September 20, 2020

More Than a Million Workers Are Expected to Have Filed Jobless Claims

In Washington, D.C., the office for local residents’ unemployment claims is mostly working remotely.  
Credit…Saul Loeb/Agence France-Presse — Getty Images

For 17 straight weeks, the U.S. government has reported that more than one million workers filed new state unemployment insurance claims. There is little doubt that the latest tally, due Thursday morning, will extend the streak. The question is whether the number of new filings will grow, reflecting reversals in many states in reopening the economy.

Wall Street analysts expect that the data will show little, if any, improvement from the 1.3 million figure reported last week. The number of new weekly claims has consistently fallen for more than three months, but improvements have slowed.

Bloomberg forecasts no change, while analysts surveyed by MarketWatch expect the number to increase to 1.4 million.

Hundreds of thousands of additional jobless claims will be also filed through a temporary federal program called Pandemic Unemployment Assistance.

“I do think there is significant risk that we’re going to see a reversal of the downward trend over the next few weeks,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “Now the risk is coming from temporary job losses that could become permanent.”

The Labor Department’s report comes days before millions of jobless workers are scheduled to lose a $600-a-week benefit booster that was part of the federal response to the pandemic’s economic impact.

Twitter executives blamed falling revenues on the pandemic, and said some marketers also became skittish about promoting their products during the Black Lives Matter protests.
Credit…Richard Drew/Associated Press

Twitter said on Wednesday that its daily users surged to 186 million in the second quarter, up 34 percent from a year ago.

But revenue fell 19 percent to $683 million, missing Wall Street estimates of $700 million. The company also had a net loss of $124 million.

Twitter executives blamed the advertising slump caused by the pandemic, and said some marketers also became skittish about promoting their products during the Black Lives Matter protests. Twitter said it saw advertising return once the protests began subsiding.

The company also said it was working on building more “direct response”-style ad features, which would allow people to purchase or download things directly from their Twitter timelines. Historically, Twitter has largely focused on brand awareness campaigns. On Facebook, direct response advertising makes up the bulk of the social network’s ad revenue.

The company continues to deal with the fallout of last week’s breach in which hackers took over dozens of high-profile Twitter accounts in a haphazard Bitcoin scam. On Thursday, the company said the hackers had accessed the direct messages of up to 36 of the 130 of the hacked accounts.

Twitter recently started labeling some of President Trump’s messages to indicate that he was spreading falsehoods or glorifying violence. On Tuesday, Twitter said it would take down accounts associated with QAnon, the pro-Trump conspiracy theory, citing concerns about how such content could incite violence. It was the first time a large social media service took sweeping action against QAnon. Facebook is planning a similar takedown in coming weeks, people with knowledge of the plans have said.

In New York, futures suggested a modest gain when trading begins on Wall Street.
Credit…Mark Lennihan/Associated Press

European stocks gained on Thursday, after a mixed day in Asia, as investors seemed heartened by some corporate earnings reports that signaled strengthening economies.

Markets in Paris, London and Frankfurt all reported gains between 0.5 percent and 1 percent. In New York, futures suggested a modest gain when trading begins on Wall Street.

Elsewhere, the yield on a 10-year U.S. Treasury note fell slightly, and oil futures were higher, with Brent crude reaching more than $44 a barrel, a four-month high. Gold was having another good day, up 0.6 percent.

The consumer products giant Unilever reported on Thursday that underlying sales fell 0.3 percent in the previous quarter, which was a much better result than had been expected amid pandemic lockdowns. It was enough to push its shares up more than 7 percent. Daimler, the automaker, said it lost 1.9 billion euros, or about $2.2 billion, in the second quarter as sales fell about a third, but the company told investors that it expected a profit for the full year; its shares rose more than 5 percent.

Another automaker, Tesla, reported an unexpected profit on Wednesday, a result that defied the depressed earnings throughout the industry. Its shares have been on a roll, and were trading nearly 5 percent higher in premarket trading.

In Asian markets, trading was mixed on Thursday. Hong Kong’s Hang Seng gained 0.8 percent, the Shanghai Composite slipped 0.2 percent, and the Nikkei in Japan and Kospi in South Korea both finished 0.6 percent lower.

