Tesla's Autopilot software steered the vehicle into the triangular "gore area" at a motorway intersection, and accelerated into a concrete barrier.
The front of the Tesla separated from the rear, causing two other drivers to crash.
The Tesla driver, 38-year-old Walter Huang, was taken to hospital but died of his injuries. The other drivers survived.
The NTSB said:
The Tesla driver had not taken control of the car because he had been distracted by a smartphone video game
The Tesla's collision avoidance system was "not designed to detect the crash [barrier]"
Tesla's Autopilot system did not "provide an effective means of monitoring the driver's engagement"
The use of Tesla's Autopilot software has been implicated in several crashes.
The system lets the car operate semi-autonomously, changing lanes and adjusting its speed.
But critics say the "Autopilot" branding makes some drivers think the car is driving fully autonomously.
The NTSB said the driver had been "over-reliant" on the software.
Tesla does instruct drivers to keep their hands on the wheel when using Autopilot, and an audible warning sounds if they fail to do so.
But the NTSB said "monitoring of driver-applied steering wheel torque is an ineffective surrogate measure of driver engagement".
"If Tesla does not incorporate system safeguards that limit the use of the Autopilot system to those conditions for which it was designed, continued use of the system beyond its operational design domain is foreseeable and the risk for future crashes will remain," it said.
Recommendations
The NTSB ended its report with several recommendations including:
improving collision avoidance systems to include common obstacles such as traffic barriers
evaluating Tesla's Autopilot to determine whether the ability to operate it "outside the intended operational design" posed an unreasonable risk to safety
preventing automation complacency in drivers
requiring all new passenger vehicles with semi-autonomous features to be equipped with a driver monitoring system that meets new standards
It also suggested smartphone manufacturers should develop a "distracted driving lockout mechanism" to "disable any driver-distracting functions when a vehicle is in motion but that allows the device to be used in an emergency".
And it urged Apple to "implement a company policy that bans the non-emergency use of portable electronic devices while driving by all employees and contractors".
The NTSB also found a impact-absorbing crash barrier hit by the Tesla had been "in a damaged and non-operational condition at the time of the collision".
It said the California Highway Patrol had failed to report damage following a previous crash and it was "likely" the Tesla driver would have survived the crash if the barrier had been replaced.
(Reuters) - Shares of Walt Disney Co (DIS.N) fell 2% on Wednesday after the media giant’s surprise move to replace top boss Bob Iger raised questions on Wall Street if his successor Bob Chapek had sufficient experience in the entertainment business.
The logo of the Walt Disney Company is displayed above the floor of the New York Stock Exchange shortly after the closing bell as the market takes a significant dip in New York, U.S., February 25, 2020. REUTERS/Lucas Jackson
Chapek headed Disney’s parks business, its largest, and oversaw the opening of the company’s first theme park and resort in mainland China and the creation of the new Star Wars: Galaxy’s Edge lands at Disneyland and Walt Disney World.
While Wall Street analysts were largely positive about the change, some were skeptical.
“Bob Chapek has less (content experience), having spent his Disney career in distribution of content and/or the physical world of parks, retail, and consumer products (ie, minimal storytelling, despite the fact that even he says that storytelling is at the center of Disney’s value proposition),” Needham analyst Laura Martin said.
Two former employees Reuters talked to expressed surprise that Kevin Mayer, chairman of Direct-to-Consumer and International, was not named to the top job, especially after the roll-out of the Disney+ streaming service, which attracted 10 million sign-ups in its first day.
Most analysts, however, agreed that the move ended years of speculation on who would take over Hollywood’s most powerful studio, built up by Iger through acquisitions of Pixar, Marvel, Lucasfilm and 21st Century Fox.
“The move takes CEO succession uncertainty off the table; we expect the markets to digest this news and ultimately give Chapek the benefit of the doubt as the new CEO,” Cowen and Company analysts wrote in a note.
To be sure, Iger is still keeping a significant role at the company. He will assume the post of executive chairman and direct the company’s “creative endeavors”.
