The daily business briefing: October 1, 2020
Trump signs deal avoiding shutdown as coronavirus relief talks continue, American and United to cut 32,000 jobs, and more
1. Trump signs bill averting shutdown
President Trump early Thursday signed a bill keeping the government funded through Dec. 11, avoiding a partial government shutdown. The bill became law after a midnight deadline, but no government operations were expected to be disrupted. The bipartisan bill was quickly approved by the Senate after receiving White House approval last week. House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin failed to reach a compromise on another key spending bill — the new coronavirus relief package. Pelosi and Mnuchin met Wednesday and plan to continue discussions. House Democrats postponed a Wednesday vote on their $2.2 trillion proposal to allow more time for negotiations. Republicans want to spend less but vulnerable lawmakers from both parties are pushing for a deal before Election Day.
2. American, United to proceed with 32,000 job cuts
American and United airlines on Thursday will move forward with plans to lay off 32,000 employees after lawmakers and the Trump administration failed to reach a deal on a new coronavirus relief package. American CEO Doug Parker said late Wednesday that his company had to cut 19,000 jobs because there was "no guarantee" the stimulus package would pass. The proposal includes $25 billion in additional aid to U.S. airlines, which have been devastated by a drop in demand for air travel due to the coronavirus pandemic. "We implore our elected leaders to reach a compromise, get a deal done now, and save jobs," said United CEO Scott Kirby, whose company is cutting 13,000 jobs. American lost $5 billion in the first half of 2020. United lost $3.3 billion.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
3. Stocks post monthly loss for 1st time since March
U.S. stocks surged on Wednesday but finished down for September, the first monthly loss since March. Still, the month capped the second straight quarter of big gains. The Dow Jones Industrial Average rose by 1.2 percent on Wednesday. The S&P 500 gained 0.8 percent and the tech-heavy Nasdaq closed up by 0.7 percent. Investor sentiment got a boost from better-than-expected private-sector jobs data, which rose by 749,000 in September, beating expectations of 600,000 more jobs. Stocks fell back from their session highs late in the day after House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin fell short of reaching a deal on a new coronavirus relief package, although they plan to continue their talks on Thursday. Futures for the Dow, the S&P 500, and the Nasdaq were up by about 0.5 percent several hours before the opening bell on Thursday.
4. Palantir shares rise in 1st day of trading
Palantir Technologies shares closed at $9.50 on Wednesday, finishing their first day of trading on the New York Stock Exchange 31 percent above their reference price of $7.26 a share. The stock's performance gave Palantir a valuation of about $21 billion. The data-mining software company was the fourth notable firm to choose the direct-listing model instead of a conventional initial public offering of stock. Direct listing allows companies to avoid investment-banking underwriters, saving them millions of dollars in fees. The process also doesn't raise money for the company, instead allowing employees and early investors to cash out stock when the stock lists on the exchange.
5. U.S. economy dropped by record 31 percent in 2nd quarter
The U.S. economy fell at an unprecedented rate of 31.4 percent in the second quarter of 2020, the Commerce Department reported Wednesday. The drop in gross domestic product, the total output of U.S. goods and services, came in just below the 31.7 percent estimated a month ago. The decline was more than three times larger than the previous record drop of 10 percent, which occurred in 1958 during Dwight Eisenhower's presidency. Economists believe that the record decline, which came as businesses were shut down across the nation due to the coronavirus crisis, will be largely offset by a record economic expansion, estimated at 30 percent, that came as businesses reopened in the third quarter, which just ended.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
-
Why Assad fell so fast
The Explainer The newly liberated Syria is in an incredibly precarious position, but it's too soon to succumb to defeatist gloom
By The Week UK Published
-
Romania's election rerun
The Explainer Shock result of presidential election has been annulled following allegations of Russian interference
By Sorcha Bradley, The Week UK Published
-
Russia's shadow war in Europe
Talking Point Steering clear of open conflict, Moscow is slowly ratcheting up the pressure on Nato rivals to see what it can get away with.
By The Week UK Published
-
Cutting cables: the war being waged under the sea
In the Spotlight Two undersea cables were cut in the Baltic sea, sparking concern for the global network
By The Week UK Published
-
The nuclear threat: is Vladimir Putin bluffing?
Talking Point Kremlin's newest ballistic missile has some worried for Nato nations
By The Week UK Published
-
Russia vows retaliation for Ukrainian missile strikes
Speed Read Ukraine's forces have been using U.S.-supplied, long-range ATCMS missiles to hit Russia
By Arion McNicoll, The Week UK Published
-
Has the Taliban banned women from speaking?
Today's Big Question 'Rambling' message about 'bizarre' restriction joins series of recent decrees that amount to silencing of Afghanistan's women
By Harriet Marsden, The Week UK Published
-
Cuba's energy crisis
The Explainer Already beset by a host of issues, the island nation is struggling with nationwide blackouts
By Rebekah Evans, The Week UK Published