Showing posts with label DealBook. Show all posts
Showing posts with label DealBook. Show all posts

Sep 16, 2020

DealBook: This Isn’t Just JPMorgan’s Problem


13-17 minutes - Source: NYT

Credit...Eduardo Munoz/Reuters

Some workers are already going back home

JPMorgan Chase sent some of its workers home this week after an employee in its trading unit in Midtown Manhattan tested positive for the coronavirus, a person familiar with the matter told DealBook.

The timing isn’t great. The news broke days after President Trump brought attention to the investment bank’s plan to bring some of its senior workers back to the office, inaccurately tweeting, “Congratulations to JPMorgan Chase for ordering everyone BACK TO OFFICE on September 21st. Will always be better than working from home!” (The bank had, in fact, only asked some senior employees in its sales and trading division to return.) Mr. Trump’s tweet politicized a decision that JPMorgan, and other companies, would probably like to make without such fanfare.

Jamie Dimon’s reported comments about young people working from home didn’t help either. JPMorgan’s C.E.O. told analysts with Keefe, Bruyette & Woods in a private meeting that working from home “seems to have impacted younger employees, and overall productivity and ‘creative combustion’ has taken a hit,” one of the analysts, Brian Kleinhanzl, wrote in a note, according to Bloomberg. A spokesman for JPMorgan later clarified that the bank had noticed a productivity drop in all employees, though younger workers “could be disadvantaged by missed learning opportunities.”

The bigger story is how it highlights the calculations that companies are making as they bring people back to the office. The worries about productivity and weakening social ties are real, and so are the risks (including legal liability) of virus outbreaks in offices. The case numbers in New York are down, which could make people more comfortable with coming in; the same can’t be said about London, for example. How much pressure should companies put on employees to return to the office? How will sporadic outbreaks affect workers’ attitudes toward coming in? When, if ever, will workers get used to the cycle of going to the office until a new case emerges and they are told to stay home? Is it better just to deal with the consequences of remote working until there is a vaccine?

• A JPMorgan spokesman told The Times in a statement, “We’ve been managing individual cases across the firm over the course of the last few months and following appropriate protocols when they occur.”


Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut, Lauren Hirsch in New York, Ephrat Livni in Washington, and Michael J. de la Merced and Jason Karaian in London.



Credit...Jason Redmond/Agence France-Presse — Getty Images

Judy Shelton’s Fed nomination appears to have stalled. Senator John Thune of South Dakota, the majority whip, said that the contentious Trump nominee did not have the votes to be confirmed, suggesting that fellow Republicans still had concerns.

A House report condemned Boeing and the F.A.A. for the 737 Max crashes. Mismanagement at the aircraft manufacturer and a “severe lack of federal oversight” contributed to the two fatal crashes of the jet that killed a total of 346 people, according to Democrats on the House Transportation and Infrastructure Committee.

ByteDance will keep a majority stake in TikTok. The deal to bring Oracle in as TikTok’s tech partner will see TikTok spun out as a U.S.-headquartered company in which Oracle and other American investors will own a minority stake. The proposal remains under review by U.S. national security officials, with a decision expected within days.

Kodak’s board claimed ignorance about the timing of stock option grants. An inquiry commissioned by the company concluded that Kodak’s general counsel had failed to properly brief directors on the legal risks of giving options to Jim Continenza, its C.E.O., the day before it announced a $765 million federal grant to make drug ingredients, which sent its share price soaring.

U.S. poverty hit a record low before the pandemic. The share of Americans living in poverty fell to 10.5 percent last year, according to the Census Bureau, the lowest rate since estimates were first published in 1959. Still, 26 million Americans lacked health coverage, according to the survey that serves as a snapshot of the economy just before the pandemic recession hit.


Credit...EPA, via Shutterstock

Apple announced a number of new products, including a $30-per-month subscription bundle of its new fitness program, Apple Fitness Plus, along with its cloud storage, music, TV, gaming and news services.

The rollout comes as Apple is under increased antitrust scrutiny. Bundling services alongside its popular hardware products sparked different reactions from rivals old and new.

Spotify warned of “irreparable harm” if regulators don’t act: The music service said in a statement that, “Once again, Apple is using its dominant position and unfair practices to disadvantage competitors and deprive consumers by favoring its own services.” Spotify is currently suing Apple in Europe for alleged anticompetitive practices, on similar grounds to Epic Games’s lawsuit in the U.S.

Peloton welcomed a new competitor: “Friendly competition is in our DNA. Welcome to the world of digital fitness, @Apple,” it tweeted.

