General Motors said it made a $3 billion profit in the first three months of the year, but warned that its profit would be significantly smaller in the second quarter because of a global shortage computer chips.
Last year, G.M. made a profit of just $294 million in the first quarter as the coronavirus pandemic took hold and shut down much of the global economy.
The company forecasts net income for the first half of the year would total about $3.5 billion, implying a profit of around $500 million in the second quarter. It said it expected a rebound in the second half and predicted net income for the full year to range from $6.8 billion to $7.6 billion.
“This remains a challenging period for the company as we emerge from 2020, but the team continues to demonstrate its ability to manage complex situations,” G.M.’s chief executive, Mary Barra, said in a letter to shareholders.
Separately, Stellantis, the company formed by the merger of Peugeot SA and Fiat Chrysler, reported revenue of 34 billion euros ($41 billion) since the merger was completed on Jan. 17. Had the merger been completed earlier, the new company’s revenue for the full first quarter would have been 37 billion euros, up 14 percent over the same period a year ago.
Stellantis said its production in the first quarter was 11 percent lower than planned because of the chip shortage, and it also warned that the second quarter would be weaker than the first.
Futures on Wall Street pointed higher on Wednesday, European stock indexes rose and oil prices continued to climb, as fresh data seemed to underscore growing confidence in an economic revival this year.
S&P 500 futures were 0.5 percent higher, and the Stoxx Europe 600 index rose 1.4 percent. The FTSE 100 in Britain rose 1.2 percent.
The upward trajectory came after Treasury Secretary Janet L. Yellen on Tuesday surprised the markets by commenting that higher interest may be needed to prevent the United States economy from overheating. The S&P 500 fell, but gained back some of that ground through the afternoon.
Interest rate policies are the purview of the Federal Reserve, not the Treasury. Ms. Yellen later said she was not recommending a rate hike and pointed out that she, as a former Fed chair (a post she held from 2014 to 2018), appreciated the central bank’s independence.
In oil markets, Brent crude gained 1.1 percent, to $69.61 a barrel, and West Texas Intermediate rose 1 percent to $66.32 a barrel.
New data on the European economy from IHS Markit reflected continued strengthening. The eurozone composite purchasing managers’ index (PMI) for April grew for the second consecutive month. Significantly, the service sector grew after seven months of contraction.
“The updated services PMIs for April confirmed that the worst for the eurozone economy should be over,” said Nicola Nobile, the lead eurozone economist for Oxford Economics, in a note to clients. “The vaccination progress and the gradual reopening of some of the economies point to” an increase in economic output already underway, she added.
More chip worries
Stellantis, the name for the merger of Fiat Chrysler and PSA, the maker of Peugeot, said the semiconductor shortage caused an 11 percent decline in production of automobiles in the first quarter, representing about 190,000 vehicles.
Dealer inventories were down in all areas, “primarily due to the semiconductor shortage,” the company said. Despite that, Stellantis reported net revenue up 14 percent. Shares gained 3 percent in European trading.
Four weeks before its scheduled end, the federal government’s signature aid effort for small business ravaged by the pandemic — the Paycheck Protection Program — ran out of funding on Tuesday afternoon and stopped accepting most new applications.
Congress allocated $292 billion to fund the program’s most recent round of loans. Nearly all of that money has now been exhausted, the Small Business Administration, which runs the program, told lenders and their trade groups on Tuesday. (An earlier version of this item misstated that the actions it described occurred Wednesday.)
While many had predicted that the program would run out of funds before its May 31 application deadline, the exact timing came as a surprise to many lenders.
“It is our understanding that lenders are now getting a message through the portal that loans cannot be originated,” the National Association of Government Guaranteed Lenders, a trade group, wrote in an alert to its members Tuesday evening. “The P.P.P. general fund is closed to new applications.”
Some money — around $8 billion — is still available through a set-aside for community financial institutions, which generally focus on lending to businesses run by women, minorities and other underserved communities. Those lenders will be allowed to process applications until that money runs out, according to the trade group’s alert.
Representatives from the Small Business Administration did not immediately respond to a request for comment.
Some money also remains available for lenders to finish processing pending applications, according to a lender who was on a call with S.B.A. officials on Tuesday.
Since its creation last year, the Paycheck Protection Program has disbursed $780 billion in forgivable loans to fund 10.7 million applications, according to the latest government data. Congress renewed the program in December’s relief bill, expanding the pool of eligible applicants and allowing the hardest-hit businesses to return for a second loan.
Lawmakers in March extended the program’s deadline to May, but they have shown little enthusiasm for adding significantly more money to its coffers. With vaccination rates increasing and pandemic restrictions easing, Congress’s focus on large-scale relief effort for small businesses has waned.
The government’s recent efforts have been focused on the most devastated industries. Two new grant programs run by the Small Business Administration — for businesses in the live-events and restaurant industries — began accepting applications in recent weeks, though no grants have yet been awarded.
Last May, Epic Games was making plans to circumvent Apple’s and Google’s app store rules and ultimately sue them in cases that could reshape the entire app economy and have profound ripple effects on antitrust investigations around the world.
Epic’s chief operating officer, Daniel Vogel, sent other executives an email raising a concern: Epic must persuade Apple and Google to give in to its demands for looser rules, he wrote, “without us looking like the baddies.”
Apple and Google, Mr. Vogel warned, “will treat this as an existential threat.” To prepare, Epic formed a public relations and marketing plan to get the public behind its campaign against the tech giants.
Apple seized on that plan in a federal courtroom in Oakland, Calif., on Tuesday, the second day of what is expected to be a three-week trial stemming from Epic’s claims that Apple relies on its control of its App Store to unfairly squeeze money out of other companies.
