• Walmart makes a huge change to its stores because of the coronavirus pandemic
    Yahoo Finance

    Walmart makes a huge change to its stores because of the coronavirus pandemic

    Thank you Walmart for finally introducing single-direction aisles to your stories — it makes a ton of sense.

  • Walmart deploys temperature checks at all locations, offers workers gloves and masks
    Yahoo Finance

    Walmart deploys temperature checks at all locations, offers workers gloves and masks

    'Any associate with a temperature of 100.0 degrees will be paid for reporting to work and asked to return home and seek medical treatment if necessary,' CEO John Furner said.

  • Trump Diplomacy Fails to Revive Oil Prices After Worst Quarter
    Bloomberg

    Trump Diplomacy Fails to Revive Oil Prices After Worst Quarter

    (Bloomberg) -- Oil was rooted near $20 a barrel as President Donald Trump’s pledge to meet with feuding producers Saudi Arabia and Russia to support the market failed to give prices a significant boost after their worst ever quarter.Futures crashed 66% in the first three months of the year as the coronavirus destroyed demand and the world’s biggest producers embarked on a catastrophic supply free-for-all. Prices hardly budged on Wednesday even after Trump said he discussed the collapse with his Russian and Saudi counterparts, adding that Moscow and the kingdom would “get together” to seek a solution. Any agreement to cut output is likely too late and would fall short of the loss in consumption, according to Goldman Sachs Group Inc.The outlook for oil looks terrible, with oil facing a potentially apocalyptic April, according to top industry analysts. Iraq has pledged to boost its output this month, while U.S. industry data is signaling the biggest weekly increase in American stockpiles since 2017.“The possibility of negotiations is offering a rare ray of light to a heavily beleaguered market,” said Howie Lee, a Singapore-based analyst at Oversea-Chinese Banking Corp. “There are too many uncertainties involved to determine how strong a driver this would be, but it would probably take more than output cuts to lift prices back to pre-crash levels.”The physical oil market continued to show deepening strain. Dated Brent, the benchmark for two-third’s of the world’s real oil supply, was assessed at $17.675 on Tuesday, down 11.5 cents from Monday when it was already the lowest price since 2002. Across major shale regions in Texas and North Dakota, oil has dropped below $10 a barrel, while some lesser known grades have posted negative prices.While Trump said he would join in a meeting with the former OPEC+ allies “if need be,” the first wave of crude from Saudi Arabia is already on its way toward Europe and the U.S. as it escalates its price war with Russia. The flood comes at a precarious time for the market, with daily oil consumption possibly dropping by as much as 22 million barrels in April from a year earlier as lockdowns across the world due to the virus outbreak dents demand.See also: Trump May Let Drillers Stash a Glut of Oil in Federal StorageWhile an output agreement between the U.S. and OPEC+ including Canada would be difficult to reach, signs of policy discussions are multiplying and an outcome should no longer be dismissed, according to Goldman. The bank predicts the crash in consumption will create a surplus of 14 million barrels a day in the second quarter, piling pressure on swelling storage tanks.West Texas Intermediate for May delivery lost 24 cents, or 1.2%, to $20.24 a barrel on the New York Mercantile Exchange as of 1:47 p.m. Singapore time after swinging between gains and losses earlier. The contract rose 1.9% on Tuesday to settle at $20.48. Prices declined 54% last month. Brent crude for June settlement fell 2.9% to $25.60 after dropping 7 cents in the previous session.The American Petroleum Institute reported U.S. crude stockpiles ballooned by 10.5 million barrels last week, according to people familiar with the data. If government figures Wednesday confirm the build, it would be the largest nationwide gain since February 2017. A Bloomberg survey of analysts is predicting a 3.3-million barrel increase.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Trump Says World’s Top Oil Producers to Meet on Market Crash
    Bloomberg

    Trump Says World’s Top Oil Producers to Meet on Market Crash

    (Bloomberg) -- President Donald Trump said the U.S. would meet with Saudi Arabia and Russia with the goal of staunching an historic plunge in oil prices.Trump, speaking at the White House Tuesday, said he’s raised the issue with Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman. “They’re going to get together and we’re all going to get together and we’re going to see what we can do,” he said. “The two countries are discussing it. And I am joining at the appropriate time, if need be.”If it happens, it would be the first meeting between Saudi Arabia and Russia since the collapse of the OPEC+ coalition in early March. Since then, both countries have vowed to flood the market with millions of excess barrels of oil in an acrimonious battle over market share. Despite the president’s remarks, neither nation has backed down from their price war, with Saudi Arabia having already loaded several supertankers with crude headed for Europe.Trump’s intervention comes as April shapes up to be a calamitous month for the oil market. Saudi Arabia plans to boost its supply to a record 12.3 million barrels a day, up from about 9.7 million in February. At the same time, fuel consumption is poised to plummet by 15 million to 22 million barrels as coronavirus-related lockdowns halt transit in much of the world.U.S. Energy Secretary Dan Brouillette and Russian Energy Minister Alexander Novak had a “productive discussion” by phone on Tuesday and agreed to “continue dialogue among major energy producers and consumers, including through the G20,” the Department of Energy said in a statement. The agency didn’t detail any steps the nations are considering to stem the downturn.Worst QuarterOil demand has been so battered by government lockdowns to stop the spread of the coronavirus that any conceivable oil production cut agreement between the U.S., Canada, Russia and OPEC members would still fall well short of what’s needed to shore up the market, Goldman Sachs Group Inc. analysts including Damien Courvalin said in a note dated March 31.The global benchmark crude has already plunged to record lows, completing the worst quarter in history on Tuesday. Brent for June delivery continued those declines Wednesday, falling 2% to $25.82 a barrel at 6:10 a.m. London time.“It’s not even feasible what’s going on,” Trump said, adding that the price meltdown was harming the oil industry. “You don’t want to lose an industry -- you’re going to lose an industry over it.”Still, he celebrated the low gasoline prices brought about by the market downturn, calling them “the greatest tax cut we’ve ever given.”“People are going to be paying 99 cents for a gallon of gasoline,” he said. “It’s incredible in a lot of ways.”(Updates with oil prices in 7th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Which Bills Will You Stop Paying First?

