UK Tells Workers to Stay at Home
Here’s what you need to know:
The British government, in the grip of a second wave of coronavirus, on Tuesday told the nation’s workers to work from home if they could, a policy reversal that forced banks and other employers to readjust their corporate policies on the fly.
“We are once again asking office workers who can work from home to do so,” Prime Minister Boris Johnson said on Tuesday, adding that Britain had reached “a perilous turning point” as nearly 5,000 new coronavirus cases were reported the same day.
Companies that had been under pressure from government ministers to get employees back to the office were scrambling to change their guidance for staff. Some had organized rotation systems to alternate different teams in the office to ensure social distancing. Others supplied personal protective equipment, created one-way systems to move around offices and reconfigured desk spaces. Both JPMorgan Chase and Goldman Sachs were at about 30 percent capacity in their London offices.
Goldman Sachs sent a memo to staff notifying them of the government’s decision, but said that its London office would remain open for employees “who need to be in the office” and that safety precautions would remain in place. At Barclays, where several hundred employees had returned to work in offices around the country, company management said it would follow the government advice and have them work from home again.
The Confederation for British Industry, a large lobby group that has warned of “ghost towns” in city centers if more people didn’t return to their offices, said that new restrictions were needed to slow the spread of the virus, but they came “at a serious price.”
In July and August, the government said it wanted people to return to their offices to support local businesses that were deprived of their customers. It even planned an advertising campaign to spur more returnees. But as the number of coronavirus cases rose through September, the government rolled back this message. On Tuesday, Mr. Johnson completed the U-turn and told workers to stay home if possible while he announced other social restrictions in England to curb the spread of the virus.
Shares in British Land and LandSec, two large commercial real estate companies that own office buildings, fell on Tuesday, even as Britain’s benchmark stock index gained.
Responding to both the outpouring of appreciation for Justice Ruth Bader Ginsburg since her death last week and the scarcity of films in movie theaters, the distributors behind the documentary “RBG” and the narrative feature “On the Basis of Sex” announced on Tuesday that they would rerelease the two 2018 films in some 1,000 theaters this weekend.
Net proceeds from the films’ box office will be donated to the American Civil Liberties Union Foundation in support of their Women’s Rights Project, which Justice Ginsburg helped found in 1972.
“RBG,” directed by Betsy West and Julie Cohen, chronicled Justice Ginsburg’s rise to the Supreme Court and her unexpected emergence as a pop culture icon. Released in May 2018 by Magnolia Pictures, “RBG” earned $14 million at the domestic box office, becoming one of the best-performing documentaries of that year. The documentary was nominated for an Oscar and won an Emmy.
Six months later, Focus Features debuted “On the Basis of Sex,” directed Mimi Leder and starring Felicity Jones as Justice Ginsburg. The film garnered mixed reviews and earned $25 million in its theatrical release.
“Justice Ginsburg spent her life upholding fairness, the law, and the rights of all Americans,” Focus Features and Magnolia Pictures said in a joint statement. “These films highlight only a small portion of her legacy to screen, but her vast impact on our country goes far beyond them. We hope that moviegoers are re-inspired by her passion, her courage and take that back into the world.”
In addition to theaters, “RBG,” which was produced by CNN Films, can be streamed on Hulu. “On the Basis of Sex” is available on the Showtime cable network and video-on-demand platforms.
Treasury Secretary Steven Mnuchin offered an upbeat view of the economic recovery on Tuesday, describing it during a congressional hearing as the fastest rebound from any crisis in American history.
Yet Mr. Mnuchin acknowledged that more than half of the jobs that had been lost as a result of the pandemic had yet to be restored.
His comments came in a joint appearance before the House Financial Services Committee with Jerome H. Powell, the chair of the Federal Reserve.
Both officials projected optimism about the economic recovery so far, but Mr. Powell made clear that many of those gains were predicated on strong fiscal support, including additional jobless benefits and stimulus checks. That economic support has largely run out and lawmakers show little indication of being able to agree on another package despite the fact that millions of people remain out of work.
Mr. Powell told Congress that the economy had made meaningful progress but that the outlook was uncertain and policymakers will need to do more.
“Many economic indicators show marked improvement,” Mr. Powell said in his testimony, crediting policies like expanded unemployment insurance, which expired at the end of July. “Both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain.”
But Mr. Powell said the path forward would depend on virus control and “policy actions taken at all levels of government.”
