Moderna‘s stock fell by as much as 9.4% in midday trading Thursday after a report said the biotech company’s late-stage trial for a potential coronavirus vaccine will be delayed, possibly by a few weeks.
The company, which is working with the National Institutes of Health, was expected to begin a phase 3 trial with 30,000 participants for its vaccine candidate later this month, pending the results from its midstage trial.
However, the company is making changes to the trial plan, which has pushed back the expected start date, according to health-care publication STAT News, citing an investigator. STAT News said it’s unclear how long the start date will be delayed.
“My understanding was that they wanted to get the first vaccines given in July, and they say they’re still committed to do that,” one investigator told STAT News. “As best I can tell, they’re close to being on target for that.”
In response to the report, Moderna CEO Stephane Bancel told CNBC’s Meg Tirrell, “we have always said July. And I confirm July.”
The shares recovered some of the losses but still down by more than 5% in afternoon trading.
Moderna’s experimental vaccine contains genetic material called messenger RNA, or mRNA. The mRNA is a genetic code that tells cells what to build — in this case, an antigen that may induce an immune response to the virus. It became the first candidate to enter a phase 1 human trial in March.
Dr. Anthony Fauci, that nation’s leading infectious disease expert, has often touted the potential vaccine.
In May, the company released data from its early-stage trial, which showed the vaccine produced neutralizing antibodies against Covid-19 in at least eight participants. The vaccine also produced binding antibodies in all participants.
The effort by Moderna is one of several working on a potential vaccine for Covid-19, which has infected more than 10 million people and killed at least 516,970, according to data compiled by Johns Hopkins University. More than 100 vaccines are under development globally, according to the World Health Organization. At least 17 vaccines are already in clinical trials, according to the WHO.
On Wednesday, Pfizer released positive results from its closely watched early-stage human trial of a coronavirus vaccine.
The delay by Moderna could set back its goal of delivering data on whether its vaccine is safe and effective by the end of the year. If all goes well with Moderna’s next trial, the vaccine could be available for public distribution by the end of December or early 2021.
But for some sectors, the road to pre-coronavirus employment recovery may take years — or worse, never occur. Some now say that the coronavirus and efforts to contain its spread could act as a catalyst for layoffs that may not be fully recouped.
CNBC studied both the short-term and long-term employment changes in a variety of the economy’s sub-industries to isolate the recent impact of Covid-19 from more-enduring trends.
One industry that could have a particularly hard time bouncing back is apparel retail. Economists have for years documented a marked decline in U.S. brick-and-mortar retail jobs at the hands of online shopping.
And now, despite a sizable rebound of 202,000 clothing retail jobs in June, it remains to be seen whether the broader retail sector will be able to make a complete recovery in employment figures.
The most recent data studied by CNBC came in the Labor Department’s monthly jobs report, which showed U.S. employers added some 4.8 million back to payrolls in June and pushed the unemployment rate back down to 11.1%.
But both stocks and bond yields moved off their session highs within a couple of hours of the report as economists and investors alike began to doubt the longevity of the headline jobs strength and uneven re-hiring.
A grim prognosis for clothing retailers came Thursday morning from Betsey Stevenson, the former chief economist at the Labor Department.
Stevenson, who also served on President Barack Obama’s National Economic Council, wrote on Twitter that June’s bounce in clothing store employment won’t do much to stanch the long-term decline in apparel retail jobs.
“Employment in clothing stores is up 202K! But it’s still down 40% compared to last year,” she wrote. “Many of those jobs are never coming back.”
Another industry that may have a more difficult time returning to prior employment levels is mining, and specifically coal mining.
The coal mining industry, which employed some 70,000 people at the end of 2014, lost 27% of its workforce through January 2020 before the Covid-19 layoffs.
But between January and June, the coal industry has lost another 14% of workers. Halfway through last month, the subindustry had just under 44,000 workers.
Other industries, though hard hit amid Covid-19 lockdowns, are showing signs of a more robust employment rebound.
Leisure and hospitality, which includes restaurants and bars, perhaps bore the worst of the coronavirus layoffs amid an eye-popping contraction in travel and dining out. In early May, the Labor Department reported that the leisure and hospitality industry had lost 47% of its entire workforce during the month of April alone.
But many of those workers were likely placed on temporary leave, or furloughed, and appear to be returning to work at a faster rate than workers in other industries.
Bars and restaurants employed 12.3 million Americans in February 2020, only to see that figure collapse to 6.2 million in April. It’s since rebounded 47% off that low and for June rose to 9.2 million jobs.
An Amazon Air plane at Ontario International Airport on Monday, February 4, 2019.
The coronavirus pandemic has shed a bright light on Amazon‘s treatment of warehouse workers and prompted the company to take extraordinary steps to reassure employees, legislators and the broader public that it’s protecting workers.
Amazon has changed how its warehouses operate to improve safety, offered additional benefits to workers who fall sick and set up a relief fund for delivery contractors.
But a crucial piece of Amazon’s shipping operations was left out of the company’s response to the pandemic, some workers say.
Workers at Worldwide Flight Services, a company that serves the Amazon’ Air freight network and other carriers, say they have gone without many of the benefits provided to warehouse and delivery employees. They also say they weren’t provided with bonuses, hourly wage increases, extra paid sick leave or unlimited unpaid time off, despite working long hours at the height of the pandemic. Employees accrue paid sick leave over time, so they’re able to take a limited number of days off if they’re sick, but once that time runs out, they must return to work.
