1. Dow set to rise as investors bet on economy reopening
Dow futures were pointing to an over 100-point gain at Tuesday’s open. After a strong month of May, the Dow started June on the upside as Wall Street continued to bet on a successful reopening of the U.S. economy after the coronavirus halt. The Dow Jones Industrial Average on Monday rose 0.4%. The move higher came despite violent protests. “The market has no conscience,” CNBC’s Jim Cramer said Monday evening. “For the most part, people still pick stocks because they’re trying to make money.”
Cramer and investors alike are monitoring whether the protests, sparked by the killing of George Floyd during an arrest in Minneapolis, will set back state coronavirus reopening plans or lead to a spike in Covid-19 cases. Dr. Scott Gottlieb, the former FDA chief, told CNBC on Tuesday it will be difficult to parse the contribution of protests to any new cases from the general reopenings that have started to also bring people together again.
Bank of America announced Tuesday that it will commit $1 billion over four years to help local communities deal with the widened economic and racial inequality caused by the Covid-19 outbreak. In a press release, the bank said the program will focus on “assisting people and communities of color that have experienced a greater impact from the health crisis.”
2. Trump threatens to deploy the military to control protests
President Donald Trump has threatened to deploy the military if states and cities fail to control the unrest. As Trump spoke Monday evening, ahead of another night of tumult across America, riot police and military police used tear gas to clear demonstrators out of Lafayette Square, a public square in front the White House.
US President Donald Trump holds up a bible in front of St John’s Episcopal church after walking across Lafayette Park from the White House in Washington, DC on June 1, 2020.
Brendan Smialowski | AFP via Getty Images
After the demonstrators were cleared out, Trump left the White House and walked through the square to raise a Bible in front of St. John’s Church, which had been set on fire by protesters Sunday night. During a teleconference earlier Monday, Trump berated governors for not using harsher tactics to bring demonstrations under control.
3. Mark Zuckerberg to address Facebook employees
Facebook CEO Mark Zuckerberg plans to hold a company town hall meeting Tuesday, a day after hundreds of employees staged a “virtual walkout” in protest of the social network’s policies regarding recent posts by Trump. The employees expressed disappointment and shame in the decision by Facebook’s leaders to leave up a Thursday post from Trump, in which he said that “when the looting starts, the shooting starts,” about the Floyd protests. Trump posted his statement on Facebook and Twitter. Unlike Facebook, Twitter placed a label warning users about the president’s violent rhetoric.
4. Companies struggle as dual crises unfold
A driver and passenger wearing protective masks exit the ride sharing pickup area in a car displaying Uber Technologies signage at San Francisco International Airport in San Francisco, California, U.S., on Monday, May 4, 2020. Photographer: David Paul Morris/Bloomberg via Getty Images
Uber, Lyft and DoorDash are suspending operations during the curfew hours that some U.S. cities imposed to try to defuse the violent protests. The unrest has added to the mounting list of challenges for many companies trying to recover and reopen as many states begin lifting coronavirus restrictions. Starbucks‘ plans to further cut back on employee hours reflects expectations that pandemic-hit sales probably won’t recover until the fall, according to The Wall Street Journal. The coffee giant reopened U.S. locations in May with reduced operations, only allowing drive-thru, delivery and pickup.
5. CBO sees coronavirus costing economy nearly $8 trillion
A store stands closed near Wall Street as the coronavirus keeps financial markets and businesses mostly shut on May 08, 2020 in New York City.
Spencer Platt | Getty Images
The coronavirus crisis is likely to reduce U.S. economic growth by $7.9 trillion, or 3%, through fiscal 2030, according to the Congressional Budget Office. Senate Minority Leader Chuck Schumer, D-N.Y., used the bleak CBO estimate as an argument for more pandemic funding. Last month, House Democrats passed a $3 trillion relief bill. Republicans have been reluctant to go that big after Capitol Hill, in bipartisan votes, approved a $2.2 trillion stimulus package in late March that the president swiftly signed. The second quarter of this year will likely see the biggest gross domestic product contraction in U.S. history, while the nation’s unemployment rate for May is expected to be near 20%, the highest since the Great Depression.
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