Southwest Airlines on Thursday reported an 83 percent decline in revenue, to just over $1 billion, in the second quarter compared to a year ago. That decline contributed to a quarterly loss of $915 million, a reversal of fortune from the same three months in 2019 when Southwest scored a $741 million profit.

“We expect air travel demand to remain depressed until a vaccine or therapeutics are available to combat the infection and spread of Covid-19,” Southwest’s chief executive, Gary Kelly, said in a statement.

The airline’s quarterly financial results are in line with its peers. Revenue fell 88 percent for United Airlines and 87 percent for Delta Air Lines. United suffered a $1.6 billion loss, down from a $1 billion profit last year. Delta lost $5.7 billion, down from a $1.4 billion profit in 2019.

The second quarter is likely to be the worst of the pandemic for the industry, which saw passenger traffic fall as much as 96 percent on some days in mid-April compared with a year prior. Airlines had been clawing their way back in May and June, but the recovery stagnated as coronavirus infections spread across the country. The number of people screened at federal airport checkpoints remains about 75 percent below last year’s levels.

Southwest said it does not plan to furlough or lay off employees or cut pay or benefits through the end of the year.

Southwest said it had about $14.5 billion in cash on hand, and lost about $23 million per day during the quarter, a rate it expects to sustain through July, August and September. United and Delta each have more than $15 billion on hand. United lost about $40 million a day throughout April, May and June, compared to Delta’s daily loss of $43 million.

Elon Musk said Tesla would build its pickup truck, the “Cybertruck,” and a semi truck, along with Model 3 and Model Y, at the company’s new plant in Texas.
Credit…Ringo H.W. Chiu/Associated Press

Tesla on Wednesday reported a profit of $104 million, a result that surprised analysts, who were expecting the electric carmaker to lose money as the coronavirus pandemic squeezed the company on two fronts.

Sales for the second quarter, which ended in June, slowed while much of the economy shut down and as millions of people lost their jobs and cut back on spending. And for nearly two months, the company was forced to halt production at its main plant in Fremont, Calif.

“We were able to achieve a fourth consecutive profitable quarter,” the company’s chief executive, Elon Musk, said in a conference call with analysts. “Although the auto industry was down about 30 percent year-over-year, we managed to grow deliveries in the first half of the year.”

Tesla has started work on a fourth car factory at a site near Austin, Texas, Mr. Musk said, where it will produce its forthcoming pickup truck, the Cybertruck, and a new semi truck, along with its Model 3 and Model Y.

Tesla’s surprise profit set it up for another major milestone: potential inclusion in the S&P 500 index. The index is one the most widely followed measures of the performance of the American stock market, with more than $11 trillion worth of mutual funds and other investments measured against it.

It’s unusual for companies with market values as large as Tesla — roughly $290 billion — not to be included in the S&P 500. But the company’s inability to consistently generate profits has made it ineligible so far. (Criteria for inclusion require the sum of the company’s fully audited profits in the four most recent quarters to be positive.)

  • 🤖 Microsoft on Wednesday said its revenue rose 13 percent in the last quarter despite the slump in the economy. The company’s growth was led by big gains in its cloud software offerings as more people work from home. For the three months ended in June, its fiscal fourth quarter, Microsoft generated revenue of $38 billion. Its operating profit increased 8 percent to $13.4 billion, or $1.46 a share. LinkedIn, the hiring and professional networking site owned by Microsoft, said on Tuesday that it was cutting 962 jobs, or 6 percent of its work force, partly because hiring has fallen sharply.

  • 💉 With profit bolstered by hundreds of millions of dollars in federal stimulus money, HCA Healthcare, the giant for-profit hospital chain, reported much higher second-quarter earnings on Wednesday, even as its revenue fell when its huge network of hospitals treated fewer patients during the pandemic. The company reported $1.1 billion in net income for the three months that ended June 30, a 38 percent jump from the same period in 2019, on lower revenue of $11.1 billion. HCA, already a major beneficiary of hospital bailout money, said it had received a total of $1.7 billion from the federal government so far.

  • 🛬 United Airlines said its revenue will max out at about 50 percent of last year’s haul if a vaccine does not become available. The airline expects passenger revenue in July, August and September to be down about 83 percent from the same period last year, a slight improvement over the nearly 94 percent decline the airline reported for the second quarter on Tuesday.