Archives for June 2021

Stocks fall broadly on Wall Street; AMC slumps on share sale

Stocks broadly fell on Wall Street in morning trading Thursday as investors weighed the latest economic reports showing that unemployment claims are falling but labor costs are rising.

Markets have been wobbly all week as investors closely watch the labor markets for more signs of economic growth and consider any information that could give more clues about rising inflation. Labor costs rose at a 1.7% rate in the first quarter, up from the initial estimate that costs had fallen 0.3%. That could stoke more fears that inflation might run hotter than expected.

The S&P 500 index fell 0.4% as of 10:53 a.m. eastern. The Dow Jones Industrial Average fell 55 points, or 0.2%, to 34,545 points and the Nasdaq shed 0.9%.

The early decline has erased all of the markets gains for the week.

Technology companies, whose pricey stock values make them more sensitive to inflation fears, were the biggest weight on the market. Microsoft fell 1.1% and Intel slipped 2.1%.

A variety of companies that rely on direct consumer spending and communications companies also had some of the biggest declines. Banks and energy companies rose.

Bond yields rose. The yield on the 10-year Treasury rose to 1.62% from 1.59% late Wednesday.

Rising inflation is expected as the economy recovers from the pandemic’s impact, but the key question for many on Wall Street is whether it will be temporary or more permanent.

“The main concern in the markets, rightfully so, is inflation,” said Cliff Hodge, chief investment officer for Cornerstone Wealth. “Data points are beginning to confirm the view that inflation is likely to be more sticky.”

Wall Street will get more detailed data on the labor market Friday when the Labor Department releases its monthly jobs report. Economists are projecting that it will show employers added more than 650,000 jobs in May.

Expectations of a strong increase in hiring have stoked worries about inflation and how the Fed may respond to it. The concern is that the global recovery could be hampered if governments and central banks have to withdraw stimulus to combat rising prices.

Inflation worries are also butting up against the recovery seemingly shifting from a sharp rebound to a grind, which could mean more choppiness as the economy adjusts.

“When the rubber meets the road with the realities of reopening, we think we could be in for a rocky period,” Hodge said.

AMC Entertainment fell 25% after the movie theater operator said it would sell more shares following a huge run-up in its stock price on surge of interest from individual investors. The stock is still up about 2,000% this year.

General Motors jumped 6% after saying it expects earnings in the first half of the year to exceed its earlier forecasts as its efforts to manage a global computer chip shortage have worked better than expected,

Markets in Europe were lower while Asian markets were mixed.

Cannes lineup features Wes Anderson, Sean Penn, Leox Carax

The Cannes Film Festival on Thursday unveiled a lineup of films from big-name auteurs — including Wes Anderson, Asghar Farhadi, Mia Hansen-Løve and Sean Penn — for its 74th edition, an in-person, summertime event that aims to make a stirring return in July after being canceled last year because of the pandemic.

Among the films that will be competing for Cannes’ Palme d’Or are the festival opener, “Annette,” by Leox Carax and starring Adam Driver and Marion Cotillard; Anderson’s “The French Dispatch,” a film originally set to premiere in Cannes last year with an ensemble cast including Timothée Chalamet; “Red Rocket,” Sean Baker’s follow-up to his acclaimed “The Florida Project”; Paul Verhoeven’s “Benedetta”; and Sean Penn’s “Flag Day,” in which he stars alongside his daughter, Dylan Penn, as a conman.

Pierre Lescure, president of the festival, and Thierry Frémaux, artistic director, announced the Cannes’ lineup at the UGC Normandie theater in Paris in a live-streamed event that was part press conference and part pep rally for world cinema.

“Cinema is not dead. The extraordinary and triumphant return of the audience to movie theaters in France and around the world was the first good news,” said Fremaux. “I hope the film festival will be the second very good news.”

As cinema’s preeminent global stage, the annual French Riviera extravaganza is hoping to make a triumphant comeback when it runs July 6-17 — two months later than its usual May perch. But many things will be different at this year’s festival. Attendees will be masked inside theaters and required to show proof of full vaccination or a recent negative COVID-19 test. Cannes’ famed red carpet leading up to the stairs of the Palais des Festivals will resume in full, but with tweaks to the traditional pageantry.

“We’re used to kissing one another at the top of the stairs. We will not kiss one another,” said Fremaux.

