Stocks and Bonds

More stories

  • 138 Shares99 Views

    in Economy

    Who Owns Stocks? Explaining the Rise in Inequality During the Pandemic

    by

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesVaccine InformationTimelineWuhan, One Year LaterAdvertisementContinue reading the main storyUpshotSupported byContinue reading the main storyWho Owns Stocks? Explaining the Rise in Inequality During the PandemicBad economies usually hurt both workers and investors. Only the first part has been true this time.Jan. 26, 2021, 5:00 a.m. ETLast year featured a devastating public health crisis, an imploding job market, a heavy dose of political tumult and — surprisingly — a roaring stock market.Add it all up, and a major consequence was an expansion of inequality in a nation where economic disparity was already on the rise.It boils down to which groups were hurt most by the sinking parts of the economy and which ones benefited most from the rising share prices.In the brick-and-mortar part of the economy, lower-wage workers were disproportionately affected by the job losses. At the same time, Americans benefited from gains in share prices: both people who own individual stocks in brokerage accounts and those who own stocks in personal retirement accounts, like mutual fund IRAs, or in those offered by employers, such as 401(k)s.Yet that’s where even more disparity kicked in, an analysis of data from the Federal Reserve’s 2019 Survey of Consumer Finances shows. Although the distribution of income is unequal in the United States, ownership of financial assets in general and stocks in particular is even more so.
    [embedded content]The survey, conducted every three years, collects exhaustively detailed financial information from a sample of American “economic units” — we’ll call them families — including income, the types of assets they own and what those assets are worth.An analysis of this data shows that in 2019, the top 1 percent of Americans in wealth controlled about 38 percent of the value of financial accounts holding stocks. Widen the focus to include the top 10 percent, and you’ve found 84 percent of all of Wall Street portfolios’ value.Using the broadest definition of Wall Street involvement, which includes everything from workplace 401(k)s to mutual funds, just over half of American families have at least one financial account tied to the market, while just one in six report direct ownership of stock shares. Wealthier people are far more likely to have these accounts than middle-class families, who in turn are far more likely to be in the market than working-class or poor families.And the wealthy, not surprisingly, are more likely to have larger portfolios.A paper-napkin calculation that assumes all market participants averaged last year’s 16 percent gain in the S&P 500 would mean that American families fattened their portfolios by $4 trillion over all last year. But $3.4 trillion of that would have gone to just 10 percent of families, leaving the other 90 percent to split $600 billion.Beyond the gap in holdings between the very rich and the merely affluent, there is also a gap between the affluent and the middle class. Only half of households in the 40th-to-49th percentiles of net worth have any brokerage or retirement accounts that include stocks. But among households in the 80th-to-89th percentiles, 84 percent are invested in at least one holding.Wealth and the Role of Stock PricesWhen the market surged last year, wealthier families benefited more. Not only do they have larger portfolios than middle-class and poorer investors, but they also are far more likely to be invested in the market in the first place.Percent of families with investments by net worth percentile:
    [embedded content] Poorest group includes unsuccessful or highly leveraged investors with low net worth.Source: The New York TimesMoreover, the median portfolio size for households in that middle group was $13,000 in 2019, and so would have gained about $2,000 in last year’s market. The typical family in the wealthier group had $170,000 in the market and would have gained about $27,000 with a similar portfolio.These wealth differences are far starker than the inequality we usually talk about on the income ladder.The Coronavirus Outbreak More

