Market Insider | Biggest Moves Premarket: Stocks making the biggest moves in the premarket: Abercrombie & Fitch, Dollar General, Amazon & more

Peter Schacknow

5-6 minutes - Source: CNBC

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Take a look at some of the biggest movers in the premarket:

Abercrombie & Fitch (ANF) – The apparel retailer lost $3.29 per share for its latest quarter, wider than the loss of $1.39 per share anticipated by analysts. Revenue was also below forecasts, with sales impacted by pandemic-related closures.
Dollar General (DG) – The discount retailer reported quarterly profit of $2.56 per share, compared to a consensus estimate of $1.74 a share. Revenue exceeded forecasts as well, and a same-store sales jump of 21.7% was well above the 8.7% FactSet estimate. Dollar General said the pandemic had a significant positive impact on sales, and that it expects to exceed prior forecasts.
Dollar Tree (DLTR) – Dollar Tree earned $1.04 per share for its latest quarter, beating the 85 cents a share consensus estimate. Revenue also beat forecasts, with the discount retailer’s overall same-store sales rising 7% compared to a 4.4% consensus estimate. Dollar Tree-branded stores did see a 0.9% drop in comparable sales, compared to estimates of a 1.2% increase, but Family Dollar saw a 15.5% rise compared to the consensus estimate of 8.1%. Like rival Dollar General, Dollar Tree benefited from the change in consumer behavior spurred by the pandemic.
Burlington Stores (BURL) – The apparel retailer lost $4.76 per share for its latest quarter, wider than the loss of $1.55 a share anticipated by analysts. Revenue was well below estimates, and Burlington said it was not prepared to give 2020 guidance. Stores were closed on March 22 due to the pandemic and remained closed through the end of the quarter. Some 332 stores have reopened since then, and the remainder are expected to open by the middle of June.
Amazon.com (AMZN) – Amazon said it would offer permanent jobs to about 70% of the U.S. workers hired to cope with the increased demand generated by the Covid-19 pandemic.
Twitter (TWTR), Facebook (FB) – Twitter and Facebook are in the crosshairs of the Trump administration, with President Donald Trump set to issue an executive order targeting social media companies after Twitter began to fact-check tweet’s include those from Trump.
American Airlines (AAL) – The airline is planning to cut management and support staff by about 30%, according to a letter to employees. The airline will first offer voluntary options, then move on to involuntary reductions.
Hertz (HTZ) – Investor Carl Icahn exited his entire position in Hertz, according to an SEC filing. That comes a few days after the car rental company filed for Chapter 11 bankruptcy, a decision Icahn said he supports despite taking a “significant loss” on his position. Icahn had been Hertz’s largest shareholder.
Boeing (BA) – Boeing has restarted production of its grounded 737 Max jet. The news came shortly after Boeing announced it was cutting more than 12,300 U.S. jobs.
Box (BOX) – Box reported quarterly earnings of 10 cents per share, doubling forecasts, while the cloud computing company’s revenue also beat estimates. Box also gave an upbeat revenue forecast as it benefits from an increasing number of employees working from home.
Toll Brothers (TOL) – Toll Brothers earned 59 cents per share for its latest quarter, 14 cents a share above estimates. The luxury home builder’s revenue also above forecasts. The company scrapped its 2020 forecast due to uncertainty related to the coronavirus outbreak.
HP Inc. (HPQ) – HP Inc. beat estimates by 7 cents a share, with quarterly profit of 51 cents per share. The computer and printer maker’s revenue fell short of Wall Street projections. Laptop computer sales grew, but printing and desktop sales plunged.
Workday (WDAY) – Workday fell 4 cents a share short of estimates, with quarterly earnings of 44 cents per share. The maker of financial management and human resources software’s revenue came in slightly above forecasts. The bottom line was impacted by product development expenses and sales and marketing costs, among other factors.
e.l.f. Beauty (ELF) – e.l.f. is the target of a proxy fight by private-equity firm Marathon Partners, which plans to nominate three directors to the discount cosmetics company’s board. Marathon is dissatisfied with the company’s cost structure and stock price, among other things.
Apple (AAPL) – Apple has landed director Martin Scorsese’s next film, “Killers of the Flower Moon” for its Apple TV service, according to The Wall Street Journal. It beat out competitors such as Netflix (NFLX), which had produced Scorsese’s last film, “The Irishman.”
Delta Air Lines (DAL) – The airline will announce details of two voluntary job reduction programs today, according to a letter sent to employees by the airline’s CEO, Ed Bastian.

US Market | Futures Indicator Update: Dow futures edge higher after blue-chip index rallies back above 25,000

Fred Imbert,Thomas Franck

3-4 minutes - Source: CNBC

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Futures contracts tied to the major U.S. market indexes edged higher early Thursday as investors looked to add to Wall Street’s robust gains so far this week.
Dow Jones Industrial Average futures were up 118 points, or 0.5%. S&P 500 futures gained 0.1% while Nasdaq 100 futures dipped 0.4%.
Gains were kept in check after China’s National People’s Congress approved a national security bill for Hong Kong. The bill will bypass Hong Kong’s legislature, raising concerns over the longevity of Hong Kong’s “one party, two systems” principle, which allows additional freedoms mainland China does not have.
The market moves Thursday promised to add to sharp rallies in the major stock indexes so far this week.
The Nasdaq Composite, S&P 500 and Dow all extended week-to-date gains during Wednesday’s regular trading session and finished the day up 0.77%, 1.48% and 2.2% respectively. The broad S&P 500 closed at its highest level since March, above 3,000; the Dow jumped 553 points to finish Wednesday’s session north of 25,000, its own highest close since March.
The S&P 500, Nasdaq Composite and Dow are up 2.7%, 0.9% and 4.4% since the start of the holiday-shortened week. The Dow is on track for its best week since the week ended April 8.

