The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Friday related to the national and global response, the work place and the spread of the virus.
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STRESS TESTS: The Federal Reserve is making modifications to the way it performs stress tests on banks due to the virus outbreak.
Vice Chair for supervision Randal Quarles said Friday that this year’s modifications include adding three new scenarios to see how well banks respond to them. The scenarios include a rapid V-shaped recovery that regains much of the output and employment lost by the end of this year; a slower, more U-shaped recovery in which only a small share of lost output and employment is regained in 2020; and a W-shaped double dip recession with a short-lived recovery followed by a severe drop in activity later this year due to a second wave of containment measures.
Quarles said that the Fed won’t hesitate to take additional policy actions should they be warranted under the then-prevailing economic conditions.
REOPENINGS:
— Penn National Gaming has restarted operations at 30 of its 41 gaming and racing properties, representing more than 70% of its regional gaming portfolio.
Friday will see the reopening of four Ohio properties and the Hollywood Casino at Penn National Race Course in Pennsylvania.
FINANCIAL RESULTS:
— Smith & Wesson Brands’ fourth-quarter revenue climbed more than 37% to $197 million as consumers demand for firearms increased in March, the period when virus outbreak lockdowns were starting in the U.S.
The company said it’s internal inventories allowed it to address the sudden increase in demand in the quarter.
Smith & Wesson said the quarter’s COVID-19 pandemic-related costs were offset by pandemic-related cost savings, including the cancellation of trade shows, conventions, travel and entertainment.
— CarMax’s earnings tumbled 98% in the first quarter, which included $122 million in its auto finance provision for loan losses, which included an increase of $84 million in its estimate of lifetime losses on existing loans resulting from the coronavirus and worsening economic factors.
Sales and operating revenue dropped 39.8%, with comparable store used unit sales down 42%. CarMax said Friday more than 80% of the days in the quarter were hurt by a mix of store closures and limited operations and occupancy restrictions. However, sales have started to improve: comparable store used unit sales for the two weeks ended June 14 were within 10% of last year’s sales.
— Glass tableware maker Libbey has filed for to reorganize under Chapter 11 bankruptcy protection, citing the pandemic and the need to address upcoming debt maturities.
In the first quarter the company’s sales fell 14% and its net loss widened, hurt by mandatory shutdowns across the U.S. Libbey supplies tabletop products to retail, foodservice and business-to-business customers in over 100 countries and said that the foodservice industry was one of the most directly impacted.
CENTRAL GOVERNMENTS & BANKS:
— Japan and Vietnam have agreed to partially lift travel bans and ease restrictions step by step as a way to reopen economic and bilateral exchanges between the two Asian nations where coronavirus infections have largely been taken under control.
Japanese Foreign Minister Toshimitsu Motegi told reporters Friday that Vietnam is one of four countries that Japan has been discussing resuming mutual visits in phases. Japan is also seeking similar bilateral arrangements with Thailand, Australia and New Zealand.
Japan and Vietnam are discussing final details such as timing of resumption, Motegi said.
Japan has imposed entry bans to 111 nations as part of coronavirus measures.
MARKETS: Wall Street is rising in midday trading Friday, putting the S&P 500 on pace to close out a winning week after encouraging reports raised hopes for a coming economic recovery.
The U.S. stock rally was widespread, with oil producers, tech companies and the parent of Coach and Kate Spade all helping to lead the way. The gains faded a bit as the day progressed, after the S&P 500 was up as much as 1.3% shortly after trading began.
WiFi NEEDS: Comcast is extending free access to its 1.5 million public Xfinity WiFi hotspots to anyone who needs them, including non-customers, through the end of the year. The hotspots are available in outdoor and business locations.
Comcast has previously made its public hotspots available for free in individual markets to help communities stay connected after local emergencies like hurricanes in the South, wildfires in California and the recent tornadoes in Nashville.
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