Jamie Dimon Says ‘U.S. Economy Will Likely Boom’: Stock Market Updates

More than 25 million lower-income Americans whose stimulus payments were delayed finally received them on Wednesday. And one group still waiting — certain veterans and their beneficiaries — can expect their payments to arrive next week, the Internal Revenue Service said.

The payments have been issued in groups, with the first batch landing in accounts on March 17. But many people who receive government benefits and don’t meet the income thresholds necessary to file a tax return hadn’t gotten money because the I.R.S. didn’t have the files needed to process their payments. They included Americans who receive benefits from Social Security, Supplemental Security Income, the Railroad Retirement Board and Veterans Affairs.

On Wednesday, 25 million delayed payments, worth about $36 billion, landed. The largest block, or $26 billion, went to more than 19 million Social Security beneficiaries, including those who receive retirement, survivor or disability benefits. Another three million payments, worth nearly $5 billion, went to Supplemental Security Income beneficiaries. And about 85,000, payments, or $119 million, went to Railroad Retirement Board beneficiaries.

Some Veterans Affairs beneficiaries are still waiting. But as long as no issues arise, nonfiling veterans and their beneficiaries who receive compensation and pension benefit payments can expect their money to land on April 14. The status of their payment should become available in the I.R.S.’s Get My Payment tool on Saturday or Sunday.

Wednesday’s batch also included more than one million payments to Americans who already received one in March but were eligible to receive a new or larger amount based on their 2020 tax return. Those so-called plus-up payments were valued at more than $2 billion.

Carnival Cruise Line, the largest cruise operator in the United States, said on Wednesday that it was optimistic that several of its U.S.-based lines would be up and running by July.

The announcement came a day after the company was forced to cancel its voyages through June 30 and threatened to take its ships out of U.S. ports. The industry has struggled to resume operations a year after the pandemic brought cruises to a halt.

“While we have not made plans to move Carnival Cruise Line ships outside of our U.S. home ports, we may have no choice but to do so in order to resume our operations,” Christine Duffy, the president of Carnival Cruise Line, said in a statement posted Tuesday on the company’s website.

The Centers for Disease Control and Prevention recommends that people avoid travel on cruises worldwide because of the high risk of contracting the coronavirus aboard ship. On Friday, it released conditional sail orders for cruise lines, including routine testing of crew members and simulated voyages to practice safety procedures.

“C.D.C. is committed to working with the cruise industry and seaport partners to resume cruising when it is safe to do so,” the agency said in a statement.

Carnival guests were given the option of a credit or a full refund for the canceled cruises.

Disney Cruise Line said on Tuesday that it would also suspend departures through June after reviewing the C.D.C. guidance. It also canceled sailings in Europe through Sept. 18.

Customers appear eager to sail again. Booking volumes for future Carnival cruises were about 90 percent higher in the first quarter of 2021 than in the previous quarter, “reflecting both the significant pent-up demand and long-term potential for cruising,” Arnold Donald, the chief executive of Carnival Corporation, the cruise line’s parent company, said in a statement on Wednesday.

Carnival reported that bookings for 2022 were ahead of bookings in 2019, adding that six of its nine brands are expected to resume limited guest cruise operations by the summer.

The company reported a net loss of $2 billion for the first quarter of 2021.

Federal Reserve officials took heart in a healing economy at their meeting last month, minutes released Wednesday showed, but inflation and the job market still fell far short of their goals, and policymakers continued to see “elevated” uncertainty around the growth outlook.

“Participants agreed that the path of the economy would depend significantly on the course of the virus, including progress on vaccinations,” according to the account of the March 16-17 meeting. The Fed left interest rates unchanged at near-zero at that meeting and continued buying bonds at a pace of $120 billion per month — two policies meant to stoke spending by keeping borrowing cheap.

The Fed took sweeping actions last year to support the pandemic-damaged economy, and investors are now watching for any hint of when it might begin to roll some of those policies back. Because officials are expected to slow their bond purchases before they raise interest rates, investors are closely watching for any sign of when buying might taper off.

Fed officials have said they want to see “substantial further progress” toward their employment and inflation goals before slowing the program down, though they haven’t defined what would qualify as substantial.

