Category: Business

AMC Entertainment Upgraded From Sell To Neutral By Exhibition Analyst: “Bankruptcy Risk Appears To Have Subsided”

Shares of top exhibition circuit AMC Entertainment were upgraded by MKM Partners analyst Eric Handler from “sell” to “neutral” due to its progress in recovering from the devastating impact of COVID-19.

Handler also raised his price target for the stock to $5 from $1. AMC shares gained 4% in early trading Wednesday to about $5.32. Shares in Cinemark, the No. 3 U.S. exhibitor, were up 8% and Regal Cinemas owner Cineworld also popped 8% in London.

The return of moviegoing at significant scale this summer is the main reason for improved sentiment around AMC. Since the depths of the COVID-19 crisis in March, when theaters shut down in many parts of the world, the company’s stock has more than doubled, though it remains low by the standards of the past couple of years.

“Near-term bankruptcy risk appears to have subsided,” the analyst wrote in a note to clients. The lower risk is due to “the combination of (1) the increasing likelihood movie theaters in the U.S. and Europe will be able to re-open with new Hollywood content in the July/August time frame; and (2) the company’s improved liquidity position.”

In a recent SEC filing, AMC said it had $300 million in cash on its balance sheet as of March 31. It also raised $500 million through a private debt offering. That should allow it to operate through the end of 2020.

“The gradual re-opening of the economies in the U.S. and Europe already allows for theatres in some markets to resume business operations. AMC has stated it will not reopen until there is new content to be shown. In our view, last week’s launch of the new trailer for Tenet was a step in the right direction showing Warner Bros. is feeling comfortable enough with a sufficient number of markets to be open in mid-July (or soon after) to start allocating marketing dollars to the opening of this film.

Financially, Handler noted, AMC is not yet on solid ground. “We remain concerned with AMC’s overall debt load of $5.35 billion and annual interest payments, which we believe are approaching $350 million,” he wrote.

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16700 New Coronavirus Cases In US In 24 Hours

The coronavirus infection rate has fallen further in the United States, which is inching towards the 10,000,0 mark in total cases.

With 16,700 new cases reporting in the last 24 hours, the total number of infections in the country rose to 1,681,418 as of John Hopkins University’ 6:00 a.m. ET update Tuesday.

The United States posted a toll of less than 700 new coronavirus deaths for the fourth consecutive day.

With 634 deaths reported in the last 24 hours, the total death toll in the U.S. reached 98,929.

Brazil has surpassed the U.S. in daily coronavirus death toll.

In New York, more than 363,000 cases have been reported and 29,302 have died so far. New cases are on the decline in the state, which is the epicenter of the country’s outbreak.

When adjusted for population, that translates to about 1,870 known cases and 151 deaths for every 100,000 residents in the state, according to CNN.

This is higher than the total number of infections reported in Russia, the world’s third worst affected country in this category. In the number of deaths, New York is worse than France, the world’s fourth worst-affected country.

The death toll in New Jersey, the second worst-affected state, is also falling. A total of 11194 deaths and 155,764 infections have been reported there so far.

The number of states where COVID-19 death toll crossed 1000 has risen to 18.

Michigan (5266 deaths, 55104 infections), Massachusetts (6473 deaths, 93693 infections), Louisiana (2702 deaths, 38054 infections), Illinois (4923 deaths, 113195 infections), Pennsylvania (5163 deaths, 72778 infections), California (3826 deaths, 99810 infections), Connecticut (3769 deaths, 41303 infections), Texas (1546 deaths, 57230 infections), Georgia (1895 deaths, 43983 infections), Maryland (2333 deaths, 47687 infections), Florida (2259 deaths, 52255 infections), Indiana (2004 deaths, 32078 infections), Ohio (2002 deaths, 33006 infections) and Colorado (1352 deaths, 24552 infections) are the other worst-affected states.

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South Korea Reports Biggest Jump in Virus Cases in Almost Two Months

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South Korea, which won praise for containing the coronavirus without mass lockdowns, reported its biggest daily surge in infections in seven weeks, underscoring the challenge in permanently taming the illness in the absence of a viable vaccine.

