Welcome to the Weekly Scan. Here’s what we’re following for the week of May 11, 2020.
Make sure to check back as we update these stories.
Let’s go for a ride. Demand for Peloton Interactive’s stationary bikes is reportedly off the charts. The exercise and media company reported sales of $525 million in the first quarter or 2020, an increase of 66% compared to the first quarter of 2019. It’s a big turnaround after Peloton’s disappointing initial public offering in late 2019, when its shares opened below its target opening price.
- The takeaway: Peloton’s sales story is an example of the way Covid-19 has altered parts of the economy, with home exercise equipment potentially becoming a new necessity in many U.S. homes. The question remains whether it’s sales will remain strong once stay-at-home orders are lifted. Barron’s
All suited up. Tesla chief executive officer Elon Musk has threatened to sue Alameda County in California in response to stay-at-home orders that have kept his electric car company’s factory shuttered. The county has told Tesla it cannot resume operations, out of fear that Covid-19 could spread among Tesla’s factory workers. Musk has also threatened to move his car manufacturing operations to either Texas or Nevada.
- The takeaway. Musk’s threats show how some businesses are increasingly at odds with individual state orders about the best way to handle the pandemic. Costco, for example, has faced backlash from shoppers in some states for requiring them to wear masks before entering stores. New York Times.
More job blues. The number of people who lost their jobs in April reached 20.5 million, according to the Department of Labor, and the unemployment rate notched up to nearly 15%, the highest level since the Great Depression. In February, unemployment was at a record low of 3.5%, a rate not seen since the 1960s.
- The takeaway. It took less than three months to erase all of the job gains of the last 10 years, following the recession of 2009. Washington Post.
Time to bond. The Department of Treasury has launched a new 20-year bond in an effort to support the record level of borrowing by the federal government to keep the economy afloat. The deficit for 2020 is expected to approach $3.8 trillion.
- The takeaway. Various federal stimulus packages have cost the U.S. about $3 trillion, including relief checks of $1,200 for most consumers, and hundreds of billions of dollars worth of aid to small businesses. CNBC.
Hacks and viruses. The Trump administration has reportedly directed the Federal Bureau of Investigations and the Department of Homeland Security to warn medical researchers working on a coronavirus vaccine in the U.S. that the Chinese government is attempting to steal information and technology related to Covid-19 treatment.
- The takeaway. The warning could escalate rising tensions between China and the U.S. The Trump administration has blamed China for the spread of Covid-19 as the virus reportedly originated from Wuhan, China. Wall Street Journal.
Retailer to the rich. Luxury retailer Neiman Marcus, known for its designer handbags, shoes and dresses, filed for bankruptcy last week. Chief Executive Officer Geoffroy Van Raemdonck reportedly expects the department store to recover from losses caused by the coronavirus-related store shutdowns this fall. Neiman Marcus will receive $675 million in financing from creditors as it restructures.
- The takeaway. Retail stores across the country have closed temporarily because of stay-at-home orders, further straining an already struggling industry. Preppy clothing retailer J. Crew also declared bankruptcy in early May. CBS News.
Find out what we covered in last week’s Weekly Scan.