| Coronavirus’ Labor-Market Toll: At Least 30 Million Jobs Lost |
| An additional 3.8 million Americans filed for unemployment benefits last week, putting at least 30 million people out of work as the coronavirus crisis ravages the economy.
The Labor Department said Thursday that seasonally adjusted initial jobless claims fell from the previous week’s 4.4 million. That marks the lowest since the first multimillion reading for the week of March 20. Still, the tally remains historically high and suggests about 1 in 5 workers has been laid off in recent weeks. For perspective, jobless claims over the past six weeks are more than five times the worst stretch of the Great Recession. |
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| ECB to Banks: Take the Money and Lend |
| The European Central Bank kept its key official interest rate steady—at minus 0.5%—on Thursday but made sure European banks would keep lending to businesses and consumers throughout the region by improving the conditions of its main liquidity operation—and launching a new one.
Faced with a coronavirus-induced recession that ECB President Christine Lagarde said could see the eurozone’s gross domestic product shrink between 5% and 12% this year, the governing council also reiterated that it was “fully prepared” to increase the massive pandemic-related bond-buying program it announced last month. |
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| The Federal Reserve Is Expanding the Reach of Its Main Street Lending Program |
| The Federal Reserve has opened up a key lending program to larger businesses, and those with higher debt levels.
It announced a new lending facility created to buy loans made to companies with relatively high debt burdens—up to six times last year’s earnings before interest, tax, depreciation and amortization, or Ebitda. In the new part of its Main Street Lending Program, called the “Main Street Priority Loan Facility,” it will buy 85% of eligible loans from the banks that originate them. |
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| Gilead Is Still Waiting for FDA Approval to Use Remdesivir to Treat Covid-19 |
| Twenty-four hours after Gilead Sciences announced positive results from a government study of its experimental Covid-19 drug remdesivir, data on the study are still scant, and the Food and Drug Administration has made no public moves to authorize the drug for emergency use.
Still, analysts say that an emergency-use authorization for remdesivir is likely to come soon. |
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| AstraZeneca Teams Up With Oxford Lab to Manufacture Covid-19 Vaccine |
| AstraZeneca said Thursday that it had signed a deal with Oxford University to develop, manufacture, and distribute the Covid-19 vaccine currently undergoing safety testing in the United Kingdom.
“Our hope is that, by joining forces, we can accelerate the globalization of a vaccine to combat the virus and protect people from the deadliest pandemic in a generation,” AstraZeneca CEO Pascal Soriot said in a statement. |
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| Amazon Says It May Lose Money While Spending on Covid-19 Response |
| Amazon.com topped $75 billion in sales in the first quarter as Covid-19 swept across the globe, but profit declined and the company said Thursday that it might lose money in the current period as it spends to keep up with demand.
Amazon reported first-quarter earnings of $2.5 billion, or $5.01 a share, down from $3.56 billion, or $7.09 a share, in the year-ago period. Revenue grew to $75.5 billion from $59.7 billion in the year-ago period. Analysts surveyed by FactSet had estimated $6.23 a share on revenue of $73.7 billion on average. |
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| American Airlines Stock Dives on Missed Earnings and Cash-Burn Rate |
| American Airlines missed earnings estimates for the first quarter, and the stock traded lower Wednesday as investors appeared unimpressed with the company’s efforts to conserve cash and cut costs in the face of the coronavirus.
American reported an adjusted loss of $2.65 a share, missing consensus estimates for a loss of $2.33 a share in the first quarter. Revenue came in at $8.5 billion, below estimates of $8.9 billion. If there was good news in the report, it was that American’s liquidity appears to have stabilized. The company said it had $6.8 billion of cash and available funds at the end of the first quarter and expects to have $11 billion by the end of June. |
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| Altria Sales Boosted by Strong Tobacco Demand in Lockdown |
| Altria stock climbed in early trading on Thursday as the tobacco giant said demand for its products surged in the first quarter but warned consumers would soon turn to cheaper brands.
Revenue grew 13% to $6.36 billion in the first quarter, beating the FactSet consensus of $5.79 billion. Shipments of cigarettes and cigars rose 6.2%, led by a 6.7% rise in Marlboro cigarettes. |
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| McDonald’s First-Quarter Earnings Were Worse Than Expected |
| Shares of McDonald’s were down on Thursday after it reported a sharper-than-expected decline in first-quarter profit, largely driven by the global coronavirus pandemic.
The fast-food chain reported a near-15% decline in its diluted first-quarter earnings per share to $1.47, a larger drop than Wall Street’s forecasts of a 9% decline to $1.56. Its net income fell 17%, also more severe than forecast. |
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| Facebook Sees ‘Signs of Stability’ in Ad Trends. Revenue Beats Forecasts. |
| Facebook shares rallied on Thursday after the social network said late Wednesday that its advertising business is showing signs of stabilizing from a slide due to the coronavirus crisis.
The company declined to give detailed financial forecasts for the second quarter or the full year, but it provided encouraging details on its business for the quarter to date. The news echoed comments made Tuesday by Alphabet in its own March quarter earnings report. |
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