Stocks gained ground on Tuesday, buoyed by an agreement by European Union leaders to support the bloc’s countries with 750 billion euros ($857 billion) in grants and loans.
Most European indexes were 1 percent to 2 percent higher in morning trading. In Asia earlier in the day, markets also had a positive day. On Wall Street, futures were pointing to a strong start to the trading day. Oil prices were up about 3 percent.
The stimulus package announced early Tuesday was notable because, for the first time, countries will raise large sums by selling bonds collectively, rather than individually. Spearheaded by Chancellor Angela Merkel of Germany and President Emmanuel Macron of France, the agreement sends a signal of European solidarity, while also exposing fault lines. Economists predict a recession in Europe far worse than anything since World War II, with France, Italy and Spain expected to suffer the most, clocking in contractions of around 10 percent this year.
Stocks in the United States climbed on Monday, pulled higher by a rally in technology companies. The S&P 500 rose almost 1 percent to return to positive territory for 2020. The tech-heavy Nasdaq composite rose 2.5 percent.
Lawmakers returned to Washington this week to begin negotiations over what would be the fourth significant bailout package since the virus shuttered large swaths of the U.S. economy earlier this year. The talks come as millions of Americans are about to see their expanded unemployment insurance benefits expire.
The House, controlled by Democrats, has signaled that it wants $3 trillion in aid, while the Republican-controlled Senate appears to want something around $1 trillion. President Trump has said he is interested in including a payroll tax cut in the next round of aid.
The beverage giant Coca-Cola reported a big drop in revenue and profit in the second quarter as many consumers remained at home during the coronavirus pandemic.
Revenue fell 28 percent in the quarter to $7.2 billion, while net income dropped 33 percent to $1.759 billion, the company said in an earnings report. Executives said, however, that they believed the second quarter was likely to be the most challenging of the year.
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.
But executives said they started to see improvements in the away-from-home segments as lockdowns around the world began to ease.
Shares of the company’s stock were down 1.5 percent in premarket trading.
EBay said on Tuesday that it planned to sell its classified advertising division for about $9.2 billion in cash and stock, the latest effort by the company to refocus on its mainstay online sales business.
In agreeing to sell the unit to Adevinta, a Norwegian ad company, eBay agreed to demands from activist investors, including Elliott Management, who urged it to slim down its operations. The classified ads business is largely international, with footholds in Europe, Africa and other regions, and reported $1.1 billion in sales last year.
Under the terms of the transaction, eBay will receive $2.5 billion in cash and about 540 million shares in Adevinta. That will give eBay a roughly 44 percent stake in Adevinta and a 33 percent voting stake, letting it keep some exposure to what will become the world’s biggest online classifieds company.
“This sale creates short-term and long-term value for shareholders and customers, while allowing us to participate in the future potential of the classifieds business,” Jamie Iannone, eBay’s chief executive, said in a statement.
Shares in Adevinta, which beat out a number of rivals for the eBay business, were up 33 percent in trading on Tuesday.
The transaction is expected to close early next year, but must still be approved by regulators and shareholders in Adevinta.
LinkedIn is planning to cut about 960 jobs globally, 6 percent of its work force, as the pandemic has severely reduced demand for its key service: helping companies with hiring. The professional social network said it also planned to work with small businesses online rather than through a field sales team, meaning this team was no longer needed.
The cost of the British government’s economic response to the pandemic is becoming clear. Between April and June, the Treasury borrowed about 128 billion pounds ($162 billion), more than double the amount borrowed in the whole of the previous fiscal year, which ended in March, the government reported Tuesday. Last month alone, the government needed £47 billion in cash more than it took in tax receipts. The net cash requirement was nearly £34 billion more than the same month a year ago. The nation’s debt pile is just under £2 trillion, about the same size as the British economy.
Warner Bros. announced on Monday that it was abandoning its Aug. 12 release date for Christopher Nolan’s film “Tenet.” That date had been the one-time marker for when Hollywood hoped moviegoing would return in earnest. The studio will move its upcoming installment of the horror film “The Conjuring 3” to June 4, 2021, from Sept. 10. Warner Bros. did not offer concrete details for the release of “Tenet,” but it is likely that the studio will open the movie in the locations around the world where it is safe to do so before unveiling it in the United States.
United Airlines said on Monday said that it would leave its high-efficiency particulate air, or HEPA, filtration systems running as passengers get on and off most planes. The move, which it will put into place next week, is intended to maximize air flow. And Delta Air Lines said it would require passengers unable to wear face masks because of health conditions to undergo a private medical consultation by phone before boarding. Passengers who falsify health claims could be barred from future flights.
