Stocks Rally After Talk of Reopening Economy: Live Updates - The New York Times

Stocks Rally After Talk of Reopening Economy: Live Updates - The New York Times


Stocks Rally After Talk of Reopening Economy: Live Updates - The New York Times

Posted: 17 Apr 2020 03:49 PM PDT

Here's what you need to know:

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Credit...Tamir Kalifa for The New York Times

Money from the Small Business Administration's Paycheck Protection Program, which ran out of funds on Thursday, flowed heavily to California and Texas, with construction companies and manufacturers getting the largest number of loans, rather than harder-hit retailers and restaurants, according to new data.

The nearly $350 billion in the Paycheck Protection Program also disproportionately flowed to states that have suffered fewer infections and deaths under the virus, like Kansas, than to harder-hit states like New York and New Jersey, when adjusting for the size of the small-business economy in each state.

The new data, which include loan approvals through Thursday, show accommodation and food service firms have received less than 9 percent of the money from the program, about $30.5 billion, though they have suffered the largest job losses of any industry during this recession. Construction firms received the largest share, at just over 13 percent, or about $45 billion.

Adjusting for the total amount of money that small businesses pay their employees and would be eligible to receive in loans to cover payroll, the Great Plains states emerge as big winners, with Nebraska, Kansas and the Dakotas receiving disproportionate shares of the money. By that metric, Nebraska did twice as well as New York.

The S.B.A. program was intended for banks to distribute the loans, which the federal government will pay off in most cases. That structure benefited companies with existing relationships with banks.

S.B.A. officials included data on the largest lending institutions in the program, though they were not identified. The top lender distributed more than $14 million in loans with an average size of more than $500,000 per loan — suggesting that the institution was giving loans to relatively large businesses.

Stocks in the United States rallied on Friday, with efforts to reopen the economy taking center stage and investors undeterred by more data showing the economic damage of the coronavirus pandemic.

The gains came after President Trump told governors on Thursday that they could begin reopening businesses in their states by May 1 or earlier, and Boeing — one of the nation's largest manufacturers — said it planned to bring about 27,000 employees back to work in Washington State to resume aircraft production.

The announcement is the first attempt at large-scale resumption of business activity by a U.S. corporation since the coronavirus outbreak forced companies and government officials to shut down most nonessential work. Boeing's shares rose more than 14 percent on Friday.

Some European automakers — including Volkswagen, Volvo and Daimler — are planning to restart assembly lines next week, staffed by workers in masks and protective clothing, sometimes separated from one another by plastic screens.

Opel, a unit of the French automaker PSA, said it would reopen its German dealerships on Monday after the German government announced that it would gradually ease lockdown restrictions.

The S&P 500 rose 2.7 percent, while Boeing's gains led the Dow Jones industrial average to a 3 percent jump.

After global stock markets nose-dived earlier this year, they have been rebounding since late March, as investors have routinely looked past evidence of the damage caused by stay-at-home orders and business shutdowns, and instead focused on hopes for an eventual recovery. The gains on Friday mean stocks ended the week higher, despite reports showing a historic plunge in retail sales and a continued surge in unemployment claims.

The S&P 500 is now up more than 28 percent from its lowest point this year, which was reached on March 23. It is still nearly 18 percent below its high in late February.

On Friday, the rally came after China reported that its economy — the world's second-largest after that of the United States — shrank for the first time in decades. And data on car sales in Europe showed they collapsed.

Some also saw hopeful signs in a report by the medical news website STAT that a drug from Gilead Sciences showed early — and, thus far, unproven — promise in fighting the coronavirus. According to STAT, the antiviral drug, remdesivir, has helped patients with severe symptoms recover rapidly in a clinical trial at a Chicago hospital. Gilead's shares jumped nearly 10 percent.

The news media industry continues to be shellacked by the dismal advertising market as businesses remain shuttered throughout much of the country. The New York Times now estimates that approximately 33,000 workers in the media industry have been affected by planned layoffs, pay cuts and furloughs, up from 28,000 last week.

The magazine company Condé Nast announced on Monday that it was cutting the pay of nearly half its work force by 10 to 20 percent. The newspaper chain Advance Local — which shares a corporate parent with Condé — said this week that it would furlough employees for one to two weeks.

Digital sites, whose subscription businesses are often immature or nonexistent, continue to impose cost-savings as a way to stanch the bleeding in the ad market. Slate, which converted its membership program, Slate Plus, into a paywall last month, is cutting all employees' pay on a sliding scale. Vox Media, which purchased New York Media last year, is furloughing roughly 10 percent of its work force and cutting the pay of high-earning employees.

The Los Angeles Times, one of the country's largest newspapers by circulation, announced internally this week that it was furloughing 40 non-newsroom workers and cutting senior managers' pay. It also shuttered three community weeklies, laying off 14 people, including guild members.

In February, Uber said it had expected to bring in $16 billion to $17 billion in revenue this year. On Thursday, the company said it could no longer forecast what will happen.

Lyft has not yet made a similar announcement, but there's no reason to think it faces a different fate.