“The fact that Bob Iger believes it’s a full time job to sort out the content assets over the next 2 years implies it’s a bigger mess over at the Fox content assets than we thought,” Martin said.
Chapek will face some immediate challenges including building on the early success of Disney+ and charting a strategy for Hulu to be profitable, Cowen analysts added.
Shares of the company were down 2.1% at $125.5 in premarket trading, set for its fifth consecutive session in red.
Reporting by Amal S and Munsif Vengattil in Bengaluru; Editing by Saumyadeb Chakrabarty
Panasonic will stop building solar cells at Tesla's New York Gigafactory 2 plant, the company revealed in a press release. That means Panasonic won't be working on Telsa's latest Solar Roof tiles, though it won't impact their Tesla EV battery partnership. Still, it's not a great sign for the two companies, especially considering that Tesla might start building its own EV batteries.
Panasonic said that the decision stems from a "broader streamlining of its global solar operations," and won't impact Tesla's future solar growth business plans. It added that "Tesla plans to hire qualified applicants to new positions needed to support its solar and energy manufacturing operations in Buffalo."
Tesla received state support from New York for the Gigafactory project in the form of grants totaling around $750 million. In return, it's required to spend $5 billion in the state over a decade and employ 1,460 workers in Buffalo. Failure to do so would result in a $41 million fine against the company. However, Tesla told New York that the Panasonic split "has no bearing on Tesla's current operations," according to a statement it gave to Reuters.
This decision will have no impact on Panasonic and Tesla's strong partnership in Nevada. The two companies will continue their industry-leading electric vehicle battery work taking place at Tesla's Gigafactory outside of Reno, Nevada.
While Tesla's EV division is doing well after a "production hell" period, the company has struggled with its solar power company. Employees recently reported production line problems with the cells and tensions with Panasonic, causing delays to both regular solar panels and Tesla's Solar Roof. Elon Musk's exacting standards for the design of the Solar Roof tiles has also caused friction between the companies, according to an earlier Reuters report.
For its latest Solar Roof (designed to generate electricity while looking like a regular slate roof), Tesla has been using Chinese-built solar cells rather than Panasonic's cells. Panasonic, meanwhile, has reportedly been selling its photovoltaic cells, originally intended for Tesla, to other third-party companies in Japan and elsewhere.
Panasonic will continue to market solar cells under its own brand name, while helping Tesla recruit current and new employees. It also tried to water down any concerns about the EV battery partnership. "This decision will have no impact on Panasonic and Tesla's strong partnership in Nevada," Panasonic said in the press release. "The two companies will continue their industry-leading electric vehicle battery work taking place at Tesla's Gigafactory outside of Reno, Nevada."
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Dow's Slump, Coronavirus Warnings, Bob Iger, Salesforce, Tesla - 5 Things You Must Know Wednesday
Stock futures fall and add to the worst four-day selloff on Wall Street since December 2018; health officials are warning the coronavirus likely will spread to the United States; Bog Iger steps down as CEO of Walt Disney; Salesforce co-CEO Keith Block will depart.
Here are five things you must know for Wednesday, Feb. 26:
1. -- Stock Futures Extend Declines on Warnings of Spread of Coronavirus
Stock futures extended declines Wednesday, adding to the worst four-day selloff on Wall Street since December 2018, following warnings from health officials that the coronavirus likely will spread to the United States.
Contracts tied to the Dow Jones Industrial Average fell 73 points, S&P 500 futures dropped 2.35 points and Nasdaq futures slumped 17 points.
The S&P 500 has lost 7.6% in the last four days after hitting a record high a week ago. The declines have led to $2.14 trillion in losses, according to S&P Global.
The Centers for Disease Control and Prevention said Tuesday that Americans should be prepared for the disease to spread in the United States.
“It’s not so much a question of if this will happen anymore, but rather more a question of exactly when this will happen - and how many people in this country will have severe illness,” said Dr. Nancy Messonnier of the CDC in a call with reporters.
The advice followed similar warnings from the World Health Organization, which urged countries to step up their defense systems as the number of global infections rose past 81,000 and the death toll reached 2,762 - including more than 50 outside of China, where the virus was first identified in late 2019.
