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Hertz, the car rental giant, could seek bankruptcy court protection if it fails to strike a deal with its creditors on Friday.
The company, which has seen sales collapse in recent weeks as people stay home, missed about $400 million in lease payments on its fleet late last month. It was able to persuade lenders to give it until the end of Friday to come up with a payment plan that they could accept.
And while Hertz had amassed $17 billion in debt, the company started the year off on solid ground. Revenue was up 6 percent in January and February. But the pandemic dealt what it has described as “a rapid, sudden and dramatic” blow. Rentals dried up in March and then a sharp drop in used-car prices dealt the company another jolt, decreasing the value of its fleet.
Its competitors were better positioned. Avis Budget Group, which has taken on less debt, said last month that it had access to enough cash to survive the year. Avis, which also raised approximately $500 million in a bond sale this month, acted more quickly to cut costs in response to the pandemic, analysts said. Enterprise, a private company, is more diversified and not nearly as reliant on airports as Avis or Hertz.
Chinese officials declined to set an economic growth target for this year and outlined plans to ramp up government spending, as they continue to look for ways to recover from the economic toll of the coronavirus.
China’s economy shrank in the first three months of the year compared with a year earlier, the first decline in the modern era, after efforts to fight the outbreak froze vast parts of its industrial machine.
China’s growth target represents a gauge of how the country’s leaders see the economy faring, and its official figures — which most economists consider to be too smooth and steady to be precisely accurate — generally meet or exceed the goal. Last year, it set a target of 6 percent to 6.5 percent.
Mr. Li’s report said China would ramp up government spending by $140 billion to stir growth, plus issue a similar amount on bonds for coronavirus recovery efforts. While significant, the spending represents about 2 percent of China’s annual economic output, a smaller proportion compared with what other countries have done. The country’s leaders are leery of implementing the kind of debt-fueled stimulus programs that helped the Chinese economy rebound quickly from the global financial crisis a decade ago but it burdened with debt.
The Alibaba Group generated $16 billion in sales in the first quarter, up 22 percent from a year earlier, the company said on Friday. That was a slower pace of growth than the e-commerce giant typically reports, but it was better than Wall Street had feared a few months ago, when the company warned that sales in certain areas, such as its retail business in China, might shrink. (In fact, revenue in that segment was up 21 percent).
On a Friday conference call with analysts, Alibaba executives attributed the better-than-expected results to the Chinese government’s “effective” handling of the outbreak, which allowed the country to start reopening for business in late February and early March.
During the nationwide lockdown, sales of groceries were particularly strong, the company said. On the other hand, with people working from home and wearing face masks, sales of clothes and makeup were not as good.
Alibaba’s profits for the quarter were down by 88 percent from a year before, which the company attributed to losses on its investments in publicly traded stocks.
Speaking to editors and reporters from The New York Times on Thursday, Mr. Greenberg said that the pandemic had turned businesses upside down, but it doesn’t mean every business with a policy has a valid claim.
Far from it. Business interruption insurance “is an outgrowth of a traditional fire insurance policy,” he said. Policyholders have to show that they “have direct physical damage,” and shelter-in-place orders by mayors or governors do not qualify. (Some trial lawyers and lawmakers don’t see it that way.)
Mr. Greenberg said he sympathized with struggling business owners, but the general exclusion of pandemic losses from business insurance coverage is no accident. “If you had insurance to cover the pandemic, you’d be underwriting the whole U.S. economy,” he said. “It’s impossible. With a finite balance sheet, you’d be taking on an infinite risk.”
Chubb is, however, paying some business interruption claims related to the pandemic, “and we’ll be paying many more over the next weeks and months,” he said. The payouts would be “quite visible” in the company’s next quarterly results.
It was an uneasy day for global stock markets, as China’s pledges to combat the damage of the coronavirus fell short of those by other countries, and Beijing’s efforts to tighten its grip in Hong Kong worried investors.
At the annual National People’s Congress, China’s leaders unveiled a plan to spend another $140 billion to combat the pandemic’s economic effects, an amount that falls short of what other countries have earmarked to fight the outbreak-related global economic crisis.
