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Stock Markets Are Mixed as U.S. Data Looms: Live Updates Stock Markets Edge Higher as U.S. Data Looms: Live Updates
(about 2 hours later)
Global stocks were mixed on Wednesday as investors awaited more indications of how well the world was recovering from the coronavirus outbreak. Government data to be released on Wednesday will almost certainly show that the U.S. economy shrank in the first quarter at its fastest rate in a decade. But the numbers will hardly begin to reflect the economic damage caused by the coronavirus pandemic.
European markets opened mixed after a mostly positive day in Asia. Futures markets were predicting gains for Wall Street when it opens later on Wednesday. Economists surveyed by the financial data and software company FactSet expect the Commerce Department to report that gross domestic product contracted at a 4 percent annual rate in the first three months of the year. That would be the first negative reading since 2014, and the worst quarter since at least 2009, when the country was in a deep recession.
Major corporations — including Boeing, General Electric and Facebook — were scheduled to report their financial results for the first three months of the year. U.S. officials were also expected to unveil economic growth figures, while the Federal Reserve was expected to release a statement about the health of the American economy later in the day. There is much worse to come. The economy was relatively strong in January and February, and even into March in some places. It wasn’t until late March that layoffs swelled into the millions as businesses shut down and people were ordered to stay home.
“It was only two weeks, but they were so bad that they were outweighing the two and a half months of decent news,” said Dan North, chief economist for the credit insurance company Euler Hermes North America.
Economists expect data from the second quarter, which will more fully capture the shutdown’s impact, to show that the economy contracted at an annual rate of 30 percent or more, a scale not seen since the Great Depression. Most forecasters see a return to growth in the second half of the year. But few expect a full rebound before 2021.
Global stocks were somewhat higher on Wednesday as investors awaited more indications of how well the world was recovering from the coronavirus outbreak.
European markets were mainly in the plus column, creeping higher through the morning, after a mostly positive day in Asia. Futures markets were predicting gains for Wall Street when it opens later Wednesday.
Volkswagen, Samsung, Airbus and other giant businesses in Asia and Europe reported grim first-quarter earnings. Major U.S. corporations — including Boeing, General Electric and Facebook — were scheduled to report their quarterly results later on Wednesday.
U.S. officials were expected to unveil economic growth figures, while the Federal Reserve was expected to release a statement about the health of the American economy later in the day.
All of that could affect investor sentiment, which has been cheered in recent days by hints that the United States and other countries will slowly try to resume business as usual.All of that could affect investor sentiment, which has been cheered in recent days by hints that the United States and other countries will slowly try to resume business as usual.
Prices for U.S. Treasury bonds — long considered a safe place to park money — were mixed during European trading on Wednesday. Prices for U.S. Treasury bonds — long considered a safe place to park money — were mostly higher during European trading on Wednesday.
In stock markets, Hong Kong’s Hang Seng index rose 0.1 percent, while the Shanghai Composite index in mainland China rose 0.4 percent. South Korea’s Kospi rose 0.7 percent. In Asian stock markets, Hong Kong’s Hang Seng index ended the day 0.3 percent higher, while the Shanghai Composite index in mainland China rose 0.4 percent. South Korea’s Kospi rose 0.7 percent.
In London, the FTSE 100 index was up 0.3 percent early. Germany’s DAX was flat, and France’s CAC 40 was down 0.1 percent.
The economic toll of the coronavirus pandemic is weighing heavily on the earnings of Airbus, the European aircraft giant, which reported Wednesday a net loss of 481 million euros (about $522 million) in the first quarter of 2020, down from a profit of 40 million euros in the same period a year ago.The economic toll of the coronavirus pandemic is weighing heavily on the earnings of Airbus, the European aircraft giant, which reported Wednesday a net loss of 481 million euros (about $522 million) in the first quarter of 2020, down from a profit of 40 million euros in the same period a year ago.
The company said that it delivered 122 commercial aircraft compared with 162 in the first quarter of 2019. Around 60 aircraft were not delivered because of the pandemic. Aircraft delivery is a key threshold for earning revenues for aircraft makers.The company said that it delivered 122 commercial aircraft compared with 162 in the first quarter of 2019. Around 60 aircraft were not delivered because of the pandemic. Aircraft delivery is a key threshold for earning revenues for aircraft makers.
“We are now in the midst of the gravest crisis the aerospace industry has ever known,” the company’s chief executive, Guillaume Faury, said in a statement. “We’re implementing a number of measures to ensure the future of Airbus.”“We are now in the midst of the gravest crisis the aerospace industry has ever known,” the company’s chief executive, Guillaume Faury, said in a statement. “We’re implementing a number of measures to ensure the future of Airbus.”
