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Sentiment in financial markets has been unsteady in recent days as traders on Wall Street have confronted new worries about the pandemic.Credit…Sasha Maslov for The New York Times
Markets jumped around the world on Tuesday, one day after U.S. Federal Reserve said it would take steps to keep credit flowing.
European markets were up about 2 percent in morning trading after an even stronger rise in Asia, where stocks in Japan and South Korea ended roughly 5 percent higher. The good cheer spread to other financial markets, too, sending oil futures higher and hitting prices for U.S. Treasury bonds, which typically fall when investors are feeling optimistic.
The exuberance could flag a bit by the time U.S. stocks open, however. Futures markets were predicting the S&P 500 index would open 0.7 percent higher.
Markets were cheered after the U.S. central bank said on Monday that it would soon start to buy debt issued by individual companies in a new effort to keep credit flowing. The S&P 500 stock index, which had been lower before the Federal Reserve announced its plan, ended about 1 percent higher on Monday as a result.
Global stocks were also reacting to a Bloomberg News report that the Trump administration was considering more infrastructure spending.
Earlier on Monday, Wall Street and other global markets had been hit by signs that the authorities around the world are facing new coronavirus outbreaks, sending stocks seesawing since late last week.
Economists expect data to show that retail sales rebounded in May, as thousands of stores and restaurants reopened after lockdowns were lifted and federal stimulus checks and tax refunds fueled a burst of spending.
But many of the stores and restaurants that welcomed back customers last month did so with fewer employees, reflecting a permanently altered retail landscape and an ominous sign for the economy as it tries to recover from the coronavirus pandemic.
Total sales, which include retail purchases in stores and online as well as money spent at bars and restaurants, will be released by the Commerce Department on Tuesday morning. The agency reported a 16.4 percent drop in April, the largest monthly decline on record, and an 8.3 percent decline in March.
Economists expect sales in May to have bounced back from a grim April, when retail sales were the lowest since 2012, driven by widespread business closures.
After more than a month of quarantine, May brought a tentative restart of brick-and-mortar retail across most of the country, with major chains like Macy’s and Gap reopening hundreds of stores. Some restaurants that had either closed or shifted their business to delivery and curbside pickup also reopened for in-person dining.
There was also stimulus money — totaling $1,200 per recipient — that will run out in the coming months, with no indications that Congress intends to pass another round of assistance.
No matter how fleeting, the rebound in May will be seen as a welcome boost, especially for small businesses.
Still, the monthly sales jump was off “a pretty low hurdle,” said Aneta Markowska, the chief financial economist for the investment bank Jefferies. The bigger question was the sustainability of any improvement, because consumer spending was bolstered from tax refunds and government stimulus efforts.
“By the time we get into July, those tax refunds will probably be largely spent, and then you’re back to, ‘Hey, what’s the underlying employment growth?’ because that’s going to have to be the key driver of spending going forward,” she said.
After being criticized for not doing enough to make passengers wear masks, the nation’s biggest airlines said on Monday that they would get tougher on people who refused to cover their faces.
Airlines for America, a trade association, said that its members would take masks more seriously, including by not letting people without face coverings get on planes. But many big airlines have said that before, and passengers concerned about their health have pointed out that enforcement on board has often been lax.
“U.S. airlines are very serious about requiring face coverings on their flights,” Nicholas Calio, the chief executive of Airlines for America, said in a statement. “Face coverings are one of several public health measures recommended by the C.D.C. as an important layer of protection for passengers and customer-facing employees.”
According to the association, all of four of the largest U.S. airlines — Southwest Airlines, American Airlines, Delta Air Lines and United Airlines — have agreed to communicate their mask policies to customers before flying, reiterate the requirements in onboard announcements and enforce them when customers refuse to comply. Southwest issued a separate statement saying that it would “deny boarding” to passengers that refused to comply with its face covering requirement.
United said that, starting Thursday, any passenger who openly disregarded its rules could face a temporary travel ban on future flights. The airline, like others, grants exceptions for those with a medical condition or disability that prevents them from wearing a mask, as well as those who cannot put on or remove a mask themselves and small children. Customers may remove their masks to eat and drink.
The airline association said each airline would establish its own punishment for passengers who refuse to comply, “up to and including suspension of flying privileges.”
Airlines have so far been reluctant to publicly establish clear consequences for failure to wear face coverings, and many passengers have chided the companies on social media with photos of planes filled with people not wearing masks and sitting close to each other.
The fitness chain 24 Hour Fitness filed for Chapter 11 bankruptcy protection on Monday, after the coronavirus pandemic forced its clubs to shut for nearly two months.
“Put simply, the Covid-19 pandemic upended the debtors’ operating model, leaving the debtors without a source of revenue to fund their operations,” the filing stated.
The national gym chain said in its bankruptcy filing that it had permanently closed 100 locations across 14 states. But the chain is expected to re-emerge: It has secured $250 million in funding to reopen some of its clubs, and expects a majority of its remaining 300 locations to be open by the end of June.
The pandemic has been particularly devastating to the gym industry. Also on Monday, Town Sports International said that it was considering bankruptcy because of revenue losses as a result of the shutdown. The company, which owns about 200 gyms including New York Sports Club and Boston Sports Club, said in a regulatory filing that the “scope and duration of the interruption to our operations has substantially reduced our cash flow.”
The Academy of Motion Picture Arts and Sciences said on Monday that it would push back the next Oscars ceremony to April 25 from Feb. 28, citing the coronavirus pandemic. The postponement, the fourth since the Academy Awards were introduced in 1929, could prompt the Golden Globes and other entertainment award shows to recalibrate.
Reporting was contributed by Mohammed Hadi, Niraj Chokshi, Sapna Maheshwari, Gillian Friedman, Carlos Tejada and Brooks Barnes.