The daily business briefing: April 17, 2020

1. China's economy contracted in 1st quarter

China's National Bureau of Statistics on Friday reported that its economy shrank by 6.8 percent in the first quarter of 2020, the first quarterly contraction for the world's second largest economy since China began providing quarterly GDP records in 1992. The data was slightly worse than the 6.5 percent decline economists had expected due to damage from the coronavirus pandemic, which was first reported in central China. The outbreak forced Chinese authorities to shut down factories and shopping malls, putting millions of people out of work. China said its industrial production fell by 8.4 percent in the first three months of the year, and retail sales dropped by 19 percent. On a positive note, factory production dropped by less than expected in March, suggesting stimulus efforts were helping to restart parts of the country's economy.

Reuters

2. Stock futures surge after report of promising coronavirus treatment

U.S. stock-index futures jumped overnight after a report that coronavirus patients receiving the experimental Gilead Sciences drug remdesivir were making "rapid recoveries" in a clinical trial. Futures for the Dow Jones Industrial Average and the S&P 500 were up by more than 2 percent, while those of the Nasdaq gained more than 1 percent. Gilead Sciences shares gained more than 16 percent in after-hours trading on Thursday after STAT reported the promising early results in the trial at a Chicago hospital. "The big question is whether it's going to be enough to help the economy 're-open' more quickly than people are thinking right now," said Matt Maley, chief market strategist at Miller Tabak. U.S. stocks closed higher on Thursday after a bumpy session.

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MarketWatch CNBC

3. Jobless claims rise to 22 million over last month

Another 5.2 million Americans filed initial claims for unemployment benefits last week as ongoing shutdowns due to the coronavirus pandemic continued to hammer the economy, the Labor Department said on Thursday. The new applications brought the job losses over the last four weeks to about 22 million in a 159 million-person workforce. The losses nearly erased all of the job gains since the 2008-2009 financial crisis. Still, the latest drop marked an improvement over the 6.6 million new unemployment claims recorded the previous week, and was close to the 5 million jobless claims economists had forecast, on average. Before the coronavirus shutdowns, the one-week record for new unemployment filings was 695,000.

The Associated Press

4. Trump unveils guidelines, task force for reopening economy

The White House on Thursday unveiled its proposed guidelines for resuming economic activity after shutdowns imposed to slow the spread of the COVID-19 coronavirus. State and local governments will make the final decisions on reopening businesses in their jurisdictions, President Trump said. The White House urged states to keep restrictions in place until they see a steady decline of cases over 14 days. Also on Thursday, Trump invited a bipartisan group of lawmakers to participate in a task force to advise him on getting the economy going again. Every Republican senator except frequent Trump critic Mitt Romney of Utah was asked to participate, as were some Republican House members and 22 congressional Democrats. Some Republicans called for returning to normal quickly; Democrats said it was best to continue social distancing policies.

The Washington Post Politico

5. Small-business rescue loan funding runs out

The Small Business Administration coronavirus rescue loan program reached its $349 billion limit on Thursday. The first-come, first-served program hit its cap before many eligible businesses managed to secure money to help them through shutdowns under stay-at-home policies aiming to curb the spread of the COVID-19 coronavirus. Republican and Democratic leaders in Congress are trying to negotiate a deal to pump more money into the program. The SBA signaled Wednesday that it was fast running out of money, with more than 1.3 million loans approved at a value of more than $296 billion. It took less than a day for the remaining $53 billion to be divvied up.

CNBC