The Asian nation reported 40 new cases for Tuesday, the biggest one-day increase since April 8, according to data from Korea Centers for Disease Control & Prevention, or KCDC, with most of the cases connected to a distribution center of an e-commerce firm. This takes the total tally to 11,265 cases while the virus-linked deaths were unchanged at 269.

Cases connected to a logistics center of Coupang Corp. increased to 36 with KCDC estimating that about 4,000 people may have been exposed to the virus. More cases are expected to emerge from this cluster, it said.

18,611 in U.S.Most new cases today

-12% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​039 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-4.​8% Global GDP Tracker (annualized), April


The second spike in a month comes after the country reported a cluster of infections linked to nightclubs in Seoul that has added almost 260 cases. These flare-ups signal the long drawn battle governments face in curbing the highly-contagious pathogen and puts to test Korea’s strategy of mass testing and rigorous contact tracing as it races to fend off a second wave of infections.

“While we’re focusing on preventing community-wide infections, facilities that are used by unspecified individuals are exposed to infections, and it’s been difficult to track down contacts since the number of cases have been rising in large-scale workplaces,” Jung Eun-kyeong, head of KCDC, said during a briefing Wednesday.

The daily new cases in South Korea had dipped to between 12 and 35 for the last three weeks, marking a hard won success against the virus.

In early March, it had the second highest number of infected cases globally after China, as infections spiked to more than 800 a day because of a cluster linked to a religious sect. But within a month, it was able to slow the outbreak without severe measures such as a nationwide lockdown or banning overseas travel.

The Virus Hunter Showing the World How to Fight an Epidemic

The local authorities instead relied on drive-in centers and phone booth-like stalls for testing and tracked down potential infections by tracing patients’ credit card transactions and smartphone usage.

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Walmart To Discontinue Jet.com Citing Strength In Own Brand

Retail giant Walmart Inc. is discontinuing online grocery store Jet.com, which was bought in 2016 for $3.3 billion, citing continued strength of the Walmart.com brand.

In its first-quarter earnings statement, the company noted that the acquisition of Jet.com nearly four years ago was critical to accelerating its omni strategy.

Walmart had acquired the Hoboken, New Jersey-based online-only grocery startup as part of its efforts to challenge Amazon’s dominance in the e-commerce market. However, the move was highly criticized then as Jet.com was an unprofitable e-commerce site. As per reports, Walmart was actually trying to grab Marc Lore, who found Jet.com in 2014, in to its e-commerce business. Lore earlier had sold his online diaper business to Amazon.

Lore is now the head of Walmart’s U.S. e-commerce business. In its first quarter, Walmart U.S. eCommerce sales grew 74 percent with strong results for grocery pickup and delivery services, walmart.com and marketplace as customers opted for online shopping amid Covid-19 related lockdowns. Sam’s Club eCommerce sales grew 40 percent. In comparison, Walmart U.S. comp sales increased only 10 percent.

Meanwhile, a December report in the Wall Street Journal estimated that losses in e-commerce operations were around $2 billion for fiscal 2019. This was double the previously estimated $1 billion loss for 2019, as per a report by Vox in July. Walmart’s e-commerce efforts reportedly were generating internal strains after it bought Jet.com.

Following its acquisition, Walmart had repositioned the Jet site, with focus on specific large cities where Walmart has few or no stores, including New York. Walmart, which is still far behind Amazon, later integrated the big-box retailer fully into its e-commerce business.

In November last year, Jet.com had announced its decision to discontinue fresh grocery delivery service in New York City. The company was then focusing on selling dry goods and other general merchandise.

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How Volkswagen is reopening factories during the pandemic

London (CNN Business)Renault, Nissan and Mitsubishi Motors will make fewer models, share production facilities and focus on the existing geographic and technological strengths of each carmaker as they try to slash costs and ride out the coronavirus pandemic.

The world’s biggest carmaking alliance said Wednesday that it would abandon the growth at all costs strategy pursued by former boss Carlos Ghosn, whose arrest in 2018 on financial misconduct charges threw the group into disarray.
Renault could 'disappear' without government help, French finance minister warns
“The alliance’s new model focuses on efficiency and competitiveness rather than on volumes,” Jean-Dominique Senard, the chairman of Renault, told reporters. “Our aim is to increase the competitiveness and profitability of each of the three companies.”

