US stocks head higher on promising treatment results: April 29, 2020

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5:44 p.m. ET, April 29, 2020

Canopy Growth lays off 200

From CNN Business' Alicia Wallace

Canadian cannabis company Canopy Growth has laid off an additional 200 employees as part of a broader whittling down of its global operations.

The 200 jobs affected were based in Canada, the United Kingdom and the United States, a Canopy Growth spokesperson told CNN Business. Canopy Growth declined to disclose which departments or job types were affected.

The reductions, which were disclosed via a corporate internal announcement, were first reported by BNN Bloomberg.

“Although difficult, the decisions that have been made over the last few months are to allow Canopy Growth to remain focused on the areas where we are winning and ensure that we are delivering the highest quality products to our consumers in every market where we operate,” Canopy Growth CEO David Klein wrote in an emailed statement. “For a long time Canopy has prioritized doing things first, but going forward we’ll be focused on doing things the best in the markets and in the product formats that show the greatest promise.”

The layoffs come on the heels of an ongoing contraction in Canopy Growth’s global operations and workforce. In March, the company laid off 500 people and closed down millions of square feet of greenhouses. Another 85 jobs were affected in moves announced earlier this month that included exiting Africa, closing a facility in Canada, scaling back operations in Colombia and shutting down a US hemp farm

5:02 p.m. ET, April 29, 2020

Microsoft beats Street expectations

From CNN Business' Clare Duffy

Many companies are feeling the financial pain from the coronavirus crisis -- but not Microsoft.

Microsoft's (MSFT) posted earnings per share of $1.40 on $35 billion in revenue for the three months ended in March, which is the company's fiscal third quarter. Both figures beat analysts' expectations. Sales were up 15% compared to last year.

Its shares rose nearly 3% in after-hours trading Wednesday.

In the announcement Microsoft said sales overall didn't take a big hit from coronavirus ripple effects, although some areas such as its advertising business were hurt. Other divisions like the cloud business may have actually received a boost with so many people working and attending school remotely.

We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything,” CEO Satya Nadella said in a statement.

Revenue from Microsoft’s intelligent cloud segment grew 27% year-over-year to $12.3 billion. That division includes the key Azure cloud business, which competes with Amazon Web Services. Azure revenue grew 59% in the three months, a slight slowdown in growth from the previous quarter.

Microsoft said usage of its cloud services increased as people moved to working remotely, though it acknowledged a slowdown in new deals during the quarter's final weeks. Analysts predicted that companies may cut back on their spending on such enterprise services as they deal with the economic fallout from coronavirus. 

The company's gaming and personal computing segments also benefitted from stay-at-home guidelines, Microsoft said.

However, it also acknowledged that its "Search" business was negatively impacted by a drop in advertising spend as a result of coronavirus, something Google (GOOGL) is also grappling with. Microsoft also noted that the effects of coronavirus "may not be fully reflected in the financial results until future periods," as the economic crisis spurred by the virus continues to unfold.

4:04 p.m. ET, April 29, 2020

Stocks finish higher

From CNN Business' Anneken Tappe

US stocks closed sharply higher on Wednesday, as investors once again grew optimistic about a potential coronavirus treatment.

Gilead Sciences announced encouraging results for remdesivir, an antiviral drug tested as part of a National Institute of Allergy and Infectious Disease study. Gilead finished up 5.7%.

Meanwhile, the Federal Reserve kept interest unchanged near zero and committed to using its “full range of tools” to support the US economy throughout this unprecedented crisis.

  • The Dow finished 2.2%, or 532 points, higher.
  • The S&P 500 closed up 2.7%.
  • The Nasdaq Composite ended 3.6% higher.
3:42 p.m. ET, April 29, 2020

Jay Powell to savers: Drop dead

From CNN Business' David Goldman

With rates at zero for the foreseeable future, people who hold onto cash aren't getting any return. That's unsatisfying to savings account holders.

