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Stock Markets Rise After Getting a Push in Asia: Live Updates Treasury Says Small-Business Loans Supported Over 50 Million Jobs: Live Updates
(about 7 hours later)
U.S. stock futures rallied and global markets were higher on Monday, bolstered by a call in China for investors to start buying shares. Restaurants, medical offices and car dealerships were the top recipients of large loans from the federal government’s $660 billion small business relief program, according to data released Monday by the Trump administration.
European markets were 1 to 2 percent higher, after a strong session in Asia in which the Shanghai Composite index soared 5.7 percent. On Wall Street, futures pointed to a strong start to Monday’s trading session later in the day. The data, which the Trump administration released under pressure from lawmakers and watchdog groups, offered the most detailed look yet at the sectors and businesses that took advantage of a program aimed at keeping workers on the payroll amid virus-induced shutdowns.
In other markets, the price of 10-year U.S. Treasuries fell, a sign that investors are more willing to take on risk, and oil futures rose nearly 2 percent. Gold was 0.2 percent higher. Yet the information released on Monday was confined to companies that received loans of more than $150,000 through the Paycheck Protection Program. The administration said that 86.5 percent of the loans were for less than that amount, so the nuanced snapshot represented only some of the companies that tapped funds.
The rise in China’s stocks was fueled by a call in state media for more retail investing. A front-page editorial in the state-run China Securities Journal urged investors to take advantage of “bullish market expectations” coming out of the pandemic. More than 40,000 full- or limited-service restaurants received loans worth as much as $32 billion.
Other Asian markets followed the rise in China’s stocks. Japan’s Nikkei rose 1.8 percent, and the Kospi in South Korea gained 1.7 percent. Physicians offices received loans worth as much as $19 billion. Total loans were as much as $17 billion for car dealers, $13 billion for law offices and $5 billion for dentists. Plumbers, religious organizations and schools also headlined the list.
In Britain, shares in house builders rose after a report suggested that Rishi Sunak, the chancellor of the Exchequer, was considering a stimulus measure that would reduce property tax payments for homeowners. Mr. Sunak is expected to give an overview of the British economy and new stimulus measures on Wednesday. Dozens of tenants at buildings owned by President Trump or managed by his companies received loans — raising the likelihood that Mr. Trump may have indirectly benefited from the government support.
Of the $521 billion allocated through the Paycheck Protection Program, about $68.2 billion — roughly 13 percent — went to companies in California. Another $41.1 billion flowed to Texas businesses.
Nearly 5,000 businesses received individual loans between $5 million and $10 million, according to the data. The administration included ranges for the loan amounts, not specific figures.
The data showed that more than 3,000 companies said they would be retaining 500 employees, exactly the program limit.
The administration said that the money allocated through the program so far had helped support more than 50 million jobs. The share of overall small business payroll supported per state ranged from 72 percent in Virginia to 96 percent in Florida.
Kasowitz Benson Torres, the law firm founded and run by President Trump’s longtime personal lawyer, Marc E. Kasowitz, received a loan of between $5 and $10 million. The firm represented Mr. Trump for more than a decade before he was elected president, both in his business dealings and in other matters, such as helping Mr. Trump keep divorce records sealed. Mr. Kasowitz and the firm also represented Mr. Trump during Robert S. Mueller III’s investigation into Russian interference in the 2016 presidential election.
Many Washington think tanks and advocacy groups accepted the loans, including some who typically oppose government spending. The conservative Citizens Against Government Waste accepted a loan of between $350,000 and $1 million, as did Citizens United, which fought to enable corporations to spend unlimited funds on elections. The anti-immigration Center for Immigration Students received a loan of between $350,000 and $1 million, as did the Council for Christian Colleges and Universities.
The money spanned the political spectrum with conservative, liberal and moderate groups using the money to help stave off the economic hit from the pandemic. Both the Israel on Campus Coalition and the CAIR Foundation, which works to promote a positive image of Islam and American Muslims, received between $350,000 and $1 million. Media Matters for America, the left-learning organization that seeks to combat “conservative misinformation,” received a loan of between $1 million and $2 million.
Groups connected to Congress also received loans. Both the Congressional Black Caucus Foundation and the Congressional Hispanic Caucus Institute received loans of between $350,000 and $1 million. — Luke Broadwater, Jeanna Smialek, Jim Tankersley and Ben Protess
Wall Street’s gains continued for a fifth straight day on Monday, with technology stocks leading the rally as investors continued to brush off signs of a resurgent coronavirus amid hopes for more government spending to bolster the economy.
