The daily business briefing: April 27, 2020
1.
Tyson Foods' board chairman, John Tyson, warned that grocery stores faced meat shortages as the coronavirus forces food processing plants to close, removing "millions of pounds of meat" from the supply chain. "The food supply chain is breaking," Tyson wrote in a full-page advertisement published Sunday in The New York Times, The Washington Post, and the Arkansas Democrat-Gazette. "There will be limited supply of our products available in grocery stores until we are able to reopen our facilities that are currently closed." Tyson closed pork plants in Waterloo, Iowa, and Logansport, Indiana, last week. Local health authorities linked 182 coronavirus cases to the Waterloo plant, where many of the 2,800 workers had been calling in sick. [CNN]
2.
The Paycheck Protection Program reopens on Monday for a second round of loans to help small businesses continue paying employees through the coronavirus crisis. The relief program quickly ran through its initial $350 billion, but Congress replenished it with $321 billion of additional funding last week. The program has generated negative publicity due to revelations that numerous large companies got some of the money from the first funding round. The latest figures from the Washington, D.C.-based data analytics firm FactSquared indicated that more than 200 public companies applied for at least $854.7 million in PPP loans. The Treasury Department has given large firms that received loans under the program two weeks to repay them. [CNBC]
3.
Italian Prime Minister Giuseppe Conte said Sunday that his government would let factories and building sites reopen starting May 4 as the country's new coronavirus infections fall. Retailers will be allowed to open their doors two weeks later, followed by restaurants and bars in early June. The country was the first in Europe to be hit hard by the COVID-19 coronavirus. The government is trying to slowly get the country's economy moving again without sparking a new surge in coronavirus infections. All businesses that reopen after the two-month shutdown will be required to respect strict safety protocols. "We expect a very complex challenge," Conte said. "We will live with the virus and we will have to adopt every precaution possible." [Reuters]
4.
U.S. stock index futures rose ahead of the start of a new week of trading on Monday as oil prices lost ground and investors awaited the looming reopening of some states' economies during the ongoing coronavirus pandemic. New York Gov. Andrew Cuomo (D) said his hard-hit state would open in phases. Some Southern states are moving faster. "As various states begin to reopen their economies and relax social distancing rules, we will get a glimpse of what the new normal looks like," said Marc Chaikin, CEO of Chaikin Analytics. "The biggest risk to the stock market is a premature reopening of the U.S. economy which results in an increase in COVID-19 cases and requires an abrupt reversal of these efforts to awaken the economy out of its engineered coma." [CNBC]
5.
The U.S. unemployment rate could reach 16 percent in the May 8 jobless report due to the economic damage from the coronavirus pandemic, White House economic adviser Kevin Hassett said Sunday on ABC's This Week. "It's a really grave situation," Hassett said. "This is the biggest negative shock that our economy, I think, has ever seen. We're going to be looking at an unemployment rate that approaches rates that we saw during the Great Depression" in the 1930s. A record 26.5 million Americans have filed claims for jobless benefits in the last five weeks, pushing up the unemployment rate from 3.5 percent, a 50-year low. The nonpartisan Congressional Budget Office has predicted that the country's gross domestic product will contract at an annual rate of 40 percent in the current quarter, with the unemployment rate remaining above 10 percent next year. [Reuters]
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