US stocks finished higher after rallying all day. Both the S&P 500 and the Nasdaq Composite logged their fourth straight day of gains. For the Dow it was the third up day, and the first time it finished above 26,000 points since early March.
Market sentiment was boosted by a much better than expected ADP employment report, which shored up hopes that the worst might be over for America’s battered labor market.
Gary Jones, the former president of the United Auto Workers union, pleaded guilty to conspiring with other high-level UAW officials to embezzle more than $1 million in dues money, among other charges.
Jones faces 46 to 57 months in prison under the plea agreement submitted Wednesday, which also includes charges of racketeering activity and tax evasion.
He’s the highest-ranking official caught up in a scandal that began in 2019, following a wide-ranging federal probe into alleged corruption involving the union and at least one of the nation’s unionized automakers: Fiat Chrysler.
In April 2019, UAW Vice President Norwood Jewell pleaded guilty to accepting, arranging and approving illegal payments from Fiat Chrysler executives to union higher-ups. A total of 14 UAW and Chrysler officials have pleaded guilty or received convictions.
Jones served as UAW president from June 2018 until he was forced to resign in November 2019 given the growing scandal. He left his post a week after the union concluded a costly 6-week strike against General Motors.
In his plea Wednesday, he admitted he and other senior UAW officials improperly used union funds to pay for personal expenses including golf clubs, private villas, cigars, golfing apparel, green fees at golf courses, and high-end liquor and meals costing over $750,000.
Two major banks with ties to Hong Kong have indicated they will support China’s controversial effort to introduce a national security law for the semi-autonomous city.
HSBC’s Asia-Pacific CEO Peter Wong has signed a petition in support of the implementation of the law, according to post by HSBC China on Chinese social media.
Another bank, Standard Chartered, said in a statement that “we believe the national security law can help maintain the long-term economic and social stability of Hong Kong.”
Both banks are based in the United Kingdom but do considerable business in both Hong Kong and mainland China.
The new law would drastically broaden Beijing’s power over Hong Kong, which last year was roiled by anti-government protests calling for greater democracy and more autonomy. Political leaders in the United States and Britain have criticized the planned law, arguing it threatens to undermine the city’s special status.
Delta Air Lines (DAL) is blocking middle seats and continuing its capacity restrictions across all of its cabins through September.
The Atlanta-based carrier originally announced the plan in April and it was due to expire later this month. Now, it will keep blocking middle seats and certain seats on planes with 2x2 layouts through September 30.
Delta implemented the changes in response to Covid-19 to encourage at least some sort of social distancing on planes. The airline is also restarting automatic upgrades for its Medallion members on June 10 and said its adding flights on routes that are getting busier.
Stocks are rallying today, with the S&P 500 up 1% and the Dow up some 380 points, even as tensions rise between the US and China, and despite protests across the United States dominate headlines.
It’s important for investors to remember that the stock market is forward looking, and the future is looking brighter because the economic reopening is going better than expected in both Europe and the Unites States. So far, reinfection rates haven’t skyrocketed even though restrictions have been pulled back.
Tech is still the sector boosting the S&P 500, as those stocks make up such a large portion of the index.
“We’ve never seen such a disconnect by sectors in the US stock market,” Beauchamp said, and it’s reasonable to be a bit skeptical of how long this will last. Investors should perhaps also look at growth stocks and not just the big tech companies.
“We really think you should be investing where the Fed is investing, because this is a liquidity-driven market,” she added.
This means corporate credit looks attractive, Beauchamp said, and gold continues to be a great hedge for investors.
America’s labor market is in disarray and the coronavirus lockdown has forced millions of Americans out of their jobs.
Career website Indeed is seeing job postings down by a third versus last year, said Jed Kolko, its chief economist, on the CNN Business’ digital live show Markets Now. That said, this has improved from the lows of four weeks ago. At that low-point, job postings were down some 40%, he said.
“The hardest hit sector are still hospitality and tourism,” he said. Job postings in those industries are down 60% from last year, Kolko said.
Some industries that support the ‘stay at home economy’, including logistics, are seeing increases in job postings, he added.
Tomorrow we find out how many millions more Americans filed for unemployment benefits last week.
Another 1.8 million first-time jobless claims are expected in the Department of Labor data due at 8:30 am ET Thursday. It would be the eleventh-straight week that claims are in the millions. Prior to the coronavirus pandemic, the United States had never recorded a single week over a million claims.
First-time filings hit their peak in the final week of March at 6.9 million and have declined every week since.
Continuing jobless claims, which count people who have filed for benefits for at least two consecutive weeks, are expected to reach 20.1 million, about a million fewer than in the week before. Economists see this is as a good sign, because it shows that people are returning to work. Even so, the progress is painfully slow given just how many people are in need of aid.
As of last week’s data, one in four Americans – more than 40 million people – had filed for unemployment aid.
