Business

PARIS — Automakers Renault, Nissan and Mitsubishi may unveil next week a new strategic plan to boost synergies and repair their troubled alliance as the coronavirus pandemic lashes the industry.

      The three announced on Tuesday they would hold on May 27 "a joint press conference regarding the progress in Alliance activities."

      The three announced in January they planned to deepen cooperation as concerns mounted their alliance would split apart, and they could unveil which companies will take the lead in certain technologies or regions in order to cut costs.

      The more than 20-year partnership between Nissan and Renault, based on cross-shareholdings without a joint structure, was built by Carlos Ghosn who held senior roles in both companies.

      Ghosn turned around Nissan's fortunes and then helped build the world's largest automotive group with the addition of Mitsubishi.

      But the alliance was pushed to the brink following Ghosn's shock arrest in Tokyo in November 2018 on charges of financial misconduct, including under-reporting millions of dollars in salary.

      The fortunes of all three automakers flagged even before the coronavirus pandemic, which has caused sales to plunge as governments forced citizens to stay at home to slow the spread of the virus.

      The day following the announcement, Nissan plans to unveil restructuring measures along with results for its 2019-2020 fiscal year that are expected to show the automaker suffered a loss.

      Then it is Renault's turn on Friday, with the automaker having already said in February it aimed to achieve two billion euros ($2.2 billion) in savings over three years and did not exclude closing factories.

      Renault registered its first loss in more than a decade last year, its credit rating has been downgraded into junk territory by Standard and Poor's, and it is in line to receive a five billion euro loan backed by the French state to help it overcome the crisis.

      Ghosn, who denies the financial misconduct charges, fled to Lebanon after being released from a Japanese jail and is being pursued by both Renault and Nissan on civil charges, while French prosecutors are also looking into whether he wrongly obtained use of the Palace of Versailles for his lavish 2016 wedding.

NEW YORK — Booming demand for groceries and essential items lifted Walmart's first-quarter profits, even as the company struggled during the coronavirus crisis to replenish key items like toilet paper and cleaning supplies, the company said Tuesday.

      "Our supply chain is amongst the most capable in the world, but in this environment we have stretched it," said Walmart CEO Doug McMillon, who estimated that US inventories were down about eight per cent at the end of the period.

      "Job number one in the US is to get back in stock," McMillon said on a conference call with analysts.

      Walmart's e-commerce business surged a staggering 74 per cent in the quarter ending April 30, with home-bound customers opting for grocery delivery at home or for click-and-pickup options at stores. 

      This included an influx of new customers drawn to Walmart's broad product slate, many of whom have become repeat customers, executives said. 

      Shares rose following the results, which topped analyst expectations despite higher costs connected to the COVID-19 crisis such as bonuses for hourly workers.

      Run on bandanas, sewing machines 

      Profits rose 3.9 per cent to $4.0 billion on an 8.6 per cent increase in revenues to $134.6 billion.

      Walmart hired 235,000 workers during the quarter in the United States, the majority on a temporary basis to boost its stores and supply chain, McMillon said.

      Walmart said the COVID-19 crisis led to $900 million in additional costs, including spending to equip staff with safety masks and sneeze guards at checkout stations and to launch or expand programs such as curbside pickup and mail-to-home service for pharmacy sales.

      Chief Financial Officer Brett Biggs expects expenses to be comparable in the second quarter, saying "there's going to be some expenses that carry on probably for some time."

      Some items such as cleaning supplies are still below targeted levels, although the company has replenished in some categories, executives said.

      Prices for meat have also increased due to the temporary shutdown of some US slaughterhouses, although that pressure may ease as the plants are brought back on line.

      After the initial run on household staples, Walmart saw consumers throng to sometimes unlikely items that have taken off in the social distancing era.

      These include adult bicycles for parents to accompany kids on rides; bandanas and sewing machines for homespun face masks; and supplies for working at home, such as office chairs and laptops.

      The company said it was discontinuing Jet.com, which it acquired in 2016 as Walmart was building up its online sales business. The move reflects the "continued strength of the Walmart.com brand," Walmart said. 

      The retail giant joined the large number of publicly-traded companies to withdraw its annual profit forecast, citing "significant uncertainty" on the duration of the COVID-19 crisis, its effect on consumer confidence and the cadence and duration of government emergency payments to consumers.

      Neil Saunders, managing director of GlobalData Retail, said the results compared favourably to those of rival Amazon, which also experienced huge revenue growth, but was hit more significantly by higher costs connected to COVID-19.

