US unemployment claims soar as coronavirus slams economy
Last week’s jobless claims hit a record-breaking 3.28 million. FOX Business’ Lauren Simonetti with more.
U.S. equity markets clambered higher Thursday as investors digested record jobless claims and waited for the House to vote on a $2 trillion relief package.
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First-time unemployment filings surged to a record 3.28 million last week, according to the Labor Department, as the COVID-19 pandemic caused businesses to temporarily close their doors and lay off employees. The previous record was 695,000, set in 1982.
The all-time high in claims came hours after the Senate voted 96-0, passing the $2 trillion relief package that would extend aid to individuals, small businesses and corporations hit hardest by the pandemic. The House of Representatives is scheduled to debate the bill on Friday.
The Dow Jones Industrial Average gained as many as 1,022 points, or 4.8 percent, while the S&P 500 and Nasdaq Composite climbed as much as 4.4 percent and 3.9 percent, respectively. A gain of 1,109.77 points or more would lift the Dow out of bear-market territory.
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Looking at stocks, hard-hit travel-related names are seeking direction as the status of the $2 trillion relief package remains in limbo.
Boeing shares continued to gain, adding to the 67 percent gain they’ve seen this week.
Oil majors Exxon Mobil and Chevron were weaker as West Texas Intermediate crude oil plunged 3 percent to $23.76 a barrel. U.S. shale names Continental Resources and Pioneer Natural Resources also fell.
EXXON MOBIL CORPORATION
Banks gained even as buying across the Treasury complex flattened the yield curve. The yield on the 10-year note was down 5.8 basis points at 0.798 percent while the yield on the 3-month bill, which fell below zero on Wednesday, was little changed at -0.048 percent.
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Ford said it’s aiming to restart production at some North American plants as early as April 6. The company’s credit rating was cut to junk at S&P.
On the earnings front, Micron Technology’s results exceeded expectations and gave a stronger-than-anticipated forecast as the company said it would receive a boost as more people worked from home.
Signet Jewelers reported better-than-expected quarterly results, but suspended its dividend and did not provide financial guidance due to uncertainty caused by the coronavirus.
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In Europe, Germany’s DAX paced the decline, down 1 percent, while France’s CAC and Britain’s FTSE were off 0.6 percent and 0.3 percent, respectively.
Asian markets were lower across the board with Japan’s Nikkei falling 4.5 percent, Hong Kong’s Hang Seng sliding 0.7 percent and China’s Shanghai Composite down 0.6 percent.
‘America will again and soon be open for business,’ Trump says
President Trump says businesses will receive monetary support from the federal government and commends Americans’ courage to stand united against the coronavirus pandemic.
NEW YORK — With masks, ventilators and political goodwill in desperately short supply, more than one-fifth of the world’s population was ordered or urged to stay in their homes Monday at the start of what could be a pivotal week in the battle to contain the coronavirus in the U.S. and Europe.
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Partisan divisions stalled efforts to pass a colossal aid package in Congress, and stocks fell again on Wall Street even after the Federal Reserve said it will lend to small and large businesses and local governments to help them through the crisis. The Dow Jones Industrial Average lost over 580 points, or 3 percent.
Warning that the outbreak continues to accelerate, the head of the World Health Organization called on countries to take strong, coordinated action.
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“We are not helpless bystanders,” Tedros Adhanom Ghebreyesus said, noting that it took 67 days to reach 100,000 cases worldwide but just four days to go from 200,000 to 300,000. “We can change the trajectory of this pandemic.”
Britain joined other countries in ordering residents to restrict their movements, imposing its most draconian restrictions ever in peacetime.
The scramble to marshal public health and political resources intensified in New York, where a statewide lockdown took effect amid worries the city of 8.4 million is becoming one of the world's biggest hot spots. More than 12,000 people have tested positive in the city and almost 100 have died.
The governor announced plans to convert a mammoth New York City convention center into a hospital with 1,000 beds. Meanwhile, the mayor warned that the city's hospitals are just 10 days away from shortages in basic supplies needed to protect health care workers and patients alike.
GM and Ford are looking into using car plants to produce medical ventilators. FOX Business’ Ashley Webster with more.
Tesla has the financial strength to withstand the storm caused by the COVID-19 pandemic, according to Morgan Stanley.
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Shares of the Palo Alto, California-based electric automaker soared Thursday after the company received two upgrades from Wall Street banks.
“We are confident in Tesla’s liquidity and cash-flow profile through a likely turbulent road ahead,” wrote Adam Jonas, an analyst at Morgan Stanley, while upgrading Tesla to “equal weight” and lowering his price target to $460 from $480.