Is the new bundle a threat? Apple’s control of its devices and operating system give it an enviable platform to host a range of services that compete with specialized rivals like Spotify, Netflix and others. Its pricing and actions as a gatekeeper will determine whether it attracts more attention from antitrust regulators (just ask Amazon). A test will come in its foray into digital fitness, a market flooded with streaming classes featuring providers, like Peloton, that have invested in years of relationships with top-tier instructors that are central to driving demand.

One final question: Where’s Apple’s rumored Tile competitor?

Splitting the difference — also known as compromise — is often a wise negotiation tactic. In that spirit, the bipartisan House Problem Solvers Caucus presented a $1.5 billion coronavirus relief package yesterday. It was close to what the White House indicated it might be willing to spend on stimulus, not as much as the $3 trillion House Democrats are looking for and much more than the $300 billion bill most recently backed by Senate Republicans.

The bill went nowhere fast, swiftly dismissed by party leaders. DealBook asked the Democratic co-chair of the 50-member Problem Solvers Caucus, Representative Josh Gottheimer of New Jersey, about the point of this doomed attempt at compromise. “Ideally, you wouldn’t need us,” he conceded. “But clearly that’s not where we are.”

The group’s mission is “putting country first” and “actually trying to govern,” Mr. Gottheimer said. The goal was to show areas of agreement and get negotiators back on track. The caucus presented a roadmap it not-so-subtly called the “March to Common Ground” for the next six to 12 months, with “boosters” and “reducers” adjusting the costs of a bill, tied to circumstances (like the discovery of a vaccine).

“We represent the voices of 50 million Americans screaming out to Congress, ‘Do your job!’” said Representative Tom Reed of New York, the Republican co-chair of the caucus. Undeterred by the rejection of his preferred plan, he said he was heartened by the news that House Speaker Nancy Pelosi had told the chamber to stay in session until there was a deal, and by signs of a “thawing in the gridlock” from the White House Chief of Staff, Mark Meadows. “Stay tuned, you’re going to see more of this,” Mr. Reed predicted.


Credit...Denis Balibouse/Reuters

After George Floyd was killed by police officers in Minneapolis in May, a deluge of executives spoke out against racial injustice and pledged to address systemic inequality. Now, the focus is shifting internally, as boardrooms confront their own lack of racial diversity. Advisers and investors are pushing directors to back up their rhetoric with action or face financial, regulatory and reputational consequences.

Racial diversity has become one of the most pressing agenda items in boardrooms, DealBook hears. Underrepresented ethnic and racial groups make up 40 percent of the U.S. population, but just 12.5 percent of board directors at the 3,000 largest listed companies, up from 10 percent in 2015, The Times’s Peter Eavis writes. Black directors account for 4 percent of all directors, versus 13 percent of the population.

“This is the singular topic of governance discussions,” Daniel Wolf, a partner at the law firm Kirkland & Ellis, told DealBook, adding, “Boards are going to try and get ahead of it.” Kirkland recently sent a 19-slide PowerPoint deck to clients that highlighted the importance of diversity and inclusion amid increasing shareholder and regulatory scrutiny.

“This seems like a fundamentally different time than the other times Black men were murdered by the police,” said Ursula Burns, a former Xerox C.E.O. who is a director at Exxon, Nestlé and Uber. She is helping to lead the Board Diversity Action Alliance to help companies add Black directors, an organization that has Dow, Mastercard and UPS among its supporters. A similar initiative, the Board Challenge, counts Merck, United Airlines and Verizon among its members.

• “You cannot look your stakeholders in the eye and say, ‘It doesn’t affect us, we are color blind, we don’t need to make changes,’ ” said Rebecca Thornton, the head of director advisory services at JPMorgan. More than 40 percent of the requests for board candidates she has received from clients this year asked for people of color, she noted.

Shareholders — and regulators — are watching. When major institutions put pressure on companies to add women to their boards a few years ago, it had a measurable impact. Now, some of those forces are turning their focus toward racial diversity, hence the warnings about the price of inaction. The evidence of stronger financial returns at more diverse firms also helps.

Who is doing what:

California passed a bill last month requiring publicly traded companies headquartered in the state to have board members from underrepresented communities.

New York City’s comptroller called for companies to adopt a version of the NFL’s “Rooney Rule,” requiring companies to consider gender and racial diversity in searches for C.E.O.s and directors.

State Street said it would start to ask companies to explain their risks, goals and strategy related to racial and ethnic diversity.

ISS, the proxy adviser, said it would begin sending letters to listed companies asking for more details on the racial diversity of board members and executives.


