Hints of economic reawakening amid mass, civic unrest
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Wednesday related to the national and global response, the work place and the spread of the virus.
TESTING THE WATERS: Businesses are starting reopen, or explore how to do so, as states and cities ease restrictions on public activities.
— Cinemark Holdings plans to begin reopening U.S. movie theaters on June 19. All theaters have been closed since mid-March and on Wednesday, the movie house chain posted its first quarterly loss since the Great Recession. Revenue plunged 24%.
This while rival AMC warned Wednesday that it may not survive the coronavirus pandemic.
— The CEO of Delta Air Lines says flights are becoming more full as air travel slowly recovers from a 90% drop in travel. Ed Bastian said Wednesday the average flight is 46% to 48% full. “That’s the signal to add more flights into the marketplace and add bigger planes,” he said during a webcast with Business Travel News.
— Amazon.com said Wednesday it has leased 12 more Boeing 767 jets, pushing its fleet to more than 80 planes. The company said the planes are critical for deliveries during the coronavirus outbreak. Amazon is continuing to expand its air and ground fleet and compete increasingly with delivery giants UPS and FedEx.
— The beauty chain Regis is working with infectious disease specialists at the University of Minnesota as it prepares to reopen more salons. Specialists from the school looked at how customers move about in salons and provided recommendations on personal protective equipment and other safety measures.
There are about 3,000 salons that are operating and Regis expects the majority of its salons will reopen this summer.
— Red Robin Gourmet Burgers anticipates reopening about 270 dining rooms by Sunday, or about 65% of company-run restaurants.
The locations are in the chain’s largest and highest volume markets in the Pacific Northwest and West Coast. There are more than 550 Red Robin restaurants across the U.S. and Canada, including franchisees.
— The clothing chain Express had reopened 303 stores, but is not ready to provide financial projections after restrictions from the pandemic ravaged the company in the first quarter. On Wednesday, the company posted an unexpectedly large quarterly loss of $154.1 million and sales plunged 53%.
STRUGGLING FOR SURVIVAL: New York & Co. parent RTW Retailwinds said in a regulatory filing Wednesday that there’s “substantial doubt″ about the company’s ability to continue as a going concern. The company said it is “probable” that it would file for Chapter 11 bankruptcy.
LOW BURN: The collapse in air travel has dried up airlines’ demand for fuel. The Transportation Department said Wednesday that U.S. airlines burned 447 million gallons of fuel in April, 70% less than a year earlier — and the lowest monthly amount in the department’s figures, which go back to 1977. Along with a drop in prices, airlines spent $617 million on fuel in April, down from $3.1 billion in April 2019.
HOUSING HEATS UP IN LOCKDOWN: With states easing travel restrictions and mortgage rates at all-time lows, there are growing signs of a resurgence in what only a few months ago had been a hot housing market.
— Prospective homebuyers flooded back into the market after weeks of sheltering in place. Mortgage applications to buy a home have been thawing for about a month and last week, they surged 18% compared with last year at this time, and 5% from just last week, according to a report Wednesday from the Mortgage Bankers Association.
In mid-April, when COVID-19 cases were spreading rapidly, those applications had slumped 35% annually.
“The pent-up demand from homebuyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring,” said Joel Kan, an MBA economist.
GOVERNMENTS & CENTRAL BANKS: Europe has spent massively to tamp down unemployment and the U.S. is reporting monthly employment numbers at the end of the week. A report from the payroll company ADP Wednesday could provide a peak at what policy makers will be dealing with.
— The virus outbreak has pushed Australia into its first recession in almost three decades.
— Cyprus is pushing forward by three weeks the removal of most remaining coronavirus restrictions, citing a consistently low infection rate since stay-at-home orders were lifted in early May.
— Austria is ending checks on its borders with neighboring countries — except Italy.
MARKETS: Stocks rose again Wednesday on optimism that the economy can climb out of its current hole more quickly than earlier feared.
SOUP IS GOOD LOCKDOWN FOOD: Campbell’s, after years of making course adjustments to catch up to a vast change in consumer tastes, has become something of an it-brand for those sheltering in place. The company easily topped quarterly profit and sales expectations, and it said Wednesday that the number of households with its products on their shelves is up 6%.