The day’s business news at a glance
As nation reopens, historic referendum on risk begins
The United States is becoming a nation of amateur actuaries, calculating the risk of restarting our lives. Can people go outside? Can they go back to work? Can they go to a restaurant or bar? Can they go to the beach? Can their children go back to school? Can they visit grandma? The questions have an infinite run.
The answers are less a product of math and hard science. They’re more a variable and often emotional assessment of the benefit relative to the cost. Americans are in the early days of a national referendum on their tolerance of risk.
Powell: Economic forecasts filled with uncertainty
Federal Reserve Chairman Jerome Powell says efforts to forecast the recovery path of the U.S. economy out of the current deep downturn face “a whole new level of uncertainty.” Powell said in an address to a virtual Fed conference Thursday that not only is there the difficulty predicting how the coronavirus pandemic will play out, it is also unclear how American workers and consumers will react as lockdowns aimed at limiting the spread of the virus are lifted.
He said successfully restarting the economy will depend in large part on the public’s confidence that the loosening of the stay-at-home orders will not trigger a resurgence of the virus.
Pandemic highlights big box stores’ ability to pivot
Big box stores like Best Buy, Target, Walmart and others have been able to capitalize on their digital expertise and stay relevant during the pandemic. As a result, they all thrived during the fiscal first quarter. But Macy’s and other mall-based clothing retailers like Victoria’s Secret struggled to adapt.
Macy’s sales were down 45% and the department store chain says it could have a loss of at least
$1 billion in the quarter. It took Macy’s nine weeks starting in late March to introduce curbside pickup at 300 stores, or about 40% of all of its stores. That compared to Best Buy, which took just 48 hours to roll out the service at nearly all of its 1,000 locations.
Stocks end lower on Wall Street amid China tension
Stocks ended lower on Wall Street as tensions flared again between the U.S. and China and as more dismal news came out detailing economic fallout from the coronavirus pandemic. The S&P 500 gave up 0.8% Thursday, but it’s still higher for the week.
The White House issued a report attacking Beijing’s economic policies and human rights violations, expanding on President Donald Trump’s get-tough rhetoric that he hopes will resonate with voters angry about China’s handling of the outbreak. Meanwhile, the number of Americans thrown out of work since the virus struck climbed to nearly 39 million.
US existing home sales plunge 17.8% in April
Sales of existing homes plunged 17.8% in April with the real estate market still in the grips of the coronavirus pandemic. The National Association of Realtors said Thursday that last month’s decline pushed sales down to a seasonally adjusted annual rate of 4.33 million units, the slowest pace since September 2011.
The sales drop was the largest one-month decline since a 22.5% fall in July 2010. That tail-off was preceded by the end a congressionally approved tax credit intended pull the housing market out of the 2006 collapse of the housing market.