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Speaker Nancy Pelosi of California on Thursday said she would not agree to stand-alone aid package for airlines unless the Trump administration committed to a broader pandemic relief plan to help struggling Americans, declaring that “there is no stand-alone bill without a bigger bill.”
Her comments cast doubt on the prospects for a compromise just hours after President Trump had given an upbeat assessment, saying in an interview that he had reconsidered his decision to pull the plug on bipartisan negotiations on a stimulus plan until after the election.
“I shut down talks two days ago because they weren’t working out,” Mr. Trump said during a wide-ranging interview on Fox Business. “Now they’re starting to work out.”
The prospect of a deal remained remote, given the steep political obstacles that have hampered agreement for months. Still, Ms. Pelosi and Steven Mnuchin, the Treasury secretary, have continued to talk privately about a potential aid measure for airlines to prevent tens of thousands of workers from being furloughed or laid off, and were scheduled to do so again later Thursday.
Mr. Trump said the discussions had also touched on the possibility of another round of $1,200 stimulus checks. “We’re talking about airlines and we’re talking about a bigger deal than airlines,” he said.
Ms. Pelosi told reporters on Capitol Hill that she had made it clear to Mr. Mnuchin on Wednesday evening that her willingness to consider an airline rescue measure was contingent on the administration’s agreement to a broader stimulus plan.
“We’re happy to review what that stand-alone bill would look like, as part of a bigger bill, if there’s a bigger bill,” she said. “We’re at the table — we want to continue the conversation.”
The election was making it more difficult to strike a deal, Senator Mitch McConnell, Republican of Kentucky and the majority leader, told reporters on Thursday in Hebron, Ky., but he added, “I think we ought to continue to talk and try to get an outcome.”
“We do agree that another rescue package is needed,” he said of Republicans and Democrats. “We have vast differences about how much we should spend.”
Republicans blocked a Democratic proposal for airline aid on Friday, calling it partisan and too expensive. A similar Republican bill in the Senate would repurpose unspent funds from the $2.2 trillion stimulus law enacted last spring, a move that many Democrats have opposed.
Still, Mr. Trump appeared to be hoping anew for some kind of deal before Election Day, after his move to publicly scuttle the stimulus discussions prompted alarm among Republicans that voters would blame them for the collapse of the effort.
The federal budget deficit was $3.1 trillion for the 2020 fiscal year, the Congressional Budget Office estimated on Thursday. The deficit is a record for the United States in terms of total dollars and is a direct result of the federal response to the coronavirus pandemic.
Driving the spike in borrowing were a drop in tax revenues as the economy contracted this spring amid the pandemic recession and a surge in government spending to reinvigorate growth, including enhanced benefits for unemployed workers and widespread aid to large and small businesses.
Federal spending from April through the end of September was $4.2 trillion, nearly double the same period in 2019, the budget office reported. Individual and corporate income tax receipts fell by $191 billion, or about 17 percent, in April through September, compared with the year before.
The 2020 fiscal year concluded at the end of September. The official budget deficit figures will be released by the Treasury Department later this month. The budget office estimates are based on daily figures released by the department.
Microsoft will allow its employees to work from home permanently, as coronavirus cases continue to climb in the United States and companies struggle to figure out how to arrange offices in a way that keeps workers socially distanced and safe.
Microsoft this week issued guidelines for its planned “hybrid model” of working after pandemic restrictions are lifted. Some employees could work from home less than half the time and still retain their company offices, the company said in a staff memo. Other options, with company approval, would include permanently working from home and relocating to other states or even countries.
The new guidelines, first reported in The Verge, are “guided by employee input, data, and our commitment to support individual workstyles and business needs,” Microsoft said in a statement. Microsoft previously said that its offices will not reopen until January 2021 at the earliest.
The news comes a day after Target and Ford Motor said that they would allow employees to continue to work from home through June 2021.
Target’s decision, announced in a letter to staff, applies just to employees at its headquarters in Minneapolis. The company said that a small number of employees who rely on the headquarter facilities would continue to work on-site. The retailer also said it was using this time as an opportunity to reimagine the role of its office in a post-pandemic era.
