A stock market rally falters, with Asian markets mixed.
A global stock market rally showed signs of faltering on Tuesday, ahead of a slew of corporate earnings announcements that are likely to reveal further damaging effects from the coronavirus outbreak.
Japanese shares were trading lower as of midday, while other Asian markets were flat or only mildly positive. Futures markets predicted downbeat openings for Wall Street and Europe as well, one day after the S&P 500 rose nearly 1.5 percent.
Companies like Ford, Merck and Starbucks are scheduled to report financial results for the first part of the year on Tuesday. While many companies are taking cautious steps to reopen, the earnings reports may further cloud the hopes for a healthy global recovery.
Underscoring the unease, prices for U.S. Treasury bonds, often seen as a safe place to put money in times of trouble, rose during Asian trading, sending yields lower. U.S. oil prices continued their plunge from Monday and were flirting with $10 a barrel at midday in Asia.
In Japan, the Nikkei 225 index was down 0.2 percent. The Shanghai Composite index in mainland China was flat. Hong Kong’s Hang Seng index was up 0.5 percent. South Korea’s Kospi index and Taiwan’s Taiex were up 0.2 percent.
U.S. oil prices continued their plunge in midday trading in Asia on Tuesday, one day after a global glut drove the price of a barrel of crude down 24 percent.
The price of a barrel of West Texas Intermediate, the type of oil used to determine industry prices in the United States, fell as much as 16 percent more in morning trading on Tuesday in Asia. The price is now flirting with $10 a barrel, a level virtually unheard of before the double whammy of the coronavirus outbreak and a price war between Saudi Arabia and Russia left the world awash in unwanted crude.
Quirks in how oil is traded are also driving the plunge. As a financial instrument, oil is typically traded on futures markets. The most active futures are typically the ones that expire the month after the current one. Anybody holding the contract when it expires has to take delivery of actual barrels of crude oil, an unappealing choice for the investors, hedge funds and others who simply want to bet on oil prices, not open a refinery.
Oil prices plunged last week when financial investors rushed to sell their futures before they expired and found few buyers. A similar dynamic is working against oil prices currently as major investors shift away from the near-month contract and diversify with those that expire in other months. On Monday, one of the biggest oil investment vehicles, an exchange-traded fund called United States Oil Fund, detailed plans in a financial filing to spread its exposure across contracts that expire as late as September.
Minutes after a $310 billion aid program for small companies opened for business on Monday, the online portal for submitting applications crashed. And it kept crashing all day, much to the frustration of bankers around the country who were trying — and failing — to apply on behalf of desperate clients.
Some irritated bankers vented on social media at the Small Business Administration, which is running the program. Rob Nichols, the chief executive of the American Bankers Association, wrote on Twitter that the trade group’s members were “deeply frustrated” at their inability to access the system. Until the problems were fixed, he said, “#AmericasBanks will not be able to help more struggling small businesses.”
Pent-up demand for the funds has been intense, after the program’s initial $342 billion funding ran out in under two weeks, stranding hundreds of thousands of applicants whose loans did not get processed. Last week, Congress approved the additional $310 billion for small businesses hit by the coronavirus pandemic. Bankers were expecting the money to once again run out quickly, and so on Monday at 10:30 a.m., when round two opened, they were ready to go.
But for the second time in a month, the relief effort, called the Paycheck Protection Program, turned into chaos, sowing confusion among lenders and borrowers. A centerpiece of the government’s $2 trillion economic stimulus package, the program offers small companies — typically those with up to 500 workers — forgivable loans of up to $10 million. The S.B.A. is backing the loans, but customers must apply through financial institutions.
Employees at TAB Bank in Ogden, Utah, spent last week pulling all-nighters to finish preparing loan applications from 1,100 customers. When the S.B.A. began accepting applications on Monday morning, they started trying to submit their files. But the S.B.A.’s computer system stalled, froze and crashed repeatedly. Five hours later, the bank had gotten only seven loans processed.
“I’m beyond frustrated,” said Curt Queyrouze, the bank’s president, who also shared his experience on Twitter. “We wanted to update all of our customers this evening on the status of their applications, but right now, there’s not a lot of good news to give them.”
With galleries and museums shuttered across the world, Seoul is offering an early answer to what the post-cornoavirus art world might look like as it tiptoes back to normalcy.
Galleries in Seoul, a dense metropolis with a population of nearly 10 million but only two coronavirus deaths to date and a daily infection rate that has dropped to the single digits, have begun reopening, but with extra precautions in place. At Lehmann Maupin, a gallery attendant dutifully took down the name, address and phone number of everyone who came through the front door — just in case someone at the opening later found out they had been exposed to the virus.
