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Buyers at the Gateway Mall in Lincoln, Neb. on Black Friday. Retail sales fell 1.1% in November, according to the Department of Commerce. in connection with Walker Pickering credit for the New York Times.
Retail in the US has declined for the first time since the spring, raising questions about the strength of consumer spending and how retailers will fare during the main Christmas shopping season.
Retail sales fell 1.1% in November, as spending in categories such as cars, electronics stores, clothing and restaurants and bars declined, the Department of Commerce said Wednesday.
The decline occurred in October, when retail sales growth was adjusted to 0.1%. Economists expected a smaller decline in November due to strong Christmas sales, boosted by online spending.
The US economy has slowed in recent months, which has contributed to an increase in coronavirus cases and a steady rise in unemployment. Despite renewed pressure on the economy, legislators need to agree on a new recovery plan.
Uncertainty about spending on Christmas increased as retailers moved their annual sales to October to advance the season and avoid overcrowded stores and late deliveries in November. Many large chains reported sales growth in October, but were not sure of the effect this would have on spending in November and December.
Black Friday, which traditionally marks the start of the Christmas shopping season, was also a big blow to many shopkeepers, given the increase in the number of incidents. Some companies reported that passenger traffic that day was 50% lower than the previous year because shoppers avoided the stores for fear of the virus.
With new concerns about personal purchases, retailers are scrambling to meet the growing demand for shipping, fighting new surcharges and delays from major carriers such as UPS and FedEx.
- Wednesday’s surprisingly strong Retail Sales report caused some excitement in the stock markets.
- Stocks in Europe and the United States made solid profits for a second day, before the Department of Commerce announced that retail sales had fallen 1.1% in November, a much larger drop than economists had expected, and new evidence of the impact of a resurgence of the coronavirus on the world’s largest economy.
- Instead, the S&P 500 started the day unchanged and stocks in Europe also missed their daily highlights. The Stoxx Europe 600 Index and the FTSE 100 in the UK were about 0.6% higher.
- Prior to the publication of the Retail Sales report, markets were stimulated by signs of progress in the Washington stimulus package and positive prospects for the European economy were given following the latest Purchasing Managers’ Index report. The production index reached 56.6 points against 55.3 in November and the composite index of production reached 49.8 points against 45.3 in the previous month.
- The data suggests that the economy is nearing stabilization after the November rebound as part of new measures to block Covid-19, said Chris Williamson, chief economist at IHS Markit.
- A better understanding of the state of the U.S. economy will be available next Wednesday when the president of the Federal Reserve, Jerome H. Powell, addresses reporters after the end of the last central bank meeting of the year. The Fed has given assurances that it will continue to support the economy, but some policymakers disagree on how much work remains to be done.
- U.S. lawmakers held talks Tuesday to agree on a pandemic finance bill by Friday’s deadline. Senator Mitch McConnell, the majority leader, later said that we are making significant progress, and Parliament President Nancy Pelosi made a similar assessment. A financing package is on the table to help the unemployed and companies in difficulty, as well as a consolidated expenditure law to keep public money in circulation.
Headquarters of the European Central Bank in Frankfurt, Germany. Banks can start paying dividends again, said the central bank, but with strict restrictions…Credit…Daniel Roland/Agence France-Presse – Getty Images
The European Central Bank said on Tuesday that it would allow banks to resume limited distributions to shareholders, a sign that regulators are a little less concerned about the pandemic leading to a financial meltdown.
Since March, the central bank has been putting pressure on commercial banks to build up stocks to absorb potential losses from the devastating impact of the pandemic on the euro area economy.
The banks were able to resume payment of dividends after consultation with the regulators, the European Central Bank said in a statement on Tuesday, but it set strict limits on the amount they could pay out as a percentage of profits and capital. These limits shall remain in force at least until the end of September 2021.
Nevertheless, the expiry of the dividend moratorium, which was technically a recommendation, is a sign that the banking system and economy of the euro area are approaching normality.
In revising its forecast, the ECB acknowledges the reduced uncertainty in the macroeconomic outlook, according to the central bank. An analysis carried out at the beginning of the year confirmed the resilience of the European banking sector.
The economic crisis has forced most banks to set aside large sums of money to cover the losses of borrowers who have lost their jobs and companies whose sales have collapsed. But the pandemic did not lead to major bank failures, partly because in recent years regulators have forced lenders to build up capital and take less risk.
The central bank said lenders should discuss dividend payments with regulators in advance and warn banks of extreme reluctance to pay bonuses and other payments to executives.
The European Central Bank is responsible for supervising those banks in the euro area that are considered large or important enough to cause a financial crisis. The bank said Tuesday that national regulators should apply the same standards to small banks in their jurisdiction.