WFS workers say managers aren’t enforcing mask requirements and that hand sanitizer and soap are in short supply at facilities. At one WFS facility in Phoenix, safety concerns became so severe that a worker filed a complaint with the federal Occupational Safety and Health Administration last month.
WFS is one of several companies that maintain lucrative contracts with Amazon Air. Workers load and unload cargo from Amazon planes at airports across the country, but they’re not considered Amazon employees. Instead, Amazon contracts with third-party companies like WFS, which employs the workers. Amazon outsources other areas of its logistics network, including last-mile delivery, which has been a subject of controversy in the past.
Before and during the pandemic, Amazon’s cargo partners, including WFS, have played an outsized role in ensuring the company can achieve its increasingly crucial goals of one- and same-day delivery.
“These workers are vital,” said Cathy Morrow Roberson, founder of consulting firm Logistic Trends & Insights. “It’s like the connective tissue for your body, except they’re the connection between the airplane and the warehouse. Without them, packages would just be sitting in these facilities.”
Amazon spokeswoman Kate Kudrna said the company’s “first priority” is the health and safety of workers involved in its operations, adding that Amazon has provided WFS with face masks during the pandemic.
“All of our airline delivery providers must comply with the Amazon Supplier Code of Conduct and Federal Aviation Administration Regulations,” Kudrna said in a statement. “We take seriously any allegation that a delivery provider is not meeting those requirements and expectations, and review accordingly.”
WFS didn’t respond to multiple requests for comment. After publication, WFS said in a statement that all employees have been notified of the company’s corporate guidelines around Covid-19 via several forms of communication, including shift briefings, company newsletters and posters inside facilities. The company said it performs daily inventory checks to make sure personal protective equipment is replenished at facilities.
“The safety, security and wellbeing of our employees and operations are our greatest priority,” WFS said in a statement. “Our local management teams are accessible to any staff needing clarification of our Covid-19 policies and procedures.”
As Amazon was hit with a surge of coronavirus-related demand in March, WFS workers were on the front lines, handling the Prime packages ordered by millions of Americans who were cloistered inside their homes.
Demand has stabilized but the workers now face a new round of coronavirus outbreaks around the country. WFS workers say they feel just as vulnerable as during the beginning of the pandemic, since they still lack the basic protections to be able to do their job safely.
Sanitizer shortages and workers refuse to wear masks
WFS operates out of dozens of airports across the country, which means facilities are largely independent of one another. Some WFS facilities have taken coronavirus safety more seriously than others.
One WFS worker in northern Kentucky said everyone wore masks in the facility and hand sanitizer is located in all areas of the building. By contrast, a WFS worker in New York City said no masks are available for employees unless they bring their own, while managers “refuse” to answer questions about positive cases at the facility. Both workers asked to remain anonymous out of fear of losing their jobs.
Five WFS workers at Phoenix Sky Harbor International Airport told CNBC they’ve confronted managers multiple times over the past few months about employees who don’t wear masks or gloves, along with other safety concerns. Despite this, they say, not much has changed, except now the facility requires temperature checks. Many of the workers asked to remain anonymous because they were not authorized to talk to the media about company matters.
“I figured when this pandemic started that they’d take it more seriously, but they haven’t been professional about it at all,” said Loren Green, a worker at the Phoenix facility.
WFS cargo handlers work in very close quarters, which makes social distancing rules difficult to follow. Employees often stand next to each other to hand off boxes, while two or three workers stack packages inside large metal containers, referred to as cans, that are estimated to be about 6 feet wide by 7 feet tall.
The issue hasn’t improved months into the pandemic, workers said. In April, WFS managers said they had station no more than four workers to a can at a time, but they haven’t always enforced that rule.
A video taken in June and obtained by CNBC shows WFS workers in Phoenix clustered in groups around cans with the Amazon logo emblazoned on the side. Many of the workers in the video aren’t wearing masks and there are at least three employees inside the cans stacking boxes.
A video obtained by CNBC shows WFS workers in Phoenix crowding around containers without face masks on.
Hand sanitizer and soap are often in short supply at the facility, the workers said. Last month, Green said he noticed an empty sanitizer bottle had been refilled with water at a workstation. Another WFS worker, who asked to remain anonymous, said the bathrooms were out of soap for several days.
The workers told CNBC they were concerned that the facility’s nearly 200 employees only have access to two, single-stall bathrooms, one per gender, which could increase crowding and spreading of germs. OSHA requires workplaces with more than 150 employees to provide six toilets, plus one additional toilet for every additional 40 workers.
Another WFS worker in Phoenix, who asked to remain anonymous, became so frustrated with the facility’s lack of safety measures that they filed a complaint with Arizona’s OSHA division on May 2. The complaint, which was viewed by CNBC, claims the facility isn’t following federal guidelines for social distancing and that it isn’t requiring workers to self-quarantine when they’ve been exposed to the coronavirus. It also claims employees aren’t able to voice their concerns about workplace safety and health.
Trevor Laky, a spokesperson for the Industrial Commission of Arizona, which includes the Arizona Division of Occupational Safety and Health, the state’s equivalent of OSHA, said the complaint was closed May 8. Laky added that ADOSH representatives did not inspect the facility.
