The news is terrible, but Wall Street had its best month in decades.
Stocks fell on Thursday, dropping some of their gains from the previous day, after reports showing that millions more Americans claimed weekly unemployment benefits and consumer spending plummeted.
The S&P 500 closed nearly 1%, but it was a small retirement in an otherwise strong month for Wall Street. Even with Thursday’s decline taken into account, the S&P 500 had its best month since January 1987, a gain that came despite it became increasingly clear that the coronavirus crisis was pushing the United States into serious economic recession.
The gain of almost 13% this month means that the S&P 500 is now up about 30% from its March 23 low. It was a rally that surprised even the most ardent bulls.
“Frankly, I’m shocked by the speed of the rally,” said Julian Emanuel, chief equity and derivatives strategist at brokerage firm BTIG, who was expecting a rebound before the rally started.
The rally, even in the face of overwhelming economic data, highlights investor confidence that things will return to normal sooner than they expected when stocks collapsed in late February and early March.
The federal government and the central bank have injected trillions of dollars into the economy and financial markets. And the lockdowns seem to have been successful in reducing infection rates, with some states setting conditions for reopening.
While most of the country is blocked, tech companies like Amazon and Apple consumers have found other ways to spend their money.
Revenues for the business were supported by higher sales of its Internet services and Apple Watch and AirPods.
Apple generally forecasts sales for the next quarter, but declined to do so on Thursday. Analysts expect the current quarter to be much uglier due to virus-related outages around the world.
Apple, however, trusted its financial position by announcing another $ 50 billion share buyback.
The spread of the coronavirus has played a direct role in Amazon’s core businesses, as consumers have purchased online and businesses have spent more on cloud computing. These two pillars of Amazon’s business have boosted sales to their highest levels outside of the holiday season, the company said on Thursday.
Amazon said it reported revenue of $ 75.5 billion in the last quarter, up 26% from the previous year, exceeding analysts’ expectations. Profit fell about 29% to $ 2.5 billion as it cost more to meet increased customer demand.
Amazon chief executive Jeff Bezos said the company’s profits may continue to decline in the near future. The company generally expects to make operating profits of about $ 4 billion in the next quarter, but “we plan to spend all of that $ 4 billion, and maybe a little more , for expenses related to Covid for providing products to customers and employee safety, “he said in a statement.
One of the strangest side effects of the coronavirus pandemic is: stacks of 40-foot steel containers filled with unwanted Chinese products that are now piling up on docks in South Korea, Morocco and Togo in west Africa.
Western retailers and manufacturers feared two months ago run out of goods from factories in China that had been temporarily closed due to the virus. Now the concern is not with empty supply chains, but with supply chains that are bursting at the seams.
In the United States, for example, department stores have been cancellation and postponement of orders. But a flood of goods has already left the doors of factories in China and is headed for padded warehouses and padlocked stores in the West.
Two of the largest container shipping companies in the world, Maersk and Mediterranean expedition, offer unorthodox solutions. They each promote programs that drop a large number of containers and store them in ports that were previously only transit points, such as Busan, in South Korea; Las Palmas, Spain; Tangier, Morocco; Salalah, Oman; or Lomé, Togo.
“Slow down your supply chain by increasing ocean delivery times,” Maersk now promises.
The accumulation of full containers may not last, for a reason that Chinese exporters and their workers will not like either. Surveys released Thursday to Chinese purchasing managers have shown that few orders are now arriving in Chinese factories for new exports.
As parts of Asia have successfully contained the spread of the coronavirus, they face ongoing challenges in restarting their economies. The problem is, how do you get the company’s wheels rolling again when business people can’t get anywhere?
Today, Hong Kong, China and South Korea have started to take steps to allow factory owners, sellers, buyers and those who need to travel for work to start crossing borders again, even though broader travel restrictions remain in place.
Details of the plan are still being worked out. But eligible people will have to demonstrate the necessity of their trip and their health will still need to be monitored when they return, said Hong Kong officials.
“Such activities are essential for the ongoing development of Hong Kong,” said Edward Yau, the Hong Kong secretary for trade and economic development. “Of course, we need to find a balance between ensuring that the epidemic does not come back through this journey, but at the same time facilitating the legitimate reasons for crossing the border. “
Representatives from China and South Korea have also reached an agreement in principle to create a fast lane for business and other essential travel, said Geng Shuang, spokesman for the Chinese Foreign Ministry last month.
China and Singapore are also studying how to set up a similar arrangement, said Geng.
Social media leaves Trump’s comments on disinfectants.
Mark Zuckerberg said last month that he would remove publications promoting bleach as a cure for coronavirus, and Twitter announced last month that he would remove tweets from viruses “that could potentially cause harm.” damage “. But Facebook, Twitter and YouTube have refused to suppress President Trump’s statements suggesting disinfectants and ultraviolet rays as possible treatments.
Friday, the day after Trump’s comments at a White House briefing, mentions of disinfectant treatment on social media and TV shows reached 1.2 million, up from around 400,000 on Thursday, according to Zignal Labs, a media information company. A New York Times analysis found 768 Facebook groups, 277 Facebook pages, nine Instagram accounts, and thousands of UV therapy tweets that were posted after Trump’s comments and stayed on Wednesday.
Social media companies have always been careful with Mr. Trump. Yet their inaction on messages echoing his remarks about UV lamps and disinfectants stands out because the companies have been saying for weeks that they will not allow false information about the coronavirus to proliferate.
Most tech companies have developed health disinformation policies “in the hope that there would be a competent government and a reputable health authority to report,” said Renee DiResta, a technical research director who studies the misinformation at the Stanford Internet Observatory. Since false information came from the White House, the companies have been sidelined, she said.
YouTube said that Trump’s comments did not violate his misinformation policy. Twitter has said that satire and discussions of Mr. Trump’s remarks that do not include a call to action, as well as Mr. Trump’s comments themselves, have not violated his policies. Facebook, owner of Instagram and WhatsApp, did not respond to requests for comment.
Catching up: here’s what’s going on.
Boeing said Thursday it had raised $ 25 billion in a bond issue to inject cash into its business. As a result, the aerospace giant has said it will not seek additional funding through capital markets or federal government assistance.
United airlines reported a net loss of $ 1.7 billion in the first quarter and said it had about $ 9.6 billion in cash to weather the crisis. The airline plans to spend money in the second quarter at an average daily rate of $ 40-45 million, on par with its peers.
The reports were provided by Su-Hyun Lee, Austin Ramzy, Keith Bradsher, Jack Nicas, Karen Weise, Gregory Schmidt and Niraj Chokshi.