Tensions Between U.S. and China Rattle Investors: Live Business Updates

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Credit…Steve Campbell/Associated Press

Stock markets were mostly lower on Wednesday, as the United States’ decision to order the closure of the China consulate in Houston seemed to rattle investors, and a sign of another blow in relations between the world’s two largest economies.

European markets were about 1 percent lower. In Asia, most indexes lost ground. And on Wall Street, futures slumped as soon as the news about the China consulate broke, pointing to a fall drop when trading begins.

Other markets also reacted to the U.S.-China news: 10-year Treasury notes suddenly rose in a price, a sign that investor were seeking safety, and oil futures fell about 1 percent, reflecting pessimism about future economic activity. Gold rose about 0.8 percent.

Relations between the United States and China, two giant trading partners, have continued to erode in recent weeks, as the Trump administration has tightened the reins on Chinese diplomats, journalists, scholars and others in the United States. In the latest action, the White House told China to leave the its consulate in Houston by Friday. China warned that it might retaliate.

The disruption comes as coronavirus cases continue to surge in the United States, where the daily death total exceeded 1,000 for the first time in weeks on Tuesday. President Trump, in a shift from his usual rosy forecasts, told reporters that the outbreak would probably “get worse before it gets better.” And a valuable economic lifeline for millions of Americans — $600 a week in extra unemployment benefits — is about to expire if Congress doesn’t extend it.

China’s mainland stock markets, which have been exuberant lately, stoked by calls from the government encouraging people to buy shares, continued their upward climb on Wednesday, with the Shanghai Composite up 0.4 percent. But the Hang Seng in Hong Kong fell 2.3 percent, and the Nikkei in Japan dropped 0.6 percent. In South Korea, the Kospi was unchanged.

Credit…Ralph Orlowski/Reuters

United Airlines is expanding its mask policy and will begin requiring passengers to wear face coverings not only on board its planes but also in its lounges and baggage claim areas and at its gates, customer service counters and kiosks.

“A mask is about protecting the safety of others, and I’m proud of the aggressive and proactive steps United Airlines has taken to ensure people are wearing a face covering,” the airline’s chief executive, Scott Kirby, said in a statement.

The new policy will go into effect on Friday and does not apply to children under 2 years old. Passengers who need an exemption from the rule are asked to contact United ahead of time or speak to one of the airline’s representatives at the airport.

Customers who fail to abide by the requirement will receive a verbal reminder, followed by a written one. Those who still refuse to wear a face covering risk being barred from future flights.

The policy was developed with help from the Cleveland Clinic, which United has partnered with for guidance on crafting health and safety policies.

On Tuesday, United said that revenue dropped 87 percent, to $1.5 billion, in the second quarter compared to last year, in line with the 88 percent decline Delta Air Lines reported last week.

Passenger travel declined dramatically in March and April, falling as much as 96 percent on some days compared to last year, according to federal data. Traffic had started to recover in May and June, but has faltered in recent weeks as infections and travel restrictions spread nationwide.

Mr. Kirby joined the chief executives of American Airlines, Lufthansa Group and International Airlines Group in asking the United States and European Union to restore trans-Atlantic travel and to test passengers for the coronavirus.

International flights are more lucrative than domestic ones and the flights between Europe and the United States are among the most valuable for airlines. For United, flights across the Atlantic accounted for about a quarter of its profits last year.

In a letter, the executives said that a coordinated testing program “could be key to providing confidence to permit services to resume without quarantine requirements or other entry restrictions.”

Credit…Natalie Keyssar for The New York Times

In a Covid-19 world, crowds and lines are more than just inconveniences — they are threats to health and, in some cases, to survival.

Thus, the pandemic has given wealthy customers an even stronger incentive to take advantage of luxury services that physically separate them from the masses.

Deluxe in-home manicures and pedicures for $125, an entire auditorium at a movie theater for $350, and socially distanced in-store appointments at Bergdorf Goodman — these offerings are an extension of a trend that predates the virus, an invisible velvet rope rising between the wealthiest Americans and everyone else on airplanes, on cruise ships, even in the health care system. They allow wealthy customers to skip to the front of lines and avoid crowds, hassle and wasted time.

