The Washignton Post - 04.04.2020

a14 eZ re the washington post.saturday, april 4 , 2020

Economy & Business

aViation industry

Avolon cancels deal for

75 Boeing 737 Max jets

Boeing’s beleaguered 737 Max
program suffered a further blow
as plane-leasing firm Avolon
Holdings canceled a deal for 75
jets valued at $8 billion at list
prices as the covid- 19 pandemic
hits travel demand.
Avolon, one of the top 20
customers for a model grounded
for more than a year after two
fatal crashes, will also defer
delivery of 25 Boeing and Airbus
SE narrow-bodies as it cuts the
order book by 40 percent, it said
in a statement Friday.
The decision compounds the
crisis surrounding the Max, the
return of which has been further
clouded by the coronavirus
outbreak. It comes a day after
Boeing Chief Executive Dave
Calhoun offered an exit package
to thousands of workers as the
pandemic all but obliterates
purchases of new planes.
Calhoun has said the company
faces a “new reality” of a jetliner
market taking years to recover
after the virus pandemic.
— Bloomberg News

Medical eQuiPMent

Founders of ventilator

firm gain wealth

As the coronavirus pandemic

wrecks economies, markets and

fortunes, three founders of a

company that makes ventilators

have added a combined

$7.3 billion to their wealth this

year.

Shenzhen Mindray Bio-

Medical Electronics shares have

climbed 41 percent, fueled by a

surge in demand for the

lifesaving devices. Covid-19, the

disease caused by the virus, has

flooded hospitals worldwide

with patients struggling to

breathe.

Chairman Li Xiting, a

Singapore citizen and the city-

state’s richest man, has added

$3.7 billion to his net worth this

year and has a $12.7 billion

fortune, according to the

Bloomberg Billionaires Index.

That puts him among the top five

gainers in the world. Jeff Bezos

— the world’s richest person — is

up $3.4 billion, while Bill Gates is

down $15.3 billion. (Bezos,

founder and chief executive of

Amazon, owns The Washington

Post.)

The global health crisis has

exposed a shortage of ventilators

— the equipment health-care

providers rely on to keep

critically sick patients alive.

While companies from Ford to

General Motors rush in to help

ramp up production, Mindray’s

board secretary Li Wenmei said

that global demand is at least 10

times what’s available at

hospitals.

— Bloomberg News

agriculture

Dairy co-ops dump

milk as prices slide

With milk prices plunging to

lows that haven’t been seen in

nearly four years, dairy

cooperatives are dumping the

product to reduce oversupply.

While shoppers are clearing

out milk cases at grocery stores,

that’s not making up for the

closings of restaurants and

schools. U.S. cows are entering

their most productive time of the

year right now as coronavirus is

killing off a significant tap for

demand. While some dumping

usually occurs during the U.S.

spring, this year it will be “even

more aggressive,” s aid Alyssa

Badger, director of operations at

HighGround Dairy in Chicago.

American dairy farmers have

been suffering a wave of

bankruptcies amid years of low

milk prices, and with so many

exiting, the industry was just

starting a recovery. The onset of

the virus has put any such

turnaround on hold.

Benchmark Class III milk

futures, a type that’s used in

cheesemaking, dropped below

$13 per 100 pounds this week in

Chicago, a low not seen since

May 2016. Butter prices are

crashing, with futures touching

the lowest since 2012 amid huge

stockpiles.

— Bloomberg News

also in Business

Auto Nation said on Friday sales

of new and used vehicles halved

in the last two weeks of March

due to global coronavirus-led

lockdowns, forcing the company

to place about 7,000 employees

on unpaid leave. The largest U.S.

auto dealership chain said it was

implementing cost-cutting

measures, including temporary

pay cuts for staff, curtailment of

advertising expenses and

postponing over $50 million of

capital expenditures.

FedEx said on Friday it would

slash its chief executive officer’s

pay and draw down $1.5 billion

from a credit facility as parcel

delivery services take a hit from

coronavirus-led lockdowns

across the globe. The company

also plans to tap debt markets to

bolster its reserves as the

pandemic compounds its own

troubles, including integration

issues with its TNT Express

acquisition, and higher costs

related to launching Sunday

home delivery.

— From news services

digest

shannon stapleton/reuters

An agricultural worker cleans carrot crops of weeds a t a farm near

Arvin, Calif. The Agriculture Department a nd Food and Drug

Administration said they are “closely monitoring the food supply

chain for any shortages” amid the coronavirus outbreak.

BY TONY ROMM

Google is a dominant data jug-

gernaut with a mission to “orga-

nize the world’s information,” i ts

leaders long have said. Now, the

company is aiming to put its lucra-

tive trove to use in a novel way —

helping doctors across the globe

to battle the deadly c oronavirus.

A new effort u nveiled by Google

on Friday seeks to harness the tech

giant’s vast cache of digital re-

cords about its users’ where-

abouts to help public health offi-

cials spot key trends and better

combat the pandemic. In 1 31

countries, down to the county lev-

el in the United States, G oogle says

government experts will soon be

able to see whether people are

traveling more or less to grocery

stores, pharmacies, parks and oth-

er businesses, or generally choos-

ing to heed advice and stay at

home.