In May, a WFS worker in Phoenix filed a complaint with the local OSHA branch, detailing various workplace hazards related to the coronavirus.
WFS said in a statement that its Covid-19 policies are in accordance with federal agencies. The company declined to comment on Phoenix workers’ specific accusations.
Kudrna, the Amazon spokeswoman, said WFS handles air cargo operations at Phoenix Sky Harbor Airport for a variety of companies, not just Amazon.
Workers estimate that at least four employees have tested positive for the coronavirus at the Phoenix facility. Each time, there was no official notification from the site’s management, they said. Instead, workers said they learned about new infections via word of mouth. The company hasn’t told workers whether it’s carried out contact tracing or notified workers who might have been in close contact with the infected individuals, the workers said.
Sidney Isais Gastelum, who quit his job as a ramp agent at the Phoenix facility last month due to coronavirus concerns, said he worked daily with three of the people there who tested positive for the virus. Gastelum said he informed the site’s human resources department that he was in regular close contact with the workers, yet he was never told to quarantine himself.
Instead, he said, an HR employee told him he had to come to work because he was “essential” and that if he didn’t show up for his shift, he’d be written up.
After his co-workers tested positive, Gastelum said, he urged his managers to hold a meeting about coronavirus safety measures, since managers had yet to address the confirmed cases. The meeting never happened.
“I was pretty disappointed they wouldn’t even have a safety meeting about this because they’re close friends of mine,” Gastelum said. “I work with them and I care about them. If they don’t talk about them, it just shows how much they don’t care about our safety.”
Amazon has called its workers “heroes” for providing supplies to millions of Americans during the pandemic. Gastelum and other WFS workers said Amazon should also applaud them for risking their health and safety on the front lines.
“Amazon hasn’t done anything for us,” said one ramp agent in Phoenix, who works the day shift, and asked to remain anonymous. “We’re pretty much fending for ourselves and expected to just keep working.”
WFS workers contracted by Amazon said they may spend their days moving Prime packages, but their interactions with the company are limited, beyond occasional visits by Amazon representatives to WFS facilities.
“To us, it seems like Amazon doesn’t really care about how we operate so long as we get the job done,” Gastelum said. “They just turn a blind eye.”
Three months after the coronavirus pandemic shut down offices, corporate America has concluded that working from home is working out. Many employees will be tethered to Zoom and Slack for the rest of their careers, their commute accomplished in seconds.
Richard Laermer has some advice for all the companies rushing pell-mell into this remote future: Don’t be an idiot.
A few years ago, Mr. Laermer let the employees of RLM Public Relations work from home on Fridays. This small step toward telecommuting proved a disaster, he said. He often couldn’t find people when he needed them. Projects languished.
“Every weekend became a three-day holiday,” he said. “I found that people work so much better when they’re all in the same physical space.”
IBM came to a similar decision. In 2009, 40 percent of its 386,000 employees in 173 countries worked remotely. But in 2017, with revenue slumping, management called thousands of them back to the office.
Even as Facebook, Shopify, Zillow, Twitter and many other companies are developing plans to let employees work remotely forever, the experiences of Mr. Laermer and IBM are a reminder that the history of telecommuting has been strewn with failure. The companies are barreling forward but run the risk of the same fate.
“Working from home is a strategic move, not just a tactical one that saves money,” said Kate Lister, president of Global Workplace Analytics. “A lot of it comes down to trust. Do you trust your people?”
Companies large and small have been trying for decades to make working from home work. As long ago as 1985, the mainstream media was using phrases like “the growing telecommuting movement.” Peter Drucker, the management guru, declared in 1989 that “commuting to office work is obsolete.”
Telecommuting was a technology-driven innovation that seemed to offer benefits to both employees and executives. The former could eliminate ever-lengthening commutes and work the hours that suited them best. Management would save on high-priced real estate and could hire applicants who lived far from the office, deepening the talent pool.
And yet many of the ventures were eventually downsized or abandoned. Apart from IBM, companies that publicly pulled back on telecommuting over the past decade include Aetna, Best Buy, Bank of America, Yahoo, AT&T and Reddit. Remote employees often felt marginalized, which made them less loyal. Creativity, innovation and serendipity seemed to suffer.
Marissa Mayer, the chief executive of Yahoo, created a furor when she forced employees back into offices in 2013. “Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu team meetings,” a company memo explained.
Tech companies proceeded to spend billions on ever more lavish campuses that employees need never leave. Facebook announced plans in 2018 for what were essentially dormitories. Amazon redeveloped an entire Seattle neighborhood. When Patrick Pichette, the former chief financial officer at Google, was asked, “How many people telecommute at Google?” he said he liked to answer, “As few as possible.”
That calculus has abruptly changed. Facebook expects up to half its workers to be remote as soon as 2025. The chief executive of Shopify, a Canadian e-commerce company that employs 5,000 people, tweeted in May that most of them “will permanently work remotely. Office centricity is over.” Walmart’s tech chief told his workers that “working virtually will be the new normal.”
Quora, a question-and-answer site, said last week that “all existing employees can immediately relocate to anywhere we can legally employ them.” Those who do not want to go anywhere can still use the Silicon Valley headquarters, which would become a co-working space. Quora declined to say how many employees it has.
Adam D’Angelo, Quora’s chief executive, said that he and the rest of the leadership team would push against the notion that remote workers were second class by working remotely themselves. All meetings would be virtual. The future of work, he wrote, would be a paradise for the rank and file.