Recently, Mr. Faury sent a memo to employees warning that Airbus, with a work force of 134,000, was “bleeding cash at an unprecedented speed.”Recently, Mr. Faury sent a memo to employees warning that Airbus, with a work force of 134,000, was “bleeding cash at an unprecedented speed.”
Overall revenues at the company declined by 15 percent to 10.6 billion euros for the quarter. Defense revenues rose by 16 percent to 1.9 billion euros, partly offsetting the drop in commercial aircraft sales.Overall revenues at the company declined by 15 percent to 10.6 billion euros for the quarter. Defense revenues rose by 16 percent to 1.9 billion euros, partly offsetting the drop in commercial aircraft sales.
Government data on Wednesday will almost certainly show that the U.S. economy shrank in the first quarter at its fastest rate in a decade. But the numbers will hardly begin to reflect the economic damage caused by the coronavirus pandemic. Volkswagen, the world’s largest carmaker, said that vehicle sales fell 25 percent in the first three months of the year, a vivid indication of the havoc that the coronavirus is causing throughout the auto industry.
Economists surveyed by the financial data and software company FactSet expect the Commerce Department to report that gross domestic product contracted at a 4 percent annual rate in the first three months of the year. That would be the first negative reading since 2014, and the worst quarter since at least 2009, when the country was in a deep recession. The company, based in Wolfsburg, Germany, said that it sold 1.9 million vehicles in the first quarter compared with 2.6 million in the first quarter of 2019. Profit also collapsed, falling more than 80 percent to 517 million euros, or $562 million.
There is much worse to come. The economy was relatively strong in January and February, and even into March in some places. It wasn’t until late March that layoffs swelled into the millions as businesses shut down and people were ordered to stay home. As Volkswagen and other carmakers issue quarterly earnings reports, the scale of the damage from factory shutdowns and dealer closings is becoming clear. Daimler, the maker of Mercedes-Benz cars, said that net profit fell more than 90 percent, to 168 million euros, compared to a year earlier.
“It was only two weeks, but they were so bad that they were outweighing the two and a half months of decent news,” said Dan North, chief economist for the credit insurance company Euler Hermes North America. A recovery is unlikely to come soon. Volkswagen, which began limited production at its main factory in Wolfsburg on Monday, said in a statement that profit for 2020 would be “severely below” that of 2019, but that it expected to avoid falling into the red
Economists expect data from the second quarter, which will more fully capture the shutdown’s impact, to show that the economy contracted at an annual rate of 30 percent or more, a scale not seen since the Great Depression. Most forecasters see a return to growth in the second half of the year. But few expect a full rebound before 2021.
Samsung said on Wednesday that it expected to see a substantial drop in earnings during the second quarter as the coronavirus pandemic hurts demand for its smartphones and televisions.Samsung said on Wednesday that it expected to see a substantial drop in earnings during the second quarter as the coronavirus pandemic hurts demand for its smartphones and televisions.
Sales of personal computers and servers have increased as many white-collar workers try to avoid exposure to the virus by working remotely. But the pandemic has slowed demand for smartphones and disrupted the production and logistics networks that manufacturers like Samsung rely on.Sales of personal computers and servers have increased as many white-collar workers try to avoid exposure to the virus by working remotely. But the pandemic has slowed demand for smartphones and disrupted the production and logistics networks that manufacturers like Samsung rely on.
Revenue and profit from the sale of smartphones, televisions and other devices “are expected to decline significantly as Covid-19 affects demand and leads to store and plant closures globally,” the South Korean electronics giant said in a statement accompanying its quarterly earnings announcement.Revenue and profit from the sale of smartphones, televisions and other devices “are expected to decline significantly as Covid-19 affects demand and leads to store and plant closures globally,” the South Korean electronics giant said in a statement accompanying its quarterly earnings announcement.
Samsung also expressed concern about the future of its smartphone business in a post-coronavirus world, saying that the medium-term outlook remained highly uncertain, with market competition “forecast to intensify” in the first half of 2020.
The company is in a better position than it was at this time last year, when a glut of chips suppressed global demand. Its year-on-year operating profit is up 3 percent to 6.4 trillion won ($5.3 billion) compared with the same period of 2019.The company is in a better position than it was at this time last year, when a glut of chips suppressed global demand. Its year-on-year operating profit is up 3 percent to 6.4 trillion won ($5.3 billion) compared with the same period of 2019.
Still, its operating profit in the first three months of the year was down nearly 10 percent compared with the previous quarter.Still, its operating profit in the first three months of the year was down nearly 10 percent compared with the previous quarter.
Federal Reserve officials are wrapping up meetings on Wednesday after two months of nonstop action to avert financial calamity as the coronavirus roiled markets and upended the world economy. In the afternoon, the chair, Jerome H. Powell, is to hold a news conference to discuss the Fed’s outlook and perhaps disclose what comes next.