2. -- Lowe's, Square, Box and Moderna Report Earnings
The economic calendar in the U.S. Wednesday include New Home Sales for January at 10 a.m. ET and Oil Inventories for the week ended Feb. 21 at 10:30 a.m.
3. -- Disney CEO Bob Iger Steps Down in Surprise Announcement
Walt Disney (DIS) - Get Report CEO Bog Iger stepped down Tuesday and Bob Chapek, who has led Disney Parks, Experiences and Products since 2018, was named as Iger’s successor.
Iger, who last year said he planned to resign in 2021, becomes executive chairman of Disney and will “direct the company’s creative endeavors,” the media and entertainment giant said.
“The company has gotten larger and more complex,” Iger said during a conference call with analysts. “I should be spending as much time as possible on the creative side of our businesses.”
As for the decision to choose Chapek, Susan Arnold, independent lead director on the board, said the directors have been "actively engaged in succession planning for the past several years, and after consideration of internal and external candidates, we unanimously elected" Chapek as CEO.
Iger's announcement caught many inside and outside of Disney by surprise.
“No one knew this was coming,” one senior Disney executive told The Wall Street Journal.
4. -- Salesforce Slumps on Co-CEO Block's Departure
Salesforce.com (CRM) - Get Report was falling 3.18% to $175.50 in premarket trading Wednesday after announcing that co-CEO Keith Block was stepping down.
Remaining chief Marc Benioff worked to assure investors that Salesforce's leadership remained strong despite Block's departure.
The announcement that Block was leaving the company - he assumed the co-CEO post alongside Benioff in August 2018 - came as a surprise given that many observers of Salesforce viewed him as a successor to Benioff, who co-founded the company 21 years ago.
On a call with shareholders, Benioff said that Block’s departure wouldn't cause any interruption in the company’s business execution this year. Block will remain as an adviser to Benioff, the company said in a press release.
“When you look at our total management team that Keith and I have built ... I think it is the finest management team in the software industry and maybe any industry,” said Benioff.
"As for the stock, while Block's departure may raise questions about keyman risk at the company, we note the bench is deep with COO Bret Taylor and Adam Selipsky, chief of Tableau, which CRM recently bought," said Jim Cramer and the Action Alerts PLUS team, which owns Salesforce in its portfolio.
In its fourth-quarter earnings report, which was released alongside the news of Block’s departure, Salesforce posted better-than-expected revenue and raised its first-quarter sales guidance. It also announced that it acquired Vlocity for $1.33 billion.
5. -- Tesla and Panasonic End Solar Cell Partnership
Tesla (TSLA) - Get Report and Japanese electronics maker Panasonic have ended their partnership to produce solar cells after years of struggling to ramp up output at the Gigafactory 2 in upstate New York, the Nikkei Asian Review reported.
Tesla reportedly has been using solar cells from other manufacturers in its solar roof tiles.
The companies formed a joint venture to manufacture solar cells at the plant in Buffalo, New York, in 2016.
Tesla and Panasonic plan to continue working together on automotive batteries for Tesla’s electric vehicles, the Nikkei reported.
Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: Copyright 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc.2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC 2018 and/or its affiliates.
Consumer confidence rose less than expected in February as people's assessment of current conditions wavered, data released Tuesday by The Conference Board showed.
The consumer confidence index came in at 130.7, up from 130.4 in January. Economists polled by Dow Jones expected a print of 132.6. The Conference Board's present situation index, which accounts for consumers' assessment of the current business and labor environment, dropped to 165.1 from 173.9 in January.
The confidence index's weaker-than-forecast print comes a day after the stock market had its worst day in two years, with the Dow Jones Industrial Average falling more than 1,000 points, amid concerns over the coronavirus' impact on the global economy.
"Despite the decline in the Present Situation Index, consumers continue to view current conditions quite favorably," said Lynn Franco, senior director of economic indicators at The Conference Board, in a statement. "Consumers' short-term expectations improved, and when coupled with solid employment growth, should be enough to continue to support spending and economic growth in the near term."
