Stock markets in Europe gained some ground on Friday, after a decidedly down day for Asia stocks, as investors tried to weigh the impacts of new coronavirus cases around the world.
Markets in London, Frankfurt and Paris started the day lower but than swept into modestly positive territory by midmorning, fueled perhaps by some better-than-expected earnings reports. In Asia, news of an apparently widening outbreak of infections in Hong Kong sent shares skidding.
Futures predicted that Wall Street would open lower when trading begins.
In other markets, U.S. Treasury bond yields were slumping, a sign that investors were seeking safety. Oil futures were lower after the International Energy Agency said that strong growth of coronavirus cases in the United States and Latin America is “casting a shadow” over the resurgence of oil demand.
In Europe, some company earnings reports caused bumps in share prices. The German biotech firm Qiagen, whose products and services are used in coronavirus testing, said its adjusted earnings per share were expected to rise nearly 70 percent this year; its shares rose about 4 percent. And Carlsberg, the Danish brewer, reported figures suggesting the fall in beer sales was flattening out, with strong growth in China. Shares jumped nearly 5 percent.
But Asian markets seemed to be worried about the spread of the coronavirus, after Hong Kong authorities reported another increase in cases that have forced the closure of school. Hong Kong’s Hang Seng market lost 1.8 percent, Japan’s Nikkei fell 1.1 percent, while the Shanghai Composite dropped 2 percent.
When California shut down its economy in March, it became a model for painful but aggressive action to counter the coronavirus. The implicit trade-off was that a lot of upfront pain would help slow the spread, allowing the state to reopen sooner and more triumphantly than places that failed to act as decisively.
But the virus had other plans, and now the state’s economy is in retrenchment mode again. For the nation, this means that an important center of its output — a magnet of summer tourism and home to the technology and entertainment industries along with the world’s busiest port operation — is unlikely to regain momentum soon when growth is needed most.
For the state, it means a progressive agenda predicated on the continuation of good times will be hampered as governments move from expansion to cuts. Voters had mostly been open to paying for expanding services and priorities like affordable housing, but they seem to be turning wary of new taxes.
Unemployment, which was 3.9 percent in February, the lowest on record, shot up to 16.3 percent by May, compared with 13.3 percent nationwide. Container traffic at the Ports of Los Angeles and Long Beach is down about a third from a year ago, while many beaches and attractions like Disneyland were closed on July Fourth and are delaying their reopening plans. Most dispiriting is the sense that even after politicians made tough calls that Californians largely supported, the economy seems no better off.
Exactly how and how quickly the state should have reopened, and who is to blame for the backslide, are unlikely to ever be resolved. What the result means for the economy is more time in the dark, more need among the poorest citizens and more drain on the taxes required to support them. — Conor Dougherty
The Federal Reserve’s Main Street loan program for medium-size businesses was destined to be a challenge.
The central bank has never tried lending to midsize companies before and it is difficult to help a very diverse group of businesses without putting taxpayer money at risk. The Fed, the Treasury Department and members of Congress have also at times appeared to be on different pages about what they want the program to achieve.
The central bank and the Treasury, which is providing money to cover any loans that go bad, spent months devising the program, negotiating over credit risk and vetting terms. Many officials within the Fed wanted to create a program that businesses would actually use, but some at Treasury saw the program as more of an absolute backstop for firms that were out of options. Steven Mnuchin, the Treasury Secretary, has resisted taking on too much risk, saying at one point that he did not want to lose money on the programs as a base case.
What has emerged after three months, two overhauls and more than 2,000 comments filed with the Fed is a program that seems to be incapable of pleasing much of anyone.
Executives at La Colombe, a Philadelphia-based purveyor of fancy coffee and canned draft lattes, thought that the program would be their best shot at getting help. But when the central bank announced the details in early April, it was clear that La Colombe would not qualify. The company has too much debt relative to earnings to meet the Fed’s leverage restrictions.
“That just doesn’t make sense for companies like La Colombe, because we’re growing so quickly,” said Aren Platt, who leads special projects for the company. — Jeanna Smialek
The personal computer market shook off the effects of supply chain disruption caused by the coronavirus pandemic, posting growth of 3 percent to 11 percent in the second quarter compared with the same period in 2019, the research companies Gartner and IDC said on Thursday.
Between 64 million and 72 million PCs were shipped worldwide as distributors and retailers restocked. Sales of mobile computers rose strongly because more people were working or learning remotely and needed devices to entertain themselves, the researchers said.
Factory closures in China, caused by the spread of the coronavirus, had led to a weak first quarter for the PC market. But the latest numbers told a story of recovery — at least temporarily. Researchers cautioned that the bump in sales might not last.
“This uptick in mobile PC demand will not continue beyond 2020, as shipments were mainly boosted by short-term business needs due to the impact of the COVID-19 pandemic,” said Mikako Kitagawa, a Gartner analyst. — Kellen Browning
Sur La Table, the upscale cookware company, filed for Chapter 11 bankruptcy on Wednesday, dealing another blow to brick-and-mortar retail. The company has started liquidating 51 of its 121 U.S. stores, according to court filings, which it said were in shopping centers and traditional shopping malls or as stand-alone storefronts.
The privately held retailer, founded in 1972 at Seattle’s Pike Place market, said that it expected to sell up to 70 stores to Fortress Investment Group, which is working with STORY3 Capital Partners. Sur La Table said in court filings that the deal would preserve nearly 2,000 jobs and the company’s online business and cooking classes.
Sur La Table is at least the eighth specialty retailer or department store chain to file for bankruptcy since May, as the pandemic forced temporary closures of nonessential businesses. The company, which recently posting annual revenue of about $346 million, said its sales had been declining for five years that it had been betting on growth in cooking classes. It filed for bankruptcy protection on the same day as Brooks Brothers. — Sapna Maheshwari