He said that “in a draconian scenario, where demand falls 90 percent," Tesla would burn $750 million per month. The company, however, has about $8 billion of cash on its balance sheet currently.
Jonas thinks the stock is “in a place where investors can potentially begin to add exposure” with shares having fallen 60 percent from their Feb. 19 peak of $917.42 through Wednesday.
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Bank of America analyst John Murphy agrees with Jonas that Tesla shares are attractive at current levels. He raised his rating to “neutral” and price target to $500, “based solely on valuation.”
However, he added that “investor optimism around the company and its business/financial future remains overhyped and a litany of risks remain under-appreciated.”
Meanwhile, Wedbush analyst Dan Ives maintained his “neutral” rating but lowered his price target to $425 from $720, because the COVID-19 pandemic has “dramatically” changed the global demand environment.
While it's not a long-term trend, the “vastly changing near-term economic conditions make Tesla's ability to hit its original 500,000-plus delivery targets for 2020 a virtual impossibility," he noted.
Ives now sees Tesla delivering 400,000 to 415,000 vehicles in fiscal year 2020 as the company “battles through a myriad of production, demand, and delivery challenges” over the coming months.
As for Tesla’s cash position, Ives agreed with Jonas that although the company’s cash burn will be “heightened” in the near-term, the “longer-term trends remain very healthy.”
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Tesla shares were down 13.7 percent this year through Wednesday, outperforming the benchmark S&P 500’s 25.8 percent decline.
Walmart expanding grocery delivery program nationwide
Walmart plans to roll out their new grocery subscription service to more than half of the country by the end of 2019.
Walmart has been quietly working on developing its own paid membership program to go up against Amazon Prime,
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The program would reportedly have perks that Amazon can't match and could be launched as soon as next month called Walmart+.
The work has been going on for the last 18 months, according to Recode.
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The program is seen as rebranding of Walmart's existing Delivery Unlimited service which charges $98 a year for unlimited, same-day delivery of fresh groceries from the Walmart stores where the program is available.
Among the possible perks in the new service could be discounts at Walmart pharmacies or fuel at walmart gas stations.
A Walmart spokesperson confirmed to Recode the membership program and Walmart+ name were in development, but declined to provide any further details.
WALMART ROLLS OUT UNLIMITED GROCERY DELIVERY SUBSCRIPTION
Amazon's Prime service has more than 150 million members worldwide, costing $119 per year. Amazon accounts for nearly 40 percent of all online sales in the U.S., according to eMarketer,
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The goal for Walmart's program is to save customers time and money and keep them loyal to the Walmart brand either online or at brick-and-mortar locations.
The head of the world's biggest rare earths producer outside of China has "no regrets" defending her company against an unsolicited takeover bid by corporate giant Wesfarmers in 2019, despite the efforts eroding its profits.
Wesfarmers made a highly conditional $1.5 billion offer for WA miner Lynas Corporation in March 2019, while the company was in the middle of a crisis over the renewal of its licence to operate its Malaysian processing facility.
Lynas’ Mount Weld mine in Western Australia, the richest known rare earths deposit in the world.Credit:Bloomberg
The offer was swiftly rejected by Lynas who felt the valuation was underdone and the company fought it. Wesfarmers eventually scrapped the offer in August.
Lynas reported a marginal half-year revenue increase to $180.1 million but a profit plunge of nearly 80 per cent from $19 million in 2018 to $3.9 million.
Lynas chief executive and managing director Amanda Lacaze placed some of the blame on the Wesfarmers defence.
She did not disclose how much was spent but described the saga as frustrating and with the company forced to pay for company valuations, advisors, media and legal fees.
"I've reflected on how can you find a different way to do this but when somebody else makes an unsolicited offer to buy a company there are a series of expenses generated as a result of that in the defence of the company," she said.
"It is very frustrating when you're the target because you end up spending this money and you're not adding any value in the business but it is the way public markets work.
"I've thought about this and I just can't see any way around it."
Ms Lacaze said the Wesfarmers offer was "found wanting" and fighting it was the right thing to do.
"For us, we certainly have no regrets," she said.
"We run the business to create shareholder value and whilst everyone in the market is facing some challenges right now, our assessment and the conversation we had with our shareholders is that best value creation comes from having the business as a pure play"
Other impacts on Lynas profits included weaker market conditions and a $11.6 million security bond payment to Malaysian regulators and ongoing costs associated with defending the company against environmental activists that oppose the Malaysian plant.