“A big part of the good economic news that we have had results from the fiscal support that came with the CARES Act,” Mr. Powell said, crediting the stimulus package for fueling consumption and helping business confidence.
Asked what would happen if no additional stimulus was forthcoming, Mr. Powell said “we don’t really know what will happen” but said there are risks, including if people begin to run through the savings they have accumulated in recent months, partly as a result of the first fiscal package.
Mr. Mnuchin projected “tremendous” economic growth in the third quarter, noting increases in business activity, manufacturing and the housing market. He said that the 8.4 percent jobless rate was a “notable achievement” considering his own projections earlier this year that unemployment could hit 25 percent.
Nonetheless, Mr. Mnuchin said that more stimulus was needed and that he would continue working with Congress to strike a deal.
“The president and I remain committed to providing support for American workers and businesses,” Mr. Mnuchin said. “I believe a targeted package is still needed, and the administration is ready to reach a bipartisan agreement.”
Mr. Powell also addressed the Main Street lending program, an effort to make loans to midsize businesses that is supported by congressional funding appropriated to the Treasury Department. The Fed and the Treasury have faced criticism for the effort, which is structured in a fairly risk-averse way and which is using hardly any of its $600 billion in capacity.
The program has made or is in the process of making about 230 loans totaling roughly $2 billion, according to Mr. Powell’s statement. But he stressed the limits of loan programs and suggest that congressional spending might be more appropriate in some instances.
Under questioning from Representative Maxine Waters, the committee chair, about whether the program could be broadened to help more companies, Mr. Mnuchin said there were limits to what could be done with the existing funds that were created to backstop the Fed facilities. But Mr. Mnuchin said that he would like to see legislation that would “reallocate that money to better use.”
Wall Street snapped its recent losing streak as a rally in technology stocks led the major benchmarks higher.
The S&P 500 rose more than 1 percent and the tech-heavy Nasdaq composite climbed nearly 2 percent. Amazon and Twitter gained more than 6 percent to become the best performing stock in the S&P 500.
Through Monday, the index had dropped in four consecutive sessions, something it had not done since February. Stock benchmarks in Europe ended modestly higher on Tuesday, as did major indexes in Asia.
Oil prices also rose slightly, after dropping more than 4 percent on Monday.
Earlier Tuesday, Jerome Powell, the chair of the Federal Reserve, told Congress the economy had seen a marked improvement in the past few months but the outlook was uncertain and policymakers would need to do more, repeating an analysis he has offered for the past several months. Treasury Secretary Steven Mnuchin offered a more upbeat view of the economic recovery, describing it during a congressional hearing as the fastest rebound from any crisis in American history.
Brookfield Properties, the real estate company that operates more than 170 retail properties in the United States, plans to cut 20 percent of employees in its retail division, according to a memo distributed to staff on Monday, as the pandemic continues to wreak havoc on shopping centers.
“All our constituents — retailers, lenders, communities, partners, investors, consumers, vendors, shareholders and our own employees — have been affected by the events of this year and forced to revisit their relationships with our industry and our company,” Jared Chupaila, the head of the company’s retail group, said in the memo, which was obtained by The New York Times.
“While many companies were quick to implement furloughs and layoffs at the onset of the pandemic, we made the conscious decision to keep all our team employed while we gained a better understanding of its longer-term impact on our company,” he wrote.
The unit has more than 2,000 employees, according to a spokeswoman for Brookfield Properties, who declined to comment further on the memo. The layoffs will affect people who work at Brookfield Properties’ corporate headquarters and in malls. Brookfield has recently been involved in deals to buy bankrupt retailers, including J.C. Penney and Forever 21.
CNBC first reported on the cuts on Tuesday.
Deutsche Bank, under intense pressure to cut costs, said Tuesday it would close one-fifth of its domestic branches after the pandemic helped persuade tech-averse Germans to switch to online banking.
Germans are notoriously suspicious of electronic banking. Two-thirds of all consumer transactions are made with cash, according to a 2019 report by the consulting firm McKinsey & Company. But the pandemic forced Germans to get friendly with banking online, emboldening Deutsche Bank to close 100 out of 500 branches as part of a broader effort to cut costs and improve its chronically weak profits.
The branch closures were first reported by Reuters.
Shuttering the branches will lead to an unspecified number of job losses, a Deutsche Bank spokesman said, but would not raise the overall total of 18,000 job cuts the bank had previously announced.
The switch to more electronic banking could also help Deutsche Bank deal with another problem: money laundering. Electronic transactions are much easier to trace than cash.