    (Bloomberg Opinion) -- What’s more important: a roof over your head or a car in your driveway? With unemployment rising as the coronavirus shuts down parts of the U.S. economy, the decision made by borrowers as their payments come due will determine how securities backed by auto loans and leases perform.Families will start to struggle as Covid-19 deepens its grip and job losses rise. Of the $14 trillion of consumer debt, mortgages account for $9 trillion and cars $1.3 trillion; however, more Americans have auto loans. When social distancing becomes the norm, cars seem more likely to fall down the priority list behind payments for homes, Netflix bills, phones and credit cards. With lockdowns spreading, many people aren’t going anywhere right now. That means the default risk is rising. Rating agencies are reassessing portfolios of loans and leases linked to asset-backed securities, or ABS, using loss levels from the 2008 financial crisis to calculate risk.When these car-related debts start going bad, the impact on the bonds they back is severe. The spread of auto ABS over Treasuries widened sharply in recent weeks, more so than on card-backed debt. The current dislocations in credit markets show that while auto-loan defaults may not be the center of a financial crisis like mortgage-backed securities, they could well set off wider panic as consumer confidence crumbles, household balance sheets deteriorate and big issuers – car companies – struggle.This market has grown rapidly since the last financial crisis. Already this year, almost $30 billion of auto asset-backed bonds have been issued in the U.S., following $118 billion in 2019. As of the third quarter last year, $250 billion was outstanding. At year-end, annualized loss rates on subprime auto ABS were around 9%, close to financial-crisis levels, while average interest rates have been even higher at 19%, according to Goldman Sachs Group Inc.Two factors will determine how these bonds perform: unemployment and the value of used cars, because cash flows come directly from borrowers. In the aftermath of a natural disaster, used-car prices rise because property has been damaged or destroyed. In this crisis, they’re likely to fall due to strain on consumer wallets. That reduces the worth of the collateral and lowers the residual value of leases that back some of these securities. Cars are, after all, a depreciating asset.What does this mean for the securitized bonds? Lenders and originators package pools of loans and leases in a special-purpose vehicle that then issues debt to investors. The interest and principal payments are structured into classes. Broadly, the more senior tiers have first claim on all cash flows and assets, while the junior take the first hit on losses but have higher yields. The lowest tranche, also known as the equity or first-loss pieces, is typically held by the issuer: auto companies’ financing arms and other lenders.  When loans default and the asset pool can’t make up for the payments due to investors, the holders of the lower tranches absorb the loss.It will be yet another blow for the finance companies of already-struggling carmakers that issue ABS to finance leases and sales. They’ll take the first hit through the equity. Funding costs will surge and in turn squeeze sales, reminiscent of 2008.(3)As sales showed signs of reaching a plateau last year, auto giants, dealers and finance companies were pushing excessive financing with looser underwriting standards and conditions, such as longer terms and incentives. The weighted average credit score for non-prime loan pool borrowers was 590 last year, lower than 597 in 2008.Household balance sheets were strong overall going into this crisis, but varied greatly across income levels. The bottom 20% of American households are far more leveraged — more than 25% — than the higher income brackets on a debt-to-assets basis. Around a third of auto ABS are typically made up of subprime loans, where the ability to pay drops off sharply and suddenly.That doesn’t bode well. Companies like Ally Financial Inc. have already offered relief packages for consumers and dealers. Payments can be deferred for six months without late fees. New customers will be allowed to defer for three months. The Federal Reserve has brought back a financial crisis-era lending facility that’s meant to support the asset-backed securities market, where auto loans and leases are among the eligible collateral.The troubles will go further: There are other auto sector-related ABS, like those backed by rental cars and dealer-floor financing plans that are even more directly dependent on automakers’ health.Sure, structures have changed since 2008 to help lower the risk for investors on these bonds. But the underlying issues remain the same: consumers’ buying and borrowing behavior.Investors are busy thinking about mortgage-backed securities, given their large size and potentially deeper and more immediate impact on the financial system. But it’s important to consider recent consumer trends: Delinquencies as a portion of outstanding loans have been on the way down for mortgages. They’re rising for autos, especially among subprime borrowers, as are past-due loans. America has always been a nation of drivers and the appeal of cars has a way of pushing consumers to stretch their budgets in a way houses don’t. But the stay-in-place strategies to fight this pandemic may change that calculus in a way investors aren’t prepared for: Driving behavior could change.(1) Unable to secure affordable financing, the financing arms severely curtailed lending and leasing activity. This caused vehicle sales volumes to plummet and hastened the Chapter 11 bankruptcy filings of Chrysler on April 30, 2009, and General Motors Inc. on June 1, 2009, according to S&P Global Ratings.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Oil Posts Worst Quarter Ever While Physical Market Craters
    Bloomberg