“As we look to the future, our headquarters environment will include a hybrid model of remote and on-site work,” Target wrote in the letter. “This will allow for the flexibility many of you have come to value, while also providing opportunity for the in-person connection and collaboration that’s central to our team and culture.”
Ford also said its decision would apply to its roughly 32,000 employees in North America who are already working remotely.
The announcements by Microsoft, Ford and Target come after several other companies, including Google, Uber and Slack, have decided that employees need not return to the office until at least next summer.
Some companies have tried bringing employees back to the office, but not always successfully. Last month, Goldman Sachs and JPMorgan Chase had to send some workers back home after employees tested positive for the virus.
AT&T’s WarnerMedia, the media powerhouse behind HBO Max, the Warner Bros. studios and CNN, plans layoffs in the coming weeks, part of a large restructuring effort to deal with the economic fallout from the global pandemic.
A company spokesman confirmed the layoffs in a statement but would not say how many employees would be affected.
“Like the rest of the entertainment industry, we have not been immune to the significant impact of the pandemic,” the spokesman said.
Jason Kilar, the head of WarnerMedia, announced cost cuts in August as part of a surprise bloodletting that saw the departure of its two top entertainment executives. The moves caught the clubby, gossipy world of Hollywood by surprise.
In an Aug. 7 email sent to the employees, Mr. Kilar said the executive reshuffling was part of a broader strategy to focus its efforts on its fledgling streaming business. Every major media business has done the same as viewers continue to cut their cable bills. The pandemic has also hollowed out movie theaters and theme parks, which mostly remain closed or are operating with limited capacity.
In the August email, Mr. Kilar made clear the situation meant cutting jobs. “These reductions are not in any way a reflection of the quality of the people impacted nor their work,” he said at the time.
Shortly after the email, WarnerMedia started its first round of job cuts, eliminating about 600 positions of its roughly 7,000-person global work force. The current round of cuts is expected to be larger.
WarnerMedia is a key part of AT&T’s overall plan to increase growth and last year accounted for nearly a fifth of total sales. But the phone giant had to borrow large sums to pay for the acquisition and has worked to make its operation more efficient.
Wall Street held on to a gain Thursday in a day of unsteady trading, as investors awaited clarity on the status of efforts in Washington to aid ailing industries in the United States.
The S&P 500 rose 0.8 percent, bringing its gain for the week so far to nearly 3 percent.
Stocks have been whipsawed this week in a reflection of shifting sentiment about a potential economic stimulus package. Financial markets fell on Tuesday after Mr. Trump said he was abandoning efforts to reach an agreement with Democratic lawmakers, but rallied on Wednesday over the prospect of deal to at least support the airline industry.
But on Thursday, the picture grew murkier. Before the start of trading, Mr. Trump said on television that negotiations on a broad stimulus package — not just an airline bill — had resumed.
Later, Speaker Nancy Pelosi said she would not agree to an airlines-only relief measure without the promise of more aid for Americans, telling reporters “there is not a stand-alone bill without a bigger bill.”
“Hopes for a U.S. pre-election fiscal stimulus are quietly fading to nothing,” Paul Donovan, an economist at UBS Global Wealth Management, wrote in a note to clients. “There might be something for the airlines, but no big package looks likely given the language (and amount of time available).”
Crude oil futures climbed more than 3 percent, as Hurricane Delta caused oil producers to shut down most of their output in the Gulf of Mexico.
Unemployment benefits have kept millions of families afloat during the pandemic-induced recession. But the benefits won’t last forever.
Last week was the 29th week since mass layoffs began in March. In most states, regular unemployment benefits last just 26 weeks, meaning that many people who lost their jobs in the first wave have already exhausted their benefits.
Congress in March created a program funded by the federal government for people whose state benefits have expired. The number of recipients under that program, Pandemic Emergency Unemployment Compensation, swelled to nearly two million in mid-September, up from 1.4 million a month earlier.
The program adds just 13 weeks of additional benefits, however, so people who lost their jobs in March will receive those benefits only until mid-December. And the entire program will expire at the end of the year if Congress doesn’t extend it.
