Markets Lose Steam as Outbreak Worsens: Dwell Updates
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A commuter walking across Westminster Bridge on a foggy Monday morning in central London. Brexit talks over a trade deal appear to be deadlocked.Credit…Daniel Leal-Olivas/Agence France-Presse — Getty Images
Stock markets lost steam on Monday, and futures suggested the S&P 500 would lose ground when trading starts, retreating from a record high reached on Friday. Deadlocked Brexit talks and the worsening outbreak of the coronavirus in the United States dampened the mood among investors.
The Stoxx Europe 600 index declined by 0.4 percent, pulled lower by financial firms and automakers. The CAC in France fell 0.8 percent, the DAX in Germany dropped 0.3 percent and the Ibex in Spain was 0.5 percent weaker. In Asia, the Nikkei 225 in Japan fell 0.8 percent and the Hang Seng Index in Hong Kong closed down by 1.2 percent.
Over the weekend in Washington, senators expressed hopes that there would be an agreement on a pandemic relief package after Friday’s job report showed the recovery in the labor market had continued to slow. A bipartisan group of lawmakers have put together a $900 billion spending plan, which would serve as a stopgap until March and restore some of the federal unemployment benefits that expired in the summer.
On Sunday, Senator Bill Cassidy, Republican of Louisiana, said he believed both Mitch McConnell, the Senate majority leader, and President Trump would end up backing the plan.
The British pound fell against all other major currencies as last-ditch talks between the European Union and Britain were at an impasse over a few issues including fishing rights and competition rules. If the two sides don’t come to an agreement soon, Britain will trade with the European Union on World Trade Organization terms, which will introduce tariffs and extensive border checks on goods at the end of the year. The pound dropped 1.2 percent against the euro and 1.4 percent against the U.S. dollar.
The 2021 Paris Air Show has been canceled, organizers said, citing the uncertainty over the pandemic. The weeklong event, held every other year, is a major trade show for the commercial and defense aerospace industries. It had been scheduled for next June. The next show, the organizers said, would be in June 2023.
A fashion show in Milan for Moncler’s 2020 fall/winter collection. The Italian label is known for its puffy outwerwear.Credit…Valerio Mezzanotti for The New York Times
Another week brings another deal in the luxury sector.
The Italian brand Moncler, known primarily for its puffy outerwear, is planning to buy a fellow Italian brand, Stone Island, for 1.15 billion euros, or $1.4 billion, strengthening its foothold in the high-end outerwear market.
As part of the acquisition, announced Monday, Moncler will buy 70 percent of the company that owns Stone Island from its chief executive, Carlo Rivetti, and his family. It will then buy the remaining 30 percent from Temasek, a state-backed holding company in Singapore.
The Rivetti family plans to reinvest part of the proceeds as a shareholder in Moncler, the company said in a statement.
“We are coming together at a challenging moment both for Italy and the world, when everything seems uncertain and unpredictable,” said Moncler’s chairman and chief executive, Remo Ruffini. “But I believe it is precisely in these moments that we need new energy and new inspiration to build our tomorrow.”
With Stone Island, Moncler is expanding its brand portfolio after a long streak of double-digit sales growth for its own offerings recently waned. The purchase also gives the Italian company a bigger presence in its domestic market, and a younger, trendier sportswear brand in which to invest in and grow globally.
Stone Island, which counts celebrities such as the musicians Drake and The Weeknd as fans, was founded in 1982 and specializes in high-tech fabrics, with some garments that can change color depending on temperature.
The latest luxury deal comes after the worst year in history for the sector, which is starting to rebound thanks to growth driven by Chinese consumers shopping from home. Last month, the Swiss luxury goods company Richemont said it would invest $1.1 billion in the online fashion retailer Farfetch to strengthen its operations in mainland China. And in October, LVMH confirmed that it would still acquire the jeweler Tiffany for almost $16 billion, albeit after months of fraught negotiations.
Amazon’s fulfillment center in Carteret, N.J. The company plans to hire 100,000 seasonal workers.Credit…Demetrius Freeman for The New York Times
If there was ever a year to get your holiday shopping done early, this is it. The pandemic surge has experts predicting three billion packages will course through the nation’s shipping infrastructure during the holiday season — about 800 million more than were delivered last year, Michael Corkery and Sapna Maheshwari report in The New York Times.
That surge has the ability to harm smaller retailers already reeling from the effects of the prolonged lockdown while bolstering Amazon’s dominance. (The company has been expanding its own logistics business and is increasingly independent when it comes to its shipping capabilities.)
“Everyone is preparing for the worst and holding their breath,” said Ravi Shanker, a transportation analyst at Morgan Stanley. “It is far easier to lose at peak shipping than to win.”
More than 7 million more packages need to be shipped daily this holiday season than the system has the capacity to handle, according to ShipMatrix, which provides technology to the shipping industry.
To cope with the surge, the large shipping companies, including FedEx and UPS, have expanded weekend deliveries and hired more workers. They are also able to play hardball with retailers, enforcing limits on how many packages companies can send out a day and introducing steep holiday surcharges.
“Demand exceeds capacity, no matter what part of the country you are in,” said ShipMatrix’s president, Satish Jindel.
Speaker Nancy Pelosi has backed a compromise plan for economic relief as the starting point for renewed negotiations.Credit…Oliver Contreras for The New York Times
The $908 billion bipartisan aid package that is gaining support in Congress will not solve all of the nation’s economic problems, but economists say that the federal government should pass it anyway.