Drawing from aggregated debit and credit card purchases of millions of U.S. consumers, for example, the analytics firm Second Measure found that spending on Uber's rides dropped about 83 percent in March. And earnings tracker service Gridwise, using data collected from more than 30,000 drivers nationwide, found that the average hourly earnings of drivers dropped 36 percent from the beginning of March to the middle of the month. By the end of March, wages began to recover slightly, but were still down 24 percent.

So how are the companies dealing with the slump? For now, the strategy appears to be: Wait it out, and deliver food — as much of it as possible.

Uber's money-losing food delivery service, Uber Eats, most likely surpassed Uber's ride-hailing business in sales by mid-March and jumped about 27 percent for the month, according to Second Measure.

Although Lyft had no food delivery business before the pandemic, it created a temporary one to deliver meals and groceries for students and seniors. And on Wednesday, Lyft expanded the program to 11 major cities, including Atlanta, Houston, San Francisco and Seattle.

Since the coronavirus outbreak reached the United States, Amazon — a company built on the promise that people will always want more items, more quickly — has struggled to respond to a surge in orders. Sometimes products are in stock. Sometimes they aren't. Its popular page featuring Deals of the Day, once a prominent feature, has been buried. The company is even trying to tamp down demand.

For consumers, the changes have generated confusion just as people have turned more than ever to online shopping to help protect themselves from the virus. The company tells customers that some products will arrive in weeks, rather than hours or days. And the sense of endless bounty on the site has eroded.

"It is almost like a run on the bank, when there is a rumor you can't get your money out and everyone runs to the A.T.M.," said Guru Hariharan, whose company, CommerceIQ, advises large consumer brands with their Amazon business.

Frauds around the coronavirus include businesses selling intravenous vitamin C drips to "boost immunity" to the virus, websites offering masks that never arrive and even reports of fake drive-up testing sites, where impostors swabbed people's cheeks in exchange for cash.

Here are some questions and answers about coronavirus-related fraud:

How can I protect myself from coronavirus fraud?

First, understand that there are currently no F.D.A.-approved vaccines or treatments for the coronavirus, said Noah Joshua Phillips, an F.T.C. commissioner. That will, hopefully, change — but you are unlikely to hear about it first via a shady robocall. The best thing to do if you get a suspicious call is to hang up, he said.

What if I am expecting a government stimulus payment?

Most people don't have to do anything to get their economic stimulus payments, which the government is issuing to help people facing money troubles because of the virus. Those payments will be deposited into your bank account automatically, the I.R.S. said.

"The I.R.S. isn't going to call you asking to verify or provide your financial information" so you can get your payment faster, the head of the agency, Chuck Rettig, said in a statement this month.

I saw a social media report about virus-related fraud occurring door to door. Is this true?

Agencies including the F.B.I. have issued public warnings about people selling fake virus test kits and "unapproved treatments" on "door-to-door visits." The inspector general for the Department of Health and Human Services also warned of "scammers" going door to door offering Covid-19 tests in exchange for personal details, like Medicare information.

New data on Friday gave the first concrete indication of how severely European carmakers were hit by coronavirus lockdowns, and it was every bit as bad as feared.

New car registrations in the European Union fell 55 percent last month compared with a year earlier, the European Automobile Manufacturers Association said, as dealers closed their doors and buyers were stuck in their homes. Owners registered 570,000 new cars during the month, down from 1.3 million in March 2019.

Sales all but evaporated in Italy, the European country that went into lockdown the earliest, falling 85 percent. Spain and France also suffered declines of around 70 percent.

Carmakers that depend on southern Europe for sales also suffered the most. Fiat Chrysler sales plummeted 77 percent. PSA, whose brands include Peugeot, Citroën and Opel, suffered a 68 percent plunge in sales.

German carmakers BMW, Daimler and Volkswagen fared marginally better, with declines of less than 50 percent.

  • Boeing will resume operations on Monday in the Philadelphia area, where it produces military aircraft such as the H-47 Chinook and V-22 Osprey. The work had been suspended for two weeks on April 3. On Thursday, Boeing said it planned to bring back 27,000 workers next week to facilities in Washington State to work on commercial aircraft production.

  • Walmart said that it had hired 150,000 workers since March 19, and it pledged to hire 50,000 more. The retailer said it had received more than a million applications since its initial hiring announcement. The new workers will be hired on a temporary basis, it said, adding that many had been furloughed from other companies and were looking to bridge the gap until they returned to their original jobs.

  • The organizers behind San Diego Comic Con, the annual pop culture celebration, announced on Friday that the event was canceled, the first time in its 50-year history. Fans who purchased badges can request a refund or transfer their badges to next year's event.

  • Ford Motor said it expected to report a $2 billion loss for the first quarter, on revenue of $34 billion. The announcement came in a regulatory filing ahead of a full quarterly report on April 28. The automaker said earlier this week that its first-quarter wholesale volume was down 21 percent from a year earlier, mainly because of the outbreak's impact on production and demand. It said last month that it was suspending its dividend and any share buybacks.