A separate program, which predates the pandemic, offers another 13 to 20 weeks of benefits, depending on the state. But the benefits are based on state economic conditions, and the rapid decline in the unemployment rate means that workers in several states would no longer qualify for it.
The net result is that potentially millions of workers could see their benefits expire this winter. Epidemiologists warn that cases of the coronavirus are likely to rise as temperatures drop, and winter weather could reduce job opportunities.
“People are going to have their backs against the wall, and it’s pretty much the worst time of the year for the program to end,” said AnnElizabeth Konkel, an economist at the employment site Indeed.
Applications for jobless benefits remained high last week, even as the collapse of stimulus talks in Washington raised fears of a new wave of layoffs.
More than 804,000 Americans filed new claims for state unemployment benefits last week, the Labor Department said Thursday. That is up from 799,000 in the previous week, before accounting for seasonal patterns. Another 464,000 people applied for benefits under the federal Pandemic Unemployment Assistance program, which covers freelancers, self-employed workers and others left out of the regular unemployment system.
For the second week in a row, the reported number will carry a Golden State-size asterisk: California last month announced that it would temporarily stop accepting new unemployment applications while it addresses a huge processing backlog and puts in place procedures to weed out fraud.
In the absence of up-to-date data, the Labor Department is assuming California’s claim number was unchanged from its pre-shutdown figure of more than 225,000 applications, or more than a quarter of the national total. The state began accepting new filings this week, and is expected to resume reporting data in time for next week’s report, though it isn’t yet clear how the backlog of claims filed this week will be reflected.
While the lack of data from California makes week-to-week comparisons difficult, the larger trend is clear: After falling swiftly from a peak of more than six million last spring, weekly jobless claims have stalled at a level far higher than the worst weeks of past recessions.
“The level of claims is still staggeringly high,” said Daniel Zhao, senior economist at the career site Glassdoor. “We’re seeing evidence that the recovery is slowing down, whether it’s in slowing payroll gains or in the sluggish improvement in jobless claims.”
That slowdown comes as trillions of dollars in government aid to households and businesses has dried up. Prospects for a new stimulus package, already dubious in a divided Washington, collapsed outright this week when President Trump said he was pulling out of negotiations.
Economists warn that without more aid, layoffs will rise again. Several major corporations like Disney and Allstate have announced thousands of new job cuts. And with winter weather looming, restaurants and other businesses that were able to shift operations outdoors during warmer weather could be forced to pull back anew.
Millions of people who lost jobs earlier in the crisis remain out of work, and many are starting to exhaust their financial resources. The threat is particularly acute for people receiving benefits under Pandemic Unemployment Assistance and another program created in response to the pandemic, both of which will expire at the end of the year.
“It seems increasingly unlikely that we’ll have a deal before the election, and bills are due now,” Mr. Zhao said. “Every week that passes puts extra pressure on workers, households and small businesses, so any delay in the stimulus is going to have a meaningful impact on Americans.”
Princeton University’s campus will soon reflect a dramatic change in its values brought about by pressure from students and the public as part of a strengthening movement toward racial equality.
A residential building complex that for over 50 years bore the name of Woodrow Wilson, the U.S. president who imposed segregation on the federal government in the lead-up to World War I, will soon be torn down and replaced with a new one named for a Black woman, Mellody Hobson, a Princeton alumna who has made a sizable donation for the new construction.
“My hope is that my name will remind future generations of students — especially those who are Black and brown and the ‘firsts’ in their families — that they too belong,” Ms. Hobson said in a statement released by the university on Thursday. She added that replacing Mr. Wilson’s name “is my very personal way of letting them know that our past does not have to be our future.”
Ms. Hobson is the co-chief executive of Ariel Investments, which describes itself as the first Black-owned investment firm (not the largest minority-owned investment firm, as this item earlier reported).
A spokesman for the university declined to say how much she is giving, but pointed to a $65 million gift from a pair of wealthy donors for another residential complex as “comparable.”
