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Virus outbreak forces Chinese to stay at home and order more delivery

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A worker inspects an order at a JD.com delivery station in Yizhuang, Beijing, amid the coronavirus outbreak.

Hilary Pan | CNBC

BEIJING — More people are stuck at home in China as they wait out the coronavirus outbreak, giving some delivery and e-commerce companies an opportunity, even as they try to manage the risks of the disease.

Previously, on a typical day, a courier for JD.com in Beijing would deliver about 140 to 150 packages per apartment complex, said Lansong Sun, head of the company’s delivery station in Yizhuang, on the outskirts of Beijing.

Now, that’s climbed to more than 200 orders a day, Sun said Tuesday, according to a CNBC translation of his Mandarin-language remarks.

More than half of China is shut down as authorities try to limit the spread of a pneumonia-causing virus that emerged in late December. It has killed more than 500 people, primarily in the city of Wuhan, but has infected more than 20,000 people throughout the country.

In an effort to prevent the virus from spreading, at least 24 provinces, municipalities and other regions have told businesses not to resume work before Monday. Beijing city authorities have strongly encouraged companies to let employees work remotely until Monday as well. Schools across the country are also generally shut until mid-February or later.

Pick up in grocery delivery

As people stay at home and avoid public areas, they’ve turned to ordering groceries online from companies that boast of one or two-hour delivery during normal operating times. As expected, orders for face masks and disinfectants have also surged.

For example, JD’s affiliate Dada, which delivers for Walmart and local grocery chains, said sales more than quadrupled from a year ago during the 10 days of the Lunar New Year holiday that ended this past Sunday. In the same period, JD said its own sales of fresh products increased more than three times compared with last year. The company said it sold 15,000 tons of fresh products during the holiday period.

Figures from rival Alibaba‘s Hema grocery store and fresh produce delivery platform were not available.

Anecdotally in Beijing, while workers make their way back to the city, the customer demand is so high that orders can take hours longer than scheduled to arrive. And rather than stretching into the evening, available delivery slots are often cut short.

Demand also remains relatively high in meal delivery. On Wednesday, a Beijing city official disclosed that about 20,000 delivery people were manning an average of more than 400,000 orders a day from takeout platforms Meituan and Elema, according to state media. The article added that delivery people are requested to wear face masks and conduct temperature tests.

Challenges from the virus

The virus has created some other logistical challenges for delivery, especially food.

Meituan, Hema and Dada have announced an in-app feature for contactless delivery, allowing the courier to leave an order in a convenient spot for the customer to pick up, without having to interact.

Kentucky Fried Chicken and Pizza Hut brands also launched a similar option for delivery. Parent company Yum China said in a statement to CNBC that the brands are testing out a feature in China for ordering online, and picking up in-store without contact. Meituan said it is trying something similar.

In many areas, couriers can no longer send packages straight to the door. Instead, they must call customers to pick up parcels from the front gate of the apartment complex, which can sometimes be a several minute walk away from the customer’s unit.

“It certainly lowers efficiency,” Ruichuang Chen, a JD.com courier, said, according to a CNBC translation of his Mandarin-language remarks. One of JD’s selling points is same-day or next day delivery.

While most people are at home and will fetch packages quickly, Chen noted that other customers may be asleep or not understand the policy and are unwilling to pick up deliveries. In order to make sure customers get their packages, Chen said he starts his day around 7 a.m. and keeps going until all the parcels are delivered.

Overall, industry representatives and analysts said logistics companies were operating fairly normally outside of areas such as Hubei, the province that has been hit hardest by the virus. Many businesses have also participated in accelerating delivery of medical supplies and other necessities to Hubei and the city of Wuhan through special channels.

But for most of the country it may take a few days or even weeks longer for orders to arrive, given the postponed re-opening of many businesses and quarantined cities. Earlier this week, some cities such as Hangzhou — where Alibaba’s headquarters is located — also stepped up inter-city highway closures and said households should only send one person out to buy goods every two days.

Alibaba’s logistics affiliate Cainiao said it “will deploy workers according to the specifics of government policy on returning to work.” That’s according to a CNBC translation of the Chinese-language text.

Virus-related disruptions, especially for China’s manufacturing hubs, will hit the entire logistics industry, Charles Guowen Wang, director at think tank China Development Institute, said, according to a CNBC translation of his Mandarin-language remarks.