Quora said 60 percent of its workers expressed a preference for remote work, in line with national surveys. In a Morning Consult survey in late May on behalf of Prudential, 54 percent said they wanted to work remotely. In a warning sign for managers, the same percentage of remote workers said they felt less connected to their company.
One very public setback for remote work was at Best Buy, the Minneapolis-based electronics retailer. The original program, which drew national attention, began in 2004. It aimed to judge employees by what they accomplished, not the hours a project took or the location where it was done.
Best Buy killed the program in 2013, saying it gave the employees too much freedom. “Anyone who has led a team knows that delegation is not always the most effective leadership style,” the chief executive, Hubert Joly, said at the time.
Jody Thompson, a co-founder of the program who left Best Buy in 2007 to become a consultant, said the company was doing poorly and panicked. “It went back to a philosophy of ‘If I can see people, that means they must be working,’” she said.
The coronavirus shutdown, which means 95 percent of Best Buy’s corporate campus workers are currently remote, might now be prompting another shift in company philosophy. “We expect to continue on a permanent basis some form of flexible work options,” a spokeswoman said.
Flexible work gives employees more freedom with their schedules but does not fundamentally change how they are managed, which was Ms. Thompson’s goal. “This is a moment when working can change for the better,” she said. “We need to create a different kind of work culture, where everyone is 100 percent accountable and 100 percent autonomous. Just manage the work, not the people.”
But it is also a moment, she acknowledged, when working can change for the worse.
“It’s a crazy time,” Ms. Thompson said. “When you’re a manager, there is a temptation to manage someone harder if you can’t see them. There’s an increase in managers looking at spyware.”
Remote workers might be free of commuting costs, but they are traditionally more vulnerable. Jeffrey Gundlach, who runs the Los Angeles investment firm DoubleLine Capital, said in his monthly webcast that he had started seeing his newly remote staff in a new light.
“I kind of learned who was really doing the work and who was not really doing as much work as it looked like on paper that they might have been doing,” he said. With “some of the supervisory, middle-management people,” he added, “I’m starting to wonder if I really need them.”
At the beginning of the year, the unemployment rate was low and workers had some leverage. All that has been lost, at least for the next year or two. Widespread remote work could consolidate that shift.
“When people are in turmoil, you take advantage of them,” said John Sullivan, a professor of management at San Francisco State University.
“The data over the last three months is so powerful,” he said. “People are shocked. No one found a drop in productivity. Most found an increase. People have been going to work for a thousand years, but it’s going to stop and it’s going to change everyone’s life.”
Innovation, Dr. Sullivan added, might even catch up eventually.
“When you hire remotely, you can get the best talent around and not just the best talent that wants to live in California or New York,” he said. “You get true diversity. And it turns out that affects innovation.”
Mr. Laermer, the public relations executive, is more cautious about the implications of the crisis. In March, when he shut down his office, he anticipated disaster — like what happened on Fridays in 2017, but five times worse.
Instead, things have been pretty good. He even hired a few people he had never met, via Zoom, “and they’ve been phenomenal.”
What changed? Well, the technology, including Zoom, is better. Moreover, “we have rules now,” he said. “You have to be available between 9 a.m. and 5:30 p.m. You can’t use this as child care.”
But he said he was not trying to get out of his office lease.
“Companies are saying working from home is working so well we’re going to let people work from home forever,” he said. “It’s good P.R., and very romantic, and very unrealistic. We’ll be back in the office as soon as there’s a vaccine.”
To paraphrase a line from the real estate industry, small businesses, hit by the economic impact of the coronavirus, have had to pivot, pivot, pivot to survive.
Many have made adjustments to the way they conduct their businesses — or have shifted their approaches entirely. In the face of a truly catastrophic financial environment, they have used the creativity that spurred them forward as entrepreneurs to adapt to a business environment no one could have foreseen.
And they have done these things under the stress of laying off employees, shutting down offices or having to give up on their dream entirely. Financial ruin was a distinct possibility and may still be for many small businesses that are barely holding on.
But their goal is the same: to continue their dream, to do what they had been doing on their own terms before the world changed abruptly. They want to own their future as they had owned their past. What they have done — and how they are still doing it — is as varied as the businesses themselves. PAUL SULLIVAN
A San Francisco-based Malaysian chef is keeping busy during the pandemic with a diverse business model that has allowed her to improvise and generate revenue.
Azalina Eusope cries every day. “But the food comforts me,” said the 41-year-old chef and owner of Azalina’s, a Malaysian restaurant business in San Francisco.
“Ten years ago, my business started off in a survivor mode,” Ms. Eusope said. “I was selling food under a tent at the farmers’ market. As a newly single mother, I needed income. I prepared the food, and at 4 o’clock in the morning, with my kids sleeping in the car, brought it to the farmers’ market and set up.”
“While every recession is different, as in 2008, small businesses today must focus on adaptability and prepare for timid consumers.”
In late 2008, as unemployment soared and consumer spending plummeted, the restaurateur Karl Franz Williams opened a stylish, low-lit cocktail lounge on a gentrifying stretch of Frederick Douglass Boulevard in lower Harlem.