    The new strategy will see each alliance member taking the lead in specific geographies while the others follow. Nissan (NSANF), for example, will lead the way in North America, the Middle East and key markets in Asia including China and Japan. Renault (RNLSY) will take first position in Europe and South America, while Mitsubishi has been assigned parts of southeast Asian and Oceania.
    The alliance will apply a similar strategy to technology and engineering. Nissan will take the lead on autonomous driving, while Renault will tackle Android-based connected car technologies. The companies will also reduce the overall number of models they sell, build more cars on shared platforms and design them to use more of the same parts. Renault and Nissan are expected to announce job cuts and plant closures later this week.

    The two companies have been partners since 1999, cooperating on strategy and product development while never taking the plunge and completing a full merger. Together with junior partner Mitsubishi Motors, the unique alliance employs roughly 450,000 people and in 2018 it sold roughly one in every nine cars around the world.
    The companies have so far largely maintained separate manufacturing facilities. But under the new strategy, more plants will produce cars for each brand. In Latin America, for example, two factories will produce Renault and Nissan SUVs.

    An assembly line near Paris that produces both the electric Renault Zoe and the hybrid Nissan Micra.
    The deepening of the commitment marks a major change: As recently as last year, Renault had been looking outside the alliance to cut costs, holding merger talks with Fiat Chrysler. The Italian-American company went on to agree to a merger with the owner of Peugeot and Citroen, closing off a potential avenue for collaboration for Renault.
    The departure of Ghosn, who has denied acting improperly, sparked a series of leadership changes at both carmakers, confusion over their strategy and questions over whether the sputtering relationship had outlived its usefulness. Nissan and Renault, which are linked through a series of equity stakes, in January denied reports that they were breaking up.
    Then the coronavirus hit, plunging the alliance deeper into crisis and necessitating a sweeping overhaul.
    Nissan will reportedly announce this week that it will reduce its global production capacity by 20% and close a plant in Barcelona. Japanese media reported that Nissan could slash its workforce by 20,000. Renault could also stop making two models in Spain and move that production to Nissan’s massive plant in England, according to the Financial Times.

    Renault and Nissan were already struggling

    Renault was in trouble before the pandemic hit. The French carmaker reported its worst financial performance in a decade last year, with net profit dropping 99% to just €19 million ($21 million). Its share price has plummeted 69% since the start of 2019.
    In April, the company’s global sales dropped by nearly 70% compared to the same month last year as the pandemic slammed Europe and North America. The company halted production at its 12 facilities in France in the middle of March, resuming operations at most plants only this month.
    There has also been turmoil in the leadership ranks, with Ghosn’s immediate successor as CEO, Thierry Bolloré, being ousted last October in what he denounced as a “coup.” Bolloré’s successor, Luca de Meo, doesn’t start work until July.
    France to inject almost $9 billion into ailing auto industry
    France’s finance minister, Bruno Le Maire, warned Friday that Renault is in “serious financial difficulty.” “Renault can disappear,” he told Europe 1 radio.
    The French government owns 15% of Renault, and is currently negotiating the terms of a €5 billion ($5.4 billion) loan for the company. The finance minister said last week that Renault must not close a factory north of Paris — one of the few facilities that currently produces cars for Nissan.
    “We sign when we know what Renault’s strategy is,” Le Maire told the radio station. The company’s plans must include a transition to more eco-friendly vehicles. “We want Renault to be more productive and to produce even more of its vehicles, particularly electric, in France,” he added.

      On Tuesday, French President Emmanuel Macron announced an $8.8 billion aid package for the country’s embattled auto industry. The plan includes big incentives for consumers to buy new cars, with the government offering subsidies worth more than $7,000 for electric vehicles and $2,000 for a hybrid.
      Nissan, which reports financial results for fiscal year 2019 on Thursday, has endured four straight quarters of declining profits. Operating profit fell to 54.3 billion yen ($504 million) for the three months ended in December, plunging 83% from the same quarter a year before.
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      ViacomCBS Unveils Face Masks From ‘SpongeBob’, ‘Star Trek’, MTV & More

      Are you ready for face masks, kids? Aye-aye, Captain! ViacomCBS has begun selling protective face coverings featuring characters from shows including SpongeBob SquarePants, Star Trek: Picard, MTV programs and more.

