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Global Markets Rise as Investors Seek Silver Linings: Live Updates Stock Markets Gain, and Oil Too, as Investors Look Ahead: Live Updates
(about 3 hours later)
Global markets rose broadly on Monday on continuing hopes that the world’s economy will gradually emerge from the coronavirus outbreak.Global markets rose broadly on Monday on continuing hopes that the world’s economy will gradually emerge from the coronavirus outbreak.
European markets jumped about 2 percent in early trading following more moderate gains in Asia. Oil prices also rose on futures markets, while prices of longer-term U.S. Treasury bonds fell, both signs of investor optimism. Futures markets were predicting Wall Street would open about 1 percent higher. European markets were trading 2 to 3 percent higher following more moderate gains in Asia. Futures markets were predicting Wall Street would open percent higher.
Oil was trading higher, with West Texas Intermediate, the U.S. standard crude, rising above $30 a barrel for the first time since March. In another sign of investor optimism, prices of longer-term U.S. Treasury bonds fell.
Investors were looking for silver linings as the world grapples with lockdowns and other restrictions. Japan released economic figures on Monday that showed the world’s No. 3 economy formally fell into recession, but Tokyo has begun easing some of its containment efforts. On Sunday, Jerome H. Powell, the Federal Reserve chair, suggested that a full American rebound from virus-induced lockdowns could take until the end of 2021.Investors were looking for silver linings as the world grapples with lockdowns and other restrictions. Japan released economic figures on Monday that showed the world’s No. 3 economy formally fell into recession, but Tokyo has begun easing some of its containment efforts. On Sunday, Jerome H. Powell, the Federal Reserve chair, suggested that a full American rebound from virus-induced lockdowns could take until the end of 2021.
The Nikkei 225 index in Japan, the Hang Seng index in Hong Kong and South Korea’s Kospi all rose 0.5 percent. Mainland China’s Shanghai Composite index gained 0.2 percent. The Nikkei 225 index in Japan and South Korea’s Kospi both finished 0.5 percent higher, while the Hang Seng in Hong Kong gained 0.6 percent. Mainland China’s Shanghai Composite index gained 0.2 percent.
The FTSE 100 index in London and the CAC 40 index in Paris both rose 2.1 percent in early trading. In Germany, the DAX was up 2.3 percent.The FTSE 100 index in London and the CAC 40 index in Paris both rose 2.1 percent in early trading. In Germany, the DAX was up 2.3 percent.
Japan fell into a recession for the first time since 2015, as its already weakened economy was dragged down by the coronavirus’s impact on businesses at home and abroad.Japan fell into a recession for the first time since 2015, as its already weakened economy was dragged down by the coronavirus’s impact on businesses at home and abroad.
The world’s third-largest economy after the United States and China shrank by an annualized rate of 3.4 percent in the first three months of the year, the country’s government said on Monday.The world’s third-largest economy after the United States and China shrank by an annualized rate of 3.4 percent in the first three months of the year, the country’s government said on Monday.
That makes it the largest economy to officially enter a recession, often defined as two consecutive quarters of negative growth, in the coronavirus era. Other major economies around the world are set to follow, joining Japan as well as Germany and France in recession, as efforts to contain the outbreak ripple around the globe. The experiences of China, where the outbreak first emerged in December and January, suggest recovery will be long and difficult.That makes it the largest economy to officially enter a recession, often defined as two consecutive quarters of negative growth, in the coronavirus era. Other major economies around the world are set to follow, joining Japan as well as Germany and France in recession, as efforts to contain the outbreak ripple around the globe. The experiences of China, where the outbreak first emerged in December and January, suggest recovery will be long and difficult.
“The economy entered the coronavirus shock in a very weak position,” said Izumi Devalier, chief Japan economist at Bank of America Merrill Lynch, but “the real big ugly stuff is going to happen in the April, June print. It’s going to be three quarters of very negative growth.”“The economy entered the coronavirus shock in a very weak position,” said Izumi Devalier, chief Japan economist at Bank of America Merrill Lynch, but “the real big ugly stuff is going to happen in the April, June print. It’s going to be three quarters of very negative growth.”
