospitalization further upended Washington.

  • The stock market took the continuing negotiations positively, with stocks jumping on news that talks were moving ahead.

What’s Next: Before speaking Tuesday, Pelosi and Mnuchin will share written proposals. There are indications that the two sides are getting closer, with Rep. Ted Lieu (D., Calif.), a member of the speaker’s leadership team, telling Bloomberg that Democrats would accept “somewhat less” than the $2.2 trillion they have proposed.

—Ben Walsh


Second Coronavirus Wave Could Delay Europe’s Recovery: Lagarde

The current spike of the Covid-19 pandemic could delay the eurozone’s economic recovery due to the impact of the containment measures being taken by governments across the region, European Central Bank President Christine Lagarde said in an interview Tuesday.

  • “Instead of that [recovery] V shape that we all long for and hope for, we fear that it might have that second arm of the V a little bit more shaky,” she said in an interview ahead of The Wall Street Journal CEO Council.

  • Lagarde reiterated that the ECB was ready to “use all the tools that will produce the most effective, efficient, and proportionate outcome” if it considers the economic situation demands it. That could include taking the key interest rate even lower than its current minus 0.5%.

  • Industrial production in the euro area was up 4.1% in July over the preceding month, but still 7.7% lower than in July, 2019, the latest data from EU statistics Eurostat showed. And eurozone inflation was at an annual minus 0.3% in September, far from the ECB’s official target of “below but close to 2%.”

What’s Next: In spite of significant stimulus plans enacted by national governments throughout the region since March, topped by a massive €750 billion joint EU recovery fund, the continuing recovery might peter out without new significant fiscal and monetary policy actions.

—Pierre Briançon


September’s virtual stock exchange game has ended. Stay tuned for interviews with winners of last month’s game in a coming newsletter and be sure to join October’s Barron’s Daily virtual stock exchange challenge.

Each month, we’ll start a new challenge and invite newsletter readers—you!—to build a portfolio using virtual money and compete against the Barron’s and MarketWatch community.

Everyone will start with the same amount and can trade as often or as little as they choose. We’ll track the leaders and, at the end of the challenge, the winner whose portfolio has the most value will be announced in The Barron’s Daily newsletter.

Are you ready to compete? Join the challenge and pick your stocks here.


—Newsletter edited by Stacy Ozol, Anita Hamilton, Mary Romano, Matt Bemer, Ben Levisohn