Officials last month “noted that it would likely be some time until substantial further progress toward the committee’s maximum-employment and price-stability goals would be realized,” the minutes said, adding that it would be important to communicate “well” ahead of making any change to the bond program.

When it comes to the policy interest rate, Fed policymakers have been more clear-cut. They have said the Fed will keep the rate near zero until inflation has exceeded 2 percent and looks poised to stay higher for some time and until the labor market has returned to full employment.

Since the Fed’s March meeting, vaccinations have continued at a steady clip in the United States, and the March jobs report showed that employers have been rehiring as state and local economies reopen. Still, there are about 8.4 million jobs missing compared with February 2020, when the pandemic began.

Several officials at the Fed’s meeting noted that the recently passed $1.9 trillion stimulus program “could hasten the recovery, which could help limit longer-term damage in labor markets caused by the pandemic,” according to the minutes.

But the central bank is not worried about runaway inflation as the government spends.

While many Fed policymakers expect inflation to pick up this year, in part as the economy opens and supply races to keep up with demand, “participants generally anticipated that annual inflation readings would edge down next year.” And they characterized risks to the inflation outlook — basically the chances of higher- or lower-than-expected numbers — as “broadly balanced.”

Unions representing employees at two prominent podcasting companies owned by Spotify, the audiostreaming giant, announced Wednesday that they had ratified their first labor contracts.

The larger of the two unions, with 65 employees, is at The Ringer, a sports and pop culture website with a podcasting network. The second union, at the podcast production company Gimlet Media, has just under 50 employees. The two groups were among the first in the podcasting industry to unionize, and both are represented by the Writers Guild of America, East.

Lowell Peterson, the guild’s executive director, said the contracts showed that the companies’ writers, producers and editors “bring enormous value to the major platforms for whom they create content.”

The contracts establish minimum base pay of $57,000 for union members at The Ringer and $73,000 at Gimlet Media, annual pay increases of at least 2 percent, and a minimum of 11 weeks of severance pay.

The agreements include provisions that limit the use of contractors and allow workers to receive titles that reflect their seniority.

The two companies will create diversity committees that include managers and union members, and will require that at least half the candidates seriously considered for union positions open to outsiders come from underrepresented groups, such as racial minorities or people with disabilities.

The Ringer and Gimlet Media have dealt with internal strife related to race over the past year. At The Ringer, employees complained about a lack of Black writers and editors after the company’s founder, Bill Simmons, hosted a podcast in which a colleague ham-handedly discussed the aftermath of the George Floyd killing and praised Mr. Simmons’s commitment to diversity.

At Gimlet, the company recently canceled the final two episodes of a four-part series on racial inequity at the food magazine Bon Appétit after staffers complained that Gimlet itself suffered from similar problems.

Employees at both companies unionized in 2019, and the contract negotiations were at times contentious. Management refused to give ground on a top union priority — rights to work that writers and podcasters create, which the companies will retain — but the unions nonetheless ratified the contracts unanimously, according to the writers guild.

“We began this process with the aim of improving working conditions and compensation at the company, especially for our lowest-paid members,” the Ringer Union said in a statement. “We’re thrilled to have achieved that goal with this contract.”

Spotify did not immediately respond to a request for comment.

The Biden administration unveiled its plan to overhaul the corporate tax code on Wednesday, offering an array of proposals that would require large companies to pay higher taxes to help fund the White House’s economic agenda.

The plan, if enacted, would raise $2.5 trillion in revenue over 15 years. It would do so by ushering in major changes for American companies, which have long embraced quirks in the tax code that allowed them to lower or eliminate their tax liability, often by shifting profits overseas. The plan also includes efforts to help combat climate change, proposing to replace fossil fuel subsidies with tax incentives that promote clean energy production.

Some corporations have expressed a willingness to pay more in taxes, but the overall scope of the proposal is likely to draw backlash from the business community, which has benefited for years from loopholes in the tax code and a relaxed approach to enforcement.

Treasury Secretary Janet L. Yellen said during a briefing with reporters on Wednesday that the plan would end a global “race to the bottom” of corporate taxation.