    Oil Posts Worst Quarter Ever While Physical Market Craters

    (Bloomberg) -- Oil posted the worst quarter on record after the coronavirus crushed demand and raised fears about overflowing storage tanks amid a price war that has flooded the market with extra supply.Futures in New York edged higher on Tuesday but still ended the quarter down more than 66%. While Brent and West Texas Intermediate futures held above $20 a barrel, the underlying, physical market flashed signs of distress. The gap between paper market trades and real barrels has widened to multi-decade highs in some cases, suggesting financial flows are supporting the futures market.“The prices of the physical barrels are showing a lot more distress than the paper benchmarks,” said Roger Diwan, oil analyst at IHS Markit Ltd.With demand weakening by the day and producers slow to cut output, Dated Brent, the benchmark for about two-thirds of the world’s physical oil, was assessed at $17.79 a barrel on Monday, the lowest since 2002. Across major shale regions in Texas and North Dakota, oil remains below $10 a barrel, while some lesser known grades have posted negative prices.Read: Key U.S. Crude Oil Grade Has Never Been Cheaper in Modern EraU.S. crude stockpiles were said to have ballooned by 10.5 million barrels last week, according to traders citing the American Petroleum Institute report, with a 2.93 million-barrel gain in Cushing, Oklahoma, the delivery point of the U.S. crude futures contract. If confirmed by the U.S. Energy Information Administration data, the nationwide crude build will be the biggest since February 2017. The market was little changed after the report.From shuttering and reduced throughput at refiners from South Africa to Canada, to major consuming countries like India pulling back, the additional oil supply and lower demand has reverberated around the globe. Saudi Arabia is unleashing a flood of oil to Europe and traders expect Aramco to slash prices for Asia further. To make matters worse, space to store the huge oversupply is quickly running out.Goldman Sachs’s Jeff Currie said on Bloomberg TV that even Russia is “extremely vulnerable” to oil storage and infrastructure limits because its fields require thousands of miles of pipelines to get to buyers.Oil tanks around the world could fill in six weeks, a move that will likely force significant production shut-downs, Standard Chartered analysts including Emily Ashford wrote in a report.“Huge inventory builds, potentially exhausting spare storage capacity, will mean that market balance requires an unprecedented output shutdown by producers,” they wrote.Brent futures are signaling a historic glut is emerging. The May contract traded at a discount of $13.66 a barrel to November, a more bearish super-contango than the market saw even in the depths of the 2008-09 global financial crisis. The WTI equivalent discount is at $12.43 a barrel.The pressure on U.S. producers and drillers is growing as the rout has caused firms to cut capital spending budgets, accelerate restructuring and lay off workers. Now, even Texas oil buyers have been asking for large production cuts as crude flows overwhelm pipelines and storage, according to Pioneer Natural Resources Co. Senators are asking President Donald Trump to take action, after he agreed with Russian President Vladimir Putin that current prices do not suit the interest of either country.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Whole Foods Workers Launch Sickout Protest. How Many Isn’t Clear

    (Bloomberg) -- Some workers at Whole Foods Market stores across the U.S. called in sick on Tuesday, part of a coordinated action to demand more sick pay and protections for grocery store employees working through the coronavirus pandemic.It’s unclear how many people participated. An organizer said they didn’t have an estimate, and a Whole Foods spokeswoman didn't provide a tally, but said the strike hadn't disrupted operations.Bloomberg News interviewed workers in five states, from Illinois and Texas to the Eastern Seaboard, who say they joined colleagues calling in sick. They cite as reasons for participating fear of contracting or spreading the coronavirus to family members and disputes with managers about appropriate measure to protect themselves, among other things. The sickout strike is the latest in a string of efforts by employees of businesses that remain open during the pandemic to extract protections and better working conditions from their employers. Workers at Perdue Farms Inc., McDonald’s Corp., and General Electric Co. have protested. Walmart Inc. said this week it was experiencing higher than normal absenteeism among its workforce, but that it was "manageable." On Monday, some employees at Amazon.com Inc.’s Staten Island, New York, warehouse walked off the job to protest the company’s handling of coronavirus cases in the facility.Organizers of the Whole Foods action have circulated a petition signed by more than 10,500 people asking for paid leave for all workers who choose to isolate themselves, health care coverage for part-time employees and funds to cover testing and treatment of sick team members. Whole Foods, which is owned by Amazon, in January stopped providing health care benefits for part-time employees who work less than 30 hours a week. The upscale grocer has rolled out temporary raises of $2 an hour through April, increased overtime compensation, and says employees placed in quarantine or diagnosed with Covid-19 are eligible for two weeks of paid sick leave, policies in place throughout Amazon’s workforce. Rachel Malish, a Whole Foods spokeswoman, on Tuesday pointed to those actions and others the company says it’s taking to safeguard employees. “So far today we have seen no changes to overall absenteeism and we continue to operate all of our stores without interruption,” she said in an emailed statement. “There is no higher priority for us than taking care of our Team Members.” Malish said the critiques from “a small but vocal group” don’t accurately reflect the collective view of the grocer’s 95,000 employees. One Whole Foods worker in the Chicago area who joined the strike on Tuesday said working at the grocer felt like a public service a few weeks ago, when aisles were full of shoppers panic buying. But as business slowed to a more normal level—and the virus spread to communities across the country—the employee no longer thinks coming to work is worth the risk. “It’s really hard for people to stay safe,” the employee said. “Workers are being forced to choose between their safety and the safety of their loved ones and being able to pay their bills.”The worker spoke on the condition of anonymity for fear of retaliation from her employer. Some Whole Foods workers said Amazon’s firing on Monday of Chris Smalls, an organizer of the Amazon walkout in Staten Island, made them reluctant to speak publicly. Amazon says he was dismissed for violating the terms of an company-ordered quarantine after he was sent home with pay for coming into contact with someone diagnosed with Covid-19. Smalls disputes that. Strike organizers also called for Whole Foods to shut down any store where a worker tests positive for Covid-19, a demand grocery workers share with some of their colleagues employed in Amazon’s logistics network. Amazon, which says it’s doing enhanced cleaning of its facilities, has opted to keep warehouses where employees tested positive open, over the objection of some employees scared to return. The strike was called for by Whole Worker, a coalition of current and former employees that has been working to organize workers  since 2018, initially with aid from the Retail, Wholesale and Department Store Union. An RWDSU spokeswoman said the New York based union isn’t involved in Tuesday’s action. Whole Foods, whose chief executive John Mackey once said was “beyond unions,” has resisted prior efforts by workers to organize, a similar stance to its corporate parent.(Updates with comments from Whole Foods spokeswoman)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • eXp World, Columbia Sportswear, Walmart, Target, Amazon as Zacks Bull and Bear of the Day
    Zacks

    eXp World, Columbia Sportswear, Walmart, Target, Amazon as Zacks Bull and Bear of the Day

    eXp World, Columbia Sportswear, Walmart, Target, Amazon as Zacks Bull and Bear of the Day

