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National Enquirer Publisher Is Cutting Employees’ Pay

American Media is the latest media outlet to announce cuts as the coronavirus has shaken the economy and the advertising market.

By Marc Tracy

American Media Inc., the publisher of The National Enquirer, Men’s Journal, Us Weekly and other titles, is cutting the pay of its employees by more than 20 percent, a spokesman said on Saturday, as the coronavirus has shaken the economy and the advertising market.

“American Media is committed to doing everything we can during the Covid-19 crisis to ensure our staff maintain their employment and health benefits,” the company said in a statement.

There have been no layoffs, the spokesman said.

The cuts, first reported on Saturday by The Daily Beast, are the latest instance of a media outlet looking to slim down as normally robust advertisers, like restaurants and travel businesses, shutter. Some alternative weeklies have laid off as much as three-quarters of their staffs. Last week, the digital giant BuzzFeed announced temporary payroll cuts.

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Wall Street jumps at open as jobless claims raise hopes of more stimulus

(Reuters) – Wall Street jumped at the open on Thursday, building on a two-day rally, as investors bet on more stimulus measures after the U.S. jobless claims surged past 3 million last week, underscoring the economic impact of the coronavirus pandemic.

The Dow Jones Industrial Average .DJI rose 267.83 points, or 1.26%, at the open to 21,468.38. The S&P 500 .SPX opened higher by 25.73 points, or 1.04%, at 2,501.29, while the Nasdaq Composite .IXIC gained 77.91 points, or 1.06%, to 7,462.21 at the opening bell.

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'Maximum bearish': funds in record rush to cash in past week

LONDON (Reuters) – Investors rushed into cash and out of bonds at a record pace over the past week as the coronavirus pandemic caused mayhem in markets, BofA said on Friday, though it noted a key positioning signal at “maximum bearish” could signal a big rally ahead.

BofA’s weekly fund flows data based on figures from EPFR Global showed a record $234.6 billion had made their way into cash funds in the week to Wednesday while another record of $109 billion was registered in redemptions from bond funds.

The bank noted record $61.2 billion outflow from investment grade debt and “monster” $17.1 billion outflows from emerging bonds. Bond outflows totalled a “stunning” $218 billion in the past two weeks and $257 billion over the past month, it noted.

“The bond bubble pops,” the report said, adding the past four weeks’ redemptions had unwound 44% of “bubble inflows of $583 billion in the prior 52 weeks.”

(Graphic: BofA chart, here)

Equity funds meanwhile shed $26.2 billion, with U.S. share funds down $15.8 billion, the data showed.

The data, however, does not capture the market rebound seen in the past three sessions that boosted New York’s Dow Jones on Tuesday to its biggest one-day rise since 1933, thanks to central banks promising “whatever it takes” to ensure liquidity and a $2 trillion U.S. coronavirus relief bill.

Before that, between February 19 and March 23, an MSCI index of world stocks .MIWD00000PUS, fell about 35%.

BofA said its Bull & Bear Indicator – a key market measure it used to track positioning – had hit zero, a level it described as “maximum bearish”.

That potentially implies a substantial rebound in credit and stock markets if the stimulus plans of the Federal Reserve and the U.S. government succeed, the bank added.

That could be borne out by the present rally, which was undeterred even after Thursday data showing nearly 3.3 million Americans had filed for unemployment benefits in the past week, eclipsing the previous record of 695,000 set in 1982.

(Graphic: BofA B&B, here)

BofA also said the equity allocations of its private clients had fallen to 52.8%, the lowest since February 2013.

While the U.S. job data shows how deep the incoming recession will likely be, some investors are hoping that additional stimulus from the Donald Trump administration will further cushion the blow.

BofA noted the Bull & Bear indicator had hit zero in July 2008 but that rally had been aborted by the Lehman Brothers bankruptcy four weeks later.

“The big difference in this crash is that policy panic (happened) before not after the credit event; if Fed bazooka short-circuits a systemic bankruptcy, the combo of max bearish positioning and max policy stimulus equate to big rally in credit and stock markets,” it added.

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Wall Street Week Ahead: Fund rebalancing could help buoy stock rebound

NEW YORK (Reuters) – Money managers rebalancing their portfolios to boost equity exposure into the end of the quarter may support the nascent stock rally that has followed the steep coronavirus-fueled market drop.

With the S&P 500 having lost around a third of its value in the recent selloff, investors may need to step up their equity purchases and sell bonds in order to maintain allocation targets.

A portfolio that had stock allocations at 60% and bond allocations at 40% in mid-February may now be more evenly split between the two asset classes, facilitating the need for some investors to shift exposure toward stocks.

