Stocks Slide as Lack of Economic Aid Weighs on Investors: Live Updates


Credit…Rozette Rago for The New York Times

The Trump administration said Friday it would block WeChat and TikTok from app stores in the United States. The ban will take effect on Sunday and means WeChat users in the country won’t be able to use it to transfer funds or make payments.

Both apps, which are used by more than 100 million people in the United States, are owned by Chinese companies. The Trump administration has argued that they collect data that could be retrieved by the Chinese government.

The ban comes as TikTok is negotiating a deal that would make Oracle a technology partner while taking an ownership stake in the app. The deal is meant to address the Trump administration’s concerns about China’s access to user data on the app.

The New York Times has been covering developments between the White House and the two apps. You can read more about what’s been going on here:

For most Chinese people in China, WeChat is a sort of all-in-one app: a way to swap stories, talk to old classmates, pay bills, coordinate with co-workers, post envy-inducing vacation photos, buy stuff and get news. For the millions of members of China’s diaspora, it is the bridge that links them to the trappings of home, from family chatter to food photos.

Woven through it all is the ever more muscular surveillance and propaganda of the Chinese Communist Party. As WeChat has become ubiquitous, it has become a powerful tool of social control, a way for Chinese authorities to guide and police what people say, whom they talk to and what they read.

It has even extended Beijing’s reach beyond its borders. When secret police issue threats abroad, they often do so on WeChat. When military researchers working undercover in the United States needed to talk to China’s embassies, they used WeChat, according to court documents. The party coordinates via WeChat with members studying overseas.

Outside China, WeChat has mainly been a tether for the Chinese diaspora to their homeland.

May Han, a Chinese-born American, moved to the United States with her family when she was 9. Lonely when she first arrived, Ms. Han was encouraged by her parents to use another Tencent chat service, QQ, to keep up with her elementary school friends in China. They also hoped it would help her remember Chinese.

Eventually she made the jump to WeChat, where she still whiles away her online days chatting with about 350 friends and relatives, many of them in China. Now an environmental science major at the University of California, San Diego, Ms. Han said WeChat had become the cultural glue that held together much of her Chinese community.

“If we can’t use WeChat, our connections to China will decrease or even vanish,” she said. “Most of us have got used to using WeChat, especially older generations. Changing an app is not easy for them; it means changing their lifestyle.”

China and the United States have different starting points when it comes to governing high-tech industries. The Communist Party has no tolerance for its citizens speaking out against it online or organizing outside its sphere of control. It has also made no secret of its ambitions to cultivate Chinese companies’ expertise in advanced technologies, which foreign competitors say sometimes leads the authorities to give local firms unfair advantages.

Credit…China Stringer Network/Reuters

Representatives of the Chinese-owned mobile apps WeChat and TikTok responded on Friday to the Trump administration’s decision to bar the apps from app stores in the United States.

A TikTok spokesman, Josh Gartner, said in a statement that the company was disappointed in the Commerce Department’s decision to block the app.

“We will continue to challenge the unjust executive order, which was enacted without due process and threatens to deprive the American people and small businesses across the U.S. of a significant platform for both a voice and livelihoods,” he said.

TikTok, which is owned by the Chinese company ByteDance but does not directly operate in China, has become a wildly popular platform for sharing viral videos in the United States.

Tencent Holdings, which owns WeChat, said in a statement it was reviewing the new rules and had submitted a proposal to address the government’s national security concerns about the app. It said it would “continue to discuss with the government and other stakeholders in the U.S. ways to achieve a long-term solution.”

Credit…Chris Delmas/Agence France-Presse — Getty Images

President Trump said on Friday that a deal intended to mitigate the White House’s concerns that TikTok poses a national security threat “could go very, very fast.”

At a news conference, Mr. Trump said the White House was continuing to talk to a number of companies and that an agreement to avoid having Chinese-control of TikTok could be reached “quickly.”