Tomorrow’s claims data comes ahead of the the May jobs report due Friday at 8:30 am ET. Economists predict that 8 million jobs were lost in May, following 20.5 million that vanished in April. This would push the unemployment rate to nearly 20%, a rate not recorded since the Great Depression, and the highest monthly level since the data collection began in 1948.
The IPO market seems to be making a comeback along with the rest of Wall Street.
Shares of Warner Music Group (WMG), the record label whose musical roster includes such top artists as Cardi B, Bruno Mars, Twenty One Pilots and Ed Sheeran, rose more than 15% in early trading Wednesday. That comes after the company priced its initial public offering above its expected range.
Warner Music Group, which was once owned by former CNN parent company Time Warner before being sold in 2003, has been privately held for the past few years – a time when the music business has been revolutionized thanks to streaming services from Apple (AAPL) and Spotfiy (SPOT).
Warner Music Group wasn’t the only IPO to shine on Wednesday either. Pliant Therapeutics (PLRX) surged 55% in its market debut.
Mass unemployment. Riots in the streets. A devastating pandemic. And near-record stock prices, at least for the Nasdaq. That’s the world we live in.
While Main Street is suffering from a series of crises, Wall Street is swiftly recovering, thanks in large part to easy money from the Federal Reserve.
The Nasdaq has rallied four days in a row, despite widespread civil unrest across America. It’s now just 1.5% away from the all-time high of 9,817.2 set in February. The
The sharp rally in the Nasdaq — it’s up 41% since March 23 — has been driven by a race to buy large tech stocks, collectively known as FAANG, that are thriving during the pandemic. That includes Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google owner Alphabet (GOOGL).
Yet the stark disconnect between the stock market and economic reality also threatens to worsen wealth inequality — one of the drivers of the civil unrest.
“The stock market taking off — and decoupling from the real economy — is exacerbating inequality,” said Kristina Hooper, chief global market strategist at Invesco.
The stock market continues to soar around midday, with the Dow up more than 400 points and the S&P 500 sharply higher as well.
A much better than expected employment report from ADP spurred today’s rally, as investors grow more optimistic that the worst might be over for America’s battered labor market. The unemployment rate is expected to jump to nearly 20% in May.
The Dow traded up 450 points, or 1.7%, while the S&P soared 1.2%. The Nasdaq Composite was up 0.7%.
The US services sector is still in disarray. But it’s recovered a bit from its deep April slump.
That’s according to the Institute for Supply Management, which surveys purchasing managers to track changes in business activities from the previous month.
In May, the purchasing managers’ index (PMI) stood at 45.4 last month, up from 41.8 in April – an improvement, and one that was slightly better than economists had expected.
The services sector is extremely important to the US economy. It includes everything from hospitality and entertainment, to travel, finance, real estate and agriculture. The effects of coronavirus hit services the hardest at first, which has made the downturn particularly painful.
Still, the sector seems to have recovered from its trough, even though any PMI level below 50 indicates economic contraction. It was the second contraction in a row following a 122-month period of expansion.
That was reflected in responses in May from purchasing managers, who told ISM they remained concerned about the pandemic’s effect on their businesses, although many are planning on the resumption of business, said Anthony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee.
The US government says it will block Chinese airlines from flying into the United States in response to what the country says is a policy that has prevented American-based carriers from service between the two countries.
The Transportation Department restrictions will take effect June 16, but could be enacted earlier if President Donald Trump decides to do so.
It says the Chinese government is violating an agreement between the two countries for international travel by preventing United Airlines (UAL) and Delta Air Lines (DAL) from resuming the trans-oceanic flights. Those airlines had asked to resume service on June 1.
United, Delta, and American (AAL) suspended service to China due to the coronavirus pandemic. The US government also instituted travel restrictions to reduce the spread of the coronavirus.
Shares of all three airlines rose around 5% in early trading.
The Transportation Department order said “Chinese aviation authorities have failed to permit US air carriers to” operate the routes they previously flew.
“The Department will continue to engage our Chinese counterparts so both US and Chinese carriers can fully exercise their bilateral rights,” the department said in a statement.
“In the meantime, we will allow Chinese carriers to operate the same number of scheduled passenger flights as the Chinese government allows ours.”
Mall brands were already struggling long before coronavirus, and the pandemic certainly hasn’t helped.
New York & Company owner RTW Retailwinds (RTW) warned it might soon file for bankruptcy because of temporary closures caused by Covid-19.
In a regulatory filing Wednesday, the company said it anticipates the pandemic to have “material adverse impact on its financial position, results of operations, and cash flows during fiscal year 2020.”
As a result, the company said, it has “substantial doubt” about its ability to survive and it’s “probable” that a Chapter 11 bankruptcy protection filing is coming. RTW Retailwinds owns around 400 stores and has 5,000 employees.
The pandemic’s effects have hit clothing retailers particularly hard. J.Crew, JCPenney and Neiman Marcus all have filed for bankruptcy within the past month.
This morning’s ADP employment report wasn’t just better than expected. It was so much that it spurred experts to grow optimistic that the worst might be over.