Delays in returning to work will slow down the ability of manufacturers and related logistics services to get back up to normal operating speed, Wang said, adding that the efficiency of logistics relating to daily needs will also have a clear drop, likely affecting profits.

One-time boost?

It’s still unclear what the ultimate economic impact this year will be. The shutdown is essentially an extension of the Lunar New Year holiday, which began on Jan. 24 this year.

The holiday is typically an off-peak season for e-commerce since most people are traveling overseas, said Charlie Chen, director and head of the consumer team at China Renaissance. If people are at home, they will typically spend more time on their phones, and play games or shop, he said.

However, he expects these to be one-time purchases, and that after the threat of the virus dies down, many consumers will return to their habit of going to fresh produce markets.

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Dow rallies more than 300 points on Friday as tech shares bounce, cutting losses for the week

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The Fearless Girl statue is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 11, 2020.

Brendan McDermid | Reuters

U.S. stocks rose on Friday, recovering some of their losses for the week, as tech shares clawed back some of their big September declines. 

The Dow Jones Industrial Average closed 358.52 points higher, or 1.3%, at 27,173.96. The S&P 500 climbed 1.6% to 3,298.46. The Nasdaq Composite popped 2.26% to 10,913.56. It was the best day for the major averages since Sept. 9.

Shares of Amazon rose 2.5% and Facebook gained 2.1%. Apple advanced 3.8% and Microsoft climbed 2.3%. Netflix closed 2.1% higher. The S&P 500 tech sector jumped 2.4% and for its best day since Sept. 9, when it popped 3.4%.

Cruise operators also contributed to Friday’s gains. Carnival, Norwegian Cruise Line and Royal Caribbean were up 9.7%, 13.7% and 7.7%, respectively, after an upgrade from a Barclays analyst

The “sell-off has stabilized a bit over the last few days, but there are still no real signs of strength,” said Mark Newton, managing member at Newton Advisors, in a note. “Thus, the trend remains bearish and not much to bet on a rebound.”

Both the Dow and S&P 500 posted four-week losing streaks, their longest slides since August 2019, despite Friday’s rally. The Dow lost 1.8% this week and the S&P 500 closed 0.6% lower week to date. The Nasdaq Composite had its first weekly gain in four weeks, rising 1.1% over that time period. 

That mixed weekly performance followed concerns around the state of the U.S. economic recovery as well as uncertainty around a new fiscal stimulus bill. 

House Democrats are preparing a $2.4 trillion relief package that they could vote on as soon as next week, a source familiar with the plans told CNBC. The bill would include enhanced unemployment benefits and aid to airlines, but the overall price tag remains well above what Republican leaders have said they are willing to spend. 

The major averages have had a tough month, with the S&P 500 falling 5.8% in September. The Dow has dropped 4.4% over that time period and the Nasdaq is down 7.3% month to date. 

Much of September’s losses have been concentrated in megacap tech stocks, which carry a heavy weight in the indexes. Shares of Apple — the largest publicly traded company in the U.S. by market cap — have dropped 13% this month. Microsoft, Alphabet, Netflix, Amazon and Facebook are all down at least 7.9% over that time period. 

“After a buoyant and hopeful summer, financial markets are cooling in the face of reality,” strategists at MRB Partners said in a note. “High-flying tech and tech-related stocks are in a full-blown correction, and weakness has recently spread to broader indexes, with a distinct smell of risk-off in the air. We had expected a gradual, albeit choppy, economic recovery, but it appears that some investors were not prepared for setbacks along the way.”

Russ Koesterich, managing director and portfolio manager at BlackRock, said on CNBC’s “Closing Bell” on Thursday that his team took profits in some high-flying tech stocks at the end of August and then were buying more cyclical stocks during the recent drop for the market. 

“What we’ve been trying to do in recent weeks is take the cyclical exposure up a little bit … it’s not that we think tech is going to roll over. We still like the themes. But on a shorter-term tactical basis, we’re comfortable with the economy, we think we’re going to continue to see improvement, and we’re looking for names that are levered to that improvement,” Koesterich said. 

—CNBC’s Jacob Pramuk contributed to this story. 

CORRECTION: A previous headline for this report was updated to note that Dow futures were higher, rather than the Dow Jones Industrial Average itself.

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Trump is expected to nominate Amy Coney Barrett to fill Ginsburg Supreme Court vacancy

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Judge Amy Coney Barrett

Matt Cashore | Notre Dame | Reuters

President Donald Trump is expected to nominate Judge Amy Coney Barrett to fill the vacancy left by the death of Justice Ruth Bader Ginsburg on the Supreme Court, sources familiar with the matter tell NBC News. 