“We have great companies talking to us about it. You know about Oracle, Microsoft has been involved, and let’s see whether or not they are continuing to be involved. Walmart is truly a great company, they are very much involved,” Mr. Trump said.

“So we have some great options and maybe we can keep a lot of people happy, but have the security that we need,” he added. “We have to have the total security from China. We are not going to do anything to jeopardize security.”

Mr. Trump and some members of his administration have said ByteDance, which owns TikTok, cannot retain a majority stake if their national security concerns are to be satisfied. Oracle, the Silicon Valley business software maker, is set to be a technology partner for TikTok while taking an ownership stake in the app, but the exact structure of the deal remains unclear.

The president’s comments came as the Commerce Department prepared to bar both TikTok and the Chinese-owned mobile app WeChat from U.S. app stores as of midnight Sunday, taking aim at two popular services used by more than 100 million people in the United States. A TikTok spokesman said it would “continue to challenge the unjust executive order.”

  • The S&P 500 fell about 1 percent Friday, a drop that left it with a third-consecutive weekly loss. Stocks have fallen more than 5 percent over the past three weeks and about 7 percent from their high in early September.

  • Shares of companies hit hard by the pandemic led the decline. Norwegian Cruise Line fell about 6 percent, while Marriott International dropped about 4 percent, and United Airlines and American Airlines slid more than 3 percent.

  • An upsurge in coronavirus cases in Europe has caused airlines to scale back their schedules after reopening for service during the summer. The discount carrier Ryanair on Friday became the latest airline to blame changing government policies for a pullback in service, as it announced a 20 percent cut in capacity for October. Varying restrictions have left customers hesitant about making travel plans, it said.

  • Stocks have also been weighed down this week by concerns about the economy, after the Federal Reserve said it would need to keep rates near zero for years to ensure an economic recovery, but noted that more immediate action needed to come from Washington, where there’s little sign of progress on a new aid package.

  • Some attributed some of the recent market weakness to the fact the Congress and the White House have still not produced another round of stimulus aimed at keeping the economy afloat, amid the pandemic.

  • “Maybe this is a market saying, ‘Wait a second. We’re pricing-in something that maybe isn’t as likely to come as we thought it was,’” said William Delwiche, an investment strategist at Baird, a financial firm in Milwaukee.

  • Just a few weeks ago, investors and analysts widely thought another round of government spending was all but certain. But amid the increasingly rancorous presidential election, talks have stalled.

  • On Friday, analysts at Goldman Sachs — who had been among those who expected another round of spending — wrote that “at this point, a major stimulus package before the election looks like a long shot.”

Credit…Pool photo by Graeme Jennings/EPA, via Shutterstock

The Treasury Department is investigating allegations of racial harassment at the United States Mint following a direct plea by workers to Treasury Secretary Steven Mnuchin, whose department oversees the agency that produces coins.

In a letter to Mr. Mnuchin in June, Mint employees made claims of “rampant racism” that they said was ingrained in the culture of the agency. The letter, which invokes the killing of George Floyd while in the custody of the Minneapolis police, says that Mint staff have faced retaliation for trying to expose racism in the agency in the past and that they were left with little choice but to escalate their concerns.

“We are taking a stand against oppression,” they wrote.

The investigation was reported earlier on Friday by The Wall Street Journal.

“The Treasury Department has zero tolerance for discrimination or harassment of any kind, and that is why Secretary Mnuchin personally requested that the Office of Inspector General launch a thorough review of the issues raised to him by Mint employees,” Monica Crowley, a Treasury spokeswoman, said in an emailed statement.

Richard Delmar, Treasury’s inspector general, said that the inquiry would probably be completed in a matter of months.

In the letter, which was reviewed by The New York Times, the Mint employees detail an array of allegations of racism at the agency. Those include a racial slur being written on walls of restrooms and a white employee leaving a noose in the work space of a Black colleague.