Consensus estimates predicted 9 million private-sector jobs were lost in May. But the actual drop was only 2.8 million, ADP reported.
White House economic adviser Kevin Hassett – who initially expressed some disbelief that the numbers and wondered “if there’s not something funny going on” – said the report was a good sign that “people are getting back to work.”
The ADP report comes ahead of Friday’s jobs report from the Bureau of Labor Statistics. Economists predict 8 million lost jobs and an unemployment rate of nearly 20%, which could be the peak.
JPMorgan economist Daniel Silver noted “the ADP report isn’t always a reliable predictor of the BLS data.” Still, “it suggests that the pace of job loss moderated noticeably between April and May, even though it remained substantial relative to pre-Covid-19 norms.”
May’s ADP report also showed a change in the sectors where job losses occurred compared to last month – a stark reminder of how the pandemic is rippling through the economy. While April’s report revealed devastation to the hospitality sector, May’s biggest drops were in transportation and manufacturing.
“There are two big questions about the job market over the next few months,” said PNC chief economist Gus Faucher.
“First, will job losses turn to job gains as businesses reopen? And second, if so, will the pace of job growth bring back millions of jobs in the second half of 2020, rapidly replacing those jobs lost during the Viral Recession, or will it be a much slower process?”
CNN’s Betsy Klein contributed to this report.
US stocks rallied at the opening bell on Wednesday, following some surprising news about the US labor market.
The ADP national employment report showed far fewer jobs were lost in April than expected – 2.8 million versus 9 million predicted. This could be a good sign that people are returning to work and the worst is over for America’s labor market, which was devasted by the coronavirus lockdown. Friday’s jobs report from the Bureau of Labor Statistics is still expected to show an unemployment rate of nearly 20%, but experts think this could be the peak.
AMC Theaters (AMC) is “generating effectively no revenue” because of the prolonged shutdowns caused by Covid-19. And if it can’t reopen anytime soon, it has “substantial doubt” about its “ability to continue as a going concern for a reasonable period of time.”
The chain made the stark warning in a preview of its first quarter earnings, which will be released next week. AMC expects to lose about $2.4 billion in the first three months of 2020.
AMC shares fell 2% in premarket trading.
Another 2.8 million private-sector jobs disappeared in May, according to the ADP national employment report.
The private sector lost far fewer jobs than expected: Economists surveyed by Refinitiv had forecast 9 million lost jobs last month.
In April, ADP reported a revised 19.6 million jobs vanished, the worst month since the company began reporting national employment numbers in 2002.
All segments of the economy were decimated again in May, but large businesses with 500 employees or more accounted for more than half the jobs lost – 1.6 million.
Nearly 2 million of the losses occurred in the battered services industry, with the trade, transportation and utilities sector leading the declines. In the goods-producing industry, manufacturing shed the most jobs.
“The impact of the COVID-19 crisis continues to weigh on businesses of all sizes,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “While the labor market is still reeling from the effects of the pandemic, job loss likely peaked in April, as many states have begun a phased reopening of businesses.”
The ADP report comes two days ahead of the US Bureau of Labor Statistics’ jobs report, which is due Friday morning.
Economists polled by Refinitiv expect another 8 million jobs lost in May, following a 20.5 million drop in April. That would push the unemployment rate to nearly 20%, a new record high.
Coty (COTY) might be adding another Kardashian to its portfolio: Kim!
The cosmetics company disclosed in a regulatory filing that it’s “currently engaged in discussions” Kim Kardashian West for a new line of makeup and beauty products.
Coty already owns 51% of Kylie Cosmetics, who is also part of the Kardashian empire. Terms of that deal garnered controversy last week after Forbes accused the family of lying about the brand’s value. Jenner denied the accusations.
Coty shares rose 6% in premarket trading.
The coronavirus pandemic has devastated America’s economy and millions of workers have lost their jobs. It is by far the worst economic shock most people have witnessed in their lifetimes and it’s going to get worse before it gets better.
Economists polled by Refinitiv expect the US economy to shed another 8 million jobs in May, bringing the tally of jobs lost during the coronavirus pandemic to 28.5 million – more than three times the number of jobs lost during the 2008 financial crisis.
That would push the unemployment rate to nearly 20%, a record high. The Bureau of Labor Statistics, which is set to release its jobs report at 8:30 am ET Friday, began tracking monthly data in 1948.
Warner Music Group, one of the world’s biggest record labels, has priced its initial public offering ahead of its debut.
Shares are priced at $25, which is toward the higher end of its proposed $23-to-$26 range. It also increased the available shares from 70 million to 77 million. Its ticker symbol, WMG, will start trading on the Nasdaq later today.
Warner Music, which represents top artists like Coldplay and Lizzo, announced it was going public in February. Market volatility sparked by Covid-19 over recent months forced Warner to delay the debut.
Warner, a profitable company, predicts that it will make even more money as streaming services like Spotify (SPOT) and Apple (AAPL) increase their subscription bases and prices.