Credit...Lucas Jackson/Reuters

The father of Microsoft’s co-founder died on Monday at the age of 94. Though best known in his later years as the man who oversaw his son’s enormous philanthropy, he was also a successful lawyer who played a major role in the life of another future billionaire, Howard Schultz of Starbucks.

Mr. Gates Sr. laid the foundation for his son’s charitable giving, starting with an $80,000 check from what was then the William H. Gates Foundation to a cancer program in the Seattle area. Mr. Gates Sr. laid out his philosophy on philanthropy in his 2009 book, “Showing Up for Life,” this way:

Those who claim that the wealth they have accumulated is theirs to pass on without returning anything back to the American system show a shocking lack of appreciation for all that the system and public monies did to help them create wealth.

As a lawyer, he helped Mr. Schultz take control of Starbucks. Mr. Gates Sr. co-founded what became the prominent Seattle law firm K&L Gates and was president of the Washington State Bar Association. One of his career achievements was helping Mr. Schultz beat out a competitor to buy Starbucks in 1987.

Mr. Schultz recounted Mr. Gates Sr. taking him to his rival bidder’s office: “All I remember him saying is: ‘You should be ashamed of yourself that you’re going to steal this kid’s dream. It’s not going to happen. You and I both know this is not going to happen.’ ” The investor quickly backed down and Mr. Schultz bought Starbucks for $3.8 million.


• The cloud software company Snowflake raised $3.4 billion in its I.P.O., the biggest U.S. public offering so far this year. (Reuters)

• The house-sales platform Opendoor will go public by merging with the blank-check company Social Capital Hedosophia II in a deal valued at $4.8 billion. (CNBC)

• Oatly, the popular oat-milk brand, reportedly may go public next year at a potential $5 billion valuation. (Bloomberg)

Politics and policy

• Joe Biden has increasingly surrounded himself with left-leaning economic advisers as the Democratic Party and voters favor more economic stimulus measures. (Politico)

• President Emmanuel Macron of France defended his country’s introduction of 5G wireless services, saying critics preferred “the Amish model” and “going back to the oil lamp.” (AFP)


• The Justice Department has reportedly begun an inquiry into whether the electric-truck maker Nikola misled investors with exaggerated claims about early models’ capabilities. (WSJ)

• Celebrities like Kim Kardashian West are planning to protest Facebook’s misinformation and hate speech policies with an “Instagram freeze.” The public’s reaction was, shall we say, divided. (NYT)

Best of the rest

• An unexpected new use of Zoom: sentencing people to death via virtual courts. (Rest of World)

• The parent company of Chuck E. Cheese wants a bankruptcy court’s approval to shred seven billion prize tickets. (Bloomberg Law)

• “The Billionaire Who Wanted to Die Broke … Is Now Officially Broke” (Forbes)

Jun 25, 2020

DealBook | US Jobless Expectations: U.S. Jobless Claims May Top 1 Million: Live Business Updates

7-8 minutes - Source: NYT

Economists expect 1.3 million new state unemployment claims.

With businesses reopening in fits and starts and anxiety increasing over new coronavirus hot spots, the latest unemployment reading on Thursday is likely to offer scant comfort.
Economists surveyed by Bloomberg expect the Labor Department to report that 1.3 million new claims for state unemployment insurance were filed last week, with 20 million people continuing to collect state benefits. If the forecasts are correct, it would be the 14th week in a row that new claims have topped one million.
The latest data will be published amid conflicting signals for the economy. New York and some other places that were hard hit are starting to get back to business. But a surge in cases in states that reopened earlier has raised fears of new setbacks.
On Tuesday, Gov. Greg Abbott of Texas urged residents to stay home and warned that the state might have to impose new restrictions if the virus could not be contained. And California and Florida have each posted record numbers of new cases in recent days.
Apple shut stores it had reopened in four states — Florida, South Carolina, North Carolina and Arizona — and on Wednesday closed seven stores in Houston.
“The renewed outbreak will hinder the recovery,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago. “I can’t help but think that the willingness of consumers to be in crowded places has diminished. It’s going to be a long haul to get back to where we were before the pandemic.”

Stock markets are mixed ahead of U.S. jobless claims.