  • Find the Fool in Carnival's 13% Bond Deal
    Bloomberg

    Find the Fool in Carnival's 13% Bond Deal

    (Bloomberg Opinion) -- Carnival Corp.’s planned $3 billion bond sale on April 1 is bound to make a fool out of someone. It’s just not clear whether it will be the investors buying the cruise-line operator’s debt or the company.The case for investors looking foolish: Carnival’s ships are grounded, which of course cuts off its dominant source of revenue. The company’s share price has tumbled from $51 at the start of the year to about $14 as it expects a loss in 2020. Even if it manages to raise $6 billion through bond and stock sales as planned, analysts say that only gives Carnival an 18.5-month liquidity cushion to wait out the coronavirus-induced halt. That’s not much comfort, given that the bonds mature in twice that time and it’s anyone’s guess when — or if — the cruise business returns to normal.The company, on the other hand, is on the verge of paying vastly more to borrow than its triple-B credit rating would indicate. Bloomberg News reported Tuesday that Carnival’s three-year dollar bonds are being marketed with a 12.5% coupon and most likely will come at a discount, bringing the yield up to 13%. In early February, a triple-C rated company, Husky, issued debt at a similarly high rate. Obviously, it feels as if the entire world has changed since then, but even the average single-B bond yields just 9.35%, and the index never topped 12%, even in the height of the sell-off.Effectively, Carnival is investment grade in rating only — markets consider it seriously distressed. Bloomberg News even reported that the deal is running off of JPMorgan Chase & Co.’s high-yield syndicate desk, citing people familiar with the matter.Every once in a while, a single corporate-bond sale takes on outsized meaning about the state-of-play in credit markets and investor sentiment about the outlook going forward. Carnival’s offering will almost certainly be such a deal. Carnival, quite contrary to its jovial name, made headlines earlier this year because its ships were basically what much of America has now become, only with virtually no refuge. As my Bloomberg Opinion colleague Timothy L. O'Brien reminds us about the Zaandam, a vessel run by Carnival subsidiary Holland America that’s been called a “death ship”:Although the cruise ship is no stranger to viral outbreaks (two years ago, 73 passengers contracted a norovirus on a trip off the coast of Alaska), the Zaandam and other Holland America and Carnival ships have received high marks in recent sanitation inspections by the Centers for Disease Control and Prevention. Yet reports have popped up regularly about other Carnival ships that don’t pass muster. (The parent company manages several brands, and the Princess lines have particularly weak health and sanitation records.) So how well prepared was Carnival for something as cataclysmic as the coronavirus?Moreover, why did the Zaandam set sail on March 7? Well before then, two other Carnival ships had already become poster children for the coronavirus. On Feb. 4, the Diamond Princess was quarantined at a Japanese port after a former passenger tested positive for the virus. A subsequent test administered to that ship’s 3,700 passengers and crew turned up 700 infections; several of those people later died. As early as March 3, it was reported that passengers aboard a Grand Princess cruise in February had tested positive. That Carnival ship, returning from Hawaii, was then detained off the California coast for several days before docking on March 9 to prevent a further spread.That doesn’t scream a company worth investing in, especially without signs of federal assistance. But notably, bond traders aren’t necessarily banking entirely on a quick rebound in the cruise industry. Carnival’s new notes will be secured by a first-priority claim on its assets, which should provide some ballpark estimates of a worst-case recovery rate. Still, it’s a tough sell to hinge an offering on liquidation value for a company operating in one of the industries facing the greatest amount of uncertainty.Usually, this is how a deal with such a finger-to-the-wind yield level goes: Investors swarm to the offering and the yield comes down by 50 or 100 basis points, maybe even more. JPMorgan, Goldman Sachs Group Inc. and Bank of America Corp., which are managing the bond sale, have little incentive to float a coupon rate that was too low to easily clear the market. They want to drum up demand and showcase an oversubscribed order book.These are not ordinary times, though. While I seriously doubt that Carnival would be willing to pay a yield even higher than 13%, it’s possible that the market just isn’t as receptive to hard-hit businesses as it appears. In that case, the offering could be delayed or downsized a bit. It’s issuing in both dollars and euros, potentially to reach a broader swath of investors and avoid such an outcome.Unfortunately for Carnival, it needs the cash quickly. That’s hardly an ideal time to be borrowing. And it’s why 13% might be just the right yield for the company and investors alike to let go of their inhibitions.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Investing.com

    Oil Ends Worst Quarter; Some Russian Reprieve?

    In a gloomier outlook for the U.S. economy, the Wall Street forecaster recast its second-quarter real GDP forecast to an annualized drop of 34% versus a previous negative 24% reading.

  • How Much Are Mylan N.V. (NASDAQ:MYL) Insiders Spending On Buying Shares?
    Simply Wall St.

    How Much Are Mylan N.V. (NASDAQ:MYL) Insiders Spending On Buying Shares?

    We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is...