SoftBank Group on Monday reported the largest annual loss in its history and one of the largest ever by a Japanese company.
The dismal results were driven largely by SoftBank’s investment in WeWork and other technology-related companies that have been hit hard by the coronavirus pandemic. Earlier, SoftBank announced that Jack Ma, the co-founder of the Chinese e-commerce giant Alibaba, had resigned from its board.
In the earnings release, the company announced an annual operating loss of 1.36 trillion yen, or $12.7 billion, in the fiscal year that ended March 31, its first annual loss in 15 years. It reported a profit of $19.6 billion during the same period last year.
Investors had been bracing for the results. The company had released two earnings warnings, telling markets to expect that its $100 billion Vision Fund — an investment vehicle that was a major finance force in the technology world — would post losses on the order of $16.7 billion.
The company’s losses were slightly higher than its estimates, and the Vision Fund reported a loss of $17.7 billion. It attributed the blow to the coronavirus’s impact on major companies in its portfolio like Uber, the ride-share company, and WeWork, the tech-related office space company.
Apple plans to reopen several stores this week in the United States, Canada and Italy, another sign of the gradual return to business across the world.Apple plans to reopen several stores this week in the United States, Canada and Italy, another sign of the gradual return to business across the world.
In March, Apple closed more than 450 of its stores — nearly every location outside of China — to combat the spread of the coronavirus. The company recently started to reopen shops in South Korea, Australia and Austria.In March, Apple closed more than 450 of its stores — nearly every location outside of China — to combat the spread of the coronavirus. The company recently started to reopen shops in South Korea, Australia and Austria.
Now Apple is planning to add another 25 stores in the United States, 12 in Canada and 10 in Italy to its list of reopenings this week. The American stores are in California, Florida, Oklahoma, Hawaii, Colorado and Washington state, though some stores in those states will remain closed. Likewise, Apple is keeping 17 stores in Canada and seven stores in Italy closed.Now Apple is planning to add another 25 stores in the United States, 12 in Canada and 10 in Italy to its list of reopenings this week. The American stores are in California, Florida, Oklahoma, Hawaii, Colorado and Washington state, though some stores in those states will remain closed. Likewise, Apple is keeping 17 stores in Canada and seven stores in Italy closed.
Apple has set limits on the number of people inside its stores and requires social distancing. Apple Store employees are checking the temperatures of their colleagues and customers at the door and requiring everyone to wear face masks. Customers who don’t have a mask are given one.Apple has set limits on the number of people inside its stores and requires social distancing. Apple Store employees are checking the temperatures of their colleagues and customers at the door and requiring everyone to wear face masks. Customers who don’t have a mask are given one.
Executives of J.C. Penney received a bankruptcy judge’s approval on Saturday to spend up to $500 million while they try to save the company.Executives of J.C. Penney received a bankruptcy judge’s approval on Saturday to spend up to $500 million while they try to save the company.
A day earlier, the 118-year-old department store chain, which was an anchor of America’s once-thriving shopping malls but is now drowning in debt, became the third major retail chain to file for bankruptcy protection this month, following J. Crew and the Neiman Marcus Group. It is the biggest corporate casualty of the coronavirus crisis so far, with more than 800 stores and nearly 85,000 employees.A day earlier, the 118-year-old department store chain, which was an anchor of America’s once-thriving shopping malls but is now drowning in debt, became the third major retail chain to file for bankruptcy protection this month, following J. Crew and the Neiman Marcus Group. It is the biggest corporate casualty of the coronavirus crisis so far, with more than 800 stores and nearly 85,000 employees.