Credit...Charly Triballeau/Agence France-Presse — Getty Images
U.S. stock futures fell and global markets were choppy on Thursday as investors worried about new coronavirus outbreaks and braced for unemployment claims data from the United States.
Futures markets were predicting Wall Street would open slightly lower. Major European markets wavered between gains and losses, following a more than 1 percent drop in Tokyo.
Other markets signaled hesitance. Prices for U.S. Treasury bonds, which often rise in times of uncertainty, were mostly higher. Oil prices were lower.
Investors have fretted for days about persistent reports of new infections in the United States, raising questions about how quickly the world’s largest economy can fully reopen and get back up to speed. India and Brazil have also reported higher infections, days after China and South Korea also disclosed outbreaks.
Those concerns drove stocks in the United States down heavily on Wednesday, with the S&P 500 index falling more than 2 percent.
On Thursday, investors were also bracing for the latest data on U.S. jobless claims, which is expected to show that more than a million people filed for state unemployment benefits last week, despite the reopening of businesses.

The founder of SoftBank is resigning from Alibaba’s board.

Credit...Kim Kyung Hoon/Reuters
Masayoshi Son, the founder of SoftBank, the Japanese conglomerate and investment company, said on Thursday that he would resign from the board of Alibaba, the Chinese e-commerce company, in which he was an early and wildly successful investor.
The move comes after Jack Ma, Alibaba’s co-founder, said last month that he would quit SoftBank’s board, without giving an explanation
SoftBank, which runs the world’s largest technology investment fund, has been hit hard by the coronavirus pandemic, which has cratered the values of some of its largest holdings, like the car-sharing service Uber and the Indian hospitality firm Oya.
Alibaba has been a golden goose for SoftBank. Mr. Son’s original investment of $20 million grew into a stake valued at more than $100 billion. In recent months, SoftBank has sold down part of its stake in the Chinese company to raise funds for a large share buyback intended to juice its stock price.
Mr. Son and Mr. Ma have been longtime members of each other’s boards. Addressing an annual meeting of SoftBank’s shareholders, Mr. Son said that there was no bad blood between the two.
“It’s just a happy ending,” Mr. Son said. “Jack is kind of graduating from SoftBank Group, and I am graduating from the Alibaba Group.”

Disney postpones its plans to reopen theme parks in California.

Credit...Mike Blake/Reuters
The Walt Disney Company on Wednesday abandoned a plan to reopen its California theme parks on July 17, citing a slower-than-anticipated approval process by state regulators. The announcement came amid tension with unionized Disneyland employees, some of whom had publicly criticized the company’s reopening timetable as too fast.
“The State of California has now indicated that it will not issue theme park reopening guidelines until sometime after July 4,” Disney said in a statement. “Given the time required for us to bring thousands of cast members back to work and restart our business, we have no choice but to delay the reopening of our theme parks and resort hotels until we receive approval from government officials.”
Disney did not give a new target reopening date. The company said it would move forward with plans to reopen its Downtown Disney shopping mall in Anaheim, Calif., on July 9.
Disneyland and Disney California Adventure, which border each other in Anaheim, closed on March 13. Two weeks ago, Disney presented government officials with a plan to reopen both parks on July 17 with limited capacity and stringent safety policies, including mandatory mask wearing. Other theme park operators in California have made similar proposals; Universal Studios Hollywood said it would like to reopen as soon as July 1, pending state approval.
But coronavirus cases in California have been soaring. Gov. Gavin Newsom said on Wednesday that the state recorded more than 7,000 new cases over the past day.
Unions representing most of the Disneyland’s 32,000 employees sent a letter to Governor Newsom on June 17 saying that “despite intensive talks with the company, we are not yet convinced that it is safe to reopen the parks on Disney’s rapid timetable.” Since then, many of Disney’s unions have signed agreements with the company outlining enhanced safety procedures.

Catch up: Here’s what else is happening.

  • Qantas, the Australian airline, will cut roughly one-fifth of its work force as it joins other airlines grappling with the global near halt in travel. In addition to the reductions of at least 6,000 jobs, it would also keep another 15,000 workers on furlough until flying resumes. It will also retire its six Boeing 747 jumbo jets six months ahead of schedule.
Reporting was contributed by Ben Dooley, Mohammed Hadi, Matt Phillips, Nelson D. Schwartz, Carlos Tejada, Brooks Barnes and Alan Rappeport.

May 7, 2020

DealBook | Markets: Stock Markets in Europe Rise as Investors Await Payroll Data: Live Update

Right Now
Futures markets signaled a positive opening on Wall Street.

Credit...Emile Ducke for The New York Times

European markets rise before release of new gauges of damage.