  • General Electric's aviation leasing division said it was canceling 69 orders for Boeing's troubled 737 Max jet, which has been grounded for over a year after two fatal crashes. Boeing received 150 Max order cancellations last month. In the first quarter, it took in four times as many order cancellations as new orders.

  • Procter & Gamble, the consumer products giant, reported a big jump in sales for the quarter as consumers stocked up on paper towels, toilet paper and diapers. P&G reported that organic net sales rose five percent to $17.2 billion. The company said increased shipments in North America and some parts of Europe offset declines in some Asian markets.

  • The coronavirus outbreak has brought China's extraordinary, nearly half-century-long run of growth to an end. The country's National Bureau of Statistics said on Friday that the economic output shrank 6.8 percent from January through March compared to the same period last year. It's the first economic shrinkage acknowledged in official statistics since 1976, when the country was in the final days of the Cultural Revolution.

Reporting was contributed by Daisuke Wakabayashi, Davey Alba, Gina Kolata, Jack Ewing, Abdi Latif Dahir, Simon Marks, Karen Weise, Julie Creswell, Marc Tracy, Elaine Yu, Kevin McKenna, Nelson D. Schwartz, Kate Conger, Katie Thomas, Erin Griffith, Emily Flitter, Alan Rappeport, Brooks Barnes, Keith Bradsher, Amie Tsang, Geneva Abdul, Niraj Chokshi, Vindu Goel, Carlos Tejada and Mike Ives. Yiwei Wang and Coral Yang contributed research.

Texas small-business owners panic as Paycheck Protection Program runs out - The Texas Tribune

Posted: 16 Apr 2020 07:20 PM PDT

In the era of lockdown and economic collapse, not all small businesses are equal.

Across Texas, owners of small engineering firms, retail shops, restaurants and countless other enterprises were in a Darwinian scramble to stay afloat in recent days as they competed for a piece of a massive federal forgivable loan program to help keep employees on staff and fend off further economic meltdown from the COVID-19 pandemic.

But the capacity of businesses to swiftly secure that money often depended on their financial sophistication and the support of high-priced accountants, bankers and attorneys. And on Thursday, the money ran out.

Texas small-business owners interviewed by The Texas Tribune described the process as evolving and confusing. Now that the fund is depleted, it is existentially terrifying.

"You are flying solo. ... It's basically beating on the door," said Tamara Morton Johnson, a chemical engineer with a small business tied to the oil and gas industry in Houston. "Each bank has its own rules and its own guidance."

Such a conundrum was not the intent of the legislation that created the program and illustrates the scale of havoc the new coronavirus has wreaked on American life.

The primary objective of the loan program was to move as much money as quickly as possible into the hands of small-business owners. As part of the $2 trillion CARES Act, congressional leaders and Trump administration officials set aside almost $350 billion for small-business owners in forgivable loans.

The majority of that tranche went into a pot known as the Paycheck Protection Program via the Small Business Administration. The aim was to prevent small businesses from laying off workers and to keep the American economy from choking as businesses were forced to shut down in compliance with social distancing rules.

Attempts to get the money out quickly have been a smashing success. That $350 billion went out the door in less than two weeks. The problem is this is such a unique program that there was no bureaucracy in the federal government to handle the task. So Congress and the Trump administration devised a plan to have banks loan the money to small-business owners, with the federal government backing them up.

What has become clear in that process is that small-business owners have vastly different levels of sophistication, and federal government aid often depended on how strong of a preexisting relationship a businessperson had with a bank.

For instance, some small-business owners have bankers, accountants and attorneys available who put them at the front of the line in applications. Those helpers quickly produced proactive advice, reassurance and years-old paperwork for application compliance.

Even before the rules became public, many bankers proactively reached out to clients with updates or clarifications on how the federal government might dole out the money. As such, many small-business owners were able to move their applications through the system and are already receiving their loans, which in all likelihood the federal government will eventually forgive.

It is a different reality for many other Texas small businesses — those whose owners do their own taxes and spent the last two weeks staring with glazed eyes at applications that confounded even some accountants.

At every turn, those small-business owners encountered obstacles to applying for loans.

Roadblocks emerged over seeming technicalities, like using personal checking accounts rather than separate business accounts for their companies, or their banks not having relationships with the Small Business Administration. Others feared they were disqualified because they hired subcontractors rather than salaried employees.

Mitigating — or even just clarifying — those obstacles took time. And while those business owners were digging through old records and trying to decipher application fine print, other businesspeople with more sophisticated operations got their paperwork in and began securing loans.

Now they're out of time — at least for now.

With the collapse of the energy market, Johnson's company is feeling a double whammy of economic hardship. For years, she has run a nimble operation that deals with rubber and plastic molding. She is doing everything she can to continue paying her team. But despite hours of paperwork, she didn't apply before the money ran out because she has yet to clarify whether her business qualifies for a PPP loan.

She said she found the Houston Small Business Administration office to be highly responsive, and she looks forward to attending a virtual seminar that her federal representative, U.S. Rep. Lizzie Pannill Fletcher, D-Houston, is hosting Friday. Johnson continues to pursue her options in hopes that she qualifies and more money comes online.