The filing was expected after J.C. Penney failed to make an interest payment on its debt in April to “maximize financial flexibility,” and then skipped another payment earlier this month. The stock of the chain, which is based in Plano, Texas, has traded below $1 a share for most of this year. Its sales have steadily shrunk to $10.7 billion for the year ending Feb. 1, when it posted a net loss of $268 million.The filing was expected after J.C. Penney failed to make an interest payment on its debt in April to “maximize financial flexibility,” and then skipped another payment earlier this month. The stock of the chain, which is based in Plano, Texas, has traded below $1 a share for most of this year. Its sales have steadily shrunk to $10.7 billion for the year ending Feb. 1, when it posted a net loss of $268 million.
After a court hearing Saturday held by telephone, David R. Jones, a bankruptcy judge in Corpus Christi, Texas, ruled that J.C. Penney executives could continue paying employees who have not been furloughed, as well as key vendors it needs to keep operating.After a court hearing Saturday held by telephone, David R. Jones, a bankruptcy judge in Corpus Christi, Texas, ruled that J.C. Penney executives could continue paying employees who have not been furloughed, as well as key vendors it needs to keep operating.
The company hopes to survive by closing stores and shedding several billion dollars in debt, but its fate remains highly uncertain. Jill Soltau, the chief executive, said in a statement that executives planned to “hit the ground running on Monday.” The judge scheduled another hearing for June 2.The company hopes to survive by closing stores and shedding several billion dollars in debt, but its fate remains highly uncertain. Jill Soltau, the chief executive, said in a statement that executives planned to “hit the ground running on Monday.” The judge scheduled another hearing for June 2.
It was a week of downbeat pronouncements and grim economic data that had investors focusing on the dire challenges facing the American economy. At a regularly scheduled Monday morning meeting on Jan. 27 with top executives at Facebook, Mark Zuckerberg turned the agenda to the coronavirus. For weeks, he told his staff, he had been hearing from global health care experts that the virus had the makings of a pandemic, and now Facebook needed to prepare for a worst-case scenario — one in which the company’s ability to combat misinformation, scammers and conspiracy theorists would be tested as never before.
Friday was no exception, and stocks were unsteady for most of the day, after new data showed how devastating the impact of the coronavirus pandemic had been to retail sales. To start, Mr. Zuckerberg said, the company should take some of the tools it had developed to fight 2020 election garbage and retool them for the pathogen. He asked executives in charge of every department to develop plans for responding to a global outbreak by the end of the week.
After a sharp fall early in the day, the S&P 500 rebounded, ending the day with a gain of less than 1 percent. The meeting, described by two people who attended it, helped vault Facebook ahead of other companies — and even some governments — in preparing for Covid-19. And it exemplified a change in how the 36-year-old is running the company he founded.
Still, thanks to back-to-back declines on Tuesday and Wednesday, the index had its sharpest weekly drop since late March, a retreat that stands out after a long stretch in which stock investors seemed willing to look past the deeply negative outlook for the economy and the uncertain path of the coronavirus outbreak. Today more than ever, Facebook is Mr. Zuckerberg’s company. In recent years, he has consolidated power among the executive ranks, taken a more active role with lawmakers and seen his board of directors populated with staunch allies. Now, the coronavirus has presented Mr. Zuckerberg with the opportunity to demonstrate that he has grown into his responsibilities as a leader.
On Tuesday, the nation’s top expert on infectious diseases, Dr. Anthony S. Fauci, warned lawmakers that an overly rapid reopening of large swathes of the American economy, which had been shuttered in an effort to control the outbreak, could reignite the spread of the virus. His comments drove a sell-off in the stock market, which closed down 2 percent.
The economic prognosis offered by the Federal Reserve chair, Jerome H. Powell, the next day did little to soothe investors. The head of the central bank warned of potentially serious consequences if the deep economic downturn facing the country was not countered with forceful fiscal policies.
Amid it all, a parade of economic reports continued to show a downturn of breathtaking speed and scope.