Global markets were mixed on Thursday, as investors held their breath over data that could add to the picture of how the world economy is dealing with the coronavirus outbreak.
European markets rose in early trading after a mostly down day in Asia. Futures markets signaled a positive opening for Wall Street.
Washington is expected on Thursday to post the latest monthly payroll data, showing the extent of the toll of the outbreak and efforts to contain it. While an ebb in new cases in some of the hardest-hit places has given investors some reason to cheer, they also face the prospect of a surge in new infections in other places, particularly as lockdown efforts ease.
Highlighting the worries, prices for longer-term U.S. Treasury bonds, typically seen as a place to park money during times of turbulence, were higher in early Thursday trading. Oil prices on futures markets fell, giving the markets another cautionary note.
In Tokyo, where trading resumed after a string of holidays, the Nikkei 225 index rose 0.3 percent. Most other regional markets fell. Hong Kong’s Hang Seng index was down 0.5 percent. In mainland China, the Shanghai Composite index lost 0.2 percent. South Korea’s Kospi was flat. In Australia, the S&P/ASX 200 index was down 0.4 percent.
In London, the FTSE 100 index was up 0.3 percent early. The DAX index in Germany gained 0.7 percent at the opening, while the CAC 40 in France was up 0.5 percent.

China’s exports jump. The good news may not last.

Credit...Agence France-Presse — Getty Images
China’s exports to the rest of the world unexpectedly jumped in April. While that would seem to be a positive development in a time when the coronavirus has curbed demand for just about everything, the good news may be fleeting.
Chinese customs officials said on Thursday that exports in dollar terms rose 3.5 percent when compared with April 2019. It was the first such increase since the outbreak emerged in Wuhan in December and spread across the world. The results surprised economists surveyed by Bloomberg and Reuters who had predicted another drop.
China’s economy, which shrank in the first quarter for the first time in decades, is expected to continue to struggle in part because the pandemic has closed stores in many other countries that would have sold Chinese-made goods.
A surge in exports would normally be seen as positive news, but economists chalked up the increase to a return in Chinese production — and local companies fulfilling pre-existing orders — rather than a run in new business. China’s vast trade machine will face tough challenges as the world recovers in the months to come, amid signs that the long-simmering trade war between the United States and China may be heating up again.
More predictably, imports fell 14.2 percent in April compared with a year earlier, as China’s lockdown efforts and slow restart cut into demand.

Britain’s central bank forecasts a 30 percent drop in economic activity.

Credit...Andrew Testa for The New York Times
The Bank of England, Britain’s central bank, said on Thursday that the economy in the April-June quarter would be nearly 30 percent smaller than at the end of 2019, as consumer spending would fall nearly 30 percent, while business revenue, investment and trade all contracted sharply.
The bank said that the full-year economy for 2020 would most likely fall 14 percent, compared with a 1 percent increase in 2019.
But the bank, which also announced it would hold interest rates steady at 0.1 percent, said it expected economic activity to pick up “materially in the latter part of 2020 and into 2021” after the lockdowns in Britain and elsewhere are eased and people are able to return to work. It forecast a 15 percent jump in economic growth for 2021.
In its report, the bank said it had tested the financial strength of major British banks and found that they were strong enough to continue lending in the difficult economic environment.
The bank, which described its report as a “scenario” rather than a formal forecast, acknowledged that the outlook for both the British and global economies was unusually uncertain and depended on the evolution of the pandemic and “how governments, households and businesses respond.” On Wednesday, the European Commission projected a 7.4 percent collapse in the European Union economy for 2020.

Wall Street drifts lower as oil prices reverse early gains.

Credit...Chang W. Lee/The New York Times
After a day of swinging between gains and losses, stocks on Wall Street ended with a small decline Wednesday.
Markets had been buoyed this week by signs that the countries hardest hit by the virus were slowly emerging from economically devastating lockdowns, though gains on Monday and Tuesday were small — as was Wednesday’s decline. The S&P 500 fell less than 1 percent.
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The rest of the week will bring more concrete evidence of the severity of the damage caused by the shutdown, with a monthly report on unemployment Friday to provide a comprehensive look at the number of Americans out of work.
Already, reports on jobless claims have shown that more than 30 million workers in the United States sought unemployment benefits over the six weeks through April. Another weekly update is due on Thursday.
On Wednesday, the ADP National Employment Report showed the private sector work force had plunged by 20 million jobs in April. Separately, new data from the European Commission predicted a deep recession on the continent this year.
Oil prices, which had rebounded over the past two days, fell on Wednesday. The price of benchmark crude in the United States retreated to a little over $23 a barrel. Brent crude, the international benchmark, fell below $30 a barrel.

Even with most plants shut, G.M. is keeping some Corvette workers busy.

