Welcome to the Weekly Scan. Here’s what we’re following for the week of June 15, 2020.
Make sure to check back as we update these stories.
More market volatility. The S&P 500 fell 2% upon opening on June 15, 2020 after falling 6% the previous week. The 6% drop was the steepest since markets plunged in mid-March in response to the Covid-19 pandemic. The drop is reportedly a response to an uptick in cases of the coronavirus in China, where the virus originated, as well as in some states.
- The takeaway: The news of increased cases comes as many states in the U.S. have begun reopening after months of stay-at-home orders. Although markets had recovered from the initial drop in March, this decline indicates that the economy has not recovered from the pandemic and that the end might not be in sight.
Court victory. In a landmark victory for LGBTQ+ people, the Supreme Court ruled on Monday that LGBTQ+ people are included in Title VII of the Civil Rights Act, protecting millions of LGBTQ+ workers from employer discrimination. Title VII prevents discrimination based on race, color, religion, sex, and national origin. Prior to the decision, no federal law prevented discrimination based on sexual orientation and gender expression.
- The takeaway: Previously, more than half of states offered no workplace protections to lesbian, gay, and transgender people, meaning it was legal for an employer to fire workers based on sexual orientation or gender expression. Monday’s decision is the most significant federal ruling on LGTBQ+ rights since its 2015 decision legalizing same-sex marriage.
The Fed speaks. Jerome Powell, the chairman of the Federal Reserve, predicted slow economic recovery through 2020 during a conference last week, and he said that interest rates will remain near zero for the foreseeable future. Additionally, the Fed expects the unemployment rate to stay high, closing out the year at 9.3%, and remaining high until 2022 and beyond.
- The takeaway: Despite steady gains in markets since March 2020, and the reopening of many states, the economic impact of the coronavirus pandemic might be far from over. Congress is beginning to discuss another stimulus package to follow the one passed in March, but some lawmakers are concerned about the budget deficit, which was 92% higher in May 2020 than it was in May 2019, at $399 billion.
Grande to go. Coffee chain Starbucks announced last week that it plans to close 400 stores in the U.S. and Canada in the next eighteen months. Starbucks also plans to open 300 stores specifically made for carryout and pickup only service in North America. Starbucks currently has 15,000 stores in the U.S., and 80% of sales in those locations are “on-the-go.”
- The takeaway: Starbucks was reportedly planning on this pivot before the pandemic hit. This shift could indicate the long-term effects of the coronavirus on businesses in the restaurant and food industry, as they find ways to provide service to customers when dine-in service is restricted or discouraged.
Face not recognized. Microsoft and Amazon announced that they will not sell their facial recognition technology, at least temporarily, to the police. This news came after Congress introduced a bill that would ban the use of such technology without a warrant in the police force. Although Microsoft and Amazon are backing out, many smaller companies included NEC Corp., Clearview AI Inc., and Ayonix Corp. have no plans to follow and will continue to sell their technology.
- The takeaway: Facial recognition technology has been criticized for disproportionately misidentifying women and people of color. The introduction of this legislation comes after weeks of protests in response to the death of George Floyd, an African American man who died in police custody in Minneapolis in May.
Find out what we covered in last week’s Scan.