This archive report was first published on 27 June 2020.
Global Markets Mixed as Virus Cases Surge ¶
As the coronavirus outbreak in the US continued to worsen, the country's stock market closed the week in the red zone. At least eleven states have paused their reopening plans over fears that new infections might be increasing rapidly.
The Dow Jones fell by more than 700 points, with Goldman Sachs leading the losses, falling by 8%. The S&P 500 fell 2.40%, while the Nasdaq 100 declined 2.50%, with Facebook emerging as the worst performer, falling by over 8%.
On Thursday, the US Federal Reserve restricted dividends banks can pay shareholders and required them to suspend share repurchases in Q3. The central bank said its analysis showed that some banks could approach minimum capital levels. Banks will only be allowed to pay dividends in line with a formula based on their most recent income and will need to re-evaluate their long-term capital plans.
Meanwhile, the country's transport department announced that 41% of domestic flights were cancelled in April due to the pandemic. The largest airlines have significantly reduced the number of scheduled flights, with almost half being cancelled. Delta Air Lines said it will lay off more than 2,500 pilots, citing reduced demand caused by the pandemic.
Several major brands, including Uniliver, Verizon, and Cocacola, have suspended paid advertising on all social media platforms, citing unhappiness with the way social networks have been reacting to hate speech and political content. Cocacola CEO and chairman James Quincey noted, "There is no place for racism in the world and there is no place for racism on social media."
Amazon has acquired self-driving startup Zoox Inc. in a deal worth over $1.2 billion. Amazon's CEO of Worldwide Consumer, Jeff Wilke, noted, "Zoox is working to imagine, invent, and design a world-class autonomous ride-hailing experience."
However, Tesla CEO Elon Musk called Amazon CEO Jeff Bezos a "copycat" after the tech giant acquired self-driving start-up Zoox.
Nike has announced layoffs, citing the closure of stores across the world due to COVID-19. The firm's revenues fell by 38% to $6.3 billion, while its share price fell by 5.18%. Nike CEO Donahoe said, "These decisions are exceptionally difficult because they impact friends and colleagues at Nike."
Shares of German Fintech company Wirecard have fallen by more than 94% over the last week following the news of an accounting scandal over a missing $2.1 billion. Wirecard's CEO Markus Braun resigned amid the scandal and was later arrested and released on $5.6 million bail.
SoftBank Group is planning to sue accounting firm Ernst & Young over its role in the scandal. In April 2019, SoftBank made a €900 million investment in Wirecard via convertible bonds to acquire a 5.6% stake.
Microsoft has announced that it will close all of its 83 physical stores and switch to online only. The company's retail team members will continue to serve customers from Microsoft corporate facilities and remotely, providing sales, training, and support.
China will start tracking big cash transactions to stop capital outflows and to preserve the value of the country's holdings in dollars. Banks in Hebei Province will have to record serial numbers for any personal cash transactions of 100,000 yuan ($14,100) or more and report them to the People's Bank of China starting July 2020.