Traders say this week’s rally is in large part thanks to optimism about the reopening of the U.S. economy.
Equity of companies that stand to benefit the most under reopenings, such as the airlines and retailers, led the major indexes higher Tuesday and Wednesday. Kohl’s, Nordstrom and Gap all rose at least 14% on Wednesday while airlines Delta, American, Alaska and United rose 2.6%, 7.5%, 2% and 3.8%, respectively.
Meanwhile, those stocks that outperformed as stay-at-home orders went into effect in March have lagged in recent sessions. Zoom Video dropped 1.2%; Shopify, Amazon and Teladoc Health fell 2.3%, 0.6% and 1.1%, respectively.
Governor of the Reserve Bank of Australia Philip Lowe offered more optimistic comments on the country’s economic situation and the efficacy of efforts to contain the impact of Covid-19.
Lowe told lawmakers that since the nation’s health outcomes are better than earlier feared, “it is possible that the economic downturn will not be severe as earlier thought.” He added that the central bank’s mid-March move to guarantee liquidity and easy borrowing “is working as expected and it is helping build the necessary bridge to the recovery.”
Thursday’s forthcoming update to the U.S. unemployment claims threatened to keep the week’s optimism in check.
The Department of Labor is scheduled to release the latest update to initial jobless claims at 8:30 a.m. ET Thursday morning. Though economists polled by Dow Jones expect the government to announce yet another deceleration in the pace of claims, the consensus estimate predicts another 2.05 million Americans filed for insurance during the week ended May 23.
Last week, the Labor Department reported another 2.44 million Americans had filed claims in the week ended May 16, which brought the coronavirus crisis total to some 38.6 million, by far the largest loss in U.S. history.

Analysis | The Cybersecurity 202: Twitter’s action gives Trump a new enemy in the mail voting fight

By Joseph Marks

15-19 minutes - Source: The Washington Post

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with Tonya Riley

The Cybersecurity 202 will publish only Tuesday, Wednesday and Thursday this week. 

President Trump’s assault on Twitter after the site fact-checked two of his tweets about voting by mail is opening up a new front in the battle over pandemic-era elections.
Republicans who hesitated to join the president in attacking voting by mail directly are far more eager to slam a major tech company they view as trying to silence a prominent conservative voice. Now the White House is using the fact check to push an executive order, which Trump may sign today, to roll back the legal immunity tech companies enjoy for content posted on their sites, as Tony Romm and Josh Dawsey report.
“Big Tech is doing everything in their very considerable power to CENSOR in advance of the 2020 Election,” Trump tweeted. “If that happens, we no longer have our freedom. I will never let it happen! They tried hard in 2016, and lost. Now they are going absolutely CRAZY. Stay Tuned!!!”
Republicans in Congress also quickly rallied to the president’s defense – including many who have not been eager to join the president's assault on mail voting. Voting by mail is popular in Republican and Democratic states alike and experts say it is vital to running a secure and accessible election during the coronavirus pandemic.
The big takeaway: It's often easier for the president’s supporters to attack his critics than to defend claims that lack a factual basis.
In the case of voting by mail, there’s no evidence that it leads to widespread fraud as the president has claimed. The fact check, which Twitter used for the first time Monday, cited numerous news reports contradicting Trump’s claims.

President Trump deplanes from Air Force One. (Jonathan Ernst/Reuters)

Lawmakers are also crafting bills that would roll back Twitter's legal immunity for content posted by its users, a remarkable threat that would fundamentally change the way the social media site operates. 

“Twitter’s unprecedented decision to single out the President for disfavor, based on his political speech, is alarming,” Sen. Josh Hawley (R-Mo.) wrote in a letter to Twitter CEO Jack Dorsey. Hawley said he’s working on legislation to remove the immunity for content on tech sites that’s contained in Section 230 of the Communications Decency Act.
Sen. Marco Rubio (R-Fla.), who has largely steered clear of the mail voting debate, also came out swinging against Twitter.
He tweeted that by fact-checking the president, Twitter “decided to exercise an editorial role like a publisher” and “should no longer be shielded from liability.”

The law still protects social media companies like @Twitter because they are considered forums not publishers.
But if they have now decided to exercise an editorial role like a publisher then they should no longer be shielded from liability & treated as publishers under the law.

— Marco Rubio (@marcorubio) May 27, 2020

Rubio and Hawley’s offices didn’t respond to requests for comment about whether they agreed with Trump’s claims about mail voting producing widespread fraud. About 30 percent of Florida voters cast their ballots by mail in 2018 and about 8 percent of Missouri residents voted that way, according to data maintained by the Brennan Center for Justice at New York University.
Voters are allowed to cast absentee ballots without an excuse in Florida. Missouri voters generally must have an excuse such as illness or travel. Lawmakers there passed a bill to expand voting by mail during this year’s primary and general election, but it’s not clear whether Gov. Mike Parson (R) will sign it. The bill requires notarized signatures on mail ballots by voters who aren’t at high risk of contracting the coronavirus.
Experts do say there's a heightened risk of fraud from mail-in ballots, but they agree that danger is still extremely low. The most prominent case of mail voting-related fraud, in a 2018 North Carolina congressional race, was quickly discovered, leading the State Board of Elections to overturn the results. It also led to criminal charges against the Republican operative who allegedly orchestrated the fraud.