Credit...Kaiti Sullivan for The New York Times
The North American plants of the three big U.S. automakers have been closed since mid-March. Mostly.
A handful of General Motors workers have labored on — including several dozen at a plant in Bedford, Ind., that makes chassis for Chevrolet Corvettes.
A G.M. spokesman said the factory’s continuing operation was aimed at reducing a chassis shortage and helping resume Corvette production more quickly once the company reopens an assembly plant in Bowling Green, Ky.
The spokesman said that the Bedford plant was running three shifts a day — with about 20 people per shift, down from about 250 hourly workers normally — and that the workers had volunteered for the assignment, at their usual wage.
The company said Wednesday that it planned to “restart the majority of manufacturing operations” in North America on May 18.
The G.M. spokesman said that aside from the Bedford plant, the company had continued work at a Texas plant to finish building a sport utility vehicle before the plant changed over to a new model, and in Lockport, N.Y., to make replacement parts for existing vehicles.
Brian Rothenberg, a United Automobile Workers spokesman, said the union had cooperated with such efforts if the return to work was voluntary and adequate safety measures were in place.

The pandemic’s fallout puts Argentina’s finances under pressure.

Credit...Agustin Marcarian/Reuters
Strict measures to limit the spread of the coronavirus in Argentina have kept most of its citizens safe, but have deeply undercut its economy, putting the country on a path toward what could be the ninth debt default in its 200-year history.
Argentina stopped making the scheduled payments on its $65 billion of debt in April, and entered a 30-day grace period that will run out on May 22. If an agreement with creditors cannot be reached by then, Argentina will officially be in default, compounding economic problems that now include 50 percent inflation and a 30 percent poverty rate.
Argentina’s economy minister, Martin Guzman, has sought to use the grace period to pitch a debt-reduction proposal to creditors including big institutional investors that buy bonds, like BlackRock, Fidelity and Pimco. The proposal includes suspending all debt payments for three years, then reducing the principal amount by about $3.6 billion and reducing the interest payments by applying lower rates.
The offer will be withdrawn if it has not received traction by Friday. So far, Argentina’s creditors have made just one firm counterproposal, suggesting big differences between the parties.
Argentina has been under quarantine restrictions since mid-March, and has closed its borders and banned the sale of domestic and international commercial airline tickets until Sept. 1. The measures appear to have limited the spread of the coronavirus: Argentina has reported about 250 deaths out of a total population of about 45 million.

Religious groups tap a small-business aid program.

Credit...Gabriela Bhaskar for The New York Times
Religious organizations around the United States are looking to a troubled federal loan program for help as donations dry up.
Around 9,000 Catholic parishes have received Paycheck Protection Program loans administered by the Small Business Administration, said Patrick Markey, the executive director of the Diocesan Fiscal Management Conference, which works with dioceses on financial issues.
“Everybody’s trying to keep their people on the payroll and hoping that with the P.P.P. they can do that until they start meeting again, and then no one gets let go,” he said.
A survey by the Jewish Federation of North America found that at least 533 loans had been distributed to Jewish organizations with a total value of $276 million. The median value of the loans was $246,000, said Rebecca Diner, a spokeswoman for the group.
The loans are meant to stabilize small businesses and are forgivable by the government if the majority of the funds go toward payroll. The government distributed $342.3 billion in loans in the first round of the program, which ended in mid-April. It has distributed $183.5 billion in loans in a second round as of Wednesday evening.
But the program has been plagued by complaints that big businesses have received the money ahead of smaller establishments, like independent restaurants and retailers.
It has also attracted ample interest from nonprofit organizations like religious congregations worried about a downturn in donations and other sources of revenue. That includes some private schools with large endowments that have kept the loans in the face of backlash from the administration and their own alumni.

Catch up: Here’s what else is happening.

  • Lyft on Wednesday gave investors their first detailed look at how the coronavirus had affected its ride-hailing service. Revenue fell 6 percent from the previous quarter, to $955.7 million. Lyft lost $398 million, up 10 percent from its loss in the previous quarter.
  • BuzzFeed’s chief executive and founder, Jonah Peretti, told staff Wednesday that 68 noneditorial employees, from the business, studio and administration teams, would be furloughed for three months, with a goal of keeping losses this year to under $20 million, according to an email obtained by The New York Times. Mr. Peretti also said cuts to the news division would be necessary and that he would begin discussions with the union about them. BuzzFeed has already instituted staff-wide graduated pay cuts for those making more than $40,000 a year.
Reporting was contributed by Kate Conger, Noam Scheiber, Stanley Reed, David McCabe, Mary Williams Walsh, Carlos Tejada and Daniel Victor.

