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| U.S. Stock Futures Rally Ahead of Retail Sales Data: Live Updates | |
| (about 3 hours later) | |
| U.S. stock futures rallied as global markets jumped on Tuesday, one day after the Federal Reserve said it would take steps to keep credit flowing. | |
| Futures for the S&P 500 were up more than 1 percent, indicating a positive open on Wall Street. European markets were up more than 2 percent after an even stronger rise in Asia, where stocks in Japan and South Korea ended roughly 5 percent higher. | |
| Investors were waiting for U.S. retail sales data Tuesday that was expected to show a bounce back in May as stores slowly began to reopen and consumers began to spend again, signaling that the worst of the economic damage from the pandemic could be over. | |
| They were also reacting to a Bloomberg News report that the Trump administration was considering $1 trillion in infrastructure spending to help the economy rebound. | |
| Signs of new coronavirus outbreaks, however, have also been front of mind for investors. U.S. stocks have mostly seesawed since late last week, after a 45 percent rally from their March lows. | |
| Markets were cheered on Monday after the Fed announced that it would soon start to buy debt issued by individual companies. The S&P 500, which had been in negative territory, ended up about 1 percent as a result. The Fed’s plan is meant to ensure businesses have access to funding during the economic downturn. | |
| The Fed chair, Jerome H. Powell, will testify before Congress Tuesday on the country’s economic outlook as he discusses the central bank’s next steps. | |
| Economists expect data to show that retail sales rebounded in May, as thousands of stores and restaurants reopened after lockdowns were lifted and federal stimulus checks and tax refunds fueled a burst of spending. | Economists expect data to show that retail sales rebounded in May, as thousands of stores and restaurants reopened after lockdowns were lifted and federal stimulus checks and tax refunds fueled a burst of spending. |
| But many of the stores and restaurants that welcomed back customers last month did so with fewer employees, reflecting a permanently altered retail landscape and an ominous sign for the economy as it tries to recover from the coronavirus pandemic. | But many of the stores and restaurants that welcomed back customers last month did so with fewer employees, reflecting a permanently altered retail landscape and an ominous sign for the economy as it tries to recover from the coronavirus pandemic. |
| Total sales, which include retail purchases in stores and online as well as money spent at bars and restaurants, will be released by the Commerce Department on Tuesday morning. The agency reported a 16.4 percent drop in April, the largest monthly decline on record, and an 8.3 percent decline in March. | Total sales, which include retail purchases in stores and online as well as money spent at bars and restaurants, will be released by the Commerce Department on Tuesday morning. The agency reported a 16.4 percent drop in April, the largest monthly decline on record, and an 8.3 percent decline in March. |
| Economists expect sales in May to have bounced back from a grim April, when retail sales were the lowest since 2012, driven by widespread business closures. | Economists expect sales in May to have bounced back from a grim April, when retail sales were the lowest since 2012, driven by widespread business closures. |
| After more than a month of quarantine, May brought a tentative restart of brick-and-mortar retail across most of the country, with major chains like Macy’s and Gap reopening hundreds of stores. Some restaurants that had either closed or shifted their business to delivery and curbside pickup also reopened for in-person dining. | After more than a month of quarantine, May brought a tentative restart of brick-and-mortar retail across most of the country, with major chains like Macy’s and Gap reopening hundreds of stores. Some restaurants that had either closed or shifted their business to delivery and curbside pickup also reopened for in-person dining. |
| There was also stimulus money — totaling $1,200 per recipient — that will run out in the coming months, with no indications that Congress intends to pass another round of assistance. | There was also stimulus money — totaling $1,200 per recipient — that will run out in the coming months, with no indications that Congress intends to pass another round of assistance. |
| No matter how fleeting, the rebound in May will be seen as a welcome boost, especially for small businesses. | No matter how fleeting, the rebound in May will be seen as a welcome boost, especially for small businesses. |