Philadelphia is an example of the simple but difficult task of helping tenants pay their rent. As in most places, it’s not enough to meet the needs. related to Hannah Yoon’s credit for the New York Times.
Almost as soon as the pandemic spread to the United States, interest groups warned that the economic consequences could lead to massive displacement of low-income tenants.
In response, more than 400 state and local governments have used money from the federal CARES code to create funds for at least $4.3 billion in rent subsidy – money that has helped tenants pay their bills and landlords manage their mortgages, according to a database created by the National Low Income Housing Coalition, a political group.
But many jurisdictions report problems with spending the money, and with only two weeks in the year, they have more than $300 million left to spend, according to the coalition database. As Conor Dougherty reports for the New York Times, pre-pandemic programs were hampered by bureaucratic hurdles, competitive budget demands and owners’ unwillingness to participate.
Philadelphia is an example of the simple but difficult task of helping tenants pay their rent. Social programmes are often partnerships in which cities provide funding and set the rules, but delegate delivery to quasi-public non-profit organizations such as Gregory Heller.
Like most other places, Philadelphia is far from being able to meet the need for help. But through slaughter rounds and three funding rounds – each with its own maze of rules and requirements – Heller’s team put together a team to distribute aid, distorted the processes that slowed it down and concluded that the best way to help was the simplest: Give the money directly to the tenants.
Society believes poor people can’t spend their money well, and I think it’s important to challenge that assumption, Heller said.
Companies that draw Wall Street’s attention are distinguished by the fact that their products and services are niche products. related to Hannah Yoon credit for the New York Times.
Until recently, the storage and transport of temperature-controlled medicines, the so-called ‘cold chain’, was a relatively undeveloped area in health care.
But the virus and the temperature-sensitive vaccines it can combat have brought new attention to the cold chain distribution systems in the United States and beyond, reports Kate Kelly for the New York Times. Wall Street, which likes nothing better than doing trendy business with potentially big profits, is rushing into action.
The companies that attract Wall Street’s attention are different because they operate in a niche market. Many use an advanced network of freezers and specialised trucks and aircraft to transport temperature-sensitive materials – such as blood, stem cells and tissues – around the world without compromising efficiency. This is a delicate process because a product can go from vital to unusable in a few minutes when taken out of the cold store.
Potential investors continue to call Stirling Ultracold, whose freezers supply UPS freezers in Louisville, Kentucky, and in the Netherlands, where the vaccines are stored. Not a day goes by without an investigation, says Dusty Tenney, director of Stirling, which operates its 24-hour production lines in Athens, Ohio.
Demand for Stirling’s freezer motors, a key component of its upright, counter top and portable freezers, has rocketed, with new orders expected to wait six to eight weeks, the company said. The eighth. In December, after several potential investors had examined the company’s finances as part of a due diligence investigation, Stirling received an injection of funds into an unspecified amount to be used for the purchase of new equipment and the expansion of production.
In October, private equity giant Blackstone invested $275 million in Cryoport, a Nashville-based company specializing in the supply of low-temperature-sensitive medical products. Investors are also optimistic about Ember, the beverage heating company that has developed a refrigerated medical can with built-in GPS and that the Jonas brothers and Brooklyn Nets striker Kevin Durant are already among its shareholders.
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Moët Hennessy, the premium spirits division of French luxury goods giant LVMH Moet Hennessy Louis Vuitton, bets that WhistlePig can make a typical American rye whisky a worldwide success, reports the DealBook newsletter.
It is the second American whisky brand in which Moët Hennessy has invested, after Woodinville, based in Washington, in 2017. The terms of the agreement have not been published.
WhistlePig brews its whisky from Vermont Oak, and sells its 15-year-old whisky for over $200 a bottle. The company was founded by Wilco Fassen, currently Senior Banker at Evercore, and Raj Bhakta, an entrepreneur and former student.
Mr. Bhakta sold his interest in the company when Byron Trott’s investment company, BDT Capital, purchased a minority interest last year. BDT will retain its shareholding after the operation, with none of the investors having hired. The Must-Hennessy agreement offers no way to an open sale, Fessen said.
Fessen said the formal partnership talks started in January, with the pandemic not changing the agreement, except that the time to work out the details was extended. Pork sales at WhistlePig and Moët Hennessy have come under pressure from the closure of bars and restaurants, but companies have also seen a shift to premium spirits during these closures.
It’s just easier to have fun when you’re stuck at home and tired of the Zoom meetings, says Jeff Kozak, WhistlePig General Manager, who said that sales have increased this year.
Rye whisky is mainly consumed in the United States, but Moet Hennessy believes it can seduce drinkers from elsewhere. According to Philippe Schaus, CEO of Moët Hennessy, connoisseurs who want to expand their repertoire in the premium whisky category have recently turned to Japanese brands and we see no reason not to introduce them to premium American whisky.
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