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Captain of the Day Traders - The New York Times

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Seasoned investors have been puzzling at the disconnect between the fragile economy and rapidly rising stock indexes. Wall Street increasingly thinks the rally is driven by retail investors, particularly bored bettors looking for action.

Without sports, some gamblers have turned to stocks, The Times’s Matt Phillips writes. The new investors have helped push the market up, some analysts believe: “There’s zero doubt in my mind that is a factor,” said Julian Emanuel of BTIG.

• It’s not clear how big a factor they are, but sports bets topped $13 billion last year, and even a small set of active traders can move stock prices. Others disagree.

• Many believe retail day traders are behind the surge of Hertz, the bankrupt car rental company. Hertz won permission last week to sell new shares — even though stockholders may be wiped out in the Chapter 11 case.

The traders’ patron saint is Dave Portnoy, the founder of the rowdy — and controversial — sports site Barstool, who has refashioned himself into a sort of Jim Cramer for the pandemic era. Mr. Portnoy, who made millions by selling a Barstool stake to the gambling company Penn National, live streams his profanity-laced trading sessions to millions.

• He boasts that he’s outperforming Warren Buffett, and declared on Twitter last week, “I’m the captain now.” (His track record is mixed.)

• One apparent link between Mr. Portnoy and market moves: Penn National shares are up more than 500 percent since mid-March.

Mr. Portnoy has plenty of critics. Peter Cecchini, the former chief markets strategist for Cantor Fitzgerald, recently called “the Portnoy Top” for the market, describing the trader as “emblematic of just how emotional and extreme equity markets are now.” And Bloomberg notes that stock valuations remain near two-decade highs. “It’s definitely the sign of a bubble,” Matt Maley of Miller Tabak said.

Credit...Jumana El Heloueh/Reuters

BP plans to write down as much as $17.5 billion of its business, Bloomberg reports. The British oil giant said that the pandemic had not only sapped demand for energy, but may also speed up a shift to greener technologies.

Private equity may not be worth the billions it collects in fees, according to a new analysis by Oxford University. The return for big public pension funds’ private equity investments was about 11 percent, net of fees, over the past decade. After some $230 billion in fees, that’s about the same as public markets.

SoftBank’s circular investing strategy raised eyebrows. The tech conglomerate reportedly invested $500 million in Credit Suisse funds that had invested in the debt of start-ups backed by SoftBank’s Vision Fund, The Financial Times reports.

Quibi’s struggles are straining its top executives’ ties. The streaming service’s founder, Jeffrey Katzenberg, and its C.E.O., Meg Whitman, differ on how to respond to the company’s troubles, The Wall Street Journal reports.

The Major League Baseball players union rejected owners’ proposal for restarting play. The move deepens a dispute over how to bring baseball back, and players are essentially daring the league to force a shortened season on them.

Credit...Thomas Peter/Reuters

Global markets are sharply lower today — and U.S. stocks look set to drop at the open — amid fears of a resurgence in coronavirus infections.

A spate of cases in Beijing led to the closure of some food markets and schools over the weekend, which the authorities described as a “wartime” action. Positive tests of passengers on a flight from Dhaka, Bangladesh, to Guangzhou triggered a “circuit breaker” halting that route for a month.

Several U.S. states have reported spikes in cases. As of Saturday, the daily count was climbing in 22 states, including Arizona, Florida and Texas, according to a Times analysis. Health experts say contact tracing is the best strategy to contain outbreaks, in the absence of reimposing stay-at-home orders. But many efforts to track infection trends fall short.

Europe is opening up to foreign tourists, with border restrictions lifting across the continent this week. President Emmanuel Macron of France declared a “first victory” in a national address on Sunday, accelerating measures like lifting restrictions on restaurants, schools and nursing homes.

Michelle Leder is the founder of the S.E.C. filing site footnoted*. Here, she recounts warnings of a second wave of infections appearing in company statements. You can follow her on Twitter at @footnoted.

On Sunday, Gov. Andrew Cuomo of New York warned about a “second wave” of Covid-19 cases, pointedly chastising people flouting the state’s reopening rules. He isn’t the only one talking about a resurgence of infections: Dozens of companies have issued warnings in regulatory filings.

Among them is the retail giant Costco, which in its most recent quarterly filing tweaked the language in its coronavirus risk factor to include “additional periods of increases or spikes in the number of Covid-19 cases, future mutations or related strains of the virus in areas in which we operate.”