| Still, the monthly sales jump was off “a pretty low hurdle,” said Aneta Markowska, the chief financial economist for the investment bank Jefferies. The bigger question was the sustainability of any improvement, because consumer spending was bolstered from tax refunds and government stimulus efforts. | Still, the monthly sales jump was off “a pretty low hurdle,” said Aneta Markowska, the chief financial economist for the investment bank Jefferies. The bigger question was the sustainability of any improvement, because consumer spending was bolstered from tax refunds and government stimulus efforts. |
| “By the time we get into July, those tax refunds will probably be largely spent, and then you’re back to, ‘Hey, what’s the underlying employment growth?’ because that’s going to have to be the key driver of spending going forward,” she said. | “By the time we get into July, those tax refunds will probably be largely spent, and then you’re back to, ‘Hey, what’s the underlying employment growth?’ because that’s going to have to be the key driver of spending going forward,” she said. |
| After being criticized for not doing enough to make passengers wear masks, the nation’s biggest airlines said on Monday that they would get tougher on people who refused to cover their faces. | After being criticized for not doing enough to make passengers wear masks, the nation’s biggest airlines said on Monday that they would get tougher on people who refused to cover their faces. |
| Airlines for America, a trade association, said that its members would take masks more seriously, including by not letting people without face coverings get on planes. But many big airlines have said that before, and passengers concerned about their health have pointed out that enforcement on board has often been lax. | Airlines for America, a trade association, said that its members would take masks more seriously, including by not letting people without face coverings get on planes. But many big airlines have said that before, and passengers concerned about their health have pointed out that enforcement on board has often been lax. |
| “U.S. airlines are very serious about requiring face coverings on their flights,” Nicholas Calio, the chief executive of Airlines for America, said in a statement. “Face coverings are one of several public health measures recommended by the C.D.C. as an important layer of protection for passengers and customer-facing employees.” | “U.S. airlines are very serious about requiring face coverings on their flights,” Nicholas Calio, the chief executive of Airlines for America, said in a statement. “Face coverings are one of several public health measures recommended by the C.D.C. as an important layer of protection for passengers and customer-facing employees.” |
| According to the association, all of four of the largest U.S. airlines — Southwest Airlines, American Airlines, Delta Air Lines and United Airlines — have agreed to communicate their mask policies to customers before flying, reiterate the requirements in onboard announcements and enforce them when customers refuse to comply. Southwest issued a separate statement saying that it would “deny boarding” to passengers that refused to comply with its face covering requirement. | According to the association, all of four of the largest U.S. airlines — Southwest Airlines, American Airlines, Delta Air Lines and United Airlines — have agreed to communicate their mask policies to customers before flying, reiterate the requirements in onboard announcements and enforce them when customers refuse to comply. Southwest issued a separate statement saying that it would “deny boarding” to passengers that refused to comply with its face covering requirement. |
| United said that, starting Thursday, any passenger who openly disregarded its rules could face a temporary travel ban on future flights. The airline, like others, grants exceptions for those with a medical condition or disability that prevents them from wearing a mask, as well as those who cannot put on or remove a mask themselves and small children. Customers may remove their masks to eat and drink. | United said that, starting Thursday, any passenger who openly disregarded its rules could face a temporary travel ban on future flights. The airline, like others, grants exceptions for those with a medical condition or disability that prevents them from wearing a mask, as well as those who cannot put on or remove a mask themselves and small children. Customers may remove their masks to eat and drink. |
| The airline association said each airline would establish its own punishment for passengers who refuse to comply, “up to and including suspension of flying privileges.” | The airline association said each airline would establish its own punishment for passengers who refuse to comply, “up to and including suspension of flying privileges.” |
| Airlines have so far been reluctant to publicly establish clear consequences for failure to wear face coverings, and many passengers have chided the companies on social media with photos of planes filled with people not wearing masks and sitting close to each other. | Airlines have so far been reluctant to publicly establish clear consequences for failure to wear face coverings, and many passengers have chided the companies on social media with photos of planes filled with people not wearing masks and sitting close to each other. |