Trump is expected to make the announcement at an event planned for 5 p.m. ET Saturday. 

Barrett is a 48-year-old federal appeals court judge favored by social conservatives and the religious right. Her confirmation to replace Ginsburg, a feminist icon who sat on the bench for 27 years, would solidify a 6-3 majority for Republican appointees on the bench for the foreseeable future. 

Trump’s announcement will come just 38 days before voters will decide whether he will hold the White House for a second term, and is bound to have profound reverberations on all three branches of government. 

Barrett’s expected selection will come just a week after Ginsburg died from complications due to cancer found on her pancreas. She will be buried in Arlington National Cemetery next week. 

Ginsburg, who had in the past publicly sparred with the president, said in a statement issued while she was dying that it was her “most fervent wish” that she not be replaced until after Election Day. 

That comment, and the precedent Republicans set in 2016 when they opposed former President Barack Obama’s nominee to the bench, prompted a battle between Democrats and Republicans over whether a vote on a new nominee would take place before Nov. 3. 

Barrett has long been anticipated as a potential nominee to the Supreme Court, and it came as a surprise to some when Trump passed over her in favor of Justice Brett Kavanaugh to fill the seat vacated by Anthony Kennedy. Trump reportedly said at the time that he was saving Barrett for Ginsburg. 

Trump has repeatedly pressed for a vote ahead of Election Day, and Senate Majority Leader Mitch McConnell, R-Ky., has said there is more than enough time to do so, despite his 2016 posture that prohibited a vote on Obama’s nominee, Merrick Garland. 

Democratic nominee Joe Biden and his allies in Congress have blasted the president’s decision to nominate a justice. During a speech in Philadelphia, Biden said of Ginsburg that “we should heed her final call to us, not as a personal service to her, but as a service to the country, our country, at a crossroads.”

But it appears Republicans will have the votes they need. Two moderate Republican senators, Susan Collins of Maine and Lisa Murkowski of Alaska, came out in opposition to holding a vote, but failed to attract other defectors. McConnell needs just 50 of the Senate’s 53 Republicans to stay in line, given Vice President Mike Pence’s ability to cast a tie breaking vote. 

Any selection Trump could have made was likely to be contentious, but Barrett could prove especially so. 

Barrett, whom Trump appointed to the 7th U.S. Circuit Court of Appeals, has already started to spur a cultural battle over the place of religion on the high court, and the future of abortion rights in the United States. 

Democrats are worried that Barrett’s deeply held Catholic faith will bias her in cases that could cause the court to revisit Roe v. Wade, the landmark 1973 case that legalized abortion. 

They have pointed to Barrett’s comments to students suggesting that their legal careers were a means to “building the kingdom of God,” and a 1998 paper in which Barrett explored whether orthodox Catholic judges should recuse themselves from cases concerning the death penalty. In the paper, Barrett referred to aborted fetuses as “unborn victims.” 

Barrett wrote in the article, co-authored with a professor while in law school, that the Catholic church’s opposition to the death penalty provided a reason for federal judges to recuse themselves in capital cases. She wrote that the same logic did not apply to abortion or euthanasia.

“We might distinguish between executing criminals and killing the aged and the unborn in this way: criminals deserve punishment for their crimes; aged and unborn victims are innocent,” she wrote.

Meanwhile, Barrett’s path to confirmation is bolstered by support among social conservatives, who accuse Democrats of attempting to put a “religious test” in the way of the Supreme Court vacancy. 

Barrett has only considered two cases touching on abortion as a federal appeals court judge, in both cases voting to reconsider rulings that struck down abortion restrictions. 

In both appeals, Barrett signed onto opinions authored by another judge, rather than independently outlining her thinking, making an assessment of her abortion jurisprudence more complicated. 

‘The dogma lives loudly within you’

One comment in particular from Sen. Dianne Feinstein, D-Calif., to Barrett energized conservatives and became something of a rallying cry. 

During Barrett’s confirmation hearing in September of 2016, Feinstein said she had concerns related to past statements about religion. 

“I think in your case, professor, when you read your speeches, the conclusion one draws is that the dogma lives loudly within you, and that’s of concern,” Feinstein said.