The S&P 500 rose more than 1 percent, while the technology-heavy Nasdaq composite climbed more than 2 percent as companies like Amazon, Apple, Netflix and Twitter rallied.
After a turbulent stretch in June, stocks have steadily recouped nearly all of their losses from that period with a rally that has lifted the S&P 500 by more than 5 percent in a week.
That run has defied a growing number of coronavirus cases around the United States and new measures to contain the virus that include shutting down some businesses again, partly because of new data that showed the economy was regaining its footing.
Last week figures showed that employers added nearly five million workers back to payrolls in June, home purchases rose sharply and consumer confidence jumped. On Monday, the Institute for Supply Management said activity in the U.S. services sector rebounded last month.
Investors also expect lawmakers in Washington to authorize more government spending to offset further economic damage. Though the specifics of any spending plan — and the timeline for it — are far from certain, the White House on Monday suggested it would back more spending.
“I think the president has been very clear that he’s supportive of another stimulus check,” Mark Meadows, the White House chief of staff, said to reporters on Monday. Mr. Meadows said a plan could come together later in July, but noted that “everybody looks at this as the ‘last train leaving the station,’ so they want to attach some of those special interest needs to that,” suggesting that much was left to be negotiated.
Still, with economists warning that the recovery could be slower than markets currently expect, the rally is susceptible to a sudden change in sentiment if indicators shift. One trigger for that shift could be the upcoming earnings reporting season, when many companies will address the financial impact of the coronavirus for the first time in months.
Wall Street’s gains on Monday came after a rally in global stocks, with shares in China surging after a front-page editorial in the state-run China Securities Journal urged investors to take advantage of “bullish market expectations” coming out of the pandemic. — Mohammed Hadi
Uber has agreed to acquire the food delivery start-up Postmates for $2.65 billion, as the ride-hailing firm aims to grow its presence in on-demand food delivery while its core business struggles.
The companies announced the all-stock deal on Monday morning. Uber will combine Postmates with its own food delivery subsidiary, Uber Eats, which has been growing during the coronavirus pandemic.
Food delivery apps, which connect drivers, restaurants and customers, have grown quickly in recent years, fueled by venture capital and armies of contract workers. But the services they offer are not very different from one another, leading to heavy competition and pressure to keep fees low. More people have been using delivery services during the pandemic, but profits have been elusive.
As a result, delivery app companies have circled one another, aiming to make deals to gain scale. Postmates previously discussed possible deals with DoorDash, the largest service in the United States, and another rival, Grubhub, according to two people with knowledge of the talks.
In recent months, Uber also discussed buying Grubhub. But last month, Grubhub was instead sold to Just Eat Takeaway, a European delivery company, for $7.3 billion.
Together, Postmates and Uber Eats would have a 37 percent share of food delivery sales in the United States, according to Edison Trends, which tracks credit card spending. DoorDash would remain the largest player with 45 percent, while Grubhub would have 17 percent. — Mike Isaac and Erin Griffith
Berkshire Hathaway bought Dominion Energy’s gas pipeline network on Sunday in a $9.7 billion deal, including debt.
The acquisition is Warren Buffett’s biggest in four years, putting to use some of Berkshire’s $137 billion cash pile. There has been some investor anxiety lately about Mr. Buffett’s recent drought of deal-making. Buying the Dominion assets would more than double Berkshire’s market share of natural gas movement in the U.S., to 18 percent.
On the same day as the deal was announced, however, Dominion and its partners canceled plans to build the Atlantic Coast Pipeline. Just last month, they had scored a victory when the Supreme Court ruled that the pipeline — which would have moved natural gas from West Virginia to Virginia and North Carolina — could be built under the Appalachian Trail, overruling objections from environmental groups.
In reversing course, the companies said that the six-year-old project faced more legal battles and costly delays that would not make it worthwhile. The shifting politics of fossil fuels, which may fall more out of favor if Democrats make gains in November elections, as polls currently suggest, could be another factor. In announcing the deal with Berkshire, Dominion emphasized a “narrowing” focus on becoming a more “sustainability focused” utility, reducing its reliance on fossil fuels.