“Our tax revenues are already at their lowest level in generations,” Ms. Yellen said. “If they continue to drop lower, we will have less money to invest in roads, bridges, broadband and R&D.”

The plan, announced by the Treasury Department, would raise the corporate tax rate to 28 percent from 21 percent. The administration said the increase would bring America’s corporate tax rate more closely in line with other advanced economies and reduce inequality. It would also remain lower than it was before the 2017 Trump tax cuts, when the rate stood at 35 percent.

The White House also proposed significant changes to several international tax provisions included in the Trump tax cuts, which the Biden administration described in the report as policies that put “America last” by benefiting foreigners. Among the biggest change would be a doubling of the de facto global minimum tax to 21 percent and toughening it, to force companies to pay the tax on a wider span of income across countries.

That, in particular, has raised concerns in the business community, with Joshua Bolten, the chief executive of the Business Roundtable, saying in a statement this week that it “threatens to subject the U.S. to a major competitive disadvantage.”

Some companies, however, expressed openness to the new proposals on Wednesday.

John Zimmer, the president and co-founder of Lyft, told CNN that he supports Mr. Biden’s proposed 28 percent corporate tax rate.

“I think it’s important to make investments again in the country and the economy,” Mr. Zimmer said.

The Biden administration also made clear that the proposal was something of an opening bid and that there will be room to negotiate.

Commerce Secretary Gina Raimondo urged lawmakers on Wednesday not to reject the plan out of hand, inviting them to have a “discussion” — even as she suggested the basic parameters of the proposal would remain in place.

“We want to compromise, she said during a briefing at the White House. “What we cannot do, and what I’m imploring the business community not to do, is to say, ‘We don’t like 28. We’re walking away. We’re not discussing.’ That’s unacceptable.”

The plan would also repeal provisions put in place during the Trump administration that the Biden administration says have failed to curb profit shifting and corporate inversions, which involve an American company merging with a foreign firm and becoming its subsidiary, effectively moving its headquarters abroad for tax purposes. It would replace them with tougher anti-inversion rules and stronger penalties for so-called profit stripping.

The plan is not entirely focused on the international side of the corporate tax code. It tries to crack down on large, profitable companies that pay little or no income taxes yet signal large profits with their “book value.” To cut down on that disparity, companies would have to pay a minimum tax of 15 percent on book income, which businesses report to investors and which are often used to judge shareholder and executive payouts.

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President Biden on Wednesday signaled his openness to “good faith negotiations” on his $2.3 trillion infrastructure proposal — but bluntly warned Republican opponents of the plan that he would “not be open to doing nothing.”

Mr. Biden pushed back against critics who have argued that his sprawling plan contains elements — such as the renovation of veterans’ hospitals, expansion of broadband internet and anti-poverty programs — that do not fit the traditional definition of infrastructure.

“To automatically say that the only thing that’s infrastructure is a highway, bridge, or whatever, that’s just not rational,” said Mr. Biden, who urged Republicans to ask working-class Americans “what infrastructure they need to build a better life, to be able to breathe a little bit,” rather than rejecting his proposal on sight.

“I don’t know why we don’t get this,” added Mr. Biden, flanked by Vice President Kamala Harris as he delivered remarks in the Eisenhower Executive Office Building, veering off script repeatedly to deliver an impassioned, at times exasperated plea of support.

Mr. Biden’s speech was overtly aimed at Congressional Republicans, led by Senator Mitch McConnell of Kentucky, the minority leader, who have expressed nearly unanimous opposition to the plan.

But he was also targeting red and swing state voters, who support projects in their communities, and speaking to moderate Democrats, like Senator Joe Manchin III of West Virginia, who have suggested they might agree to a corporate tax increase, but one not quite as big as the 28 percent Mr. Biden has proposed. The current rate is 21 percent.

Asked if he was willing to compromise on the corporate rate in his plan — perhaps to 25 percent — Mr. Biden replied, “I’m willing to negotiate,” adding that he was “wide open” to new proposals that would pay for his plan.