  • 150 Shares119 Views

    in Economy

    Is Rivian the Next Tesla? Investors Bet Big on Electric Truck Maker

    by

    The Rivian factory in Normal, Ill. The company is hoping to cash in on the same opportunity that Tesla identified and has advanced: the electrification of transportation.Credit…Lyndon French for The New York TimesSkip to contentSkip to site indexThe Next Tesla? Investors Bet Big on Electric Truck Maker RivianRivian, which has raised another $2.65 billion, plans to sell a pickup truck and S.U.V. it has worked on for more than a decade.The Rivian factory in Normal, Ill. The company is hoping to cash in on the same opportunity that Tesla identified and has advanced: the electrification of transportation.Credit…Lyndon French for The New York TimesSupported byContinue reading the main storyJan. 19, 2021Updated 6:24 p.m. ETPLYMOUTH, Mich. — It’s hard to imagine any company matching Tesla’s rocketlike rise. But if any electric car start-up could aspire to be the “next Tesla,” it would be Rivian.Founded in 2009, Rivian is preparing to produce an electric pickup truck and a sport utility vehicle. Both models are supposed to be on the road by the summer and will be made in a former Mitsubishi plant in Illinois. Rivian is also developing electric delivery trucks for Amazon.What distinguishes Rivian, however, is its extraordinary roster of investors. Amazon is not just a customer; it has put a lot of money into Rivian. Others backers include BlackRock, Fidelity, T. Rowe Price and Ford Motor, which plans to introduce a vehicle based on Rivian’s technology.The latest injection of capital was revealed Tuesday, when Rivian said it had raised $2.65 billion from a group led by funds and accounts advised by T. Rowe Price. Other investors included Fidelity and Amazon’s Climate Pledge Fund. The investment round values the company at more than $27 billion, and brings the total investment in the company to $8 billion since the beginning of 2019.“We have been eagerly anticipating the arrival of 2021 and, with it, the exhilaration of Rivian starting to deliver its revolutionary products to customers,” Joseph Fath, a T. Rowe Price portfolio manager, said in a statement.A hefty war chest is no guarantee of success, and producing a new car from scratch is a monumental task for established automakers, let alone a start-up.“The process of creating something like this is anything but simple,” RJ Scaringe, Rivian’s founder and chief executive, said in an interview. “It’s a complex orchestra, several thousand parts coming from several hundred suppliers. It’s definitely far more complex than people think and far more complex than I thought it would be.”Rivian is hoping to cash in on the same opportunity that Tesla identified and has advanced — the electrification of transportation. To most auto executives, there is now little doubt this is the way the world is going. In the last five years, Tesla has gone from making 50,000 cars annually to making 10 times that many last year. General Motors, Ford, Volkswagen and others are investing billions to develop electric cars and trucks that eventually will begin supplanting fossil fuel models.“In my lifetime, we are going to go from a world where electric vehicles are a tiny subset of the market to where electric vehicles represent 100 percent of the market,” Mr. Scaringe said. “Some existing players will be able to make that transition, but it also creates opportunities for new companies to enter that space.”Another big trend reshaping the auto industry is autonomous cars. On Tuesday, Cruise, a unit of G.M. that is working in that area, announced it had raised $2 billion from Microsoft, G.M., Honda and other investors. Rivian and Tesla are also working on automated-driving technology.Rivian is different from Tesla in several respects. Tesla so far has grown by selling sporty sedans, a type of vehicle that is falling out of favor with consumers. Tesla intends to begin making an oddly angular, futuristic pickup, the Cybertruck, this year. But it hasn’t yet put heavy focus on the trucks and S.U.V.s that make up 75 percent of the passenger vehicle market in the United States.Rivian, on the other hand, is focused on producing “adventure” vehicles that owners can take off road, an approach that means Rivian won’t often compete head to head with Tesla.“There’s a perception that this is winner take all, and that’s just wrong,” Mr. Scaringe said. “Consumers need to have different brands, different flavors. Our success is not at all mutually exclusive to others’ success.”Business & EconomyLatest UpdatesUpdated Jan. 19, 2021, 6:30 p.m. ETSmall-business relief loans start flowing again, with $5 billion worth approved in the first week.Representative introduces a resolution to recognize the journalists who covered the Capitol attack.Retailers drop MyPillow amid fallout from comments by its pro-Trump founder.Rebecca Puck Stair is the kind of car buyer Rivian hopes to attract. A movie location scout in Albuquerque, she has been interested in buying an electric vehicle for a few years, but needs high ground clearance and four-wheel drive for assignments that take her into the desert.