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Selling pressure on global stock markets eased on Tuesday despite further evidence of the global spread of the coronavirus and warnings by Italy and Japan on the impact of the outbreak.
On Wall Street, the S&P 500 opened 0.4 per cent higher after it dropped 3.4 per cent on Monday, in its biggest slide since trade tensions rattled markets in February 2018.
This helped trim heavy losses in Europe where sentiment swung on a near-hourly basis and the Stoxx Europe 600 fell as much as 1.1 per cent in early trade before the losses were pared to 0.7 per cent.
Stocks in Italy, the hardest hit country in Europe from the coronavirus, fluctuated sharply through the trading day and were down 0.2 per cent by the early afternoon, extending losses this week to 5.5 per cent. London’s FTSE 100 fell to its lowest level since October as it slipped 0.8 per cent.
The firmer tone expected on Wall Street came despite concerns over the wider disruption caused by the coronavirus, including restrictions on how companies operate to the breakdown of some global supply chains.
Michael Arone, chief investment strategist at State Street Global Advisors, said US equities have reversed course because investors increasingly believed the Federal Reserve will step in to shore up the US economy as needed to fend off any negative impact to growth and earnings.
“Investors believe that [the coronavirus] has accelerated the Fed’s willingness to act,” he said. “History proves that central banks will often come in to help support markets at times of stress.”
In fact, the odds of a quarter-point reduction in the US central bank’s main policy rate at its June meeting have nearly doubled in the last month to 47 per cent, according to data compiled by the CME Group.
Japan earlier urged companies to adopt remote working, stagger shifts and hold online meetings to reduce the spread of the illness in the country. An expert government panel said there had been 146 infections confirmed in more than 16 different prefectures, excluding cases from an infected cruise ship and Japanese evacuees from China.
“We are at the crossroads,” Shigeru Omi, head of the Japan Community Health Care Organization, said at a press briefing. “Local transmission is already going on.”
Prime Minister Shinzo Abe asked companies to adopt the new strategy after his cabinet on Tuesday approved an antivirus plan.
Italy warned that the EU should offer flexibility on its budget targets should the country’s sudden coronavirus outbreak in its industrialised northern regions have a prolonged impact on an economy already teetering on edge of a recession.
On Monday, a seventh Italian died from the virus and the infection count rose to 220. The majority of cases were clustered in the regions of Lombardy and Veneto, which together make up a third of output for the eurozone’s third-largest economy and about half of its exports.
Globally, the number of confirmed cases jumped to more than 80,000 on Tuesday, with 2,699 deaths. The Austrian province of Tyrol has confirmed the country’s first cases of coronavirus.
In Iran, health officials said 15 people had died in the country and 95 had tested positive for the disease, the highest number of coronavirus deaths outside of China. The high mortality rate has sparked concerns that Iran is struggling to contain the outbreak and prompted neighbouring countries to impose border restrictions.
Among the infected is Iran’s deputy health minister, the semi-official news agency ILNA reported on Tuesday.
The spike in cases in South Korea, where authorities say nine people have died and there have been 893 confirmed infections, prompted officials in Washington and Seoul to consider scaling back joint military exercises. US officials also raised the travel warning to South Korea to its highest level, warning Americans against all but essential travel to the country.
The expert panel in Japan recommended changing its strategy of keeping the infection out altogether to containing it and slowing its spread. It no longer made sense to test everybody who might have been exposed to the virus, they said, as doing so would overwhelm the healthcare system.
Instead, Japan was asking anybody who felt ill to isolate themselves and said they should only seek medical help if they suffered severe symptoms.
“The biggest objective of our response from this point should be to control the speed of the infection’s spread and minimise the number of deaths and people with severe symptoms,” the panel said.
It also said that the next one to two weeks would be decisive in preventing the spread of the virus.
Additional reporting by Miles Johnson in Rome, Hannah Kuchler in New York and Adam Samson in London
The U.S. consumer rose even as the deadly coronavirus outbreak threatened sentiment around the world. The Conference Board’s February consumer confidence index rose to 130.7 from a downwardly revised January reading of 130.4. Consensus expectations were for 132.2 in February.