The scale of the problem is staggering.

Janie Barrera, CEO of LiftFund, a San Antonio-based nonprofit that supports small businesses, said the onus of helping struggling small-business owners navigate the process has fallen on organizations like hers.

"We're helping them maneuver through the system," she said. "That's what LiftFund's role is, to help people maneuver this system. We're right there, holding their hands."

On Monday, her group got a boost.

Gov. Greg Abbott announced that Goldman Sachs would help groups like LiftFund, known as community investment development institutions. Goldman Sachs would lend $25 million to LiftFund. LiftFund would then use the Goldman Sachs money to acquire SBA money that would eventually end up in the hands of desperate small-business owners. LiftFund would eventually pay the money back to Goldman Sachs.

Within 24 hours, requests overwhelmed the $25 million allotment. In one day, LiftFund received 1,500 applications with requests totaling $1.6 billion.

"We were only able to get nine loans approved, totaling almost $800,000," she said.

Then on Thursday, the SBA money ran out.

U.S. Rep. Kevin Brady, R-The Woodlands, the top Republican on the House's tax-writing committee, acknowledged those businesses' struggles Thursday morning.

"Most small businesses have a local banking relationship of some type," he told MSNBC. "That was the key to moving these dollars out. Is it a perfect system yet? No, because our economy is complex. Our small businesses, in how they're structured, are all a little different."

Lawmakers in both parties acknowledge that more money might be needed for the fund.

"We're hearing concerns locally that there won't be money for them, especially in the minority community, in those underserved communities where not every business has that banking relationship," he said. "That's why the extra $250 billion the president has asked for is so crucial. We can't leave them out."

But partisan differences need to be worked out. At issue: Republicans want a straight injection of money directly into the PPP fund, which was only part of the massive $2.2 trillion bill. Democratic leaders want broader legislation that also would replenish other distressed sectors of the economy, specifically adding funding for hospitals and for state and local governments.

"It's not that we don't share the values of small business, we do," U.S. House Speaker Nancy Pelosi said on a conference call with reporters Thursday. "We have been their champion. ... But in order for them to succeed, people have to be well. ... People need to be safe, and we need to have the state and local [funding]."

Pelosi added that while only the SBA money is depleted, the other funds will soon be out of money as well, and what's left has already been allocated.

U.S. Sen. John Cornyn, R-Texas, countered that logic.

"There's just no sense of urgency [from Democrats], apparently, when it comes to these small businesses that need this lifeline known as the Paycheck Protection Program," he said. "And so they're holding that hostage in order to get other unrelated spending. We're going to probably have to pass additional legislation when this crisis passes and when we get back in session after May 4. But now is not the time to obstruct the money for the Paycheck Protection Program just because you have other demands you'd like to make."

The paralysis is not total. Pelosi and Treasury Secretary Steve Mnuchin have, by most public accounts, struck up a productive negotiating relationship, and the outbound money is saving businesses across the country. But complications remain. With each legislative step taken to pass the first bill, the process often took days longer than anticipated. And once leaders strike a deal, passing legislation through Congress while it's practicing social distancing could be complicated.

Every day of delay is a day closer to a small-business owner somewhere in Texas missing a rental or mortgage payment — or worse, it's a day when a businessperson decides to lay off staff or close up shop altogether.

Johnson, the chemical engineer, says that even amid frustration and distress, she intends to focus on the big picture. While frustrated, she said she is grateful that a program like PPP exists. And she notes that other Texans are facing far more dire and worrisome circumstances than she is.

"I will take my problems all day long compared to those that are sick, all our medical professionals helping us all, and the poorest and most vulnerable in our society now," she said. "That's really how I feel."

Sam Manas contributed to this report.

Disclosure: The Texas Tribune applied for one of these small-business forgivable loans via the Paycheck Protection Program.

Related News

China’s G.D.P. Shrank in the First Quarter - The New York Times

Posted: 16 Apr 2020 09:33 PM PDT

This briefing is no longer updating. Read the latest developments in the coronavirus outbreak here.

Here's what you need to know:

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Credit...Andy Wong/Associated Press

The stark numbers reflect China's dramatic efforts to stamp out the coronavirus, which included shutting down most factories and offices in January and February as the outbreak sickened tens of thousands of people.

They also illustrate how monumental the challenge of getting the global economy back on its feet will be.

China is trying to restart its vast, $14 trillion economy, an effort that could give the rest of the world a much-needed shot in the arm. But the spread of the virus to Europe and the United States has sharply cut the world's appetite for China's goods. That could lead to factory shutdowns and worker furloughs even as the country tries to get back to business.

China's National Bureau of Statistics confirmed last month that domestic industrial production, retail sales and investment all suffered record, double-digit drops in the first two months of this year compared with the same period of 2019. That prompted most, though not all, economists to guess that overall economic performance for the first quarter of this year would show a decrease from a year earlier.

The Small Business Administration has run out of money for its Paycheck Protection Program, officials said on Thursday, leaving millions of businesses unable to apply for emergency loans while Congress struggles to reach a deal to replenish the funds.

