Welcome to the Weekly Scan. Here’s what we’re following for the week of May 26, 2020.
Make sure to check back as we update these stories.
Prime numbers. Amazon will reportedly postpone Prime Day, its annual two-day shopping extravaganza, until September. It is usually held in July. Since Prime Day first began in 2015, it has turned into one of the largest shopping events of the year, generating billions of dollars worth of sales for Amazon. During the sale, Amazon offers highly anticipated discounts on hot consumer items such as Instapots and home assistants including Amazon Dot. The event is one of the ways Amazon encourages customers to join its Prime subscription service, which offers free delivery and further discounts on items, and is one of Amazon’s big money makers. The postponement comes as Amazon continues to deal with an increase in orders due to stay-at-home orders caused by the coronavirus.
- The takeaway: Amazon has lifted some of the restrictions on delivery of non-essential goods that had previously been in place because of the virus. However, the delay of Prime Day might be an indication that Amazon is still struggling to keep up with demand from customers.
Powder it over. Johnson & Johnson announced it will stop selling its talc-based baby powder in North America after facing more than 19,000 lawsuits alleging the product causes ovarian cancer. The talc in the baby powder allegedly contained traces of asbestos, a known carcinogen. Plaintiffs suing Johnson & Johnson claim that the company knew of the potential risks of using the powder, but didn’t warn consumers. Johnson & Johnson will reportedly continue selling talc-based powder outside of North America, in addition to its cornstarch-based powder.
- The takeaway: Talc-based baby powder is one of Johnson & Johnson’s most iconic products. The powder, used for generations, has been thought to be safe enough for infants. Johnson & Johnson nevertheless reportedly plans to continue to stand by the product in court.
Shooting for the stars. Moderna, the Massachusetts-based biopharma company, announced early success with a new vaccine that could potentially fight Covid-19. The experimental drug produced antibodies to the virus in early human trials. However, some experts have expressed doubts, since Moderna cited only eight results of the 45 people who participated in the trial. Moderna is one of several biotech companies working on a vaccine for the virus.
- The takeaway: The results from this trial mark the end of the first phase of human trials of the vaccine for Moderna. The company will move into its second phase of human trials next and its third phase likely in July 2020. Johnson & Johnson, Inovio Pharmaceuticals, and Novavax are also testing their vaccines for the virus. Vaccine development usually takes two to three years. Companies are speeding up the usual process for making a vaccine but it’s still not clear when a coronavirus vaccine will go to market.
Hurt for Hertz. The global car rental chain filed for bankruptcy last week, the latest business casualty from Covid-19. Its Chapter 11 filing follows consumer companies including J. Crew, Neiman Marcus, and J.C. Penney, which have sought to reorganize as consumer demand for products and services has plummeted since March, 2020. Hertz owns nearly 600,000 cars and rents from approximately 13,000 locations worldwide. It has rented cars since 1918, reportedly starting with Ford Model-Ts.
- The takeaway: Hertz’s bankruptcy is perhaps the highest-profile attempt to reorganize through bankruptcy during the pandemic, as it’s the market leader in the car rental industry, also operating discount brands including Dollar, Thrifty, and Firefly.
National jobless rate. Another 2.4 million people filed for unemployment during the week of May 10, 2020, bringing the total number of Americans unemployed during the pandemic to 38.6 million. The number of unemployment claims continued to decline from the peak at the end of March, 2020. And the number of claims decreased 9% from the previous week.
- The takeaway: Despite the decrease in claims from week to week, unemployment continues to be the highest it’s been in the U.S. since the end of the Great Depression. Congress is currently grappling with how to handle unemployment benefits if the coronavirus crisis continues.
Find out what we covered in last week’s Scan.