Here’s what you need to know:
Tens of millions of lower-income Americans are still waiting for their stimulus checks, but there’s been some progress toward getting them paid.
People who receive benefits from Social Security, Supplemental Security Income, the Railroad Retirement Board and Veterans Affairs — while also not having to file tax returns because they don’t meet the income thresholds — have faced delays because the Internal Revenue Service didn’t have the proper payment files to process their stimulus checks.
Now the I.R.S. has all of the necessary files in hand, but it’s still not clear how long it will take for payments to be processed. The I.R.S. did not immediately comment on Friday.
Democratic leaders from the House Ways and Means Committee and other congressional subcommittees had sent a letter to the Social Security Administration and the I.R.S. on Monday, urging the quick transmission of the files. By Wednesday, the lawmakers’ request became an ultimatum: They demanded that the files for 30 million unpaid beneficiaries be sent by Thursday.
The Social Security Administration delivered its files to the I.R.S. on Thursday, according to a statement from the Ways and Means committee. (Veterans Affairs said it delivered its files on Tuesday; the Railroad Retirement Board delivered its files on Monday.)
The Social Security Administration notified congressional leaders that it had transmitted the necessary data to the I.R.S. at 8:48 a.m. Thursday.
Members of the committee blamed the delay on the Social Security Administration’s commissioner, Andrew Saul, who was appointed by President Trump. But the agency said it had been unable to act immediately because Congress hadn’t directly given it the money to do the work.
AARP also sent letters to both the Social Security Administration and I.R.S. on Thursday, urging them both to provide clear information on when beneficiaries could expect their payments.
Many federal beneficiaries who filed 2019 or 2020 returns — or who used the tool for non-filers on the I.R.S. website to update their information — have already received their payments.
So far, the I.R.S. has delivered roughly 127 million payments in two batches, totaling $325 billion.
Credit…Brendan Mcdermid/Reuters
Shares of ViacomCBS, the media goliath led by Shari Redstone, took a nosedive this week, with the company losing more than half of its market value in just four days.
Thes stock was as high as $100 on Monday. By the close of trading on Friday it had fallen to just over $48, a drop of more than 51 percent in less than a week.
There’s no better way to say it: The company’s stock tanked.
What happened? Several things all at once. First, it is worth noting that ViacomCBS had actually been on a bit of a tear up until this week’s meltdown, rising nearly tenfold in the past 12 months. About a year ago, it was trading at around $12 per share.
That rally came as the company, like the rest of the media industry, had made a move toward streaming. It recently launched Paramount+ to compete against the likes of Netflix, Disney+, HBO Max and others. The service tapped ViacomCBS’s vast archive of content from the CBS broadcast network, Paramount Film Studios and several cable channels, including Nickelodeon and MTV.
That shift matters because ViacomCBS has been hit hard by an overall decline in cable viewership. The company’s pretax profits have fallen nearly 17 percent from two years ago, and its debt has topped more than $21 billion.
But the stock rose so much that Robert M. Bakish, ViacomCBS’s chief executive, decided to take advantage of the boon by offering new shares to raise as much as $3 billion. The underwriters who managed the sale priced the offering at around $85 per share earlier this week, a discount to where it had been trading on Monday.
You could say it backfired. When a company issues new stock, it normally dilutes the value of current shareholders, so some drop in price is expected. But a few days after the offering, one of Wall Street’s most influential research firms, MoffettNathanson, published a report that questioned the company’s value and downgraded the stock to a “sell.” The stock should really only be worth $55, MoffettNathanson said. That started the nosedive.
“We never, ever thought we would see Viacom trading close to $100 per share,” read the report, which was written by Michael Nathanson, a co-founder of the firm. “Obviously, neither did ViacomCBS’s management,” it continued, citing the new stock offering.
Streaming is still a money-losing enterprise, and that means the old line media companies must still endure more losses over more years before they can return to profitability.
In the case of ViacomCBS, it seemed to hasten the cord-cutting when it signed a new licensing agreement with the NFL that will cost the company more than $2 billion a year through 2033. As part of the agreement, ViacomCBS also plans to stream the games on Paramount+, which is much cheaper than a cable bundle.
As the games, considered premium programming, shifts to streaming, “the industry runs the risk of both higher cord-cutting and greater viewer erosion,” Mr. Nathanson wrote.
On Friday, an analyst with Wells Fargo also downgraded the stock, slashing the bank’s price target to $59.
But the market decided it wasn’t even worth that much. It closed on Friday barely a quarter above 48 bucks.
Credit…Ben Quinton for The New York Times
The Biden administration is keeping on the table the threat of tariffs on Austria, India, Italy, Spain, Turkey and the United Kingdom over their taxes on digital commerce as negotiations over a global tax agreement proceed.
