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Despite Historic Plunge, Europe’s Economy Flashes Signs of Recovery – The New York Times

European countries that have better contained the virus are poised for speedier economic recovery than the United States.

Credit…Lena Mucha for The New York Times

LONDON — Before the pandemic, a traditional state of play prevailed in the enormous economies on the opposite sides of the Atlantic. Europe — full of older people, and rife with bickering over policy — appeared stagnant. The United States, ruled by innovation and risk-taking, seemed set to grow faster.

But that alignment has been reordered by contrasting approaches to a terrifying global crisis. Europe has generally gotten a handle on the spread of the coronavirus, enabling many economies to reopen while protecting workers whose livelihoods have been menaced. The United States has become a symbol of fecklessness and discord in the face of a grave emergency, yielding deepening worries about the fate of jobs and sustenance.

On Friday, Europe released economic numbers that on their face were terrible. The 19 nations that share the euro currency contracted by 12.1 percent from April to June from the previous quarter — the sharpest decline since 1995, when the data was first collected. Spain fell by a staggering 18.5 percent, and France, one of the eurozone’s largest economies, declined 13.8 percent. Italy shrunk by 12.4 percent.

Eurozone G.D.P.

+2%

-2

-4

-6

-8

-10

–12.1%

Percentage change from previous quarter

-12

2008

2010

2012

2014

2016

2018

2020

Eurozone G.D.P.

+2%

-2

-4

-6

-8

-10

-12

–12.1%

Percentage change from previous quarter

-14

2008

2010

2012

2014

2016

2018

2020

Europe appeared even worse than the United States, which the day before recorded the single-worst three-month stretch in its history, tumbling by 9.5 percent in the second quarter.

But beneath the headline figures, Europe flashed promising signs of strength.

Germany saw a drop in the numbers of unemployed, surveys found evidence of growing confidence amid an expansion in factory production, while the euro continued to strengthen against the dollar as investment flowed into European markets — signs of improving sentiment.

These contrasting fortunes underscored a central truth of a pandemic that has killed more than 670,000 people worldwide: The most significant cause of the economic pain is the virus itself. Governments that have more adeptly controlled its spread have commanded greater confidence from their citizens and investors, putting their economies in better position to recuperate from the worst global downturn since the Great Depression.

“There is no economic recovery without a controlled health situation,” said Ángel Talavera, lead eurozone economist at Oxford Economics in London. “It’s not a choice between the two.”

Image

Credit…Andrew Testa for The New York Times

European confidence has been bolstered by a groundbreaking agreement struck in July within the European Union to sell 750 million euro ($892 million) worth of bonds that are backed collectively by its members. Those funds will be deployed to the hardest hit countries like Italy and Spain.

The deal transcended years of opposition from parsimonious northern European countries like Germany and the Netherlands against issuing common debt. They have balked at putting their taxpayers on the line to bail out southern neighbors like Greece while indulging in crude stereotypes of Mediterranean profligacy. The animosity perpetuated the sense that Europe was a union in name only — a critique that has been muted.

The United States has spent more than Europe on programs to limit the economic damage of the pandemic. But much of the spending has benefited investors, spurring a substantial recovery in the stock market. Emergency unemployment benefits have proved crucial, enabling tens of millions of jobless Americans to pay rent and buy groceries. But they were set to expire on Friday and there were few signs that Congress would extend them.

Europe’s experience has underscored the virtues of its more generous social welfare programs, including national health care systems.

Americans feel compelled to go to work, even at dangerous places like meatpacking plants, and even when they are ill, because many lack paid sick leave. Yet they also feel pressure to avoid shops, restaurants and other crowded places of business because millions lack health insurance, making hospitalization a financial catastrophe.

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Credit…Joseph Rushmore for The New York Times

“Europe has really benefited from having this system that is more heavily dominated by welfare systems than the U.S.,” said Kjersti Haugland, chief economist at DNB Markets, an investment bank in Oslo. “It keeps people less fearful.”

The more promising situation in Europe is neither certain nor comprehensive. Spain remains a grave concern, with the virus spreading, threatening lives and livelihoods. Italy has emerged from the grim calculus of mass death to the chronic condition of persistent economic troubles. Britain’s tragic mishandling of the pandemic has shaken faith in the government.