The Fed’s efforts to protect the economy have outstripped even its response to the 2008 financial crisis.
Officials slashed interest rates to rock bottom in a matter of weeks, not months. They have been buying bonds at a record pace, swelling their balance sheet to $6.6 trillion from less than $4.2 trillion in mid-February. And the Fed’s emergency lending authorities are reaching further this time: The central bank has said it will buy municipal debt and lend to both large and midsize companies, measures it did not take in the darkest days of the last crisis.
The monetary intervention reflects the economic shock at hand. The coronavirus outbreak gripped the world quickly and nearly completely, bringing the gears of modern capitalism — from schools and offices to amusement parks — to a standstill.
For all of the Fed’s activism, its most challenging job comes next. A first glimpse at the Fed’s playbook may come after Wednesday’s meeting. Policymakers could hint that they will leave interest rates unchanged for months or years, and some economists think they could offer guidance about their bond-buying plans.
One thing seems likely: Mr. Powell will pledge to do whatever it takes to get the country through a tight economic spot.
As the pandemic disrupts American lives and livelihoods, Instagram has been overrun with giveaways in which influencers offer cash to their fans in exchange for tags, follows and comments.As the pandemic disrupts American lives and livelihoods, Instagram has been overrun with giveaways in which influencers offer cash to their fans in exchange for tags, follows and comments.
The giveaways are often framed as charity, but they’re part of a growth scheme that allows big influencers — whose brand deals and sponsored trips are on hold — to make quick money from home. Purchasing sponsor slots for the events has also become the fastest and cheapest way to grow on the platform.The giveaways are often framed as charity, but they’re part of a growth scheme that allows big influencers — whose brand deals and sponsored trips are on hold — to make quick money from home. Purchasing sponsor slots for the events has also become the fastest and cheapest way to grow on the platform.
“Corona has been tough on influencers and if you get told you can make $20,000 for posting a giveaway on Instagram you’re probably going to do it,” said Nathan Johnson, 19, who helps YouTube and TikTok stars orchestrate giveaways.“Corona has been tough on influencers and if you get told you can make $20,000 for posting a giveaway on Instagram you’re probably going to do it,” said Nathan Johnson, 19, who helps YouTube and TikTok stars orchestrate giveaways.
Instagram giveaways first emerged around 2016, and at one point focused on gifting things like Louis Vuitton bags. But in the era of the coronavirus, influencers are mostly just offering cash.Instagram giveaways first emerged around 2016, and at one point focused on gifting things like Louis Vuitton bags. But in the era of the coronavirus, influencers are mostly just offering cash.
“People really need cash more than they do handbags, and logistically it’s harder to take a promotional pic with the celebrity and the bag when everyone is in lockdown,” said Louisa Warwick, the founder of Social Acceleration Group, which has orchestrated seven Instagram giveaways with influencers and actresses.“People really need cash more than they do handbags, and logistically it’s harder to take a promotional pic with the celebrity and the bag when everyone is in lockdown,” said Louisa Warwick, the founder of Social Acceleration Group, which has orchestrated seven Instagram giveaways with influencers and actresses.
Simon Property Group, the biggest operator of shopping malls in the United States, plans to reopen 49 properties between Friday and Monday, according to documents that were shared with retailers on this week and obtained by The New York Times. Most of the properties listed are in Texas, Indiana, Georgia and Missouri.
The malls will have shorter hours to allow for “enhanced sanitizing and disinfecting,” the company said in the documents, which were first reported by CNBC. Simon Property outlined safety protocols for employees, contractors and vendors, including required temperature screenings before work, protective face masks and social distancing.
Some of the guidelines suggest a somewhat dystopian mall experience. Security officers and employees will “actively remind and encourage shoppers” to maintain a proper distance from other shoppers and employees and to refrain from shopping in groups. Food court seating will be altered and spaced to encourage social distancing. Play areas and drinking fountains will be closed, while in restrooms, every other sink and urinal will be taped off.
The company said it would also provide masks, free temperature testing and sanitizing wipe packets to shoppers upon request. Simon Property did not return requests for comment.
The media website Axios said on Tuesday night that it would return a $4.8 million loan it had received from the Small Business Administration, adding that it was near a deal to raise capital through other means.
Axios received the loan through the federal Paycheck Protection Program, a $342 billion fund created to help small American businesses cover payroll, rent and other expenses. The program, part of a vast economic rescue plan signed by President Trump in March, has been riddled with problems.
After the initial money ran out in less than two weeks. Congress replenished the fund with an additional $310 billion, but the online portal for submitting applications crashed just minutes after the program went live on Monday.
Axios said it was returning the money because the program had become “politically polarized.”