      "That Walmart has outperformed Amazon, at least in growth terms, underlines both the deficiencies of Amazon in grocery -- which generated the bulk of sales this quarter -- and Walmart's growing power in the segment," Saunders said. 

      "Having a wide range of fulfilment options, including delivery to home, collection from store -- and by using stores for fulfilment -- allowed Walmart to ramp up capacity in a way that many other players struggled to do."

      Shares rose 2.1 per cent to $130.33 in early trade.

HONG KONG — Stock markets rose on Monday as a further easing of lockdowns around the world offset another round of data highlighting the sharp economic pain being inflicted by the novel coronavirus.

      Traders also looked past a warning from the head of the Federal Reserve that a full recovery would likely not come until next year, and a vaccine would be needed to get things back to normal.

      With infection and death rates falling in some of the worst-hit countries, governments are slowly allowing businesses to re-open and people to venture out again, with top-tier football returning in Germany -- albeit in empty stadiums.

      California's governor said the state was 75 per cent up and running, New York is also lifting the shutters in some regions, and Apple said almost 100 of its stores were now open.

      "With the worst of the pandemic likely behind us, central bank-supported equity markets are unlikely to re-test their lows," said Seema Shah at Principal Global Investors.

      But she added that "while reopening momentum may well carry risk assets a bit higher over the near term, the tepid economic recovery and deep uncertainty over the virus outlook argue against a pivot to more risk-on positioning".

      Tokyo ended 0.5 per cent higher, Hong Kong gained 0.6 per cent and Shanghai closed 0.2 per cent up.

      Sydney jumped more than one per cent, Singapore added 0.9 per cent and Seoul was 0.5 per cent higher, while there were also gains in Wellington, Bangkok and Jakarta.

      But Manila dropped more than one per cent and Mumbai shed almost three per cent after the Indian government extended its lockdown until May 31.

      In early trade, London rose two per cent, Frankfurt jumped 2.2 per cent and Paris climbed 1.8 per cent.

      "Good news for the market and the economy as a whole is that businesses worldwide are reopening, albeit in fits and starts," said AxiCorp's Stephen Innes.

      "While restaurants are opening at minimal capacity and mall traffic remains depressed, traffic congestion is beginning to tick significantly higher, suggesting that people feel confident in leaving their homes.

      "Indeed, this is huge as the global recovery will fall 100 per cent on the back of consumer confidence."

       Short downturn 

      The gains come despite a flurry of downbeat economic data, including Monday's news that Japan had fallen into its first recession since 2015. 

      While the January-March contraction was not as bad as expected, observers warned the current quarter would likely be much worse.

      That followed a warning from Fed boss Jerome Powell that the US economy could "easily" collapse 20-30 per cent this quarter, and unemployment could peak at 20 to 25 per cent -- although he added "it should be a much shorter downturn than you would associate with the 1930s" during the Great Depression.

      "Market reaction to these dire data releases was short lived, suggesting investors are now placing more value on forward looking indicators rather than real economic prints, which we all know have been negatively impacted by containment measures against COVID-19," said Rodrigo Catril at National Australia Bank.

      Still, uncertainty over the economic outlook continues to play in the background, while there are also concerns about brewing tensions between China and the United States, which notched a little higher at the weekend when Washington ramped up sanctions on Huawei by cutting it off from global chipmakers.

      Beijing responded by saying it would take "necessary measures" to protect the company and others.

      OANDA analyst Jeffrey Halley said: "If Washington DC's intent to escalate trade issues has markets nervous, it is being trumped by the increasing pace of lockdown reopenings around the world, and the expected follow-on uptick in economic activity."

      The reopenings continue to boost oil prices, with WTI -- which last month fell below zero -- breaking $30 for the first time since mid-March.

      "There's been a very sharp reaction by US producers in cutting output and that's gone a long way in alleviating the stress on the system," said Daniel Hynes of ANZ, adding he did not see prices going back below $20 unless there was another mass wave of infections.

SHENZHEN, China — Huawei on Monday assailed the latest US move to cut it off from semiconductor suppliers as a "pernicious" attack that will put the Chinese technology giant in "survival" mode and sow chaos in the global technology sector.

      The Commerce Department said on Friday it was tightening sanctions on Huawei -- seen by Washington as a security risk -- to include denying it access to semiconductor designs developed using US software and technology.

