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Stock Markets Fall on Rising U.S.-China Tensions: Live Updates Stocks Drop on Rising U.S.-China Tensions: Live Updates
(32 minutes later)
Google has rescinded offers to more than 2,000 people who had agreed to work at the company as temporary and contract workers.Google has rescinded offers to more than 2,000 people who had agreed to work at the company as temporary and contract workers.
Google employs more than 130,000 contractors and temp workers, a shadow work force that outnumbers its 123,000 full-time employees. Google’s full-time staff are rewarded with high salaries and generous perks, but temps and contractors often receive less pay, fewer benefits and do not have the same protections, even though they work alongside full timers.Google employs more than 130,000 contractors and temp workers, a shadow work force that outnumbers its 123,000 full-time employees. Google’s full-time staff are rewarded with high salaries and generous perks, but temps and contractors often receive less pay, fewer benefits and do not have the same protections, even though they work alongside full timers.
Many of the contract and temp candidates who had agreed to work at Google before the pandemic took hold in the United States were let go without any severance or financial compensation. This came after weeks of uncertainty as Google repeatedly postponed their start dates during which time they were not paid by Google or the staffing agencies through which they were recruited.Many of the contract and temp candidates who had agreed to work at Google before the pandemic took hold in the United States were let go without any severance or financial compensation. This came after weeks of uncertainty as Google repeatedly postponed their start dates during which time they were not paid by Google or the staffing agencies through which they were recruited.
Some of the would-be contractors left stable, full-time jobs once they received an employment offer at Google and are now searching for work in a difficult labor market. Some, who are Americans, said the rescinded offers have complicated and, in some cases, delayed their ability to receive unemployment benefits because they left their last jobs voluntarily, according to several of the workers facing this dilemma.Some of the would-be contractors left stable, full-time jobs once they received an employment offer at Google and are now searching for work in a difficult labor market. Some, who are Americans, said the rescinded offers have complicated and, in some cases, delayed their ability to receive unemployment benefits because they left their last jobs voluntarily, according to several of the workers facing this dilemma.
In mid-April, a company spokeswoman said that Google intended to bring on the people who it had already hired but who had not started.In mid-April, a company spokeswoman said that Google intended to bring on the people who it had already hired but who had not started.
But this did not seem to apply to contractors or temp workers for Google and Alphabet, which has a market capitalization of near $1 trillion dollars. It made $6.8 billion in profit in the first three months of 2020, despite what it called “a significant and sudden slowdown” in advertising.But this did not seem to apply to contractors or temp workers for Google and Alphabet, which has a market capitalization of near $1 trillion dollars. It made $6.8 billion in profit in the first three months of 2020, despite what it called “a significant and sudden slowdown” in advertising.
“If these people were promised jobs at Alphabet, which is worth a trillion dollars, it seems like the company has a responsibility to take them on,” said Ben Gwin, who works as a data analyst in a Google office for HCL America, a contracting agency. “It’s not like Google can’t afford it.”“If these people were promised jobs at Alphabet, which is worth a trillion dollars, it seems like the company has a responsibility to take them on,” said Ben Gwin, who works as a data analyst in a Google office for HCL America, a contracting agency. “It’s not like Google can’t afford it.”
Twitter said early Friday that a tweet from President Trump suggesting that protesters in Minneapolis could be shot violated the company’s rules against glorifying violence, in a move that threatens to escalate tensions between Mr. Trump and his favorite social media megaphone over its content policies. Stocks dipped on Friday, with shares on Wall Street adding to losses from the day before, as tensions worsened between Washington and Beijing.
The company prevented users from viewing Mr. Trump’s message without first reading a brief notice describing the rule violation. Twitter also blocked users from liking or replying to Mr. Trump’s post. The S&P 500 dropped less than half a percent in early trading. Shares in Europe were also lower after a mixed day in Asia.
But Twitter did not take the tweet down, saying it was in the public’s interest that the message remain accessible. Investors were bracing for President Trump to unveil measures aimed at China. The Trump administration has criticized Beijing’s recent move to strengthen its authority over Hong Kong, a semiautonomous Chinese city that enjoys special trade and financial relations with the United States. Any sharp move by the administration risks inviting retaliation from Beijing, worsening tensions between the world’s two biggest single economies.
