The daily business briefing: May 20, 2020

1. Mnuchin warns some economic damage could be permanent unless states reopen

Treasury Secretary Steven Mnuchin told the Senate Banking Committee that the U.S. economy might suffer "permanent damage" from the coronavirus crisis if states wait too long to let businesses reopen. He said if people remain unemployed for extended periods their careers might never recover. In a joint appearance, Federal Reserve Chair Jerome Powell warned that the economy could face long-term damage unless authorities use aggressive policies to boost the economy through the crisis. Powell suggested that the Fed might have to expand its purchases of municipal debt so that state and local governments don't slow the recovery by laying off workers. Powell said the economy won't recover completely until the public health emergency ends.

The Washington Post The New York Times

2. Johnson & Johnson to stop selling talc powder in U.S.

Johnson & Johnson announced Tuesday that it would stop selling its talcum-based Baby Powder in the United States and Canada. The company said the move was prompted by declining demand "due in large part to changes in consumer habits," but it came as the company faced more than 19,000 lawsuits over the product. Johnson & Johnson said "misinformation around the safety of the product and a constant barrage of litigation advertising" also factored into the decision. Plaintiffs in the lawsuits claim that, after years of use, Johnson & Johnson's talcum-based baby powder caused ovarian cancer and mesothelioma due to contamination with asbestos, a known carcinogen. The company has won some of those lawsuits, but lost others, with a jury in 2018 awarding 22 plaintiffs $4.69 billion.

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The Wall Street Journal Reuters

3. Stock futures rise after Wall Street's 3-day winning streak ends

U.S. stock index futures rose early Wednesday as markets remained volatile due to uncertainty surrounding coronavirus vaccines and the reopening of state economies as governors ease stay-at-home restrictions imposed to fight the pandemic. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up by more than 1 percent three hours before the opening bell. The three main U.S. indexes fell on Tuesday, snapping a three-day winning streak. The Dow closed down by 1.6 percent, while the S&P 500 and the Nasdaq dropped by 1.1 percent and 0.5 percent, respectively. With states reopening their economies, "it seems almost assured that fundamental economic and earnings reports are headed for a period of improvement," said Jim Paulsen, chief investment strategist at the Leuthold Group.

CNBC

4. McDonald's workers demand more COVID-19 protection

McDonald's workers plan to strike in 20 cities on Wednesday to demand more protections from the coronavirus. Hundreds of workers are expected to participate in at least 17 states. The strike comes the day before the company's annual shareholders meeting. Labor organizers noted that 42 percent of more than 800 McDonald's workers surveyed early last month said they had been told by management not to wear masks and gloves. "This is about choices," Service Employees International Union President Mary Kay Henry said. "McDonald's can do the right thing and protect its workers. It is choosing not to." McDonald's disputes the allegations, saying they do not represent the views of the company's 850,000 U.S. employees.

USA Today

5. Trump orders agencies to cut regulations that could impede recovery

President Trump on Tuesday signed an executive order instructing federal agencies to cut back on what he called "unnecessary regulations that impede economic recovery." Trump said trimming red tape would help businesses return to normal after shutting down or drastically curbing operations under the nationwide effort to slow the spread of the coronavirus pandemic. "I'm directing agencies to review the hundreds of regulations we've already suspended in response to the virus," Trump said, "and make these suspensions permanent where possible." Trump told members of his cabinet they would now have "great authority" to scrap regulations. The move came after Trump discussed the next round of coronavirus relief and other matters with Senate Republicans over lunch.

CNBC MarketWatch