His timing, at the beginning of the global financial crisis, could not have been more inauspicious. With its pricey cocktails and global small-bites menu, 67 Orange Street was an ambitious prospect even during the most ideal economic conditions. And the Great Recession — in which nearly nine million jobs were lost from February 2008 to February 2010 — was hardly ideal.
After the lockdown, the owner of Honey Space for Moms had such success going virtual that she is making bigger plans.
When people tell Brooke Miller they haven’t been sleeping since the coronavirus pandemic started, that they feel anxious and overwhelmed, she smiles and empathizes. To her, it sounds as if they’re experiencing what mothers go through.
“I’m like, ‘See, we told you being a mom is hard,’” said Ms. Miller, who has two young daughters. “You’re changing who you were before, changing who you were supposed to be, changing expectations. And you don’t get any sleep.”
Iwi Fresh in Atlanta has survived with some creative thinking by its owner, Yolanda Owens.
As a little girl, Yolanda Owens would soak in warm bathtubs filled with collard greens, garlic and onions to help soothe her skin. “I had eczema, and my grandmother would go out to her garden to find all kinds of vegetables and make up this remedy for me,” Ms. Owens said.
Today, Ms. Owens, 55, owner of the Atlanta-based Iwi Fresh, produces and sells a line of preservative-free skin-care products, including Squash-It-Out Cleanser and 14 Carrot Glow Moisturizer, which are created from her own recipes that blend fruit, vegetables, herbs and essential oils.
Some of these devices have been around for years but are now being mustered to help keep us safe.
Dr. Cristiano Huscher has long used robotics and artificial intelligence for surgical procedures at the Policlinico Abano chain of hospitals in Italy. So when six doctors contracted Covid-19 at his hospital in Sardinia two months ago, he once again turned to technology — in this case, UVD Robots — to disinfect the rooms.
The robot moves autonomously through a room, using ultraviolet-C light to destroy the RNA in a virus and DNA in bacteria, effectively gutting the virus’ ability to infect people and multiply.
The pandemic has been brutal for owners, but there are many organizations offering loans and grants to help out.
The pain and insecurity of the shock of the coronavirus on small-business owners have been overwhelming. Entrepreneurs have taken extreme steps to stay operational, and many are deeply worried about their prospects in the coming months and beyond.
But help is out there. Federal, state and local governments, as well as communities, corporations and foundations have stepped up with financial resources.
For a small business trying to stay afloat during the shock of the coronavirus, every little bit of financial aid can have a bearing on their future.
What to do with a business that involves close physical contact with clients? Innovate and, if you’re lucky, grow — but at a distance.
The routine has been the same for six years.
On Saturday mornings, Jason Atlas changes into a T-shirt, a pair of comfortable shorts and lightweight training shoes, then heads down to the basement gym of his home in Dix Hills, N.Y., on Long Island, where precisely at 10 a.m., he meets his personal trainer, Matt Sulam, for an hourlong, strength-training workout.
Mr. Sulam, 48, an independent contractor who until recently saw most of his clients in their homes, has become a familiar presence since he was first hired by Mr. Atlas, a lawyer, in January 2014.
For some companies, like Mike’s Organic Delivery, embracing higher demand without changing their core strategy is the key to survival.
Mike Geller spent the better part of a decade tweaking the focus of Mike’s Organic Delivery, which he founded in 2009. Early on, the model was similar to a community-supported agriculture program, or C.S.A., where customers agreed to receive whatever food was in season.
By the third year, the company was up to about 200 deliveries a week: in Fairfield County in Connecticut and Westchester County in New York. Access to organic produce was more widespread and customers wanted options other than a preselected basket. So he created an online organic market, to allow people to pick the fruit, vegetables and meat that they wanted in advance.
The roots of one store on the block extend to Mexico, from where a 13-year-old boy left for the United States decades ago and found his footing in the food industry.
A drugstore is owned by a pharmacist lured to the neighborhood from the Midwest by an acquaintance. Another shop is run by a man from the Dominican Republic who began working there nearly 30 years ago
Now these storefronts in the 4400 block of Fifth Avenue in Sunset Park, Brooklyn, a collection of restaurants, bodegas and mom-and-pop shops largely run by immigrants, are in many ways emblematic of the toll the coronavirus pandemic has taken on New York’s small businesses.
Nearly 90 percent of the city’s restaurants and bars paid none or only part of their May rent, according to a survey by the New York City Hospitality Alliance, a business group. Nearly two-thirds of ground-floor commercial tenants, from bodegas to nail salons to boutiques, did not pay rent in May and June, according to the Community Housing Improvement Program, which represents thousands of property owners.
As the city reopens, many mom-and-pop shops will not return, while others are struggling to survive.
El Rancho Nuevo Supermarket
When the pandemic erupted in New York in March, the Soriano family made the difficult decision to shut down its butcher and grocery store for all of April. A relative, as well as friends, had died of the virus, and the family worried about its spread.
A month’s worth of income vanished. The store, which reopened in May, has not recovered. The employees’ schedules have been cut back. The staff of five butchers has been reduced to three. And the store now closes at 7 p.m. — not at 9, as it had before — because the former rush of customers has disappeared.
“A lot of the community is out a job,” said Dennis Soriano, 27, who owns El Rancho with his parents and brothers.
His father, Felix, left Mexico for the United States at 13 by himself, eventually moving to New York and working his way up in the food industry, from dishwasher to head chef of a restaurant in Chelsea.