Chevron, the American oil giant, said on Monday that it had agreed to acquire Noble Energy, a Houston-based oil and gas explorer with an international dimension, for $5 billion. Noble would bring Chevron properties in shale drilling regions in the United States.
Judy Shelton, an unorthodox economist who was an adviser to President Trump’s 2016 campaign, could move one step closer to a seat on the Federal Reserve’s Board of Governors this week.
The Senate Banking Committee is expected to approve Ms. Shelton’s nomination on Tuesday, putting her one simple-majority vote in the full Senate away from confirmation at a moment when the central bank is employing vast powers that she has a track record of questioning.
Opponents of Ms. Shelton’s nomination say confirming her would place the Fed at risk of politicization while it tries to rescue the pandemic-hit economy. Democrats on the committee have called for a second confirmation hearing in light of the crisis so that they can get her views on the current response.
Her nomination seemed shaky in the wake of her mid-February Banking Committee hearing, but Republican opposition has slowly crumbled.
Ms. Shelton’s bid can advance to the full Senate without any support from the 12 Democrats on the committee as long as all 13 Republicans back her. Her nomination will come to a vote alongside Christopher Waller’s. Mr. Waller, the research director at the Federal Reserve Bank of St. Louis, was also nominated by Mr. Trump to the seven-seat Fed board. Mr. Waller, a more traditional nominee, is expected to clear the committee easily.
There may be a pandemic and a recession. But in the past day, there has also been plenty of action among deal makers, as reported in the DealBook newsletter.
EBay announced on Tuesday that it would sell its classified-ads business for $9.2 billion in cash and stock to Adevinta of Norway. It is one of the biggest tech deals of the year, and will create the world’s largest online classifieds company.
Ant Group, the financial arm of China’s Alibaba, said Monday that it planned to go public this year in Hong Kong and Shanghai, in what could be one of the biggest initial public offerings on record.
Chevron struck a $5 billion deal to buy Noble Energy on Monday, in what may be the first of a wave of oil giants buying smaller, weaker rivals.
Walmart has restarted talks about selling most of Asda, its British grocery division. Competition regulators blocked a merger of Asda and J Sainsbury last year; Walmart restarted discussions in February, then suspended them during the crisis.
This suggests corporate boardrooms still have confidence in deal-making, perhaps more than could be expected during a pandemic.
Some 22,600 takeovers had been announced so far this year, according to Refinitiv, down 18 percent from the same time last year. But the total dollar value of deals was down even more, 38 percent, implying some caution. And then there are the buyers who have gotten cold feet, as when Sycamore Partners successfully got out of an agreement to buy control of Victoria’s Secret.
Buoyant equity markets have also coaxed companies to resume planning for stock listings. The I.P.O. hopefuls include Airbnb and Palantir, the data-mining consultancy.
Nearly 900,000 public workers in Britain, including teachers, doctors and security forces, will receive raises in recognition of the “vital contribution” they have made during the coronavirus pandemic, Britain’s finance ministry announced Tuesday.
Salaries for teachers in England will increase 3.1 percent, and dentists across Britain will get raises of 2.8 percent. The salaries of police and military forces, along with members of the judiciary and other civil servants, will also increase from 2 to 2.5 percent. But nurses and other National Health Service staff will not be included in the deal because they negotiated a three-year pay increase in 2018.
“These past months have underlined what we always knew — that our public sector workers make a vital contribution to our country and that we can rely on them when we need them,” Rishi Sunak, chancellor of the Exchequer, said in a statement.
The announcement was welcomed as deserved news for thousands of workers who have battled the pandemic, including many in the revered National Health Service, but opposition politicians said the raises would not make up for a decade of austerity during which a Conservative government froze salaries or granted small increases.
“Many other public sector workers — including those working on the front line in social care — won’t get a pay rise out of this,” said Anneliese Dodds, the Labour Party’s economic minister, because they are paid by local governments that have not seen their budgets increase.
At least 300 health workers and caretakers for adults had died of the coronavirus as of late May, according to numbers provided by Prime Minister Boris Johnson. Britain has been one of the worst-hit countries in the world, with more than 45,300 confirmed deaths and 295,000 cases.
The somber ad includes testimonials describing being told to “go back to China” or having people spit in their direction.
Anxiety about the coronavirus, which originated in Wuhan, China, has fueled xenophobia and bigotry toward people of Asian descent. A list of recent cases compiled by the Anti-Defamation League chronicles “surging reports of xenophobic and racist incidents,” including Asian-owned stores defaced with racist graffiti, video chats disrupted by anti-Asian comments and people being beaten or denied entry to businesses.