Mr. Buffett appears to believe that the economic benefits of the deal overcome its political risks, argues today’s DealBook newsletter. And he has not ignored the politics of pipelines in other situations. This spring, Berkshire backed away from an investment in a liquefied natural gas export terminal in Quebec amid protests by environmental activists and Indigenous groups. — Michael J. de la Merced
Alarmed at China’s stranglehold over supplies of masks, gowns, test kits and other equipment for batting the coronavirus, countries around the world have set up their own factories to cope with this pandemic and outbreaks of the future.Alarmed at China’s stranglehold over supplies of masks, gowns, test kits and other equipment for batting the coronavirus, countries around the world have set up their own factories to cope with this pandemic and outbreaks of the future.
When the outbreak subsides, those factories may struggle to survive. But China has laid the groundwork to dominate the market for protective and medical supplies for years to come.When the outbreak subsides, those factories may struggle to survive. But China has laid the groundwork to dominate the market for protective and medical supplies for years to come.
Factory owners get cheap land, courtesy of the Chinese government. Loans and subsidies are plentiful. Chinese hospitals are often told to buy locally, giving China’s suppliers a vast and captive market.Factory owners get cheap land, courtesy of the Chinese government. Loans and subsidies are plentiful. Chinese hospitals are often told to buy locally, giving China’s suppliers a vast and captive market.
Once vaccines emerge, demand will plummet. Factories will close. But Chinese companies are likely to have the lowest costs by far and be best positioned for the next global outbreak.Once vaccines emerge, demand will plummet. Factories will close. But Chinese companies are likely to have the lowest costs by far and be best positioned for the next global outbreak.
For years, China’s leaders have worried that the country depended too much on foreign sources for everything from medical supplies to microchips to airliners. It has used subsidies, economic targets and other government inducements to emerge as a powerhouse in important industries.For years, China’s leaders have worried that the country depended too much on foreign sources for everything from medical supplies to microchips to airliners. It has used subsidies, economic targets and other government inducements to emerge as a powerhouse in important industries.
The policies have often proved effective in building industries that can withstand losses and tough foreign competition. Medical supplies may be similar. — Keith BradsherThe policies have often proved effective in building industries that can withstand losses and tough foreign competition. Medical supplies may be similar. — Keith Bradsher
Malls were already in trouble before the pandemic, as shopping had moved increasingly online. But a string of bankruptcy filings by major retailers like Neiman Marcus and J.C. Penney in recent months could hasten their decline.Malls were already in trouble before the pandemic, as shopping had moved increasingly online. But a string of bankruptcy filings by major retailers like Neiman Marcus and J.C. Penney in recent months could hasten their decline.
As many as 25 percent of the nation’s nearly 1,200 malls could shut down amid the fallout from the coronavirus, said Deborah Weinswig, founder of Coresight Research, an advisory and research firm that specializes in retail and technology.As many as 25 percent of the nation’s nearly 1,200 malls could shut down amid the fallout from the coronavirus, said Deborah Weinswig, founder of Coresight Research, an advisory and research firm that specializes in retail and technology.
The traditional suburban mall has been built around big department stores that anchored smaller clothing and specialty stores.The traditional suburban mall has been built around big department stores that anchored smaller clothing and specialty stores.
Department stores account for about 30 percent of the mall square footage in the United States, with 10 percent of that coming from Sears (which filed for bankruptcy in 2018) and J.C. Penney, according to Green Street Advisors, a real estate research firm.Department stores account for about 30 percent of the mall square footage in the United States, with 10 percent of that coming from Sears (which filed for bankruptcy in 2018) and J.C. Penney, according to Green Street Advisors, a real estate research firm.
As the department stores struggle or shut down, other retailers are no longer able to feed off the foot traffic that those large anchors used to generate.As the department stores struggle or shut down, other retailers are no longer able to feed off the foot traffic that those large anchors used to generate.
Many small mall retailers have clauses in their leases — so-called co-tenancy clauses — that allow them to pay reduced rent or even break the lease if two or more anchor stores leave a location.Many small mall retailers have clauses in their leases — so-called co-tenancy clauses — that allow them to pay reduced rent or even break the lease if two or more anchor stores leave a location.
That could lead to even more mall vacancies and few options to fill the empty storefronts during a pandemic when shoppers are already nervous about being in enclosed spaces. — Sapna Maheshwari and Michael Corkery That could lead to even more mall vacancies and few options to fill the empty storefronts during a pandemic when shoppers are already nervous about being in enclosed spaces. — Sapna Maheshwari
In late February, Uber executives were set to gather in San Francisco to form business plans for the year as the coronavirus steadily spread beyond China. While some executives who were initially invited had been told to stay home, the remaining few huddled at Uber’s headquarters to make plans for the inevitable pandemic.