Sen. Josh Hawley (R-Mo.). (Andrew Harnik/AP)

Trump, meanwhile, seemed invigorated by having a new enemy in the mail voting fight. 

He declared that “Twitter has now shown that everything we have been saying about them (and their other compatriots) is correct."

Twitter has now shown that everything we have been saying about them (and their other compatriots) is correct. Big action to follow!

— Donald J. Trump (@realDonaldTrump) May 27, 2020

A Twitter spokeswoman declined to comment on the president's threats to remove the company's legal immunity. CEO Jack Dorsey chimed in, however, saying the fact check was aimed at helping voters make their own decisions rather than silencing the president. He also said the company was editing the fact check to make its intentions clearer.

Per our Civic Integrity policy (https://t.co/uQ0AoPtoCm), the tweets yesterday may mislead people into thinking they don’t need to register to get a ballot (only registered voters receive ballots). We’re updating the link on @realDonaldTrump’s tweet to make this more clear.

— jack (@jack) May 28, 2020

Numerous other Republicans used the opportunity to bash big tech.

Sen. Ted Cruz (R-Tex.) tweeted that “federalizing elections by mandating mail-in voting is a direct invitation for ballot harvesting and voter fraud. Twitter’s refusal to acknowledge that fact and their blatant attempts to discredit those who do is shameful & another example of why Americans don’t trust #big tech”
In fact, Trump’s tweet that fact checked by Twitter referred to an executive order in California with no federal repercussions. The order from Gov. Gavin Newsom (D) requires counties to send mail ballots to all eligible voters but does not mandate residents vote using those ballots, and they would retain the option to vote in person.
Here’s more from Cruz:

Big Tech is the single biggest threat facing our democracy. We know in 2016 social media companies had an outsized role in influencing our presidential election. With another presidential election months away, we need to take action now to curtail that influence.

— Senator Ted Cruz (@SenTedCruz) May 27, 2020

Rep. Matt Gaetz (R-Fla.) said he’s drafting a House version of legislation that would remove Twitter’s immunity.
“If you are going to opine as to the truth or falsity of that which is put on your platform for the sake of its viewers, you should not get the protections of Section 230,” he tweeted.

Democrats, meanwhile, are applauding Twitter’s action.

They’re also citing Trump’s bellicose response as evidence he’s willfully spreading misinformation. Those attacks were buoyed by a new report that White House press secretary Kayleigh McEnany, who has championed the president’s assault on mail voting, voted by mail nearly a dozen times in Florida during the past decade.
Trump also voted by mail in Florida’s presidential primary this year. 
Here’s Sen. Richard Blumenthal (D-Conn.):

Twitter’s milquetoast labeling of two Trump lies—out of thousands—prompts horrifying demagogic response: shut down the internet. https://t.co/QQ2s90EF9S

— Richard Blumenthal (@SenBlumenthal) May 27, 2020

Blumenthal, who’s no fan of big tech, has also sponsored legislation that contemplates removing tech firms’ immunity from prosecution. In that case, however, the immunity would be withheld only if they don’t follow an advisory board’s recommendations to prevent the spread of child pornography.
Sen. Mazie Hirono (D-Hawaii):

Hey @realDonaldTrump, anti-conservative bias in Big Tech is a figment of your imagination. If you don’t want Twitter to flag your tweets for fact check, maybe you shouldn’t lie in the first place.

— Senator Mazie Hirono (@maziehirono) May 27, 2020

Rep. Barbara Lee (D-Calif.):

Trump uses Twitter to push out lies and conspiracy theories.
His tweets put people in danger and undermine our democracy.
Fact checking his tweets is the least they can do.

— Rep. Barbara Lee (@RepBarbaraLee) May 27, 2020

At the state level, however, efforts to expand mail voting are generally winning the day. 

An analysis by the OSET Institute, a nonprofit election technology organization, found that 46 states will be offering all voters an option to cast ballots by mail in some form during the pandemic.
Among those states, 24 have Democratic governors and 22 have Republican governors, according to the analysis shared with The Cybersecurity 202. Among the 12 states that typically require an excuse to vote by mail but have relaxed those requirements during the pandemic, seven have Republican governors and five have Democratic governors.
The Wisconsin Elections Commission voted yesterday to send absentee ballots to all registered voters in November’s election. The state was previously a flash point for conflict when the Republican-led legislature bucked Democratic Gov. Tony Evers’s efforts to delay the April 7 primary, resulting in thousands of mail ballots not arriving for people who requested them and blocks-long lines at in-person polling sites in Milwaukee and Green Bay.
In Kentucky, advocates including the state’s chapter of the American Civil Liberties Union filed a lawsuit seeking to mandate that all voters will be able to cast mail ballots in the general election.

The keys

A bill to overhaul government surveillance authorities collapsed as Republicans and progressive Democrats turned against it. 

House Speaker Nancy Pelosi (D-Calif.). (Sarah Silbiger/Bloomberg News)

House leaders decided to abandon the bill a few hours after Trump tweeted his opposition to it, Ellen Nakashima and Mike DeBonis report.
The president has railed against the FBI's use of surveillance to listen to the communications of a former Trump campaign adviser. He said he would veto the bill if it reached his desk.

WARRANTLESS SURVEILLANCE OF AMERICANS IS WRONG!