“Debate is welcome, compromise is inevitable, changes are certain,” he said. “In the next few weeks the vice president and I will be meeting with Republicans and Democrats to hear from everyone. And we’ll be listening, we’ll be open to good ideas and good-faith negotiations. But here’s what we won’t be open to: We will not be open to doing nothing.”

Democrats on Capitol Hill were buoyed on Monday by a ruling from the Senate parliamentarian, saying that Democrats could use the fast-track budget reconciliation process for a second time this fiscal year. The ruling means Democrats can essentially reopen the budget plan they passed in February and add directives to enact the infrastructure package or other initiatives. If they opt to use the move, it would shield them from a filibuster that requires 60 votes to overcome.

Treasury Department officials said Wednesday that Mr. Biden’s complete tax plan, which also eliminates tax subsidies for fossil fuel companies, would raise $2.5 trillion in new revenues over the next 15 years.

The nonpartisan Penn Wharton Budget Model, at the University of Pennsylvania, estimated on Wednesday that Mr. Biden’s tax plans would raise $2.1 trillion over the course of a decade. Analysts at the group estimate that the plan would spend $2.7 trillion over the decade, and that the programs it invests in would help the economy function more productively.

But they calculate the combination of tax increases and additional government debt incurred by the plan would slow economic growth slightly, leaving the economy 0.8 percent smaller in 2050 than it otherwise would have been.

Treasury Department officials said Wednesday that they were still reviewing the analysis but disagreed with its conclusion, insisting that Mr. Biden’s plans will boost growth.

Jeff Bezos, Amazon’s founder and chief executive, said on Tuesday that he supported an increase in the corporate tax rate to fund investment in U.S. infrastructure.

President Biden is pushing a plan to spend $2 trillion on infrastructure improvements, in part by raising the corporate tax rate to 28 percent, from its current rate of 21 percent.

Mr. Bezos said in a statement on Amazon’s corporate website that he applauded the administration’s “focus on making bold investments in American infrastructure.”

“We recognize this investment will require concessions from all sides — both on the specifics of what’s included as well as how it gets paid for (we’re supportive of a rise in the corporate tax rate),” Mr. Bezos said.

For years, Amazon has been a model for corporate tax avoidance, fielding criticism of its tax strategies from Democrats and former President Donald J. Trump. In 2019, Amazon had an effective tax rate of 1.2 percent, which was offset by tax rebates in 2017 and 2018, according to the Institute on Taxation and Economic Policy, a left-leaning research group in Washington. In 2020, the company paid 9.4 percent in taxes on U.S. pretax profit of about $20 billion, the group said.

The company has said in the past that it “pays all the taxes we are required to pay in the U.S. and every country where we operate.”

Companies employ varied strategies to reduce their tax liabilities. In 2017, the same federal bill that lowered the tax rate to 21 percent expanded tax breaks, including allowing the immediate expensing of capital expenditures. The goal was to lift investment, but the change also caused the number of profitable companies that paid no taxes to nearly double in 2018 from prior years.

Target will spend more than $2 billion with Black-owned businesses by 2025, it announced on Wednesday, joining a growing list of retailers that have promised to increase their economic support of such companies in a bid to advance racial equity in the United States.

Target, which is based in Minneapolis, will add more products from companies owned by Black entrepreneurs, spend more with Black-owned marketing agencies and construction companies and introduce new resources to help Black-owned vendors navigate the process of creating products for a mass retail chain, the company said in a statement.

After last year’s protests over police brutality, a wave of American retailers, from Sephora to Macy’s, have committed to spending more money with Black-owned businesses. Many of them have joined a movement known as the 15 Percent Pledge, which supports devoting enough shelf space to Black-owned businesses to align with the African-American percentage of the national population.

Target’s announcement appears to be separate from that pledge. It said its commitment added to other racial-equity and social-justice initiatives in the past year, including efforts to improve representation among its work force.

The annual letter to shareholders by JPMorgan Chase’s chief executive, Jamie Dimon, was published early Wednesday. The letter, which is widely read on Wall Street, is not just an overview of the bank’s business but also covers Mr. Dimon’s thoughts on everything from leadership lessons to public policy prescriptions.