“Given the many trillions of dollars in assets that follow some sort of multi-asset class approach, the coming rebalance could well be in the range of a few hundred billion,” Jurrien Timmer, director of global macro in Fidelity’s global asset allocation division, wrote in a note to clients this week.

Funds can raise stock allocations in several ways, including selling bonds to buy stocks, using the cash in their portfolios or putting fresh money toward equities, said Leo Acheson, director of multi-asset ratings at Morningstar.

From speaking with portfolio managers, Acheson said many have not been waiting for quarter-end to make adjustments and instead are revisiting their portfolios daily and adjusting the split between equities and bonds to maintain their desired risk exposure.

“As managers rebalance and reallocate toward equities to get back toward their strategic weights … that would be a support for equities,” he said.

U.S. stocks have bounced more than 17% from their lows this week following unprecedented stimulus measures from the Federal Reserve and U.S. Senate passage of a $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus pandemic. Few believe the volatility in markets has ended, as the outbreak’s trajectory remains uncertain and the economic fallout potentially massive.

Still, the Fed’s pledge to buy billions of dollars worth of bonds, including $75 billion in U.S. Treasury securities a day this week, may be a boon to those looking to rebalance.

“You are buying equities at significantly lower prices than they were and you are selling bonds that are being artificially bid up by the Federal Reserve,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

The flows generated by rebalancing appear to have a noticeable impact on asset prices, especially when bond performance trounces that of equities, as has occurred so far in March.

On average, the S&P 500 has climbed nearly 7% over the final five days of a month in which bonds outperformed stocks by at least 10% during the month’s first few weeks, according to Christopher Murphy, co-head of derivatives strategy at Susquehanna Financial Group, citing eight such previous occurrences in data back to 1990.

The iShares Core US Aggregate Bond ETF (AGG.P) has fallen just 1% so far in March, against an 11% slide in the S&P 500 .SPX, as of Thursday, though that performance gap narrowed this week.

Pensions, endowments and foundations – overseeing as much as $15 trillion in assets – are among those that often look to adjust their portfolios around quarter end, said Steve Foresti, chief investment officer at Wilshire Consulting.

“All else equal, these institutions are fairly significantly under their target weight to equities, meaning they need to purchase to get back to their target,” Foresti said. “There is no question there is some natural buying and selling around those rebalancing activities.”

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Britain's Tesco limits online shop to 80 items during coronavirus crisis

LONDON (Reuters) – Britain’s biggest supermarket group Tesco will limit the number of items customers can order in an online shop to 80 during the coronavirus emergency, it said on Friday.

It said a typical online order before recent weeks would contain fewer than 60 items but the average has notably increased due to the number of very large shops over 100 items.

Tesco said the threshold of 80 has been set so that it does not restrict customers doing a normal weekly shop.

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Wall Street ends recovery week on a sour note

(Reuters) – Wall Street fell on Friday, ending a massive three-day surge after doubts about the fate of the U.S. economy resurfaced and the number of coronavirus cases in the country climbed.

The Dow Jones Industrial Average .DJI fell 915.39 points, or 4.06%, to 21,636.78, the S&P 500 .SPX lost 88.6 points, or 3.37%, to 2,541.47 and the Nasdaq Composite .IXIC dropped 295.16 points, or 3.79%, to 7,502.38.

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Bank of America capital levels allow operational focus during crisis: CEO

(Reuters) – Bank of America Corp (BAC.N) is better positioned to focus on operations rather than financial risk during the coronavirus outbreak, thanks to regulatory safeguards put in place after the financial crisis in 2008, Chief Executive Brian Moynihan said on Friday.

“What’s different this time is clearly our capital liquidity,” Moynihan said in a CNBC interview. “Everything that changed has led the banking industry be in a great condition to service clients continuously for the last few weeks as this thing has hit.”

The second largest U.S. bank by assets has extended more than $50 billion in loans this so far month to commercial clients looking for cash to survive the coronavirus recession. The retail division has fielded more than 150,000 requests to defer payments on mortgages and auto loans. Many requests are managed digitally, he said.

The bank has also been hiring and reallocating employees to the consumer bank to help manage a surge in requests related to the pandemic, according to a memo seen by Reuters. So far this month the Charlotte-based bank has hired 2,000 people and shifted 3,000 internal employees to support its consumer bank.

Bank of America followed its peers like Morgan Stanley (MS.N), Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N) in reassuring employees that they would not be immediately hit by layoffs as a result of the pandemic. In the memo sent to employees on Friday, the bank said it “will not do layoffs or job reductions in 2020 due to coronavirus impacts.”

“We don’t want our teammates to worry about their jobs during a time like this,” Moynihan said.

(Corrects second-last paragraph to reflect that Wells Fargo did not suspend layoffs through 2020)

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Coronavirus: Tesco steps up measures to avert virus stockpiling

Tesco is limiting new online shopping orders to 80 items following a surge in order sizes as households fill their fridges, freezers and cupboards amid the coronavirus lockdown.

