| New Jobless Claims Come In Above 1 Million for the 16th Consecutive Week |
| First-time claims for unemployment insurance remain stubbornly high, demonstrating how tough it will be for the labor market to recover from the coronavirus pandemic despite better-than-expected hiring in recent months.
The Labor Department said Thursday that some 1.31 million Americans filed initial jobless claims in the latest week. That’s down from 1.41 million a week earlier and below the 1.38 million economists surveyed by FactSet predicted, but it marks the 16th straight week where initial claims exceeded 1 million. What’s more, continuing claims for unemployment benefits remain above 18 million, while continuing claims for Pandemic Unemployment Assistance—representing gig workers and others not normally eligible—rose 1.5 million to 14.4 million in the latest week.
“Fundamentally, the fact that initial unemployment claims are still running over 1.3 million per week this far into the onset of the pandemic in the U.S., and the stubbornly high level of continuing claims, provides a cautionary message about the difficulties involved and the time it will take to heal a labor market thrown into turmoil by unprecedented circumstances,” says Josh Shapiro, chief U.S. economist at MFR. Before the pandemic, the highest single weekly tally ever was 695,000 in 1982. |
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| Airlines Stocks Are Falling Because None of Us Are Going Anywhere |
| Airline stocks were down sharply on Thursday as a new reality appeared to be sinking in: The rebound in leisure travel may be sputtering, and there are signs that corporate travel may not materialize to pick up the slack.
Air traffic has rebounded a bit since the pandemic started, largely because leisure travelers have started boarding planes to take vacations or see family and friends. But a leisure-travel recovery extending beyond the summer is looking dicier. More than a dozen U.S. states and cities recently imposed quarantines amid a surge in coronavirus cases. New jobless claims are still rising. And federal unemployment benefits are set to expire for 31 million Americans at the end of July, potentially pinching consumer spending. |
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| Biden Proposes $700 Billion-Plus ‘Buy American’ Campaign |
| Launching an economic pitch expected to anchor his fall presidential campaign, Democratic candidate Joe Biden is proposing sweeping new uses of the federal government’s regulatory and spending power to bolster U.S. manufacturing and technology firms.
Biden calls for a $400 billion, four-year increase in government purchasing of U.S.-based goods and services plus $300 billion in new research and development in U.S. technology concerns. Among other policies expected to be announced Thursday, he proposes tightening current “Buy American” laws that are intended to benefit U.S. firms but can be easily circumvented by government agencies. |
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| Bed Bath & Beyond Stock Takes a Bath After Earnings, Plunging More Than 20% |
| Bed Bath & Beyond plunged more than 20% on Thursday, following its downbeat fiscal first-quarter earnings that stood in contrast to its home-furnishing retailer peers.
Bed Bath said it lost $1.96 a share on revenue that fell 49.2% year over year, to $1.31 billion. Analysts were looking for a $1.31 per-share loss on revenue of $1.39 billion. The company declined to report same-store sales, citing temporary store closures, but said that net sales from its digital platform grew 82% in the quarter, including sales growth of more than 100% in April and May. Online sales accounted for nearly two-thirds of Bed Bath’s total sales for the period. The company said it was also encouraged by the strong response to its expanded click-and-collect option. |
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| Costco’s June Sales Show It Is Still Winning With Consumers |
| Costco Wholesale stock closed higher Thursday, following the discounter’s latest report of robust same-store sales.
Costco said comparable sales jumped 11.5% in June, well ahead of consensus, which called for just over 4% growth. Costco’s total adjusted comparable sales, excluding gasoline and foreign exchange, climbed 14.4%. Costco’s e-commerce business jumped 86.7%. Store traffic fell 1.6% on a global basis, but climbed 0.4% in the U.S., the first reported growth in U.S. traffic since March. |
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| Walgreens Earnings Land With an ‘Oof’ |
| Walgreens Boots Alliance earnings landed like a gut punch Thursday morning, the first blow in what could be a rocky earnings season for some health-care stocks.
The drugstore conglomerate said early Thursday that the Covid-19 crisis had hurt sales by up to $750 million in the third quarter of its fiscal year. The company said it had furloughed more than 16,000 employees in the U.K. and that it planned to eliminate 4,000 positions in its Boots chain there. “Oof,” wrote Evercore ISI analyst Elizabeth Anderson in a note. |
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| A Cheaper Peloton Treadmill Could be Coming, CFO Says |
| The next Peloton Interactive product probably won’t be a rowing machine or an exercise bike, said the company’s chief financial officer Jill Woodworth. But a lower-priced treadmill could be in the cards. “We believe the running and boot camp category is two-to-three [times] the size of the bike category,” she said. “If you think about our priorities, that is first and foremost on our minds.”
Woodworth addressed new product rumors, the company’s subscription model, and its much-discussed holiday commercial during a Barron’s Investing in Tech call. The conference takes place every Wednesday until July 15. |
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| Carnival’s German Cruise Brand to Resume Sailings. The U.S. No-Sail Order Remains. |
| Carnival said its German brand, Aida Cruises, will resume sailings in August, giving some brief cheer Thursday to a stock that has lost about 70% of its value this year amid the coronavirus pandemic.
Carnival, the largest U.S.-based cruise operator, suspended sailings in mid-March along with its peers due to Covid-19. The company had several high-profile Covid-19 outbreaks on its ships, including the Diamond Princess, which was quarantined in Japan earlier this year. |
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| Musk Says Tesla Will Have Full Autonomous Driving Figured Out This Year |
| Elon Musk’s Tesla has become the world’s most valuable car company, quite an accomplishment for pandemic-affected 2020. And Musk has an encore planned.
The Tesla CEO plans to crack “level 5 autonomous driving” this year. That’s the message he delivered Thursday at the World Artificial Intelligence Conference in China. |
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| SAP’s Covid-19 Recovery Has Started Well |
| SAP stock jumped on Thursday as the German software maker said it made a quicker-than-expected recovery from the impacts of the coronavirus crisis in the second quarter.
The software giant stuck to its full-year outlook for gradually improving demand in the second half of the year, with revenue rising 1%-3% to a range of €27.8 billion to €28.5 billion. |
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