“That didn’t exist in the market,” she said. “A Tesla doesn’t fit my needs.”About a year ago, she heard about Rivian for the first time and put a deposit down on an S.U.V. the next day — like Tesla, the company does not plan to sell through dealers. Ms. Stair has seen the Cybertruck, but the design is not for her. “It just screams ‘obnoxious guy truck,’” she said, laughing.Rivian’s truck and S.U.V., which start at $67,500, look more conventional, as if they could have been designed by Land Rover.Unlike Tesla, which is trying to grow quickly, Rivian is taking measured steps. Last year, before the pandemic struck, it said it planned to make around 20,000 pickup trucks and S.U.V.s in 2021 and some 40,000 in 2022. It has not yet offered an updated outlook. It is aiming to have production capacity of 250,000 vehicles a year at its plant in Normal, Ill., by the middle of the decade. The company has not disclosed how many orders it has taken, but a spokeswoman said it had customers lined up for all the vehicles it expected to make this year.And even as other auto start-ups go public by merging with shell companies that have bundles of cash and stock market listings, Rivian is not eager to do so. “We want to launch, demonstrate our capability and let our performance speak for itself before we can look into being public,” Mr. Scaringe, 38, said.That difference in the approaches favored by Rivian and Tesla probably has a lot to do with the men that lead the companies.RJ Scaringe, Rivian’s chief executive, is an engineer who tried to slash his carbon footprint at M.I.T. by getting around by foot and bike, taking cold showers and doing his laundry by hand.Credit…Lyndon French for The New York TimesTesla’s chief executive, Elon Musk, is a disruptive force unlike anything the auto industry had seen in decades, perhaps not since Henry Ford. He has powered his company to stock market heights while attracting an army of fans. But Mr. Musk has also courted controversy — he has called government efforts to limit the spread of the coronavirus “fascist.” His Twitter posts have gotten him and Tesla into legal jams, including with the Securities and Exchange Commission. Not long ago, he claimed Tesla would have a million self-driving cars on the road in 2020, but the company has yet to demonstrate a fully autonomous vehicle.Mr. Scaringe, by contrast, is a bookish engineer, with a Ph.D. from the Massachusetts Institute of Technology. He once tried to slash his personal carbon footprint at M.I.T. by getting around by foot and bike, taking cold showers and doing his laundry by hand. His Twitter feed is so tame that one recent post was about the car color preferences of his children (blue).In the second half of this year, Rivian hopes to start producing its Amazon delivery van in large numbers. Amazon is already testing prototypes on the road. The retail giant has made the trucks a central part of its strategy to reduce emissions, placing an order for 10,000 to be delivered by the end of 2022.Rivian still has a lot of work to do. On a recent afternoon, engineers at its labs in Plymouth were tinkering with a half-dozen R1T pickups in various stages of development. A few were hand-built models with screws visible in door wells — telltale signs of early prototypes. One was a more refined version that seemed a step or two away from the production version.“People are working all hours,” said Ryan Kalb, a special projects engineer. “We are trying to move quickly, and we want to be doing it. We all want to see this happen.”It was a similar story about 300 miles down the road at Rivian’s plant in Normal, a 3.4 million-square-foot factory that the company bought for $16 million in 2017. Since then, the plant has undergone an overhaul that cost more than $1 billion. Freshly painted and brightly lit, it has a long, winding assembly line where the R1T and R1S S.U.V. will be made. At the moment, only a few are built each day.Michael Ramsey, a Gartner analyst, said he was eager to see if Rivian could avoid the mistakes that hamstrung Tesla a few years ago, when Mr. Musk rushed to ramp up production of the Model 3 sedan only to end up in what he called “manufacturing hell.”“Is Rivian going to be a giant future competitor to Ford and G.M.? I don’t know,” Mr. Ramsey said. “But they have all these mega-investments. They have a strategic partner in Ford. They have contracts with Amazon. Of all the E.V. start-ups, they seem to have the best chance of making it.”AdvertisementContinue reading the main story More