The UK’s biggest retailer said the restriction would also allow its expanded delivery operation to serve more customers, especially the vulnerable, as the grocery sector battles high demand while keeping staff and customers safe at the same time.

The chain said a typical online shopping basket ahead of the COVID-19 crisis would have averaged around 60 items but many, more recently, were totalling over 100.

A spokesperson said: “We know that it’s difficult to get a delivery slot for online shopping at the moment due to high demand, and we ask those who are able to safely come to stores to do so, instead of shopping online, so that we can start to free up more slots for the more vulnerable.

“We’re looking at every opportunity to increase the number of slots available and by introducing a limit of 80 items per online order we’ll be able to get more orders onto each van, helping us to ensure all customers can get the essentials they need.”

It made the announcement as the major supermarket chains make use of government data to help get deliveries to those most at risk from COVID-19.

An Asda spokesman said: “We have a dedicated team who will work with government on the available data to support as many extremely vulnerable people as we can – whilst also continuing to ensure our stores are stocked and our deliveries are moving for millions of customers nationwide.”

Grocers have been on a hiring spree to bolster warehouse, store and delivery staff.

The Co-op, which announced the creation of 5,000 jobs last week, said it had seen an “unprecedented” response with every position filled.

The chain expected it expected every recruit to be working by the weekend.

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Trump tells GM: Stop 'wasting time', build ventilators to address coronavirus

WASHINGTON/DETROIT (Reuters) – U.S. President Donald Trump on Friday invoked emergency powers to require General Motors Co (GM.N) to build much-needed ventilators for coronavirus patients after he accused the largest U.S. automaker of “wasting time” during negotiations.

Trump, who has been on the defensive for not moving faster to compel the production of medical equipment, for the first time invoked the Defense Production Act, saying GM was not moving quickly enough even though earlier on Friday the largest U.S. automaker announced it would begin building ventilators in the coming weeks.

Asked about negotiations with GM over ventilators, Trump expressed anger with the company’s decision to close an assembly plant in politically important Ohio. He also criticized GM’s prior decisions to build plants outside the United States.

“I didn’t go into it with a favorable view,” Trump told a news conference of the GM talks. White House adviser Peter Navarro said the administration ran into “roadblocks” with GM this week.

GM said in a statement in response to Trump that it has been working with ventilator firm Ventec Life Systems and GM suppliers “around the clock for over a week to meet this urgent need” and said its commitment to Ventec’s ventilators “has never wavered.”

The act grants the president power to expand industrial production of any key materials or products for national security and other reasons. New York Governor Andrew Cuomo and other Democrats have urged him to invoke the act, but the president had been reluctant to do so until now.

Democratic U.S. Senator Ed Markey said, “About time. Now, tell us every day: which companies will be making more of this equipment, how much is being made, and where the equipment is going.”

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  • Factbox: Carmakers churn out machines, masks to help fight coronavirus

On Friday, the number of confirmed coronavirus cases in the United States topped 100,000, the highest in the world according to a Reuters tally. The U.S. death toll topped 1,550. [L1N2BK21G]

Trump also said countries such as the United Kingdom, Germany, Spain and Italy need ventilators and that if the excess volume is not needed, the United States can export them.

Earlier, Trump lashed out at GM and Ford Motor Co F.M for moving too slowly just hours before GM said it would build medical equipment at an Indiana plant.

Trump criticized the U.S. automakers and said he expected the United States would make or obtain 100,000 additional ventilators within the next 100 days.

The attack on the automakers coincided with rising tension between Trump and the Democratic governors of New York and Michigan, who have criticized the administration’s response to the COVID-19 epidemic. On Thursday evening, Trump questioned in an interview on the Fox News network whether New York state needed 30,000 ventilators to cope with rising numbers of coronavirus patients, as Cuomo had said.

GM and Ford separately announced earlier this week they were working with medical equipment companies to help boost ventilator production.

GM and its partner Ventec confirmed after Trump’s tweets that the No. 1 U.S. automaker would deploy 1,000 workers to build ventilators at its Kokomo, Indiana, parts plant and ship as soon as next month. It was aiming to build more than 10,000 per month with the ability to go higher. Suppliers in the effort were told the target was 200,000 ventilators.

But early Friday, before GM issued its release, Trump attacked the automaker and Chief Executive Mary Barra on Twitter, reviving his grievance with Barra for closing and selling a car factory in Ohio, a state critical to the president’s re-election campaign.

“General Motors MUST immediately open their stupidly abandoned Lordstown plant in Ohio, or some other plant, and START MAKING VENTILATORS, NOW!!!!!! FORD, GET GOING ON VENTILATORS, FAST!!!!!!” Trump wrote on Twitter on Friday.