Twitter said that it had made its decision “based on the historical context of the last line, its connection to violence, and the risk it could inspire similar actions today.” Mr. Trump had said on Thursday that he would hold a news conference on Friday to discuss China, but few details were available about when he planned to speak or what he would address specifically. In addition to rising concerns over Hong Kong, the Trump administration has been critical of China’s response to the coronavirus outbreak as the president has sought to divert blame for the toll it has taken on the United States.
In the tweet, Mr. Trump called the protesters “thugs” and said he had told Minnesota’s governor that the military “is with him all the way.” Tension between Washington and Beijing, which are currently negotiating a trade deal, has been one of the few factors that has managed to deter bullish investors who have looked past the coronavirus pandemic’s immense human and economic toll, and instead have focused on signs of a recovery as they bid stocks higher.
“Any difficulty and we will assume control but, when the looting starts, the shooting starts,” the president wrote. “Thank you!” Investors were also parsing mixed retail sales data from Europe, as well as business confidence figures from Britain.
The company’s decision comes a day after Mr. Trump signed an executive order that seeks to to limit the legal protections that shield social media companies from liability for the content posted on their platforms. Government infusions to Americans’ bank accounts led to a surge in personal income in April, the Commerce Department reported Friday, but the coronavirus-related economic shutdown still caused a steep decline in consumer spending.
Hours after the warning label was added to Mr. Trump’s Friday tweet, he posted another that accused Twitter of targeting “Republicans, Conservatives & the President of the United States.” He also urged Congress to revoke “Section 230,” part of a 1996 law that laid out rules for online media, though if lawmakers did so, it could push social media companies to police content even more closely. Personal income rose overall by $1.97 trillion, a gain of 10.5 percent in March and 11.7 percent from the previous April. The drop-off in wages was offset by nearly $3 trillion in government transfer payments. Of that, $360 billion was unemployment benefits and $2.6 trillion was “other” — reflecting the checks of up to $1,200 a person that the federal government sent to most households.
That extra cash was not translated, at least immediately, into spending on consumer goods, which was down 13.6 percent from March. The decline was spread across all major categories — durable goods, nondurable goods and services.
The U.S. dollar has gained about 7 percent this year against a basket of major currencies. But with interest rates at rock-bottom levels, the Fed’s printing presses revving up and the government borrowing enormous sums for stimulus spending, today’s DealBook newsletter asks: Can it retain its haven status?The U.S. dollar has gained about 7 percent this year against a basket of major currencies. But with interest rates at rock-bottom levels, the Fed’s printing presses revving up and the government borrowing enormous sums for stimulus spending, today’s DealBook newsletter asks: Can it retain its haven status?
A recent research note by Gregory Daco at Oxford Economics found that since 1973, the dollar has appreciated an average of 6 percent in the past six recessions, in line with its performance during the current downturn. Mr. Daco expects the dollar to remain strong this year, but not for the usual reasons.A recent research note by Gregory Daco at Oxford Economics found that since 1973, the dollar has appreciated an average of 6 percent in the past six recessions, in line with its performance during the current downturn. Mr. Daco expects the dollar to remain strong this year, but not for the usual reasons.
Unlike in past recessions, when investors flocked to the safety of Treasury bonds, foreign investors dumped U.S. government debt at a record rate in March, which would normally push the dollar down. But since the Fed flooded the markets with stimulus, the U.S. stock market has, unusually, become a “safe refuge,” Mr. Daco writes, propelled by tech stocks whose businesses are benefiting from stay-at-home orders.Unlike in past recessions, when investors flocked to the safety of Treasury bonds, foreign investors dumped U.S. government debt at a record rate in March, which would normally push the dollar down. But since the Fed flooded the markets with stimulus, the U.S. stock market has, unusually, become a “safe refuge,” Mr. Daco writes, propelled by tech stocks whose businesses are benefiting from stay-at-home orders.
U.S. stock futures followed European markets lower on Friday as tensions worsened between Washington and Beijing.
Futures for the S&P 500 were negative, predicting that Wall Street would open down at the start of trading. European stocks were down more than 1 percent, after a mixed day in Asia. Other markets also signaled rising worries among investors. Prices for U.S. Treasury bonds, typically regarded as a safe haven in troubled times, rose. Oil prices were lower on futures markets.
Investors were bracing for President Trump to unveil more measures aimed at China in a news conference scheduled for Friday. The Trump administration has criticized Beijing’s recent move to strengthen its authority over Hong Kong, a semiautonomous Chinese city that enjoys special trade and financial relations with the United States. Any sharp move by the administration risks inviting retaliation from Beijing, worsening tensions between the world’s two biggest single economies.
