Hints of Economic Reawakening Amid Mass Civic Unrest
NEW YORK (AP) – The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Wednesday related to the national and global response, the work place and the spread of the virus.
TESTING THE WATERS: Businesses are starting reopen, or explore how to do so, as states and cities ease restrictions on public activities.
— Cinemark Holdings plans to begin reopening U.S. movie theaters on June 19. All theaters have been closed since mid-March and on Wednesday, the movie house chain posted its first quarterly loss since the Great Recession. Revenue plunged 24%.
— The beauty chain Regis is working with infectious disease specialists at the University of Minnesota as it prepares to reopen more salons. Infectious disease specialists from the school looked at how customers move about in salons and provided recommendations on personal protective equipment and other safety measures.
There are about 3,000 salons that are operating and Regis expects the majority of its salons will reopen this summer.
— Red Robin Gourmet Burgers anticipates reopening about 270 dining rooms by Sunday, or about 65% of company-run restaurants.
The locations are in the chain’s largest and highest volume markets in the Pacific Northwest and West Coast. There are more than 550 Red Robin restaurants across the U.S. and Canada, including franchisees.
— The clothing chain Express had reopened 303 stores, but is not ready to provide financial projections after restrictions from the pandemic ravaged the company in the first quarter. On Wednesday, the company posted an unexpectedly large quarterly loss of $154.1 million and sales plunged 53%.
HOUSING HEATS UP IN LOCKDOWN: With states easing travel restrictions and mortgage rates at all-time lows, there are growing signs of a resurgence in what only a few months ago had been a hot housing market.
— Wannabe homebuyers flooded back into the market after weeks of sheltering in place. Mortgage applications to buy a home have been thawing for about a month and last week, they surged 18% compared with last year at this time, and 5% from just last week, according to a report Wednesday from the Mortgage Bankers Association.
In mid-April, when COVID-19 cases were spreading rapidly, those applications had slumped 35% annually.
“The pent-up demand from homebuyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring,” said Joel Kan, an MBA economist. “However, there are still many households affected by the widespread job losses and current economic downturn. High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months.”
GOVERNMENTS & CENTRAL BANKS: Europe has spent massively to tamp down unemployment and the U.S. is reporting monthly employment numbers at the end of the week. Areport from the payroll company ADP Wednesday could provide a peak at what policy makers will be dealing with.
— The virus outbreak has pushed Australia into its first recession in almost three decades.
The current quarter will be the the second straight in which the economy shrinks, Federal Treasurer Josh Frydenberg said Wednesday, which would mean a recession has begun. He warned that the next quarter will be worse.
Data released Wednesday for the March quarter show a 0.3% contraction for the three month period that started with destructive wildfires, and ended with the early stages of the coronavirus lockdown.
— Cyprus is pushed forward by three weeks the removal of most remaining coronavirus restrictions, citing a consistently low infection rate since stay-at-home orders were lifted in early May.
The third phase of the country’s gradual rollback of restrictions will be completed by June 24, rather than July 14.
That means that on Tuesday, shopping malls, airports and the interior seating spaces of hotels, bars and restaurants, open-air theaters and cinemas will be back in business. Sports events without spectators, kindergartens, playgrounds and schools canteens will also reopen.
A ten-people limit on public gatherings will stay in effect at least until June 24.
Cyprus has recorded 952 COVID-19 infections and 17 deaths.
— Austria is ending checks on its borders with neighboring countries – except Italy.
People entering Austria on Thursday will no longer be required to self-quarantine or undergo tests. Austria will retain checks on its southern border with Italy, where some virus hot spots remain.
MARKETS: Global stock markets rose Wednesday extending a three-day run as more economies began to recover from shutdowns forced by COVID-19.
SOUP IS GOOD LOCKDOWN FOOD: Campbell’s, after years of making course adjustments to catch up to a vast change in consumer tastes, has become something of an it-brand for those sheltering in place. The company easily topped quarterly profit and sales expectations, and it said Wednesday that the number of households with its products on their shelves is up 6%.