The daily business briefing: June 3, 2020

Harold Maass
The Zoom logo
Kena Betancur/Getty Images

1.

Zoom shares jump after it reports record earnings

Zoom Video Communications on Tuesday reported record quarterly sales and earnings after its videoconferencing platform surged in popularity as Americans have been forced to work and socialize from home during the coronavirus pandemic. Zoom reported $27 million in net income, or 9 cents per share, compared to just $200,000 in net income, or less than 1 cent per share, in the same quarter last year. Revenue jumped by 169 percent to $328.2 million. "The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions, and collaboration using Zoom," CEO Eric Yuan said. "Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives." Zoom shares jumped on the news, rising by more than 4 percent in after-hours trading. [MarketWatch]

2.

Zuckerberg reaffirms decision on Trump posts despite protest

Facebook CEO Mark Zuckerberg told employees on Tuesday that he would stick to his decision not to moderate or remove a post in which President Trump said "when the looting starts, the shooting starts." Dozens of Facebook employees on Monday publicly criticized Zuckerberg over the post, which they said endorsed violence against people protesting the death of George Floyd, an unarmed black man, in Minneapolis police custody. Twitter posted a warning over Trump's post on its platform, saying it violated the site's ban on glorifying violence. At least two Facebook employees said they were quitting over Zuckerberg's decision. "I cannot stand by Facebook's continued refusal to act on the president's bigoted messages aimed at radicalizing the American public," software engineer Timothy Aveni posted on LinkedIn. [CNBC]

3.

U.S. unemployment payouts lag

Over the course of the last three months, the Treasury Department has disbursed $146 billion in unemployment benefits to Americans who have lost their jobs during the coronavirus pandemic. That's more than in all of 2009, when unemployment peaked following the financial crisis, but it's still reportedly only two-thirds of what's actually owed. The total bill should have reached $214 billion by now, which means millions of Americans have yet to receive their benefits. Millions still haven't had their jobless claims processed, and reported numbers are likely understated. A spokesperson for the Labor Department told Bloomberg that "states are struggling to keep up with demand and some have backlogs they are working through," even as some have expanded call centers and brought in other government workers to help with the claims. [Bloomberg]

4.

Stocks gain as business reopenings offset protests, China tensions

U.S. stock index futures made modest gains early Wednesday as the reopening of businesses after coronavirus lockdowns continued to boost optimism on Wall Street. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up by 0.2 percent or more several hours before the opening bell. The Dow rose by more than 1 percent on Tuesday, while the S&P 500 and the Nasdaq gained 0.8 percent and 0.6 percent, respectively. "Despite several issues of importance — national riots, Chinese relations, an ongoing pandemic — the stock market is primarily focused on a single thing: the restart of U.S. and global economic activities," said Jim Paulsen, chief investment strategist at the Leuthold Group. [CNBC]

5.

Private employment report expected to show 8.7 million jobs lost in May

Economists expect a private-sector employment report being released Wednesday morning to show that the U.S. economy lost 8.7 million jobs in May, according to Econoday. The figure would mark an improvement on the record 20.2 million job losses Automatic Data Processing Inc. estimated in April. The data, scheduled for release at 8:15 a.m., comes ahead of the Labor Department's monthly employment report due to be released on Friday. The ADP report is not always a reliable indicator of what the federal employment report will show, but it still could provide insights into the impact of state efforts to reopen their economies by easing coronavirus lockdowns. [MarketWatch, Yahoo Finance]