  • 113 Shares119 Views

    in Economy

    Why Markets Boomed in a Year of Human Misery

    by

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus PlanVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storyUpshotSupported byContinue reading the main storyWhy Markets Boomed in a Year of Human MiseryIt wasn’t just the Fed or the stimulus. The rise in savings among white-collar workers created a tide lifting nearly all financial assets.Neil Irwin and Jan. 1, 2021, 5:00 a.m. ETThe central, befuddling economic reality of the United States at the close of 2020 is that everything is terrible in the world, while everything is wonderful in the financial markets.It’s a macabre spectacle. Asset prices keep reaching new, extraordinary highs, when around 3,000 people a day are dying of coronavirus and 800,000 people a week are filing new unemployment claims. Even an enthusiast of modern capitalism might wonder if something is deeply broken in how the economy works.To better understand this strange mix of buoyant markets and economic despair, it’s worth turning to the data. As it happens, the numbers offer a coherent narrative about how the United States arrived at this point — one with lessons about how policy, markets and the economy intersect — and reveal the sharp disparity between the pandemic year’s haves and have-nots.Income More

  • 175 Shares199 Views

    in Economy

    What Is 13-3? Why a Debate Over the Fed Is Holding Up Stimulus Talks

    by

    AdvertisementContinue reading the main storySupported byContinue reading the main storyWhat Is 13-3? Why a Debate Over the Fed Is Holding Up Stimulus TalksThe Fed’s emergency lending authorities are a key part of its job. Republicans want to curb them. Democrats are pushing back.Senate Republicans are trying to make sure that emergency programs backed by the Federal Reserve cannot be restarted after they expire on December 31.Credit…Anna Moneymaker for The New York TimesDec. 18, 2020Updated 7:40 p.m. ETAs markets melted down in March, the Federal Reserve unveiled novel programs meant to keep credit flowing to states, medium-sized businesses and big companies — and Congress handed Treasury Secretary Steven Mnuchin $454 billion to back up the effort.Nine months later, Senate Republicans are trying to make sure that those same programs cannot be restarted after Mr. Mnuchin lets them end on Dec. 31. Beyond preventing their reincarnation under the Biden administration, Republicans are seeking to insert language into a pandemic stimulus package that would limit the Fed’s powers going forward, potentially keeping it from lending to businesses and municipalities in future crises.The last-minute move has drawn Democratic ire, and it has imperiled the fate of relief legislation that economists say is sorely needed as households and businesses stare down a dark pandemic winter. Here is a rundown of how the Fed’s lending powers work and how Republicans are seeking to change them.The Fed can keep credit flowing when conditions are really bad.The Fed’s main and best-known job is setting interest rates to guide the economy. But the central bank was set up in 1913 in large part to stave off bank problems and financial panics — when people become nervous about the future and rush to withdraw their money from bank accounts and sell off stocks, bonds and other investments. Congress dramatically expanded the Fed’s powers to fight panics during the Great Depression, adding Section 13-3 to the Federal Reserve Act.The section allows the Fed to act as a lender of last resort during “unusual and exigent” circumstances — in short, when markets are not working normally because investors are exceptionally worried. The central bank used those powers extensively during the 2008 crisis, including to support politically unpopular bailouts of financial firms. Congress subsequently amended the Fed’s powers so that it would need Treasury’s blessing to roll out new emergency loan programs or to materially change existing ones.The programs provide confidence as much as credit.During the 2008 crisis, the Fed served primarily as a