Connect with us

Finance

Dow futures point to a more than 700 point Monday opening gain

Published

on

A person wearing a face mask walks along Wall Street after further cases of coronavirus were confirmed in New York City, New York, U.S., March 6, 2020.

Andrew Kelly | Reuters

U.S. stock futures rose on Sunday night as Wall Street tried to recover from another decline last week while investors shook off rising tensions between Saudi Arabia and Russia.

Dow Jones Industrial Average futures traded 696 points higher, implying a gain of about 730 points at the Monday open. S&P 500 and Nasdaq 100 futures also pointed to robust Monday opening gains for the two indexes.

Last week, the major averages posted their third weekly decline in four. The Dow slid 2.7% while the S&P 500 lost 2.1%. The Nasdaq Composite closed last week down 1.7%. Stocks are also deep in bear-market territory as concerns over the coronavirus outbreak have virtually shut down the global economy and have dampened sentiment around corporate profits. 

However, some on Wall Street think the market could start to turn a corner soon. 

Billionaire investor Bill Ackman, founder of Pershing Square Capital Management, said in a series of tweets he is “beginning to get optimistic.” He said cases in New York, a hot spot for the coronavirus in the U.S., “appear to be peaking” while some treatments “appear to help.”

“If this is true, the severity and death rate could be much lower than anticipated, and we could be closer to herd immunity than projected,” Ackman also said. “While it is hard to be positive when we know that tens of thousands more will die and many more will get severely sick, I have no choice but to be more optimistic about the intermediate future based on the data and facts I have seen recently.”

Last month, Ackman called for the U.S. to completely shut down for 30 days as a way to curb the coronavirus outbreak. “Hell is coming,” Ackman told CNBC’s “Halftime Report” on March 18. 

The number of coronavirus-related hospitalizations has fallen slightly in New York while discharges are up, Gov. Andrew Cuomo said Sunday. Italy also reported Sunday its smallest daily increase in deaths in two weeks.

To be sure, the number of coronavirus cases continues to increase sharply. More than 1.2 million coronavirus cases have been confirmed, according to Johns Hopkins University. The U.S. is by far the country with the most cases at over 330,000. On Saturday, Trump warned “there will be a lot of death,” noting the U.S. faces its “toughest week” in its fight against the virus.

Marc Chaikin, CEO of Chaikin Analytics, advises investors to remain cautious.

“Until the spread of the COVID-19 virus peaks and we are closer to a reopening of the U.S. economy, sell rallies and sit on your cash,” said Chaikin. “If we are fortunate to see an effective treatment there will be plenty of capital gains opportunities. For me, capital preservation is more important than capital gains.”

Stock futures shook off a massive decline in oil prices as a key meeting between major oil producing countries was delayed. U.S. crude fell more than 4% to $27 per barrel

The meeting between OPEC and Russia was scheduled for Monday, but sources familiar with the matter told CNBC it will “likely” take place Thursday. The delay comes after President Donald Trump told CNBC last week he expected both countries to cut production by up to 15 million barrels.

Trump’s comments helped U.S. crude post its biggest-ever weekly gain. West Texas Intermediate futures rallied 12% last week. WTI also jumped 24% on Thursday for its best day on record, lifting equity prices that day as concern about financial and job losses in the energy sector eased.

Crude has taken a beating this year as Saudi Arabia-led OPEC and Russia failed to reach a deal on production cuts while the global spread of the coronavirus dampens the demand outlook for oil. Year to date, WTI has lost more than half of its value.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

Source link

Finance

The Villages’ policy on face masks presents a financial risk

Published

on

By

Scott Fenstermaker

Villages-news.com has reported on the new Recreation Department policy of not requiring masks for situations in recreation centers where social distancing is not feasible. In fact, the new policy has just turned the task of checking Villager ID’s into a potential suicide mission for employees.

Furthermore, if the staff, themselves, don’t wear masks, a sick, maskless ID checker could infect hundreds, and indirectly, thousands of Villagers. While this potential death and suffering has been discussed, at length, on this site, what has not appeared here is a discussion of the financial risk of the new policy.

In addition to the death and suffering that the new policy will likely cause, the new policy could jeopardize the financial solvency of our amenity system. Sick employees (or their survivors) will be filing worker compensation claims. Even more costly, sick Villagers (or their survivors) will be filing lawsuits against the amenity system for negligently not following the recommendation of both the CDC and virtually every other expert in the field.

I won’t get into the merit of such lawsuits (which will depend on the facts), the intricacies of the ownership and administration of the amenity system, or the effectiveness of masks. But do not think for a moment that such worker compensation claims and lawsuits will have no chance of succeeding. For people interested in learning more, here is a link to one of many articles that have appeared on the general subject: https://www.nytimes.com/2020/04/28/business/businesses-coronavirus-liability.html For more, Google: “COVID-19 business liability”.

Scott Fenstermaker is a resident of the Village of Winifred.