Tension between Washington and Beijing, which are currently negotiating a trade deal, has been one of the few factors that has managed to deter bullish investors who have looked past the coronavirus pandemic’s immense human and economic toll, and instead have focused on signs of a recovery as they bid stocks higher.
Investors were also parsing mixed retail sales data from Europe, as well as business confidence figures from Britain.
On Friday, the S&P 500 turned negative after two day of gains this week, a rally that reflected optimism about prospects for an economic rebound.
The multitrillion-dollar patchwork of federal and state relief programs has not kept bills from piling up or prevented long lines at food banks. But it has mitigated the damage. Now the expiration of those programs represents a cliff that many Americans and the economy are hurtling toward.The multitrillion-dollar patchwork of federal and state relief programs has not kept bills from piling up or prevented long lines at food banks. But it has mitigated the damage. Now the expiration of those programs represents a cliff that many Americans and the economy are hurtling toward.
The $1,200 checks are long gone, at least for those who needed them most, with little imminent prospect for a second round. The lending program that helped millions of small businesses keep workers on the payroll will wind down if Congress does not extend it. Eviction moratoriums that are keeping people in their homes are expiring in many cities.The $1,200 checks are long gone, at least for those who needed them most, with little imminent prospect for a second round. The lending program that helped millions of small businesses keep workers on the payroll will wind down if Congress does not extend it. Eviction moratoriums that are keeping people in their homes are expiring in many cities.
And the $600 per week in extra unemployment benefits that have allowed tens of millions of laid-off workers to pay rent and buy groceries will expire at the end of July.And the $600 per week in extra unemployment benefits that have allowed tens of millions of laid-off workers to pay rent and buy groceries will expire at the end of July.
President Trump and other Republicans have played down the need for more spending, saying the solution is for states to reopen businesses and allow companies to bring people back to work. So despite pleas from economists across the political spectrum — including Jerome H. Powell, the Federal Reserve chair — any federal action is likely to be limited.President Trump and other Republicans have played down the need for more spending, saying the solution is for states to reopen businesses and allow companies to bring people back to work. So despite pleas from economists across the political spectrum — including Jerome H. Powell, the Federal Reserve chair — any federal action is likely to be limited.
To some Republican lawmakers, extra unemployment benefits and other assistance made sense when businesses were shut down and the government was discouraging people from leaving home. But as the economy reopens, they say, the benefits could impede the recovery by providing an incentive not to return to work.To some Republican lawmakers, extra unemployment benefits and other assistance made sense when businesses were shut down and the government was discouraging people from leaving home. But as the economy reopens, they say, the benefits could impede the recovery by providing an incentive not to return to work.
Many economists feel those fears are overblown. Generous benefits might be a deterrent to work in normal times, they argue, but these are hardly normal times. Even the most optimistic forecasters expect the unemployment rate to be well above 10 percent when the extra benefits expire, meaning there will be far more jobless workers than available jobs.Many economists feel those fears are overblown. Generous benefits might be a deterrent to work in normal times, they argue, but these are hardly normal times. Even the most optimistic forecasters expect the unemployment rate to be well above 10 percent when the extra benefits expire, meaning there will be far more jobless workers than available jobs.
The French carmaker Renault said on Friday that it would cut nearly 15,000 jobs worldwide and drastically reduce production as it tries to deal with “the major crisis facing the automotive industry.”The French carmaker Renault said on Friday that it would cut nearly 15,000 jobs worldwide and drastically reduce production as it tries to deal with “the major crisis facing the automotive industry.”
About a third of the job cuts would be in France, Renault said. The company, which is partly owned by the French government, indicated it is likely to close several factories while it cuts the number of cars it produces annually to 3.3 million, from 4 million. Renault will also pull out of China, where it has failed to get much traction.About a third of the job cuts would be in France, Renault said. The company, which is partly owned by the French government, indicated it is likely to close several factories while it cuts the number of cars it produces annually to 3.3 million, from 4 million. Renault will also pull out of China, where it has failed to get much traction.
Renault has been hit hard by the pandemic. Renault sales in the European Union, its most important market, fell almost 80 percent in April, when dealerships were closed and most buyers were not leaving their homes.Renault has been hit hard by the pandemic. Renault sales in the European Union, its most important market, fell almost 80 percent in April, when dealerships were closed and most buyers were not leaving their homes.