true lender of last resort — it mostly backed up the various financial markets by offering to step in if conditions got really bad. The 2020 emergency loan programs have been way more expansive. Last time, the Fed concentrated on parts of Wall Street most Americans know little about like the commercial paper market and primary dealers. This time, it reintroduced those measures, but it also unveiled new programs that have kept credit available in virtually every part of the economy. It has offered to buy municipal bonds, supported bank lending to small and medium-sized businesses, and bought up corporate debt.The sweeping package was a response to a real problem: Many markets were crashing in March. And the new programs generally worked. While the terms weren’t super generous and relatively few companies and state and local borrowers have taken advantage of these new programs, their existence gave investors confidence that the central bank would prevent a financial collapse.But things started getting messy in mid-November.Most lawmakers agreed that the Fed and Treasury had done a good job reopening credit markets and protecting the economy. But Senator Patrick J. Toomey, a Pennsylvania Republican, started to ask questions this summer about when the programs would end. He said he was worried that the Fed might overstep its boundaries and replace private lenders.After the election, other Republicans joined Mr. Toomey’s push to end the programs. Mr. Mnuchin announced on Nov. 19 that he believed Congress had intended for the five programs backed by the $454 billion Congress authorized to stop lending and buying bonds on Dec. 31. He closed them — while leaving a handful of mostly older programs open — and asked the Fed to return the money he had lent to the central bank.Business & EconomyLatest UpdatesUpdated Dec. 18, 2020, 12:25 p.m. ETLee Raymond, a former Exxon chief, will step down from JPMorgan Chase’s board.U.S. adds chip maker S.M.I.C. and drone maker DJI to its entity list.Volkswagen says semiconductor shortages will cause production delays.The Fed issued a statement saying it was dissatisfied with his choice, but agreed to give the money back.Democrats criticized the move as designed to limit the incoming Biden administration’s options. They began to discuss whether they could reclaim the funds and restart the programs once Mr. Biden took office and his Treasury secretary was confirmed, since Mr. Mnuchin’s decision to close them and claw back the funds rested on dubious legal ground.The new Republican move would cut off that option. Legislative language circulating early Friday suggested that it would prevent “any program or facility that is similar to any program or facility established” using the 2020 appropriation. While that would still allow the Fed to provide liquidity to Wall Street during a crisis, it could seriously limit the central bank’s freedom to lend to businesses, states and localities well into the future.In a statement, Senator Elizabeth Warren, Democrat of Massachusetts, called it an attempt to “to sabotage President Biden and our nation’s economy.”Mr. Toomey has defended his proposal as an effort to protect the Fed from politicization. For example, he said Democrats might try to make the Fed’s programs much more generous to states and local governments.The Treasury secretary would need to have the Fed’s approval to improve the terms to help favored borrowers. But the central bank might not readily agree, as it has generally approached its powers cautiously to avoid attracting political scrutiny and to maintain its status as a nonpartisan institution.Fed officials have avoided weighing in on the congressional showdown underway.“I won’t have anything to say on that beyond what we have already said — that Secretary Mnuchin, as Treasury secretary, would like for the programs to end as of Dec. 31” and that the Fed will give back the money as asked, Richard H. Clarida, the vice chairman of the Fed, said Friday on CNBC.More generally, he added that “we do believe that the 13-3 facilities” have been “very valuable.”Emily Cochrane More