— Donald J. Trump (@realDonaldTrump) May 27, 2020

Progressives, meanwhile, dropped their support after the House Democratic leadership halted plans to vote on an amendment to stop the warrantless search of Internet search and browsing history. 
Congressional Progressive Caucus co-chairs Reps. Pramila Jayapal (D-Wash.) and Mark Pocan (D-Wis.) said the House was rushing through reauthorizing the powers and failing “to make critical reforms needed to protect the civil liberties of the American public.” A similar amendment in the Senate fell short of passing by just one vote.
The spying powers lapsed in March.
An independent oversight board announced it will review how the FBI uses the spying powers, Shane Harris reports. In a rare partisan split, the decision to launch the review was supported by the board’s three Republican members and opposed by its two Democrats.

Arizona is suing Google for collecting users’ phone location data even after they opt out. 

Google offices in London. (Alastair Grant/AP)

The lawsuit brought by Arizona Attorney General Mark Brnovich argues Google deceived users about its data protections in a way that violated state consumer protection laws, Tony Romm reports. 
Google's Android operating system allows users to stop apps from tracking their location. But the devices still kept location records for some apps, even after users tried to opt out of them, the lawsuit states. Google said it offers clear instructions for how users can turn off additional tracking, but privacy experts and lawmakers say the process is deceptive.
“When consumers try to opt out of Google’s collection of location data, the company is continuing to find misleading ways to obtain information and use it for profit," Brnovich told Tony. 
Google spokesman Jose Castaneda said Arizona is mischaracterizing the company’s practices. “We have always built privacy features into our products and provided robust controls for location data. We look forward to setting the record straight,” he said.
The lawsuit isn’t seeking a specific dollar amount from Google but violations of the state anti-fraud law carry a maximum penalty of up to $10,000 per violation, which could lead to millions in damages. 

U.S. immigration authorities have used controversial cellphone tracking technology nearly 500 times in the past three years, records show. 

A U.S. Immigration and Customs Enforcement officer. (Gregory Bull/AP)

Immigration and Customs Enforcement officers use of the technology produced dozens of arrests, according to public records obtained by the American Civil Liberties Union, TechCrunch's Zack Whittaker reports.
The tools, called Stingrays, spoof cellphone towers and collect messages, calls and location data from phones that connect to them. That means they also collect data from any phones that happen to be in the area in addition to the phones they're specifically targeting, posing civil liberties and privacy concerns.
“We are all harmed by government practices that violate the Constitution and undermine civil liberties,” said Alexia Ramirez, a fellow with the ACLU’s Speech, Privacy, and Technology Project.
The group also sued Customs and Border Protection for documents on its use of Stingrays. The agency has spent over $2 million on the technology but maintains it doesn't have public records responsive to the ACLU's request.

Government scan

U.S. officials will announce their participation in a global organization on the development of artificial intelligence. 

President Trump. (Saul Loeb/AFP/Getty Images)

Member nation's science and technology ministers will gather for a meeting today where U.S. Chief Technology Officer Michael Kratsios will outline U.S. involvement, Max Chafkin at Bloomberg News reports. The move signals growing U.S. concern with China's influence over the future of artificial intelligence and other emerging technologies.
The United States has joined similar partnerships to help develop cybersecurity standards for 5G wireless technology, another area where the United States has slammed Chinese influence.
More government news:

The Federal Trade Commission (FTC) is warning college students about coronavirus-related phishing scams in which the scammers are pretending to have information about their direct payments from the IRS.

Cyber insecurity

Coronavirus-themed scams are dominating the digital threat landscape in 2020, Google reports. 

Medical workers wearing full protective gear prepare to take swab samples. (Nicolas Asfouri/AFP/Getty Images0

Google's Threat Analysis Group is also seeing major attacks on medical and health-care officials, the report notes. "Hack-for-hire" firms have also been spoofing World Health Organization emails to trick people into sharing personal information.
Google also announced this morning it is partnering with the Cybercrime Support Network, a nonprofit group supporting cybercrime victims, to launch a new educational project called “Scam Spotter.” The project will provide tips on how to spot coronavirus-related online scams.

Global cyberspace

The French government will launch its coronavirus contract-tracing app this weekend.  

French Economy and Finance Minister Bruno Le Maire, left poses with Cedric O, new junior minister for digital affairs (Francois Mori/AP)

The tool was developed independently of Apple and Google's contact-tracing software that is being adopted by much of the rest of the European Union, Reuters reports. French officials clashed with Apple over its refusal to allow constant access to Bluetooth.
“A big company, as efficient as it is, should not dictate the public health choices of a sovereign state," said tech minister Cedric O.
More international cybersecurity news:

A Canadian judge ruled that the U.S. met a key legal test to seek the extradition of a senior Huawei Technologies executive who has been at the center of a fight between Washington and Beijing over the giant telecom-equipment maker.
Wall Street Journal

Secure log off

The Washington Post mapped out all 100,000 U.S. deaths due to the coronavirus. You can read the full story here.

 (Map illustration by Lauren Tierney and Tim Meko/The Washington Post)

Analysis | The Finance 202: The Fed has bracing news for anyone expecting a sharp economic rebound

By Tory Newmyer

18-23 minutes - Source: The Washington Post

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with Brent D. Griffiths

The Federal Reserve just tossed a glass of cold water in the face of anyone predicting a swift economic recovery.
The ongoing crisis brought on by the pandemic shutdowns has caused “steep" job losses, with activity “falling sharply” across the map, the central bank’s latest survey of economic conditions on the ground finds.
And business owners report their outlook for the recovery remains “highly uncertain” and most are pessimistic about the trajectory of the rebound, according to the Fed’s new beige book, which collects anecdotal information from a wide swath of business owners around the country.

