May 11, 2020

Live Stock Market News During the Coronavirus Pandemic

Live Stock Market News During the Coronavirus Pandemic


AutoNation, the country’s biggest chain of new-car dealerships, said on Monday that auto sales have started to improve after a steep drop in the early days of the coronavirus outbreak.

In the first 10 days of April, the company saw sales of new and used vehicles plunge by 50 percent. But in the final 10 days of last month, sales were off by just 20 percent, the company’s chief executive, Mike Jackson, said.

While the auto industry will see ups and downs the rest of this year, consumers are still interested in buying new vehicles, Mr. Jackson said in an interview. “The automotive recovery is underway,” he said.

Many buyers coming to AutoNation are buying cars to reduce their use of public transit or shared transportation to avoid the chance of contracting the virus, he said. “There is now a greater desire to be in your own personal space,” Mr. Jackson said.

News that auto sales are improving comes as several manufacturers are preparing to resume production of new cars and trucks. Toyota Motor planned to reopen its plants on Monday. General Motors, Ford Motor and Fiat Chrysler have said they will begin production May 18.

AutoNation on Monday reported that it lost $232 million in the first quarter, compared to a profit of $92 million in the same period a year earlier.

Many consumers expect to lose their jobs and to see home prices stall — or even decline — over the coming year, according to a Federal Reserve survey. Given that peoples’ homes are often their largest investment, that could spell even more trouble for the economy.

For the first time since the Federal Reserve Bank of New York started its survey of consumers in 2013, the median consumer did not expect home prices to increase over the next year. More than 44 percent of April respondents actually expected home prices to decline, and that pessimism was broad-based across demographic groups and regions.

As recently as February, consumers expected a 3 percent home price appreciation. The swift deterioration in their outlook underlines how much the coronavirus lockdown, which has left millions out of work and has made loans harder to come by, could threaten the housing industry.

Mortgage credit availability has tumbled to its lowest level since late 2014, a Mortgage Bankers Association index showed last week, as lenders shy away from borrowers with low credit scores and those looking for large mortgages. That could blunt the economic benefit of the Fed’s recent rate cuts, as consumers struggle to benefit directly from lower borrowing costs.

Consumers were glum along other dimensions, too. They increasingly expected to lose their jobs, putting the chances over the coming year at 20.9 percent in April, a new series high.

Natural gas exports slow as the pandemic reduces global demand.

The coronavirus pandemic is putting the brakes on a two-decade-long global expansion for natural gas, which has been replacing coal for electricity and heating and even competing with oil as a transportation fuel in some developing countries. Gas prices, already low after a relatively warm winter in the Northern Hemisphere, have plummeted and storage facilities have filled to the brim. Struggling international oil and gas companies have slashed investment budgets, jettisoning projects.

Now, tankers carrying gas in its compressed, cooled liquid form are sitting idle off the coasts of Europe as factories and businesses are only slowly coming back on line, if at all, and many people are forced to wait out the pandemic at home.

“The coronavirus trajectory is a big unknown in both economic and financial impact and policy changes to manage the fallout,” said Leslie Palti-Guzman, president of Gas Vista, a research and consulting firm. “But it poses unprecedented risk to L.N.G. demand and investments.”

Investment decisions for proposed multibillion-dollar liquefied natural gas export terminals — which can take up to a decade to plan, permit and build — have been delayed or canceled in Australia, Mozambique, Qatar, Mauritania, Senegal and the United States in recent weeks. Industry executives estimate that investments of more than $50 billion will be delayed this year and next.

With air travel nearly shut down during a pandemic, Delta Air Lines has swung from huge profits and is bleeding money. On Wednesday, it will drop 10 more airports from its already skeletal network.

Delta and the other major airlines in the United States are losing $350 million to $400 million a day as expenses like payroll, rent and aircraft maintenance far exceed the money they are bringing in. And even though they are slashing schedules, they are averaging an anemic 23 passengers on each domestic flight.

Passenger traffic is down about 94 percent and half of the industry’s 6,215 planes are parked, according to Airlines for America, a trade group.

Yet, devastating as the downturn has been, the future is even more bleak. With much of the world closed for business, and no widely available vaccine in sight, it may be months, if not years, before airlines operate as many flights as they did before the crisis. Even when people start flying again, the industry could be transformed, much as it was after the Sept. 11 terrorist attacks.

The crisis could push some airlines, especially smaller ones, into bankruptcy or make them takeover targets. Consumer fears about catching the virus on crowded planes could lead to reconfigured seating. Carriers may initially entice wary travelers with discounts, but if they can’t fill up flights, they may resort to raising ticket prices.

U.S. stocks wavered and global markets fell on Monday as investors weighed the easing of restrictions on business activity in many countries against the chance of a resurgence of the coronavirus.

The S&P 500 fell nearly 1 percent in early trading before turning positive. Markets in Europe were lower after giving up early gains.

Some investors are betting on what is called a V-shaped recovery, or a strong surge following the current plunge in economic activity. But a quick recovery isn’t assured, especially amid worries that a second wave of outbreaks could eventually undermine efforts to get economies back on track.

In France, Spain, Greece, the Netherlands and other countries in Europe, different restrictions on business activities were eased on Monday, part of a gradual approach as authorities try to balance economic recovery with control of the deadly virus. In the United States, President Trump has pushed for the reopening of the economy, and more than half the states have reopened businesses in some way or plan to do so soon.

The stock market has shown a remarkable indifference to the dire outlook for the economy since it began to rally on March 23. That was the day the Federal Reserve signaled that it stood ready to pump an unlimited amount of dollars into financial markets to keep key borrowing markets from malfunctioning. The S&P 500 has risen roughly 30 percent since then.

