Retail Sales Rise as Americans Stock Up: Live Market Updates

Credit…Erin Schaff/The New York Times

The Senate is poised to vote on Judy Shelton’s nomination to one of two remaining open seats on the Federal Reserve’s Board of Governors, a move that could place a loyal fan of President Trump’s and a long time proponent of some sort of gold standard in a role that sits at the nerve center of the American economy.

Ms. Shelton’s procedural vote is scheduled for around 2:15 p.m. Tuesday, and the final vote to confirm her could come as soon as later Tuesday.

But her chances of winning confirmation could be complicated by the coronavirus. On Tuesday morning, Senator Charles E. Grassley of Iowa announced that he would need to quarantine after being exposed to the virus. Senator Rick Scott of Florida is also in quarantine, potentially depriving Ms. Shelton of two Republican votes that she needs to win confirmation if all Democrats are present.

Democrats are opposed to her confirmation and at least two Republicans Senators — Mitt Romney and Susan Collins — are expected to vote against Ms. Shelton, meaning she could come up short of the 50 votes she needs to be confirmed. While Senator Lamar Alexander, Republican of Tennessee, also announced his opposition to Ms. Shelton’s nomination, he will not be present for the vote because of what a spokesman said were family matters.

That threatened to drop Ms. Shelton below the number of votes she would need to at least strike a tie, which Vice President Mike Pence could then resolve in her favor.

Her path to a Fed seat seemed to hinge on Democrat attendance at the vote. If enough are absent, she could still clear the Senate.

If confirmed, Ms. Shelton, 66, would take one of seven seats on the central bank’s Washington-based board. With her addition, five of the six filled seats will contain Mr. Trump’s appointees. The president has nominated Christopher Waller, a Federal Reserve Bank of St. Louis research official, to fill the remaining open seat. It is unclear when his less contested nomination could come to a vote.

Senators are rushing Ms. Shelton’s nomination through in a brief window before Mike Kelly, the Democratic Senator-elect from Arizona, can be seated at the end of the month. Her offbeat views and loyalty to the White House have stirred concern among even some key Republicans, leaving her such a narrow margin of support that flipping that one seat could cost her chances of confirmation.

Ms. Shelton has long favored backing the U.S. currency with gold or some other peg, which would undermine the very function of the Fed. She advised the Mr. Trump’s 2016 campaign, and while Fed appointees often have political pasts, she has written glowing articles praising Mr. Trump and has at times appeared to question the value of central bank independence. She once favored higher interest rates, but abruptly changed that position to mirror Mr. Trump’s low-rate preference once she was in the running for a nomination to the Fed.

Joseph R. Biden Jr.’s election victory probably helped Ms. Shelton’s chances. Installing Republican nominees at the Fed before the new administration takes office will curb Mr. Biden’s ability to appoint his own central bank picks. Governors have 14-year terms, but Ms. Shelton is filling an unexpired seat and would need to be reappointed in 2024.

Credit…Brendan Mcdermid/Reuters

Even as the broader economy weakened and federal stimulus money ran out, Americans continued to stock up on food and buy new and used cars, and that’s meant retail sales have held up better during the pandemic than just about anyone expected.

On Tuesday morning, the Commerce Department reported that sales for October rose 0.3 percent, the sixth consecutive month of gains. Sales in September had increased 1.6 percent.

An earlier holiday shopping season, with Black Friday deals beginning many weeks before Thanksgiving, helped drive October’s increase. Amazon also moved its “Prime Day” to October from July, which bolstered sales.

“Even as we enter the fourth month with no additional fiscal stimulus, elevated political uncertainty and unprecedented levels of new Covid-19 cases, American households continued to spend,” Morgan Stanley economists wrote in a research note last week.

Sales continued to be robust in specific categories, with Americans buying groceries and home improvement items. But with many people still working from home, they were spending much less on clothing and gas.

The economists said an improving job market and growing savings rate had enabled Americans to keep spending.

But just as they have every month since retail sales began to rebound in May, economists warned that rising infections and new lockdowns could stall a recovery that seems, at times, to have defied reality.

Also on Tuesday, Walmart reported that its strong sales growth during the pandemic continued in the third quarter. The nation’s largest retailer said that same store sales increased 6.4 percent from a year ago, while e-commerce sales were up 79 percent. Walmart has been making a big bet on its online sales, including curbside pick of groceries at its stores, as more people shy away from shopping in physical stores because of the virus. The company said the shift to online shopping would endure past the pandemic.