  • 138 Shares189 Views

    in Economy

    Carrier Plant Is Bustling, but Workers Are Wary as Trump Exits

    by

    AdvertisementContinue reading the main storySupported byContinue reading the main storyCarrier Plant Is Bustling, but Workers Are Wary as Trump ExitsThe president championed an Indiana factory facing a shutdown four years ago. Hundreds of jobs were kept, and overtime abounds. Can the revival last?Less than a month after President Trump’s victory in 2016, he worked out a deal to keep to keep the Carrier plant in Indianapolis open.Credit…Doug Mills/The New York TimesDec. 18, 2020, 5:00 a.m. ETFor the workers fortunate enough to remain employed at Carrier’s Indianapolis factory, which Donald Trump singled out as a symbol of American manufacturing distress in 2016, these should be the best of times. The assembly line is churning out furnaces seven days a week, overtime is abundant, and shares of Carrier are soaring even as Covid-19 ravages the overall economy.But that’s not how Anthony Cushingberry, a 24-year veteran of the factory floor and a union steward, sees it. “The trust left a long time ago,” he said recently after completing a 10-hour shift as a materials associate, taking deliveries of parts and shipping out scrap. “Some of us think they are stockpiling equipment so they can close the factory later.”That’s a worry that has only intensified for workers like Paul Roell, a Trump supporter who fears that after the president leaves office, Carrier management will dust off old plans to move the factory’s 1,050 jobs to Mexico.“Trump is the reason we have our job, and as long as he was in office, we were safe,” Mr. Roell said. “We don’t have the leverage anymore.”That is open to debate, but it’s clear that without Mr. Trump’s intervention even before he took office, the factory would never have become so prominent, if it had survived at all.The furnace-maker’s turn in the spotlight began in February 2016 with a 3-minute-32-second video of a Carrier executive announcing that the factory would be closed, with production shifting to a facility near Monterrey, Mexico. Workers in Indianapolis make more in an hour than their colleagues in Mexico do in a day.“This is strictly a business decision,” the executive told the booing, cursing workers before telling them to quiet down. Mr. Trump soon warned on Twitter that as president he would force Carrier, then part of the conglomerate United Technologies, to reverse its decision.Credit…Lee Klafczynski for The New York Times“The trust left a long time ago.” Anthony CushingberryIt didn’t take that long. Less than a month after his victory, Mr. Trump and Vice President-elect Mike Pence, Indiana’s governor at the time, worked out a deal with the company to keep the factory open. In exchange for $7 million in state tax breaks, Carrier would preserve about 700 blue-collar jobs, while laying off 632 workers.Since then, the 2016 deal itself has become a political Rorschach test. The loss of nearly half the positions, plus the tax incentives that United Technologies received, underscored the limits of Mr. Trump’s powers to save jobs, even as his supporters hailed his role in keeping the plant open at all.The factory has managed to hang on since then and even prosper. But even relatively well-paid blue-collar workers don’t feel secure. The real winnings have gone to Carrier shareholders, whose shares have more than tripled since the company was spun out of United Technologies in April.And now, with Mr. Trump about to leave the White House, the factory is at a turning point. It is operating seven days a week, with mandatory overtime for workers. Carrier has been hiring, adding some 300 workers and bringing the total work force to nearly 1,050.The hiring has helped morale improve since it bottomed out in 2018 with rising absenteeism and machine breakdowns. “I still go in and keep on pushing every day,” said Robin Maynard, who manages 13 to 15 workers as a group leader and is looking forward to retiring in two years.New hires have helped offset absenteeism, Mr. Maynard said, but not all of the newcomers could handle the job and were quickly let go. “They just weren’t factory material,” he said.James Adcock, an official with the United Steelworkers, which represents the Carrier workers, said there was hiring every week. “We’re not quite where we were in 2016,” he said, “but we are working toward that.”And for those who can handle the pace, the Indianapolis plant offers a shot at a solidly middle-class lifestyle, with wages of more than $20 an hour, with time-and-a-half pay on Saturdays and double-time on Sundays.“Financially, it’s good,” Mr. Cushingberry allowed, noting that some workers are making more than $80,000 a year. By contrast, the warehouses and logistics centers that are hiring nearby pay much less, in the range of $15 an hour. But many workers say they can’t handle the pace, however rich the rewards.Business & EconomyLatest UpdatesUpdated Dec. 18, 2020, 7:11 a.m. ETStocks close the week on an uncertain note.Catch up: Coinbase files for initial public offering.Restaurant chains are finding it difficult to navigate differing regulations.