But the issue has been largely ignored by federal leaders — President Trump has repeatedly described the coronavirus as the “Chinese virus” — and the fight against pandemic-related harassment of Asian-Americans has largely fallen to civil rights groups, marketing agencies, social media accounts and nonprofit organizations, which have promoted hashtags like #IAmNotCovid19, #RacismIsAVirus, #HealthNotHate and #MakeNoiseToday.
The nonprofit Advertising Council, which also introduced a face mask initiative with Gov. Andrew M. Cuomo of New York this month, will roll out the new anti-harassment campaign online and on television.
The issue of racism toward Asians hit “very close to home,” said the Emmy-winning writer Alan Yang, who is known for popular shows like “Parks and Recreation” and “Master of None.”
“This wasn’t an abstract idea to me, something theoretical,” Mr. Yang said. “I knew people this was happening to.”
Even as the Covid-19 death toll rises in the nation’s most dense urban cores, economists still mostly expect cities to bounce back, once there is a vaccine, a treatment or a successful strategy to contain the virus’s spread.
And yet, this pandemic threatens the assets that make the country’s most successful cities so dynamic — not only their bars, museums and theaters, but also their dense networks of innovative businesses and highly skilled workers, jumping among employers, bumping into one another, sharing ideas, powering innovation and lifting productivity.
Covid-19 is not the deadliest disease to have ravaged cities through the ages. But it is showing us that they might not be as essential as they once were. “Cities are more in danger than in the 19th century even though this plague is less severe,” said the Harvard economist Edward Glaeser, “because we are rich enough to imagine a deurbanized world.”
Paradoxically, America’s big cities are becoming more valuable, churning out an increasing share of the nation’s economic output.
They have benefited from the rise of economic complexity and the explosive growth of technologies that reward the most highly educated workers. Complex industries like information technology, biotechnology and finance concentrate in large cities where they can find the most skilled employees.
These cutting-edge businesses don’t mind paying top dollar for the talent, not least because — research has found — highly skilled workers tend to be more productive and innovative when they are surrounded by others like them.
But if big-city businesses find that work from home doesn’t hit their productivity too hard, they might reassess the need to pay top dollar to keep employees in, say, Seattle or the Bay Area. A survey by the market research firm Reach Advisors found that companies facing high real estate and labor costs were the most interested in pursuing remote work into the future.
Since the 2008 global financial crisis, American corporations have taken advantage of historically low interest rates to gorge themselves on debt. Then came the pandemic and the sharpest economic downturn in history, which resulted in an odd solution for the companies that did all that borrowing: more debt.
Through late June, giant U.S. companies had borrowed roughly $850 billion in the bond markets this year, double the pace from last year. Analysts at JPMorgan Chase anticipate that investment-grade companies will borrow roughly $1.6 trillion from investors by the time 2020 is over.
It has turned conventional wisdom on its head.
The increased borrowing can be traced, in part, to the actions of the Federal Reserve. The central bank slashed interest rates back to rock-bottom levels, making it attractive for businesses to refinance and borrow more to build a cushion of cash. But an even bigger factor was the Fed’s announcement — in the heat of March’s market upheaval — that it would buy corporate bonds.
Investors have been so emboldened by the Fed’s actions that even companies viewed as especially risky are having no problem borrowing heavily despite a deeply uncertain economic recovery weighed down by surging infections and rolled-back reopening plans.
When Google and Apple announced plans in April for free software to help alert people of their possible exposure to the coronavirus, the companies promoted it as “privacy preserving” and said it would not track users’ locations. Encouraged by those guarantees, Germany, Switzerland and other countries used the code to develop national virus alert apps that have been downloaded more than 20 million times.
But for the apps to work on smartphones with Google’s Android operating system — the most popular in the world — users must first turn on the device location setting, which enables GPS and may allow Google to determine their locations.
Some government officials seemed surprised that the company could detect Android users’ locations. After learning about it, Cecilie Lumbye Thorup, a spokeswoman for Denmark’s Health Ministry, said her agency intended to “start a dialogue with Google about how they in general use location data.”
Switzerland said it had pushed Google for weeks to alter the location setting requirement.
Google’s location requirement adds to the slew of privacy and security concerns with virus-tracing apps, many of which were developed by governments before the new Apple-Google software became available. Government officials and epidemiologists say the apps can be a helpful complement to public health efforts to stem the pandemic. But human rights groups and technologists have warned that aggressive data collection and security flaws in many apps put hundreds of millions of people at risk for stalking, scams, identity theft or oppressive government tracking.