The family opened the butcher shop about five years ago cater-corner from a Key Food supermarket. But El Rancho specializes in cuts of beef and pork not found at most grocers, like tripe, al pastor, cecina (salted beef) and longaniza, a sausage similar to chorizo.
Even after El Rancho reopened, many customers could not afford the groceries or use food stamps. The store’s food stamp permit expired during the pandemic, and it could not file for a renewal until recently because of the shutdown, Dennis Soriano said.
Since May, the store has yet to make a profit, he said. In recent weeks, the store’s expenses soared when pork and beef prices skyrocketed. A weekly order of meat and groceries to stock the store, which typically cost $1,500, jumped to as much as $4,000. Prices have since started to return to normal, he said.
The family did not want anyone to leave hungry, so El Rancho has extended informal lines of credit to customers, totaling about $8,000 a month Mr. Soriano said. The store has given away boxes of produce and meat to about 450 families.
“It’s a special block,” he said. “It’s a special community. And it’s built by immigrants.”
Bay Ridge French Cleaners
The conveyor of clothes at Bay Ridge French Cleaners is a time capsule from March 14, its last full day of business.
Pressed button-down shirts hang in plastic bags. Hemmed jeans wait for their owners. About the only items being cleaned nowadays are police uniforms.
The pandemic has turned the economy upside down. Dry cleaners were allowed to remain open as “essential” businesses, but at the same time, they were less essential than ever.
For more than three months, working professionals have traded their collared shirts, dresses and suits for comfortable work-from-home attire. If a customer does show up, it’s usually to say hello.
“The situation is really, really, really bad,” said Alex, 52, the owner, who started working at the front counter in 1992, a few years after he immigrated to the United States from the Dominican Republic. He asked that his last name not be published.
When Alex turns on the conveyor and watches clothes swing by, he is reminded of the lost income. Customers do not pay until they pick up.
On a recent afternoon, he pulled a plastic bag off the rack and placed it on the counter: Three tailored pants for a man named Victor. He died from the coronavirus, Alex said.
Bay Ridge French Cleaners was started by an immigrant from Cuba in 1980, and Alex bought the cleaners and the entire building in 2004.
The business has never made Alex particularly wealthy — he is the only full-time employee — but he made enough over the years to buy a three-story home for his family about 150 feet from the store.
The shop had been in decline for years, he said, as office workers who had lived in the neighborhood retired or moved. The new residents, he said, cannot afford to have items dry cleaned as often and, in a sign of modern work culture, they increasingly wear clothes that can be washed at home.
Alex said he has spent the past months thinking a lot about the future of Bay Ridge French Cleaners. If he did not own the property, he said, he would have had to close it long ago because of rising rents. A vacant storefront down the street is for lease for about $8,000 a month.
“I have no choice right now,” Alex said about keeping the store open. “But if I had the chance, I would close.”
In 1984, Gopesh Patel bought a one-way ticket from Chicago to La Guardia Airport and hopped in a car for Sunset Park. It was his first time in New York City. At the corner of Fifth Avenue and 44th Street, Dr. Patel met a friend of a friend who had bought a drugstore there.
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
I’ve heard about a treatment called dexamethasone. Does it work?
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
What is pandemic paid leave?
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
Does asymptomatic transmission of Covid-19 happen?
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
What’s the risk of catching coronavirus from a surface?
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
How does blood type influence coronavirus?
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
How many people have lost their jobs due to coronavirus in the U.S.?
The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
What should I do if I feel sick?
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
“He handed me the keys and said, ‘You got to run this store,’” recalled Dr. Patel, who grew up in India and moved to the United States in 1980. “We didn’t know each other that well, but we always believed in trust.”
Since then, VLS Pharmacy has transformed from a neighborhood store into a pharmacy that ships to 20 states and has a state-of-the-art sterile compounding lab, a rarity in mom-and-pop drugstores. But all that seemed at risk in March.
In an instant, customers stopped shopping its aisles and picking up their medicine. Masks, gloves and hand sanitizer flew off the shelves. New supplies were harder to come by. Shipments to customers were delayed.
There was a personal toll, too. Over the weeks, 25 longtime customers died from the virus, Dr. Patel said. In late March, Dr. Patel himself contracted the virus and went into quarantine for two weeks.
Through it all, Dr. Patel pledged to his staff, which had grown to 25 workers from just four in 1984, that no one would be let go. “Not in the pandemic and not ever,” he said.
In recent weeks, business has picked up. The pharmacy started manufacturing a hand sanitizer in its lab and increased delivery of prescription medication so customers did not have to venture outside. But the number of customers who go to the store, which makes up a majority of the company’s business, is not what it used to be.
“People are afraid to come out,” Dr. Patel said, “so it’s becoming very difficult.”
Tony’s Park Barber Shop
The barber shop has stood on the block for decades. Today it is shuttered, not because of the pandemic, but because Felice Garofalo decided it was time to call it quits. Still, an empty storefront will most likely be harder to fill.
Mr. Garofalo moved from his family’s home in Italy when he was about 15 and skipped around Europe, cutting hair for a living in Germany, Switzerland and elsewhere. In 1963, he landed in Brooklyn and soon took a job at the Park Barber Shop, which locals say opened about a century ago.
Mr. Garofalo charged less than $1 for a haircut. His customers were also immigrants, mostly Scandinavians who had settled in Sunset Park.