The money, which is coming from Ms. Hobson personally and from the Hobson/Lucas Family Foundation (her husband is the film producer George Lucas), will create Hobson College, which will replace a dormitory complex known until this summer as Wilson College. It was renamed First College in June after Princeton’s president, Christopher L. Eisgruber, declared that Mr. Wilson’s “racist thinking and policies make him an inappropriate namesake for a school or college whose scholars, students and alumni must stand firmly against racism in all its forms.”
In a statement on Thursday, Mr. Eisgruber said the new dormitory “will enable us to improve the student experience at Princeton and to reimagine a central part of our campus, while also recognizing a remarkable woman who is a positive, powerful force for change in the world.”
Work will begin in 2023, and the new dormitory is expected to open in 2026.
A Paris appeals court on Thursday upheld an order by French antitrust regulators requiring Google to negotiate with publishers over paying to display headlines and snippets of their news articles, after years in which the online giant culled them for its own news service.
The ruling, which compels Google to negotiate with French news outlets over just how much the company owes them for using their content, comes after the European Union passed new copyright rules last year requiring Google to pay to display story summaries. Australia is preparing a similar rule that would affect Google and Facebook.
It is part of a bigger media battle over how money is derived from online content. Google has argued that it shouldn’t have to pay publishers for showing snippets of stories because its search engines send millions of readers to news outlets’ websites. In some cases, it stopped displaying snippets altogether to get around the rules.
Germany, Spain and other European countries have previously tried to require Google to compensate national publishers for scraping news items in its aggregator, with little success. Google pushed back in Spain, halting its Google News service there. In Germany, some publishers dropped a push for compensation after Google stopped displaying snippets, leading to a drop in online traffic from the search engine to their websites.
Google said last week it would pay publishers in Germany, Brazil, Argentina, Canada and Britain a total of $1 billion over the next three years to display their content in a bid to calm tensions with media outlets.
In France, Google had also threatened to stop displaying news summaries and thumbnail photos in search results after regulators last year pressed it to compensate French media groups. Publishers and the news agency Agence France-Presse had filed a complaint with the French market authority claiming the company was abusing its dominant position as a search engine — a ruling that the authority upheld.
The court decision on Thursday rejects Google’s appeal, requiring the company to come to the bargaining table.
“Our priority remains to reach an agreement with the French publishers and press agencies,” Google said. “We appealed to get legal clarity on some parts of the order, and we will now review the decision of the Paris Court of Appeal.”
Morgan Stanley announced Thursday that it planned to acquire Eaton Vance, investment and wealth management firm, in a deal worth $7 billion. The combined group would oversee roughly $1.2 trillion assets and generate more than $5 billion in sales, Morgan Stanley said in a statement.
Morgan Stanley said it expected to extract $150 million in cost savings out of the deal, which it is financing half in cash and half in stock. The companies said they expected the deal to close in the second quarter of next year.
Morgan Stanley has been expanding its money management business, most notably via its $13 billion purchase of E-trade in February. That deal, which officially closed this week, and the acquisition of Eaton Vance brings the Wall Street institution best known for its investment bank a mass-market customer base and a steadier business line.
The asset management industry is under pressure to consolidate, driven by a shift to passive strategies, pioneered by Vanguard, that track indexes and charge lower fees from active investment funds, which aim to beat the market in return for higher fees. Other recent deals include Franklin Resources’ $4.5 billion acquisition of Legg Mason, announced this summer.
There may be more deals on the way: the activist investment firm Trian Fund Management has taken stakes in Invesco and Janus Henderson and reportedly plans to push the two to merge.
IBM is splitting itself in two, spinning off its legacy technology services business to focus on cloud computing and artificial intelligence, a move that reflects how decisively computing has shifted to the cloud.
The split is IBM’s effort to grab more of that fast-growing business and thrive amid the market leaders, Amazon Web Services, Microsoft and Google.
The business retaining the IBM name will include its cloud operations, along with its hardware, software and consulting services units. They represent about three quarters of the current company’s revenue.
The business to be spun off, in a company that has not yet named, is IBM’s basic technology services business, which maintains, supports and upgrades the computing operations of thousands of corporate customers.
That business is sizable, with sales of about $19 billion a year, but it’s not where the growth opportunities lie in the technology business.