Along with JPMorgan Chase, Citigroup and Bank of America, Deutsche Bank was among the big international lenders whose regulatory filings indicated they had helped move trillions of dollars of dirty money, according to documents obtained by BuzzFeed News and shared with a worldwide consortium of journalists.
Deutsche Bank said in a statement that the problems reported to BuzzFeed were already well known to regulators and it was working to change its ways. “We have devoted significant resources to strengthening our controls and we are extremely focused on meeting our responsibilities and obligations,” the bank said.
United Airlines plans to take a Treasury Department loan provided under the CARES Act that was passed in March, joining American Airlines. United declined to provide further details, though it had been expected to borrow up to $4.5 billion. American is expected to borrow $4.75 billion. Delta Air Lines and Southwest Airlines, which were both eligible for similar loans, declined to take them.
Nike said demand from China and strong online sales helped bolster revenue in the three months through August. Revenue fell slightly to $10.6 billion, which was better than analysts had expected. Nike’s shares jumped more than 8 percent in after-hours trading.
The World Economic Forum won’t be held in Davos, Switzerland, next year. The annual gathering of the global elite at the Swiss ski resort was already rescheduled for the summer, from its usual time in January, because of the pandemic. Now, organizers say a new location elsewhere in Switzerland will be announced in the coming weeks. The summit for executives, political leaders and other bigwigs celebrated its 50th year in 2020, and has become synonymous with its exclusive Alpine setting.
Ralph Lauren said on Tuesday that it would reduce its global work force by 15 percent by the end of the company’s fiscal 2021 as part of its plans to simplify its organizational structure as the pandemic continues to take a toll on the retail industry. The company said it expected to incur a pretax charge of up to $160 million in connection to the layoffs. The retailer also plans to invest in new technology, including augmented reality, to enhance its online shopping infrastructure. “The changes happening in the world around us have accelerated the shifts we saw pre-COVID, and we are fast-tracking some of our plans to match them — including advancing our digital transformation and simplifying our team structures,” Patrice Louvet, the company’s president and chief executive, said in a statement.
Whitbread, the British owner of restaurant and hotel chains including Premier Inn, said on Tuesday it planned to lay off 6,000 workers, about 18 percent of its work force. The company is already in the process of cutting 15 percent to 20 percent of its head office staff. Whitbread said tourist bookings were “strong” but that September and October used to be busy periods of business bookings. Also on Tuesday, the British government announced new guidance for people to work from home if they could.
The Hollywood unions representing the interests of the directors, actors, below-the-line crafts people and the Teamsters have reached a deal with the major studios to restart production during the coronavirus pandemic. The agreement focuses on testing regimens, personal protective equipment, and a system to create zones for different groups of workers.
Tesla is expected to outline advances in battery technology and announce new production plans on Tuesday as part of its annual general meeting and a “Battery Day” presentation much anticipated by the carmaker’s fans.
In a message on Twitter, the company’s chief executive, Elon Musk, said the battery strategy “affects long-term production” of its vehicles, especially three vehicles not yet introduced — a semi truck, a pickup known as the Cybertruck and a two-seat roadster.
Mr. Musk also appeared to temper expectations for an immediate effect on Tesla’s business, saying that what the company will announce “will not reach serious high-volume production until 2022.” Tesla’s stock fell more than 5 percent on Tuesday.
He also said Tesla would increase purchases of battery cells from Panasonic, LG and CATL, a Chinese battery maker. But he hinted that Tesla had new manufacturing goals of its own. “Even with our cell suppliers going at maximum speed, we still foresee significant shortages in 2022 and beyond unless we also take action ourselves,” he wrote.
The events on Tuesday in Fremont, Calif., will begin after the close of Wall Street trading. Because of the pandemic, the meeting and presentation will be available mostly to an online audience, though the company said “a very limited number of stockholders,” determined by a drawing, would be allowed to attend in person.
Tesla offers models that can go 350 miles or more on a single charge, while many competitors fall short of that range. Audi’s e-tron electric sport utility vehicle and the Chevrolet Bolt, made by General Motors, go about 200 to 250 miles on a charge.
But many companies are racing to catch or pass Tesla. A start-up company, Lucid Motors, has said it plans to offer a car next year that can exceed 500 miles on a charge.
Mr. Musk has often outlined ambitious plans that failed to unfold as described. Last year, he said one million Teslas would be operating in the United States this summer as driverless taxis. But the company has not yet demonstrated a car capable of operating without a driver.