Source link

Continue Reading

Finance

Pandemic-related restaurant closures take an emotional and financial toll

Published

on

By

Michael Raviele agonized for hours over how to break the news to his loyal customers before finally announcing at 4:30 a.m. on May 15 that he was closing Il Gatto Nero, the Italian restaurant his father first opened some six decades prior.

“I did that road for 18 years — up and down, every single day,” said the man with a tattoo of the restaurant’s logo on his arm. “I worked there every single day.”

Restaurants across Canada — from local institutions to newer spots hustling to establish themselves — have closed permanently in recent weeks as the COVID-19 pandemic ravaged an industry already plagued by razor-thin margins. Their owners face not only the emotional loss of their business, but also often large debt, little savings and an uncertain future.

Il Gatto Nero started as an Italian social club featuring pool tables and espresso more than 60 years ago. Raviele joined the business in the early 90s and slowly added to the club’s repertoire with a pizza oven, sandwiches and other tweaks.

The club moved to Toronto’s College Street about 18 years ago. At the new location, they saw a lot of success — like when Italy won the FIFA World Cup in 2006 — as well as some down times — like the 2008 recession — that prompted Raviele and his father to dip into personal savings to keep the restaurant afloat. Raviele invested more money into the business in 2014 for a renovation and expanded to a second location, a small cafe in Etobicoke, in October 2019.

When COVID-19 hit and government ordered dining rooms to close, Raviele attempted to shift to take away, but eventually stopped. Bills piled up from utility companies.

“I obviously incurred some debt and debt that wasn’t there,” he said.

But uncertainty over the future of dining was the final nail in Il Gatto Nero’s coffin.

Raviele speculated he might be required to remove the restaurant’s 10 bar seats and slash his 65-seat capacity in half to comply with pending physical distancing rules, which would cripple his business.

“I don’t see a future for my business or for my family,” he said. “The model for opening any restaurant is based on feeding capacity versus space, and how many people can you do over the course of a night… I mean, if you have one bad weekend, it could be disastrous for many small business.”

He plans to focus on the small espresso bar, add a pizza oven and hustle to keep that business going, which he said he invested his second life into.

“I’m angry because I wanted to do something good and now the possibility of losing both is always there.”

Mohammed Bin Yahya, co-founder and chief executive at Plentea, found the coronavirus to be “just like the knock out punch” for his Toronto tea bar.

Before the pandemic, the company was struggling to pay some $5,000 in rent. When they shifted to takeaway to abide by health regulations amid the pandemic, foot traffic dropped dramatically.

The tea shop, which Bin Yahya opened in 2015 with dreams of growing to multiple locations, will close at the end of the month.

“The numbers. Straight up, the numbers don’t lie,” he said.

The company had to pay penalties when closing some of their accounts with cleaning companies, internet and phone providers, and others, he said.

“We are in debt,” he said, estimating they’ll owe some $40,000 in the end.

For now, he’s trying to minimize his expenses, and said he may have to find a side job and move in with family to help pay back the loans.

But he’s keeping the dream alive. Plentea will continue selling tea online, he said, and — for now — he’ll keep the equipment in storage with the hopes of opening again.

With nearly four decades in the food industry, 77-year-old Frances Wood’s retirement plan relied heavily on the Cajun-and-Creole food restaurant she co-owns, Southern Accent in Toronto. 

After 34 years in one location, Wood dipped into her nest egg to help cover a move to a new spot about three years ago. It took some time to build up a new customer base and Wood noticed in recent years, lucky restaurants made 10 per cent in profit.

Still, at the start of this year, she started seeing “the light at the end of the tunnel” in making the new location work.

She debated selling the restaurant after her five-year lease ended. But with about one-and-a-half years to go, COVID-19 hit.

Southern Accent also attempted take-away and delivery, but found with high delivery app fees, it was losing money each day it stayed open.

Wood and her co-owner decided to close permanently in April and have about $60,000 in loans and bills to pay back between them.

In what Wood called “a miracle,” their landlord released them from their roughly $10,000 monthly lease early, Wood said.

“I don’t know what we would have done. We would have to go personally bankrupt, I guess” had that not happened, she said.

The next phase of the septuagenarian’s life “doesn’t look very good.” Wood didn’t draw a salary for the past several years, but the restaurant did pay some of her expenses. She collects Old Age Security, the Canada Pension Plan and has some personal savings, but that hardly covers her monthly expenses.

“My livelihood, what I was expecting to have at the end of 37 years in the restaurant business was some money from the restaurant when I sold it to help with my senior years.”

She planned to sell the name and recipes, and help set the buyer up for success. She even kept the restaurant’s 1940s bar in case a buyer emerges. It’s tucked away in the garage.

Still, she considers herself lucky all things considered.

“I think, ‘Okay, I’m lucky. I have my health.’”

This report by The Canadian Press was first published May 31, 2020.