Conservatives promptly put versions of the statement on merchandise as a sign of protest. “‘The Dogma Lives Loudly Within You’; Now It Lives Loudly On Your T-Shirt,” read one headline in The Daily Wire, a conservative outlet. 

Democrats are likely to choose their words carefully in any potential Barrett confirmation hearings, but whether she will make decisions based on her faith is expected to be a prominent line of inquiry. 

Membership in People of Praise

Barrett has also courted controversy with her membership in a small, primarily Catholic organization called People of Praise. Members of the group swear to uphold so-called “covenants” and are held accountable to advisors. 

Female advisors were referred to as “handmaidens” until the term was introduced into popular culture by the dystopian television show, Hulu’s “The Handmaid’s Tale,” based on the Margaret Atwood novel. 

Critics of the group have called it a “cult,” and said the idea of a justice on the Supreme Court being accountable to a spiritual leader crossed the typical bounds defining the separation between church and state. 

As with Feinstein’s comments during Barrett’s confirmation, the controversy over Barrett’s membership in People of Praise similarly led to a conservative backlash against what some saw as anti-Catholic bigotry.  

Conservatives deny that the group is a cult, and have criticized Democrats and newspapers like The New York Times for what they say are unfair attacks on religion. Conservative writer David French wrote in The National Review that “parachurch” organizations such as People of Praise are misunderstood.

“It betrays fundamental ignorance about the way millions of American Christians live their lives,” he wrote, noting that groups like People of Praise are common places where religious people seek advice on issues like dating, marriage, careers, and child-rearing. Words like “covenant,” he said, were very common. 

Members of the organization have also pointed out that it is open to both Republicans and Democrats. 

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How a process using carbon dioxide could stop your wine from spoiling

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Whether it’s a dry Chablis or punchy, full-bodied Cabernet Sauvignon, a glass or two of quality wine can be one of life’s small pleasures.

A phenomenon known as “cork taint” can, however, create a host of problems including rancid smells and an off-putting taste.

It’s a problem that Fredérique Vaquer, a winemaker in the south of France, has first-hand experience of.

“One time, I was with a lot of customers, it was a very important tasting and I opened a magnum,” she told CNBC’s Sustainable Energy.

“I had only one magnum … normally, it’s a beautiful wine and that time it was ‘corky’.”

When it comes to cork tainted wine, the chemical compound 2,4,6-Trichloroanisole, or TCA, which can make its way into the cork, plays a significant role.

However, in France, a firm called Diam Bouchage has been developing a process that looks to tackle the issue head on through the use of carbon dioxide (CO2).

Dominique Tourneix, the company’s CEO, explained that its system addressed the problem by using pressurized, “supercritical” CO2.

According to a video demonstration on its website, Diam Bouchage takes this supercritical CO2 — a fluid state of carbon dioxide — and injects it into an autoclave containing granulated cork that’s been pre-sifted.

The idea is that the CO2 passes through the cork, removing all the substances, including TCA, that could taint wine.

The CO2 itself is then “removed, filtered and … recycled in a closed circuit,” while the cleaned and purified cork grain is turned into stoppers at a manufacturing site. Diam Bouchage has also developed a product range which incorporates beeswax and a bio-based binding agent. 

In his interview with CNBC, CEO Dominique Tourneix explained how by-products of the company’s process could also be recycled and reused. 

“Different companies are actually purchasing our extract coming from the cork to use the extract for their cosmetic applications,” he said.

The power of green chemistry

Diam Bouchage’s use of nature-based solutions such as beeswax within an industrial and manufacturing context is also interesting.

Some of the company’s work encompasses so-called “green chemistry.” A relatively broad term, the United States Environmental Protection Agency has defined it as “the design of chemical products and processes that reduce or eliminate the use or generation of hazardous substances.”

Paul Anastas is director of Yale University’s Center for Green Chemistry and Green Engineering. Together with John Warner — a chemist who is now president and chief technology officer of the Warner Babcock Institute for Green Chemistry — Anastas co-authored the book “Green Chemistry: Theory and Practice,” a key body of work in the field.

Speaking to CNBC’s Sustainable Energy, he was asked about the relationship between business and science when it came to green chemistry.

“People think I’m joking when they ask, ‘how did you come up with this name, green chemistry, all those years ago?’,” he explained. 

“And I say it’s true that green is the color of the environment but here in the U.S. it’s also the color of our money,” he added.

“So this was about how you accomplish both goals at the same time, that you align environmental and health goals with your economic and profitability goals.”

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