“They said they were going to give us 40,000 much needed ventilators, ‘very quickly’,” Trump said on Twitter of GM and Ventec’s effort. “Now they are saying it will only be 6000, in late April, and they want top dollar.”

Trump’s comments about GM and Ford came after a New York Times story Thursday suggested the White House had backed away from announcing a major ventilator deal with GM and Ventec because the price tag was too high. That drew criticism from Democrats.

Following Trump’s tweets, Ford said it was moving as fast as it could to gear up its ventilator manufacturing efforts and was in “active conversations” with the Trump administration seeking approvals. Ford said it has “teams working flat-out with GE Healthcare (GE.N) to boost production of simplified ventilators.”

Other automakers have said they are working to produce ventilators, masks and other medical equipment.

On Friday, Toyota Motor Corp (7203.T) said it was “finalizing agreements to begin working with at least two companies that produce ventilators and respirators to help increase their capacity.”

New York City Mayor Bill be Blasio on Friday said on Twitter that Tesla Inc (TSLA.O) had agreed to donate hundreds of ventilators to hospital intensive care units in New York City and the state of New York.

    Tesla Chief Executive Elon Musk in response said the electric carmaker was helping locate and deliver existing ventilators.

    Tesla on Friday did not respond to a request for comment on where it got the ventilators and whether the company was producing any ventilators of its own, something Musk has said the company will do.

Fiat Chrysler Automobiles NV (FCA) and Ferrari (RACE.MI) previously said they were exploring making ventilators in Italy.

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Asia stocks rise on bets of more stimulus as dollar rally fades

TOKYO (Reuters) – Asian stocks rose on Friday as investors wagered policymakers will roll out additional stimulus measures to combat the coronavirus pandemic after U.S. unemployment filings surged to a record.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.0%. Australian shares were up 2.02%, while Japan’s Nikkei stock index rose 3.65%.

E-Mini futures for the S&P 500 rose 0.81% in Asia following three consecutive days of gains in the S&P 500 on Wall Street.

The dollar nursed losses against major currencies as central banks’ steps to solve a dollar shortage in funding markets started to gain traction.

The U.S. House of Representatives is expected to pass a $2 trillion stimulus package later on Friday that will flood the world’s largest economy with money to stem the damage caused by the pandemic.

The U.S. Federal Reserve has already slashed rates to zero and launched quantitative easing. The Fed will also take the unprecedented step of offering a direct backstop for corporate loans.

The United States is now the country with the most coronavirus cases, surpassing even China, where the flu-like illness first emerged late last year. Policymakers may need to offer more stimulus as the virus slams the brakes on economic activity and increases healthcare spending.

“I’m not sure what measures are left, but the reaction in stocks shows some people hoping for more stimulus thought the market was a little oversold,” said Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo.

“Currencies tell a different story. The dollar is the lead actor. The mad rush to buy dollars due to liquidity concerns is starting to fade.”

The number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week as strict measures to contain the coronavirus pandemic ground the country to a sudden halt, data showed on Thursday.

The jobless blowout was announced shortly after Federal Reserve Chairman Jerome Powell said that the United States “may well be in recession,” an unusual acknowledgement by a Fed chair that the economy may be contracting even before data confirms it.

Global equity markets took the data in their stride, partly because most central banks have already aggressively eased policy and governments are backing this up with big fiscal spending.

Leaders of the Group of 20 major economies pledged on Thursday to inject over $5 trillion into the global economy to limit job and income losses from the coronavirus and “do whatever it takes to overcome the pandemic.”

In the currency market, the greenback fell 0.25% to 109.34 yen in Asia on Friday, on pace for a 1.3% weekly decline.

The dollar was also headed for weekly declines against the Swiss franc, the pound, and the euro.

The U.S. currency’s fall after two weeks of gains suggests that the Fed’s efforts to relieve a crunch in the dollar funding market are working, some analysts said.

The yield on benchmark 10-year Treasury notes rose slightly in Asia to 0.8383%, while the two-year yield edged up to 0.2946%.

Yields were still headed for a weekly decline, taking cues from the Fed’s extraordinary steps to bolster markets and the $2 trillion stimulus package.

U.S. crude ticked up 1.77% to $23 a barrel in Asia. Energy markets have been caught in a tug-of-war between hopes for stimulus spending and worries about excess supplies of crude.

Gold, normally bought as a safe haven, was slightly lower. Spot gold fell 0.30% to $1,626.58 per ounce. [GOL/]

Gold market participants remained concerned about a supply squeeze following a sharp divergence between prices in London and in New York. The coronavirus has grounded planes normally used to transport gold and closed precious metals refineries.

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