US stocks keep roaring higher despite protests: June 3, 2020

10 Posts
Sort byDropdown arrow
9:45 a.m. ET, June 3, 2020

ADP jobs numbers: Could we dare to think the worst may be over?

From CNN Business' Anneken Tappe

This morning's ADP employment report wasn't just better than expected. It was so much that it spurred experts to grow optimistic that the worst might be over.

Consensus estimates predicted 9 million private-sector jobs were lost in May. But the actual drop was only 2.8 million, ADP reported.

White House economic adviser Kevin Hassett -- who initially expressed some disbelief that the numbers and wondered "if there's not something funny going on" -- said the report was a good sign that "people are getting back to work."

The ADP report comes ahead of Friday's jobs report from the Bureau of Labor Statistics. Economists predict 8 million lost jobs and an unemployment rate of nearly 20%, which could be the peak.

JPMorgan economist Daniel Silver noted "the ADP report isn't always a reliable predictor of the BLS data." Still, "it suggests that the pace of job loss moderated noticeably between April and May, even though it remained substantial relative to pre-Covid-19 norms."

May's ADP report also showed a change in the sectors where job losses occurred compared to last month -- a stark reminder of how the pandemic is rippling through the economy. While April's report revealed devastation to the hospitality sector, May's biggest drops were in transportation and manufacturing.

"There are two big questions about the job market over the next few months," said PNC chief economist Gus Faucher.

"First, will job losses turn to job gains as businesses reopen? And second, if so, will the pace of job growth bring back millions of jobs in the second half of 2020, rapidly replacing those jobs lost during the Viral Recession, or will it be a much slower process?"

CNN's Betsy Klein contributed to this report.

9:34 a.m. ET, June 3, 2020

Stocks rally at the open

From CNN Business' Anneken Tappe

US stocks rallied at the opening bell on Wednesday, following some surprising news about the US labor market.

The ADP national employment report showed far fewer jobs were lost in April than expected – 2.8 million versus 9 million predicted. This could be a good sign that people are returning to work and the worst is over for America’s labor market, which was devasted by the coronavirus lockdown. Friday’s jobs report from the Bureau of Labor Statistics is still expected to show an unemployment rate of nearly 20%, but experts think this could be the peak.

8:34 a.m. ET, June 3, 2020

AMC Theaters isn't optimistic about its future

From CNN Business' Jordan Valinsky

AMC Theaters (AMC) is "generating effectively no revenue" because of the prolonged shutdowns caused by Covid-19. And if it can't reopen anytime soon, it has "substantial doubt" about its "ability to continue as a going concern for a reasonable period of time."

The chain made the stark warning in a preview of its first quarter earnings, which will be released next week. AMC expects to lose about $2.4 billion in the first three months of 2020.

AMC shares fell 2% in premarket trading.

8:31 a.m. ET, June 3, 2020

Another 2.8 million private-sector jobs disappeared in May -- far less than expected

From CNN Business' Anneken Tappe

Another 2.8 million private-sector jobs disappeared in May, according to the ADP national employment report.

The private sector lost far fewer jobs than expected: Economists surveyed by Refinitiv had forecast 9 million lost jobs last month.

In April, ADP reported a revised 19.6 million jobs vanished, the worst month since the company began reporting national employment numbers in 2002.

All segments of the economy were decimated again in May, but large businesses with 500 employees or more accounted for more than half the jobs lost -- 1.6 million.

Nearly 2 million of the losses occurred in the battered services industry, with the trade, transportation and utilities sector leading the declines. In the goods-producing industry, manufacturing shed the most jobs.

“The impact of the COVID-19 crisis continues to weigh on businesses of all sizes,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “While the labor market is still reeling from the effects of the pandemic, job loss likely peaked in April, as many states have begun a phased reopening of businesses.”

The ADP report comes two days ahead of the US Bureau of Labor Statistics' jobs report, which is due Friday morning.

Economists polled by Refinitiv expect another 8 million jobs lost in May, following a 20.5 million drop in April. That would push the unemployment rate to nearly 20%, a new record high.

8:13 a.m. ET, June 3, 2020

Coty confirms it's in talks with Kim Kardashian West for new makeup line

From CNN Business' Jordan Valinsky

Coty (COTY) might be adding another Kardashian to its portfolio: Kim!

The cosmetics company disclosed in a regulatory filing that it's "currently engaged in discussions" Kim Kardashian West for a new line of makeup and beauty products.

Coty already owns 51% of Kylie Cosmetics, who is also part of the Kardashian empire. Terms of that deal garnered controversy last week after Forbes accused the family of lying about the brand's value. Jenner denied the accusations.

Coty shares rose 6% in premarket trading.

7:36 a.m. ET, June 3, 2020

America's unemployment rate could hit 20%. But there's light at the end of the tunnel

From CNN Business' Anneken Tappe

The coronavirus pandemic has devastated America's economy and millions of workers have lost their jobs. It is by far the worst economic shock most people have witnessed in their lifetimes and it's going to get worse before it gets better.

Economists polled by Refinitiv expect the US economy to shed another 8 million jobs in May, bringing the tally of jobs lost during the coronavirus pandemic to 28.5 million -- more than three times the number of jobs lost during the 2008 financial crisis.

That would push the unemployment rate to nearly 20%, a record high. The Bureau of Labor Statistics, which is set to release its jobs report at 8:30 am ET Friday, began tracking monthly data in 1948.

Read more here.

7:13 a.m. ET, June 3, 2020

Warner Music prices shares at $25

From CNN Business' Jordan Valinsky

Mel Melcon/Los Angeles Times via Getty Images
Mel Melcon/Los Angeles Times via Getty Images

Warner Music Group, one of the world's biggest record labels, has priced its initial public offering ahead of its debut.

Shares are priced at $25, which is toward the higher end of its proposed $23-to-$26 range. It also increased the available shares from 70 million to 77 million. Its ticker symbol, WMG, will start trading on the Nasdaq later today.

Warner Music, which represents top artists like Coldplay and Lizzo, announced it was going public in February. Market volatility sparked by Covid-19 over recent months forced Warner to delay the debut.

Warner, a profitable company, predicts that it will make even more money as streaming services like Spotify (SPOT) and Apple (AAPL) increase their subscription bases and prices.

6:51 a.m. ET, June 3, 2020

US stock futures point toward a higher opening

From CNN Business' Jordan Valinsky

Markets are still not deterred by the widespread protests. Instead, they are focusing on the reopening of the economy following Covid-19 lockdowns.

Here's where things stand this morning:

  • Dow futures were up nearly 200 points
  • S&P 500 futures rose 0.52%
  • Nasdaq futures were 0.42% higher.

6:13 a.m. ET, June 3, 2020

Australia suffers first recession in 29 years

From CNN Business' Angus Watson and Laura He

Australia's economy is suffering its first recession in nearly three decades as the nation grapples with the impact of the coronavirus pandemic.

The country's economy shrank 0.3% in the first three months of the year from the previous quarter, according to the Australia Bureau of Statistics. Treasurer Josh Frydenberg on Wednesday warned that GDP will shrink in the April-to-June period, marking the second consecutive quarter of contraction for Australia.

The Covid-19 shutdown has caused the end of a 29-year run of economic growth in Australia. The streak was partly fueled by China's voracious appetite for commodities, such as iron ore and coal, as it rose to become the world's second largest economy.

Read more here.