The office of the United States Trade Representative said on Friday that those countries continue to be “subject to action” because they discriminated against American technology companies with their digital services taxes. Those taxes, which are levied against the digital services that tech companies like Amazon and Google provide — even if they have no physical presence in those nations — have become a huge global issue with which regulators are wrestling.
The United States has until June to decide whether to move forward or delay retaliatory tariffs under the terms of an investigation that began last year under the Trump administration.
“The United States is committed to working with its trading partners to resolve its concerns with digital services taxes and to addressing broader issues of international taxation,” said Katherine Tai, the newly confirmed United States Trade Representative. “The United States remains committed to reaching an international consensus through the O.E.C.D. process on international tax issues.”
U.S.T.R. will release a list of products from those countries that could face tariffs, and it will hold hearings in May about the investigations. Senior administration officials said on Friday that the step is procedural and not intended to provoke America’s trade partners. However, the administration wants to keep its options open to make sure that the negotiations continue to move forward productively.
In January, before President Biden took office, U.S.T.R. suspended tariffs that were about to be imposed on French imports while the other investigations proceeded.
U.S.T.R. said that the Biden administration is ending its investigations into Brazil, the Czech Republic, the European Union and Indonesia because the digital services taxes that they were considering have not been adopted. U.S.T.R. could still initiate new investigations if those countries decided to proceed.
The Biden administration has said it plans to take a much more deliberative approach to trade policy than the previous administration, and it is conducting a broad review of the tariffs that President Donald J. Trump levied on China and other countries. Administration officials have signaled a desire to adopt a more conciliatory approach to trade with American allies, like Europe.
Earlier this month, the United States and European Union agreed to temporarily suspend tariffs levied on billions of dollars of each others’ aircraft, wine, food and other products as both sides try to find a negotiated settlement to a long-running dispute over the two leading airplane manufacturers, Boeing and Airbus.
Last year, the Trump administration paused the international digital tax talks taking place through the O.E.C.D. so that countries could focus on the pandemic.
The Treasury Department will assume a leading role in the talks this year. In February, Treasury Secretary Janet L. Yellen signaled that the United States could be more flexible in the negotiations when she told the Group of 20 finance ministers that it was no longer calling for a contentious “safe harbor” plan that would have essentially given American companies the ability to opt out of some of the taxes.
Negotiations are expected to continue at international economic forums this summer, and officials have said that the United States’ new position has given the talks renewed momentum.
Credit…Amy Lombard for The New York Times
Union workers at The New Yorker, Pitchfork and Ars Technica said Friday they had voted to authorize a strike as tensions over contract negotiations with Condé Nast, the owner of the publications, continued to escalate.
In a joint statement, the unions for the three publications said the vote, which received 98 percent support from members, meant workers would be ready to walk off the job if talks over collective bargaining agreements continued to devolve. At The New Yorker, the unionized staff includes fact checkers and web producers but not staff writers, while most editors and writers at Pitchfork and Ars Technica are members.
The unions, which are affiliated with the NewsGuild of New York, which also represents employees at The New York Times, have been separately working toward first-time contracts with Condé Nast. In the case of The New Yorker Union, negotiations have dragged out for more than two years.
The core of their demands, the unions said, were fair contracts that included wage minimums in line with industry standards, clear paths for professional development, concrete commitments to diversity and inclusion, and work-life balance. They said in the statement that Condé Nast had “not negotiated in good faith.”
“Condé Nast has long profited off the exploitation of its workers, but that exploitation ends now,” the statement said.
A Condé Nast spokesman said management had already reached agreements on a range of issues with The New Yorker, Pitchfork and Ars Technica unions over the course of negotiations.
“On wages and economics, management has proposed giving raises to everyone in these bargaining units; increasing minimum salaries for entry-level employees by nearly 20 percent; and providing guaranteed annual raises for all members, among other enhancements,” the spokesman said in a statement.
He added: “All of this has been accomplished in just two rounds of bargaining, as we first received the unions’ economic proposals at the end of last year. We look forward to seeing this process through at the bargaining table.”
The labor disputes at Condé Nast have spilled into the public arena a number of times. In January, union members at The New Yorker, including fact checkers and web producers, stopped work for a day in protest over pay. Last year, two high-profile speakers at The New Yorker Festival — Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez — vowed not to cross a picket line in solidarity with unionized workers.
The NewsGuild of New York said it would hold a rally for fair contracts on Saturday at Condé Nast’s offices in downtown Manhattan.
Credit…Jim Wilson/The New York Times
Facebook said on Friday that it would bring employees back into its California offices beginning in May, one of the first large tech companies to lay out a plan for workers to physically return to offices.
