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Investors’ Confidence Lifts U.S. Stocks to Best Month Since 1987: Live Updates Investors’ Confidence Lifts U.S. Stocks to Best Month Since 1987: Live Updates
(about 2 hours later)
Stocks fell on Thursday, giving up some of their gains from the day before, after reports that showed millions more Americans had applied for weekly unemployment benefits and consumer spending had collapsed.
Stocks fell on Thursday, giving up some of their gains from the day before, after reports that showed millions more Americans applied for weekly unemployment benefits and consumer spending collapsed. The S&P 500 closed down nearly 1 percent, but it was a small retreat in an otherwise strong month for Wall Street. Even with the decline on Thursday factored in, the S&P 500 had its best month since January 1987, a gain that came despite it becoming increasingly clear that the coronavirus crisis is pushing the United States into a dire economic downturn.
The S&P 500 closed down nearly 1 percent, but it was a small retreat in an otherwise strong month for Wall Street. Even with the decline on Thursday factored in, the S&P 500 had its best month since January 1987, a gain that came despite it becoming increasingly clear that the coronavirus crisis was pushing the United States into a dire economic downturn. The nearly 13 percent gain this month means that the S&P 500 is now up roughly 30 percent from its March 23 low. The rally has surprised even the most ardent bulls.
The nearly 13 percent gain this month means the S&P 500 is now up roughly 30 percent from its March 23 low. It’s a rally that has surprised even the most ardent bulls.
“Frankly, I’m shocked by the speed of the rally,” said Julian Emanuel, chief equity and derivatives strategist at the brokerage firm BTIG, who has been expecting a rebound since before the rally began.“Frankly, I’m shocked by the speed of the rally,” said Julian Emanuel, chief equity and derivatives strategist at the brokerage firm BTIG, who has been expecting a rebound since before the rally began.
The rally, coming even in the face of crushing economic data, highlights investors’ confidence that things will return to normal sooner than they thought when stocks were collapsing in late February and early March.The rally, coming even in the face of crushing economic data, highlights investors’ confidence that things will return to normal sooner than they thought when stocks were collapsing in late February and early March.
Both the Federal government and the central bank have pumped trillions of dollars into the economy and financial markets. And lockdown measures appear to be having some success in reducing rates of infection, with some states laying out the conditions for reopening. Both the federal government and the Fed have pumped trillions of dollars into the economy and financial markets. And lockdown measures appear to be having some success in reducing rates of infection, with some states laying out conditions for reopening.
Financial markets may be in for some rockier days ahead if the first day of trading in May is anything to go by. While most financial capitals were closed for Labor Day, those few that were open fell dramatically. Financial markets may be in for some rockier days ahead if the first day of trading in May is anything to go by. While most financial capitals in Asia and Europe were closed for the celebration of Labor Day, the few that were open fell significantly.
Australia’s ASX 200 tumbled by 5 percent, while Japan’s Nikkei 225 fell 2.8 percent. In London, early morning trading pushed the FTSE 100 down 2.4 percent. Australia’s ASX 200 tumbled 5 percent, while Japan’s Nikkei 225 fell 2.8 percent. In London, early morning trading pushed the FTSE 100 down 2.2 percent. On holidays, markets can be susceptible to big swings because of the relatively few transactions being made.
Futures trading showed Wall Street heading for a sell-off at the opening bell on Friday.Futures trading showed Wall Street heading for a sell-off at the opening bell on Friday.
News from some of the world’s biggest companies and more jobless claims, as well as a retreat Thursday on Wall Street, may have helped to dampen optimism. The S&P 500 slipped by 1 percent on Thursday, while Amazon warned that ongoing costs related to the pandemic could swing it into a loss of as much as $1.5 billion in the next quarter, and Apple refused to give any guidance. News from some of the world’s biggest companies and more jobless claims, as well as a retreat Thursday on Wall Street, may have helped dampen optimism. The S&P 500 slipped 1 percent on Thursday, while Amazon warned that costs related to the pandemic could swing it into a loss of as much as $1.5 billion in the next quarter, and Apple refused to give any guidance.
The emergence of doubt could mark a turn for the markets, which have risen despite the steady drumbeat of negative news. Even with its retreat on Thursday, Wall Street closed out the month of April with its best performance since 1987. The emergence of doubt could signal a turn for the markets, which have risen despite the steady drumbeat of negative news. Even with its retreat on Thursday, Wall Street closed out the month of April with its best performance since 1987.
“After such a huge rally, I’m getting the question frequently about what to do now,” the hedge fund manager Whitney Tilson wrote in an email to investors overnight. “You might want to trim a bit to generate some ‘dry powder’ to take advantage of the volatility I expect in the markets in the next few months,” he added.“After such a huge rally, I’m getting the question frequently about what to do now,” the hedge fund manager Whitney Tilson wrote in an email to investors overnight. “You might want to trim a bit to generate some ‘dry powder’ to take advantage of the volatility I expect in the markets in the next few months,” he added.