      "The decision was arbitrary and pernicious and threatens to undermine the entire (technology) industry worldwide," Huawei said in a statement.

      Huawei has largely weathered an escalating 18-month campaign by the Trump administration to isolate it internationally.

      But it "will inevitably be affected" by the new American salvo, rotating chairman Guo Ping said at an annual summit of technology analysts that Huawei organises at its headquarters in the southern Chinese city of Shenzhen.

      Survival mode 

      "Survival is the key for us now," Guo said, issuing an appeal to Huawei's suppliers and customers worldwide to stand with it.

      He declined to give a detailed forecast of the impact when asked by journalists.

      But the Huawei statement said the US decision "will have a serious impact on a wide number of global industries" by creating uncertainty in the chip sector and technology supply chains.

      US officials said Huawei had been circumventing sanctions by obtaining chips and components that are produced around the world based on American technology.

      Washington last year said it would blacklist Huawei from the US market and from buying crucial American components, though it has extended a series of reprieves to allow US businesses that work with Huawei time to adjust.

      On Friday, it extended this reprieve by another 90 days but said these exceptions are not likely to be extended further.

      Commerce Secretary Wilbur Ross had said that even as Huawei seeks to develop its own components in response to US sanctions, "that effort is still dependent on US technologies."

      US officials accuse Huawei, the world's biggest supplier of telecom network equipment and number two smartphone manufacturer, of stealing American trade secrets and say it could allow Beijing to spy on global telecoms traffic.

      Huawei strenuously denies the charges, saying the United States has never provided any proof of a security threat.

      The sanctions against the company have been a key driver of heightened US-China trade tensions.

      China's Ministry of Commerce on Sunday warned it would take unspecified "necessary measures" to protect Huawei.

      US officials said the new rules would have a 120-day grace period. 

      A senior State Department official said the move would not necessarily deny Huawei access to these products but require a license allowing Washington to keep track of the technology.

       US trying to 'crush' rivals 

      Huawei is poised to become a global leader in the coming advent of fifth-generation, or 5G, wireless networks and Washington has lobbied other countries to shun Huawei gear over potential security risks.

      China's government has poured money into developing home-grown semiconductors -- the building blocks of tech -- but it still lags behind the US, Japan and South Korea, which analysts say is a glaring Achilles heel for Chinese companies like Huawei.

      Huawei said the US was "leveraging its own technological strengths to crush" foreign companies.

      The resulting disruptions to supply chains will ultimately harm US interests, it added.

      Declaring Huawei was "taking the lead" in global tech, Guo suggested that Washington's pressure was fuelled by fear that the United States was falling behind technologically.

      "Any other country or company with more advanced technologies may put US supremacy at risk," he told the industry conference. 

SAN FRANCISCO — Facebook said on Friday it had acquired the animated graphics startup GIPHY and would integrate the company in its Instagram visual social network.

      Terms of the deal were not disclosed, but the news site Axios said the California-based tech giant was paying $400 million.

      GIPHY is a platform and search engine for "stickers" and other products using the graphics interchange format or GIFs.

      "GIPHY, a leader in visual expression and creation, is joining the Facebook company today as part of the Instagram team," Facebook said in a statement.

      "GIPHY makes everyday conversations more entertaining, and so we plan to further integrate their GIF library into Instagram and our other apps so that people can find just the right way to express themselves."

      GIPHY was created in 2013 with a simple goal in mind. That is “to make communication more fun," a blog from the GIPHY team said.

      "That's why we're thrilled to announce that GIPHY has been acquired by Facebook and is joining the team at Instagram.

      "Instagram has revolutionised self-expression. More than one billion people use Instagram to communicate how they're feeling and what they're passionate about -- we can't wait to help those people become even more animated."

      The news comes with social networks seeing usage grow as a result of billions of people sheltering in place due to coronavirus lockdowns.

      At the same time, tech critics have warned about the pandemic boosting the power of top Silicon Valley firms, and some lawmakers have called for a moratorium on mergers and acquisitions involving the large companies.

      Facebook said it has partnered with GIPHY for years and that the company would continue to operate its library.

      "We're looking forward to investing further in its technology and relationships with content," said Instagram vice president of product Vishal Shah.

      "GIFs and stickers give people meaningful and creative ways to express themselves. We see the positivity in how people use GIPHY in our products today, and we know that bringing the GIPHY team's creativity and talent together with ours will only accelerate how people use visual communication to connect with each other."