“You feel worked to death,” said Rod Smith, a 17-year veteran. “When you work 30 days straight, where is the light at the end of the tunnel?” Despite the recent additions to the work force, Mr. Smith feels Carrier should be hiring more aggressively, rather than working its existing employees so hard.“The company is trying to run it light to cut costs on manpower,” he said. Carrier declined to comment for this article, but the company recently raised its target for annual cost savings to $700 million from $600 million, and the pressure to find new efficiencies is intense.Demand for Carrier’s residential heating and cooling systems rose 46 percent in the third quarter, and the company raised its full-year sales and profit forecast when it reported earnings in late October.Credit…Lee Klafczynski for The New York TimesMr. Roell, a member of the Indiana National Guard, said the days he has to don his uniform and report for Guard duty are a welcome respite from the assembly line. “It’s not a vacation, but there’s more downtime,” he said.Employees were idled for several weeks in the spring after the coronavirus pandemic first struck, but they were soon classified as essential workers and went back to work. One employee died of Covid-19, and Carrier has adjusted production lines to create more space between employees while requiring masks and checking temperatures as people arrive for the day.To thank them for working through the pandemic in the spring, the company gave a party in a tent in June “with a chicken lunch and a pack of Life Savers as thanks,” Mr. Roell recalled, while other local employers gave bonuses and raises.At the same time, Carrier has made an unlikely emergence as a stock-market darling. Long a dull if steady performer overshadowed by the military business within United Technologies, it was spun out as an independent company in early April.The timing couldn’t have been worse — it was the depth of the recession caused by the coronavirus outbreak — and Carrier’s shares made their debut at $12. But a booming housing market, driven by low interest rates, has powered demand for new heating and air conditioning systems, said Deane M. Dray, an analyst with RBC Capital Markets.So has a desire by Americans suddenly stuck at home to upgrade their ventilation systems, Mr. Dray said. Demand for Carrier’s residential heating and cooling systems rose 46 percent in the third quarter, and the company raised its full-year sales and profit forecast when it reported earnings in late October.“There’s a silver lining to working from home — it means work on the home,” Mr. Dray said. Carrier now trades around $38 a share, and Mr. Dray sees a further opportunity for the company as the new Covid vaccines are rolled out.The two leading vaccines need to be refrigerated well below freezing, which could drive demand for cooling systems worldwide. That, plus Carrier’s new freedom to maneuver as an independent company, bodes well for shareholders.“At United Technologies, Carrier was not a priority for growth capital,” Mr. Dray said. “They are finally in control of their own destiny.”The same cannot be said of workers like Mr. Smith, Mr. Roell or Mr. Cushingberry. And while the saga of Carrier’s Indianapolis factory is well known in political circles, it hasn’t even come up on earnings calls or otherwise registered for the analysts who cover Carrier on Wall Street. “This is below the radar screen for us,” Mr. Dray said.Credit…Lee Klafczynski for The New York Times“Trump is the reason we have our job, and as long as he was in office, we were safe.”Paul Roell Carrier workers who held United Technologies shares in their retirement accounts received stock as part of the offering, but didn’t receive shares outright or otherwise take part in the spinoff. Carrier’s chief executive, David Gitlin, owns more than 200,000 shares, worth nearly $8 million.“It’s once in a lifetime, but it was a missed opportunity,” said Corey Austin, a Carrier employee who has worked on the assembly line for 17 years. But Mr. Austin, who earns $23.87 an hour, has no illusions about how lucky he is to still be employed at Carrier.His father and mother spent decades as assembly workers and United Steelworkers members at Diamond Chain, a factory in downtown Indianapolis that announced this year that it would close after operating for more than a century.Negotiations on a new contract at Carrier begin next year, and Mr. Austin hopes to see a raise when the new contract goes into effect. “Employees didn’t even know the spinoff was happening,” he said. “And a lot of employees don’t trust what management tells them. People are just in the mind-set of working every day.”In the past, new contracts have typically increased salaries by 50 cents an hour each year over three years.With or without Mr. Trump in office, Mr. Roell has no plans to look for a job anywhere else, despite his anxiety about the factory’s long-term prospects. In the meantime, he doesn’t foresee a break until Christmas Eve, and the last full day he was able to spend with his family was on Thanksgiving weekend.But with a salary of $25.96 an hour — and two children to put through college — the long hours and constant uncertainty are worth it. “It’s a pretty big worry,” he said. “I just turned 40, and I’m going to keep working there. Hopefully, they will stick around.”AdvertisementContinue reading the main story More