China’s plan to place Hong Kong firmly under Beijing’s control and crack down on new antigovernment protests triggered a sharp decline in the city’s stock market — which fell more than 5 percent.
The move could further increase tensions between the United States and China, coming as President Trump and Republican lawmakers seek to focus blame for the coronavirus outbreak on China’s leadership as part of their re-election strategy. On Thursday, when China’s plans for Hong Kong were announced, a number of U.S. senators proposed sanctions on Chinese officials.
The S&P 500 was slightly lower in early trading Friday, adding to losses from the day before.
Crude oil also dropped, with West Texas intermediate down nearly 6 percent after climbing for six straight days. W. T. I., the U.S. crude benchmark, climbed 26 percent during that rally.
It’s been a turbulent week for markets, with shares alternating between gains and losses as investors assessed new economic developments and the prospect of businesses reopening.
Still, thanks mostly to a big rally on Monday, the S&P 500 is set to end the week with a gain.
Logistics — the science of making Thing A and delivering it to Point B — had become a national art form, the corporate answer to jazz, stand-up comedy and end-zone dances. The United States was like an operating system that upgraded itself so regularly that its design and endless enhancements were taken for granted.
Now, the heart of the great American logistics machine is beating slowly and erratically, and in some places it has gone into full-on cardiac arrest, writes David Segal.
Rationing meat. Scrambling for masks. Running low on crucial drugs. The early shortages for the pandemic — swabs, toilet paper, ventilators — were a foreshadowing, not an aberration. We still don’t have enough good tests. Our national pantry, long bursting, lacks essentials. Come to think of it, it’s also missing some nonessentials. Just try to buy a bicycle.
The country is flunking a curriculum that it basically wrote. Which is baffling. American supremacy in logistics has been a calling card for decades, even among people unfamiliar with the L-word.
Facebook will allow many of its employees to work from home permanently, Mark Zuckerberg, Facebook’s chief executive, announced during a staff meeting that was live-streamed on his Facebook page.
The social media giant sent its employees home in March as the coronavirus began to spread in the United States. Mr. Zuckerberg said that the temporary changes caused by the virus spurred the company to re-evaluate its requirement that employees work in a shared office. Within a decade, he said, as many as half of the company’s more than 45,000 employees would work from home.
Facebook will begin by allowing new hires who are senior engineers to work remotely, and then allow current employees to apply for permission to work from home if they have positive performance reviews.
Mr. Zuckerberg’s announcement followed similar decisions at Twitter and the payments company Square, both led by Jack Dorsey. Mr. Dorsey said last week that employees at his companies would be allowed to work from home indefinitely. At Google, employees have been told they can work from home through the end of the year.
Retailers were among the first to feel the financial pain of the pandemic. During a special call for DealBook readers, Sapna Maheshwari, who covers the retail industry for The Times, said that stores were planning to reopen by the end of July and hoping that the trickle of revenue keeps them afloat until the holiday season.
And what to do with all those empty department stores? For big-box buildings that won’t reopen, property owners need to be imaginative. “In the past, there have been experiential companies that make kids’ game centers in them, but that’s probably not the best idea right now in a social-distancing world,” Ms. Maheshwari said. “Maybe they become distribution centers, or in some cases we’ve even seen them become
housing.”
Catch up: Here’s what else is happening.
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Lululemon, the athleisure company known for its $100 yoga pants, said that it expected to have 70 percent of its stores reopened in coming weeks with new safeguards in place. It plans to add cashless payments “where permissible” and ask staff to “state a daily health declaration before every shift.” The company, which had 491 stores worldwide as of Feb. 2, said that it has reopened 150 locations and is set to reopen 200 more during the next two weeks. The company declined to share details what constituted the health declaration or about specific openings in the United States.
Reporting was contributed by Niraj Chokshi, Raymond Zhong, David Segal, Mary Williams Walsh, Paul Mozur, Jason Karaian, Mohammed Hadi, Kate Conger, Sapna Maheshwari, Carlos Tejada, Daniel Victor and Kevin Granville.