Google is presenting t he data as

aggregated statistics, and it is not

publishing the real-time move-

ments of individual users or the

places they have visited, Jen Fitz-

patrick, a senior vice president,

and K aren DeSalvo, Google’s c hief

health officer, said in a blog post.

The technology powering this s er-

vice is typically used to help peo-

ple figure out whether a restau-

rant or bar is crowded.

With the coronavirus, though,

the Mountain View, Calif.-based

search-and-advertising behe-

moth wants to make it easier for

epidemiologists to gauge the ef-

fectiveness of social distancing, a

centerpiece in efforts to slow the

spread of an outbreak that has

sickened more than 1 million peo-

ple a round the world.

The company also signaled it

would share anonymous “mobili-

ty” data with select, unspecified

researchers that would help them

“forecast the pandemic.” The ag-

gregated information can help

map patterns of movements over

time, Google said.

Google’s project has illuminat-

ed the growing global debate over

the role that data-rich tech giants

should play in a public health

crisis. With detailed dossiers

about billions of users at its dis-

posal, and insights about their

behavior t hat rival what most gov-

ernments can discern on their

own, the whole of Silicon Valley is

confronting a n unprecedented di-

lemma — how to balance people’s

privacy w ith fighting a pandemic.

“There’s no higher stakes,” s aid

Michelle Richardson, director of

the D ata and Privacy Project at t he

Center for Democracy and Tech-

nology, who praised Google’s ef-

fort as privacy protective. “We’ve

talked a lot about commercial use

of data over the last couple years

and the serious impacts on peo-

ples lives. This is really life and

death, so we have to get it right.”

Similar tensions have played

out globally in recent weeks. In

Singapore, South Korea and Isra-

el, for example, government lead-

ers have taken a much more ag-

gressive tech approach to the cor-

onavirus, compiling data and tap-

ping private-sector sources in an

attempt to stop the outbreak at a ll

costs — a strategy some say has

contributed t o their s uccess.

But those efforts have drawn

sharp rebukes from consumer

watchdogs, who fear they presage

a more permanent erosion of peo-

ple’s privacy. This week, more

than 100 public-interest groups

urged governments not to adopt

sweeping new surveillance pro-

grams to combat the coronavirus,

stressing that even in extraordi-

nary times, “human rights law

still applies.”

“Technology can and should

play an important role during this

effort to save lives, such as to

spread public health messages

and increase access to health

care,” t hey wrote.

But they added that the o veruse

of data, including location re-

cords, also “threatens privacy,

freedom of expression and free-

dom of association, in ways that

could violate rights and degrade

trust in public authorities — un-

dermining the e ffectiveness of any

public health response.”

For now, some U.S. officials are

working with academics, re-

searchers and tech companies to

harness anonymous location in-

formation to study social distanc-

ing. One such endeavor from Un-

acast, a mobile ad company,

helped The Washington Post pin-

point last month where Ameri-

cans are following health guide-

lines. (The nation’s capital did a

better j ob than Wyoming, the data

showed.)

Google said Friday it is taking a

different approach. The goal is to

provide statistical data that can

“shape recommendations on busi-

ness hours or inform delivery ser-

vice offerings,” t he company exec-

utives said.

In one example, shared with

The Post, Google offered a snap-

shot of California, where corona-

virus infections have recently lev-

eled off. Across the state, visits to

retail s tores were down 50 percent

than usual. Trips to workplaces

were down nearly 40 percent,

Google data found, while people

were home 15 percent more. The

company collects the information

from users who have opted to

share their location history and

plans to update the numbers fre-

quently.

Google said it developed i ts por-

tal with the input of the Centers

for Disease Control and Preven-

tion, governors in states such as

Te xas and California, and health

officials around the world. The

CDC and the governors of Te xas

and California did not respond to

requests for comment.

“Having access to these data

can allow real-time adjustments

to be made in social distancing

decisions to further prevent the

spread of COVID-19,” Lori Trem-

mel Freeman, the leader of the

National Association of County

and City Health Officials, said in a

statement s hared by Google.

[email protected]

Google taps t rove of

data to aid in virus effort

Officials, researchers are

using location records to

analyze social distancing

○

dow 21,052.

Down 360.91, 1.7% ○

nasdaQ 7,373.

Down 114.23, 1.5% ○

s&P 500 2,488.