Some of the cases mentioned in the letter occurred years ago and the agency was unable to substantiate some of the allegations, a spokesman for the Mint, Todd Martin, said. Regardless, the agency took the matter seriously, he said, and was holding listening sessions with “concerned” staff members in hopes of “determining action items to address underlying perceptions at the U.S. Mint.”

Following the death of Mr. Floyd, Mr. Mnuchin issued a call for tolerance in a memo to Treasury staff.

“We must condemn racism, discrimination, and intolerance in all forms,” he said.

Credit…Shannon Stapleton/Reuters

The Federal Reserve unveiled a major update to its policy statement this week, indicating that it will leave interest rates on hold near zero until the economy has regained full employment, inflation has risen above 2 percent, and those price gains look to be headed even higher.

The guidance lays the groundwork for years of growth-stoking monetary policy, but Neel Kashkari from the Federal Reserve Bank of Minneapolis wanted to do even more and was one of two votes against the statement. He would have pledged to keep rates low until core inflation — which strips out volatile fuel and food — had exceeded 2 percent on a sustained basis.

“I would have preferred the committee make a stronger commitment to not raising rates until we were certain to have achieved our dual mandate objectives,” Mr. Kashkari wrote in an explanation of his dissent published Friday.

Had the Fed’s new guidance been in place following the Great Recession, it would have only slightly delayed the central bank’s timing on rate increases, he said. Inflation did briefly rise above 2 percent in 2017. He argued that the revamped language should not include a reference to full employment, which is nearly impossible to gauge in real time.

Mr. Kashkari’s colleague, Robert S. Kaplan from the Federal Reserve Bank of Dallas, joined him in dissenting. But Mr. Kaplan did so for a very different reason: He wanted the central bank to retain more flexibility, rather than indicating that actual achievement of 2 percent inflation was a necessary condition for raising rates. That would create leeway to raise rates earlier.

The update from the Fed came after it reworked its long-run policy goals last month, making changes that would embrace periods of faster inflation and which enshrined modesty when it came to judging labor market hotness.

“They’re sort of on two sides of the discussion,” Jerome H. Powell, the Fed’s chair, said of the dissents at his post-meeting news conference. “We’re the first major central bank to adopt this framework. There’s no cookbook.”

The editors and reporters for the DealBook newsletter sift through a lot of company reports and listen to many corporate conference calls. These are some of the things that caught our notice this week:

💥 “I think the word ‘unprecedented’ gets way overused this year, 2020, and you use the figure of speech ‘earth shattering,’ which I don’t actually think we can use in 2020 because it might actually literally happen.” — Paul Jacobson, chief financial officer of Delta Air Lines, on not tempting fate

😠 “My team told me that I came across a bit too stern in my opening remarks on Monday, so feedback is always welcome, and I hope I wasn’t putting anybody off.” — Bernard Looney, chief executive of BP, on his presentation style

🍩 “A lot of our early morning traffic that used to be in that 6 to 9 a.m. window for us has really shifted into that 10 to 2 or 10 to 1. People are coming out a little later., Maybe they need a break from their Zoom.” — Kate Jaspon, chief financial officer of Dunkin’ Brands, on changing workday patterns

🏰 “The ‘Barbie Dreamhouse’ movie was the No. 8 most watched content in its first week on Netflix across all genres, not just kids.” — Ynon Kreiz, Mattel’s chief executive, on pandemic pastimes

🌯 “Our portion sizes are much more consistent because there’s not somebody pointing at every single pan and … the crew will see just the way that a customer is looking at them and think, ‘Oh, I better put another scoop in.’” — Jack Hartung, chief financial officer of Chipotle, on the benefits of online orders

Credit…Hannah Yoon for The New York Times

The pandemic has had devastating consequences for a wide variety of occupations, but housekeepers have been among the hardest hit.

Seventy-two percent of them reported that they had lost all of their clients by the first week of April, according to a survey by the National Domestic Workers Alliance. The fortunate had employers who continued to pay them. The unlucky called or texted their employers and heard nothing back. They weren’t laid off so much as ghosted, en masse.