“We think these new customer behaviors will largely persist,” the company’s chief executive, Doug McMillion, said in a statement.

Credit…Ruth Fremson/The New York Times

Two runoff elections in January will decide Georgia’s senators, the Senate majority and potential limits on President-elect Joseph R. Biden’s agenda. Private equity’s preference for the Republican contenders shows up in campaign contributions in races there, Ricardo Valadez of the nonprofit organization Americans for Financial Reform noted in the DealBook newsletter.

Government gridlock protects private equity’s business model, ensuring that major changes proposed by Democrats, like Senator Elizabeth Warren’s Stop Wall Street Looting Act, won’t become law, Mr. Valadez said. Mr. Biden got the most direct contributions associated with private equity in 2020, but Republican Senators Mitch McConnell of Kentucky, John Cornyn of Texas and Susan Collins of Maine were the next-biggest recipients, reflecting the sector’s preference for divided government.

In Georgia, donations linked to people at Apollo and KKR were in the top 10 contributions for the Republican incumbent David Perdue. His Democratic challenger, Jon Ossoff, appears to have no private equity ties among top donors. The dynamic is less skewed in the other Senate race, where contributions linked to Blackstone and Roark Capital were among the top donations to the Republican incumbent Kelly Loeffler, who previously worked on Wall Street. Her Democratic challenger, the Rev. Raphael Warnock, counts donors from Insight Partners among his top five givers.

A lucrative tax break is at stake, said Eileen Appelbaum, the co-director of the nonprofit group Center for Economic and Policy Research. With Senate control, Democrats could eliminate the favorable tax treatment of carried interest, which would put a big dent in private equity executives’ earnings, she said. Although President Trump has denounced the carried interest loophole, lobbying helped fend off any changes. A Republican-controlled Senate is likely to continue to resist altering the treatment of investment gains.

  • Stocks were lower Tuesday, falling back after a run that has lifted shares on Wall Street to new highs.

  • The S&P 500 fell more than half a percent in early trading Tuesday. The Stoxx Europe 600 and the FTSE 100 in Britain were also slightly lower.

  • The retreat comes with Wall Street on track for its best month since April. Through Monday, the S&P 500 is up nearly 11 percent. The most recent gains have come amid optimism that an effective vaccine against the coronavirus was within reach, after Moderna and Pfizer each reported that early trials of their vaccine candidates were showing high rates of success.

  • Still, any vaccine is months away from being widely available and coronavirus cases are currently surging in Europe and the United States, with new measures to contain it threatening the economic recovery.

  • Share of Tesla jumped about 11 percent after S&P Dow Jones Indices said it would add the company to the S&P 500. The stock is up nearly 400 percent this year.

  • Pharmacy stocks including CVS Health, Rite Aid and Walgreens Boots Alliance were sharply lower after Amazon said it would allow customers to order prescription drugs online. Shares of Amazon rose about 1 percent.

  • EasyJet, the Britain-based discount airline that primarily serves vacation travelers, fell about 2 percent after it reported a loss of 1.27 billion pounds ($1.68 billion) for the year ending in September, the carrier’s first annual loss in its 25-year history.

Credit…Cliff Owen/Associated Press

Tuesday is the first day of the DealBook Online Summit, featuring top newsmakers in business, policy and culture debating the most important issues of the moment — and the future. Speakers will consider the arc of innovation, the prospects for beating the pandemic, the race for a Covid-19 vaccine, and the future of policymaking in Washington.

Here is lineup for Tuesday (all times Eastern):

  • 9-9:45 a.m.: Masayoshi Son of SoftBank. The billionaire founder and chief executive of SoftBank, the Japanese tech conglomerate, will discuss the $100 billion Vision Fund’s biggest bets and his long-term outlook for innovation.

  • 11-11:30 a.m.: Dr. Anthony Fauci of the National Institute of Allergy and Infectious Diseases. Dr. Fauci will provide an update on the latest developments in the coronavirus pandemic and reflect on his service under six presidents.

  • 1-2 p.m.: Pfizer’s Albert Bourla, Bill Gates and Heidi Larson of the Vaccine Confidence Project. The panel will discuss the latest breakthroughs in the development of a Covid-19 vaccine and the challenges of distributing it, both in terms of logistics and winning public trust.