BEIJING — China on Sunday warned it would take "necessary measures" to protect Huawei and other firms after the United States announced new restrictions on the Chinese company purchases of semiconductor technology.

      Washington on Friday ramped up sanctions on the company at the centre of US spying allegations, cutting Huawei off from global chipmakers.

      "China will take all necessary measures to resolutely protect the legitimate rights and interests of Chinese firms," the Ministry of Commerce said on Sunday.

      "China urges the US to immediately cease its wrong actions," the ministry added, calling the restrictions a "serious threat to global supply chains."

      The threat of retaliation comes a day after Beijing condemned the US move as "unreasonable suppression of Huawei and Chinese enterprises."

      The US Commerce Department said on Friday its new sanctions would "narrowly and strategically target Huawei's acquisition of semiconductors that are the direct product of certain US software and technology."

      US officials have repeatedly accused the Chinese technology giant of stealing American trade secrets and aiding China's espionage efforts, ramping up tensions with the rival superpower while both sides were involved in a long-simmering trade war. 

      As a result, Huawei has increasingly relied on domestically manufactured technology, but the latest rules will also ban foreign firms that use US technology from shipping semiconductors to Huawei without US permission.

      The new restrictions will cut off Huawei's access to one of its major suppliers, the Taiwanese chipmaker TSMC, which also manufactures chips for Apple and other tech firms. 

      Huawei has not yet responded to requests for comment.

BEIRUT — Lebanon, whose currency has been pegged to the dollar for 23 years, is ready to float the pound only after it secures billions in aid, Finance Minister Ghazi Wazni said on Friday.

      Speaking to AFP after talks started on Wednesday with the International Monetary Fund (IMF) on a plan to rescue Lebanon's free falling economy, he also said a restructuring of the banking sector would entail halving the number of banks in the country.

      A hard currency crunch in recent months has strained the official fixed rate of 1,507 to the dollar, with the pound losing more than half of its value to fetch well over 4,000 on the black market.

      "The IMF always asks for the freeing of the pound's exchange rate," Wazni said.

      But "we need to change the stabilisation policy to one of a flexible exchange rate in a first stage and for the forseeable future," he said, referring to an initial managed flotation.

      "When we receive financial support from abroad, we will transition to floatation" according to the market, he said.

      "The Lebanese government has asked for a transitional period to pass through a flexible exchange rate before we reach floatation," he added.

      Wazni said the first phase would involve "a gradual increase of the exchange rate to the dollar," in coordination with the central bank.

      He said this was necessary because the government feared "huge deterioration of the pound exchange rate" otherwise.

      Lebanon, which was hit last autumn by unprecedented protests, asked the IMF for financial assistance on May 1 after laying out a much-awaited financial rescue plan.

      That plan aims to drum up billions of dollars in aid, reduce the deficit, restructure a colossal debt, and reorganise an oversized banking sector.

      Wazni said the restructuring would be done "step by step".

      "Lebanon counts 49 commercial banks and it is normal for that number to decrease to around half of that in the next stage," he said.

      Lebanon is in the grips of a severe liquidity crunch, with depositors unable to make transfers abroad or withdraw dollars.

      The Mediterranean nation is one of the most indebted countries worldwide with a debt equivalent to 170 per cent of its gross domestic product. 

      It defaulted on a repayment for the first time ever in March.

NEW YORK — US department store JCPenney, which has not turned a profit since 2011, on Friday became the latest American retailer to be pushed into bankruptcy by the coronavirus pandemic.

      The iconic business said it was filing for Chapter 11, a mechanism which allows a company that can no longer pay its debts to restructure.

      The group, based in Plano, Texas, will close some stores across the US as a result, it said in a statement. 

      It has $500 million in cash and has received financing commitments of $900 million from lenders, it added. 

      The company missed a debt interest payment in April, fueling rumors of an impending bankruptcy. 

      "The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country," chief executive officer Jill Soltau in a statement. 

      "The American retail industry has experienced a profoundly different new reality, requiring JCPenney to make difficult decisions in running our business," she continued. 

      "Until this pandemic struck, we had made significant progress rebuilding our company... While we had been working in parallel on options to strengthen our balance sheet and extend our financial runway, the closure of our stores due to the pandemic necessitated a more fulsome review to include the elimination of outstanding debt," Soltau said. 

      Founded in 1902 in Wyoming by James Cash Penney, the chain survived the Great Depression and established itself in the second half of the 20th century as an anchor of giant suburban shopping malls, then symbols of American consumerism. 

