Protocol Index: What are investors looking for right now?

What Matters Today

• 7:30 a.m. PDT: The Dallas Fed manufacturing index for March will indicate just how much U.S. manufacturing has contracted. Trading Economics expects it to drop to -6, from February's 1.2.
• 4:50 p.m. PDT: Japan's retail sales data for February will show whether tech sales fell, as well as giving a general sense of consumer spending.
• 6 p.m. PDT: China's business activity indexes will show how its tech sector has fared this month, after last month's contraction.

Layoff Watch

• Bird laid off 406 workers, 29% of its total headcount.
• Airbnb has halted hiring and may begin layoffs.
• Knotel, a WeWork competitor, laid off 30% of its workforce and furloughed a further 20%.
• Rent The Runway laid off all of its retail employees.
• Supposedly unrelated to coronavirus, WeWork cut 250 jobs.
• Zipcar laid off 30-40% of its team.
• Ziprecruiter laid off over 400 people.

The bigger picture: Salary negotiation startup Candor has started tracking layoffs and hiring freezes in tech-linked roles. According to Candor, so far 131 companies are laying people off and 484 have frozen hiring. And Protocol's Lauren Hepler spoke to the Boston startup behind the Layoff List, which has seen traffic to its firings index surge by 2,000% over the last two weeks.

Tip us: If you hear of layoffs we should know about, you can anonymously contact us.

Today's News

As of 3.45 a.m. PDT: Nasdaq Futures: 0.45% | Euro 600: -0.59% | Nikkei: -1.57% | Hang Seng: -1.32%

OPPORTUNITIES

• Bloom Energy is refurbishing ventilators for LA.
• Lyft is telling drivers to go work for Amazon.
• Amazon is telling warehouse workers to go work in groceries.
• U.K. internet providers have agreed to lift data caps.
• Indian internet providers are offering free broadband.
• Google Classroom has become one of the top 10 downloaded apps in the U.S.
• Didi is launching a car leasing service with automaker BAIC.
• Microsoft's Azure usage increased 775% in places with enforced quarantine rules.
• The U.K.'s NHS is working with Palantir, Microsoft, and Google on a data dashboard.

THREATS

• OneWeb filed for bankruptcy, and now wants to sell itself.
• SoftBank, a OneWeb investor, saw its stock drop as much as 10% on Monday.
• Ad tech company IAS blocked 1.3 billion ads from appearing next to coronavirus keywords in March.
• WeWork bonds are yielding 36% as the bottom falls out of co-working.
• Apple suppliers are lowering their forecasts for iPhone sales.
• E.U. economic sentiment dropped the most on record — and much of the survey was done before strict lockdowns were imposed there.

DEALS

• Microsoft is selling its stake in Israeli facial recognition company AnyVision.
• Benchmark stands to lose out on up to $600 million if SoftBank pulls its tender offer for WeWork shares; Adam Neumann $970 million.
• SoftBank is in discussions to lead a $100 million funding round in Plenty, possibly at a discount to its last valuation.
• Tiger Global has built a secondary market stake in ByteDance.

Diving Deeper

Some tech is more equal than others

Everyone's getting hammered in this crisis, but some are doing much worse than others. In general, tech is doing better than the broader market: So far this year, the S&P North American Expanded Technology Sector Index is down 15%, versus the S&P 500's 21%.

• That's not too surprising — the big tech companies have a ton of cash, can weather the crisis, and their revenue isn't going to be that badly hit. Plus they had a huge rally in January, so they've had further to fall.

More interesting are the wildly different performances within tech, which have revealed just how cyclical certain tech sectors are. And a new survey from Wolfe Research published Friday showed where investors' heads are at these days.

• When Wolfe last polled investors about tech sectors in December, they were most bullish about services and software.
• Now, software's looking less appealing: Forrester Research thinks software spending will remain flat this year, while services spending could contract.
• Instead, investors are now keen on "value sectors" like hardware and semiconductors — which Nvidia's successful $5 billion bond sale last week is testament to.
• Wolfe itself is more specific: It doesn't want to hold hardware, but says chip stocks are set to succeed. It's just unsure about timing.

Tech as a whole is expected to outperform the wider markets this year, according to 70% of Wolfe's survey respondents. But such a dramatic shift in sentiment within the sector over such a short time period shows that it's hard to predict exactly who will benefit from that … well, if not success, how about we call it lack of failure.

Relatedly: Protocol's Biz Carson takes a look at the kinds of startups most at risk during the COVID-19 outbreak.

Overheard

• "The best time to invest is in a downturn." — Tony Fadell is looking for opportunities amid the crisis.
• "Early stage businesses have seen a swift and severe contraction of investor interest." — Founders Factory's Brent Hoberman, asking the U.K. government to start investing in startups.
• "You can't go public right now." — An anonymous head of equity capital markets, speaking to the Financial Times about startups' IPO prospects.
• "Given the potential length and depth of downturn, it is hard to imagine overinvesting in pandemic-related investment." — Yale economist William Nordhaus on how the government should respond to the virus.
• "Lending these companies more money will … make the companies even more vulnerable to failure in the long run." — Guggenheim's Scott Minerd, on his concerns about overleveraged companies.

Closing Bell

If everything changes, what stays the same?

According to Podtrack, the number of unique podcast listeners has dropped by around 20% this month, a decline it attributes to everyone turning their commute time into "I will not get out of bed until my first Zoom call" time. Now, that might go back to normal once we're let out again — but what if it doesn't? There are a lot of behavioral changes that could feasibly persist beyond quarantine: less business travel, lower demand for offices, and maybe a greater tolerance for silence and boredom. We talk a lot about tech's potential to benefit from that (Zoom! HQ Trivia!) but less so about how the way we live in the post-pandemic world could hit products that were built for the old world (TripActions, Quibi, WeWork). One thing is certain: Those companies will be spending some of this lockdown time thinking about how they'll pivot once we're out the other side.