  • Bloomberg

    Trump and Putin Are All Talk on Oil Price Plunge

    (Bloomberg Opinion) -- Well there’s a surprise. During a telephone conversation on Monday, Presidents Donald Trump and Vladimir Putin “agreed on the importance of stability in global energy markets.” However, it’s very unlikely either will go beyond extolling stability and waiting for (or pressuring) somebody else to do something about it.According to the Kremlin, energy officials from the U.S. and Russia, the world’s first and third-largest oil producers, will hold discussions — although they didn’t elaborate on what they might cover. But don’t expect them to lead anywhere. Neither president is renowned for his statesmanship or flexibility.Putin’s most recent diplomatic “successes” include the annexation of Crimea and sending troops to support Bashar al-Assad’s regime in Syria. Trump has become the master of the empty photo-op, most notably with North Korea’s Kim Jong Un.In the energy sector, points of contention between the two men include Russia’s role in Venezuela’s oil export trade; U.S. sanctions on Russia’s oil and gas industries, including those targeting the second Nord Stream gas pipeline from Russia to Germany and others that have prevented foreign investment in Arctic oil and gas projects; and Russia’s own nascent shale sector.Putin has no interest in throwing another lifeline to the U.S. shale sector. Trump still seems to see the problem as being caused by Russia and Saudi Arabia both going “crazy” and launching a price war.Let’s get one thing straight. The collapse in oil demand as a result of the worldwide response to the Covid-19 virus is a much, much bigger problem than the additional barrels threatened by Saudi Arabia and Russia — none of which has arrived yet. As airplanes stop flying and drivers stop driving, they are going to struggle to find buyers for their oil, just like everyone else. Saudi Arabia is already threatening to boost its exports by a further 600,000 barrels a day in May because its own refineries don’t want the crude. This is simply more stranded oil trying to find a buyer.Goldman Sachs estimates that global oil demand this week is down by 26 million barrels a day, or 25%. That’s more than the combined consumption of the U.S., Canada, Mexico, Central America and the entire Caribbean.Sadly, the loudest voices in America still seem to be those calling for the use of bully-boy tactics against the world’s other heavyweights. A letter sent to Secretary of State Mike Pompeo last week from six Republican senators, including Lisa Murkowski from Alaska and John Hoeven from North Dakota, characterizes the Saudi and Russian decisions to end output restriction as “economic warfare against the United States.” The lawmakers argue that “Saudi Arabia must change course,” when what they really mean is that the kingdom led by Crown Prince Mohammed bin Salman must return to its previous course, and they name-check the whole gamut of pressure tactics the U.S. has at its disposal to get it to do so, from the threat of “tariffs and other trade restrictions to investigations, safeguard actions, sanctions, and much else.”I get that senators from oil-producing states want someone else to cut back to keep the oil price high enough so that their local fossil-fuel industries can keep functioning. But the Saudis might well argue that the current situation would be easier to deal with had the U.S. not doubled its oil production in less than a decade.Targeting Saudi Arabia and Russia for behaving as American leaders have always urged them to behave — by removing “artificial” restrictions on their oil production — will not solve the crisis faced by oil producers everywhere. As I wrote Sunday, we are now getting the free-market in oil. The demand destruction caused by the collapse in oil demand as a result of responses to the Covid-19 virus will not be solved by sanctions or tariffs.The world’s Big 3 oil producers might have had a chance to get together to organize a global response to the temporary loss of oil buyers, but they squandered it. As things stand, the companies (and countries) that bear the brunt will be those who can’t find buyers or storage tanks for their oil. No amount of bullying, or half-hearted diplomacy, can change that now.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Distressed-Debt Vultures Might Already Be Too Late
    Bloomberg

    Distressed-Debt Vultures Might Already Be Too Late

    (Bloomberg Opinion) -- “Investing in distressed debt is a struggle today. … The economy is too good, the capital markets are too generous. It’s hard for a company to get into trouble.”Howard Marks, the co-founder of Oaktree Capital Group and a legendary distressed-debt buyer, said this in mid-September. He was very much speaking to the widespread frustration among his peers in the industry at the time. The Federal Reserve had swooped in and starting cutting interest rates to offset any damage from the U.S.-China trade war. Stocks shrugged off a brief decline in August. The yield pickup on speculative-grade corporate bonds had again retreated toward post-2008 lows. Indeed, distress was virtually nowhere to be found.It’s remarkable to consider just how much has changed. Junk-bond spreads have more than tripled since Marks’s interview, hitting as high as 1,100 basis points last week compared with about 350 basis points in September. The amount of debt trading at a distressed level reached almost $1 trillion. Suddenly, the economy is not “too good” but rather headed into a short recession at best and a depression at worst. Capital markets have been frozen for weeks for all but the highest-quality companies. Credit-rating firms are contemplating default scenarios more severe than the last downturn.Given this shift, it comes as little surprise that hedge funds are making headlines daily with plans to capitalize on this rapid shift in the outlook, contending the market presents a once-in-a-lifetime opportunity. Just to name a few in the past week (credit to Bloomberg’s Katherine Doherty for the reporting):Highbridge Capital Management is preparing to launch two credit-dislocation funds totaling $2.5 billion, expecting to complete fundraising in mid-April. Knighthead Capital Management wants up to $450 million in additional cash for its distressed-debt fund. Silverback Asset Management is preparing to start a $200 million credit fund, aiming to wrap up fundraising sometime in April.Make no mistake, it’s still relatively early days in the coronavirus outbreak, particularly in the U.S. The lasting damage to the world’s largest economy remains very much a guessing game at this point. And yet, despite all of that, it’s starting to feel as if even waiting a few weeks to round up cash might cause some opportunistic funds to miss out on the biggest bargains.For one, the ICE Bank of America Merrill Lynch distressed-debt index gained for four consecutive days through the end of last week, the longest rally since the start of the year. It’s still down more than 40% in just three months, so the market is hardly back to the halcyon days of the recent past, but the semblance of a floor provides at least some optimism that the precipitous drops are winding down. High-yield spreads broadly have tightened to 921 basis points from the aforementioned 1,100.The steep March sell-off has been enough to excite some large traditional fixed-income managers. Ashish Shah, co-chief investment officer of fixed income at Goldman Sachs Asset Management, told Bloomberg’s Gowri Gurumurthy that speculative-grade bonds will gain 20% in 2020 and potentially 30% in the next 18 months. Scott Roberts at Invesco Ltd. declared the chance to scoop up cheap debt will be “gone way before the fear subsides.”Meanwhile, distressed-debt funds have been sitting on cash for years waiting for a moment like this. Preqin collects data on this so-called dry powder, and when I checked in on Monday, the firm estimated that the funds had $63.6 billion to invest as of this month. That might not be enough to buy all debt now trading at a distressed level — but it’s certainly enough to pick through the wreckage for companies with the best chance of survival.Centerbridge Partners LP, for instance, last week activated $3 billion of capital it raised way back in 2016, while Sixth Street Partners plans to activate a $3.1 billion contingency fund raised mostly in 2018, Bloomberg’s Gillian Tan reported. Centerbridge’s cash reserve is tied to two funds focused on opportunistic investments in senior loans and high-yield bonds. Sixth Street will have more than $10 billion of dry powder to invest once the TAO Contingent Fund is activated on Wednesday.Then there’s Marathon Asset Management, which managed to draw $500 million into its opportunistic and distressed credit funds in just a week, Bloomberg’s Eliza Ronalds-Hannon reported on Monday. Bruce Richards, co-founder and chief investment officer of the firm, called this the “greatest dislocation in credit we’ve seen since 2008” and said last week that he was first looking for bonds with coupons between 5% to 7% that were trading at full value earlier this year but have since fallen to about 70 cents. That might sound picky, but with money to invest right now, Richards can afford to be selective.“Historically speaking, when you get to these spread levels, it’s never been a bad place to enter and in a two-year window of time it’s a good buying opportunity,” Jim Schaeffer, global head of leveraged finance at Aegon Asset Management, which manages $390 billion of assets, told me in an interview. And firms that can call capital on funds have “got to start calling them now — if not now, when? What are you waiting for?”It still feels like a tough market for risky credit, but the tide may be turning. Notably, Yum! Brands Inc. brought the first U.S. high-yield offering since March 4 and the deal was upsized to $600 million from $500 million after receiving $3 billion of orders. Yum is far from a distressed company, of course, with double-B credit ratings from Moody’s Investors Service and S&P Global Ratings. But last week, bonds in that rating tier yielded on average 865 basis points more than U.S. Treasuries, compared with 162 basis points in December. That’s not quite distressed, but it’s certainly dislocated.By no means does one deal indicate that credit has bounced back from rock-bottom. But it’s another box checked on the road to recovery, along with tightening spreads in the secondary market and big-name investors getting more vocal about wading back into risky assets (which could be a tell that they’ve already placed their bets).If we’ve learned one thing about financial markets in the age of coronavirus, it’s that they can move at breakneck speed and that those with cash on hand at a moment’s notice are in the driver’s seat. Investors looking to seize on the distressed-debt opportunities of today may want to turbocharge their fundraising efforts accordingly.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Reuters - UK Focus

