Companies Fear Economic Recovery Won’t Last
Even though many companies recently reported earnings that showed a faster-than-expected bounce back from the pandemic, executives remain leery about the foreseeable future, The Wall Street Journal (WSJ) reported Sunday (Nov. 1).
“It is not a straight-line recovery around the world. It’s important to remember the world is in a fragile state,” Coca-Cola CEO James Quincey said last month, according to WSJ.
Apple, which in ways has benefitted from the change in habits brought about by the pandemic, took the unusual step of declining Thursday (Oct. 29) to offer revenue guidance for the quarter that ends Dec. 31, WSJ reported. Apple Chief Financial Officer Luca Maestri said the reason was “the continued uncertainty around the world in the near term.”
“The coronavirus remains a central problem,” said Volkswagen Head of Finance Frank Witter, WSJ reported.
The corporate caution comes amid new measures intended to combat the virus in major markets around the world.
Germany and France have enacted significant shutdowns expected to last about a month.
In Germany, the government will help businesses with fewer than 50 employees make up as much as three quarters of lost revenue and will help larger companies with assistance allowed under European Union rules.
In the U.S., data released Friday indicated the economy recovered more strongly than many experts had predicted. One factor may be that according to PYMNTS data, U.S. consumers are reversing a trend of recent years and seeking to buy goods rather than experiences.
And as the country moves toward the presidential election, many pandemic signs are pointing in the wrong direction. The number of new infections detected has climbed steadily over the past few weeks. Nearly 100,000 new cases were reported Friday (Oct. 30) and more than 80,000 were reported Saturday (Oct. 31), according to the federal Centers for Disease Control and Prevention (CDC).