Meanwhile, markets lost some steam in early trade. After opening the trading session higher by 0.58%, the broader market turned negative and seesawed between positive and negative territory.
Here’s an updated check of the markets, as of 10 a.m. ET:
S&P 500 (^GSPC): +0.16%, or up 5.05 points to 3,230.94
Dow (^DJI): +0.21%, or up 58.38 points to 28,019.18
Nasdaq (^IXIC): +0.28%, or up 25.53 points to 9,246.81
Crude oil (CL=F): -0.47%, or down $0.24 to $51.19 a barrel
Gold (GC=F): -1.39%, or down $23.30 to $1,653.30 per ounce
—
9:30 a.m. ET: Stocks open higher, snap a 3-day losing streak
U.S. stocks rose across the major indices and snapped a three-day losing streak following a brutal trading session Monday when the Dow plummeted 1,031.61 points. It was the worst day for the S&P 500 and Dow in two years and only the third time in history when the Dow logged a loss of more than 1,000 points. The other two instances occurred on Feb. 5 and Feb. 8, 2018.
Here were the main market moves, as of 9:30 a.m. ET:
S&P 500 (^GSPC): +0.58%, or up 18.63 points to 3,244.52
Dow (^DJI): +0.60%, or up 166.77 points to 28,127.57
Nasdaq (^IXIC): +0.93%, or up 85.65 points to 9,306.93
Crude oil (CL=F): -0.19%, or down $0.10 to $51.33 a barrel
Gold (GC=F): -1.59%, or down $26.70 to $1,649.90 per ounce
—
7:30 a.m. ET: Stock futures rally after ugly Monday; HD beats
U.S. stock futures posted early gains, shaking off weakness in Asia and Europe, as investors become increasingly jittery about the possibility that the coronavirus is becoming a worldwide pandemic.
Here’s were the main moves during the pre-market session, as of 7:30 a.m. ET:
S&P 500 futures (ES=F): 3,234.25, up 8 points or 0.25%
Dow futures (YM=F):28,037.00, up 69.00 points or +0.25%
Nasdaq futures (NQ=F):9,137.50, up 46.50 points or 0.51%
Crude oil (CL=F):51.29, down 0.14 points or -0.27%
Gold (GC=F):1,648.90, down $27.70 points or -1.65%
Stocks are coming off their worst day in 2 years — a rout that saw $1.7 trillion in market capitalization evaporate in a single trading session, according to veteran analyst Howard Silverblatt. On Wednesday, the Nasdaq and S&P set record highs — but since then have hemorrhaged $2.44 trillion in value, according to Silverblatt.
An unexpected surge in confirmed infections in Italy and South Korea — which now has the largest cluster of cases outside of China — is sparking widespread fear and undermining the sense of calm the World Health Organization has strived to project. On Monday, the agency said the virus was “not yet” a pandemic, but could become one.
Amazon's checkout-free Go concept has officially morphed into a supermarket. Amazon Go Grocery opens in Seattle today, with 5,000 items for sale across the 10,400-square-foot premises. Using a range of cameras, shelf sensors and software, shoppers can pick up the items they want and simply walk out the door -- their accounts are charged via a smartphone app as they leave.
While this isn't a brand new concept – Amazon has been running a number of Go convenience stores since 2018 -- this is the first time the technology has been implemented on such a large scale. Shoppers can choose from a much wider range of goods, such as organic produce and wine, making the concept a much more viable alternative to the usual weekly shop involving scanners and checkouts. Indeed, the store has been positioned closer to residential areas -- as opposed to business districts -- to encourage this.
And it could get even bigger. Speaking to The Wall Street Journal, Amazon Go vice president Dilip Kumar said, "There's no real upper bound. It could be five times as big, it could be 10 times as big." Kumar hasn't clarified exactly how many Go Grocery stores the company has planned, although it has previously said it hopes to open as many 3,000 Go convenience stores by 2021.