If short-term factors look more beneficial to European economies, longer-term forces may favor the United States, with its younger population and greater productivity.

A sense of European-American rivalry has been provoked by the bombast of a nationalist American president, making the pandemic a morbid opportunity to keep score.

“There is a certain amount of triumphalism,” said Peter Dixon, a global financial economist at Commerzbank in London. “People are saying, ‘Our economy has survived, we are doing OK.’ There’s a certain amount of European schadenfreude, if I can use that word, given everything that Trump has said about the U.S.”

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Credit…Samuel Aranda for The New York Times

But for now, Europe’s moment of confidence is palpable, most prominently in Germany, the continent’s largest economy.

Though the German economy shrank by 10.1 percent from March to June — its worst drop in at least half a century — the number of officially jobless people fell in July, in part because of government programs that have subsidized furloughed workers.

Surveys show that German managers — not a group inclined toward sunny optimism — have seen expectations for future sales return to nearly pre-virus levels. That buoyancy translates directly into growth, emboldening companies to rehire furloughed workers.

Ziehl-Abegg, a maker of ventilation systems for hospitals, factories and large buildings, recently broke ground on a 16 million euro ($19 million) expansion at a factory in southern Germany.

“If we wait to invest until the market recovers, that’s too late,” said Peter Fenkl, the company’s chief executive. “There are billions of dollars in the market ready to be invested and just waiting for the signal to kick off.”

The euro has gained more than 5 percent against the dollar so far this year, according to FactSet. European markets have been lifted by international money flowing into so-called exchange-traded funds that purchase European stocks. The Stoxx 600, an index made up of companies in 17 European countries, appears set for a second straight month of gains outpacing the S&P 500.

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Credit…Lena Mucha for The New York Times

The French oil giant Total saw demand for its products in Europe drop by nearly one third in the second quarter of the year, but a powerful recovery has been gaining momentum, said the company’s chairman and chief executive, Patrick Pouyanné.

“Since June, we have seen a rebound here in Europe,” he said during a call with analysts. “Activity in our marketing networks is back to, I would say, 90 percent of the pre-Covid levels.”

France, Europe’s second largest economy, has been buttressed by aggressive government spending. President Emmanuel Macron has mobilized more than 400 billion euros ($476 billion) in emergency aid and loan guarantees since the start of the crisis, and is preparing an autumn package worth another 100 billion euros.

Those funds paid businesses not to lay off workers, allowing more than 14 million employees to go on paid furlough, stay in their homes, accumulate modest savings and continue spending. Delayed deadlines for business taxes and loan payments spared companies from collapse.

In the second quarter, when France was still partially locked down, the country’s economy contracted by nearly 14 percent. Tourism, retail and manufacturing, the main pillars of the economy, ground to a halt.

But services, industrial activity and consumer spending have all shown signs of improvement. The Banque de France, which originally expected the economy to shrink more than 10 percent this year, recently forecast less damage.

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Credit…Christophe Archambault/Agence France-Presse — Getty Images

In Spain, a sense of recovery remains distant. Its economy shrunk by nearly 19 percent from April to June. The nation’s unemployment rate exceeds 15 percent, and could surge higher if a wage subsidy program for furloughed workers is allowed to expire in September.

Spain officially ended its coronavirus state of emergency on June 21, but has since suffered an increase in infections. The economic impacts have been compounded by Britain’s decision to force travelers returning from Spain to quarantine for two weeks. Tourism accounts for 12 percent of Spain’s economy.

Italy is also highly exposed to tourism. Its industry is concentrated in the north of the country, which saw the worst of coronavirus. The central bank expects the Italian economy to contract by nearly 10 percent this year.

But exports surged more than one-third in May compared with the previous month. That left them below pre-pandemic levels, yet on par with German and American competitors, according to Confindustria, an Italian trade association.

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Credit…Alberto Pizzoli/Agence France-Presse — Getty Images

“We are starting to slowly recover after the most violent downfall in the last 70 years,” said Francesco Daveri, an economist at Bocconi University in Milan.

Europe’s fortunes appear on the mend because its people are more likely to trust their governments.