Judge Yvonne Gonzales Rogers of California’s Northern District, who will decide the case, also asked Epic’s chief executive, Tim Sweeney, a series of pointed questions about its potential consequences. She asked whether he had any understanding of the economics of other types of apps, including food, maps, GPS, weather, dating or instant messaging.
“So you don’t have any idea how what you are asking for would impact any of the developers who engage in those other categories of apps, is that right?” the judge asked.
“I personally do not,” Mr. Sweeney said, in his second day on the witness stand.
Apple’s lawyers argued that Epic had attacked App Store fees to shore up a slowing business. Gross revenue on Fortnite, Epic’s flagship video game, shrank in the last three quarters of 2019 compared with 2018, according to an Epic presentation to its board of directors about its plan to fight Apple. The presentation was disclosed in court on Tuesday, along with the executive’s emails.
Under questioning from Apple’s lawyers, Mr. Sweeney said Epic’s own game store was not expected to turn a profit until at least 2024.
Epic’s lawyers said the lawsuit was not just about Epic and Fortnite but about fairness for all apps that must use Apple’s App Store to reach consumers.
“Our contention in this case is that all apps are at issue,” said Katherine Forrest, a lawyer at Cravath, Swaine & Moore.
Epic is not asking for a payout if it wins the trial; it is seeking relief in the form of changes to App Store rules. Epic has asked Apple to allow app developers to use other methods to collect payments and open their own app stores within their apps.
Apple has countered that these demands would raise a world of new issues, including making iPhones less secure.
On Tuesday afternoon, Benjamin Simon, founder of Yoga Buddhi, which makes the Down Dog Yoga app, testified about his company’s problems with Apple’s policies. Mr. Simon said that he had to charge more for subscriptions on the App Store to make up for the 30 percent fee that Apple charged him, and that Apple’s rules prevented him from promoting inside his app a cheaper price that is available on the web.
Mr. Simon said Apple warned app developers against speaking out about its policies in guidelines for getting their apps approved. “‘If you run to the press and trash us, it never helps,’” he said. “That was in the guidelines.”
Dogecoin, the cryptocurrency that started as a joke, is on a tear. A surge in the past day pushed it to another record, sending it some 14,000 percent higher than it started the year.
One theory is that the upcoming appearance of Elon Musk, the Tesla chief executive and noted Dogecoin superfan, as the host of “Saturday Night Live” on May 8 could get more people interested in trading the crypto token. It’s as good a reason as any for those who try to rationalize its movements.
The latest bout of Dogecoin mania has somewhat overshadowed what’s going on in Ethereum, the second-largest cryptocurrency, which also set records this week and made its 27-year-old co-creator, Vitalik Buterin, a billionaire (in dollars). The price of Ether, the crypto token built on the Ethereum blockchain, is up more than 350 percent for the year to date, outpacing Bitcoin’s relatively pedestrian 90 percent gain — which, for context, outpaces every stock in the S&P 500 over that period.
Facebook has scheduled an announcement for 9 a.m. Eastern time Wednesday on whether former President Donald J. Trump can regain access to his account on the site.
The decision will come from an independent panel called the Facebook Oversight Board.
The board is a panel of about 20 former political leaders, human rights activists and journalists picked by Facebook to deliberate the company’s content decisions, Cecilia Kang reports for The New York Times. It began a year ago and is based in London.
The idea for the board was for the public to have a way to appeal decisions by Facebook to remove content that violates its policies against harmful and hateful posts. Mark Zuckerberg, Facebook’s C.E.O., has said neither he nor the company wanted to have the final decision on speech.
The company and paid members of the panel stress that the board is independent. But Facebook funds the board with a $130 million trust and top executives played a big role in its formation.
So far the board has issued a handful of decisions on minor takedowns by Facebook. The majority of the rulings have overturned Facebook’s decisions.
The board will tell Facebook to remove the ban of Mr. Trump, or to keep it. The ruling may also come with more nuance. The board could say that the ban of was appropriate at the time but is no longer necessary, or that the ban was the wrong decision from the start.
The company then has seven days to put the board’s ruling into effect.
When Bill and Melinda Gates announced filed for divorce in Washington State on Monday, grant recipients and staff members alike wondered what would happen to the Bill and Melinda Gates Foundation.
The message from the headquarters in Seattle was clear: The Bill and Melinda Gates Foundation isn’t going anywhere.
The foundation’s $50 billion endowment is in a charitable trust that is irrevocable, Nicholas Kulish reports for The New York Times. It cannot be removed or divided up as a marital asset, said Megan Tompkins-Stange, a professor of public policy and scholar of philanthropy at the University of Michigan. She noted, however, that there was no legal mandate that would prevent them from changing course.
“I think there may be changes to come,” she said. “But I don’t see it as a big asteroid landing on the field of philanthropy as some of the hyperbole around this has indicated.”
The foundation, which set a new standard for private philanthropy in the 21st century, has given away nearly $55 billion, giving the couple instant access to heads of state and leaders of industry.
The couple’s prominence has also brought a fair share of scrutiny, throwing a spotlight on Mr. Gates’s robust defense of intellectual property rights — in this case, specific to vaccine patents — even in a time of extreme crisis, as well as the larger question of how unelected wealthy individuals can play such an outsize part on the global stage.
“In a civil society that is democratic, one couple’s personal choices shouldn’t lead university research centers, service providers and nonprofits to really question whether they’ll be able to continue,” said Maribel Morey, founding executive director of the Miami Institute for the Social Sciences.