US stocks rise after Fed promises low rates for years: September 16, 2020

By CNN Business

Updated 5:08 p.m. ET, September 16, 2020
6 Posts
Sort byDropdown arrow
10:29 a.m. ET, September 16, 2020

FedEx soars as online shopping booms at 'holiday levels'

From CNN Business' Paul R. La Monica

You've probably seen a lot of FedEx trucks in your neighborhood during the past six months. Heck, you've probably been getting a lot more FedEx deliveries if you've been stuck at home during the coronavirus outbreak. So it's no wonder that FedEx just reported strong jumps in sales and earnings for the first quarter.

Shares of FedEx (FDX) rose more than 7% on the news Wednesday. The stock is up nearly 70% this year, and not far from an all-time high. FedEx rival UPS (UPS) gained nearly 2% following the FedEx results and is now up about 40% in 2020.

FedEx is thriving even without Amazon. Last year, FedEx decided to not renew ground and air cargo contracts with Amazon (AMZN) as the e-commerce giant has ramped up its own delivery and logistics network.

Without mentioning Amazon by name, FedEx CFO Alan Graf, who plans to retire at the end of the year, said during a conference call with analysts that the company "made a strategic decision to go all in on e-commerce." 

"We moved away from a large customer to focus on the broader market." The move appears to be working," Grad added.

FedEx chief marketing officer Brie Carere said during the call that "in the US, spending that would normally have gone into services has shifted towards goods" and that "e-commerce is booming at holiday levels" because of Covid-19.

But FedEx executives also conceded that the economy won't truly return to normal until there is a coronavirus vaccine. CEO Fred Smith said "detailed planning is underway at FedEx to distribute vaccines at scale worldwide once approved."

9:32 a.m. ET, September 16, 2020

Stocks open higher

From CNN Business' Anneken Tappe

US stocks ticked higher at the open on Wednesday, ahead of the Federal Reserve’s monetary policy update at 2pm ET.

The stock market has enjoyed unprecedented stimulus from the central bank and the government during the pandemic crisis, which has pushed the market higher. Now investors are anxiously awaiting what the Fed might do next, especially after it announced a change to its inflation target last month.

In economic data, August retail sales were weaker than expected, sparking worries about consumers growing more cautious again.

9:54 a.m. ET, September 16, 2020

Kohl's slashes corporate jobs by 15%

From CNN Business' Chris Isidore

A Kohl's store in Jersey City, New Jersey, is pictured on August 16.
A Kohl's store in Jersey City, New Jersey, is pictured on August 16. Jeenah Moon/Bloomberg/Getty Images

Kohl’s eliminated 15% of jobs at its corporate headquarters and other corporate offices this week.

Kohl’s did not give a headcount for how many jobs it eliminated. It had about 122,000 employees in total last year -- including store employees -- with 37,000 of those jobs being full-time positions.

The Wisconsin-based department store chain will save about $65 million annually from the job cuts, and that it will spend $23 million on severance and other separation costs.

Kohl’s returned to profitability in the three month period ending Aug. 1, earning $47 million, after posting a $495 million loss (excluding special items) in its fiscal first quarter because of pandemic-related store closures. But that income is still down from the $241 million it earned a year earlier, as revenue plunged 23%.

Department store chains including Kohl's were having trouble even before the Covid-19 pandemic. Those problems have been made worse with millions of people out of work and unable to spend money, and millions more working from home and not needing to spend as much on dressier clothes.

6:33 a.m. ET, September 16, 2020

US stock futures point higher ahead of the Fed meeting

From CNN Business' David Goldman

US futures were pointing to a higher open ahead of the Fed's meeting. Investors are hoping the Fed will provide more detail about its new low-rate policy and provide more support for economic stimulus.

Here's where things stand this morning:

  • Dow futures were up 71 points, or 0.3%
  • S&P 500 futures were 0.5% higher
  • Nasdaqfutures rose 0.4%

6:36 a.m. ET, September 16, 2020

Oil surges 2% on surprisingly dwindling supply

By David Goldman

Oil futures surged more than 2% to $39.14 a barrel after the American Petroleum Institute reported Tuesday that US stockpiles unexpectedly shrank.

Americans had been using less oil as the pandemic led people to ditch their commutes in favor of working from home -- or not working at all, for many. Although just one week's worth of data, the drawdown on supply is potentially encouraging.

Oil prices could continue to rise as Hurricane Sally is made landfall on the Gulf coast today, disrupting oil production and refineries.

6:34 a.m. ET, September 16, 2020

The outlook for top global economies is improving, OECD says

From CNN Business' Julia Horowitz

The huge shock to many of the world's biggest economies from the coronavirus pandemic may not be quite as bad as economists feared just a few months ago.

In a report published on Wednesday, the Organization for Economic Cooperation and Development upgraded its forecast for global economic output this year, noting that while declines were still "unprecedented in recent history," the outlook has improved slightly since June.

The Paris-based agency said it now expects the world economy to shrink by 4.5% in 2020 before expanding by 5% in 2021. Previously, the OECD said it thought the global economy would contract by 6% this year and grow 5.2% next year.

But the agency, which represents the world's biggest economies, warned that headline figures mask major discrepancies. While it significantly boosted its 2020 forecasts for the United States and China, and slightly raised the outlook for Europe, the OECD lowered its expectations for developing countries such as Mexico, Argentina, India, South Africa, Indonesia and Saudi Arabia.