May 4, 2020

DealBook: Global Markets Fall on Recovery Fears and China Tensions: Live Updates

17-21 minutes - Source: NYT

Credit...Lam Yik Fei for The New York Times

Global markets fall sharply on recovery jitters.

Global markets on Monday were pointing to a downbeat beginning to the week, with stocks falling and futures markets predicting a negative opening for Wall Street.
Markets in France and Germany opened more than 3 percent lower, on a day when many markets were catching up after a trading holiday on Friday in much of the world. Futures market were predicting Wall Street would open about 0.6 percent lower.
Prices for U.S. Treasury bonds also rose during Asian trading, amid investor skepticism over the global economic outlook.
Sentiment was also hurt by rising tensions between the United States and China. The Trump administration, under pressure for its own bungles in dealing with the outbreak, has ramped up criticism of China’s response. Other governments have also added their criticism.
Shares in Hong Kong, which didn’t trade Thursday and Friday because of holidays, ended down 4.2 percent. South Korea’s Kospi index fell 2.7 percent. Taiwan’s Taiex lost 2.2 percent.
In London, the FTSE 100 index was down 0.5 percent early in the trading day. In Germany, the DAX index was down 3.2 percent. France’s CAC 40 index was down 3.7 percent.

J. Crew files for bankruptcy, the first major retailer to fall during the pandemic.

J. Crew, known for producing preppy fashion with mass market appeal, filed for bankruptcy on Monday. The company is the first major retailer to fall victim to the pandemic that has hobbled the world economy.
The company, whose popularity was lifted more than a decade ago by Michelle Obama, had amassed enormous debt even before the outbreak. Since then, it has seen sales virtually wiped out at more than 170 J. Crew stores and a further 140 operated under the popular Madewell brand that it also owns.
J. Crew had struggled to keep up with changing tastes, but appeared to be adapting in recent months, having named Jan Singer, formerly of Nike and Victoria’s Secret, its new chief executive. The company had been planning an initial public offering this spring of Madewell, a popular denim brand among millennials, to pay down debt and revamp the J. Crew brand.
While it is the first major retailer to fall to the coronavirus, J. Crew is unlikely to be the last. The pandemic halved sales of clothing and related accessories in March and is believed to have had an even greater effect in April. Neiman Marcus is carrying significant debt, for example.
And Brooks Brothers is already facing questions about its future.

Hong Kong takes its worst economic hit in decades.

Hong Kong’s economy shrank by 8.9 percent in the first three months of the year compared with a year earlier, according to government estimates, the worst plunge since the authorities began tracking similar data in 1974.
On a seasonally adjusted quarter-to-quarter basis, Hong Kong’s economy contracted by 5.3 percent when compared with the fourth quarter.
Private consumption, imports and exports fell by about one-tenth. Social distancing, layoffs and concerns about the future of the economy led to a drop in spending.
The coronavirus slowed Hong Kong’s economy before it spread around the world, so the semiautonomous Chinese city’s performance could offer a hint of what might happen elsewhere. But it was already in a recession brought by anti-government protests and the protracted trade war between the United States and China.
Hong Kong could also offer a hint of what an emergence might look like. The city has managed to keep the outbreak under control through widespread use of masks, social distancing and aggressive efforts to track and isolate those who have been infected. The city has recorded 1,040 confirmed cases and four deaths, with no local cases reported over the past two weeks.
Schools, bars and public facilities have been closed, and a series of restrictions have been put in place to reduce the number of people in restaurants. Still, the city has avoided the broad lockdowns put in place in mainland China, Europe and the United States.
The government has also introduced several stimulus measures, including tax cuts and handouts of 10,000 Hong Kong dollars each, or about $1,300, to adult residents.
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Hong Kong officials estimate that the economy will contract this year by 4 percent to 7 percent.

New efforts to cut food waste as risk of hunger grows in America.

Even as lines at food banks grow and Americans worry about getting enough to eat, farmers have had to destroy produce, smash eggs and dump milk as the demand from restaurants, hotels and schools has drastically declined in the coronavirus pandemic.
Now, the Department of Agriculture plans to spend $300 million on surplus produce, milk and meat and ship it to food banks. States have also joined the effort: New York is giving food banks $25 million to buy products made from extra milk produced on farms in the state.
Even college students have stepped in, renting trucks to rescue unsold onions and eggs from farms. They have created a website that connects farmers and food banks around the country.
But the combined efforts are only a “drop in the bucket,” said Jackie Klippenstein, a senior vice president of the Dairy Farmers of America, the largest dairy co-op in the United States. The co-op has diverted almost a quarter of a million gallons of milk to food banks.
And more food is coming — California strawberry growers are fretting about how to sell their goods, with peak harvest season approaching in May.
“Time is not on our side,” said Mary Coppola, a vice president at the United Fresh Produce Association, a trade group of fruit and vegetable growers and processors. “In my own personal opinion, we are not coming up with the supply-chain logistical solutions as quickly as produce is growing.”
FIGHTING FOOD WASTE Read our full story on plans to distribute onions, strawberries and eggs from farms to food banks.