Leveraging Amazon's Go technology on this larger scale, however, has not been without challenges. As GeekWirereports, implementing accurate weighing and pricing for goods such as loose produce has been a major focus for the larger stores, especially ensuring it's done in a way that shoppers can intuitively engage with. Other obstacles have been circumnavigated entirely --– there's no meat or seafood counter, for example, and no on-site food preparation. Fresh meat products are instead brought in throughout the week, individually wrapped. When it comes to alcohol, there's a human on hand to check IDs.
While the new store is certainly indicative of Amazon's own plans for cashless grocery shopping in the future, it's also designed to act as a showpiece for the technology overall. As The Wall Street Journal reports, the company has been discussing licensing its cashless platform to a number of potential partners, including other convenience stores and shops in airports and sports arenas. And as this kind of technology is implemented in more and more spaces, it might not be long until the concept of carrying a wallet is almost completely redundant.
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Global stocks were mixed in a day of volatile trading, even as bond markets signaled continuing fears among investors about the economic impact of the coronavirus outbreak following the sharp selloff a day earlier.
Futures tied to the Dow Jones Industrial Average edged up 0.4% Tuesday after China took further steps to shield its economy by bolstering the supply of credit to businesses. The pan-continental Stoxx Europe 600 index dropped 0.5%, paring back losses from earlier in the day, after having fallen more than 3% Monday.
Home Depot beat Wall Street's expectations for the fourth quarter, and its CEO Craig Menear said the results indicate its significant investments in the company are paying off.
Here's what the company reported compared with what analysts expected for Home Depot's fiscal fourth quarter, based on Refinitiv data:
Earnings per share: $2.28 vs. $2.10, expected
Revenue: $25.78 billion vs. $25.76 billion, expected
Same-store sales: 5.2%vs.up 4.8%, expected
The Atlanta-based home improvement retailer's shares were up more than 2% in premarket trading on the earnings news. It also increased its dividend by 10% and backed its prior forecast for the year.
For the fourth quarter that ended Feb. 2, Home Depot reported that net income rose 5.8% to $2.48 billion, or $2.28 a share, from $2.34 billion, or $2.09, a year ago. Analysts surveyed by Refinitiv expected the company to earn $2.11 a share.
Revenue fell 2.7% to $25.78 billion from $26.49 billion a year ago, but it outpaced analyst estimates of $25.76 billion.
Home Depot's sales per square foot were $425.70, up nearly 3% from $414.17 a year ago. Its average ticket also increased to $68.29, up about 4% from $65.59 a year ago.
Home Depot's shares have been trading near an all-time high, buoyed by a strong U.S. economy and a housing market with appreciating home values. But the company is been under pressure as it spends billions of dollars to integrate its brick-and-mortar stores and its online business. It announced in 2017 that it would invest about $11 billion over three years as part of its "One Home Depot" program.
The company cut its forecast twice in 2019. In December, Home Depot said its forecast for 2020 sales would be below Wall Street expectations and its margins would be pressured by its investments. That news caused the company's shares to temporarily fall.
But on Tuesday, Home Depot reiterated its forecast for fiscal 2020, calling for total sales growth between 3.5% and 4% and same-store sales growth of between 3.5% and 4%. It plans to open six new stores in 2020.
Menear said that fiscal 2019 was "marked by significant progress as we invest to transform ourselves into The Home Depot of the future."
He said the company has "more conviction than ever that our strategic initiatives are creating a value proposition that is unique to the marketplace and will extend our leadership position for years to come."
Home Depot leaders have said its investments will peak this year. The company plans to spend $3.9 billion, up from $3.6 billion in 2019 and $3.3 billion in 2018.
Home Depot's investments have fueled changes, such as improving signage to make its big-box stores easier to navigate, revamping its supply chain to speed up deliveries and adding lockers in stores for pickup of online purchases.
The company's shares are up nearly 25% over the past 12 months. It has a market value of about $261.5 billion.
Investors will listen on Tuesday's earnings callto hear if Home Depot and its supply chain will be hurt by the coronavirus outbreak. About 70% of the company's products are sourced from the U.S., but 30% come from other parts of the world — with much of that coming from China, according to company spokeswoman Sara Gorman.