| The International Energy Agency forecast Tuesday that demand for oil, which has been slammed by the coronavirus pandemic, would rebound by a record amount next year but would still remain below 2019 levels largely because of what it called “an existential crisis” in commercial aviation. | |
| Demand, especially among large oil importers like China and India, is already recovering rapidly from the April lows, the Paris-based group said. The agency forecast that demand will increase by 5.7 million barrels a day in 2021, but even this growth would not be enough for consumption to completely recover from the drop of 8.2 million barrels a day expected for 2020. | |
| Most of the lingering shortfall is likely to be in aviation fuel, the group said, as travel restrictions designed to prevent the spread of the virus weigh heavily on long-distance flying. | |
| The agency said in its Monthly Oil Report, published Tuesday, that the aviation recovery may depend on the discovery and dissemination of a vaccine for the virus, which it said might require another 12 to 18 months. | |
| Overall, the agency’s analysis seemed to support the recovery in oil prices from their April lows. In the agency’s view, demand for oil may exceed output by the third quarter of this year if deep cuts by the Organization of the Petroleum Exporting Countries and Russia and well shutdowns in countries like the United States persist. | |
| The fitness chain 24 Hour Fitness filed for Chapter 11 bankruptcy protection on Monday, after the coronavirus pandemic forced its clubs to shut for nearly two months. | The fitness chain 24 Hour Fitness filed for Chapter 11 bankruptcy protection on Monday, after the coronavirus pandemic forced its clubs to shut for nearly two months. |
| “Put simply, the Covid-19 pandemic upended the debtors’ operating model, leaving the debtors without a source of revenue to fund their operations,” the filing stated. | “Put simply, the Covid-19 pandemic upended the debtors’ operating model, leaving the debtors without a source of revenue to fund their operations,” the filing stated. |
| The national gym chain said in its bankruptcy filing that it had permanently closed 100 locations across 14 states. But the chain is expected to re-emerge: It has secured $250 million in funding to reopen some of its clubs, and expects a majority of its remaining 300 locations to be open by the end of June. | The national gym chain said in its bankruptcy filing that it had permanently closed 100 locations across 14 states. But the chain is expected to re-emerge: It has secured $250 million in funding to reopen some of its clubs, and expects a majority of its remaining 300 locations to be open by the end of June. |
| The pandemic has been particularly devastating to the gym industry. Also on Monday, Town Sports International said that it was considering bankruptcy because of revenue losses as a result of the shutdown. The company, which owns about 200 gyms including New York Sports Club and Boston Sports Club, said in a regulatory filing that the “scope and duration of the interruption to our operations has substantially reduced our cash flow.” | The pandemic has been particularly devastating to the gym industry. Also on Monday, Town Sports International said that it was considering bankruptcy because of revenue losses as a result of the shutdown. The company, which owns about 200 gyms including New York Sports Club and Boston Sports Club, said in a regulatory filing that the “scope and duration of the interruption to our operations has substantially reduced our cash flow.” |
| British employment data released Tuesday showed a sharp decline in the number of people on payrolls, but the overall unemployment rate for the February-March period remained steady, at 3.9 percent, as the country’s furlough program kept many people off the jobless rolls. Over 600,000 people were shed from payrolls between March and May, a 2.1 percent decline an the first drop after years of steady growth. | |
| The Academy of Motion Picture Arts and Sciences said on Monday that it would push back the next Oscars ceremony to April 25 from Feb. 28, citing the coronavirus pandemic. The postponement, the fourth since the Academy Awards were introduced in 1929, could prompt the Golden Globes and other entertainment award shows to recalibrate. | The Academy of Motion Picture Arts and Sciences said on Monday that it would push back the next Oscars ceremony to April 25 from Feb. 28, citing the coronavirus pandemic. The postponement, the fourth since the Academy Awards were introduced in 1929, could prompt the Golden Globes and other entertainment award shows to recalibrate. |
| Reporting was contributed by Stanley Reed, Mohammed Hadi, Niraj Chokshi, Sapna Maheshwari, Gillian Friedman, Carlos Tejada and Brooks Barnes. |