Oil markets were more sturdy as supply restrictions from oil-producing nations gave hope that depressed prices would rise. The U.S. benchmark gained 1.8 percent to $19.70 while the international benchmark Brent was flat at $26.40. In the oil markets West Texas Intermediate, the U.S. benchmark, gave up gains from earlier in the day and was 2 percent lower, at $18.47 a barrel. The international benchmark, Brent crude, was 2.6 percent higher, at $25.98.
With most of the nation on lockdown, technology companies like Amazon and Apple benefited as consumers found other ways to spend their money. As the coronavirus spreads around the world, people are no longer commuting to work, flying on planes and going on cruises, smothering the demand for oil.
Apple said on Thursday that its revenue grew by nearly 1 percent in the first three months of the year as the company was able to make up for sales declines in China, which was locked down for much of the quarter because of the coronavirus. It has been devastating for the industry. Oil field workers who dined on strip steak and lobster before energy prices went into a tailspin in March are now standing in line at food banks.
For over a decade, the Permian Basin has been the center of the American oil boom. Now, it’s the center of its demise. In just over a month, scores of drilling rigs have been dismantled and tucked away in storage yards. Pump jacks, the piston pumps that lift crude out of the ground, have seesawed to a standstill as operators shut down wells.
“We’ve had our ups and downs, even over the last 20 years, but this feels very different,” said Matthew Hale, the president of S.O.C. Industries, a pump truck and chemical services company that has operated in the Permian for 19 years. “We’re concerned about our industry, survival and what survival is going to look like.”
All of the forecasts point in the same direction: A wave of small-business bankruptcies is coming.
More than 40 percent of America’s 30 million small businesses could close permanently in the next six months because of the coronavirus pandemic, according to a poll by the U.S. Chamber of Commerce.
“It’s a crisis that will impact our economy for generations,” said Amanda Ballantyne, the executive director of Main Street Alliance, an advocacy group for small business.
Commercial bankruptcies in the first quarter of 2020 ticked up 4 percent from a year earlier, according to data from the American Bankruptcy Institute. And many of those filing were made before the pandemic, when the economy was healthy. Now, some owners are waiting to find out whether they will receive federal stimulus aid before deciding on bankruptcy.
Many may just disappear. For some, though, a bankruptcy law that took effect in February, the Small Business Restructuring Act, could help them survive the pandemic.
With most of the United States on lockdown, technology companies like Amazon and Apple benefited as consumers found other ways to spend their money.
Apple said on Thursday that its revenue grew nearly 1 percent in the first three months of the year as the company made up for sales declines in China, which was locked down for much of the quarter because of the coronavirus.
The company’s income was bolstered by surging sales of its internet services and the Apple Watch and AirPods.The company’s income was bolstered by surging sales of its internet services and the Apple Watch and AirPods.
Apple typically forecasts its sales for the next quarter but declined to do so on Thursday. Analysts expect the current quarter to be much uglier because of virus-related shutdowns around the world.Apple typically forecasts its sales for the next quarter but declined to do so on Thursday. Analysts expect the current quarter to be much uglier because of virus-related shutdowns around the world.
Apple showed confidence in its financial footing though by announcing another $50 billion in stock buybacks. Apple showed confidence in its financial footing, though, by announcing another $50 billion in stock buybacks.
The spread of the coronavirus played right into the hands of Amazon’s core businesses, as consumers shopped more online and companies spent more on cloud computing. Those two pillars of Amazon’s business drove sales to their highest on record outside of the holiday shopping season, the company said on Thursday. The spread of the coronavirus played into the hands of Amazon’s core businesses, as consumers shopped more online and companies spent more on cloud computing. Those two pillars of Amazon’s business drove sales to their highest on record outside the holiday shopping season, the company said.
Amazon reported that it had $75.5 billion in sales in the latest quarter, up 26 percent from a year earlier, surpassing analysts’ expectations. Profit fell about 29 percent, to $2.5 billion, because it cost more to meet the increased customer demand.Amazon reported that it had $75.5 billion in sales in the latest quarter, up 26 percent from a year earlier, surpassing analysts’ expectations. Profit fell about 29 percent, to $2.5 billion, because it cost more to meet the increased customer demand.