In April, consumer prices — excluding volatile food and energy prices — posted their fastest month-on-month collapse in records going back to 1957; industrial production fell 11.2 percent in April, the largest drop in the 101-year history of the index; manufacturing output fell 13.7 percent, also a record; and retail sales dropped a record 16.4 percent.
The latest weekly update on applications for unemployment benefits showed nearly three million more Americans applied. Some 36 million jobs have been lost in the last two months.
The result is an incongruous situation in which stocks have soared even as economic data has continued to show the United States is entering one of the worst recessions in its history.
The wild swings in stock prices that occurred in mid-March were shocking to most investors, but now it’s clear that even the Oracle of Omaha appears to have panicked.The wild swings in stock prices that occurred in mid-March were shocking to most investors, but now it’s clear that even the Oracle of Omaha appears to have panicked.
Warren E. Buffett bailed out of his holdings in Goldman Sachs in the first quarter of 2020, selling 84 percent of his stake in the Wall Street bank, according to regulatory filings made Friday by his conglomerate, Berkshire Hathaway. Despite the drastic move, Mr. Buffett hung on to shares of two giant banks with stronger consumer operations, JPMorgan Chase and Wells Fargo.Warren E. Buffett bailed out of his holdings in Goldman Sachs in the first quarter of 2020, selling 84 percent of his stake in the Wall Street bank, according to regulatory filings made Friday by his conglomerate, Berkshire Hathaway. Despite the drastic move, Mr. Buffett hung on to shares of two giant banks with stronger consumer operations, JPMorgan Chase and Wells Fargo.
It was an unusual move for Mr. Buffett, who rarely exits his investments with such abruptness. But it’s clear that the coronavirus crisis has hit his company hard. Berkshire Hathaway reported a $49.7 billion loss during the first quarter, in contrast to a $21.7 billion profit during the same period a year earlier.It was an unusual move for Mr. Buffett, who rarely exits his investments with such abruptness. But it’s clear that the coronavirus crisis has hit his company hard. Berkshire Hathaway reported a $49.7 billion loss during the first quarter, in contrast to a $21.7 billion profit during the same period a year earlier.
Goldman Sachs shares are down more than 30 percent from their peak this year in January at $249.72, but their price has recovered somewhat from the lowest point, reached on March 23, when the stock closed at $134.97.Goldman Sachs shares are down more than 30 percent from their peak this year in January at $249.72, but their price has recovered somewhat from the lowest point, reached on March 23, when the stock closed at $134.97.
Marc Hamburg, Berkshire Hathaway’s chief financial officer, did not immediately respond to a request for comment.Marc Hamburg, Berkshire Hathaway’s chief financial officer, did not immediately respond to a request for comment.
Consumer spending on video games, hardware and accessories surged to a record $10.86 billion in the first quarter of 2020, an increase of 9 percent compared with the same period last year, according to data from the NPD Group. Millions of Americans sought distractions while being ordered to shelter in place. Games such as Animal Crossing: New Horizons, Call of Duty: Modern Warfare and Doom Eternal were top titles, and the Nintendo Switch console was a strong seller.Consumer spending on video games, hardware and accessories surged to a record $10.86 billion in the first quarter of 2020, an increase of 9 percent compared with the same period last year, according to data from the NPD Group. Millions of Americans sought distractions while being ordered to shelter in place. Games such as Animal Crossing: New Horizons, Call of Duty: Modern Warfare and Doom Eternal were top titles, and the Nintendo Switch console was a strong seller.
Reporting was contributed by Ben Dooley, Carlos, Tejada, Jack Nicas, Sapna Maheshwari, Michael Corkery, Matt Phillips, Emily Flitter and Gregory Schmidt. Reporting was contributed by Mike Isaac, Sheera Frenkel, Cecilia Kang, Ben Dooley, Carlos, Tejada, Jack Nicas, Sapna Maheshwari, Michael Corkery, Matt Phillips, Emily Flitter and Gregory Schmidt.