Lynas shares soared 19 cents to $2.09 on Thursday after news the Malaysian government approved a new three-year licence for its plant that allowed the company to continue processing rare earths.
Those gains were lost on Friday after the results hit the market, which was already in a tailspin thanks to Coronavirus fears.
Lynas said the production of Neodymium and Praseodymium, used in magnets, fell more than 10 per cent for the half-year to 2512 tonnes, while rare earth oxide production dropped 22 per cent to 7518 tonnes.
Amazon removes ‘coronavirus kill’ products; Twitter considers new ways to fight misinformation
Morning Business Outlook: Amazon says it’s removing items from its marketplace claiming to cure, treat or prevent the coronavirus; Twitter considering colored labels to flag misinformation from political or public figures.
A Texas-based genetic engineering company is claiming to have a vaccine for the new coronavirus.
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Greffex Inc. CEO told the Houston Business Journal that his company completed the vaccine this week, and it will now move on to animal testing as required by the U.S. government.
STOCKS TRADING LOWER AS CORONAVIRUS OUTBREAK WORSENS OUTSIDE CHINA
"The trick in making a vaccine is: Can you scale the vaccine that you’ve made to be able to make a certain number of doses? Can you test that vaccine quickly and efficiently? And then can you get it into patients?" Price told Houston's KHOU 11. "And that’s where we have an edge as well on the other companies that are out there."
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If the vaccine is approved by the government, Greffex will distribute the vaccine to other countries for free, Price added.
Price said Greffex did not use a living or dead version of the actual virus that originated in Wuhan, China, to create the vaccine – a popular method used by some scientists to create an immunity to a virus, like the flu vaccine. Instead, Greffex uses adenovirus-based vector vaccines, meaning they are genetically engineered.
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The vaccine was developed as the result of an $18.9 million contract that the National Institute of Health’s National Institute for Allergy and Infectious Diseases gave to Greffex in September 2019 in an effort to fight infectious diseases, the Business Journal reported.
So far, 26 countries outside China have reported more than 1,000 coronavirus cases to the World Health Organization (WHO) as of Friday. China has reported more than 2,100 deaths and 74,675 total cases to WHO.
Minimum wage increases unworkable from economic standpoint: Ed Rensi
Former McDonald’s USA CEO Ed Rensi argues the 2020 Democratic candidates’ proposed minimum wage increases would be damaging to small businesses and will result in higher prices for consumers. He also discusses decreasing SNAP participation and plant-based fast food trends.
Since the bill was passed on June 25, 1938, under President Franklin D.Roosevelt, the minimum wage, coming under the Fair Labour Standards Act, has been a regular bone of contention for politicians, unions and the general population alike.
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Each state has interpreted what a minimum wage is differently. This can be driven by politics as well as and the cost of living, but not necessarily by inflation.
YOUR iPhone keeps a log of your real-world movements – and you probably had no idea it existed.
The list is buried deep inside your iPhone settings, and let's you see a map of your exact location over the past few months.
What is iPhone Significant Locations?
Your iPhone has a feature called Location Services, which uses your location to improve various features on the device.
This includes Significant Locations, a rolling log of your real-world movements, which are then used to offer other services.
For instance, if your iPhone knows about your daily commute, it can provide tailored timing information about your journey.
"Allow your iPhone to learn places significant to you in order to provide useful location-related information in Maps, Calendar, Photos and more," Apple explains.
Is iPhone Significant Locations safe?
You might be panicking that Apple is keeping a log of your every move, but that's not quite the case.
"Significant Locations are encrypted and cannot be read by Apple," according to Apple.
That means that the location info is stored on your iPhone, and is encrypted and dissociated from you if it needs to leave the device.
No outsiders can see your Significant Locations, and they're not accessible through iCloud either.
And even if a pal is using your iPhone, they can't get into Significant Locations without getting past a Face ID or Touch ID lock first.
However, if you're really worried that a spouse might sneak their way onto your iPhone and catch you at the pub when you were supposed to be at work, it might be worth deactivating the system – or clearing your history at the very least. We'll explain how to do that below.
It's also worth mentioning that Significant Locations is opt-in, although you probably never knew that.
It turns on when you activate Location Services during iPhone set-up, but it's buried beneath several layers of Settings, so most people have no idea it exists.
The location data tracks back around a year.
How to find your iPhone Location Map
First, launch the Settings app on your iPhone, then tap on the Privacy section.
Then click on Location Services and scroll to the very bottom of the page, where you'll need to tap on System Services.