“It’s within the range where you could argue it does enough good that it would be worth taking it,” said William E. Spriggs, a Howard University economist who served in the Labor Department under President Barack Obama. “But it leaves a ton on the table, and still leaves us with a big problem going forward.”
Details of the plan, proposed by a group of senators including Susan Collins, Republican of Maine, and Joe Manchin III, Democrat of West Virginia, are still being negotiated, Jim Tankersley and Ben Casselman report in The New York Times. Furthermore, its success is not assured: Senator Mitch McConnell, Republican of Kentucky and the majority leader, has not endorsed it and President Trump would still need to sign it. But experts say the plan would provide nearly $300 billion for small-business aid, $180 billion for unemployed workers and $160 billion for state, local and tribal governments.
The plan doesn’t include everyone in need and is unlikely to last long enough to bridge the economy to the rebound that is expected to come when the coronavirus vaccines reach mass distribution. But if passed soon, it could send money out quickly, which would help the stalling economy.
“You get most of the way there, you don’t turn around at the end,” said Gov. Mike DeWine of Ohio, one of several Republican governors who has called for more federal aid. “We can’t stop now, and I guess I would say that to my friends in Congress: We need your help one more time here. Help get us through what’s going to be a very tough winter.”
DoorDash plans to make its stock market debut on Wednesday, followed by Airbnb on Thursday. Both have raised their valuation targets significantly, part of a frenzy of tech deal making that some say resembles the dot-com mania.
Negotiators from Britain and the European Union will try to break the deadlock in Brexit talks ahead of a year-end deadline to sign a trade deal. Negative news on Monday about progress led to a plunge in the British pound.
The Food and Drug Administration holds a hearing on the Covid-19 vaccine developed by Pfizer and BioNTech on Thursday, which could lead to the country’s first emergency authorization of a vaccine candidate.
In a light week for earnings, Adobe and Campbell Soup report on Wednesday, while Costco, Lululemon and Oracle release their financials on Thursday.
Senator Mark Warner, Democrat of Virginia, predicted a few more “days of drama” before the deal gained enough support to pass both chambers.Credit…Tasos Katopodis/Getty Images
A bipartisan group of senators on Sunday made the case for a $908 billion stimulus proposal that they argued would break the stalemate in Congress over delivering additional economic relief to Americans battered by the coronavirus pandemic.
Senator Mark Warner, Democrat of Virginia and one of the lawmakers who created the plan, said on CNN’s “State of the Union” that the number of senators backing the proposal “goes up every day.”
“It would be stupidity on steroids if Congress doesn’t act,” Mr. Warner said, adding that he predicted a few more “days of drama” before the deal gained enough support to pass both chambers.
The proposal, spearheaded by two centrist senators, Joe Manchin III, Democrat of West Virginia, and Susan Collins, Republican of Maine, has yet to be endorsed by Senator Mitch McConnell, Republican of Kentucky and the majority leader. But Speaker Nancy Pelosi, Democrat of California, has been more encouraging, saying it should serve as the “basis” for negotiations.
Intended as a stopgap measure to last until March, the plan would restore federal unemployment benefits that lapsed over the summer, but at half the rate, providing $300 a week for 18 weeks, and would provide $160 billion to help state, local and tribal governments facing fiscal ruin — a fraction of what Democrats had sought. Also included was $288 billion to help small businesses and a short-term federal liability shield from coronavirus-related lawsuits. The proposal does not include another round of $1,200 checks for most Americans.
Mr. Warner pushed back against criticism from the left over the liability provision, which was meant to last just four months while states come up with their own proposals. Senator Bernie Sanders, independent of Vermont, had criticized the plan as a “get-out-of-jail-free card” for corporations, but Mr. Warner said Mr. Sanders was “not involved in these negotiations, and his characterization is just not accurate.”
On “Fox News Sunday,” Senator Bill Cassidy, Republican of Louisiana and one of the plan’s architects, also said the immunity provision — which Mr. McConnell has championed — was “one of the sticking points right now.”
Mr. Cassidy said he believed both Mr. McConnell and President Trump would end up backing the plan.
The bill is an attempt to find a middle ground between the dueling stimulus proposals that Democrats and Republicans have haggled over for months. Its cost is less than half of what Democratic leaders had pushed for in the weeks leading up to the election, but nearly double the latest proposal from Republican leaders.
On NBC’s “Meet the Press,” Mr. Manchin emphasized the plan was not supposed to be a long-term solution for the American economy, but an immediate boost that could avert the impending lapse at the end of the year of a series of relief programs that were established in the $2.2 trillion stimulus law enacted in March. He said President-elect Joseph R. Biden Jr. could offer a more comprehensive proposal, but waiting until Mr. Biden took office “might be too late for so many people and small businesses.”
Senator Richard J. Durbin of Illinois, the Senate’s No. 2 Democrat, said on ABC’s “This Week” that there were “a few remaining issues,” but he thought they could be worked out.
When asked about the lack of direct payments in the package, Mr. Durbin held that the given limit was $900 billion. He estimated that the program to distribute $1,200 checks would cost $300 billion alone.
“This is our last chance before Christmas and the end of the year to bring relief to families across America in the midst of a public health crisis,” Mr. Durbin said. “It’s time to put the partisan labels aside.”