    UK supermarket visits jump by 79 mln before coronavirus lockdown -Nielsen

    Britons made over 79 million extra grocery shopping trips in the four weeks to March 21 year-on-year as they stocked their "pandemic pantries", driving a 20.5% jump in supermarket sales, industry data published on Tuesday showed. Market researcher Nielsen said British consumers spent an additional 1.9 billion pounds ($2.4 billion) on groceries. The data showed that in the week ending March 21, two days before Prime Minister Boris Johnson announced the full UK lockdown to try to contain the coronavirus spread, sales rose 43% compared to the same period last year.

  • Oil Crashes to 18-Year Low With Broken Market Drowning in Crude
    Bloomberg

    Oil Crashes to 18-Year Low With Broken Market Drowning in Crude

    (Bloomberg) -- Oil tumbled to an 18-year low as coronavirus lockdowns cascaded through the world’s largest economies, leaving the market overwhelmed by cratering demand and a ballooning surplus.Futures in London plunged by 9% to the lowest level since March 2002, while New York crude dipped below $20 a barrel before settling just above that level. While U.S. President Donald Trump spoke with Russian counterpart Vladimir Putin Monday to discuss the importance of stable energy markets, that did little to stanch the decline.A huge oversupply is further collapsing the oil market’s structure, and there may be more weakness to come as the world quickly runs out of storage capacity. The slump in demand has shut refineries from South Africa to Canada, leading to excess barrels in the market.At the key storage hub of Cushing, Oklahoma, inventories are said to have ballooned by more than 4 million barrels last week, according to traders with knowledge of Genscape data, raising fears about storage capacity limits being reached.“We’re grinding lower here and we’ll continue to get lower as runs get cut globally,” said John Kilduff, a partner at Again Capital LLC, a New York hedge fund focused on energy. “As we see specific points like Cushing near its limits, it’s just going to put greater and greater pressure on the price till we get to a clearing point.”Prices are on track for the worst quarter on record. Goldman Sachs Group Inc. estimates consumption will drop by 26 million barrels a day this week as measures to contain the coronavirus hurt global GDP. Consultant FGE estimated that refinery operating rates have been cut by over 5 million barrels a day worldwide, and could bottom out at between 15 million and 20 million lower.Meanwhile, Riyadh and Moscow are showing no signs of a detente in their supply battle as Saudi Arabia announced plans to increase its oil exports in the coming months.In the market for physical barrels of crude, prices are already far below those of futures benchmarks. Oil from Canada touched a record low of $3.82, while many other key grades are trading below $10 a barrel, with some as low as just $3.It’s a similar picture in Europe, where Kazakh crude was offered at a 10-year low. The six-month contango on the global Brent benchmark has grown bigger than in the financial crisis, at more than $13 a barrel. The equivalent six-month contango for WTI is about $12.The plunge in prices has caused distress in some OPEC nations. Algeria, which holds the cartel’s rotating presidency, urged the secretariat to convene a panel but the call has failed to gather the majority backing necessary to go ahead. Riyadh is among those opposing the idea.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Trump Shifts to Worry Over Oil Rout, Discusses Prices With Putin
    Bloomberg