Federal Reserve Chairman Jerome Powell doesn't want to hear it.

"Low interest rates affect the economy through a number of channels in a positive way," Powell said. "Lower interest rates support economic activity...They make it cheaper to borrow, they drive your costs of borrowing down. They do raise asset prices, including the value of your home -- if your saver owns a home or has 401(k), savers will benefit from that."

Powell acknowledged people who rely only on bank account savings will not benefit from low interest rates. But he said that's too myopic a lens through which the Fed should look.

"We have to look out for the overall economy," he said. "Low interest rates are a good thing. And it does not say they are good for every single person. But that shouldn't stop us from doing what we think is good for the whole."

3:37 p.m. ET, April 29, 2020

How can we avoid this economic shock from happening again?

From CNN Business' David Goldman

What are the lessons to be learned from the shock that the coronavirus pandemic wrought on the US economy?

Hang on, said Fed Chairman Jerome Powell. We're still figuring out how to solve the crisis.

"It's early to be asking them," Powell said. "We are still putting out the fire. We are still trying to win. I think we will be at that for a while."

That didn't stop Powell from expounding on where the underlying problems are with the US economy -- if not necessarily what is wrong with them.

"The breakdowns that we have seen in market function have been in the capital markets," he noted. "The size and force of this shock will no doubt reveal weaknesses in the financial architecture, and we will have to go to work on those."

Powell also criticized companies for maintaining far too much debt before the shock arrived.

"Ideally you would go into a unexpected shock like this with a much stronger fiscal posture," he said.

3:31 p.m. ET, April 29, 2020

Unemployment will remain high for a long time

From CNN Business' David Goldman

The unemployment rate is expected to soar from a 50-year low two months ago to 14% this month. Don't expect to see a return to 3.5% unemployment anytime soon.

Before that could happen, consumer spending needs to start up again. Once people are willing to go out and spend, unemployment will go back down, predicted Federal Reserve Chairman Jerome Powell. But the labor market won't make a full recovery.

"I don't think it will get anywhere near the historically low levels that we had as recently as February -- 3.5%," he said. "It will take time for that to happen for to us get back to anything that resembles maximum employment."

3:25 p.m. ET, April 29, 2020

This is the worst economy in history, Fed says

From CNN Business' David Goldman

How bad is the coronavirus economy? The worst ever, says Fed Chairman Jerome Powell.

"We are going to see economic data for the second quarter that is worse than any data we have seen for the economy," Powell said. "There are direct consequences of the disease and measures we are taking to protect ourselves from it."

The recovery will be long and painful, but the economy could begin to bounce back significantly in the third quarter as businesses reopen, he added. While we won't go back to pre-coronavirus levels for quite some time, the third quarter could provide some economic relief.

"We will enter the new phase -- and we are just beginning to maybe do that -- where we will begin formal measures that require social distancing will be rolled back, gradually, and at different paces in different parts of the country. And in time, during this period, the economy will begin to recover," Powell said.

"People will come out of their homes, start to spend again, we will see unemployment go down, we will see economic activity pick up," he added. Exactly then that happens is "very hard to say," although he reiterated the third quarter could get a "fairly large increase" in economic activity.

3:26 p.m. ET, April 29, 2020

Minorities are faring the worst during the economic collapse

From CNN Business' David Goldman

Unemployment has shot higher for minorities in the United States -- much faster than it has for white Americans, Federal Reserve Chairman Jerome Powell said.

Just a few months ago, the US labor market was the best-ever for minorities, Powell noted. Now, minorities are among the first to lose their jobs as stay-at-home orders have shuttered restaurants, movie theaters, retailers and many other businesses.

"It is heartbreaking, frankly, to see that all threatened now," Powell said. "All the more need for our urgent response and also that of Congress, which has been urgent and large, and to do what we can to avoid longer run damage to the economy."

Powell noted that people "who are least able to bear it have been the first to lose their jobs, and they have little cushion to protect themselves.

"That is a very big concern," Powell said.