Stock Markets in Europe Fall. Wall Street May Follow.

Wall Street is set to fall, one day after its big surge.

European markets fell in early Tuesday trading, setting the stage for a rough opening on Wall Street one day after its big bounce.

Stocks in Britain, Germany and France were about 1 percent lower in morning trading, after a mostly positive day in Asia. Prices for U.S. Treasury bonds rose, further signaling investor skepticism.

Futures markets were suggesting that Wall Street would open more than 1 percent lower.

Just a day ago, the S&P 500 erased its losses for this year, as if the coronavirus had never happened. Investors have taken heart in signs that the global economy is on the mend, particularly in China, Europe and the United States. They have also been cheered by government and central bank efforts to use money to fight the global freeze-up.

Tuesday brought reminders that the global situation remained tenuous. Tensions on the Korean Peninsula rose, while prospects for a quick batch of new stimulus spending in the United States looked uncertain.

Faced with a crisis unlike any other in memory, central bankers have gone beyond what the monetary authorities did even in the darkest days of the 2008 global financial crisis.

Central bankers entered the crisis with low interest rates, leaving them less room to goose growth using their tried-and-true tools. Because they went into the crisis with limited ammunition to stoke growth, experimentation may prove even more crucial in the months and years ahead as the world embarks on what could be a long slog back to prosperity.

Germany, France, the United States and many other countries have poured trillions of dollars into their economies through tax cuts, cheap credit and cash handouts. Monetary policy and fiscal policy can act as complements during a crisis to get economies back on track.

But appetite for further fiscal action is eroding in some places, including the United States. And the next stage — the recovery — could pose a fresh test for the world’s central banks, forcing them to get more creative as they try to keep pandemic aftershocks from permanently scarring growth potential. The Fed and its global counterparts are shifting from crisis-fighting mode, when they worked to keep credit markets open, to a period when they must stoke lending and spending to get economies churning again.

“It will be a potential concern as the economy turns around, if that turnaround is less than ideal,” said Donald Kohn, a former Fed vice chairman now at the Brookings Institution. “Central banks will have to work hard at supplying the extra push, the extra zip that they’d want to achieve.”

Cathay’s announcement came on the same day that hundreds of protesters gathered in Hong Kong shopping malls to commemorate the one-year anniversary of a protest march that became the start of the city’s biggest political crisis in decades.

Ahead of the announcement, rumors had swirled around a possible takeover by Air China, a Chinese state-owned enterprise. That stoked fears about China’s encroachment not only in the city’s politics but its finance sector.

Even before the contagion spread, Cathay Pacific’s fate looked increasingly uncertain.

Last year, it fell under withering criticism from China’s state-run propaganda machine after several of its employees participated in protests or spoke out in support of them on social media. The airline shuffled its leadership in an effort to deflect the fray, but Chinese customers avoided Cathay anyway, sending its traffic plummeting.

More broadly, the protests drove Chinese tourists to avoid Hong Kong, hitting travel-related businesses hard. Police officers and protesters even clashed last summer in Hong Kong’s slick airport, where Cathay is headquartered.

Stock in Chesapeake Energy, the troubled oil and gas company, made moves on Monday that were astonishing even in a period in which the stock market has been rocked with volatility.

The company’s shares soared 182 percent during regular trading but then plunged more than 30 percent in after-hours trading. The free fall was most likely caused in part by a Bloomberg News report that Chesapeake was preparing to file for bankruptcy.

The company has a heavy debt load that it will struggle to repay at a time when oil prices, even after a recent rally, are well below levels reached in recent years. Chesapeake warned in a securities filing last month that it may reorganize under bankruptcy protection. At its after-hours trading price, Chesapeake has a stock market value just above $400 million.

Typically, shareholders get wiped out in bankruptcy, but in some cases, like that of Pacific Gas & Electric, the California utility, the shares retain much of their value. But this is unlikely to be the outcome for Chesapeake, judging by the price of its bonds, which are trading below 10 percent of their full value.

Bondholders come before shareholders when claiming assets of a bankrupt company, so the fact that the bonds are trading at very low prices is a strong signal that shareholders will get nothing.

Chesapeake was a pioneer of hydraulic fracturing, the drilling method that enabled drillers to get at vast reserves of oil and gas in the United States. Its former chief executive, Aubrey McClendon, died in a car crash in 2016.

3M sues third-party sellers on Amazon over masks.

The industrial conglomerate 3M filed a trademark infringement lawsuit in federal court in California on Monday, alleging price-gouging and bait-and-switch sales of 3M respirators from third-party Amazon sellers.

The complaint claims that three third-party sellers — all believed to be owned and operated by a California resident named Mao Yu — began in late February to sell what were advertised to be 3M-branded N95 masks on Amazon. The sellers charged for roughly 18 times 3M’s $1.27 list price for the respirators. Buyers spent more than $350,000 for such masks, and sometimes received fewer masks than promised or masks that were damaged or tampered with, according to the suit, which was filed in the United States District Court for the Central District of California.

“By selling and delivering to customers counterfeit, damaged, deficient, or otherwise altered respirators and engaging in price-gouging, Defendants caused irreparable damage to 3M’s reputation,” the suit states.

The defendants in the case could not be reached for comment.

3M, based in a suburb of Saint Paul, Minn., has filed 12 other such suits as part of an effort to combat fraud, price-gouging and counterfeiting tied its respirators and other high-demand health products as a result of the coronavirus outbreak.

The travel business is picking up as Americans look for escape.

The nation’s largest airlines are preparing for a limited rebound next month as more Americans book vacations in places like Florida and the mountains and national parks in the West.

That resurgence would offer some hope to the travel industry, which racked up billions of dollars in losses as tourists and businesspeople canceled trips in the last three months because of the coronavirus epidemic.

After cratering in April, the number of travelers and airline and airport employees filtering through the Transportation Security Administration’s airport checkpoints has steadily climbed in recent weeks. The low point was April 14, when the agency screened fewer than 90,000 people, just 4 percent of those screened the same date last year. On Sunday, the agency screened more than 440,000 people, about 17 percent of last year’s number and the best day since March.

Investors appear to have noticed those numbers, and airline stock prices have surged. American Airlines is up nearly 90 percent since Monday morning last week, United Airlines is more than 70 percent higher, and Delta Air Lines is up more than 45 percent.

Movie theaters in California could reopen as soon as Friday if they limit auditorium capacity to 25 percent, according to guidelines released on Monday by the California Department of Public Health. County public health officials must still give their approval.

Many states have allowed theaters to reopen. But California theaters are especially important to the film business. Los Angeles and its suburbs make up the nation’s No. 1 moviegoing market by ticket sales. (The New York area, where no reopening date has been announced, is second.) The Bay Area is also a major market. To justify a national release — Christopher Nolan’s “Tenet,” for instance, is scheduled for July 17 — studios need theaters in most top markets to be operating.

In clearing the way for theaters to relight their marquees, California health officials asked for face masks to be worn for all patrons, except when eating or drinking, and for groups to be seated at least six feet apart in a “checkerboard” style. They also suggested that theaters provide ticket holders with designated arrival times so that they could enter “in staggered groups.”

Catch up: Here’s what else is happening.

  • Dunkin’ Donuts said on Monday that it planned to hire up to 25,000 new workers at its franchises to deal with an influx of customers as states start to reopen. Dunkin’, which has 8,500 restaurants in the United States, said about 90 percent of its locations were now open.

Reporting was contributed by Brooks Barnes, Niraj Chokshi, Peter Eavis, Jack Ewing, Mohammed Hadi, Jeanna Smialek and Carlos Tejada.

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