Here’s what you need to know:
- As a deal on oil production nears, producers are baffled by President Trump’s promises.
- Nearly 30,000 news media workers have been laid off, furloughed or had their pay cut.
- Apple and Google team up to ‘contact trace’ the coronavirus.
- Everything is awful. Why are stocks up?
- The pandemic is a natural disaster, not an economic shock.
- How the coronavirus crisis is accelerating automation.
As a deal on oil production nears, producers are baffled by President Trump’s promises.
President Trump said Friday that he had offered to cut U.S. oil production to help advance an agreement between the Organization of the Petroleum Exporting Countries, Russia and other countries. But it was not clear what exactly he had promised and whether it would even work.
As the coronavirus pandemic has led to the shutdown of large swaths of the global economy, oil prices have plunged, jeopardizing companies and jobs and forcing the largest producers to consider drastic cuts in how much crude they put on the world market.
In a highly unusual move, Mr. Trump said he had told President Andrés Manuel López Obrador of Mexico that he would cut U.S. oil production by 250,000 barrels a day so that Mexico would cut its output by only 100,000 barrels a day. Mexico’s reluctance to cut output was a key sticking point in a Thursday conference call between OPEC and other oil producers.
“We are trying to get Mexico, as the expression goes, over the barrel. And Mexico is committing to do 100,000 fewer barrels,” Mr. Trump said at a White House news conference.
“The United States will help Mexico along,” he continued, “and they will reimburse us at a later date when they’re prepared to do so.”
But Mr. Trump added that he was not sure his deal with Mexico would be “acceptable to the other oil-producing nations.”
American oil executives said it was not clear to them how the president would cut production. The federal government controls permitting on federal lands and offshore, but drilling for oil is done by private companies and it would be highly unusual for the federal government to force them to cut production.
In addition to the meeting between OPEC, Russia and other oil producers on Thursday, energy ministers from the Group of 20 countries spoke on a teleconference on Friday.
The ministers did not endorse a production cut, and instead offered a much more generic statement about the importance of taking “all the necessary and immediate measures to ensure energy market stability.”
Mr. Trump also spoke on Friday to President Vladimir Putin of Russia about energy markets but the White House did not provide details about the conversation. Separately, the Kremlin issued a statement saying Mr. Putin spoke with Crown Prince Mohammed bin Salman of Saudi Arabia about the production cut agreement between OPEC and other oil producing nations.
On Thursday night, Russia and all but one member of OPEC reached an agreement to cut 10 million barrels a day in production, which amounts to a 23 percent reduction from the group’s baseline of about 44 million barrels a day.
The deal was held up by Mexico, a member of the so-called OPEC Plus group. Mexico’s energy minister, Rocío Nahle, rejected OPEC’s proposal that the country cut production by 400,000 barrels a day, proposing a cut of one-quarter of that amount instead, according to a message on her Twitter account. The agreement was contingent on Mexico’s approval, according to a statement on OPEC’s website.
The terms of the deal and the late-developing snag disappointed the oil markets, which had surged from two-decade lows in late March on the prospect of collective actions being taken to bolster prices and rescue the industry. West Texas Intermediate, the benchmark U.S. crude, ended the day down more than 9 percent to $22.76 a barrel on Thursday.
Analysts and traders had hoped for a bigger reduction to prevent the buildup of a glut of oil as demand for energy is expected to continue as the global economy contracts.
Oil markets were closed on Friday for the Good Friday holiday.
Nearly 30,000 news media workers have been laid off, furloughed or had their pay cut.
The coronavirus-related economic downturn has led to pay cuts, layoffs and shutdowns at many news outlets, from weeklies like Seven Days in Burlington, Vt., to Gannett, the nation’s largest newspaper chain.
Finding a sizable audience has not been a problem for publishers. Hunger for news in a time of crisis has sent droves of readers to many publications. But with businesses paused or closed — and no longer willing or able to pay for advertisements — a crucial part of the industry’s support system has cracked.
“The traffic numbers are still way up,” said David Chavern, the president and chief executive of the News Media Alliance. “The digital subscriptions are hanging in there.”
He added, “The ad contraction is brutal and continuing.”
All told, 28,000 workers in the news media industry have been laid off, furloughed or had their pay reduced, a New York Times survey of the industry has found.
Executives like Jonah Peretti of BuzzFeed and Ben Lerer of Group Nine Media are forgoing their salaries. Publications like The Stranger, a weekly in Seattle, and the fashion magazine W have suspended publication. Tribune Publishing, the publicly traded company behind The Chicago Tribune and The New York Daily News, has cut the salaries of those making more than $67,000.
Raises have been put on hold at Condé Nast, the publisher of Vogue, Vanity Fair and The New Yorker. A hiring slowdown has also gone into effect. And company leaders are considering layoffs for staff members and pay cuts for executives, according to two people with knowledge of discussions. In a March 27 staff memo, Roger J. Lynch, the chief executive, acknowledged the difficulties for a company dependent on the luxury industry: “Overall, we’re seeing many advertisers shift their investments with us to the second half of the year,” he wrote. “Others are decreasing or pausing their spend.”
Apple and Google team up to ‘contact trace’ the coronavirus.