“The program has become divisive, turning into a public debate about the worthiness of specific industries or companies,” Jim VandeHei, the chief executive of Axios, said on the company’s website. He added that a new source of funding had emerged in the past week, allowing Axios to confidently return the money.
Several large companies, including AutoNation, Shake Shack and the owner of Ruth’s Chris Steak Houses, have also disclosed that they were returning money they had received through the program.
As the coronavirus outbreak ebbs in China, the country’s companies and officials have made big strides in restarting its economy. Its factories, brought to a standstill when the coronavirus outbreak swept through the country in January, are humming again, and even the air pollution is coming back.As the coronavirus outbreak ebbs in China, the country’s companies and officials have made big strides in restarting its economy. Its factories, brought to a standstill when the coronavirus outbreak swept through the country in January, are humming again, and even the air pollution is coming back.
But empowering consumers could be the tougher task. Many lost their jobs or had their pay slashed. Still others were shaken by weeks of idleness and home confinement, a time when many had to depend on their savings to eat. For a generation of young Chinese people known for their American-style shopping sprees, saving and thrift hold a sudden new appeal.But empowering consumers could be the tougher task. Many lost their jobs or had their pay slashed. Still others were shaken by weeks of idleness and home confinement, a time when many had to depend on their savings to eat. For a generation of young Chinese people known for their American-style shopping sprees, saving and thrift hold a sudden new appeal.
China’s consumer confidence problem offers potential lessons for the United States and Europe, which are only beginning to plan their recoveries. Even if companies reopen, the real challenge may lie in enabling or persuading stricken and traumatized consumers to start spending money again.China’s consumer confidence problem offers potential lessons for the United States and Europe, which are only beginning to plan their recoveries. Even if companies reopen, the real challenge may lie in enabling or persuading stricken and traumatized consumers to start spending money again.
A number of economists have called on China to do more to help consumers. The United States and other countries have unleashed major spending programs that include direct payments to households, but China has largely refrained so far, in part because of debt concerns.A number of economists have called on China to do more to help consumers. The United States and other countries have unleashed major spending programs that include direct payments to households, but China has largely refrained so far, in part because of debt concerns.
The ratings agency Fitch downgraded Italy’s government debt to the brink of junk status, leaving Rome little room for error as it borrows heavily to counter the effects of the coronavirus pandemic. Fitch predicted that Italy’s debt would equal 156 percent of gross domestic product by the end of 2020, an astronomical level that will make it harder for the government to sell bonds at affordable interest rates.
Ford Motor said on Tuesday that it lost $2 billion in the first quarter as factory and dealership shutdowns cut into auto production and sales for much of March. The automaker also said it expected to lose more than $5 billion on an adjusted, pretax basis in the second quarter, when the damage from the coronavirus is expected to be significantly greater.Ford Motor said on Tuesday that it lost $2 billion in the first quarter as factory and dealership shutdowns cut into auto production and sales for much of March. The automaker also said it expected to lose more than $5 billion on an adjusted, pretax basis in the second quarter, when the damage from the coronavirus is expected to be significantly greater.
Starbucks said its global same-store sales fell 10 percent, with sales in China down 50 percent in the first three months of the year. Over all, revenue was down 5 percent to $6 billion, the company said. The company said it expected a recovery, but warned that the blow from the pandemic would be “significantly greater” in the current quarter, which ends in June, because of the hit to business in the United States. Reporting was contributed by Taylor Lorenz, Ben Casselman, Stanley Reed, Ben Dooley, Keith Bradsher, Jeanna Smialek, Kate Conger, Mike Isaac, Neal E. Boudette, Michael Corkery, Sapna Maheshwari, Gregory Schmidt, Carlos Tejada, Mike Ives and Kevin Granville.
Alphabet, the parent company of Google, reported a 3 percent increase in profit in the quarter that ended in March, but warned that there was a significant slowdown in advertising spending during the final month as the coronavirus spread in the United States. Revenue rose 13 percent in the first quarter to $41.2 billion, exceeding projections from Wall Street analysts.
Uber is discussing layoffs of as much as 20 percent of its work force, or roughly 5,400 employees, according to two people familiar with the ride-hailing company’s deliberations. In addition, Thuan Pham, Uber’s chief technology officer, resigned last week, said the people, who spoke on condition of anonymity because the details were confidential. Mr. Pham was one of the longest-tenured executives at Uber, having started his career there in 2013.
Reporting was contributed by Taylor Lorenz, Ben Casselman, Stanley Reed, Ben Dooley, Keith Bradsher, Kate Conger, Mike Isaac, Neal E. Boudette, Michael Corkery, Sapna Maheshwari, Gregory Schmidt, Carlos Tejada and Mike Ives.