Global tourism upended; worst-case earnings scenario dodged

The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Friday related to national and global response, the work place and the spread of the virus.

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SUPPLY DEMANDED: The virus has upended supply chains and shut stores that would typically furnish goods and services.

— Amazon India is filling nearly 50,000 seasonal positions across its fulfillment and delivery networks to keep up with increased demand. The company said in a blog post Friday that the jobs will include part-time flexible work opportunities as independent contractors with Amazon Flex.

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— Bed Bath & Beyond plans to reopen about 600 additional stores within three weeks and bring back 11,000 furloughed workers. The vast majority will be Bed Bath & Beyond locations, but it’s also opening dozens of its Christmas Tree Shop stores and Cost Plus World Market stores. Its buybuy BABY and Harmon Face Values stores have remained open because to provide essential goods.

EARNINGS SEASON: The worst was expected this season and must Wall Street analysts believe the majority of companies at least dodged that. But 40% of all S&P 500 pulled all financial guidance for the year due to the chaos of a pandemic.

— Deere CEO John May said the virus has created a lot of uncertainty and the company expects global sales of its agriculture equipment to fall between 10% and 15% this year, and for construction and forestry equipment to fall as much as 40%. The company on Friday reported that revenue fell 18%, and profits tumbled 41% in its most recent quarter. Both were better than expected.

— Foot Locker’s comparable-store sales plunged 42.8% in the quarter and its loss of $98 million far exceeded all projections. The footwear chain suspended its dividend for this quarter, cut its capital expenditure expectations in half, slashed salaries, and also deferred executive compensation for top executives.

— The Buckle, which closed all of its stores on March 18, reported a loss of $11.8 million, and sales slumped 42.7%. It has since opened 331 of its locations in 42 states.)

WANDERLOST: Travel has come to a standstill and tourist destinations, from Florida to Italy face potential catastrophe.

— Air travel continues to creep higher while remaining far below pre-pandemic levels. The Transportation Security Administration screened 318,449 people on Thursday, the busiest day for U.S. airport checkpoints since March 23. That was still down 88% from the comparable Thursday a year ago.

— United Airlines is giving new CEO Scott Kirby a base salary of $1 million, which he promised in March to waive through the end of the year, and stock awards valued at nearly $2.3 million.

Kirby, previously the airline’s president, replaced Oscar Munoz as CEO on Wednesday. In a filing Friday, United said Kirby was also eligible for up to $2.5 million in 2020 incentives, but the company called the payout “extremely unlikely” because United isn’t expected to earn a profit this year. Last year, when the company posted a $3 billion profit, Kirby got compensation valued at $16.8 million, mostly in stock and options including a $9.7 million stock award for being picked to replace Munoz.

Airlines are staggering under a collapse in air travel due to the COVID-19 outbreak. United will get $5 billion in federal money to help cover payroll through September and it might borrow more from the government. Kirby has warned that United will be smaller when it emerges from the pandemic.

— Spain’s National Statistics Institute said Friday that hotel occupancy was “nil,” in April as the nation shut down. The institute published columns of zeros for overnight stays, average length of stays and occupancy rates. Spain is Europe’s second most popular tourist destination, after France.

— Portugal’s foreign minister says tourists are welcome in his country and no quarantine will be imposed on people arriving by plane. The country is pushing for the reopening of all beaches, hotels, restaurants and national monuments.

Foreign Minister Augusto Santos Silva said Friday that “minimal health controls,” which he did not specify, will be enacted at airports. Other European countries, including Spain, Italy and the United Kingdom, have sought a 14-day self-isolation rule for arrivals.

— Miami Beach will reopen beaches and hotels on June 1. Mount Rushmore will reopen Saturday, about three weeks earlier than planned.

GOVERNMENTS & CENTRAL BANKS: The U.S. this week reported that 39 million people have lost jobs. Federal Reserve Chair Jerome Powell said uncertainty is certain. That is the theme for countries on every continent.

— Japan’s central bank will provide some 30 trillion yen ($280 billion) to banks for financing small and medium-size businesses battling economic hardships brought on by the pandemic. The Bank of Japan will start providing funding to the banks in June, it said Friday. The offer for zero-interest and unsecured loans comes on top of earlier measures, such as 20 trillion yen ($187 billion) for purchasing corporate bonds and commercial papers

MARKETS: It was another rollicking week on Wall Street, finishing up for the week.

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