In one of the most far-ranging attempts to halt the spread of the coronavirus, Apple and Google said they were building software into smartphones that would tell people if they were in recent contact with someone who was infected with the virus.
The technology giants said they were teaming up to release the tool within several months, building it into the operating systems of the billions of iPhones and Android devices around the world. That would enable the smartphones to constantly log other devices they get close to, enabling “contact tracing” of the disease.
With the tool, infected people would notify a public health app that they have the coronavirus, which would then alert phones that had recently come into proximity with that infected person’s device.
The effort could raise questions about the reach that these companies have in individuals’ lives, especially because Google in particular has faced scrutiny for collecting data for online advertising.
“It could be a useful tool but it raises privacy issues,” said Dr. Mike Reid, an assistant professor of medicine and infectious diseases at the University of California, San Francisco, who is helping San Francisco officials with contact tracing. “It’s not going to be the sole solution, but as part of a robust sophisticated response, it has a role to play.”
Google and Apple said the tool would protect the privacy of smartphone users and that people would have to opt in to use it.
Everything is awful. Why are stocks up?
What on earth is the stock market doing?
Death and despair are all around. The number of people filing for unemployment benefits each of the last two weeks was about 10 times the previous record — and is probably being artificially held back by overloaded government systems. Vast swaths of American business are shuttered indefinitely. The economic quarter now underway is likely to feature Great Depression-caliber shrinkage in economic activity.
Yet at the close of the market on Thursday, the S&P 500 was up 25 percent from its recent low on March 23. It is down only about 14 percent this year — and is up from its levels of just 11 months ago.
Two powerful forces are pushing in opposite directions. Commerce is being disrupted to a degree that seemed impossible just weeks ago. But simultaneously, stock investors are betting that powerful interventions out of Washington — including an additional $2.3 trillion in lending programs from the Federal Reserve announced on Thursday — will be enough to enable major companies to emerge with little damage to their long-term profitability.
It’s a battle between collapsing economic activity and the federal government’s money printer going “brrr.” In the stock market, at least, the revving of the money printer is winning.
The pandemic is a natural disaster, not an economic shock.
The coronavirus’s economic fallout looks more like the aftershock of a massive hurricane — like Katrina, which devastated Louisiana in 2005 — than that of a recession, analysts at the Federal Reserve Bank of New York wrote in a new analysis.
“The recent surge in jobless claims has tracked the pattern observed in post-Katrina Louisiana fairly closely,” the analysts, Jason Bram and Richard Deitz, wrote — except that the pain is scaled up about 78 times to cover the entire nation. “If the overall U.S. economy were to follow the same pattern today, we could see more than 27 million pandemic-related claims by the end of May.”
The researchers note that neither the Great Recession nor Hurricane Katrina was a perfect comparison for the pandemic. During the recession, job losses happened much more slowly. The storm wiped out New Orleans’ infrastructure and caused an exodus from the area. Both of those factors hampered the recovery and are not true of the pandemic.
But the storm was also a short-lived event: Recovery efforts began fairly immediately. It is still not clear when the crawl back from coronavirus will start.
How the coronavirus crisis is accelerating automation.
Now, social-distancing directives are prompting more industries to accelerate their use of automation. And as the pandemic intensifies, long-simmering worries about job losses or a broad unease about having machines control vital aspects of daily life could dissipate.
“Pre-pandemic, people might have thought we were automating too much,” said Richard Pak, a professor at Clemson University who researches the psychological factors around automation. “This event is going to push people to think what more should be automated.”
At supermarkets like Giant Eagle, robots are freeing up employees who previously spent time taking inventory to focus on disinfecting and sanitizing surfaces and processing deliveries to keep shelves stocked. And YouTube said in a blog post that with fewer people in its offices around the world, machines were doing more content moderation.
Catch up: Here’s what else you need to know.
At least 715 pilots at American Airlines have signed up for early retirement, according to the Allied Pilots Association union. Under the terms of the offering, the airline will continue to pay about half of their salaries until they reach the mandatory retirement age of 65. Nearly 4,800 more have signed up to take short-term leave.
After closing lounges and scaling back food service in flight, airlines are starting to donate their huge stockpiles of food. Delta Air Lines said it was distributing more than 200,000 pounds of perishable food to various charities nationwide and American Airlines said it would donate about 81,000 pounds of food.
European Union finance ministers agreed Thursday night to a plan calling for more than half a trillion euros worth of new measures to buttress their economies against the onslaught of the coronavirus, but dealt a blow to their worst-hit members, Italy and Spain, by sidestepping their pleas for the bloc to issue joint debt.
Lear Corporation, a global supplier of car seating and vehicle interiors, said Friday that it would temporarily cuts the salaries of its employees by 20 percent in response to the impact of the coronavirus outbreak. Its chief executive and president, Ray Scott, will have his salary reduced by a further 10 percent for the rest of 2020.
Reporting was contributed by Jack Nicas, Daisuke Wakabayashi, Marc Tracy, Jeanna Smialek, Tara Siegel Bernard, Niraj Chokshi, Michael Corkery, David Gelles, Peter S. Goodman, Neil Irwin, Katie Thomas, Michael Crowley, Kirk Semple, Sui-Lee Wee, Jeffrey Gettleman, Clifford Krauss, Carlos Tejada, Stanley Reed, Katie Robertson and Daniel Victor.