      Proceeds will go to charity, ViacomCBS Consumer Products said today. Sales of masks from Nickelodeon shows including SpongeBob, PAW Patrol and Blue’s Clues & You! will benefit the nonprofit Save the Children, and those from sibling networks’ programs will go to other philanthropic groups.

      The face wear is available online and at numerous retail outlets around the world. See a sampling above and below.

      “ViacomCBS is proud to support Save the Children and its COVID-19 Global Response by donating 100% of our proceeds from this new face mask initiative,” said Pam Kaufman, President of ViacomCBS Consumer Products. “During this unprecedented time, we hope Nickelodeon’s beloved characters and iconic brands will provide solace and ultimately make these new circumstances more manageable.”

      Disney began selling face masks with characters from its catalog, along with  Pixar, Marvel and Star Wars, in late April. Those proceeds also are earmarked for charity.

      Here are a few examples of the masks available from ViacomCBS Consumer Products:



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      Asian Markets Mostly Lower

      Asian stock markets are mostly lower on Wednesday after a report from medical news website STAT raised concerns about the trial results of biotech company Moderna’s coronavirus vaccine. The decline comes just a day after global stock markets rallied on reports of positive results from the phase one trial of the potential COVID-19 vaccine.

      The Australian market is little changed, paring earlier losses. The market opened lower after the STAT News report raised concerns about the trial results of Moderna’s coronavirus vaccine. Worries about rising trade tensions between Australia and China following Australia’s call for an international investigation into the origins of the coronavirus outbreak also weighed on stocks.

      The benchmark S&P/ASX 200 Index is edging down 4.40 points or 0.08 percent to 5,555.10, after touching a low of 5,507.00 earlier. The broader All Ordinaries Index is up 3.40 points or 0.06 percent to 5,662.20. Australian stocks rose to a more than two-month high on Tuesday.

      Among the big four banks, ANZ Banking, Westpac, National Australia and Commonwealth Bank of Australia are lower in a range of 1.0 percent to 1.5 percent.

      In the mining space, BHP and Rio Tinto are declining more than 1 percent each, while Fortescue Metals is edging down 0.1 percent.

      Gold miners are lower even as gold prices rose overnight. Evolution Mining is lower by almost 2 percent and Newcrest Mining is losing more than 1 percent.

      In the oil sector, Woodside Petroleum is lower by more than 1 percent and Santos is down 0.3 percent, while Oil Search is rising more than 1 percent after crude oil prices rose more than 2 percent overnight.

      Australian Agricultural Co. reported a turnaround to profit for the full year, aided by a recovery in the live cattle markets. The company’s shares are gaining more than 5 percent.

      In economic news, Australia will see April results for the leading economic index from Westpac today.

      In the currency market, the Australian dollar is edging higher against the U.S. dollar on Wednesday. The local unit was quoted at $0.6548, compared to Tuesday’s close of $0.6546.

      The Japanese market is extending gains from earlier sessions, despite the weak cues from Wall Street. Data showing that Japan’s core machine orders fell less than expected in March boosted sentiment. Reports that Japan is considering lifting a state of emergency in Osaka, Hyogo and Kyoto later this week also lifted stocks.

      The benchmark Nikkei 225 Index is advancing 112.25 points or 0.55 percent to 20,545.70, after touching a high of 20,567.75 earlier. Japanese shares closed notably higher on Tuesday.

      Market heavyweight SoftBank Group is down 0.2 percent, while Fast Retailing is advancing more than 1 percent.

      The major exporters are mixed despite a weaker yen. Sony is declining more than 2 percent and Mitsubishi Electric is down 0.6 percent, while Panasonic and Canon are adding 0.2 percent each.

      In the tech space, Advantest is higher by more than 2 percent and Tokyo Electron is rising almost 2 percent. Among automakers, Honda Motor is declining almost 1 percent and Toyota is down 0.5 percent.