A pedestrian wearing a protective mask walks passed closed businesses the Chinatown neighborhood of New York on Wednesday. (Nina Westervelt/Bloomberg)

The report, covering six weeks of activity through May 18, offers a snapshot of an economy in the teeth of a shock whose scale and duration remain unknown. It is a bracing reminder that as some Americans take advantage of easing restrictions to resume working and spending — and the stock market continues to rally — the economic wound remains open.

The ongoing muddiness of the picture compounds the challenge for policymakers.

As job losses pile up, the Paycheck Protection Program, a cornerstone of the federal relief effort, largely missed the neediest businesses it aimed to save with its first round, a new report from S&P Global finds. Per the study, 63 percent of the PPP’s initial $350 billion in forgivable loans went to sectors less effected by the shutdowns. The loans also skewed toward larger businesses, meaning there were fewer to go around.
“The industries that were hit so hard are still feeling the pain,” S&P Global chief U.S. economist Beth Ann Bovino tells me.

(via S&P Global)

And while the second tranche of the program appears to be doing a better job reaching the most at-risk businesses — so far, it has doled out roughly 2.6 million loans, a million more than the first round, and it still has 39 percent of its cash remaining — it is too soon to evaluate how many jobs the program has salvaged.
“We’re not going to know that until we do a post-mortem on the PPP,” Bovino says. “The first question is, ‘Did PPP keep small businesses alive?’ Once we learn how many of these businesses survive, we can find out how many workers they need.” 
House lawmakers are poised to vote today on a revamp of the program's rules to give businesses more time and flexibility with the loans. And the question of its efficacy will take on renewed urgency this morning when the Labor Department releases the latest weekly jobless claims number. Economists expect 2.1 million more people filed for unemployment benefits, bringing the ten-week total to over 40 million.

How weekly job loss claims have piled up since the pandemic shutdowns began, through last week.

The Fed’s survey suggests a significant number of those job losses will be permanent.

The PPP “has helped many businesses to limit or avoid layoffs, although employment continued to fall sharply in retail and in leisure and hospitality sectors,” the beige book found.
And expectations for a swift bounce back in some regions remain grim. In the Cleveland area, for example, the survey finds only a third of business owners who cut workers expect to rehire close to the full number of them when they reopen. And among the firms closed in the St. Louis area, only a third expect to reopen in the next three weeks; less than a fifth expect demand for their offerings to pick up in the next five weeks.
“There was little in the report to suggest the economy was on the verge of a ‘V’-shaped recovery as of mid-May,” Evercore ISI analysts Krishna Guha and Ernie Tedeschi write in a note.

The macroeconomists’ view from on high offers little more clarity. 

As business owners fumble forward, those trained to understand the nature of major economic shocks appear just as stumped about what's happening. “Is this a demand shock or a supply shock? Yes. And no,” Paul Krugman, the Nobel Prize-winning economist and liberal New York Times columnist, tells Bloomberg’s Noah Smith. “What's happening now is that we've shut down both supply and demand for part of the economy because we think high-contact activities spread the coronavirus. This means we can't just use standard macro models off the shelf.”
And when it comes to crafting a federal response, the disease itself “remains the wild card in all this,” Bloomberg’s Timothy O’Brien and Nir Kaissar note. “If the coronavirus stops savaging lives and the economy soon, then the bailout’s scope and duration will come into focus. If the virus remains deadly — particularly if a second surge appears later in the year — then government lifelines will need to lengthen and the bailout’s playbook may need to be rewritten.”

Trump tracker

Trump listens as acting director of the Office of Management and Budget Russ Vought speaks during an October news conference last year. (Evan Vucci/AP)

White House will break decades of precedent by not releasing updated economic projections.

Outlooks this summer would almost certainly predict a downturn: “White House officials have decided not to release updated economic projections this summer, opting against publishing forecasts that would almost certainly codify an administration assessment that the pandemic has led to a severe economic downturn,” Jeff Stein and Josh Dawsey report.
“The White House is supposed to unveil a federal budget proposal every February and then provides a ‘mid-session review’ in July or August with updated projections on economic trends such as unemployment, inflation and economic growth. Budget experts said they were not aware of any previous White House opting against providing forecasts in this ‘mid-session review’ document in any other year since at least the 1970s.”

• There's bipartisan consternation over the decision: “Both liberal and conservative critics said the White House should publish its economic projections in line with the precedent set by prior administrations, regardless of the uncertainty caused by the pandemic. The White House under President Barack Obama continued to release these numbers during the Great Recession, although they were unflattering.”

When superpowers collide

Chinese delegates cast their votes at the closing session of the National People's Congress (NPC) in Beijing on Thursday. (Carlos Garcia Rawlins/Reuters)

China moves forward on Hong Kong crackdown.

Communist Party officials made the decision even as other countries ready potential punishments: “China’s rubber-stamp parliament approved a plan to impose a new national security law on Hong Kong that will dramatically increase Beijing’s power over the city and could bring about an end to its status as an international financial capital,” Anna Fifield reports.
“The National People’s Congress, wrapping up its annual meeting [today], voted to forward the plan to its standing committee for drafting, but the outlines have already been well telegraphed. The law is Beijing’s boldest move yet to undercut Hong Kong’s autonomy and is a direct response to the pro-democracy protests that broke out in the former British colony last year.”

Secretary of State Mike Pompeo. (Nicholas Kamm/Pool/AP)

Pompeo declares Hong Kong is no longer autonomous from China.