Aleksandra Sagan, The Canadian Press



Source link

Continue Reading

Finance

Why it matters that China is putting Hong Kong independence ‘through the shredder’

Published

on

By

Hong Kong’s long history as an independent entity is being systematically squeezed by China, which experts contend is lashing out at challenges to its global ambitions — as well as the coronavirus crisis spawned within its borders, which remains shrouded in suspicion.

Roiled for over a year by anti-government protests, Hong Kong is now in the crosshairs of a Chinese government that’s increasingly on the defensive as it moves to entrench its status as a superpower.

By enacting the Security Act of Hong Kong this week, the Chinese government effectively put the world on notice that decades of Hong Kong semi-autonomy — and a raucous independence movement — are coming to an end. It also raises the possibility that the dispute may end in a violent confrontation between Hong Kong’s pro-freedom movement and an authoritarian power determined to maintain the status quo.

According to experts, China’s move against Hong Kong’s independence has dovetailed with a wide-ranging campaign of intimidation and “wolf-warrior” influence-projection across the world. The evolving conflict has imperiled Hong Kong’s special trading status with the U.S., which has locked horns with China over everything from trade to a perceived lack of transparency during the COVID-19 pandemic.

The Security Act “pretty much put through the shredder” any ambitions Hong Kong may have harbored over maintaining the autonomy it’s enjoyed since 1997, when Great Britain handed Hong Kong back to China, according to Arthur Dong, professor at Georgetown University’s McDonough School of Business.

China is “sending a message to not only Hong Kong but the rest of the world that they are going to …[consider] actual martial law as well as the imposition of greater military authority over Hong Kong,” Dong told Yahoo Finance in an interview. It’s also a major impetus behind why President Donald Trump moved on Friday to end Hong Kong’s trade preferences, as part of a multi-pronged pushback against Beijing’s influence.

“Now up until this point, China was rather restrained in terms of what it was going to do, although it sent an implied message that if things fall apart, we’re going to roll the tanks,” Dong warned, in a veiled reference to the 1989 pro-freedom protests in Tiannamen Square that ended with a bloody government crackdown.

“And now it’s become very clear that that possibility and that prospect is going to be a very, very real option that’s being put on the table,” he added.

‘Fairly embattled’

Food delivery workers wearing face masks to protect against the spread of the new coronavirus prepare to delivery foods near a TV screen showing Chinese President Xi Jinping attending the closing ceremony of the National People’s Congress in a news report, in Beijing, China, Thursday, May 28, 2020. China’s ceremonial legislature on Thursday endorsed a national security law for Hong Kong that has strained relations with the United States and Britain. (AP Photo/Andy Wong)

The mounting challenges to preserving decades of U.S.-China-Hong Kong status quo are likely to make American multinational companies nervous, while also unsettling global investors.

With bipartisan support growing in Washington for reprisals against Beijing, Goldman Sachs said this week that “legislation related to the U.S.-China relationship looks increasingly likely to become law.” A bill that passed the Senate on May 20 to delist Chinese companies from U.S. stock exchanges received overwhelming support, and may get Trump’s signature, the bank suggested. 

“China-focused legislation specifically related to COVID-19 could also become law, but is farther behind in the legislative process and appears to have somewhat less support in Congress, but it is not out of the question,” Goldman added.

Meanwhile, the U.S. is hardly the only country reacting to China’s provocations. Rodger Baker, vice president of strategic analysis at Stratfor, told Yahoo Finance this week that countries around the world are growing more concerned about Beijing’s “heavy handed use of economic tools to stop political commentary. They’re starting to shift their vision of China as well.”

The Security Act “clearly empowers Hong Kong security forces, under the direction of Beijing, to increase the arrest, detentions and shutting down of protests and demonstrations,” Baker said. He also said that U.S. businesses are “re-weighing” their position in Hong Kong, as questions are raised over its status, and China’s policies grow more revanchist. 

“Beijing has been very vocal and active over the past several months…from rising backlash against the questions around the origins of COVID,” Baker said. With China feeling “fairly embattled,” the government may renege on U.S. trade deal commitments, or make multinationals feel the heat, he added.

Eurasia Group Founder and CEO Ian Bremmer, who believes that the U.S. and China are heading towards a new “cold war,” told Yahoo Finance this week that the world’s largest economy should avoid inflicting damage on an ally just to spite China.

“We don’t want to hurt Hong Kong more than we hurt mainland China,” Bremmer said, adding: “I expect we will put sanctions on a bunch of mid-level Chinese officials that have been involved in the crackdown … [and] we might say that Hong Kong will have export tariffs that are similar to mainland China.”

Javier David is an editor for Yahoo Finance. Follow him on Twitter: @TeflonGeek

Follow Yahoo Finance on TwitterFacebookInstagramFlipboardLinkedIn, and reddit.

Find live stock market quotes and the latest business and finance news



Source link

Continue Reading

Trending