      In the oil sector, Japan Petroleum is declining more than 2 percent and Inpex is lower by 0.4 percent even as crude oil prices rose overnight.

      Sony Financial is gaining almost 8 percent after consumer electronics maker Sony offered to buy the remaining stake in its financial services business, Sony Financial Holdings, for 400 billion yen, or about $3.7 billion.

      Among the other major gainers, Furukawa Electric is climbing more than 16 percent, while Screen Holdings and Fujikura are rising almost 4 percent each.

      On the flip side, Denka Co. is losing 3 percent, while Fujifilm Holdings and Mitsubishi Motors are lower by almost 3 percent each.

      In economic news, the Cabinet Office said that core machine orders in Japan slid a seasonally adjusted 0.4 percent on month in March, standing at 854.7 billion yen. That beat expectations for a tumble of 7.1 percent, following the 2.3 percent increase in February.

      In the currency market, the U.S. dollar is trading in the upper 107 yen-range on Wednesday.

      Elsewhere in Asia, Shanghai, New Zealand, Indonesia, Malaysia and Hong Kong are also lower, while South Korea and Taiwan are modestly higher.

      On Wall Street, stocks closed lower on Tuesday as traders cashed in on the rally seen in the previous session. Traders have recently expressed considerable optimism about the economy reopening, although lingering concerns about the coronavirus pandemic led to some caution. Traders were also reacting to comments from Federal Reserve Chair Jerome Powell, who reaffirmed the central bank will provide more support to the economy.

      The Dow tumbled 390.51 points or 1.6 percent to 24,206.86, the Nasdaq slid 49.72 points or 0.5 percent to 9,185.10 and the S&P 500 slumped 30.97 points or 1.1 percent to 2,922.94.

      The major European markets ended mixed on Tuesday. While the German DAX Index edged up by 0.2 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index fell by 0.8 percent and 0.9 percent, respectively.

      Crude oil prices rose on Tuesday, supported by increased demand and output cuts, on the expiration of the front-month contract. WTI crude for June delivery climbed $0.68 or about 2.1 percent to $32.50 a barrel.

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      U.S. Housing Starts Plunge More Than Expected In April

      Reflecting the impact of the coronavirus-induced economic shutdown, the Commerce Department released a report on Tuesday showing another steep drop in new residential construction in the U.S. in the month of April.

      The report said housing starts plummeted by 30.2 percent to an annual rate of 891,000 in April after tumbling by 18.6 percent to a revised 1.276 million in March.

      Economists had expected housing stocks to plunge by 23.8 percent to a rate of 927,000 from the 1.216 million originally reported for the previous month.

      The steeper than expected drop in housing starts reflected substantial decreases in both single-family and multi-family starts.

      Single-family starts dove by 25.4 percent to a rate of 650,000, while multi-family starts cratered by 40.5 percent to a rate of 241,000.

      The Commerce Department said building permits also slumped by 20.8 percent to an annual rate of 1.074 million in April after falling by 5.7 percent to a revised 1.356 million in March.

      Building permits, an indicator of future housing demand, had been expected to nosedive by 26.1 percent to a rate of 1 million from the 1.353 million originally reported for the previous month.

      Single-family permits plunged by 24.3 percent to a rate of 669,000, while multi-family permits tumbled by 14.2 percent to a rate of 405,000.

      Compared to the same month a year ago, housing starts in April were down by 29.7 percent and building permits were down by 19.2 percent.

      On Monday, the National Association of Home Builders released a separate report showing a rebound in homebuilder confidence in the month of May.

      The report said the NAHB/Wells Fargo Housing Market Index climbed to 37 in May after plummeting to 30 in April. Economists had expected the index to rise to 33.

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      Huawei CFO Gets First Chance at Release in Extradition Fight

      In this article

      The chief financial officer of Huawei Technologies Co., fighting extradition to the U.S., gets her first shot at release this week in a case that’s triggered an unprecedented diplomatic tussle between the U.S., China and Canada.