American Airlines and Delta Air Lines are offering buyouts to employees as they prepare for a rebound in demand for air travel that most industry expect will take years to materialize.American Airlines and Delta Air Lines are offering buyouts to employees as they prepare for a rebound in demand for air travel that most industry expect will take years to materialize.
“Delta will have to be a smaller airline as we adjust to reduced demand and the need for distancing and safety during travel,” Delta’s chief executive, Ed Bastian, told employees in a memo on Wednesday. “A smaller Delta unfortunately means fewer people will be required.”“Delta will have to be a smaller airline as we adjust to reduced demand and the need for distancing and safety during travel,” Delta’s chief executive, Ed Bastian, told employees in a memo on Wednesday. “A smaller Delta unfortunately means fewer people will be required.”
Delta is offering two programs — an early retirement option and a general buyout package — to most employees except for pilots, whose union is still in talks with management, Mr. Bastian said. The email did not say how much of its work force the airline was seeking to pare.Delta is offering two programs — an early retirement option and a general buyout package — to most employees except for pilots, whose union is still in talks with management, Mr. Bastian said. The email did not say how much of its work force the airline was seeking to pare.
The American program, also announced on Wednesday, applies to management and support staff, which the airline hopes to cut by about 30 percent, or about 5,000 workers.The American program, also announced on Wednesday, applies to management and support staff, which the airline hopes to cut by about 30 percent, or about 5,000 workers.
The British low-price airline easyJet said on Thursday that it planned to reduce staff by up to 30 percent and that it expected to fly in the July-September period at nearly 30 percent of the capacity a year earlier. When flights restart, staff and passengers will be required to wear masks and, at least initially, no onboard food service will be offered, the company said.The British low-price airline easyJet said on Thursday that it planned to reduce staff by up to 30 percent and that it expected to fly in the July-September period at nearly 30 percent of the capacity a year earlier. When flights restart, staff and passengers will be required to wear masks and, at least initially, no onboard food service will be offered, the company said.
Going into the crisis, American had 130,000 employees and Delta had 90,000; about 40,000 workers at each have taken voluntary leave or early retirement. Most airline jobs are protected into the fall as a condition of the CARES Act, which provided $50 billion to passenger airlines, half of it earmarked to pay employees through September.Going into the crisis, American had 130,000 employees and Delta had 90,000; about 40,000 workers at each have taken voluntary leave or early retirement. Most airline jobs are protected into the fall as a condition of the CARES Act, which provided $50 billion to passenger airlines, half of it earmarked to pay employees through September.
Nordstrom, the top-performing department store in the United States, said on Thursday that its net sales fell 40 percent to $2 billion in the first quarter, and that it posted a net loss of $521 million. Digital sales accounted for more than half of its total net sales during the quarter. The retailer closed stores on March 17 and started reopening in early May. It said it now has about 40 percent of its locations open.Nordstrom, the top-performing department store in the United States, said on Thursday that its net sales fell 40 percent to $2 billion in the first quarter, and that it posted a net loss of $521 million. Digital sales accounted for more than half of its total net sales during the quarter. The retailer closed stores on March 17 and started reopening in early May. It said it now has about 40 percent of its locations open.
Costco Wholesale said on Thursday that its net sales rose 7.3 percent to $36.5 billion in its quarter ending May 10 and that it posted a net profit of $838 million, as the pandemic prompted customers to stock up on goods. The warehouse chain, which has more than 500 U.S. locations, said its income took a hit from a $283 million pretax charge “from incremental wage and sanitation costs related to Covid-19.”Costco Wholesale said on Thursday that its net sales rose 7.3 percent to $36.5 billion in its quarter ending May 10 and that it posted a net profit of $838 million, as the pandemic prompted customers to stock up on goods. The warehouse chain, which has more than 500 U.S. locations, said its income took a hit from a $283 million pretax charge “from incremental wage and sanitation costs related to Covid-19.”
Reporting was contributed by Ben Casselman, Niraj Chokshi, Daisuke Wakabayashi, Kate Conger, Jack Ewing, Mike Isaac, Maggie Haberman and Carlos Tejada. Reporting was contributed by Ben Casselman, Niraj Chokshi, Daisuke Wakabayashi, Kate Conger, Jack Ewing, Mike Isaac, Maggie Haberman, Kevin McKenna, Mohammed Hadi and Carlos Tejada.