    Trump Shifts to Worry Over Oil Rout, Discusses Prices With Putin

    (Bloomberg) -- President Donald Trump said he’s concerned oil prices have fallen too far and called Vladimir Putin on Monday to discuss Russia’s oil-price war with Saudi Arabia.The leaders, who also talked about the spread of the coronavirus, agreed to discussions on oil between energy officials in the two countries, according to the Kremlin. Both leaders “agreed on the importance of stability in global energy markets,” the White House said in a statement.The U.S. president said earlier he doesn’t want to see the American energy sector “wiped out” after Russia and Saudi Arabia “both went crazy” and launched into a conflict that depressed oil prices.“I never thought I’d be saying that maybe we have to have an oil increase, because we do. The price is so low,” Trump said in an interview on “Fox & Friends.”Crude oil futures tumbled as much as 7.7% in New York, touching an 18-year low.The Trump-Putin call came at the request of the U.S. and was “prolonged,” according to the Kremlin. Neither the White House or Kremlin statements said specifically how long the two leaders talked.Trump’s view on the oil dispute marks a shift from earlier this month, when he likened the plunge in oil prices to a “tax cut” for Americans. The U.S. president spoke to Saudi Crown Prince Mohammed bin Salman on March 9 about the price war.Trump has long argued that improving relations between Washington and Moscow could help solve international disputes. The president said he wanted to discuss trade with Putin, though he said he expected the Russian president to raise objections to U.S. sanctions. State-run Tass quoted Kremlin spokesman Dmitry Peskov as saying that Putin didn’t ask Trump for sanctions relief on the call.Oil tumbled earlier to its lowest point in nearly two decades, heading for the worst quarter on record as coronavirus lockdowns cascaded through the world’s largest economies, leaving the market overwhelmed by cratering demand and a ballooning surplus. The slump in demand has shut refineries from South Africa to Canada.Goldman Sachs Group Inc. estimates consumption will drop by 26 million barrels a day this week. Meanwhile, Riyadh and Moscow are showing no signs of a detente in their supply battle as Saudi Arabia announced plans to increase its oil exports in the coming months, despite U.S. warnings against flooding the market.Some analysts argue Russia’s motivations extend well beyond oil and are complicated by the federation’s anger over U.S. sanctions and opposition to the Nord Stream 2 pipeline linking Russia to Germany. And the price for getting Russia to back down could be too high.“Russia’s concerns with the U.S. go beyond market share. Putin is frustrated with sanctions and may be more interested in punishing the U.S. than Saudi Arabia,” said Dan Eberhart, a Trump donor and chief executive of drilling services company Canary LLC. “If Trump wants an agreement with Putin, he may have to promise to ease up on sanctions. I am not sure he can deliver without the backing of congress.”Rosneft PJSC over the weekend sold its assets in Venezuela to the Russian government, a move that shields the Russian oil giant from further U.S. sanctions while keeping Moscow behind the regime of Nicolas Maduro. Fears of broader sanctions have grown after the U.S. in recent months slapped restrictions on Rosneft trading companies for handling business with Venezuela.In the call, the White House said Trump “reiterated that the situation in Venezuela is dire, and we all have an interest in seeing a democratic transition to end theongoing crisis.” The statement didn’t say how Putin responded.Talks between members of the Organization of Petroleum Exporting Countries and its allies broke down in early March as Russia refused to sign on to larger production cuts proposed by Saudi Arabia. The failure to reach an agreement prompted the Saudis to unleash a price war which, combined with the devastating effect of the virus pandemic, caused the market to crash.Global demand is slumping by as much as 20 million barrels a day, about 20%, as billions of people go into lockdown to slow the spread of the virus. The outlook remains dire, with traders, banks and analysts forecasting a huge oversupply as governments effectively shut their economies.Oil industry leaders, trade groups and some Republican senators have pressed the Trump administration to seek a diplomatic solution with Saudi Arabia. Six senators from oil-producing states last week urged Secretary of State Michael Pompeo to take a tougher stance against Saudi Arabia, while highlighting several “powerful tools at our disposal,” including sanctions, tariffs and other trade restrictions.“Trump would have better success pressing Saudi Arabia than Russia since they are dependent on the U.S. for protection, intelligence and arms sales,” Eberhart said.On the coronavirus outbreak, the two sides expressed concern about the scale of its spread, according to the Kremlin. The leaders discussed steps they were taking to fight the virus and potential areas of cooperation.The White House said in its statement that “the two leaders agreed to work closely together through the G-20 to drive the international campaign to defeat the virus and reinvigorate the global economy.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Wells Fargo Has $384 Billion of Lending Power Stymied by Fed Cap
    Bloomberg

    Wells Fargo Has $384 Billion of Lending Power Stymied by Fed Cap

    (Bloomberg) -- Wells Fargo & Co. is a leading lender to small and midsize U.S. companies, home buyers and commercial property investors, and has capacity to unleash about $384 billion of additional loans to customers trying to weather the coronavirus pandemic.But the bank can’t -- because it’s in the regulatory doghouse.The Federal Reserve remains reluctant to ease or lift its 2018 order capping the San Francisco-based lender’s assets because the company has yet to fully address concerns that prompted the unprecedented sanction, according to people with knowledge of the situation. The cap effectively prevents the bank from deploying a mountain of pent-up capital that could back a surge of lending.As the coronavirus pandemic began upending the economy in recent weeks, it quickly emerged that Wells Fargo’s representatives had privately broached the idea of at least temporarily lifting the restriction so it could help more customers. The Fed has yet to publicly disclose its decision.Behind the scenes, Fed officials are skeptical the bank is ready, the people said. Wells Fargo’s new leaders have been making progress but have yet to prove they have made adequate reforms to prevent the consumer abuses that fueled scandals in recent years. And they have confidentially warned the Fed they will miss an April deadline to submit a required plan for improvements.“While we cannot comment on regulatory matters, Wells Fargo is focused on satisfying the requirements of the consent order,” the company said in a statement. “During these challenging times, we are very focused on doing all we can for our clients while operating under the constraints of the asset cap.”Most FirepowerThe Fed’s consent order from February 2018 caps Wells Fargo’s assets at their 2017 level. At the end of last year, the bank was just $24 billion short of that level -- all the room it had to grow unless the ban is rescinded. With credit lines being drawn by companies and deposits flowing in, it may already have gotten there.Wells Fargo executives have made internal adjustments over the years to ensure they can meet customers’ needs. The bank should be able to keep meeting demands from existing clients, but it might be constrained in ramping up lending significantly as new ones seek help, one of the people said.The appeal puts the Fed in a difficult spot -- conflicted between its role as a tough regulator of financial giants and its current efforts as a central bank trying to ensure ample cash for the struggling economy. The Fed has encouraged the biggest lenders to use their excess capital and dip into additional buffers to expand lending during the pandemic.Bloomberg calculated Wells Fargo’s capacity for additional lending based on its capital at the end of 2019. Together, the nation’s eight banking titans had enough then to ramp up lending by $1.6 trillion. But ironically, the firm with the most firepower among them can’t proceed.It would be tricky to lift the ban temporarily, because it would entail setting a time line for undoing any growth. It’s one thing to prevent a balance sheet from expanding, quite another to shrink it significantly after making hundreds of billions of dollars in ongoing loans.Chief Executive Officer Charlie Scharf took over in October after two previous CEOs frustrated regulators and politicians who accused the bank of failing to act quickly enough to fix problems. Unlike his predecessors, both longtime Wells Fargo veterans, Scharf is an outsider, and he’s been developing plans to more radically overhaul the company. At a congressional hearing this year, he acknowledged there’s much left to do.The bank’s representatives didn’t try pressing a case to the Fed that Scharf’s work on reforms is done, the people said. Rather, they noted the scope of the emergency facing the country and the bank’s willingness to help. Without the cap, Wells Fargo would be able to arrange significantly more financing for consumers, local businesses, large corporations and municipalities.Wells Fargo has been in Washington’s crosshairs since a variety of scandals emerged following the 2016 revelation that employees had opened millions of potentially fake accounts to meet sales goals. Lawmakers on both sides of the aisle have expressed deep frustration with the bank, with some signaling the Fed would face a backlash if it’s lifted. But there’s a chance that the virus’s impact on the economy might shift the political landscape.On Saturday, Maxine Waters, who chairs the House Financial Services Committee, asked Fed Chair Jerome Powell for information on Wells Fargo’s request and what the regulator makes of it. She wants his staff to provide a briefing to the committee in coming days on its supervision of the bank.Desperate CompaniesCompanies eager for cash have drawn down credit lines and arranged new facilities, obtaining at least $177 billion in financing since March 9, when Bloomberg News began tracking the data. Behind the scenes, bankers have sought to persuade corporate clients that they don’t need to tap cash preemptively -- often for reasons that have less to do with liquidity than profitability. That suggests that even if Wells Fargo’s cap were lifted, it may not rush to deploy all of the money.While lending boosts the asset side of banks’ balance sheets, investors fleeing capital markets have generated a flood of deposits, increasing the liability side. By March 18, the 25 largest commercial banks had collectively gained $420 billion of deposits this year, according to Fed data.Wells Fargo had 9.6% of the market share for U.S. deposits in 2019, according to Federal Deposit Insurance Corp. data. If it maintained that share, the influx would amount to about $40 billion, potentially pushing the bank above its 2017 asset cap.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Morgan Stanley, Goldman Get Nod for Majority Stakes in China JV
    Zacks

