The daily business briefing: July 30, 2020

Harold Maass
Mark Zuckerberg testifies
Mandel Ngan-Pool/Getty Images

1.

Tech leaders grilled in House antitrust hearing

Amazon CEO Jeff Bezos, Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, and Google CEO Sundar Pichai testified via videoconference before Congress on Wednesday, facing questions from members of a House subcommittee investigating their business practices as part of a 13-month antitrust probe. Committee Chair David Cicilline (D-R.I.) said the investigation had convinced him that the tech giants have abused their power to "shake down small businesses and enrich themselves while choking off competitors" and putting democracy at risk. "Our founders would not bow before a king. Nor should we bow before the emperors of the online economy," Cicilline said. The CEOs argued they faced plenty of competition and defended their roles in modern society. [The New York Times, The Washington Post]

2.

Fed vows to keep interest rates near zero to aid recovery

Federal Reserve policy makers said Wednesday that they had agreed to keep their benchmark interest rate near zero to boost the economy as a renewed rise in coronavirus cases threatens the recovery. "The increase in virus cases and the renewed measures to control it are starting to weigh on economic activity," Fed Chair Jerome Powell said. The U.S. central bank's policy statement directly linked the prospects for an economic recovery to the resolving of the coronavirus crisis, as the expiration of extra unemployment benefits and other relief programs looms with lawmakers still debating whether to end, extend, or replace them. Fed leaders renewed their promise to use their "full range of tools," including keeping interest rates near zero, to keep the economy afloat. [Reuters]

3.

Stock futures pull back after Wednesday's gains

U.S. stock index futures dropped Thursday, pulling back ahead of a federal report expected to show that GDP fell by 35 percent in the second quarter, by far the worst drop since World War II. Futures for the Dow Jones Industrial Average and the S&P 500 were down by about 0.8 percent several hours before the opening bell, while those of the tech-heavy Nasdaq fell by roughly 0.9 percent. All three of the main U.S. indexes closed higher on Wednesday. The Dow gained 0.6 percent, while the S&P 500 and the Nasdaq rose by 1.2 percent and 1.4 percent, respectively. The moves came after the Federal Reserve announced its decision to keep interest rates near zero as a coronavirus spike threatens the recovery. [CNBC, MarketWatch]

4.

Americans owe $21.5 billion in overdue rent, study finds

Americans struggling to pay bills during the coronavirus crisis now owe more than $21.5 billion in late rent, global advisory firm Stout, Risius and Ross estimated on Wednesday. Senate Republicans this week unveiled their proposal for a new coronavirus relief bill that would not reinstate the federal eviction ban, which just expired. The original relief law's $600 per week in enhanced unemployment benefits is set to expire on Friday, which will increase the financial pressure on struggling families. If lawmakers don't agree on a fix, there "will be a staggering surge in homelessness unlike anything we have seen," said Public Justice Center attorney John Pollock, coordinator of the National Coalition for a Civil Right to Counsel, which helped develop Stout, Risius and Ross' eviction tracking tool. [Reuters]

5.

COVID-19 economic damage sparks rise in child hunger deaths

As coronavirus restrictions hurt economies in already struggling nations, virus-linked hunger is leading to the deaths of 10,000 more children per month in the first year of the pandemic, according to a United Nations call to action obtained by The Associated Press ahead of its publication in the medical journal Lancet. Another 550,000-plus children per month are suffering from wasting, malnutrition resulting in spindly limbs and distended bellies, according to the U.N. Wasting can cause permanent physical and mental damage. "The food security effects of the COVID crisis are going to reflect many years from now," said Dr. Francesco Branca, the World Health Organization head of nutrition. "There is going to be a societal effect." [The Associated Press]