Amazon’s chief executive, Jeff Bezos, signaled that the company’s profits may continue to fall in the near future. The company would typically expect to make around $4 billion in operating profit in the next quarter, but “we expect to spend the entirety of that $4 billion, and perhaps a bit more, on Covid-related expenses getting products to customers and keeping employees safe,” he said in a statement.Amazon’s chief executive, Jeff Bezos, signaled that the company’s profits may continue to fall in the near future. The company would typically expect to make around $4 billion in operating profit in the next quarter, but “we expect to spend the entirety of that $4 billion, and perhaps a bit more, on Covid-related expenses getting products to customers and keeping employees safe,” he said in a statement.
One of the stranger side effects from the coronavirus pandemic is this: piles of 40-foot steel containers packed with unwanted Chinese goods that are now piling up at docks in South Korea, Morocco and Togo in West Africa. One of the stranger side effects from the coronavirus pandemic: 40-foot steel containers, packed with unwanted Chinese goods, piling up at docks in South Korea, Morocco and Togo.
Two months ago, retailers and manufacturers in the West worried that they might run out of goods from factories in China that had been temporarily closed because of the virus. Now the worry lies not in empty supply chains, but supply chains that are full to bursting. Two months ago, retailers and manufacturers in the West worried that they might run out of goods from factories in China that had been temporarily closed because of the virus. Now the worry lies not in empty supply chains, but in supply chains that are full to bursting.
Department stores in the United States, for example, have been canceling and postponing orders. But a flood of goods has already left factory gates in China and is heading for stuffed warehouses and padlocked stores in the West. Department stores in the United States have been canceling and postponing orders. But a flood of goods that had already left factory gates in China is heading for stuffed warehouses and padlocked stores in the West.
Two of the world’s largest container shipping lines, Maersk and Mediterranean Shipping, are offering unorthodox solutions. They are each promoting programs that allow huge numbers of containers to be dropped off and stored at ports that previously were just transit points, such as Busan, South Korea; Las Palmas, Spain; Tangier, Morocco; Salalah, Oman; or Lome, Togo. Two of the world’s largest container shipping lines, Maersk and Mediterranean Shipping, are offering unorthodox solutions. They are each promoting programs that allow huge numbers of containers to be dropped off and stored at ports that previously were just transit points, such as Busan, South Korea; Las Palmas, Spain; Tangier, Morocco; Salalah, Oman; and Lome, Togo.
“Slow down your supply chain by increasing the ocean lead time,” Maersk now promises.“Slow down your supply chain by increasing the ocean lead time,” Maersk now promises.
The accumulation of full containers may not last, for a reason that Chinese exporters and their workers also will not like. Surveys released on Thursday of Chinese purchasing managers showed that few orders are now arriving at Chinese factories for any further exports. The accumulation of full containers may not last, for a reason that Chinese exporters and their workers also will not like. Surveys released on Thursday of Chinese purchasing managers showed that few orders are arriving at Chinese factories for further exports.
As parts of Asia have managed to largely contain the spread of the coronavirus, they face continuing challenges restarting their economies. One issue: how to get the wheels of business rolling again when businesspeople can’t go anywhere? As parts of Asia have managed to largely contain the spread of the coronavirus, they face continuing challenges restarting their economies. One issue: How to get the wheels of business rolling again when businesspeople can’t go anywhere?
Now Hong Kong, China and South Korea have begun taking steps to allow special channels for factory owners, salespeople, buyers and others who need to travel for work to begin to cross borders again, even as broader restrictions on movement remain in place. Hong Kong, China and South Korea have begun taking steps to allow special channels for factory owners, salespeople, buyers and others who need to travel for work to begin to cross borders again, even as broader restrictions on movement remain in place.
In Hong Kong, which on Thursday reported its first fifth straight day of no new cases, the government said this week that it plans to drop quarantine requirements for people with business in mainland China. Currently, Hong Kong residents returning from the mainland are required to undergo a mandatory 14-day home quarantine. In Hong Kong, which on Thursday reported its first fifth straight day of no new cases, the government said this week that it planned to drop quarantine requirements for people with business in mainland China. Currently, Hong Kong residents returning from the mainland are required to undergo a 14-day home quarantine.
The details of the plan are still being worked out. But those eligible would need to demonstrate a need for their travel and would still be required have their health monitored upon their return, Hong Kong officials said. Details of the plan are still being worked out. But those eligible would be required to demonstrate a need for their travel and would have to have their health monitored upon their return, Hong Kong officials said.
“Such activities are essential for Hong Kong’s ongoing development,” said Edward Yau, the Hong Kong secretary for commerce and economic development. “Of course, we need to strike a balance between making sure that the epidemic will not come back through this traveling, but at the same time facilitating legitimate reasons for crossing the boundary.”“Such activities are essential for Hong Kong’s ongoing development,” said Edward Yau, the Hong Kong secretary for commerce and economic development. “Of course, we need to strike a balance between making sure that the epidemic will not come back through this traveling, but at the same time facilitating legitimate reasons for crossing the boundary.”