Mr. Garofalo bought the barbershop in the late 1960s, started going by Tony (no one could pronounce Felice) and barely raised prices; a haircut today costs $10.
The neighborhood is still filled with immigrants, but now they are from the Dominican Republic and other parts of Latin America.
At 84, Mr. Garofalo decided in early March to retire so he could care for his wife, who has cancer. His family had begged him for years to hang up his shears. He would not budge.
“My father just loved that neighborhood,” said his son Joseph Garofalo, who worked alongside his father on weekends for about 16 years. “He learned to speak Spanish fluently. He speaks better Spanish than Italian right now.”
Joseph Garofalo said his father’s retirement was fortuitously timed. Barbershops and salons would be closed for weeks and were only allowed to resume business on Monday, when the city entered the second phase of its reopening.
Mr. Garofalo, whose father owns the building, said that the family is not in a rush to clear out the shop, which features oversized barber chairs and teal cabinets, or to take down the faded sign out front.
“It’s extremely sad for us,” Mr. Garofalo said. “It was time, but it’s definitely bittersweet.”
The Supreme Court in a ruling Monday allowed the Consumer Financial Protection Bureau to continue operating, but said that the director of the watchdog can be removed by the president of the United States “at will.”
The decision, written by Chief Justice John Roberts, agreed with a California-based law firm’s argument that the CFPB’s leadership by a sole director who was removable “only for cause” violated the separation of powers rule under the U.S. Constitution.
The 5-4 ruling overturns decisions by a federal district court and appeals court that had rejected the law firm’s arguments.
“The agency may … continue to operate, but its Director, in light of our decision, must be removable by the President at will,” Roberts wrote in his majority decision, in which he was joined the court’s other four conservative justices.
Justice Elena Kagan, in a dissent joined by her three liberal colleagues, wrote that the majority failed to respect the proper role of the Supreme Court in allowing the two political branches of government, Congress and the presidency, to decide how to structure the executive branch of the government.
A police officer walks in front of the U.S. Supreme Court April 6, 2020 in Washington, DC.
Alex Wong | Getty Images
“Today’s decision wipes out a feature of that agency its creators thought fundamental to its mission — a measure of independence from political pressure,” Kagan wrote.
But Sen. Elizabeth Warren, the Massachusetts Democrat who first envisioned the CFPB as a professor at Harvard Law School, in a tweet responding to the ruling wrote, “Let’s not lose sight of the bigger picture: after years of industry attacks and GOP opposition, a conservative Supreme Court recognized what we all knew: the @CFPB itself and the law that created it is constitutional”
“The CFPB is here to stay,” Warren added.
The CFPB, which was established by Congress under President Barack Obama in the wake of the 2008 financial crisis, oversees consumer financial markets like credit cards and home mortgages.
It returned nearly $12 billion to consumers through 2017, before largely curtailing enforcement actions under President Donald Trump.
The bureau’s constitutionality was challenged in the case decided Monday by the firm Seila Law, which alleged that the CFPB’s director’s protection from dismissal by the presidential was unlawful.
The firm, which provides debt-related legal services to clients, was fighting a civil demand for information and documents from the CFPB related to the firm’s practices.
Under the 2010 law establishing the bureau, the director is appointed for a five-year term and may only be removed for “inefficiency, neglect of duty, or malfeasance in office.”
In his majority decision, Roberts noted the the leadership structure of the CFPB “has no foothold in history or tradition,” and that Congress has given protection from removal to principal officers of agencies in just four “isolated instances.”
Those were for the the Comptroller of the Currency for just a a one-year period during the Civil War, the Office of Special Counsel, the administrator of the Social Security Administration, and the director of the Federal Housing Finance Agency.”
“Aside from the one-year blip for the Comptroller of the Currency, these ex-amples are modern and contested; and they do not involve regulatory or enforcement authority comparable to that exercised by the CFPB,” Roberts wrote.
He added that, “The CFPB’s single Director configuration is also incompatible with the structure of the Constitution, which — with the sole exception of the Presidency — scrupulously avoids concentrating power in the hands of any single individual.”
Kagan, in her dissent, took aim at the argument by the majority that the rule that that CFPB’s director could not be removed except for cause violated the separation of powers rule.
“What does the Constitution say about the separation ofpowers — and particularly about the President’s removal authority? (Spoiler alert: about the latter, nothing at all.),” Kagan wrote.
“Nowhere does the text say anything about the President’s power to remove subordinate officials at will,” Kagan wrote.
Jeremy Funk, spokesman for consumer watchdog group Allied Progress, in a prepared statement said, “The Roberts-led Corporate Court strikes again, predictably siding with industry groups that have an axe to grind against the CFPB or a financial motive in seeing the agency weakened.”
“The CFPB’s independence is what allowed it to be a powerful and effective advocate for consumers in the past, but the high court ruled that the agency should instead be guided by the political whims of the President,” Funk said.
The case is formally known as Seila Law v. Consumer Financial Protection Bureau, No. 19-7.
Stocks rose on Friday, clawing back some of the sharp losses from Wall Street’s worst day since March as traders concluded a volatile week of trading.
The Dow Jones Industrial Average traded 271 points higher, or about 1.1%. The S&P 500 gained 0.7% while the Nasdaq Composite advanced 0.6%. The major averages were off their session highs, however. The Dow had gained more than 800 points earlier in the day.