One of them, Susan Anderson, who managed Uber’s business in Australia, New Zealand and North Asia, delivered bad news: In Hong Kong, Uber trips had declined rapidly as the coronavirus took hold.
Months later, Uber is facing its greatest crisis: keeping the ride-hailing business afloat when many people are still staying home. Coronavirus totals in the United States, Uber’s highest-revenue market, continue to grow, challenging cities and local businesses that are trying to reopen. And rides, not surprisingly, are only haltingly returning to a semblance of what they were.
Hong Kong, on the other hand, has recovered from the pandemic faster than most other cities where Uber operates. The outbreak has been less severe there than in the United States, and many commuters have gone back to work. Although Uber’s business in Hong Kong is small and doesn’t generate much revenue, the foothold gave the company a preview of how quickly its business would slip away during the pandemic — but also a best-case example of what its recovery elsewhere could look like.
“If the world looked like Hong Kong, we would be in great shape,” Uber’s chief executive, Dara Khosrowshahi, said during a March call with financial analysts. At the peak of the outbreak in Hong Kong, rides declined 45 percent, Uber said. — Kate Conger and Tiffany May
Dozens of new companies are popping up to rent or sell retrofitted sleeper vans, some now with yearlong waiting lists. Apps are surfacing to help these van dwellers find legal parking. Big R.V. park conglomerates are starting to eye the new interest and figure out ways to capitalize.Dozens of new companies are popping up to rent or sell retrofitted sleeper vans, some now with yearlong waiting lists. Apps are surfacing to help these van dwellers find legal parking. Big R.V. park conglomerates are starting to eye the new interest and figure out ways to capitalize.
The last few months have felt chaotic, and the van living sell is that there can be stability in constant motion. “What we say is: We build your escape,” said Leland Gilmore, the founder of Benchmark Vehicles, which makes custom vans. “These are little escape vessels, escape pods.”The last few months have felt chaotic, and the van living sell is that there can be stability in constant motion. “What we say is: We build your escape,” said Leland Gilmore, the founder of Benchmark Vehicles, which makes custom vans. “These are little escape vessels, escape pods.”
Mr. Gilmore typically sells custom vans for $100,000 to $300,000, not including the cost of the van, which is usually a $40,000-and-up Mercedes Sprinter. Demand has nearly doubled since lockdowns began, he said, and Benchmark Vehicles just hired three more people.Mr. Gilmore typically sells custom vans for $100,000 to $300,000, not including the cost of the van, which is usually a $40,000-and-up Mercedes Sprinter. Demand has nearly doubled since lockdowns began, he said, and Benchmark Vehicles just hired three more people.
Vanlife has been an influencer trend on Instagram for years. It usually involved a good-looking young couple in a van posting gauzy portraits of each other and sweeping scenes of the places they visited. The fantasy life they sold is freedom and simplicity, a radical reduction in burden — but not comfort. For these are not backpackers looking tired and worn, with massive calves and wild hair. Vanlife is an aesthetic trend, closer to the tiny-home movement, yet even richer, lusher and typically sexier.Vanlife has been an influencer trend on Instagram for years. It usually involved a good-looking young couple in a van posting gauzy portraits of each other and sweeping scenes of the places they visited. The fantasy life they sold is freedom and simplicity, a radical reduction in burden — but not comfort. For these are not backpackers looking tired and worn, with massive calves and wild hair. Vanlife is an aesthetic trend, closer to the tiny-home movement, yet even richer, lusher and typically sexier.
Ss the pandemic has worn on, it is a fantasy more people are finding themselves having. — Nellie BowlesSs the pandemic has worn on, it is a fantasy more people are finding themselves having. — Nellie Bowles
Uber plans to announce Monday that it will buy the meal-delivery company Postmates for about $2.65 billion. The takeover is a consolation prize after missing out on buying the far larger Grubhub. Reporting was contributed by Jeanna Smialek, Jim Tankersley, Alan Rappeport, Ben Protess, Luke Broadwater, Keith Bradsher, Mohammed Hadi, Nellie Bowles, Kate Conger, Tiffany May, Sapna Maheshwari, Michael J. de la Merced, Michael Corkery, Niraj Chokshi, Jason Karaian, Mike Isaac, Erin Griffith and Kevin Granville.
Reporting was contributed by Keith Bradsher, Mohammed Hadi, Nellie Bowles, Kate Conger, Tiffany May, Sapna Maheshwari, Michael Corkery, Niraj Chokshi, Mike Isaac, Erin Griffith and Kevin Granville.