The former Mayor Michael Bloomberg of New York lays out how the government can help companies start up again in a Bloomberg Opinion piece. It’s a mix of protecting workers and businesses.

Companies should be shielded from lawsuits if they meet certain criteria, including providing workers with protective equipment, imposing social-distancing and offering flexible sick leave. Otherwise, Mr. Bloomberg writes, “these suits could impose a significant economic cost, create uncertainty for businesses, impede needed investment and potentially cause production bottlenecks.”

Companies that don’t follow the reopening guidelines could still be sued, he writes.

Congress should expand unemployment insurance for high-risk workers and let companies offer tax-free “hazard pay” for those who must be at work, Mr. Bloomberg writes. Lawmakers should also create a public fund for employees in critical industries.

And Washington should relax health-privacy laws that would otherwise prevent companies from verifying whether employees had been sick or tracing their contacts.

Saudi Arabia’s government said Monday that it would triple the rate of its value added tax on sales to 15 percent and take other measures to shore up state finances as the combination of lower oil prices and the costs of fighting the coronavirus pandemic strain the kingdom’s budget.

The minister of finance, Mohammad Aljadaan, also said that spending on Crown Prince Mohammed bin Salman’s Vision 2030 projects, which aim to diversify the Saudi economy and create new jobs for Saudis, would be cut, according to the official Saudi Press Agency.

The Crown Prince, who is Saudi Arabia’s chief policymaker, wants to build a futuristic new city called Neom and vast tourist schemes on the Red Sea and in the interior, but the effects of the pandemic have virtually killed off international tourism.

The new measures would boost state coffers by around 100 billion Saudi riyals, or about $26 billion.

On Monday, the Saudi government also said that it had ordered Saudi Aramco, the national oil company, to cut a further 1 million barrels a day in oil production, to about 7.5 million barrels a day in June, the lowest level in nearly two decades. The aim, according to the energy ministry, is to encourage other producers to comply with previously agreed output trims and make additional cuts of their own.

Kuwait and the United Arab Emirates, both Saudi allies, said they would add another 180,000 barrels a day in trims.

Saudi Arabia’s government is heavily reliant on oil revenue, and the price of oil has collapsed more than 50 percent this year, partly because of lost demand as governments shut down their economies to curb the spread of the coronavirus.

Here’s the business news to watch for this week.

😷 Back in business: Shanghai Disneyland reopened, with a maximum of 30 percent of capacity; Apple stores reopen in Alabama, Alaska, Idaho and South Carolina, with customers and employees required to undergo temperature checks and wear masks; and Swiss schools reopened, with classes split into groups that attend two days a week.

🏨 Caesars Entertainment reports its latest quarterly earnings Monday, answering questions about changes they must make when casinos reopen. Marriott said its first-quarter profit fell by more than 90 percent.

🛍 America’s largest mall operator, Simon Property Group, surveys the damage to its finances Monday, as prominent tenants file for bankruptcy. On Friday, U.S. retail sales data for April are expected to show a fall of nearly 12 percent, the steepest decline since at least 1992, when the data was first collected.

🛢 The turmoil in oil markets is an obvious talking point for Saudi Aramco’s earnings on Tuesday, along with cuts in capital spending and a potential rise in royalty payments to the state.

⚡️ At some point this week, enough Bitcoin will be created to trigger a “halving,” a much-anticipated reduction in rewards that is designed to limit the supply of the cryptocurrency. (It’s complicated.)

🚗 Toyota and Honda report earnings on Tuesday, along with details of production cuts made in response to weak auto demand and government-mandated factory closures.

🛳 Norwegian Cruise Line and Royal Caribbean update investors on Thursday and Friday, respectively, after rival Carnival’s announcement last week that it may resume cruises as soon as August.

🗣 Other companies reporting earnings this week include Applied Materials, Cisco, Deutsche Telekom, DraftKings, JD.com, Sony, Under Armour and Vodafone.

Catch up: Here’s what else is happening.

  • Twitter will add new labels to tweets containing misinformation about the coronavirus, the social media company said on Monday in a blog post. Tweets that contain “potentially harmful, misleading information” related to the virus will now include a link to additional information from trusted sources like public health officials. Posts that Twitter considers particularly harmful or misleading will be hidden behind a warning label, which cautions viewers that the tweet contains information that “conflicts with guidance from public health experts.” Viewers must click through the warning label before seeing the tweet.

  • The hotel giant Marriott International reported a 92 percent drop in profits in the first quarter as the coronavirus pandemic closed many of its hotels. Marriott said its net income for the first quarter fell to $31 million, down from $375 million a year ago. The hotel operator said occupancy rates at its hotels in China were rebounding, but about a quarter of its hotels were closed globally. At limited-service hotels that are open in North America, occupancy rates are about 20 percent, the company said.

  • Avianca, Colombia’s flagship airline and one of the world’s oldest carriers, filed for bankruptcy protection in federal court in New York late on Sunday. The company said that the drop in air travel had eroded its revenue by more than 80 percent and that it is in talks to secure financial lifelines from the government of Colombia and those of its other markets. As part of its reorganization plans, the Avianca plans to shut its Peruvian operations.

Reporting was contributed by Kate Conger, Neal E. Boudette, Jeanna Smialek, Michael de la Merced, Liz Alderman, Julie Creswell, Stanley Reed, Niraj Chokshi, Brooks Barnes, Clifford Krauss, Conor Dougherty, Gregory Schmidt, Jason Karaian, Mohammed Hadi, Ana Swanson, David Yaffe-Bellany, Michael Corkery, Keith Bradsher, Carlos Tejada, Daniel Victor and Kevin Granville.



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