Go to the Significant Locations tab, at which point you'll be asked to log in with Face ID, Touch ID or your passcode.
You should see a long list of cities, which you can tap into to find various locations you've previously been at.
All of these locations are time-stamped, and are included on a map at the top of the screen.
It may even highlights your 'Home' and 'Work', which should be your most-visited destinations.
How to delete iPhone Significant Locations
There are a few ways to clean up your Significant Locations on the iPhone.
The first is to simply toggle Significant Locations off when you're in the correct menu.
You can also hit the Clear History button inside Significant Locations, which deletes your locations collected so far.
Alternatively, you can toggle Location Services off entirely, although this means you'll lose out on some really useful mapping features.
We've asked Apple how frequently the tracker updates with your location, and how it works out where your home and work addresses are.
In other news, a recent Apple Maps update adds more detail and gives "faster and more accurate" navigation.
Never lose your car at the shops again – how to save a parking spot on Google Maps.
And Google Maps now highlights where speed cameras are.
What new features would you like to see added to your iPhone? Let us know in the comments!
Like all the advanced economies, ours has stopped working the way we’re used to. Our obsession with home ownership is a fair part of the problem.
Let’s be clear: I’m a believer in the Great Australian Dream of owning your own home.
But right now, it’s adding to the economic troubles of many countries. I doubt if the preference for home ownership is causing those countries bigger problems than it’s causing us. We have one of the highest rates of household debt to household disposable income (although ours is made to look worse than the others because of our unusual tax breaks for negatively geared property investments).
Like a lot of people who care about the state of the world we’re leaving to our children and grandchildren (my four-year-old grandson is “helping” me as I write this), I was pleased to see the period of spiralling house prices come to an end a few years back and prices start falling.
But, for Sydney and Melbourne, this sorely needed correction came to an end last year, after three interest-rate cuts and a change in prudential lending rules, prices resumed their upward climb.
If we can’t cut interest rates a little without an upsurge in borrowing causing us to resume bidding up house prices, we’ve got a problem. Our household debt is at near-record levels, but let’s add to it.
Meanwhile, when you add falling house prices to the economy’s deeper problem of protracted weak wage growth, many home buyers worry and slash their consumer spending to try to reduce their debt.
That huge household debt will be a drag on our economy for years, keeping growth low. Another issue that isn’t helping is our “new normal” of exceptionally low price and wage inflation.
Until recent years, first-home buyers (or any other borrowers for owner-occupied housing) used to be able to load themselves up to the gunnels in debt and monthly payment obligation, secure in the knowledge that, after a few years of high growth in nominal wages, those repayments (little changed in nominal terms) would be reduced to a much more manageable share of their income.
When such “norms” get stuck in people’s heads, it can take years for people to realise they can no longer be relied on. And for those couples for whom the memo arrived too late, they’ll be struggling to keep up their huge mortgage payments for many more years than they bargained for.
So, on one hand we’ve got the economy being held back by households’ huge level of debt and mortgage payments while, on the other, home ownership is becoming unattainable for an increasing proportion of the population. Those who do eventually manage to attain it have to scrimp on other aspects of their living standards, and often get there so much later in their working lives that their ability to save for retirement is diminished.
The devouring monster we’ve allowed home ownership to become is now eroding what’s long been the fourth leg of retirement income policy. More people are retiring without owning a home, whereas the level of the age pension is kept low under the assumption that almost everyone owns their home outright.
Get it? We’re suffering the wider economic disadvantages of huge household debt without the commensurate advantage of a higher rate of home ownership. The rate of home ownership is actually falling slowly as the oldies with high rates of home ownership are dying and being replaced by newly formed, young households, very few of which can afford a mortgage.
But Reserve Bank governor Dr Philip Lowe has injected a note of hope. When measured against the ruler of household income, America’s house prices are much lower than ours. Why? Because of differing policies towards housing. The Yanks have kept land prices lower by allowing more suburban sprawl.
For our part, we’ve had various tax and pension policies seemingly intended to help would-be first-home buyers that, in reality, work to benefit existing home owners. We’ve made housing – whether owner-occupied or rental properties – a tax-preferred investment, not just a means to security of tenure. In the process, we’ve made it too hard for young first-home buyers to afford.
When parents respond to this by recycling to their offspring some of the capital gain they’ve enjoyed on their own property investment (as I have), they’re solving their own children’s affordability problem in a way that keeps house prices high, at the expense of those many young people whose parents aren’t able to help out.
No, if we want to make home ownership more affordable for more young people seeking security of tenure for their home, the answer is to make home ownership less attractive as a form of investment.