Home Depot is gearing up for spring, its busiest sales season. Home Depot said that it plans to hire 80,000 additional employees, with many part-time hires staffing its garden center. That's on par with seasonal hiring in recent years.
Home Depot is the largest home improvement chain in the country. It has about 2,290 retail stores and more than 400,000 employees across the U.S., Canada, Mexico.
Stocks on Wall Street plunged Monday, but futures trading suggests a rebound — or a least a respite — on Tuesday.
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Dow Jones Industrial Average futures (YM00) rose more than 200 points on Tuesday, while S&P 500 futures (ES00) gained 0.8% and Nasdaq Composite futures (NQ00) added more than 1%
A pause or bounce-back would not be unusual. The past 10 times that the S&P 500 index fell by as much as 3%, for example, it declined just 0.27%, on average, in the next trading session, according to Dow Jones Market Data.
Researchers at Bespoke Investment Group also said Monday that, over the past 11 years, declines of more than 2% for the S&P 500 have tended to see healthy rebounds, particularly when that daily slide happens on a Monday. “Since March 2009, there have been 18 prior 2%+ drops on Mondays, and SPY has seen an average gain of 1.02% on the next day (Turnaround Tuesday),” they wrote.
Crude oil prices, which tumbled 5% Monday, ticked up in electronic trading, with West Texas Intermediate crude for April delivery (CLJ20) and April Brent crude (UK:BRNJ20) , the global benchmark, each up around 0.5%.
Gold prices (GCJ20) , which jumped 1.7% Monday to their highest point in seven years, slipped 1.5% to $1.651.80.
Asian markets continued to fall, with Japan’s Nikkei (JP:NIK) — which was closed for a holiday Monday — last down over 3%. Australia’s S&P/ASX 200 (AU:XJO) fell 1.6%, though South Korea’s Kospi (KR:180721) , which fell 4% on Monday, rebounded 1.1% on Tuesday.
Monday on Wall Street, the Dow finished more than 1,000 points lower, marking its third-worst daily point drop in history, as the global spread of the coronavirus raised worries that the impact on economic growth could be worse than investors expected, hurting the prospects for a global recovery in 2020.
The Dow Jones Industrial Average (DJIA) shed 1,031.60 points, or 3.6%, to settle at 27,960.80. The S&P 500 (SPX) slumped 111.86 points, or 3.4%, to close at 3,225.89, and the Nasdaq Composite (COMP) off by 355.31 points, or 3.7%, to finish at 9,221.28.
Amazon is getting more serious about its brick-and-mortar retail ambitions with its first-ever Amazon-branded grocery store. The store opens today in Seattle’s Capitol Hill district, confirming reports from last year that Amazon was developing a more ambitious version of its cashier-less Go model. The new store, which The Verge toured late last week, is indeed modeled after a standard Amazon Go location, but it has been expanded to include a wide array of grocery items you’d find at, say, Amazon-owned Whole Foods.
In fact, the store does source a number of its items, including some produce and meat and other fresh food, from Whole Foods suppliers. It also carries Whole Foods’ 365 brand for certain items. But Amazon’s store offers other products, including breakfast cereal and soda, that you won’t find at Amazon’s higher-end, organic-focused subsidiary.
Amazon says the store combines the product availability and low prices of a grocery chain like Publix or Walmart with the convenience and quick shopping times of its Go model, with a selection that includes both big mainstream brands and local, organic produce. It joins the nearly 20 Go stores currently open throughout the country in cities like New York and San Francisco.
Amazon Go stores use overhead cameras and computer vision technology, paired with smartphone geofencing, to track both shoppers and items throughout the store. That way, the system can identify when a specific person has picked something off the shelf and placed it in their cart, and even when they decided to put something back.
The end result is that customers don’t have to sit through check out. When you’re done at a Go store, you just walk out and your receipt is sent to you through Amazon’s companion app. The same is true of Amazon’s new grocery store, which features shopping carts, but no checkout lanes or counters.
