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Small-Business Shortfall Leaves Owners in the Lurch: Live Updates China’s G.D.P. Is Expected to Shrink: Live Updates
(about 2 hours later)
For more than four decades, China has never acknowledged that its economy actually shrank, even during major economic crises. But that may change on Friday, when the country announces gross domestic product for the January-to-March quarter.
China’s National Bureau of Statistics already 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 has prompted most, though not all, economists to guess that overall economic performance for the first quarter of this year will show a decrease from a year earlier.
The question is how big a drop it will be.
One survey of 18 Chinese and foreign institutions by Caixin, a Chinese news organization, found that they were forecasting that the economy was anywhere from flat to down 11.5 percent in the first quarter. The average forecast was for a drop of 6.6 percent.
A broader survey by Reuters of 57 analysts found an even wider range of predictions — anywhere from a nose-dive of 28.9 percent to a gain of 4 percent. But the average in the Reuters survey, a loss of 6.5 percent, was practically identical to Caixin’s.
Foreign banks, which come under only slightly less political pressure than Chinese institutions to issue sunny forecasts, have tended to be at the bearish end of the range.
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.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.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.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.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.”“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.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.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.’”“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.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.
New precautions, such as staggered start times, will be in place to ensure worker safety, the company said.New precautions, such as staggered start times, will be in place to ensure worker safety, the company said.
“The health and safety of our employees, their families and communities is our shared priority,” Stan Deal, president and chief executive of Boeing Commercial Airplanes, said in a statement. “This phased approach ensures we have a reliable supply base, our personal protective equipment is readily available and we have all of the necessary safety measures in place to resume essential work for our customers.”“The health and safety of our employees, their families and communities is our shared priority,” Stan Deal, president and chief executive of Boeing Commercial Airplanes, said in a statement. “This phased approach ensures we have a reliable supply base, our personal protective equipment is readily available and we have all of the necessary safety measures in place to resume essential work for our customers.”
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.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.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.”“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 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.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.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.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.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.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.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.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.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.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.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.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.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.”“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.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.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, 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.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.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 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.
Some of the funds that lawmakers in Washington set aside for small businesses in the United States went to companies that are owned or controlled by an entity outside of the country. 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.
Wave Life Sciences — a biotech company whose parent is incorporated in Singapore — secured a $7.2 million loan from the Paycheck Protection Program, it said in a filing with the Securities and Exchange Commission. 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.
A company spokeswoman, Alica Suter, said that 97 percent of its global work force was based in the United States. She said in a statement that a “substantial” number of its employees were unable to do their jobs from home. 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.
The restaurant chain Kura Sushi USA said in a securities filing that it had received an almost $6 million loan on Tuesday. It was created in 2008 as a subsidiary of Kura Japan and was spun off last year as a public company incorporated in Delaware, but the Japanese firm still owns a controlling interest in the American company. Johnson & Johnson, which is also developing a vaccine, announced a similar award last month.
The company had just over 1,300 employees before the pandemic forced the closure of its 25 restaurants, said Ben Porten, a spokesman. Restaurant chains successfully lobbied for an exemption to a rule restricting the program to firms with 500 or fewer employees. Infectious disease experts have said it could take a year to 18 months to develop a vaccine that would be ready for the public.
Mr. Porten said the money would be spent on paying its domestic employees who remained on the payroll as well as real estate and utility bills.
“We’re going to use it exactly as we believe it was intended to be used,” he said of the loan. “Not a single penny of this is going overseas.”
The loans to those companies were flagged by Accountable.US, which describes itself as a watchdog group that focuses on corruption. Accountable.US does not disclose its backers, but is routinely critical of the Trump administration.
The coronavirus pandemic’s devastation became more evident Thursday with more than 5.2 million workers added to the tally of the unemployed.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.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.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.”“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.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.
Uber said on Thursday that the coronavirus pandemic had made it impossible to forecast how much money it would make this year.Uber said on Thursday that the coronavirus pandemic had made it impossible to forecast how much money it would make this year.
Uber had said in February that it expected to earn “adjusted net revenue” of $16 billion to $17 billion this year. But now, “it is impossible to predict with precision the pandemic’s cumulative impact on our future financial results,” the ride-hailing company said in a statement.Uber had said in February that it expected to earn “adjusted net revenue” of $16 billion to $17 billion this year. But now, “it is impossible to predict with precision the pandemic’s cumulative impact on our future financial results,” the ride-hailing company said in a statement.
Uber also warned investors that its stakes in several international ride-hailing businesses would lose value. For example, Uber acquired a stake in its Indian competitor, Grab, in exchange for selling its business in Southeast Asia in 2018. “We believe these investments will be reduced by an estimated range of $1.9 to $2.2 billion during the three months ended March 31, 2020, due to the impact of the pandemic,” Uber said.Uber also warned investors that its stakes in several international ride-hailing businesses would lose value. For example, Uber acquired a stake in its Indian competitor, Grab, in exchange for selling its business in Southeast Asia in 2018. “We believe these investments will be reduced by an estimated range of $1.9 to $2.2 billion during the three months ended March 31, 2020, due to the impact of the pandemic,” Uber said.
The company also told investors to expect losses caused by its financial impact program, which compensates drivers that are unable to work because they are under quarantine orders or have a positive diagnosis for the virus. Uber estimated the program would cost $17 to $22 million in the first quarter and $60 to $80 million in the second quarter.The company also told investors to expect losses caused by its financial impact program, which compensates drivers that are unable to work because they are under quarantine orders or have a positive diagnosis for the virus. Uber estimated the program would cost $17 to $22 million in the first quarter and $60 to $80 million in the second quarter.
Uber will report its first quarter financial results on May 7.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.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.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.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.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 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. Reporting was contributed by 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.