Denmark acted early, imposing a strict lockdown while paying wage subsidies that limited unemployment. Denmark suffered far fewer deaths per capita than the United States and Britain.

With the virus largely controlled, Denmark lifted restrictions earlier, while Danes heeded the call to resume commercial life. The Danish economy is expected to contract by 5.25 percent this year, according to the European Commission, with a substantial improvement in the second half of the year.

In the United States, people have wearied of bewildering and conflicting advice from on high against a backdrop of more than 150,000 deaths.

President Trump first called the virus a hoax, then treated it as an emergency befitting wartime mobilization, then urged states to reopen to spur the economy. He encouraged protesters who portrayed wearing masks as an affront to civil liberties.

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Credit…Ritzau Scanpix/via Reuters

The result has been record surges of new cases along with a syndrome likely to persist — an aversion to being near other people. That spells leaner prospects for retail, hotels, restaurants and other job-rich areas of the American economy.

Liz Alderman reported from Paris. Emma Bubola contributed reporting from Milan, Raphael Minder from Madrid and Stanley Reed and Eshe Nelson from London.

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Coronavirus Despite

Despite coronavirus pandemic, consumers still turned on by big-screen TVs – USA TODAY

, USA TODAY
Published 11:25 a.m. ET July 20, 2020 | Updated 2:38 p.m. ET July 20, 2020

CLOSE

Even the coronavirus pandemic cannot sate Americans’ appetite for big TVs.

During the spring as state and local regulations across the U.S. recommended people stay at home, consumers purchased televisions at levels normally seen during the holiday season.

Some used the $1,200 government stimulus payments they were sent to buy a new TV, while others took funds originally targeted for vacations. 

Sales of TVs 65 inches and larger were up 53% (in units) over the first half of 2020, according to research firm The NPD Group. Especially big sellers were TVs bigger than 65 inches, which were up 77% in April-June, compared to a year ago.

With prices on 65-inch displays dropping, NPD had expected sales to be up this year, but were forecasted as about 20% higher than a year ago. The sales surge happened despite many workers being laid off and furloughed. 

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“Obviously the numbers have accelerated as the pandemic has kept many people in their homes,” said Stephen Baker, The NPD Group’s vice president of industry analysis.

“During the pandemic, TVs have served as a refuge for people, as we have seen double-digit increases in sound bars, streaming players, and mounts.”

The average price for a 65-inch TV in the April-June period was $644, about $200 lower than the same time a year ago, NPD says.

At Video & Audio Center stores in Los Angeles, sales of the largest display it carries, a 98-inch Samsung 8K TV, have exceeded expectations. When the retailer began selling the $60,000 8K display at its Santa Monica store on the last weekend of June, it sold three quickly. Since then, the chain has expanded sales of the display to its other four L.A. area stores.

“Big screen sales are definitely up. It’s all part of COVID-19 because people are spending more time at home for business and personal activities,” said Tom Campbell, chief technologist for Video & Audio Center stores in Los Angeles. “As such the television is becoming an essential communication device.”

Screens larger than 75 inches have become one of the fastest growing segments of the market, says James Fishler, senior vice president for Home Entertainment at Samsung Electronics America. “As consumers spend more time at home, work from home, and even teach their kids from home, they’ve invested more in home improvement projects to make their homes more comfortable and enjoyable,” he said.

Competitor LG, too, has seen double-digit growth in premium TVs, priced at $1,000 and up, in spending and number of sets sold since mid-March, says John Taylor, senior vice president of public affairs and communications at LG Electronics USA.

“People are rethinking how to spend their discretionary income,” Taylor said. “And the more time we spend at home, the more time we are exposed to this plethora of amazing content streaming and otherwise, people are going to want the biggest, best experience in their living room they can get.”

This surge in consumer spending on TVs may not offset a likely down year for TV sales, according to the Consumer Technology Association’s latest forecast, out Monday. Overall, the CTA projects a 2.2% decline in 2020 in sales of technology from smartphones and wireless earbuds to streaming services and video game consoles.

TV makers are expected to ship 39 million TVs in 2020, down 6% from 2019, CTA projects. And projected TV sales revenue of $21 billion represents a 14% decline. But sales of higher-end TVs including 4K Ultra High Definition sets will surpass sales of 2019. 