The decision could have major trade implications: “It will be up to [Trump] to decide the next steps, which could include sanctions on Chinese officials, higher tariffs and visa restrictions. David Stilwell, the assistant secretary of state for East Asia Pacific Affairs, said the administration has a ‘very long list’ of options, but refused to be more specific. But Stilwell said efforts will be made to target the pain on officials in Beijing while mitigating the impact on the people of Hong Kong and the United States,” Carol Morello reports.
“Tensions between Washington and Beijing have been growing steadily over the past year, with belligerent disputes over trade, press freedoms and China’s early reluctance to alert the world to the coronavirus that became a global pandemic. Then last week, China announced a proposed law in which the Chinese Communist Party can deploy 'relevant national security organs' to Hong Kong, giving legal cover for the mainland security services to operate in the previously autonomous financial center. Pompeo has called it a ‘death knell’ for Hong Kong.”
House sends different China sanctions bill to Trump: Lawmakers "passed legislation calling for sanctions against Chinese officials for the detention and torture of Uighur Muslims in the country’s western region of Xinjiang,” CNBC's Tucker Higgins reports. “The legislation was approved by a vote of 413-1 after passing overwhelmingly in the Senate earlier this month.”

Meng Wanzhou, chief financial officer of Huawei, leaves B.C. Supreme Court in Vancouver. (Jonathan Hayward/The Canadian Press via AP)

Huawei CFO loses court fight against extradition to the U.S.: “Huawei Technologies Co’s Chief Financial Officer Meng Wanzhou was dealt a setback by a Canadian court,” Reuters's Tessa Vikander and Moira Warburton report.
“The ruling, which could further deteriorate relations between Ottawa and Beijing, elicited immediate strong reaction from China’s embassy in Canada, which said Canada is ‘accomplice to United States efforts to bring down Huawei and Chinese high-tech companies’ … The ruling paves the way for the extradition hearing to proceed to the second phase starting June, examining whether Canadian officials followed the law while arresting Meng.”
U.S. seizure of Chinese-built transformer in Houston may foreshadow the future: “Federal officials commandeered the electrical transformer, built by closely held Jiangsu Huapeng Transformer Company, at the port and had it trucked under federal escort to Sandia National Laboratories in Albuquerque, N.M., according to people with knowledge of the matter,” WSJ's Rebecca Smith reports of equipment that was headed to Colorado.
The event "raises questions about whether more interventions could be ahead as the federal government begins to enforce an executive order [Trump] signed on May 1 that gives federal officials authority to block utilities from using gear sourced from companies deemed influenced or controlled by ‘foreign adversaries’ of the U.S. While the order didn’t identify these adversaries, it was widely seen as targeting primarily Russia and China.”

Coronavirus fallout

The Post's front page:

The U.S. death toll has reached 100,000.

This has happened in less than four months: “Nearly three months into the brunt of the epidemic, 14 percent of Americans say they know someone who has succumbed to the virus,” Marc Fisher reports.
“These 100,000 are not nameless numbers, nor are they mostly famous people. They are, overwhelmingly, elderly — in some states, nearly two-thirds of the dead were 80 or older. They are disproportionately poor and black and Latino. Among the younger victims, many did work that allowed others to stay at home, out of the virus’s reach. For the most part, they have died alone, leaving parents and siblings and lovers and friends with final memories not of hugs and whispered devotion, but of miniature images on a computer screen, tinny voices on the phone, hands pressed against a window."

Record unemployment leaves Americans vying for “safe” jobs.

There are signs the pandemic is transforming the labor market: “The scramble for remote, socially distant employment reflects lingering fears on the part of U.S. workers about their physical and financial security as the pandemic stretches into its third month. There have been roughly 40 million applications for jobless benefits since March, and the Trump administration is expected to announce Thursday that even more have joined their ranks," Tony Romm reports.
“For Americans seeking new gigs, or aspiring to return to the workplace, the market may prove daunting, according to a snapshot compiled by ZipRecruiter, a job-posting website. There is a growing number of openings in warehouses as major retailers such as Amazon expand their footprints. But some of the greatest demand is for harder-to-get, ‘safe’ jobs requiring little to no face-to-face contact, including data entry, customer service and other human-resource tasks, said Julia Pollak, the company’s labor economist.” (Amazon CEO Jeff Bezos owns The Washington Post)

More from the U.S.:

• Americans who kept their jobs are finding their salaries slashed: “The hard numbers won’t be in for months, but anecdotal evidence is piling up. On earnings calls, big businesses including The Container Store Group and Lyft have cited what they say are temporary salary reductions. Federal Reserve officials also have found plenty of supporting evidence,” Bloomberg's Matthew Boesler and Reade Pickert report.
• Fauci warns about hydroxychloroquine: “Anthony Fauci, the government’s top infectious-disease expert, said hydroxychloroquine isn’t an effective treatment for covid-19 and urged caution as Republicans and Democrats plan their conventions for later this summer,” WSJ's Andrew Restuccia reports.
• Cuomo renews push for state aid: “New York Governor Andrew Cuomo said … he has a message for ‘our friends’ in Congress: ‘Stop abusing New York. Stop abusing New Jersey. Stop abusing Massachusetts and Illinois and Michigan and Pennsylvania,'” CBS News reports.