The split comes as IBM has been unable to generate overall growth for years, disappointing investors, as the erosion of its old-line businesses held it back. Last year, the company’s revenue declined by 3 percent, to $77 billion.
The split, IBM’s chief executive, Arvind Krishna said, was intended to “unlock growth,” adding that IBM should deliver “mid-single-digit” revenue growth over the next few years.
IBM shares rose more than 7 percent in early trading.
The company has positioned itself as a champion of a “hybrid cloud” strategy. It is trying to take its corporate customers into cloud computing — a more flexible, typically pay-for-use model — without abandoning its old technology altogether. But it lags behind the biggest, cloud providers, led by Amazon and Microsoft.
Its hybrid approach is an attempt to carve out a lucrative, growing business in the cloud market without competing head-to-head with the cloud leaders, each of which spends tens of billions of dollars a year on vast data center networks.
JPMorgan Chase announced a $30 billion initiative on Thursday to “advance racial equity” via loans and other investments in Black and Latino communities over the next five years.
“We can do more and do better to break down systems that have propagated racism and widespread economic inequality,” said Jamie Dimon, the bank’s chief executive.
To promote more affordable housing, the bank is committing $8 billion to support the origination of an additional 40,000 mortgages for Black and Latino households. It its also putting up $14 billion in loans, equity and other capital to help finance 100,000 affordable rental units.
To help to Black and Latino-owned businesses, the bank will commit $2 billion it says will support additional 15,000 loans. It also plans to spend $750 million more with Black and Latino-owned suppliers to the bank.
JPMorgan said it was expanding access to its services by opening up new branches in underserved communities and hiring 150 new community managers. It is investing up to $50 million in capital and deposits in Black and Latino-led community banks and financial firms.
Internally, JP Morgan says it will it will consider progress in achieving a more diverse work force as part of yearly performance reviews. That will also play a role in pay for members of the firm’s operating committee, as well as their direct reports.
The banking system has been under pressure to help address the growing racial economic divide in the United States. JPMorgan found itself the center of a political firestorm last year, after a report alleged discriminatory practices. Mr. Dimon later said that although the bank had “done some great work on diversity and inclusion,” it must be “absolutely relentless on doing more.”
President Trump vowed to once again punish China with tariffs if he won re-election, claiming his strategy of heavily taxing Chinese products had forced Beijing to make trade concessions and helped American farmers.
“I’m going to use tariffs on China,” Mr. Trump said during an interview on Fox Business Network Thursday morning, saying that the strategy had helped bring “billions of dollars” into the United States.
“I gave all of the money to the farmers and we had tens of billions leftover which goes into the Treasury,” Mr. Trump said.
Mr. Trump pointed to record purchases of corn and soybeans that he said had been made “two weeks ago” as evidence that his aggressive approach toward China was working.
China did make a series of record corn purchases in July, and in August made a record purchase of beef. Some analysts have said that Chinese soybean purchases are likely to hit new highs this year. Those purchases are required by an initial trade deal that the United States and China signed in January, in which Beijing agreed to buy $200 billion of additional American products by the end of 2021.
“They want to keep me happy because they know that I’m a hair trigger when it comes to them. And I’m sick of them,” the president said.
The Trump administration has raised plenty of funds from its China tariffs — $64 billion since those duties went into effect in July 2018, according to government statistics. And the federal government has channeled much of that to American farmers, who were badly hit when China responded to Mr. Trump’s tariffs by placing its own levies on American pork, soybeans, corn and other products.
But economists say that most of those funds have actually been paid by American consumers and other businesses, not China, as the president insists.
Chinese purchases of American agricultural products have been trending sharply up in recent months. But American farmers also have a long way to go to recover from the damage they sustained in the trade war, and so far, the purchases still remain far behind the pace necessary for China to meet its commitment of purchasing $36.6 billion of American products this year. According to tracking by the Peterson Institute of International Economics, China’s imports of farm products covered by the trade deal totaled $11 billion through August, compared with a year-to-date target of $24.4 billion.
The hedge fund billionaire Daniel S. Loeb is urging the Walt Disney Company to cut its dividend payments and redirect the money to buying content for its Disney+ streaming service. It’s an unusual break from the traditional activist investor playbook, reports today’s DealBook newsletter.