  • 4:30-4:55 p.m.: Senator Elizabeth Warren. One the most prominent progressives in the Senate, with a track record of aggressively trying to rein in Wall Street, Ms. Warren will discuss the post-election outlook for the intersection of business and policy.

Credit…Jim Wilson/The New York Times

Airbnb revealed declining revenue and growing losses in a prospectus for an initial public offering on Monday.

The offering, which could value Airbnb at more than $30 billion and raise as much as $3 billion, will test investors’ appetite for hospitality-related stocks in a year when the industry has been battered and its future is uncertain, The New York Times’s Erin Griffith reports.

The company provides a marketplace for people to rent their homes, taking a percentage of the fees, and facilitates bookings for activities. Here are some highlights:

  • In total, Airbnb brought in $2.5 billion in revenue in the first nine months of the year, down from $3.7 billion a year earlier.

  • Its net loss more than doubled during that period to $697 million. The company’s shrinking revenue means it cannot pitch Wall Street on the typical tech start-up narrative of soaring growth.

  • Airbnb was valued at $31 billion before the pandemic, but some investors bought shares valuing it at $18 billion after travel ground to a halt.

  • Morgan Stanley and Goldman Sachs will lead Airbnb’s public offering, which will list on Nasdaq.

  • S&P Dow Jones Indices said on Monday that it would add Tesla to the S&P 500 next month. The addition had been expected by investors after Tesla met profitability requirements to be added to the index earlier this year, but the shares still jumped more than 9 percent in after-hours trading on Monday. The stock is up nearly 400 percent this year.

  • Universal Pictures and Cinemark, the third-largest cinema chain in North America, said on Monday that they reached a deal to bring new movies to homes a mere three weeks after their theater debuts. The agreement guarantees that Universal will give Cinemark at least 17 days (three weekends) to play movies exclusively — down from roughly 90 days. After that, even as films continue to play in Cinemark theaters (as long as there is demand), Universal has the option of simultaneously making them available on premium video-on-demand.

The beleaguered Chinese tech giant Huawei said on Tuesday that it would sell its budget smartphone brand, Honor, to a Chinese state-owned entity, in a sign of the strain the company is under as the Trump administration’s restrictions on its business start to bite.

Huawei did not disclose the size of the sale. The company said that once the transaction was complete, it would not hold any shares in the new Honor business or be involved in its management.

The Trump administration has long called Huawei a threat to American national security, and it now effectively dictates the company’s ability to buy many of the components and software in its smartphones and telecommunications gear. Huawei is one of China’s most revered tech success stories. Yet its products have used a range of specialized parts made by American companies, as well as computer chips manufactured using American software and equipment. Many of Huawei’s suppliers now need licenses from the U.S. government to sell to it.

“Huawei’s consumer business has been under tremendous pressure as of late,” the company said in a statement on Tuesday announcing the Honor sale. “This has been due to a persistent unavailability of technical elements needed for our mobile phone business.”

Honor, created in 2013, is Huawei’s youth-oriented gadget brand. The company that is buying it, Shenzhen Zhixin New Information Technology, is owned mostly by an entity backed by the government of the city of Shenzhen, where Huawei is headquartered. Once Honor is in new hands, it would likely not be subject to the U.S. export restrictions that bind Huawei.

Huawei was the world’s second biggest smartphone seller in the latest quarter, according to the research firm Canalys. But the company’s uncertain future has caused its sales in key markets outside China, such as Europe, to fall sharply.

Mars, the company behind M&M’s and Snickers, is acquiring the company that makes Kind bars, the snacks that celebrate their lack of artificial flavors and preservatives, company executives told The New York Times in an interview.

The deal for Kind North America comes three years after Mars, a privately held giant in the candy industry, took a minority stake in the company. The purchase was confirmed by company executives. Terms were not formally announced, but people with knowledge of the deal said it valued Kind at about $5 billion.

Kind, which was founded by Daniel Lubetzky in 2005, sells bars in flavors like Cranberry Almond and Dark Chocolate and emphasizes clear packaging and simple ingredients.

The deal is a bet on the durability of the healthy snacking industry, as Mars looks beyond its long-established brands like Twix and Skittles. Mr. Lubetzky said it would allow Kind to take a longer view and continue to consider new products, geographic expansion and, likely, acquisitions.

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