Global stocks trim their gains as investors grow cautious.
A global stock market rally showed signs of faltering on Tuesday, ahead of a slew of corporate earnings announcements that are likely to reveal further damaging effects from the coronavirus outbreak.
European markets opened cautiously higher following mixed trading in Asia. Futures markets predicted a modestly positive opening for Wall Street, one day after the S&P 500 rose nearly 1.5 percent.
Companies like Ford, Merck and Starbucks are scheduled to report financial results for the first quarter of the year on Tuesday. While the earnings reports may further cloud the hopes for a healthy global recovery, they may also give companies a chance to outline the steps they are taking to reopen.
Underscoring the uncertainty, prices for U.S. Treasury bonds, often seen as a safe place to put money in times of trouble, were mixed outside U.S. trading hours. U.S. oil prices continued their plunge from Monday and were flirting with $10 a barrel at midday in Asia.
In Japan, the Nikkei 225 index fell 0.1 percent. The Shanghai Composite index in mainland China fell 0.2 percent. Hong Kong’s Hang Seng index was up 1.2 percent, bucking the trend toward mixed trading. South Korea’s Kospi index was up 0.6 percent, and Taiwan’s Taiex rose 0.5 percent.
In London, the FTSE 100 was 0.5 percent higher. Germany’s DAX traded 0.7 percent higher in early hours, while the CAC 40 index in France was up 0.5 percent.
U.S. oil prices continued their plunge in midday trading in Asia on Tuesday, one day after a global glut drove the price of a barrel of crude down 24 percent.
The price of a barrel of West Texas Intermediate, the type of oil used to determine industry prices in the United States, fell as much as 16 percent more in morning trading on Tuesday in Asia. The price is now flirting with $10 a barrel, a level virtually unheard of before the double whammy of the coronavirus outbreak and a price war between Saudi Arabia and Russia left the world awash in unwanted crude.
Quirks in how oil is traded are also driving the plunge. As a financial instrument, oil is typically traded on futures markets. The most active futures are typically the ones that expire the month after the current one. Anybody holding the contract when it expires has to take delivery of actual barrels of crude oil, an unappealing choice for the investors, hedge funds and others who simply want to bet on oil prices, not open a refinery.
Oil prices plunged last week when financial investors rushed to sell their futures before they expired and found few buyers. A similar dynamic is working against oil prices currently as major investors shift away from the near-month contract and diversify with those that expire in other months. On Monday, one of the biggest oil investment vehicles, an exchange-traded fund called United States Oil Fund, detailed plans in a financial filing to spread its exposure across contracts that expire as late as September.
When the University of California, San Francisco, was running perilously low on personal protective equipment, the university’s chancellor called Marc Benioff, the hyperconnected billionaire who is a founder and the chief executive of Salesforce.
The phone call set off a frenzied effort by Mr. Benioff and his team that drew in major companies like FedEx, Walmart, Uber and Alibaba. In a matter of weeks, Mr. Benioff’s team spent more than $25 million to procure more than 50 million pieces of protective equipment. Fifteen million units have already been delivered to hospitals, medical facilities and states, and more are on the way.
The relative ease with which Salesforce acquired so much protective gear stands in sharp contrast to the often chaotic government efforts to secure it. And while the national stockpile of supplies has been depleted, Mr. Benioff and his team simply called their business partners in China and started writing checks.
Once it was apparent that the Salesforce team could obtain and deliver supplies, they took steps to formalize their efforts and set a lofty target.
“We did the math when we started, and thought we were going to acquire a billion pieces of P.P.E.,” Mr. Benioff said.
By March 29, 10 days after the chancellor called Mr. Benioff, Salesforce had found more than 50 million pieces of protective equipment, with millions already delivered.
Minutes after a $310 billion aid program for small companies opened for business on Monday, the online portal for submitting applications crashed. And it kept crashing all day, much to the frustration of bankers around the country who were trying — and failing — to apply on behalf of desperate clients.
Some irritated bankers vented on social media at the Small Business Administration, which is running the program. Rob Nichols, the chief executive of the American Bankers Association, wrote on Twitter that the trade group’s members were “deeply frustrated” at their inability to access the system. Until the problems were fixed, he said, “#AmericasBanks will not be able to help more struggling small businesses.”
Pent-up demand for the funds has been intense, after the program’s initial $342 billion funding ran out in under two weeks, stranding hundreds of thousands of applicants whose loans did not get processed. Last week, Congress approved the additional $310 billion for small businesses hit by the coronavirus pandemic. Bankers were expecting the money to once again run out quickly, and so on Monday at 10:30 a.m., when round two opened, they were ready to go.
But for the second time in a month, the relief effort, called the Paycheck Protection Program, turned into chaos, sowing confusion among lenders and borrowers. A centerpiece of the government’s $2 trillion economic stimulus package, the program offers small companies — typically those with up to 500 workers — forgivable loans of up to $10 million. The S.B.A. is backing the loans, but customers must apply through financial institutions.