Despite those solid gains, the major averages were all on pace to post their first weekly losses in four weeks. The Dow and S&P 500 are both down more than 5% week to date while the Nasdaq has lost 2.7%.
Investors on Friday went right back into the plays whose fates hinge on a successful reopening of the economy. Carnival Corp jumped 10.9%. United Airlines climbed 13.8%. Other winners included brick-and-mortar retailers like Kohl’s. Those stocks were hit big time during Thursday’s sell-off as investors feared the reopening of the economy could be delayed by a second wave of cases.
Even after Friday’s bounce, Morgan Stanley Investment Management’s Andrew Slimmon said: “Given the magnitude of the rally, it would shock me if we had a one day sell-off and that’s it.”
“The stocks that are up the most from the lows are still the risk-on, high beta, value, small-cap stocks,” Slimmon, who is a managing director and senior portfolio manager at the firm, told CNBC’s “Squawk Box Asia” Friday morning Singapore time. “They’re still the big winners and I would suspect that there’s more pain to come near-term before the market clears out kind of this excessive speculation that we’ve seen recently.”
Wall Street’s fear gauge signaled more wild trading ahead. The Cboe Volatility Index rose to its highest level since April and traded above 41.
The S&P 500’s gains on Friday put the index back above its 200-day moving average, a widely followed level by traders. The broad market index posted closed below that level on Thursday for the first time since May.
“Once the S&P 500 crossed above the 200-day moving average [last month], it gave investors the green light to buy stocks; it said things are OK with the economy,” said Mitchell Goldberg, CEO of ClientFirst Strategy. “It also signaled hedge fund managers who got too heavy into cash are now way behind their benchmarks and are now performance-chasing.”
The Dow, S&P 500 and Nasdaq on Thursday all recorded their biggest one-day losses since mid-March, posting losses of at least 5%. Thursday’s declines put the Dow and S&P 500 on pace for their biggest weekly losses since March 20, when they all dropped at least 12% amid broad economic shutdowns stemming from the pandemic.
Stocks had been ripping higher prior to this week, as investors cheered the prospects of the economy recovering as states and countries eases quarantine measures.
“We had gone straight up more than 30% without a real sell-off, so you’re due for one, and I don’t think it’s the worst thing in the world,” said JJ Kinahan, chief market strategist at TD Ameritrade. “As more states get back, the question becomes: Are they going to ramp up fast enough to please Wall Street? What you’re seeing is it’ll be hard to do that.”
The S&P 500 and Dow remain more than 37% above the intraday lows reached on March 23. Most of those gains have been driven by stocks that would benefit from the economy reopening, including airlines, cruise lines and retailers.
“Some of these stocks may have gotten ahead of their skis,” said Kinahan. “When you see some of the airlines being priced at the levels they were before this all started when they say they’re going to do 60% of their business just doesn’t make sense.”
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CNBC’s Jim Cramer said Friday that professionals on Wall Street are taking advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading.
“It’s a game. If it weren’t securities, let’s say it was monopoly, let’s say it’s Draft Kings … it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
The “Mad Money” host said people who really wanted to invest in a company like American Airlines, betting that coronavirus-related impacts of air travel would not be a long-term drag, would wait until the market opens.
“If people wanted these stocks, there would be plenty of supply if they would just wait until 9:30 a.m.,” Cramer said later on “Squawk on the Street.” “But no, they’re fomenting action. Once you foment action, it brings in suckers and then maybe they’ll buy the stock thinking that there’s something going on.”
But Cramer said there really is nothing driving that kind of move in a stock that has been so impacted by the Covid-19 crisis and faces a rocky future. He also pointed to the recent action in bankrupt car rental company Hertz, as well as Carnival Corp. Hertz’s stock was up more than 50% to above $3 each Friday, while shares of the cruise line Carnival were up about 12% in the premarket.
“Carnival’s not about to merge with Royal Caribbean that I know of, and you can’t really have any more consolidation in the airlines,” Cramer said. “But it doesn’t matter. Look, I could stand on my head until I’m blue and say, ‘Listen, please don’t do this. Wait til 9:30 a.m. The stocks won’t be up. Don’t bid them up.'”
“You’re going to be able to get them lower” if you waited, Cramer said. “But if your job and your goal is to foment activity, then you’re fomenting it left and right. And that’s what this is. It’s fomenting.”
“The vast majority of stocks is held by the wealthy, who are and will be weathering the pandemic just fine,” Wolff said. “They will continue to save and invest their money in the market, which will buoy up the value of stocks.”
Meanwhile, many Americans will be financially devastated by this recession.
Just look at what happened in the 2008 financial crisis: Between 2007 and 2010, the median U.S. household’s net worth sank by more than 40%, according to calculations by Wolff. “And it still hasn’t recovered,” he said.
Indeed, the median U.S. household had a net worth of $78,000 in 2016. That’s down from $119,000 in 2007.
The coronavirus recession will trigger another collapse in wealth for middle-class families, while the rich just get richer, Wolff said.
That’s in large part because of who’s invested in the stock market, one of the most powerful engines for wealth accumulation in the U.S. A $100,000 investment in the S&P 500 at the end of 2007 would be worth around $265,000 today, according to data provided by Morningstar Direct.
Here’s who benefits, and who misses out, when the market goes up.
(The calculations are based on data from 2016, the most recent year for which it was available.)