  • 125 Shares149 Views

    in Economy

    Fed Leaves Rates Unchanged and Commits to Ongoing Bond Purchases

    by

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Latest Vaccine InformationU.S. Deaths Surpass 300,000F.A.Q.AdvertisementContinue reading the main storySupported byContinue reading the main storyFed Leaves Rates Unchanged and Commits to Ongoing Bond PurchasesCentral bank officials left rates near-zero at their December meeting and tied bond buying to their employment and price goals.Jerome H. Powell, the Federal Reserve Chair, said Wednesday that the central bank will keep interest rates near zero to support the economy as coronavirus cases surge nationwide, adding that “a full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.”CreditCredit…Al Drago for The New York TimesDec. 16, 2020Updated 5:26 p.m. ETWASHINGTON — Federal Reserve officials pledged to help the economy through the painful pandemic era, making clear at their final meeting of the year that the central bank would continue cushioning businesses and households by keeping interest rates at rock bottom and buying government-backed debt for the foreseeable future.The Fed’s chair, Jerome H. Powell, said at a news conference after the meeting that the central bank would keep its effort to bolster demand going “for some time,” adding that the “the next few months are likely to be very challenging.”The Fed cut interest rates to near-zero in March and has been buying about $120 billion in government-backed debt each month to soothe markets and help shore up growth. The central bank explicitly tied its bond-buying program to its goals of full employment and stable inflation in its December policy statement. The move suggested that the Fed expected to continue its purchases for some time, given how far the economy is from meeting those goals.The committee said the Fed would continue to increase its holdings of Treasury securities at the current pace “until substantial further progress has been made toward the committee’s maximum employment and price stability goals.”Mr. Powell said the policy decisions were intended to show that the Fed would “deliver powerful support to the economy until the recovery is complete.”He used his post-meeting remarks to paint a picture of a bifurcated economy, one in which many businesses and households face acute economic pain in the near-term, coupled with the expectation that the economy would snap back once vaccines were widely available — a development that he guessed could come about as soon as midyear.The United States could then see a long period of unbroken growth, Mr. Powell predicted, signaling that he and his colleagues were prepared to leave rates low for years on end as they try to return the labor market and broader economy to full strength.Government policies are “trying to work together to try to create a bridge across this economic chasm that was created by the pandemic, and for many Americans, that bridge is there, and they’re across it,” he said.“But there’s a group for which they don’t have a bridge yet,” Mr. Powell added, suggesting later that more help from Congress is needed to help fill the gap. “It’s the 10 million people who lost their jobs, it’s the people who may lose their homes. You see the many, many millions of Americans who are waiting in food lines in their cars these days.”He said the economy would need the Fed’s support for some time because while officials expect it to grow at a healthy clip starting in the middle of next year, “it is going to be a while before we really are back to the levels of labor market conditions that we had early this year.”The central bank’s summary of economic projections, released Wednesday, underlined Mr. Powell’s patient point. They showed that Fed officials had a slightly more optimistic outlook for growth and unemployment at the end of 2020 and in coming years than they had been in September. The central official now sees unemployment declining to 5 percent in 2021, versus a previous prediction of 5.5 percent, and sees gross domestic product coming in at 4.2 percent versus 4 percent.Despite that upgrade, the median Fed official continued to project interest rates near-zero through the end of 2023, demonstrating the central bank’s plan to move glacially coming out of the crisis.While the Fed promised to do what it could to help the economy, Mr. Powell also stressed its limitations. He repeated his call for more fiscal stimulus, saying that the continuing rise in virus cases and the lapse in funding for several programs that were helping households and businesses stay afloat posed challenges.The Coronavirus Outbreak More

  • 125 Shares99 Views

    in Economy

    ‘This Is Insanity’: Start-Ups End Year in a Deal Frenzy

    by

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesC.D.C. Shortens Quarantine PeriodsVaccine TrackerFAQAdvertisementContinue reading the main storySupported byContinue reading the main story‘This Is Insanity’: Start-Ups End Year in a Deal FrenzyInvestors are tripping over one another to give hot start-ups money. DoorDash and Airbnb are going public. The good times are baaack.Credit…Mark WangBy More

  • 125 Shares179 Views

    in Economy

    Chinese Companies to Face More Scrutiny as Bill Clears House

    by

    AdvertisementContinue reading the main storySupported byContinue reading the main storyChinese Companies to Face More Scrutiny as Bill Clears HouseThe House voted to approve legislation that will increase oversight for Chinese companies listed on American exchanges, making the bill almost certain to become law.The United States Capitol in Washington. The House of Representatives on Wednesday passed legislation that would create more oversight of Chinese companies operating in American markets.Credit…Oliver Contreras for The New York TimesBy More