In this week’s recap we talk about forecasts on lay offs coming anytime soon, President Trump and Melania testing positive for COVID, and the Irish Supreme Court ruling that Subway’s bread does not qualify as bread.
American Airlines & United Airlines say they will begin to furlough a total 32K employees, after lawmakers failed to agree on a broad pandemic relief package, that includes more federal aid for airlines. American Airlines CEO says a deal with $25B for airlines would allow the company to reverse 19K furloughs set to begin. United made a similar statement with concern over 13K workers.
Disney’s theme parks shut down globally & the company’s profit dropped a whopping 91% during Q1 of 2020. Now the firm is laying off 28K people in the U.S. as the pandemic hits its parks & resorts business, which employs 100K workers. The employee cuts will affect the Disney’s Parks, Experiences & Products unit. 67% of the employees laid off, will be part-time workers.
U.S. President Trump & First Lady Melania have both tested positive for the Covid-19 virus. U.S. futures markets immediately plunged near -2% across all major stock indices, with the Dow dropping over 500 points. It is likely there will be an effect on most global markets as well.
Ireland’s Supreme Court has ruled that the bread in Subway’s hot sandwiches at 10% contains far too much sugar to meet the legal definition for bread. Judgment handed down in response to a Subway franchisee who had appealed for a tax refund, arguing that its bread is a staple food & therefore subject to a 0% tax rate. Under Ireland’s Tax Act 1972, the sugar content should not exceed 2% of the weight of flour in the dough.
The U.S. economy suffered its sharpest contraction in at least 73 years in Q2 due to disruptions from the coronavirus. GDP plunged at a 31.4% annualized rate, the largest decline in output since the government started keeping records in 1947. Output was previously reported to have contracted at a 31.7% pace in the 2nd quarter.
The U.S. gained 661K jobs in September, vs. an expectation of 800K in the final jobs report before Election Day. The unemployment rate fell to 7.9% in September, as the U.S. posted its 5th consecutive month of job gains. Permanent job losses also increased for the 2nd consecutive month, rising by 345K to 3.8 million.
German based Bayer, shares fell -10.00% as the pharmaceutical & chemicals conglomerate reports 2021 core earnings per share, will be slightly below this year’s at constant exchange rates, with sales basically flat. A major factor is the agricultural sector, which is being hurt by low commodity prices for major crops. Shares are down -34.10% in 2020.
Volatile beginning of the 4th quarter; Signing of contracts to buy homes in the U.S. is on the rise; New claims for jobless benefits remains at near recession levels; Rolls-Royce RR will sell shares at a 41% discount; Devon Energy & WPX Energy will move forward with a merger of equals