Congress initially allocated $349 billion for the program, which was intended to provide loans to businesses with 500 or fewer employees. The money has gone quickly, with more than 1.4 million loans already approved as of Wednesday evening, as small businesses struggle with virus-induced quarantines and closings.

Treasury Secretary Steven Mnuchin is expected to resume negotiations with lawmakers about adding another $250 billion to the fund on Thursday.

Dr. Nancy Kim, 42, who owns Spectrum Dermatology in Scottsdale, Ariz., tried to get a loan through the program, but her bank, Wells Fargo, never accepted their application and eight other lenders turned her away.

"Within the next one or two months, we might run out of money and have to shut down completely," Dr. Kim said on Thursday. "Our patients are going to suffer."

A Wells Fargo spokeswoman said the bank continued to prepare applications for the funds and would submit them when the funds were available again.

Doug Martin, 63, a sports marketer in Long Beach, Calif., says the events company he spent the month of February negotiating with went silent when conditions on the West Coast began to deteriorate in early March.

"There's a whole domino effect to this thing, and I'm one of the dominoes," he said. "This morning, I read that the money's gone and I'm like, 'Heck, I didn't even get a shot at this.'"

Boeing plans to bring about 27,000 employees back to work in Washington State to resume aircraft production, the company said on Thursday. Most will come back to work by the end of next week.

The announcement is the first attempt at large-scale resumption of business activity by a U.S. corporation since the coronavirus outbreak forced companies and government officials to shut down most nonessential work. President Trump is encouraging businesses and states to reopen the economy by May 1 or earlier.

"Following thorough reviews of local conditions, we've started restoring operations at some sites where work has been suspended," Boeing's chief executive, Dave Calhoun, said in a letter to employees ahead of the announcement. This week, the company brought about 2,500 employees in the state back to work, most of them focused on defense production operations.

Of Boeing's approximately 160,000 employees worldwide, there are at least 66 current confirmed coronavirus cases. At least 124 others have recovered after being infected

Boeing employees who return to work in the coming week will find new health and safety precautions in place, such as staggered start times and spread-out work areas, the company said. But a company spokesman, Charles Bickers, said Boeing would not test employees for the virus.

USAA, which serves military members and their families, will temporarily change its policies on overdrawn accounts to let customers collect stimulus money after The New York Times reported that it was not allowing those customers to access the funds.

The Times had reported that USAA and some other lenders were applying stimulus funds to overdraft fees and negative balances and only giving overdrawn customers the balance that remained after the accounts were zeroed out. USAA said on Thursday that it would pause overdraft collections for the next 90 days.

"This will allow members access to their full stimulus payment to help cover the costs of rent, food and other important necessities," Matthew Hartwig, a bank spokesman, said in an email. "Beginning as early as today, we will apply this policy retroactively to any member accounts with a negative balance at the time the first stimulus checks were deposited, so that members will have access to their stimulus funds."

The Treasury Department has begun electronically depositing funds meant to help with basic expenses into people's bank accounts. But when funds come into accounts with negative balances, banks are legally allowed to take what is needed to bring the balance to zero.

The government checks are meant to cushion the financial blow to Americans hit hardest by the fallout from the coronavirus pandemic.

Bank of America, JPMorgan Chase and Wells Fargo are pausing their collections on negative account balances to give customers access to the government's stimulus.

After a day of unsteady trading, stocks on Wall Street held on to a small gain even as investors were presented with new data showing the economic damage from the coronavirus outbreak.

Thursday's rally was driven in part by gains in technology stocks that are seen as benefiting from coronavirus pandemic related stay-at-home orders. Amazon rose sharply, as did Netflix. Shares of both companies are at record highs.

But banks continued to slide, as Morgan Stanley added to a string of earnings reports from the sector that show profits tumbling and lenders preparing for damage to come.

Energy stocks were also sharply lower, as were shares of major airlines after leaders of United Airlines issued a dire note to the carrier's 100,000 employees on Wednesday, warning that staffing cuts may be coming and demand for air travel is likely to remain subdued into next year. United fell more than 11 percent.

Investors also faced another spate of bad economic news on Thursday, with weekly unemployment claims data showing another mass shedding of jobs.

The S&P 500 drifted between gains and losses for much of the day before climbing late in the session to end less than 1 percent higher.

Though still far from the record reached on Feb. 19, stocks in the United States had been steadily climbing in recent weeks as investors began to focus on the prospect of an eventual rebound from the economic collapse set off by the pandemic.

Throughout the country, hotel groups and hosts on platforms like Airbnb and VRBO continue to make direct appeals to guests seeking refuge from the pandemic. And they are finding takers.

Airbnb hosts are not allowed to use the words "Covid-19," "coronavirus" or "quarantine" in listing titles, or to claim that their lodgings are free of the virus. But it is still easy to promote the idea of a salubrious refuge.

In Raleigh, N.C., Shari Outlaw offers a "Sparkling Clean Social Distancing Space" through Airbnb, in the little house behind her home where her great-grandparents once lived.