      But -- like clothing company J.Crew and department store Nieman Marcus, which have also filed for bankruptcy since the pandemic began -- it has struggled for years.

      Its decline began a decade ago with the advent of online shopping and the rise of Amazon as well as trendy, cheap chains like H&M and Zara. 

      In February, JCPenney had about 90,000 employees and nearly 850 stores in the United States, according to documents provided to the US Securities and Exchange Commission (SEC). 

      The company plans to reduce its number of stores in stages as part of its comprehensive restructuring plan. 

      It reported sales of $10.7 billion in 2019, a decrease of more than $7 billion in 10 years. 

NEW YORK — Global stocks were mostly firm on Friday as investors shrugged off weak economic data from Germany and the United States and focused on the easing of lockdowns rather than on fears of another coronavirus wave.

Equity investors in Europe went fishing for bargains a day after stocks tanked on news of spiking jobless claims in the United States.

"After two down days for the markets, the week is ending on a more positive note for equities," said AJ Bell investment director Russ Mould.

The German economy shrank by 2.2 per cent in the first quarter of 2020, federal statistics agency Destatis said, calling the quarter-on-quarter decline "the worst since the global financial crisis" in 2009.

The agency also revised its gross domestic product figure for the final quarter of 2019 from zero growth to a contraction of 0.1 per cent. That means Germany has experienced two consecutive quarters of decline, meeting the technical definition of a recession.

In spite of that, the DAX 30 finished up 1.2 per cent, with analysts viewing Germany as better situated than other eurozone members.

The downturn "was significantly smaller than the average for the eurozone and less than half the impact seen in the countries that saw the harshest lockdowns such as France and Spain," Oxford Economics said in a note.

On Wall Street, stocks were initially pressured following weak retail sales data and US actions against Chinese telecom giant Huawei that escalated Washington's tensions with Beijing.

But the Federal Reserve's muscular response to the coronavirus crisis has reassured equity investors, said Gregori Volokhine of Meeschaert Financial Services.

These programmes include vehicles to purchase corporate debt, which means "solvent borrowers have a backup and that lifts their shares," he said.

In one bright spot for the US, the University of Michigan monthly survey showed consumer sentiment improved slightly in May, ticking up to 73.7 per cent from 71.8 per cent in April.

But Oxford Economics warned the bounce was "fragile," according to a note Friday. 

"Whether it can be sustained will depend in part on whether the government enacts further stimulus measures to help households and whether the relaxation of restrictions results in a resurgence in COVID-19 infections," the note said.

SAN FRANCISCO — Authorities in California say Tesla's only assembly plant in the United States could open as early as next week, albeit with enhanced safety measures because of the pandemic, after a very public anti-lockdown tirade by Elon Musk with support from President Donald Trump. 

      In a series of tweets on Wednesday, authorities in Alameda County, which includes the city of Fremont, home to the plant, said they had met with Tesla representatives, reviewed the electric carmaker's safety plans for the factory and made some extra recommendations.

      "If Tesla's Prevention and Control Plan includes these updates, and the public health indicators remain stable or improve, we have agreed that Tesla can begin to augment their Minimum Business Operations this week in preparation for possible reopening as soon as next week," the county health agency said.

      Musk said on Monday the company was resuming production, defying authorities and escalating a feud over the Pacific state's pandemic shutdown.

      "I will be on the line with everyone else," Musk tweeted. "If anyone is arrested, I ask that it only be me."

      Musk's move comes amid rising disputes over the pace of easing the lockdowns imposed by states to contain the deadly coronavirus outbreak.

      The new statement from the county said police in Fremont would be on hand to verify that Tesla is observing social distancing and that other agreed upon safety measures for workers are being upheld.

      Tesla did not immediately respond to the announcement.

      Musk has been raging on Twitter for days about his unsuccessful efforts to restart production, claiming the ban violates "our Constitutional freedoms & just plain common sense!"

      The US administration is pushing a reopening of the world's largest economy, battered by weeks of lockdown, even as the daily death toll has generally been rising by 1,000 to 2,500 in recent weeks.

      Trump weighed in Tuesday in support of Musk.

      "California should let Tesla & @elonmusk open the plant, NOW. It can be done Fast & Safely!" Trump said in a tweet.

      Over the weekend, Musk threatened to move Tesla's headquarters and factory out of California as a result of the standoff.