Still, there are many questions leading up to a Cannes that will unfold just as France is reopening and loosening restrictions. Audience capacity limitations will be removed just five days before the festival opens. Concern over a new virus strain led France last week to institute a seven-day quarantine for travelers arriving from the United Kingdom — a potential blow to the British film industry that regularly decamps to Cannes.

For such an international festival as Cannes, many other travel regulations could pose complications. Fremaux acknowledged some filmmakers may not be able to attend. The movie market that typical runs in tandem with the festival and draws much of the film industry for a week of frenzied deal-making, will be held virtually in late June.

But the Cannes program, while perhaps lacking a Hollywood title as anticipated as Quentin Tarantino’s “Once Upon a Time in Hollywood” (an entry in 2019, when Bong Joon Ho’s “Parasite” won the Palme), was praised as top-class. It includes former Palme d’Or winners Jacques Audiard (“Paris 13th District”) and Apichatpong Weerasethakul (“Memoria,” starring Tilda Swinton).

Four of the 24 films in competition are directed by women, a low percentage but one that ties the festival’s previous top mark. That includes new films from Mia Hansen-Løve (“Bergman Island,” with Mia Wasikowska, Tim Roth and Vicky Krieps) and Hungarian filmmaker Ildikó Enyedi.

Cannes has previously refused to play in competition any film that doesn’t have a theatrical release in France, leading to an impasse with Netflix. Though other movie institutions like the Academy Awards have bended theatrical rules during the pandemic, Cannes has not.

Among the standouts playing out of competition, or in Cannes’ new “Cannes Premiere” are: Andrea Arnold’s “Cow”; Todd Haynes’ documentary “The Velvet Underground”; Tom McCarthy’s “Stillwater”; and the Oliver Stone documentary “JFK: Through the Looking Glass.”

Spike Lee, who debuted “Do the Right Thing” at Cannes in 1989, will preside over the jury selecting the Palme d’Or winner. He’s the first Black person to ever head the Cannes jury. At the opening ceremony, an honorary Palme will be given to Jodie Foster, who first came to Cannes as a 13-year-old for the premiere of Martin Scorsese’s “Taxi Driver.”

Speaking to The Associated Press after the press conference, Fremaux said it will be “the ultimate Cannes.”

“It will be something special. In five years people will be asking ‘Were you in Cannes in 2021?’ and people would say ‘No I wasn’t.’ ‘Oh you weren’t? That’s a pity. It was really great,’” said Fremaux. “It’s going to be a special Cannes.”

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AP’s Jeffery Schaeffer contributed to this report from Paris.

GM lifts forecast as chip shortage eases, stock hits record

DETROIT (AP) — Shares of General Motors Co. rose to record highs Thursday after the company said its efforts to manage the global computer chip shortage have worked better than expected, so it’s financial results will improve.

The company said in a statement Thursday it has made engineering changes, prioritized semiconductor use and pulled some potential deliveries into the second quarter. So now the first-half earnings will be significantly better than forecasts it issued earlier in the year.

GM had predicted a first-half pretax profit of around $5.5 billion when it released first-quarter earnings in May. The company also said it’s optimistic about the full year, but gave no further details.

Shares of GM rose 5.7% in Thursday afternoon trading to $63.02. During the day it hit $63.58, an intraday high since the company emerged from bankruptcy protection in November of 2010.

In the first quarter the company turned a $2.98 billion net profit as strong U.S. consumer demand and higher prices offset production cuts brought on by the chip shortage.

GM previously forecast a full-year pretax profit of $10 billion to $11 billion and said earnings would be at the high end of the range. Full-year net income is expected to be between $6.8 billion and $7.6 billion.

In a Thursday afternoon online discussion with a Credit Suisse analyst, GM Chief Financial Officer Paul Jacobson said the chip supply situation is volatile, but GM has been able to step up its production a bit from what it expected a month ago. The company sees the shortage lasting into the third quarter.

“We certainly see it starting to get better in the second half, and hopefully getting to a point where we’ve reached normalization in 2022,” he said, cautioning against predictions that far into the future.

Credit Suisse analyst Dan Levy said GM has enough dealer stock to supply only 22 days of demand, when it normally has 80.

Jacobson said consumer demand has been strong, especially for full-size SUVs and pickup trucks. He said the company may not return to the stocks its dealers carried before the pandemic, but it has to increase inventory from current levels because there are “too many dealers with empty lots.”