"I just decided to change the heading," Ms. Outlaw said, describing the detached, self-contained unit as a quiet spot in the middle of city that is "attractive for people who just need a break, something different from looking at the same four walls."

A local couple called; they were in the process of separating and wanted a place where one spouse could stay while the other remained at home with their children, alternating every week. The unit is booked through April at $40 a night, less than half of the usual weekday rate.

Extended stays bring committed revenue, allow hosts to develop relationships of trust with their guests and, in some places, sidestep regulations banning short-term rentals. In areas like the Jersey Shore and Newport Beach, Calif., and in states like Pennsylvania and Vermont, officials have severely restricted short-term rentals to discourage residents of urban hot zones from spreading the coronavirus to lower-density locations.

Robinhood, a stock trading app popular with young people, is in talks to raise a new round of funding led by Sequoia Capital that would value it around $8 billion, according to a person familiar with the situation.

Robinhood, which was last valued at $7.6 billion and has 10 million users, experienced multiple outages during the market turmoil of March, in which users were unable to buy or sell stocks. Still, stock trading tends to increase during times of volatility, leading to higher demand for Robinhood.

Bloomberg earlier reported the news. Robinhood declined to comment.

The funding comes as many start-ups across Silicon Valley slash costs and lay off workers in response to the pandemic. But some start-ups are thriving and investors continue to pour money in. Stripe, a payments company, recently announced an additional $600 million in funding as an extension of a funding round from September.

The biotechnology company Moderna said Thursday that it had been awarded up to $483 million from the federal government to develop its coronavirus vaccine and to scale up manufacturing.

Moderna was the first company in the United States to begin a human clinical trial, although several other companies are also moving forward with potential vaccines against the coronavirus.

Moderna, which is developing its vaccine with the National Institutes of Health, said the agreement with the Biomedical Advanced Research and Development Authority, a unit of the Department of Health and human Services, would allow it to accelerate development of the vaccine.

Johnson & Johnson, which is also developing a vaccine, announced a similar award last month.

Infectious disease experts have said it could take a year to 18 months to develop a vaccine that would be ready for the public.

22,034,000

Claims were filed in

the last four weeks

Initial jobless claims, per week

Seasonally adjusted

22,034,000

Claims were filed in

the last four weeks

Initial jobless claims, per week

Seasonally adjusted

22,034,000

Claims were filed in

the last four weeks

Initial jobless claims, per week

Seasonally adjusted

22,034,000

Claims were filed in

the last four weeks

Initial jobless claims, per week

Seasonally adjusted

Source: Department of Labor

By The New York Times

The coronavirus pandemic's devastation became more evident Thursday with more than 5.2 million workers added to the tally of the unemployed.

The latest figure from the Labor Department, reflecting last week's initial unemployment claims, brings the four-week total to about 22 million, roughly the net number of jobs created in a nine-and-a-half-year stretch that began after the last recession and ended with the pandemic's arrival.

It underscores how the downdraft has spread to every corner of the economy: hotels and restaurants, mass retailers, manufacturers and white-collar strongholds like law firms.

"There's nowhere to hide," said Diane Swonk, chief economist at Grant Thornton in Chicago. "This is the deepest, fastest, most broad-based recession we've ever seen."

Some of the new jobless claims represent freshly laid-off workers; others are from people who had been trying for a week or more to file. "We're still playing catch-up on multiple fronts," Ms. Swonk said.

  • The movie theater chain AMC Entertainment said in a statement that it intended to raise $500 million in a private offering — squelching speculation, for now, that it will need to file for bankruptcy sooner than later as its venues remain closed, and it burns through cash reserves. AMC said that it had $299.8 million in cash as of March 31, enough to make it until "a partial reopening" in July. With the new debt, AMC said it would have enough liquidity to withstand global closure until November.

  • Uber said on Thursday that the coronavirus pandemic had made it impossible to forecast how much money it would make this year. It also warned investors that its stakes in several international ride-hailing businesses would lose value. Uber will report its first quarter financial results on May 7.

  • An updated tally from a trade group for big apartment owners and developers shows that 16 percent of tenants failed to make a full or partial monthly rent payment by April 12, compared with 9 percent in a similar period a month earlier. The report, from the National Multifamily Housing Council, surveyed 11.5 million units. In data through April 5, the nonpayment rate had been 31 percent.

  • Google said it would grant its employees up to 14 weeks of paid leave to care for family members during the coronavirus shutdown, an increase from the six weeks of paid leave it made available in March. Under the new policy, the leave can be taken in half-day increments, allowing workers to stretch it across more than six months if necessary.

  • The Transportation Department largely denied requests from JetBlue and Spirit Airlines to stop flying to several destinations, service that is required under the terms of the federal stimulus. The decision suggests that the department may be unlikely to grant the majority of such exemption requests, many of which have been made by smaller carriers.

  • Amazon's founder, Jeff Bezos, said the company was developing its own coronavirus testing capabilities, including building a lab, and is preparing to start testing a small number of workers soon. In an annual letter to shareholders, Mr. Bezos also advocated "regular testing on a global scale, across all industries," as a way to reopen the economy.