“The idea that we’re all in this pandemic together is in some ways right,” said Eric Klinenberg, a sociologist at New York University. “But it quickly gets undermined when it becomes clear that millions feel trapped and a select few have their own private yacht or luxury jet as an escape hatch.”

Many luxuries once considered relatively affordable for the upper-middle class are now even more exclusive — available at a premium for those affluent enough to enjoy them in a private setting.

Among the most sought-after commodities in the pandemic era: child care.

The Beverly Hills agency Westside Nannies has received an overwhelming number of requests for people with experience as summer camp counselors to watch children, the better to plan one-on-one camplike activities, said Katie Provinziano, the agency’s managing director.

“Parents are really feeling like they want their kids to have some sense of normalcy and a little bit of that traditional summer experience within the confines of the pandemic,” she said.

Credit…Stephen Speranza for The New York Times

Best Buy will raise the starting hourly wage for all U.S. employees to $15, effective Aug. 2, the electronics retailer said on Tuesday.

The company said sales were up by about 2.5 percent so far this quarter, which started May 3, over the same period last year.

“Strong consumer demand, combined with shopping experiences that emphasize safety and convenience, has helped produce our sales results to date,” Corie Barry, Best Buy’s chief executive, said in a statement.

The company furloughed 51,000 hourly store employees in the United States on in April, out of a total of about 125,000 employees. Hourly employees who continued to work received incremental hourly appreciation pay, which will end on Aug. 1.

Since June 12, Best Buy has brought about half of its furloughed employees back to work, the company said.

The wage increase may be an effort by the company to incentivize employees to start working again, rather than continuing to stay home and receive unemployment benefits.

“If unemployment insurance benefits are really keeping people out of the labor market, employers will have to raise wages in order to attract workers,” said Heidi Shierholz, senior economist at the Economic Policy Institute.

Best Buy follows other major retailers in raising base wages: Target raised its minimum wage to $15 on July 5, and Amazon did the same in 2018. Walmart’s starting wage is $12 per hour.

  • 📱 Snap, the maker of Snapchat, said on Tuesday that it had brought in more money than expected during the recent quarter despite advertisers cutting back their budgets during the pandemic. The social media firm generated $454 million in revenue, a 17 percent increase from the prior year, and lost $326 million, an increase of 27 percent. Daily active users of Snapchat grew to 238 million. During shelter-in-place orders in the first quarter of the year, Snapchat saw users rush to the platform as a means of staying in touch with friends and family while in isolation. But the surge faded faster than Snapchat expected, causing the company to miss its guidance on active users by 1 million.

  • 🥤 Coca-Cola reported a drop in revenue of 28 percent in the second quarter to $7.2 billion, and net income dropped 33 percent to $1.759 billion. Coca-Cola attributed much of the declines in the quarter to continued weakness in its away-from-home channels, such as restaurants and theaters, which either remained largely closed or had limited capacity in the quarter globally. That segment of the market makes up about half of Coca-Cola’s total revenue.

  • 🤵 Tailored Brands, the owner of Men’s Wearhouse and the JoS. A. Bank chain, announced plans on Tuesday to eliminate 20 percent of its corporate positions and close up to 500 of its retail stores, citing business disruptions resulting from the coronavirus pandemic. Tailored Brands has struggled to adapt to the rise of e-commerce, while saddled with extensive debt. On May 2, the company had a long-term debt of $1.4 billion and $244.2 million of cash and cash equivalents.

  • 🦃 Walmart said on Tuesday that it would not open on Thanksgiving Day, pushing back the traditional start of the holiday shopping season as a show of appreciation for its workers. “We know it’s been a trying year, and you’ve stepped up,” John Furner, the head of Walmart’s U.S. operations, said in a memo to employees. The company, which is the world’s largest retailer, said it made the decision to close on the holiday after one of its employees wrote a letter suggesting it.

  • 🛫 The beleaguered Boeing beleaguered 737 Max could be in the air in a few months. The Federal Aviation Administration said on Tuesday that it was close to proposing design changes and crew procedures that would address its safety concerns. The public would have 45 days to comment on the proposed changes before the F.A.A. made its final decisions. A number of hurdles remain before the agency allows the plane to fly again, but the F.A.A.’s decision to move ahead is nonetheless a big shot in the arm for Boeing.

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