Officials from China and South Korea have also reached an agreement in principal to create a fast track for business and other essential travel, Geng Shuang, a spokesman for China’s Ministry of Foreign Affairs, said last month.Officials from China and South Korea have also reached an agreement in principal to create a fast track for business and other essential travel, Geng Shuang, a spokesman for China’s Ministry of Foreign Affairs, said last month.
Under the agreement, which goes into place Friday for travelers between South Korea and 10 parts of China that see large numbers of business travelers, visitors will have to take tests for coronavirus infections both in their home country and after arrival in their destination. Beijing is also requesting that Korean businesspeople entering China via the new fast-track procedures only move between their places of residence and work, Korean officials said. Under the agreement, which goes into place Friday for travelers between South Korea and 10 parts of China that see large numbers of business travelers, visitors will have to take tests for coronavirus infections both in their home country and after arrival in their destination. Beijing is also requesting that Korean businesspeople entering China via the new fast-track procedures move only between their places of residence and work, Korean officials said.
China and Singapore are also exploring how to set up a similar arrangement, Mr. Geng said. China and Singapore are exploring how to set up a similar arrangement, Mr. Geng said.
Mark Zuckerberg said last month that it would remove posts promoting bleach as a cure for the coronavirus, and Twitter last month announced it would delete virus tweets “that could potentially cause harm.” But Facebook, Twitter and YouTube have declined to remove statements by President Trump suggesting disinfectants and ultraviolet light as possible treatments. Ryanair, the Irish discount carrier that has been grounded since mid-March, said on Friday that it planned to cut up to 3,000 jobs, nearly 20 percent of its work force. The airline said that it expected to return to service in July and that it would take two years for passenger demand to return to pre-pandemic levels.
By Friday, the day after Mr. Trump’s comments at a White House briefing, mentions of a disinfectant cure on social media and television broadcasts surged to 1.2 million, up from roughly 400,000 on Thursday, according to Zignal Labs, a media insights company. A New York Times analysis found 768 Facebook groups, 277 Facebook pages, nine Instagram accounts and thousands of tweets pushing UV light therapies that were posted after Mr. Trump’s comments and that remained on the sites as of Wednesday. Boeing said on Thursday that it had raised $25 billion in a bond offering in an effort to inject liquidity into its business. As a result, the aerospace giant said that it would not seek additional funding through capital markets or aid from the federal government.
The social media companies have always tread delicately when it comes to Mr. Trump. Yet their inaction on posts echoing his remarks on UV lights and disinfectants stands out because the companies have said for weeks that they would not permit false information about the coronavirus to proliferate. United Airlines reported a net loss of $1.7 billion in the first quarter and said it had about $9.6 billion in cash on hand to weather the crisis. The airline expects to burn through cash in the second quarter at an average daily rate of $40 million to $45 million, on par with its peers.
Most of the tech companies developed health misinformation policies “with the expectation that there would be a competent government and reputable health authority to point to,” said Renee DiResta, a technical research manager who studies misinformation at the Stanford Internet Observatory. Given that false information is coming from the White House, the companies have been thrown for a loop, she said. Reporting was contributed by Tamir Kalifa, Clifford Krauss, Amy Haimerl, Kevin Granville, Alexandra Stevenson, Su-Hyun Lee, Austin Ramzy, Keith Bradsher, Jack Nicas, Karen Weise, Gregory Schmidt and Niraj Chokshi.
YouTube said Mr. Trump’s comments did not violate its misinformation policy. Twitter said satire and discussions of Mr. Trump’s remarks that do not include a call to action, as well as Mr. Trump’s comments themselves, did not violate its policies. Facebook, which owns Instagram and WhatsApp, did not respond to requests for comment.
Ryanair, the Irish discount carrier that has been grounded since mid-March, said Friday it is planning to cut up to 3,000 jobs, or nearly 20 percent of its work force. The airline said it expected to return to service in July, and that it would take two years for passenger demand to return to pre-pandemic levels.
Boeing said on Thursday that it had raised $25 billion in a bond offering in an effort to inject liquidity into its business. As a result, the aerospace giant said, it would not seek additional funding through capital markets or aid from the federal government.
United Airlines reported a net loss of $1.7 billion in the first quarter and said it had about $9.6 billion in cash on hand to weather the crisis. The airline expects to burn through cash in the second quarter at an average daily rate of $40 to $45 million, on par with its peers.
Reporting was contributed by Kevin Granville, Alexandra Stevenson, Su-Hyun Lee, Austin Ramzy, Keith Bradsher, Jack Nicas, Karen Weise, Gregory Schmidt and Niraj Chokshi.