Employees at TAB Bank in Ogden, Utah, spent last week pulling all-nighters to finish preparing loan applications from 1,100 customers. When the S.B.A. began accepting applications on Monday morning, they started trying to submit their files. But the S.B.A.’s computer system stalled, froze and crashed repeatedly. Five hours later, the bank had gotten only seven loans processed.
“I’m beyond frustrated,” said Curt Queyrouze, the bank’s president, who also shared his experience on Twitter. “We wanted to update all of our customers this evening on the status of their applications, but right now, there’s not a lot of good news to give them.”
With galleries and museums shuttered across the world, Seoul is offering an early answer to what the post-cornoavirus art world might look like as it tiptoes back to normalcy.
Galleries in Seoul, a dense metropolis with a population of nearly 10 million but only two coronavirus deaths to date and a daily infection rate that has dropped to the single digits, have begun reopening, but with extra precautions in place. At Lehmann Maupin, a gallery attendant dutifully took down the name, address and phone number of everyone who came through the front door — just in case someone at the opening later found out they had been exposed to the virus.
“Now is actually a good time to see if you can buy art, because collectors around the world having a hard time have put forward quite good art pieces into the market at cheap prices,” said one attendee, Passion Lim. He said he didn’t feel uncomfortable in the crowd of about 50 inside the gallery’s two-story, 3,200-square-foot space, as he trusted the government’s handling of the outbreak.
Back in New York City, Lehmann Maupin’s co-founder, Rachel Lehmann, said she was painfully aware of the market dynamic. The gallery’s Hong Kong branch had reopened, but its flagship Manhattan locations had been closed since March 13. With sales there reduced to a crawl, she said she had been forced to institute salary cuts and furloughs among its 36 staffers. Still, having worked as an art dealer for several decades and weathered a string of recessions, she took the long view: This too shall pass.
“It’s what I have seen happening in 2008, and after 9/11, and even earlier, at the end of the ’70s in Europe,” she said. In fact, Asia was already rebounding. Her Seoul branch, which opened in 2017, already accounted for 20 to 25 percent of Lehmann Maupin’s total revenue before the pandemic. Now, after an initial pause, many of Seoul’s moneyed collectors have re-entered the fray.
Many celebrations and milestones have been delayed, but grief is in abundance, and the greeting card aisle offers a snapshot of the virus’s wicked toll. Sympathy cards are nearly all sold out.
CVS, one of the nation’s largest sellers of greeting cards, said that it was seeing “higher demand for sympathy cards than most other types of greeting cards during the pandemic” and was experiencing shortages in certain stores. Shoppers across the country have posted on social media that their local Winn Dixie or ShopRite was running out of cards.
Some of the shortages have been caused by distribution problems. Pharmacies and grocery chains, focused on keeping their shelves stocked with household staples, are not allowing card companies to come into the stores and restock regularly.
With stores running out and people unable to leave their homes, many card sales have moved online and are at record levels, suppliers say. On Etsy, the online marketplace for crafts and jewelry, searches for sympathy cards more than doubled from March 1 to April 17 compared with the same period a year ago.
Before the pandemic, the greeting card industry had experienced declining sales. Some big retailers recently cut back on the aisle space devoted to cards. The parent company of high-end card retailer Papyrus declared bankruptcy in January and closed all of the brand’s stores. But virtual communication has its limits, especially in times of grief. With many people unable to attend funerals or drop off food for a grieving neighbor, or even offer an embrace, mailing a sympathy card seems more necessary.
Barbara Macchiaroli’s longtime companion died of the virus the day after Easter in a nursing home. He was 90. They haven’t had a funeral, but the cards — 34 so far — have been arriving at her house every day. The senders have written memories about his beautiful singing voice, his devotion to the local Kiwanis Club and his love of Ford Model A’s.
“The cards have comforted me in a way I never expected they would,” she said. “I think it is because I can’t be with people right now.”
Catch up: Here’s what else is happening.
Amazon may have violated federal worker safety laws and New York State’s whistle-blower protections when it fired an employee from its Staten Island warehouse who protested the company’s response to the coronavirus outbreak, according to a letter the office of the New York attorney general, Letitia James, sent the company last week.
JetBlue announced on Monday that it would require all passengers to wear a face covering during travel starting May 4. The mask must cover the nose and mouth throughout the entire journey, from check-in to deplaning. JetBlue did not say whether it would provide masks to its passengers.
Boeing plans to resume operations in South Carolina next week, bringing several thousand employees back to work on the 787 Dreamliner about a month after sending them home. Those who can work remotely will continue to do so, and managers will tell the recalled workers when to return to Boeing’s complex in North Charleston, the company said.
Reporting was contributed by Karen Weise, David Gelles, Gregory Schmidt, Su-Hyun Lee, Brett Sokol, Michael Corkery, Sapna Maheshwari, Niraj Chokshi, Stacy Cowley, Carlos Tejada and Daniel Victor.