The daily business briefing: June 25, 2020

1. Stocks struggle as coronavirus surge dampens hopes for economic recovery

U.S. stock index futures fell early Thursday but struggled to rebound as one-day new coronavirus infections surged to a new record. Futures for the Dow Jones Industrial Average and the S&P 500 were down slightly after fighting back from deeper losses several hours before the opening bell. Nasdaq Composite futures were flat. The Dow plunged by 2.7 percent on Wednesday as concerns mounted about rising infection rates in numerous states. The S&P 500 dropped by 2.6 percent. The tech-heavy Nasdaq, fresh off a record high, fell by 2.2 percent. "All the hopes of investors looking for a better economy to improve the bottom lines of companies shut down in the recession have been dashed," said Chris Rupkey, chief financial economist at MUFG.

CNBC

2. Bayer agrees to $10.9 billion Roundup settlement

German drug and pesticide maker Bayer AG on Wednesday agreed to pay up to $10.9 billion to settle nearly 100,000 U.S. lawsuits over cancer links to the company's weedkiller Roundup. Bayer said the agreement resolves about 75 percent of the claims it inherited in its $63 billion takeover of Monsanto in 2018. "The Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end," Bayer Chief Executive Werner Baumann said. "Unfortunately, we have to pay an awful lot of money for a product which is perfectly regulated." Under the arrangement, Bayer did not admit liability or wrongdoing. Loyola Law School professor Adam Zimmerman said the company would not be "getting complete relief, but trying to do as much as it can to calm uncertainty."

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Reuters

3. IMF says global economy to shrink more than previously projected

The International Monetary Fund projected on Wednesday that the global economy would shrink by 4.9 percent this year, deeper than the 3 percent contraction it forecast in April. The change reflected rising concerns that the stubborn spreading of the coronavirus pandemic threatened to exacerbate the worst economic downturn since the Great Depression, even though many countries have started reopening their economies after prolonged lockdowns. The IMF also noted that even in areas where businesses are reopening, social distancing and workplace safety protocols are creating a drag on activity. The fund said it expected the total global economic loss through 2021 to exceed $12 trillion. "This is a crisis like no other and will have a recovery like no other," said Gita Gopinath, director of the IMF's research department.

The New York Times

4. Disney postpones Disneyland reopening amid California COVID-19 surge

The Walt Disney Co. said on Wednesday it will delay reopening Disneyland and California Adventure in Anaheim, California, due to uncertainty about safety guidelines as the state's coronavirus infections surge. The two parks had been scheduled to reopen on July 17, but Disney said California won't issue new rules for theme parks until after July 4, which doesn't give the company enough time to bring back workers and prepare the parks to meet the July 17 target. California had a record 7,149 new coronavirus cases on Wednesday. Unions representing 17,000 Disney employees sent a letter to California Gov. Gavin Newsom (D) last week expressing concerns about their safety returning to work as infections surge. A spokesperson said Newsom "appreciates Disney's responsiveness to his concerns about reopening."

Los Angeles Times

5. Wirecard collapses, leaving creditors facing potential $3.9 billion loss

German payments company Wirecard filed to open insolvency proceedings in a Munich court on Thursday "due to impending insolvency and over-indebtedness." The collapse came two years after the company, once worth $20 billion, was admitted to Germany's benchmark DAX stock index. Wirecard's sudden nosedive could leave creditors owed $3.9 billion with nearly nothing. "The money is gone," a source at one lender told Reuters. "We may recoup a few euros in a couple of years, but will write off the loan now." Shares of Wirecard rocketed down on the news, falling 80 percent to their lowest level since January 2006. The shares have lost 98 percent since an auditor refused to sign Wirecard's 2019 accounts last week, leading to the departure of CEO Markus Braun.

Reuters CNBC