Many households added a display in March and April “to ease the pressure on the family TV” or decided to upgrade their TV ahead of schedule, said Steve Koenig, CTA’s vice president of research. Then, federal stimulus dollars that began arriving in April also drove some consumers to buy new TVs.

“We see a different scenario playing out the rest of the year,” Koenig said. “The second half of the year and more importantly holiday is going to be a lot weaker for TV sales because if you upgraded your flagship display in March you don’t need to upgrade again at end of the year.”

Follow Mike Snider on Twitter: @MikeSnider.

Read or Share this story: https://www.usatoday.com/story/tech/2020/07/20/coronavirus-effect-big-tvs-have-helped-some-homes-navigate-pandemic/5432582002/

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Dow, S&P 500 gain despite bad NYSE market breadth – MarketWatch

The Dow Jones Industrial Average
DJIA,
-0.64%

and S&P 500
SPX,
-0.36%

are both rising in afternoon trading, despite NYSE internals indicating that market breadth is fairly negative. The number of declining stocks is outnumbering advancers 1,612 to 1,214 on the Big Board, and the volume of declining stocks represents 63.2% of total volume. But the Dow is up 37 points, or 0.1%, with 16 of 30 components gaining ground, and the S&P 500 is up 0.4%. Meanwhile, the Nasdaq Composite
COMP,
+0.14%

is surging 0.8%, amid mixed breadth readings on the Nasdaq exchange. Decliners are outnumbering advancers 1,704 to 1,426 on the Nasdaq, but advancing volume on the Nasdaq represents 57.2% of total volume.

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Despite 22 years leading Iowa, Kirk Ferentz claims ignorance of player mistreatment within program – CBS Sports

It took until the last week for veteran Iowa coach Kirk Ferentz to become aware of allegations of widespread mistreatment of players within his program. That’s shocking enough, especially with the allegations having to do with bullying and racist comments.

Now, add the context that Ferentz is the longest-tenured coach in the country at one school. The widely respected Iowa legend will turn 65 on Aug. 1 as he begins his 22nd season at Iowa this fall.

If he makes that far.

“I don’t want to say I was blind-sided,” Ferentz said during a Sunday call with media, “… but the bottom line is we don’t want anybody to leave this place not feeling like this was a good experience.”

There is apparently a long way to go before Iowa becomes a feel-good program. We know that because powerful, highly-compensated, highly-regarded strength coach Chris Doyle has been put on administrative leave. An investigation is ongoing regarding alleged mistreatment — including racist comments and actions — by Doyle.

Tweets began being published by Iowa players on Friday and picked up over the weekend. An estimated 40 ex-Hawkeyes have come forward to share their negative experiences with Doyle while involved with the program.

The situation roiled so intensely that some of those came forward while Ferentz was on the call. Ferentz’s own son, offensive line coach Brian Ferentz, was also implicated.

Doyle is considered one of the best in the business; he is definitely the highest paid, making $800,000 per year.

How he got to that lofty position and kept his job for this long is now in question.

Former defensive back Emmanuel Rugamba said Doyle mocked black players, making them walk around the facilities on “eggshells.” Rugamba called the anxiety caused by Doyle’s actions “unbearable.”

Doyle allegedly told another black player, “I’ll put you back on the streets.”

If true, those incidents alone might be fireable offenses. And not just because the Black Lives Matter protests have raised awareness of social injustice. Players may have been compelled to come forward amid the protests that have sprung from George Floyd’s death, but the overwhelming reaction for their willingness to talk should be positive.

If the allegations are true, it’s a shame it took this long for them to go public. Awareness is supposed to be raised at an institution of higher education. And not just for the players.

Racial disparity continues throughout college football, a sport where minority head coaches are scarce while 45% of the athletes are African-American.

Adding to the confusion is determining just what is the culture of Iowa football.

Minutes before Ferentz started his call Sunday, Doyle posted a tweet denying any racial comments. He also said that his statement was being made despite the fact that he was told to “remain silent.”

“I don’t remember using the word ‘silent,'” Ferentz said. “I’m not here to tell Chris what to do. When you feel like you’re being wrongly accused of some things, you want your chance [to speak].”