Amazon says its Go system has been trained to handle tricky situations that are unique to grocery stores, like customers handling unpackaged produce that looks similar and sits next to other fruits and vegetables or unboxed baked goods that might get stuffed into a single plastic bag. You can even buy alcohol by taking it off the shelf and walking out, although a human employee will have to check your ID before you enter the store if you intend to peruse the libations aisle.
Go stores have so far focused on prepared foods, snacks, and a light amount of grocery items including frozen food and condiments. Some have acquired licenses to sell alcohol, too. But no Go store to date has the size or scope of Amazon’s new Go Grocery, as it’s called. The location, at 610 E. Pike Street, is 10,400 square feet, while a standard Go store tends to fall between 1,200 and 2,300 square feet.
This grocery effort is starting small, Amazon’s Dilip Kumar, the company’s vice president of physical retail and technology, tells The Verge. Kumar says Amazon has no immediate plans to open more grocery stores. But if it succeeds, an Amazon-branded grocery store using its Go model, which allows customers to get in and out much quicker, could become a fast-growing avenue for the e-commerce giant to continue expanding its offline footprint.
And according to Kumar, Amazon Go Grocery is not intended to be competitive with Amazon’s Whole Foods chain, but complementary instead. “Customers shop in many different ways, in many different locations. Sometimes you want it to be delivered, some times you go to the store, some times you go to Whole Foods. Our job is to be able to figure out how to add value,” Kumar says. “Because the customer has different needs... and different things that they look for at different stores, what is it we can we do here in this type of format in this neighborhood to add value? That to me is the selection we carry, the pricing we have — plus the convenience of just being able to walk out.”
While Amazon dominates many sectors of online retail, it has yet to make large inroads into the much larger offline retail market, a large segment of which is related to food and beverage consumption. People spend $800 billion a year on groceries in the United States, of which only about 2 percent happens online. Amazon’s domestic retail rival Walmart currently leads the grocery market in volume, and Walmart’s huge retail footprint throughout the country has always put it in a strong position to sell customers everything else they might need on a shopping outing. The same is true of Kroger’s, the largest dedicated grocery chain in the country.
That’s because not only do a majority of people buy fresh food in person from grocery stores, they also use those same trips to buy household goods, alcohol, and a number of other products that a company like Amazon could more easily sell in-store than online. Although Amazon has services like Prime Pantry for selling bundles of household goods and a grocery delivery service called Amazon Fresh, it would be immensely difficult and costly to scale those services to reach every grocery shopper in the country. That’s why Amazon has been investing in brick-and-mortar retail in the first place.
That complexity inherent to the grocery market is why Amazon chose to brand its new store as a Go one, instead of choosing to bring its cashier-less Go model to an existing Whole Foods location. Amazon wants the freedom to sell people products from major brands they might find at a city bodega, a neighborhood CVS, or a Kroger store, and not just the organic and high-end ones Whole Foods sells today. That sets up Amazon to service a wider variety of customers: Go stores for the office lunch crowd, Go Grocery for the everyday residential shopper, and Whole Foods for the organic-minded and more affluent.
“This is not a bigger Amazon Go store. It’s a separate format. We worked backwards from what constitutes a neighborhood grocery store,” Kumar says. “We have a section for pet food, household items, health and personal care, oral care, skin care.” Kumar says that to satisfy the needs of a grocery store, you have to “go beyond food” and include those items that people might normally buy during a standard grocery outing, from paper towels and dish soap to shampoo and deodorant.
In addition to all that, the Go Grocery store has a bakery section, as well as a prepared meals and snack section similar to what you’d find in the smaller standard Go store. Amazon says it will also offer items from local Seattle businesses including pastries from Seattle Bagel Bakery, yogurt from Ellenos, and sausage from Uli’s.
Whether Amazon Go Grocery takes off is an open question, but the steady rollout of Go stores so far seems to suggest that the cashierless model has been a worthwhile investment for the company so far. Kumar says key for Amazon right now is making sure it’s doing something customers actually want.
“How big it gets and how fast it goes, customers get to decide that,” Kumar says.
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