The daily business briefing: March 31, 2020
Johnson & Johnson starts testing of coronavirus vaccine, GE workers call for making ventilators in idled plants, and more
Johnson & Johnson starts testing of coronavirus vaccine
Johnson & Johnson said Monday it would start human testing of its experimental coronavirus vaccine in September. The company said it would invest more than $1 billion to co-fund the research with the federal Biomedical Advanced Research and Development Authority, part of the Department of Health and Human Services. Clinical data from the testing is expected by the end of the year. If all goes well, the vaccine could be available to be authorized for emergency use early next year. "The world is facing an urgent public health crisis and we are committed to doing our part to make a COVID-19 vaccine available and affordable globally as quickly as possible,” chairman and CEO Alex Gorsky said.
GE workers call for company to make ventilators in idled plants
General Electric employees on Monday started protests calling for the company to convert their jet engine factories to produce ventilators needed for treating coronavirus patients. Workers at GE's Lynn, Massachusetts, aviation facility stood silently, six feet apart. Union members at the company's Boston headquarters marched, also practicing social distancing, and called for the company to start making ventilators at the shuttered aviation factories. The protests followed GE's announcement that it would lay off 10 percent of its domestic aviation workforce, firing nearly 2,600 people, and temporarily send home 50 percent of its maintenance workers, saving up to $1 billion. GE and Ford, working in cooperation, already plan to produce 50,000 ventilators over 100 days at a Ford plant in Michigan.
Fed economists estimate unemployment rate could hit 32 percent
Economists at the Federal Reserve's St. Louis District are now projecting the unemployment rate in the United States could hit 32.1 percent, placing 47 million people out of work. That estimate is up from the 30 percent figure previously publicized by St. Louis Fed President James Bullard. During the Great Depression, unemployment peaked at 25 percent. The numbers presented by the economists may be a slight overestimate because they don't account for people who may drop out of the workforce altogether or for the possible effects of Congress' stimulus package. Bullard previously predicted this moment in history won't necessarily mirror the depression in terms of length.
Macy's, Gap to furlough most of their workers
Macy's and Gap on Monday announced mass furloughs due to store closures forced by the COVID-19 coronavirus pandemic. Macy's said it had lost "the majority of our sales" since closing all of its stores due to the pandemic, although online sales continue. The company said it's "moving to the absolute minimum workforce needed to maintain basic operations." Macy's employs about 125,000 people, most of whom are being furloughed. They will continue to receive health-care coverage "at least through May." Gap, which operates Gap, Old Navy, and Banana Republic stores, gets about 20 percent of its sales online, but its brick-and-mortar outlets were already struggling when the pandemic hit. The company closed all of its stores March 18.
Stocks continue to rise after last week's rebound
U.S. stock index futures rose early Tuesday, adding to Monday gains of more than 3 percent. Futures for the Dow Jones Industrial Average and the S&P 500 were up by about 0.4 percent three hours before the opening bell. The gains, which continued a rebound started last week, followed President Trump's decision to extend social distancing guidelines through April after pushing to reopen much of the economy by April 12, signaling a government approach in line with recommendations by public health experts. "I think the market has established some type of bottom," Tom Lee, head of research at Fundstrat Global Advisors, said on CNBC's "Markets in Turmoil" special on Monday.