    Morgan Stanley, Goldman Get Nod for Majority Stakes in China JV

    With the approval of increasing their stake in respective securities JV, Morgan Stanley (MS) and Goldman (GS) are set to further diversify their revenues.

  • Coronavirus Crisis Boosts Grocery Apps Download: Stocks to Gain
    Zacks

    Coronavirus Crisis Boosts Grocery Apps Download: Stocks to Gain

    With coronavirus spreading far and wide, more and more people are adopting online grocery delivery services in order to maintain social distancing

  • Investing.com

    Oil Prices Touch The Teens as 3 Billion People Locked At Home

    West Texas Intermediate, the New York-traded benchmark for U.S. crude prices, was down $1.51, or 7%, at $20 per barrel by 1:32 PM ET (17:32 GMT). “With the lockdowns extending geographically to India, the U.S. (and) now Russia, as well as extending in time in other regions, the focus has entirely shifted to demand destruction,” said Olivier Jakob of Zug, Switzerland-based oil risk consultancy Petromatrix.

  • Bloomberg

    We Took Amazon's Free, Fast Delivery for Granted. Will We Pay for It?

    (Bloomberg Opinion) -- In the pre-coronavirus world, retailers big and small were in an arms race over free and fast delivery. In New York City, where I live, that meant you could get a range of items from toothpaste to batteries within 48 hours or less without paying an extra fee. Now, the wait for such items via my Amazon Prime account is nearly a week. And that’s actually a pretty good pace these days: Prime members are reportedly facing month-long delivery delays for some items as Amazon prioritizes getting household staples to those in need. And those staples are hard to find online, or come with big strings attached. Last week, Walmart.com offered me the option of paying $75 to get speedier delivery on a bottle of Zicam cold-remedy medicine that typically retails for about $10 to $15. The item is now out of stock. Demand for essential items is skyrocketing as people hunker down in their homes, and many are turning to delivery services, straining networks that even after years of growth in e-commerce weren’t built for such astronomical spikes. With orders for things like thermometers and toilet paper getting canceled as inventory dries up, I’m less concerned these days about when my delivery shows up and just happy if it gets here at all. And there are, of course, much bigger concerns about the health and safety of the employees that make these deliveries possible. About 100 Amazon.com Inc. workers at a Staten Island, New York fulfillment center plan to go on strike at noon on Monday. They’re demanding the facility be closed for two weeks and sanitized amid the spread of the coronavirus and that workers continue to be paid. It remains unclear how long such coronavirus-related disruptions will linger, but expectations for daily life are already being reset. What if some of those changes stick?Wary of another pandemic, people may be more vigilant about stockpiling essentials at home, to the point where it’s really not necessary to get a fresh pack of toilet paper delivered in two hours versus two days. For those who do want fast service, Amazon, Walmart Inc. and other retailers will eventually be able to start putting packages on people’s doorsteps at their previous pace as the flow of goods starts to normalize. But the perception of the value of that service seems to have changed. I don’t think I’ll take it for granted in the way that I did before. I might even be willing to pay for it. A 2019 report from the National Retail Federation found that 75% of consumers surveyed expected to get free delivery even if their order total was less than $50. Meeting those expectations eats into profit margins for retailers, and even when a fee is assessed, it’s usually well below what it actually costs to ship the package. And that's before you think about the cost of shipping it back. “Retailers Gave You Free Returns and You Ruined It,” was the title of a December 2019 story by Bloomberg News about how consumers were taking advantage of free-return policies by ordering a range of sizes or many more products than they ever intended on keeping. U.S. consumers were expected to send back $100 billion worth of goods purchased last holiday season, according to forecasts from retail technology company Optoro cited by the Financial Times. Retailers foot the bill for both the two-way logistics and the resulting pileups in inventory, some of which may be unsellable upon its return, but they seemed sort of stuck with this dynamic. While some outlets such as Urban Outfitters Inc.’s Anthropologie had started charging fees for returns by mail in an effort to incentivize customers to bring items back into a store to ease the logistical challenges, this was far from a widespread process.The whole history of e-commerce has been about making the process as easy for consumers as possible, and retailers weren’t keen to rock the boat. In a way, the coronavirus crisis has done that for them. While sales of food and other essential items are rising, less-vital retailers have been forced to shutter their stores and their e-commerce operations are fielding little interest for more discretionary products like clothing or home goods. As they dig themselves out of that hole, the margin squeeze from free delivery and free returns may matter in ways it hasn’t before. Maybe that means a small fee is assessed; maybe that means incentivizing customers to use a buy-online, pick-up-in-store model. If there was ever going to be a moment to adjust the expectations of the American consumer, this may be it. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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