Down 38.25, 1.5% ○

gold $1,645.

up $8.00, 0.5% ○

crude oil $28.

up $3.02, 11.9% ○

10-year treasury

up $0.10 per $1,000, 0.60% yIelD

currencies

$1=108.47 y en, 0.93 euros

BY THOMAS HEATH

AND JACOB BOGAGE

U.S. stock markets on Friday
stumbled out of another volatile
week marked by dismal unem-
ployment numbers and a relent-
less rise in coronavirus deaths.
The one positive aspect of the
week may have been that markets
didn’t perform even worse,
thanks in part to a surge in oil
prices.
The Dow Jones industrial aver-
age fell 360 points, or 1.7 percent,
to finish the day at 21,052. The
Standard & Poor’s 500-stock in-
dex closed at 2,488, a 1.5 percent
decline. The Nasdaq composite
index also lost 1.5 percent, finish-
ing at 7,373.
All three major indexes have
declined in three of the past five
sessions and in three of the past
four weeks. The Dow and the S&P
are down 29 percent and 27 per-
cent, respectively, from their all-
time highs in February. Both in-
dexes were down more than 2 per-
cent during the day Friday.
The week was marked by de-
flating declines interspersed with
euphoric upswings, but the losses
were still less than some analysts
had feared, given the brutal jobs
news and the severity of the coro-

navirus outbreak.

“The reason stocks didn’t per-

form even worse may be that

people are looking beyond the

despair of the next several weeks

and realizing that the economy

could begin to recover in the sec-

ond half,” said Ivan Feinseth of

Tigress Financial Partners.

“There is a lot of bad news already

built into stocks.”

The Labor Department an-

nounced Friday that 701,000 jobs

were shed in March, driving the

jobless rate up to 4.4 percent. The

losses ended the nation’s 113-

month streak of job growth and

were the worst since 2009, when

the country was experiencing the

Great Recession. A day earlier, the

agency disclosed that more than

6.6 million Americans had filed

jobless claims last week, shatter-

ing the preceding week’s record of

3.3 million jobless claims.

Te n of 11 stock sectors turned

negative Friday. All but five of the

Dow’s 30 blue chips were also in

the red. Pfizer was the big winner

for the Dow, and health-care king

UnitedHealth Group was the big-

gest drag, falling 5 percent on the

day.

Oil prices had another banner

day. U.S. crude jumped 14 percent

to more than $28 per barrel. That

is still historically low but almost

a 50 percent gain from the $20 per

barrel price of earlier this week.

But the oil companies, which

helped propel Thursday’s big

stock rally, didn’t share in the

price surge. ExxonMobil and

Chevron, the big U.S.-based pro-

ducers, both posted declines.

Analysts said that a worldwide

agreement to cut oil production

would be likely to require Ameri-

can companies also to reduce out-

put. That would bite into revenue

and profit for U.S. companies,

many of which are suffering from

low revenue and heavy debt bur-

dens that they cannot service.

The United States has become

the world’s b iggest o il producer in

the past five years, mostly because

of the shale oil companies. But,

given the relatively high cost of

producing shale oil, many of the

shale oil companies face bank-

ruptcy if the price of oil doesn’t

increase much higher from its

current level. Private firms find it

difficult to make a profit with an

oil price below $50 per barrel.

“There is a lot more hope for

the commodity than there is for

the companies that produce and

sell it,” s aid John Kilduff of Again

Capital. “They aren’t just behind

the eight ball. The eight ball is

sitting right on top of them.”

The past week saw an end to

the worst first quarter for stocks

in U.S. history and the beginning

of a critical second quarter filled

with anticipation over the fight

against the coronavirus and

whether the tens of millions of

Americans sequestered in their

homes can get on with their lives.

“There is a silver lining” t o the

terrible quarter just ended, said

Kristina Hooper, chief global

strategist at Invesco. “What we

have learned from the experience

of China is that the sooner the

cessation in economic activity

and [the start of ] strict adherence

to health guidelines, the sooner

the virus’s growth can be con-

trolled and economic activity can

resume. We c ould see a rollback of

the ‘lock down’ begin later in the

second quarter.”

U.S. stocks rallied Thursday on

word that Saudi Arabia and Rus-

sia may slash crude output by

10 million barrels a day. Dimin-

ished demand resulting from the

economic slowdown caused by

the coronavirus coupled with in-

creased supply from Russia, Sau-

di Arabia and the United States

has driven the commodity’s price

so low that almost no one can

make a profit. Some experts say

the world is pumping a surplus of

20 million barrels of oil per day

with no place to put it.

Slashing output could chart a

path toward restoring the

h ardest-hit sector of the economy,

which is why Thursday’s an-

nouncement lifted crude prices

by 25 percent, their best-ever one-

day performance.

Global markets made modest

gains on that news Thursday but

were mixed Friday. The DAX in

Germany lost 0.3 percent, and

London’s FTSE fell 1.1 percent.

Japan’s Nikkei saw great gains in

midday trading but gave most of

them back to finish ahead by not

even one-tenth of a percent. The

HSI in Hong Kong fell 0.2 percent,

and the BSE Sensex in Mumbai

lost 2.4 percent.

[email protected]

[email protected]

Dow falls 360 points after rough

j obs report, but oil has a banner day

Courtney Crow/new y orK stoCK eXChanGe/assoCIateD press

Robert Glorioso, chief of building engineering operations at the New York Stock Exchange, rings the opening bell at the exchange
Thursday. One analyst said the reason stocks did not perform worse on Friday may be that investors are looking past the current crisis.

Week marks end of

worst first quarter for

U.S. financial markets