Reporting was contributed by Brooks Barnes, KatieThomas, Kate Conger, Julie Lasky, Vindu Goel, Kevin McKenna, Michael M. Grynbaum, Alexandra Stevenson, Davey Alba, Neil Irwin, Nelson D. Schwartz, Liz Alderman, Alan Rappeport, Kate Kelly, Keith Bradsher, Niraj Chokshi, David McCabe, Caitlin Dickerson, Vanessa Friedman, Miriam Jordan, Jason DeParle, Jim Tankersley, Stacey Cowley, Emily Cochrane, Emily Flitter, Reed Abelson, Sapna Maheshwari, Ben Casselman, Noam Scheiber, Geneva Abdul, Mohammed Hadi, Carlos Tejada and Mike Ives.

Small businesses cry for lifeline as government aid underway - The Jakarta Post - Jakarta Post

Posted: 17 Apr 2020 01:38 AM PDT

Some 37,000 small and medium enterprises (SMEs) have reported difficulties to the government, crying for help as government aid has yet to reach their bleeding operations, with some forced to close shop amid the pandemic.

According to the Cooperatives and SME Ministry, most of the reports came from micro businesses, related to declining sales, funding, goods distribution and access to raw materials. The government is reviewing these reports to better target incentives as it is preparing economic stimuli for micro, small and medium enterprises (MSMEs).

The stimuli would include tax waivers for six months and loan relaxation even for borrowings of less than Rp 10 million (US$645), said Cooperatives and SMEs Minister Teten Masduki on Wednesday. They would also cover cash transfers for micro-scale businesses and easing MSMEs access to new loans for survival.

"The president requested for this loan relaxation to be applied as wide as possible, especially for micro businesses," Teten said after a virtual meeting with President Joko "Jokowi" Widodo. "We have also agreed to integrate the cash transfer program and the food card program with micro businesses like warung [traditional eateries], so they can still survive and have an income."

SMEs contribute more than 60 percent to Indonesia's gross domestic product (GDP), ranging from small shops and warung to distributors of consumer products, batik workshops and craft makers. There are 70 million SMEs with outstanding loans to financial institutions.

Read also: 37,000 SMEs hit by COVID-19 crisis as government prepares aid

Jokowi said he wanted the loan relaxation for all SMEs as soon as possible. "Don't wait until the businesses are closed. Don't wait until it's too late and create disruption among the public," he said.

Not all would be supported, however, as the Cooperatives and SMEs Ministry is reviewing eligibility of the micro and small businesses to receive aid, said the ministry's special staffer on creative economy empowerment, Fiki Satari. The ministry will be coordinating with the Finance Ministry, the Coordinating Economic Ministry and the Financial Services Authority (OJK) to finalize the stimuli.

Indonesia SME Association chairman Ikhsan Ingratubun said he appreciated the government's plan to support SMEs; however, most small and medium businesses had already temporarily closed or seen a steep decline in revenues. Such a condition had limited their daily cash flow which they relied upon heavily to finance their daily operations and pay for their liabilities.

"The government must relieve us from paying taxes, because where are we supposed to get the cash from in times when our daily operation is limited?" he told The Jakarta Post on Thursday.

Ikhsan still deemed the stimulus insufficient to keep small and medium businesses from succumbing to the COVID-19 crisis and called for broader incentives for electricity that still burdens them.

Read also: Jokowi announces free electricity, discounts for households hardest hit by COVID-19 impacts

The government announced free electricity for three months starting April for 24 million households in the 450-volt ampere (VA) category, the lowest of six categories listed under existing regulations. It will also provide a 50 percent discount for 7 million households in the 900 VA category, the second-lowest category, for the same three months.

"The government should broaden the incentives to other categories as well, because bigger businesses are in a cash crunch," said Ikhsan.  

The Cooperatives and SMEs Ministry suggested that SMEs convert their businesses to meet current demand, such as making masks and coveralls, as the government's large-scale social distancing (PSBB) policy had forced business owners to close shops and as demand weakens with people staying at home.

"This effort could help fulfill the domestic demand for personal protective equipment [PPE] and masks, as well as help them fulfill their daily needs during this pandemic," said Victoria Simanungkalit, the ministry's undersecretary for production and marketing.

The ministry is also working with industrial goods supplier PT Daruma Adira Pratama to help SMEs produce appropriate PPE that correspond to the Health Ministry's medical equipment standards.

Currently, around 330 SMEs from 16 provinces have joined the program and around 80 have been included in the ministry's catalog, Victoria said.

The SMEs have also received a total of Rp 127.8 million (US$8,145) worth of orders from potential buyers consisting of 10,276 masks, 962 hazmat suits and 25 pairs of shoe covers, she added.


If you want to help in the fight against COVID-19, we have compiled an up-to-date list of community initiatives designed to aid medical workers and low-income people in this article. Link: [UPDATED] Anti-COVID-19 initiatives: Helping Indonesia fight the outbreak
 

Pool of small-business benefits runs dry while Congress debates - Northwest Arkansas Democrat-Gazette

Posted: 17 Apr 2020 03:15 AM PDT

FAYETTEVILLE -- Congress is considering another $250 billion in aid to small businesses, and Northwest Arkansas chambers of commerce have no doubt it's needed.