Yeah, but what about the players who have felt abused? Ferentz was sympathetic saying he is the process of assembling an advisory committee of former players to guide future policy.

Clearly, though, any way out of this has to involve Ferentz’s bosses, athletic director Gary Barta and school president Bruce Harreld. If Doyle’s alleged actions were missed, whether enabled or ignored, this is still a matter for the board of trustees, not just a football coach.

Ferentz literally got to this point in his career by knowing everything that goes on within his program. He wouldn’t be the first coach to rule like an autocrat only to claim ignorance when times get rough.

That institutional dominion is how Ferentz got to be this successful, this powerful in a state that only sees 2% of its high school players recruited by Division I schools.

The first question from a reporter Sunday capsulized the moment: Given all of the above, how does this happen?

“That’s a fair question,” Ferentz said.

The answer hangs in the air like a booming punt.

Doyle is no stranger to controversy. Under his watch, 13 Hawkeyes were hospitalized in 2011 with rhabdomyolysis. “Rhabdo” a stress-induced syndrome that can cause organs to shut down and even death. An internal investigation by Iowa found that the exercises Doyle was using, not Doyle himself, were responsible for the players’ condition. Later that season, he was honored as Iowa’s “most valuable coach of the year.”

The school settled a lawsuit with a player who sued for negligence, paying $15,000. According to reports, since 2009, Doyle has made at least as much as both Iowa coordinators each year but two.

“There’s a fine line between demanding and demeaning,” Ferentz said more than once on Sunday.

There’s no fine line when it comes to racist comments. Those are for the weak-minded and uneducated. They’re why this country is experiencing its largest united protests since the 1960s.

“I don’t want to say [the reaction] is a ‘spin off,’ but I think people are tired. People are frustrated. They are angry,” Ferentz said.

Maybe the Iowa players felt compelled to share their experiences because of this national awakening, but that shouldn’t muddle or distract from what actually happened to them.

Most coaches know the line between demanding and demeaning. Ferentz has called for a “cultural shift” in the program. Asked what that culture was before the past week, he said, “you could argue, in my mind, it’s been healthy.”

Ferentz added: “[But] in the last 48 hours, I learned of things that needed more attention. However you want to break it down, I’m the one who is responsible.”

Doyle and Ferentz were also credited by former players for their success. The mother of one current player, who spoke with the Des Moines Register, said she felt safe with her son reporting for voluntary workouts on Monday.

In a tweet, 49ers All-Pro tight end George Kittle called it a “defining moment” for Iowa football.

Asked whether he feared for his job, Ferentz said, “That’s really not my frame of work. But I did ask multiple players if they feel like I’m part of the problem or if they feel like we can’t move forward with me here, I’d appreciate that feedback. That’s not what I’ve heard thus far.”

The picture painted of Iowa football is over overachieving excellence. In the Big Ten, it is not Michigan or Ohio State or Penn State. But under Hayden Fry and then Ferentz, it frequently punched above its weight class. Those teams were/are tough.

Doyle has helped produce two Outland Trophy winners (Robert Gallery, Brandon Scherff) and the AFC Defensive Player of the Year (Bob Sanders), but something has seemingly gone wrong for that many players to speak out.

Fifteen minutes into Sunday’s call, former walk-on defensive lineman Jack Kallenberger posted a lengthy tweet about being ridiculed for his ADHD. Kallenberger referenced that a coach wrote his GPA on a meeting room whiteboard to mock him. That is a possible violation of privacy laws.

If the allegations are true, Barta has no choice but to fire Doyle for cause. The current crisis is a symptom of college football culture not just central to Iowa. Too much power is consolidated at the top.

In that Iowa culture, Doyle was seen as some sort of body-building savant. He reveled in making stars out of two- and three-star recruits. Iowa coaches and administration bought in, making him the highest-paid strength coach in the country. He has even been called a “third coordinator.”

Strength coaches have outsized — and sometimes unregulated — influence in most major programs. They are able to spend large swatches of time alone with players when head coaches cannot. Those experiences can be tremendously enriching. Those moments can also be abused.

This cannot be explained simply as a coach and a program out of touch. Ferentz recently relaxed a ban on Twitter which seems almost prehistoric these days.

What else, one might ask, was he missing? 

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