      On Wednesday, the Supreme Court of British Columbia is set to release a decision on whether Meng Wanzhou’s case meets a key threshold of Canada’s extradition law. If Associate Chief Justice Heather Holmes rules that it fails to meet that test, Meng could be released from house arrest in Vancouver. If not, extradition proceedings will continue.

      The case was triggered when Meng was arrested on a U.S. handover request in December 2018 during a routine stopover at Vancouver airport, a city where she owns two homes and often spent summer holidays. The fallout has since spanned three countries.

      Meng, the eldest daughter of Huawei’s billionaire founder, Ren Zhengfei, has become the highest profile target of a broader U.S. effort to contain China and its largest technology company, which Washington sees as a national security threat.

      China has accused Canada of abetting “a political persecution” against a national champion. In the weeks after her arrest, China put two Canadians — Michael Spavor and Michael Kovrig — in jail, halted billions of dollars in Canadian imports and put two other Canadians on death row, plunging China-Canada relations into their darkest period in decades. U.S. President Donald Trump muddied the legal waters further when he indicated early on that he might try to intervene in her case to boost a China trade deal.

      Canadian Prime Minister Justin Trudeau — caught between his country’s two biggest trading partners — has resisted any such attempt to interfere in the high-stakes proceedings, saying the rule of law will govern Meng’s case.

      “Canada has an independent judicial system that functions without interference or override by politicians,” Trudeau said last week in response to comments by the Chinese ambassador that Meng’s case was the biggest thorn in Canada-China relations. “China doesn’t work quite the same way and doesn’t seem to understand that we do have an independent judiciary.”

      China’s foreign ministry didn’t respond to a request for comment.

      Escalating Fight

      Meng, 48, faces tough odds: of the 798 U.S. extradition requests received since 2008, Canada has refused or discharged only eight cases, or 1%, according to Canada’s Department of Justice.

      Whether she goes free or continues her battle against U.S. extradition, the ruling is likely to further escalate the fight between Washington and Beijing, increasingly at loggerheads over everything from the coronavirus pandemic to the status of Taiwan and Hong Kong to trade and investment.

      Huawei continues to play a central role in those tensions. Earlier this month, the Commerce Department barred chipmakers using American equipment from supplying Huawei without U.S. government approval, closing a loophole in an effort to cut the Chinese company off from essential supplies used in its phones and networking gear. The move drew condemnation from Beijing and warnings from Huawei’s rotating chairman, Guo Ping, that the latest U.S. curbs on its business would cause the whole industry to “pay a terrible price.”

      The U.S. government has lobbied its allies, including Canada, to ban Huawei from next-generation 5G networks, saying its equipment would make such infrastructure vulnerable to spying by the Chinese government. Despite that, the U.K. said in January it would allow Huawei a limited role. But in recent days, British media have reported the government is backtracking and preparing to end Huawei’s presence by 2023.

      Trudeau has been stalling on Canada’s decision with the fates of Spavor and Kovrig hanging in the balance. The two detainees have been confined for more than 500 days without access to lawyers. In contrast, Meng was photographed by CBC News on Saturday as she posed with nearly a dozen colleagues and friends — social distancing rules to fight the virus notwithstanding — displaying victory signs in front of the courthouse.

      The pursuit of Meng by U.S. authorities predates the Trump administration: officials were building a case against her since at least 2013, according to court documents in her case. Central to the case are allegations that Meng committed fraud by lying to HSBC Holdings Plc and tricking the bank into conducting Iran-related transactions in breach of U.S. sanctions.

      Wednesday’s ruling will focus on whether the case meets the so-called double criminality test: would Meng’s alleged crime have also been a crime in Canada?

      Her defense has argued that the U.S. case is, in reality, a sanctions-violations complaint framed as fraud in order to make it easier to extradite her. Had Meng’s alleged conduct taken place in Canada, the transactions by HSBC wouldn’t violate any Canadian sanctions, they say. The U.S. bank and wire fraud charges carry a maximum term of 20 years in prison on conviction.

      If the ruling goes against her, Meng’s next court hearings are scheduled for June and are set to continue to at least the end of the year. Appeals could lengthen the process for years longer.

      — With assistance by Kait Bolongaro, and Sharon Chen

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