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Wall Street Set to Rise as Stimulus Deadline Arrives: Live Updates

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People walk by the New York Stock Exchange in lower Manhattan.
Credit…Spencer Platt/Getty Images
  • U.S. stock futures indicated a gain on Wall Street when trading begins on Tuesday, the day Speaker Nancy Pelosi has set as a deadline for reaching an agreement with Republicans on an economic stimulus package. Stock indexes in Europe and Asia were mixed.

  • The Stoxx Europe 600 index wavered between gains and losses. France’s CAC index rose 0.3 percent, while Germany’s DAX index fell 0.4 percent. Japan’s Nikkei 225 index closed 0.4 percent lower. Hong Kong’s Hang Seng index ended the day 0.1 percent higher.

  • Oil prices were little changed, with futures in West Texas Intermediate falling 0.2 percent and Brent crude staying flat, as analysts speculated about whether OPEC would restart production it cut earlier in the year in response to weaker demand.

  • Even with Ms. Pelosi’s instructions to work toward a deal, the odds of a last-minute agreement between Democrats and the Trump administration remain long. If differences over funding levels and policy issues could be resolved, there are still Senate Republicans to contend with, who are unlikely to approve a spending package as large as the one under discussion. On Monday, the S&P 500 index dropped 1.6 percent.

  • Some European stock indexes were pushed higher on Tuesday by a spate of positive earnings, which helped quell anxiety in markets about rising coronavirus cases and new social restrictions, including national lockdowns in Ireland and Wales. Reckitt Benckiser, the British owner of cleaning brands such as Dettol and Lysol, reported a jump in revenue on Tuesday. Logitech, which makes other computer hardware such as keyboards, said its quarterly sales exceeded $1 billion for the first time in the three months that ended in September. Logitech’s share price jumped more than 20 percent in European markets.

  • Shares in the Swiss bank UBS rose 2.5 percent after the firm said its profit nearly doubled in the third quarter compared to a year ago, because of an increase in trading revenues and growth in its wealth management business. The gains follow a similar pattern on Wall Street, where banks saw increases in trading offsetting a slump in their consumer businesses. UBS said it would give “less senior” employees a one-off bonus equal to one week’s pay, which it expects to cost about $30 million.

Randy Lint, owner of Big Creek Coffee Roasters in Hamilton, Mont., requires customers to wear a mask. Most order outdoors from a takeout window.
Credit…Lido Vizzutti for The New York Times

In a small business district in Montana, owners are trying to navigate conflicting directives on mask-wearing to combat the spread of the coronavirus — and it’s taken them into some emotional territory.

The governor, Steve Bullock, issued a mask mandate in the summer. But the commissioners in Ravalli County, in southwestern Montana, opted not to enforce the order, citing individual rights. That decision put the business owners of Hamilton, a town of about 5,000, in the tricky position of creating their own policies — an especially difficult proposition in an area of the country that, until recently, was slow to see the spread of the virus.

Some businesses don’t require the face coverings, though others do. One owner, who runs a coffee shop, requires face coverings of employees but not customers — and some of her workers have been openly criticized while taking orders.

The businesses want safety for workers, but don’t want to alienate customers, either — especially when every one of them is needed to stay afloat. Yet despite owners’ best efforts — “We are scrupulously apolitical,” said Randy Lint, owner of Big Creek Coffee Roasters — the masks have become a political statement.

“We just try to give a good drink and kindness,” Mr. Lint said.

The workbench in the garage where David Packard and Bill Hewlett started Hewlett-Packard.
Credit…Peter DaSilva for The New York Times

Designing and creating new technology — never an easy task — has become far more difficult in the pandemic.

This is particularly true for companies building batteries, computer chips, robots, self-driving cars and any other technology that involves more than software code. While many American workers can get by with a laptop and an internet connection, start-up engineers piecing together new kinds of hardware also need circuit boards, car parts, soldering irons, microscopes and, at the end of it all, an assembly line.

But Silicon Valley is not the home of ingenuity for nothing. When the pandemic hit, many start-up engineers in the area moved their gear into their homes so they could keep innovating, The New York Times’s Cade Metz reports.

For example, an engineer at Cerebras Systems, a start-up in Los Altos, Calif., that is building what may be the world’s largest computer chip turned his living room into a hardware lab. In mid-March, Mr. Hedges packed the 10-by-14-foot room with chips and circuit boards. There were also monitors, soldering irons, microscopes and oscilloscopes, which analyze the electrical signals that travel across the hardware.

Employees work at the Daimler production plant in Sindelfingen near Stuttgart, Germany.
Credit…Ralph Orlowski/Reuters

The German auto industry is bouncing back strongly from the pandemic as customers make purchases they postponed earlier in the year, earnings reports by BMW and Daimler indicate. Strong economic growth in China, a crucial market for both vehicle makers, has also helped.

But analysts say the miniboom may not last. Infections in Europe and the United States are surging, endangering sales in those two essential car markets. The profit figures “look too good to be sustainable,” Tim Rokossa, an analyst at Deutsche Bank, said in a note, referring to Daimler.

BMW said late Monday that its free cash flow, a measure of profit, quadrupled to 3 billion euros, or $3.6 billion, in the third quarter compared to the same period last year. Daimler said last week that operating profit rose to €3 billion in the quarter from €2.7 billion a year earlier.

Neither company disclosed net profit in the preliminary earnings reports. Daimler will issue a detailed earnings report on Friday and BMW will do so on Nov. 4.

German carmakers have a strong influence on the economic fate of Europe. Cars and trucks are Germany’s biggest export, and German carmakers buy components from all over the continent.

The Disneyland park in California has been closed since March.
Credit…Mario Tama/Getty Images

Marking a potentially significant step toward the reopening of the Disneyland Resort in California, a coalition of unions representing thousands of workers has informed Gov. Gavin Newsom that it is generally satisfied with the health measures laid out by the company for operating safely.

The two-park resort in Anaheim, which supports tens of thousands of jobs, has been closed since March, even as the company reopened Walt Disney World in Florida and resorts in Paris, Shanghai, Hong Kong and Tokyo.

The union announcement, in a letter dated Saturday, reflects a turnabout after the coalition expressed concern in June about efforts to reopen the resort the following month. “Unfortunately, despite intensive talks with the company, we are not yet convinced that it is safe to reopen the parks on Disney’s rapid timetable,” the coalition wrote at the time.

Since then, according to Saturday’s letter, Disney has shared plans with the unions to protect workers through social distancing, protective equipment, ventilation and free tests for workers who have Covid-19 symptoms or have been in close contact on the job with someone who was infected.

“We believe a path exists where Disneyland would be able to open safely,” the coalition said.

At least one union that signed the June letter did not sign the more recent one.

Both workers and the company have suffered economically from the pandemic. In September, Disney said it planned to cut nearly 30,000 jobs, most of them from its theme parks.

Despite pleas from the company, Governor Newsom has been skeptical of reopening. “We’re going to be stubborn about it,” he said this month. “We feel there’s no hurry putting out guidelines.” Last week he dispatched a team of state officials to inspect the resort.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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