Activists traditionally buy stakes in companies and press them to increase shareholder payouts, cut costs or shed assets. But in a letter to Disney’s chief executive, Robert Chapek, Mr. Loeb urged the entertainment giant to commit more resources to Disney+. By permanently cutting its dividend — worth about $3 billion a year — the company could more than double its Disney+ content budget of about $1 billion a year, Mr. Loeb said.
Mr. Loeb, whose Third Point hedge fund owned about a 0.3 percent stake in Disney as of June 30, said that the company could raise the “lifetime value” of Disney+ subscribers to $500 apiece, from $100 today, by charging more for the service and reducing customer defections. He also recommends consolidating Disney’s other streaming services, including Hulu and ESPN+, into Disney+.
By taking these steps, Disney could build a streaming business that eventually generates more revenue than cable TV and box-office releases, “but only if the company leans into this opportunity and invests more aggressively,” Mr. Loeb wrote.
Disney would still face a formidable competitor in Netflix. Analysts at BMO Capital expect that company to spend over $17 billion on new content this year, and more than $26 billion by 2028. Mr. Loeb wrote that the market values Netflix customers at about $1,200 each.
He isn’t the only activist investor seeking to shake up a major media company: Nelson Peltz’s Trian has taken a stake in Comcast, which owns NBCUniversal. But Trian has yet to publicly disclose what it wants Comcast to do.
Forget about Halloween: Best Buy is the latest retailer to announce that it will offer the holiday deals typically found after Thanksgiving on Oct. 13 and 14, following similar announcements from Amazon, Target and Walmart, as the pandemic pulls seasonal shopping earlier than ever.
Best Buy said on Thursday that it would offer the Black Friday deals next week, both online and in stores, after Target said that it would hold an event called “Deal Days” on the same dates. Walmart is planning its own deals bonanza called the “Big Save Event” Oct. 11 to Oct. 15.
The chains’ announcements came after Amazon said that its annual Prime Day sale, which was postponed in July, would be held on Oct. 13 and 14.
Even before Amazon’s announcement, big retailers were already planning to kick off holiday deals in October to help limit in-store crowds and to reduce concerns around the reliability and timeliness of shipping in a season ruled by digital sales.
Guidelines from the Centers for Disease Control and Prevention encourage people to avoid “higher risk” activities like “going shopping in crowded stores just before, on, or after Thanksgiving” to help prevent the spread of the coronavirus.
Ruby Tuesday filed for bankruptcy protection on Wednesday, citing the “unprecedented impact” of the coronavirus pandemic.
The casual dining chain said it would use the Chapter 11 process to cut debt and buttress its financial position. Ruby Tuesday expects to keep its restaurants open during the bankruptcy process, which it intends to emerge from “as quickly as possible.”
“This announcement does not mean ‘Goodbye, Ruby Tuesday,’” the company’s chief executive, Shawn Lederman, said in a statement. “With this critical step in our transformation for long-term financial health — this is ‘Hello’, to a stronger Ruby Tuesday.”
The pandemic has had a particularly devastating impact on the hospitality industry, including restaurants, hotels and entertainment companies. Virus restrictions forced businesses to shut down for long periods and reopen with reduced capacity, prompting a number of chains to file for bankruptcy protection, including Chuck. E Cheese, California Pizza Kitchen and NPC International, the largest franchisee of Pizza Hut in the United States.
Imax furloughed 150 employees in the North America and Europe, or roughly 20 percent of its global work force, for at least two months because of the closing of movie theaters by the Regal Cinemas chain and postponement of major movies by Hollywood studios. The move would allow it to “temporarily retrench, conserve resources and adjust its operations,” the company, which makes large-format films, said in a statement.
“Jurassic World: Dominion,” the $200 million movie that has been a guinea pig as Hollywood resumes filming, will stop production for two weeks after a handful of people working on the film tested positive for the coronavirus. “All tested negative shortly after, but due to our safety protocols we’re going to pause for two weeks,” the film’s director, Colin Trevorrow, posted on Twitter.