The chip shortage happened because automakers and parts supply companies closed factories and canceled chip orders early last year as the novel coronavirus was spreading. The factories came back in eight weeks, faster than expected, but by then the semiconductor industry had switched production to chips for the booming consumer electronics market.

A March 19 fire at a Japanese factory that makes automotive chips made the problem worse. The shortage has forced production cuts, crimping the supply of new vehicles just as demand recovers from the coronavirus pandemic, causing shortages and raising new vehicle prices. Used vehicle prices have hit record levels.

Renesas, the company hit by the fire, said production is now back to 88% of what it was before the blaze. With new equipment being installed, the company expects to resume full production by mid June.

Ford has said the shortage would halve its production from normal levels in the second quarter. Nearly all automakers have been affected including Nissan, Honda, Stellantis, Tesla and Volkswagen.

GM’s statement said its factories will still be affected by the chip shortage through June and July. But it’s shifting chips to higher-margin, high-demand vehicles such as pickup trucks and full-size SUVs. U.S. assembly plants that build those products won’t take the traditional summer two-week shutdown this year, the company said.

In addition, GM’s heavy-duty truck plant in Flint, Michigan, will crank out about 1,000 more trucks per month due to production line efficiencies, the company said.

GM also said it’s starting to install computers in midsize trucks that were built without them due to the shortage. Those vehicles will be shipped in early July.

Greece starts vaccine campaign at asylum-seeker facilities

ATHENS, Greece (AP) — Greek authorities launched a vaccination campaign Thursday for tens of thousands of asylum-seekers living in government-run facilities, starting with the islands of Lesbos, Chios, and Samos.

Health Ministry officials said the single-dose Johnson & Johnson vaccine was being used for the program, which is scheduled to expand to other Greek islands and the mainland starting later this week.

Around 60,000 migrants and asylum-seekers currently live in camps, shelters, and government-subsidized apartments in Greece. About one-quarter are children and not currently eligible to receive vaccines.

COVID-19 has killed more than 12,000 people in the country of 10.7 people. Nearly one in five Greek residents have been fully vaccinated, according to government figures published Thursday. In a technical report published Wednesday, the European Center for Disease Prevention and Control urged European Union member nations to “ensure equitable access to COVID-19 vaccines and ensure equitable uptake” for migrants and the wider population. ___ Follow more of AP’s pandemic and migration coverage at:

https://apnews.com/hub/coronavirus-pandemic

https://apnews.com/hub/migration

Walmart aims to empower workers with own devices, new app

New York (AP) — Walmart is coming out with a new app for its store workers’ phones that allows them to do a variety of tasks from digitally clocking into work to helping locate merchandise and answering customers’ questions.

It also has a push-to-talk feature to let them communicate directly with colleagues.

As part of the launch, the nation’s largest private employer and largest retailer says it plans to offer more than 740,000 store workers a new Samsung smartphone for free by year-end. That’s nearly half of its total U.S. workforce, according to Drew Holler, senior vice president of people operations.

The moves, announced Thursday, come as Walmart and other rivals aim to free up store workers from menial tasks to better serve customers. The new features go beyond the Walmart’s previous suite of apps that allowed workers to check inventory and prices, scan products and review sales data.

In the next few months, the new app will allow workers to help speed up the time it takes its stockers to get items from the backroom to the sales floor. Using an augmented reality feature, workers will be able to highlight the boxes as they’re ready to go, instead of scanning each box individually.

Up until now, most Walmart store workers had to share company handheld devices, with only about 10% having their own company device, Holler said. But Walmart did allow workers to download the work app directly to personal phones and use it on the job.

Walmart says employees will only be able to gain access to the app’s work features while they are on the clock. But employees can also use the smartphone as their own personal device if they want outside of work and during breaks when they’re on the job. Holler said Walmart will not have access to any personal data.

Neil Saunders, managing director of GlobalData Retail, says that the move to give out cellphones to workers will benefit shoppers and will make workers’ jobs easier. But he said it creates “a whole array of issues and problems that Walmart will need to work through.” He noted that workers may feel nervous about privacy issues including worrying that every work task they do is being tracked on their cellphone; for Walmart, it might be hard to regulate how much employees are using the phone for personal reasons during the day.

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Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

Archives for June 2021

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