A Boeing Co. 737 Max airplane sits on the production line at the company's manufacturing facility in Renton, Wash., last year. (David Ryder/Bloomberg)

The corporate front: 

• Boeing cutting more than 12,000 U.S. jobs and resumes production of 737 Max: “The company had said it would cut 10 percent of a workforce that numbered about 160,000. A Boeing spokesperson said Wednesday’s actions represent the largest number of job cuts, but several thousand additional jobs will be eliminated in the next few months,” the Associated Press's David Koenig reports.
• Disney says its Florida theme parks will re-open in mid-July: “A number of social-distancing measures will be imposed at the parks, said Jim MacPhee, senior vice president of operations for Walt Disney World Resort. Customers will be required to wear masks and undergo temperature checks,” Steven Zeitchik reports. “And MacPhee said parades and fireworks displays will remain temporarily suspended because of the crowds those events attract.”
• American Airlines plans to cut 30 percent of management and administrative staff: That's a reduction of about 5,000 jobs, CNBC's Leslie Josephs reports. “The airline also started offering buyouts to these employees and said it plans to offer new voluntary leave and buyouts for frontline staff, such as flight attendants, next month.”

Around the world:

• E.U. proposes $825 billion rescue plan: “Proponents are calling it Europe’s ‘Hamiltonian moment,’ after the 1790 agreement, engineered by Treasury Secretary Alexander Hamilton, that transformed the United States from a loose confederation of former colonies into a true federation with a central government. If approved, the E.U. plan could bind the bloc together at a moment when it seemed at risk of spinning apart under the pressure of the pandemic,” Michael Birnbaum and Loveday Morris report from Brussels.
• Lufthansa rejects E.U.'s $10 billion bailout: The airline's supervisory board balked at the conditions attached to the funds, Reuters's Arno Schuetze and Ilona Wissenbach report. “The board, which had been expected to sign off on the aid, instead refused EU requirements that Lufthansa permanently give up take-off and landing slots at Frankfurt and Munich airports, where it commands a two-thirds market share.”
• Johnson continues to defend embattled aid: “Prime Minister Boris Johnson faced a tough round of angry queries, serious skepticism and even mockery from British lawmakers over his continued support for his top political strategist, Dominic Cummings, who left his London home when he and his wife were stricken by the novel coronavirus to travel 260 miles to a family home,” William Booth and Karla Adam report from London.

Market movers

Traders wear masks as they work on the floor of the New York Stock Exchange on Wednesday. (Lucas Jackson/Reuters)

Dow tops 25,000 for the first time since March.

Markets are surging: “Financial stocks and beaten-up industrials helped power the blue chips — a comeback signaling confidence in the recovery — to a close of 25,548.27. Goldman Sachs, JPMorgan Chase and American Express all had big days,” Thomas Heath reports.
“This comes on top of Tuesday’s 530-point gain and leaves the Dow about 14 percent shy of the all-time high it set in February. It’s now off 10 percent for the year. The Standard & Poor’s 500-stock index advanced 1.5 percent to close above 3,000 points for the first time since March 5. At 3,036.13, the index is now 10 percent off its all-time high and down 6 percent for 2020. All 11 S&P sectors were positive, led by financials and industrials. The S&P technology sector was down most of the day but notched a slim gain at the close.”

Pocket change

SpaceX's historic launch scrubbed due to weather.

Elon Musk's moment will have to wait just a little bit longer: “Space officials Wednesday postponed the launch of a manned SpaceX rocket en route to the International Space Station because of problematic weather around Kennedy Space Center in Merritt Island, Fla., and a tropical storm brewing off the coast of the Carolinas,” Jacob Bogage and Christian Davenport report.
“The mission’s next launch window is scheduled for Saturday at 3:22 p.m., from historic launch pad 39A, the same facility that launched the first astronauts to the moon aboard Apollo 11 in 1969. The flight would have culminated years of work and the fulfillment of a risky bet by NASA under the Obama administration to entrust the private sector to fly astronauts. For SpaceX, it was the crescendo of an improbable odyssey that began in 2002 when founder and chief executive Elon Musk set out to start a space company.”

Daybook

Today:

• The Labor Department reports weekly jobless claims
• Costco Wholesale, Nordstrom, Dollar General, Ulta Beauty, Abercrombie & Fitch and Burlington stores are among the notable companies reporting their earnings
• Jet Blue CEO Robin Hayes speaks during a Post live event on the future of travel

Friday:

• Former Treasury Secretary Larry Summers speaks during a Post live event about the state of global economy

The funnies

Bull session

The contretemps on CNBC

I don't think that's what the opening bell means: “CNBC’s ‘Squawk Box’ hosts Andrew Ross Sorkin and Joe Kernen got into a shouting match in a segment about the road to economic recovery,” Taylor Telford reports.
“Sorkin accused his co-host of downplaying the dangers of the pandemic, including the loss of 100,000 American lives. Kernen retorted that Sorkin was being an alarmist and sparking undue concern, and maintained that his goal was to help investors keep a cool head. The exchange highlights the deep divide in how to respond to what is both a public health and financial crisis. Business and social activity was suspended in much of the country to contain the spread of the deadly virus to devastating results for the economy. Some say the economic damage is worse than the pandemic itself.”
Video of the exchange:

In almost ten years, I’ve never seen Sorkin get this heated on Squawk Box. Worth searching for the segment in its entirety.
pic.twitter.com/1RkMd1gV2N

— priyadesai (@priyadesai) May 27, 2020

News | Politics | China: What it means for investors if Hong Kong loses its special status with the U.S.

Weizhen Tan

5-6 minutes - Source: CNBC

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Riot police patrol the streets at the Central district of Hong Kong during demonstrations against the new proposed national security law.
Ivan Abreu | Barcroft Media | Getty Images

Hong Kong’s special status with the U.S. now appears to be under threat, as U.S.-China tensions ramped up after Beijing proposed a new security law for the Chinese special administrative region.
On Wednesday, U.S. Secretary of State Mike Pompeo told Congress that Hong Kong was no longer highly independent from China. He pointed to Beijing’s law that would effectively bypass Hong Kong’s legislature — which has been approved on Thursday — reigniting concerns over the city’s diminishing freedoms.
“No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground,” Pompeo said in a statement.
A U.S. law, passed last year, requires that Hong Kong retains enough autonomy to qualify for a favorable trading relationship with the U.S. The city has so far been exempted from tariffs that the U.S. has imposed on China as part of the trade war between the two countries.
Here’s what it means if Hong Kong loses its special status.