“Now is actually a good time to see if you can buy art, because collectors around the world having a hard time have put forward quite good art pieces into the market at cheap prices,” said one attendee, Passion Lim. He said he didn’t feel uncomfortable in the crowd of about 50 inside the gallery’s two-story, 3,200-square-foot space, as he trusted the government’s handling of the outbreak.
Back in New York City, Lehmann Maupin’s co-founder, Rachel Lehmann, said she was painfully aware of the market dynamic. The gallery’s Hong Kong branch had reopened, but its flagship Manhattan locations had been closed since March 13. With sales there reduced to a crawl, she said she had been forced to institute salary cuts and furloughs among its 36 staffers. Still, having worked as an art dealer for several decades and weathered a string of recessions, she took the long view: This too shall pass.
“It’s what I have seen happening in 2008, and after 9/11, and even earlier, at the end of the ’70s in Europe,” she said. In fact, Asia was already rebounding. Her Seoul branch, which opened in 2017, already accounted for 20 to 25 percent of Lehmann Maupin’s total revenue before the pandemic. Now, after an initial pause, many of Seoul’s moneyed collectors have re-entered the fray.
U.S. stocks rose and global markets rallied on Monday as governments around the world discussed when and how to reopen businesses and get their economies back on track.
The S&P 500 rose more than 1 percent. European benchmarks rose 1 to 3 percent after a broadly higher day in Asia.
The clearest signal of this on Monday was a rally in companies that stand to gain from the lifting of restrictions on travel and public gathering. Department store Kohl’s rose nearly 18 percent, while shares of Nordstrom and Gap were also sharply higher, for example.
Hotel operators like Hilton Worldwide and Marriott International also jumped.
The shortage you haven’t heard about: sympathy cards.
Many celebrations and milestones have been delayed, but grief is in abundance, and the greeting card aisle offers a snapshot of the virus’s wicked toll. Sympathy cards are nearly all sold out.
CVS, one of the nation’s largest sellers of greeting cards, said that it was seeing “higher demand for sympathy cards than most other types of greeting cards during the pandemic” and was experiencing shortages in certain stores. Shoppers across the country have posted on social media that their local Winn Dixie or ShopRite was running out of cards.
Some of the shortages have been caused by distribution problems. Pharmacies and grocery chains, focused on keeping their shelves stocked with household staples, are not allowing card companies to come into the stores and restock regularly.
With stores running out and people unable to leave their homes, many card sales have moved online and are at record levels, suppliers say. On Etsy, the online marketplace for crafts and jewelry, searches for sympathy cards more than doubled from March 1 to April 17 compared with the same period a year ago.
Before the pandemic, the greeting card industry had experienced declining sales. Some big retailers recently cut back on the aisle space devoted to cards. The parent company of high-end card retailer Papyrus declared bankruptcy in January and closed all of the brand’s stores. But virtual communication has its limits, especially in times of grief. With many people unable to attend funerals or drop off food for a grieving neighbor, or even offer an embrace, mailing a sympathy card seems more necessary.
Barbara Macchiaroli’s longtime companion died of the virus the day after Easter in a nursing home. He was 90. They haven’t had a funeral, but the cards — 34 so far — have been arriving at her house every day. The senders have written memories about his beautiful singing voice, his devotion to the local Kiwanis Club and his love of Ford Model A’s.
“The cards have comforted me in a way I never expected they would,” she said. “I think it is because I can’t be with people right now.”
Catch up: Here’s what else is happening.
Amazon may have violated federal worker safety laws and New York State’s whistle-blower protections when it fired an employee from its Staten Island warehouse who protested the company’s response to the coronavirus outbreak, according to a letter the office of the New York attorney general, Letitia James, sent the company last week.
JetBlue announced on Monday that it would require all passengers to wear a face covering during travel starting May 4. The mask must cover the nose and mouth throughout the entire journey, from check-in to deplaning. JetBlue did not say whether it would provide masks to its passengers.
Boeing plans to resume operations in South Carolina next week, bringing several thousand employees back to work on the 787 Dreamliner about a month after sending them home. Those who can work remotely will continue to do so, and managers will tell the recalled workers when to return to Boeing’s complex in North Charleston, the company said.
Reporting was contributed by Karen Weise, Gregory Schmidt, Su-Hyun Lee, Brett Sokol, Michael Corkery, Sapna Maheshwari, Niraj Chokshi, Stacy Cowley, Carlos Tejada and Daniel Victor.