“We plateaued at about 40 percent employment in our surveys of members,” said Ai-jen Poo, executive director of the alliance. “And because most of these people are undocumented, they have not received any kind of government relief. We’re talking about a full-blown humanitarian crisis, a Depression-level situation for this work force.”

The pandemic has laid bare not just the vulnerability of housekeepers to economic shocks but their total lack of leverage. Several workers said they had clients who would not let anyone clean who has had Covid-19; others know clients who will hire only Covid survivors, on the theory that after their recovery, they pose no health risk. Housekeepers are often given strict instructions about how they can commute, and are quizzed about whether and how much they interact with others. But they have no idea whether their employers are taking similar precautions. Nor, in many cases, are they accorded the simple decencies that are part of formal employment.

“It would be nice to have at least two days’ notice when someone cancels on you, either to let you know or compensate you for your time,” said Magdalena Zylinska, a housekeeper in Chicago who helped lobby for a Domestic Workers’ Rights bill that passed in Illinois in 2017. “I think a lot of people don’t realize that if I don’t work, I don’t get paid and I still have to buy food, pay bills, utilities.”

Credit…Emilio Morenatti/Associated Press

CaixaBank and Bankia agreed late Thursday to merge in a deal that would form Spain’s largest bank and end the government’s majority control over Bankia, the institution that was at the heart of Spain’s financial crisis and 2012 banking bailout.

The all-share agreement was presented as a merger, but CaixaBank, which is based in Barcelona, will account for about two-thirds of the new bank’s combined assets, worth 665 billion euros, or $785 billion. The combined institution, with an expected 20 million customers, will keep the CaixaBank name.

The transaction comes after both banks have reported sharp drops in first-half earnings, at a time of record-low interest rates and as the coronavirus pandemic has plunged Spain into one of the deepest recessions in Europe.

Many analysts expect the continued pressure on banks’ margins to force further consolidation in the sector. A merger between CaixaBank and Bankia “could revive moves by other banks to gain scale or strengthen their franchises or business models to remain competitive,” Fitch Ratings said in a note to investors earlier this month.

Bankia was formed as a seven-way merger intended to consolidate savings banks, known as cajas in Spain, which were crippled by bad loans, a result of the bursting of the country’s construction bubble after the onset of the world financial crisis in 2008.

But instead of shoring up Spain’s financial sector, Bankia ended up posting the largest banking loss in the country’s history and requiring about €22 billion in rescue funding, as part of a European banking bailout that the Spanish government was forced to negotiate in 2012. As a result, the government also took over Bankia, which was then slimmed down to return it to profit.

  • Two Goldman Sachs employees have tested positive for the virus, according to a company official, as more workers have returned to the firm’s downtown Manhattan headquarters in recent weeks. One works in one of the firm’s revenue producing businesses and the second is employed in its back-office division, known internally as “the federation.” The two workers sit on different floors. The cases at Goldman, which company officials believe came from exposure outside the office, come just days after JPMorgan Chase sent workers home after they came in contact with a stock-division employee who was confirmed to have the virus.

  • Blue Bell Creameries must pay $17.25 million in criminal penalties for shipments of contaminated products linked to a 2015 listeria outbreak, a federal court in Texas declared on Thursday. The fines constitute the largest-ever criminal penalty following a conviction in a food safety case, according to the Department of Justice. Blue Bell pleaded guilty in May to two misdemeanor counts of distributing adulterated ice cream products. Prosecutors in the case charged that the company dispensed products that were manufactured under unsanitary conditions.

  • Walmart, the nation’s largest private employer, said on Thursday that it was raising wages for 165,000 of its workers, as it revamps leadership roles in its stores. The pay increases, which will affect about 11 percent of the company’s United States employees, come as Walmart is undergoing a transformation to be a more digitally focused retailer and seeks to reward and retain its more skilled workers. The starting wages for bakery and deli employees will increase to $15 an hour from $11 an hour, while pay is also being raised by $1 an hour for many employees in the company’s auto car centers.


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