"I've been talking to my peers in Florida, and they say this is just like a hurricane," said Raymond Burns, president of the Rogers-Lowell Area Chamber of Commerce, speaking about the covid-19 pandemic. "Everything is shut down, and when it's over, you see what's still there."

The difference is this disease outbreak lasts for weeks and is storming all over the country, he said.

"It's coast to coast."

Congress' relief package of $2.2 trillion, passed in late March, included $349 billion for small businesses. The money didn't last a month. Also, a $5 million state fund for bridge loans to companies with fewer than 50 employees ran dry this week.

"State government is not going to have enough money to help everyone who needs help," Burns said of the degree of assistance needed if many small businesses are to survive. Added relief money can only come from Congress, which is negotiating another $250 billion in small business aid in the Paycheck Protection Program.

The sheer scale of the assistance needed appears to have taken the national government by surprise, said Steve Clark, president of the Fayetteville Chamber of Commerce. Fayetteville alone has at least 3,600 qualifying businesses, he said.

The money is needed, but some of the requirements attached to assistance should be dropped, said Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas' Walton School of Business.

"There is no 'one size fits all' program for small business," he said.

The payroll program as written requires a small business to have kept 75% of its employees on the payroll through the economic crisis, he said. Employers whose employees were laid off because they would be better off financially with increased unemployment benefits could now be ineligible. That includes employers who were unable to get any of the quickly drained first round of assistance.

Also, 75% of the benefits received are earmarked for payroll, Jebaraj said.

"If someone has a restaurant in a high-profile, highly visible area where your biggest expense is rent, that doesn't help," he said. "In fact, it has sometimes made it worse. Landlords sometimes are not negotiating on rents because they think those businesses can get money from the program."

Many of the instructors at gyms and fitness clubs are private contractors, Jebaraj said. This limits a gym owner's eligibility to get payroll assistance because so many people working there are not his direct employees.

Not far down the road, states and local governments will need federal assistance, too, as the business plunge guts sales tax revenue, he said.

Co-owner Jack Kingston of the KAR Shop in Rogers is trying to keep his crew together, he said. He and his brother, Keith, are using a newly invented combination of sick leave, the paycheck protection assistance, some unemployment benefits, rotating schedules and the auto repair shop's own emergency reserve fund to pay employees at a time when business is about 25% of normal, he said Wednesday.

"We are running with a skeleton crew, bringing in one technician at a time," Kingston said. "It's hard to get good technicians, so we're doing what we can."

Nine people normally work in the shop at a time, but less than one-half do now. They have room to keep the recommended distance apart to impede any spread of the virus, and "the counter is wiped down almost constantly," he said. The waiting room is closed. Bottles of hand sanitizer are scattered throughout the business and used repeatedly.

Applying for and getting federal benefits is complicated, but manageable, Kingston said. It's also just one piece among the other factors affecting management decisions.

"It's a juggling act," he said.

The biggest problem is accommodating the uncertainty of when the pandemic's grip will end, Kingston said. It's a question that simply cannot be answered now.

"People are still cautious," he said.

The business is mostly repairing items their customers cannot put off: a flat tire, engine warning lights flashing, a disturbing rattle or shaking.

"We're basically putting out fires," he said. "We just need to be patient and cautious. We'll all come through this and be better in the end, but it is a totally unique situation. We should pray, too."

Recovery from the virus' economic effects will take time, Burns said. Neither businesses nor their customers want a another round of the disease.

"When the restaurants open again, they are not going to seat people back to back," he said. "They aren't going to crowd us together."

The disease has reached a state where its effects are getting personal, Clark said.

"When you hear a number, that's a statistic. When it's your mom who has it or the mom of someone you know, it's not a statistic anymore."

Congress won't be back in session until Monday. The time isn't wasted though.

"Those members of Congress are definitely hearing from their constituents that they need to pass this," he said. Members of Arkansas' congressional delegation have also been diligent in staying in touch throughout the emergency.

"When they get back in session, I expect they will pass something very quickly," Clark said. "It will not be everything they need to do, but it will be what parts they agree on. The parts they disagree on will come later."

The additional $250 billion in paycheck program relief should have been passed already, said 3rd District Rep. Steve Womack, R-Rogers.

"It quickly became apparent that another injection of funds would be necessary -- that should have been passed last week," Womack, of Rogers, said Thursday.

"Will it be enough? I wish I had an answer to that, but this is a constantly evolving situation. Right now, we need to immediately replenish the program. There will be time for debate on further relief legislation in the future, but people's livelihoods are on the line. The end cost gets higher every minute we don't act."

Sen. John Boozman, R-Rogers, agreed.

"There is an immediate need to increase funding to the program because the money has run out, but there are still many small businesses in need of assistance," the senator said in a statement. "I am confident Congress will approve additional resources to support its continuation."

NW News on 04/17/2020

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