Market Brief: May 14, 2020

Still, the latest tally leaves the number of jobs lost to the virus at more than 36 million—a massive number with economic consequences that are only starting to play out. The Labor Department said Thursday that the seasonally adjusted rise in initial jobless claims for the week ending May 9 fell from the previous week’s 3.2 million. Economists polled by FactSet expected a bigger fall to 2.5 million.

Expectations for demand are still extremely low for the second quarter, with the IEA projecting a decline of 19.9 million barrels a day, which would leave consumption about 20% below last year’s level. But those projections are better than they were last month.

In recent weeks, Chinese state media and scholars have lashed out at the U.S. and others they accuse of using the coronavirus outbreak as a political weapon against China. The growing tensions come as the U.S. election approaches, with China thrust into the spotlight as the source of the epidemic that has crippled the American economy and eroded President Trump’s approval rating.

Earlier in the week, the Wall Street Journal reported that the two companies were in talks for a transaction in which Uber would use its stock to buy Grubhub. But CNBC reported Thursday morning that either a deal will come soon, or there won’t be a deal at all—and so far, the two sides apparently can’t reach an agreement on price. On Thursday afternoon, Grubhub shares were down 6%, to $54.64, but still up 17% for the week. Uber was off 2.9%, at $32.07, and is now down slightly for the week.

Norwegian said in a release Thursday that it “has experienced rapid and significant impacts related to the COVID-19 global pandemic including significant softness in near-term demand and an elevated rate of cancellations for existing bookings.”

ABX464 has also been tested in ulcerative colitis, where it showed positive results in a Phase 2 trial. Abivax says that ABX464’s anti-inflammatory mechanisms could help prevent or treat the overactive immune responses that can lead to death in serious cases of Covid-19.

Early reopening might expose the company to new liabilities. “Investors must try to balance the potential benefit of an earlier reopening (less cash burn) with the risk of liability from potentially adverse health outcomes,” Morgan Stanley analyst Adam Jonas wrote in a Thursday research report. “All [auto makers] confront this risk during the restart.

Delta said in a filing Thursday that it plans to retire its 18 Boeing 777 planes and accelerate the retirement of MD-88 and MD-90 aircraft. Delta CEO Ed Bastian told employees in a memo that the airline is burning through $50 million in cash a day and that retiring the aircraft will “help us stem the bleeding.”

But the stock shouldn’t have initially slumped following the news, for a simple reason: Delta is predominantly an Airbus customer for wide-body jets. Out of the roughly 900 aircraft the U.S. airline operates, 18 are 777-model planes. Delta has 42 A330 aircraft and an additional 13 A350 aircraft for a total of 55 Airbus wide-body jets.

Penske, whose businesses include operating automotive and commercial truck dealerships in the U.S. and abroad, in February had declared its 35th consecutive dividend increase of a penny. It was an unusual approach as most U.S. companies put through dividend increases once a year.