Retailers like Aaron’s, Dick’s Sporting Goods, Home Depot, Macy’s and Signet Jewelers have added similar warnings in their filings, but other companies have also begun to account for a potential surge in cases. The communications company Keysight Technologies recently warned about “a second wave of infection resulting in additional government mandated shutdowns.” And Deckers Outdoors said in its latest annual report that “even the threat or perception” of a second wave could have a material impact on its business.

What makes for a second wave is open to interpretation, of course, and there is unlikely to be a formal announcement if one starts. News outlets reported over the weekend that we may already be at the start of a new surge in Covid-19 cases — or perhaps still in the midst of the first wave.

But one thing seems clear: Because so many companies didn’t anticipate the severity of the initial outbreak, they’re more sensitive to signs of a second one.

Credit...Angela Weiss/Agence France-Presse — Getty Images

Online shopping has grown during the pandemic, but Amazon’s U.S. market share has fallen, suggesting that Americans are ordering elsewhere more often. Shira Ovide, who writes the On Tech newsletter, tried to make sense of the latest numbers.

Amazon’s market share bottomed out in April, and it has risen a bit in recent weeks, according to Rakuten, which tracks the emailed purchase receipts of more than one million Americans. But Amazon hasn’t returned to the market share it held early this year.

What’s going on? Shira shared her thoughts with DealBook:

No one should weep for Amazon. It’s still by far the dominant online shopping destination, even as people spend more of their e-commerce budgets with Instacart, Target, Home Depot and Best Buy, the Rakuten figures show. Notably, eBay and Kroger barely gained online market share as more people shopped from their sofas.

The big question is what happens next. Amazon is trying to get back to normal after its early troubles keeping some high-demand merchandise in stock. It’s possible it will easily grab back all the market share it lost — and then some.

If you haven’t already, sign up for the On Tech newsletter, your daily guide to how technology is transforming our lives.

Credit...Kevin Lamarque/Reuters

🗣 Jay Powell, the Fed chairman, discusses the central bank’s latest economic report to committees at the Senate (Tuesday) and House (Wednesday). His downbeat outlook spooked markets last week, and he will most likely hint that lawmakers should be as aggressive as the Fed in propping up the U.S. economy.

🏦 In other central banking news, the Bank of Japan isn’t expected to unveil any new stimulus measures at its policymaking meeting on Tuesday, while the Bank of England will probably announce on Thursday a boost to its bond-buying program.

The Coronavirus Outbreak

  • Frequently Asked Questions and Advice

    Updated June 12, 2020

    • 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.

    • Will protests set off a second viral wave of coronavirus?

      Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.

    • How do we start exercising again without hurting ourselves after months of lockdown?

      Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.

    • My state is reopening. Is it safe to go out?

      States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • How can I protect myself while flying?

      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.)

    • Should I wear a mask?

      The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.

    • 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.

📈 On Tuesday, data for U.S. retail sales and industrial production are expected to show increases in May, following steep declines in April.

📅 Friday is Juneteenth, the annual holiday celebrating the end of slavery in the U.S. It has gained new resonance during the protests against racial discrimination and police brutality. Several companies, including Nike and Twitter, have made it an official company holiday.

💵 We’re headed into a quiet stretch for company earnings, with this week’s noteworthy reports coming from Oracle on Tuesday and Kroger on Thursday.

Deals

• Plans to merge Volvo with its biggest backer, the Chinese car company Geely, face scrutiny as Swedish policymakers take a tougher stance on China. (NYT)

• European telecom companies are preparing a wave of mergers after an E.U. court rejected efforts to limit such consolidation. (FT)

• The hedge fund investor Kyle Bass made millions betting against a Texas real-estate lender. Now, that investment is reportedly under investigation. (WSJ)

Politics and policy

• Larry Kudlow, the White House’s top economic adviser, recommended replacing coronavirus-related unemployment benefits with return-to-work bonuses. (WSJ)

Tech

• Amazon’s Ring home-security division has signed 29 new contracts with local police departments since the killing of George Floyd. (Protocol)

Best of the rest

• How hedge funds are using remote-working arrangements to avoid paying a New York City tax. (WSJ)

• Rethinking the logic of pandemic layoffs. (NYT Opinion)

• Relatedly, Mark Cuban urged C.E.O.s to rethink their pay in light of pandemic-related economic troubles. (@mcuban)

We’d love your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.

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