Amazon and Target face protests over worker safety.

Amazon and Target are the focus of renewed labor protests over the health risks of working during a pandemic.
In addition to earlier demands to keep workers safe, the protests featured a newer goal: to discourage employers from rolling back safety measures in a rush to return to business as usual, especially as states lift stay-at-home orders.
The companies are not unionized, and the scattered protests on Friday were organized ad hoc.
Some Amazon workers said they were alarmed that the company was ending a policy of unlimited unpaid time off, which many workers had taken advantage of to avoid coronavirus exposure in warehouses.
Jordan Flowers said he had declined to return to work Friday at an Amazon warehouse on Staten Island. “They’re going to have to fire me,” said Mr. Flowers, who joined more than a dozen people, not all of them employees, in a protest nearby. “I choose my life over this.”
An Amazon spokeswoman said that there was “no measurable impact on operations” from the protest and that the company was extending a $2-an-hour pay increase and double overtime pay in the United States and Canada through May 16. She did not dispute that the policy on unpaid time off had changed but said Amazon was providing a range of other leave-of-absence policies.
At Target, some workers expressed concern that the company was again allowing customers to return goods to stores, a practice that had been suspended to reduce potential virus exposure.
“That’s a point of frustration,” said Adam Ryan, a Target worker in Christiansburg, Va., who helped organize a protest there. “When they stopped accepting returns from guests, we thought that was a good call.”
A Target spokeswoman confirmed that returns were again being accepted in stores, citing cleaning, safety and social distancing measures now in place. She said that the company knew of fewer than 10 of its 340,000 front-line workers who had taken part in the protest, and that it had extended a $2-an-hour wage increase until May 30.

Washington gave more than $1 billion in loans to publicly traded firms.

The federal government has distributed stimulus loans worth more than $1 billion to public companies as part of a program meant to protect payrolls at small businesses, according to an analysis of public filings and company announcements by The New York Times.
In total, more than 300 publicly traded firms have disclosed receiving loans from the roughly $660 billion Paycheck Protection Program, which is administered by the Small Business Administration.
The loans have set off an outcry, and led the agency to issue new guidance pushing the public companies to return the money, especially as many smaller operations were left empty-handed in the early stages of the program. In recent weeks, at least 32 public and private companies have disclosed that they had returned loans, including the burger chain Shake Shack and car dealerships like AutoNation.

Media layoffs grow, but small news outlets are starting to receive aid.

Approximately 36,000 employees of news media companies have been affected by layoffs, pay cuts or furloughs since the coronavirus crisis began in earnest in the United States in March, according to New York Times estimates.
Recent weeks have brought layoffs at The New York Post and Protocol, while other outlets, such as Condé Nast, continue to ponder them. But on the other hand, the hundreds of billions of dollars in federal stimulus money have begun to arrive in bank accounts. The Vermont weekly newspaper Seven Days even brought five laid-off employees back after receiving its Paycheck Protection Program loan. But such loans still may not go to newspapers owned by large chains.
This week, the general public will begin to get a fuller look at how the crisis has affected newspapers in particular as Gannett, Lee Enterprises and The New York Times Company all make their quarterly earnings reports.

Catch up: Here’s what else is happening.

  • Taubman, the shopping mall owner, said that it would reopen three major shopping centers on May 6 as retailers aim to return to business: International Plaza in Tampa, Fla.; The Mall at University Town Center in Sarasota, Fla.; and City Creek Center in Salt Lake City, Utah. The company made its plans known after Simon Property Group, the biggest mall operator in the United States, said that it planned to reopen 49 malls this weekend across 10 states. Macy’s, which also owns Bloomingdale’s and Bluemercury, said on Thursday that it planned to open 68 stores on Monday.
Reporting was contributed by Kate Conger, Michael Corkery, David Yaffe-Bellany, Vanessa Friedman, Sapna Maheshwari, Austin Ramzy, Michael J. de la Merced, Carlos Tejada, Noam Scheiber, David McCabe, Marc Tracy and Sapna Maheshwari.

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