The daily business briefing: April 9, 2020

Harold Maass
The Zoom logo
Kena Betancur/Getty Images

1.

Senate tells lawmakers to avoid Zoom due to security concerns

The U.S. Senate on Wednesday told members not to use Zoom's video conferencing app due to concerns about the service's data security. Zoom's use has soared as political groups, companies, schools, and other groups communicate remotely under lockdowns imposed to fight the spread of the COVID-19 coronavirus. The surge has called attention to Zoom's lack of end-to-end encryption, which has allowed hackers to crash or "zoombomb" virtual meetings. One of the company's shareholders this week filed a class action lawsuit accusing the Zoom Video Communications Inc. of overstating its privacy standards and failing to disclose the lack of end-to-end encryption. Zoom shares have lost nearly a third of their value since peaking in late March. [Financial Times, Reuters]

2.

Geico joins insurers offering car-insurance credits during lockdown

Geico plans to give auto and motorcycle insurance customers a 15 percent credit when they renew coverage this year because they are driving less under coronavirus lockdowns. The company joins fellow insurers Allstate and American Family in returning customers some of their premiums because the decline in driving has resulted in fewer accident payouts. Geico's policy will apply to renewals between April 7 and Oct. 7. The company estimated the average discount at $150 per semi-annual auto policy premium, and about $30 per motorcycle policy. The benefits could total $2.5 billion for Geico customers. Allstate is offering about 15 percent in refunds for at least April and May. American Family is giving back $50 per vehicle. [Fox Business]

3.

Fed minutes show support for strong action to curb coronavirus damage

Federal Reserve officials in two emergency meetings last month expressed mounting concerns about economic damage from the coronavirus outbreak, leading them to take "forceful action," according to minutes of the meetings released Wednesday. At the March 2 and March 15 meetings, Fed leaders agreed to cut interest rates to zero and resume huge asset purchases to pump more money into the economy. The U.S. central bank also decided to increase access to U.S. dollars for foreign central banks. The minutes provided details on the Fed's swift decision to make the historic moves due to the "profoundly uncertain" economic outlook during the crisis. [Reuters, The New York Times]

4.

Trade group: 1 in 3 tenants paid no rent in early April

Only 69 percent of tenants paid any rent in the first five days of April, down from 81 percent in March and 82 percent in April 2019, the National Multifamily Housing Council, a landlord trade group, and real estate data firms reported Wednesday. While 31 percent of tenants have paid no rent, some may still pay later this month and electronic payments are possibly still being processed, NMHC said. The drop was "anticipated, given the 6.6 million new applications for unemployment benefits" last week, The Wall Street Journal reported. Many of the renters are protected from eviction by coronavirus emergency measures. NMHC President Doug Bibby said if rent payments fall sharply some property owners won't be able to pay their staffs, mortgages, or utilities. [The Wall Street Journal, NPR]

5.

Stock futures flat after Wednesday's big gains

U.S. stock index futures were flat early Thursday following huge gains on Wednesday. The Dow Jones Industrial Average and the S&P 500 rose by about 3.4 percent on Wednesday. Analysts attributed the gains partly to slight drops in new coronavirus cases in the U.S. and New York, the epicenter of the outbreak in the country. Investors also reportedly were reacting to news that Sen. Bernie Sanders (I-Vt.) was suspending his presidential campaign, essentially sealing the Democratic nomination for former Vice President Joe Biden, who is considered the more markets-friendly candidate. On Thursday, focus turns to the government's report on weekly applications for jobless benefits, which is expected to show that another 5.25 million people filed for benefits as layoffs continue under coronavirus shutdowns. [The Washington Post, CNBC]