The social network said employees would begin working in its San Francisco Bay Area offices — including its headquarters in Menlo Park, as well as those in Fremont, Sunnyvale and downtown San Francisco — starting on May 10 and on a rolling basis thereafter. The offices would be at 10 percent capacity, the company said, as long as national health data continued to improve.
“The health and safety of our employees and neighbors in the community is our top priority and we’re taking a measured approach to reopening offices,” said Chloe Meyere, a Facebook spokeswoman. She said Facebook would require regular weekly testing for on-site workers, as well as physical distancing and mask wearing indoors.
The San Francisco Chronicle earlier reported on Facebook’s back-to-office plans.
Mark Zuckerberg, Facebook’s chief executive, has been a vocal proponent of remote work since the pandemic began. Last May, Mr. Zuckerberg said he would allow some employees to work from home permanently, though they would face salary reductions if they moved to different parts of the country.
For now, Facebook has given employees the option to work from home until July 2, after which any employee who was not hired as a full-time remote worker can continue to work from home until their office is operating at 50 percent capacity. The latest health data, Facebook said, suggested that it would be able to reopen its largest offices at 50 percent capacity after Sept. 7.
Those who were designated as full-time remote workers can continue to work remotely, the company said.
Other office reopenings will be on a case-by-case basis, as Facebook continues to study regional data provided by the World Health Organization, Centers for Disease Control and Prevention and other health agencies.
“We will continue to work with experts to ensure our return to office plans prioritize everyone’s health and safety,” Ms. Meyere said.
Credit…Fabrizio Costantini for The New York Times
Volkswagen said on Friday that it would seek financial compensation from its former chief executive and the former head of the Audi division, accusing them of failing to act after learning that diesel vehicles sold in the United States were fitted with illegal emissions-cheating software.
The decision by the German carmaker’s supervisory board marks a turnabout. Volkswagen had been reluctant to publicly accuse former top managers of complicity in the emissions fraud, which has cost Volkswagen tens of billions of euros in fines, settlements and legal fees.
At the same time, the supervisory board said it found “no breaches of duty” by other executives who were members of Volkswagen’s management board in September 2015, when the scandal came to light.
That group includes Herbert Diess, now the chief executive of Volkswagen, who had joined the company two months earlier from BMW. Hans Dieter Pötsch, now chairman of the supervisory board, was chief financial officer and a member of the Volkswagen management board at the time, a position he had held for more than a decade.
Volkswagen’s supervisory board said that in a statement on Friday that a law firm hired to review evidence in the case found that Martin Winterkorn, the former chief executive, failed “to comprehensively and promptly clarify the circumstances behind the use of unlawful software functions” after learning about the misconduct in July 2015.
Mr. Winterkorn, who resigned shortly after the emissions fraud became public, also failed to ensure that questions by U.S. authorities “were answered truthfully, completely and without delay,” the supervisory board said. Shareholders suffered damages as a result, the board said, although it did not say how much money the company will try to recover.
Mr. Winterkorn’s lawyers said in a statement Friday that he denied the accusations and had done everything possible “to avoid or minimize damage” to Volkswagen.
The Volkswagen board said it also concluded that Rupert Stadler, former chief executive of the Audi luxury car division, was negligent because he failed to investigate the use of illegal software in diesel vehicles sold in the European Union.
Mr. Winterkorn and Mr. Stadler face criminal charges in Germany that revolve around the same circumstances. Mr. Winterkorn’s trial was scheduled to begin in April, but judges in the case postponed it this week until September, citing the pandemic.
Mr. Stadler has been on trial in Munich since last year on charges that, even after the wrongdoing came to light, he allowed Audi to continue selling cars that were programmed to recognize when an official emissions test was underway and dial up emissions controls to make the car appear compliant. The cars were not capable of consistently meeting pollution standards.
Mr. Stadler’s lawyer did not immediately respond to a request for comment. In the past, Mr. Stadler has denied wrongdoing.
Credit…Laura Moss for The New York Times
Personal income and spending dipped last month as the effects of stimulus checks faded following a big jump in January, but both are expected to rebound as another round of federal payments arrived in March.
The government reported on Friday that personal income fell 7.1 percent in February from the previous month, while consumption dropped by 1 percent. Powered by $600 checks to most Americans from a December relief bill, income in January leapt by 10.1 percent, while consumption rose by 3.4 percent, a figure revised Friday from the originally reported 2.4 percent.
Despite the drop last month, a big pickup is expected in March with the arrival of $1,400 payments to most Americans from the $1.9 trillion relief package signed into law this month.
In the months ahead, most economists expect consumers to return in greater numbers to stores, restaurants and other gathering places as vaccination efforts gather speed and consumers put the stimulus money and lockdown-accumulated savings to work.