Impact on U.S. trade with Hong Kong

Hong Kong’s trade with the U.S. would suffer a significant impact if tariffs were imposed.
U.S. goods and services trade with Hong Kong totaled more than $66 billion in 2018, according to the Office of the U.S. Trade Representative (USTR). U.S. exports to Hong Kong were $50.1 billion, while imports were $16.8 billion, according to the data.
Hong Kong was America’s third-largest market for wine exports, fourth-largest market for beef and seventh-largest for agriculture products in 2018, according to the city’s trade and industry department.
Top goods imported from Hong Kong include machinery and plastics, according to the USTR.
“A greater risk is that loss of special status leads the US to restrict sales of sensitive technologies to Hong Kong firms,” Mark Williams, chief Asia economist at Capital Economics, wrote in a note that was sent out on Thursday morning.
“Knowledge-intensive products from the US only make up around 5% of Hong Kong’s total imports. But restricting the ability of Hong Kong-based firms to source sensitive products would remove one of Hong Kong’s distinct advantages as a business location relative to mainland China,” he wrote.

Both U.S. and Hong Kong companies could suffer

There are more than 1,300 U.S. companies operating in Hong Kong, as well as 85,000 Americans living in the city, according to the U.S. State Department.
The international community’s perception of Hong Kong as an autonomous and attractive place to do business could be affected.
“Recent surveys by the American Chamber of Commerce show that US firms already plan to scale back their investments in the city,” Capital Economics said. “Much of Hong Kong’s success is based on its ability to attract FDI and enjoy the productivity dividends that come from hosting internationally-competitive firms.”
In a statement on Tuesday, the U.S. Chamber of Commerce said that Hong Kong’s autonomy under the “one country, two systems” framework has “long been among its greatest assets” in forming its transparent, rules-based economy.
“It would be a serious mistake on many levels to jeopardize Hong Kong’s special status, which is fundamental to its role as an attractive investment destination and international financial hub,” it wrote, urging the Trump administration to prioritize a positive relationship with Hong Kong.
Currently, Americans also enjoy visa-free travel to the Chinese territory. But visa restrictions could kick in if those tensions worsen, analysts said.
“Pompeo’s decision open(s) the door for possible tariffs on imports from Hong Kong, visa restrictions or asset freezes for top officials. China has previously warned it would retaliate if the US interfered in its affairs,” Rodrigo Catril of National Australia Bank wrote in a note on Thursday morning.

No impact on Hong Kong’s global trade status

While revoking the city’s special status with the U.S. could have far-reaching consequences, doing so “would have no direct impact on Hong Kong’s international status,” said Capital Economics.
The city would still be treated as an independent customs territory by the World Trade Organization, and as a separate entity by other institutions such as the International Monetary Fund and the World Bank.
Of course, the U.S. is unlikely to be deterred by those WTO rules if it considers slapping tariffs on the city, the research firm said.

— CNBC’s Tucker Higgins contributed to this report.

News | Politics | China: China approves controversial national security bill for Hong Kong

Yen Nee Lee

3-4 minutes - Source: CNBC

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Red flags fly in front of the Great Hall of the People as the third session of the 13th National People’s Congress (NPC) opens on May 22, 2020 in Beijing, China.
Du Yang | China News Service | Getty Images

China’s National People’s Congress, the country’s parliament, on Thursday approved the proposal to impose a new national security law for Hong Kong — paving the way for the legislation to be finalized and implemented in the city.
The NPC voted 2,878 to 1 in favor of the bill, which will pave the way for its Standing Committee — a smaller decision-making body — to proceed to working out details of the legislation to be implemented in Hong Kong. Six abstained from the vote.
Ahead of that decision, protests in Hong Kong reignited. Large crowds in the Chinese territory were out in force after the legislation was first proposed last Friday at the start of the annual parliamentary meeting. The U.S. has criticized Beijing’s move and said it undermines the freedoms and autonomy of Hong Kong, a former British colony that returned to Chinese rule in 1997.
Details of the law are still scarce — but it will target secession, subversion of state power, terrorism activities and foreign interference, the Chinese government has said. The process to enact the law bypasses Hong Kong’s legislature and could take a few months to complete.
The decision to press ahead with the new legislation — which was widely expected — followed a controversial week that saw protests surge again in Hong Kong after weeks of relative calm as the territory observed social distancing measures during the coronavirus outbreak. On Wednesday, U.S. Secretary of State Mike Pompeo declared that the city was no longer independent from China.

Hong Kong, a special administrative region of China, is ruled under a “one country, two systems” principle that allows the city some freedom that those on the mainland do not enjoy. That includes self-governing power, a largely separate legal and economic framework from mainland China, and limited election rights.
Last year, proposed changes to law that would have allowed extradition to China sparked widespread protests in Hong Kong. That later morphed into broader pro-democracy demonstrations that swamped the city for much of last year, sending its economy into a recession.
Those demonstrations came to a pause earlier this year because of the coronavirus outbreak. But protesters took to the streets over the weekend after Beijing announce its plans for a new national security law in Hong Kong, which once again heightened concerns that China is expanding its control over the city.