“In February, households were waiting for the bigger stimulus check coming in March and there will be a surge in consumer spending, particularly on services,” said Gus Faucher, chief economist at PNC Financial Services in Pittsburgh.
All of the drop in spending last month was for goods, Mr. Faucher noted, as consumers pulled back on buying big-ticket items like automobiles and appliances. Services should benefit in the coming months, he added, as people have more opportunities to go out and life increasingly returns to normal more than one year after the pandemic hit.
“Consumer spending will be very strong for the remainder of this year and into 2022,” Mr. Faucher added. “There’s a lot of money saved up.”
In another sign of optimism, the University of Michigan reported Friday that its index of consumer sentiment rose to the highest level since the pandemic began.
Economists have improved their forecasts for U.S. economic growth, with Bank of America foreseeing a 7 percent increase this year in gross domestic product.
By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet
Stocks rose on Friday, along with government bond yields, amid a bout of optimism about the economic recovery.
The gains came a day after President Biden said he wanted the United States to administer 200 million vaccines by his 100th day in office, on April 30, a target the country is already on track to meet. The Federal Reserve vice chair, Richard Clarida, pushed back on concerns that the government’s spending plans would fuel higher sustained inflation.
In a victory for financial institutions, the central bank said that pandemic-era rules that restricted share buybacks and dividend payouts by banks would end midway through 2021 for most firms. On the economic front, gross domestic product data for the fourth quarter was also revised slightly higher on Thursday.
Stocks & Bonds
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The S&P 500 index rose 1.7 percent, ending the week with a 1.6 percent gain. Bank stocks fared better than the broad market, with the KBW Bank index up 2 percent.
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The Stoxx 600 Europe rose 0.9 percent, logging a fourth consecutive week of gains.
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The yield on 10-year Treasury notes rose to 1.67 percent.
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Shares of ViacomCBS plunged 27 percent on Friday, bringing the stock’s losses for the week to 50 percent. The decline followed Viacom’s announcement that it plans to raise $3 billion by selling stock and put some of those funds toward building its streaming offering.
Economic data
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Personal income and spending in the United States dipped last month as the effects of stimulus checks faded following a big jump in January, but both are expected to rebound as another round of federal payments arrived in March.
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Retail sales in Britain rose 2.1 percent in February, rebounding from a slump of 8.2 percent the month before, when the country entered a third national lockdown.
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A survey of German business expectations rose to the highest level in nearly three years.
Oil
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Oil prices rose with futures of Brent crude, the global benchmark, climbing 3.9 percent to $64.34 a barrel.
Credit…Matt York/Associated Press
The thrift-store start-up ThredUp on Friday will become the latest clothing resale website to become publicly traded, a move that seeks to take advantage of a growing interest in secondhand retailers among young shoppers.
The company sold 12 million shares for $14 each in its initial public offering, raising $168 million and valuing the business at $1.3 billion.
Founded in Oakland in 2009, ThredUp built its inventory by sending prepaid packages, or “clean out kits,” to sellers, who fill the bags with used clothes and accessories and mail them back.
The website joins Poshmark, which went public in January, and The RealReal, which went public in 2019, on the Nasdaq stock market.
The three companies are all leaders in secondhand shopping, but they take different approaches to resale. The RealReal consigns high-end brands exclusively. Poshmark allows sellers to directly list their items. ThredUp has formed partnerships with brands including Gap, Walmart and Macy’s, helping these large retailers incorporate resale into their stores and e-commerce platforms.
All three emphasize the environmental benefits of resale — but ThredUp more so than its competitors. The company refers to itself as a “force for good” and has criticized the fashion industry’s carbon footprint, including by writing open letters to luxury brands like Burberry that have burned their unsold inventory.
James Reinhart, the chief executive and a co-founder of ThredUp, said Thursday that the company was “ushering in a more circular future for fashion by helping new waves of consumers, brands and retailers take steps toward sustainability.”
With the retail analytics firm GlobalData, ThredUp also publishes a widely cited annual “Resale Report,” which tracks growth of the secondhand market. By the end of 2021, the market value of online resale is estimated to grow to $12 billion, up from $7 billion in 2019, according to the last year’s report.
Much of that growth has been attributed to Generation Z’s preference for online shopping and passion for sustainability. ThredUp’s revenue was $186 million in 2020 (up from $163.8 million in 2019). It posted a net loss of $47.9 million last year.
Still, the company was not immune to retail’s upheaval during the pandemic, as detailed in a March filing with the Securities and Exchange Commission. Average monthly orders have now returned to prepandemic levels, ThredUp said, but the company has not “seen sustained growth” in the time since.
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CreditCredit…By Ben Denzer
In today’s On Tech newsletter, Shira Ovide writes that people are buying digital items like a tweet and a meme for bonkers amounts of money. But we need to take a step back.