“The U.S. economy will likely boom.” A combination of excess savings, deficit spending, vaccinations and “euphoria around the end of the pandemic,” Mr. Dimon wrote, may create a boom that “could easily run into 2023.” That could justify high stock valuations, but not the price of U.S. debt, given the “huge supply” soon to hit the market. There is a chance that a rise in inflation will be “more than temporary,” he wrote, forcing the Federal Reserve to raise interest rates aggressively. “Rapidly raising rates to offset an overheating economy is a typical cause of a recession,” he wrote, but he hopes for “the Goldilocks scenario” of fast growth, gently increasing inflation and a measured rise in interest rates.

“Banks are playing an increasingly smaller role in the financial system.” Mr. Dimon cited competition from an already large shadow banking system and fintech companies, as well as “Amazon, Apple, Facebook, Google and now Walmart.” He argued that those nonbank competitors should be more strictly regulated; their growth has “partially been made possible” by avoiding banking rules, he wrote. And when it comes to tougher regulation of big banks, he wrote, “the cost to the economy of having fail-safe banks may not be worth it.”

“China’s leaders believe that America is in decline.” The United States has faced tough times before, but today, “the Chinese see an America that is losing ground in technology, infrastructure and education — a nation torn and crippled by politics, as well as racial and income inequality — and a country unable to coordinate government policies (fiscal, monetary, industrial, regulatory) in any coherent way to accomplish national goals,” he wrote. “Unfortunately, recently, there is a lot of truth to this.”

“The solution is not as simple as walking away from fossil fuels.” Addressing climate change doesn’t mean “abandoning” companies that produce and use fossil fuels, Mr. Dimon wrote, but working with them to reduce their environmental impact. He sees “huge opportunity in sustainable and low-carbon technologies and businesses” and plans to evaluate clients’ progress according to reductions in carbon intensity — emissions per unit of output — which adjusts for factors like size.

Other notable news (and views) from the letter:

• With more widespread remote working, JPMorgan may need only 60 seats for every 100 employees. “This will significantly reduce our need for real estate,” Mr. Dimon wrote.

• JPMorgan spends more than $600 million a year on cybersecurity.

• Mr. Dimon cited tax loopholes that he thought the United States could do without: carried interest; tax breaks for racing cars, private jets and horse racing; and a land conservation tax break for golf courses.

This was Mr. Dimon’s longest letter yet, at 35,000 words over 66 pages. The steadily expanding letters — aside from a shorter edition last year, weeks after Mr. Dimon had emergency heart surgery — could be seen as a reflection of the range of issues that top executives are now expected, or compelled, to address.

Voting in the union election at an Amazon warehouse in Bessemer, Ala., ended on March 29, and counting began the next day, but the outcome is still unknown. What’s going on? It’s less about the number of ballots than how they’re counted.

The stakes are high, for both Amazon and the labor movement. Progressive leaders like Senator Bernie Sanders, Independent of Vermont, have argued a victory for the union, the first at an Amazon facility in the United States, could inspire workers elsewhere to unionize. And Amazon is facing increased scrutiny for its market power and labor practices.

Despite the significance, only a tiny portion of Amazon’s work force was eligible to vote. About 5,800 workers were eligible to mail their ballots to the Birmingham office of the National Labor Relations Board. Counting each vote involves two envelopes: one that identifying the workers and, inside that, another sealed envelope containing an anonymous ballot. Handling them has been a painstaking process:

• In a private video conference, an N.L.R.B. staff member reads the names of the workers identified on the outer envelopes. Amazon and the union both have a chance to contest each worker’s eligibility.

• Once Amazon and the union have gone back and forth over disputed voters, the N.L.R.B. counts the uncontested ballots anonymously and by hand, on a video conference open to reporters. This could start today.

Samsung’s sales grew by an estimated 17 percent in the first quarter from a year earlier, and operating profit increased by 44 percent, the company said on Wednesday. The South Korean electronics titan’s growth has been helped during the pandemic by strong demand for televisions, computer monitors and other lockdown staples.

The company released its latest flagship smartphones, the Galaxy S21 series, in January. In the United States, the devices handily outsold Samsung’s last line of premium phones in their first six weeks on the market, according to Counterpoint Research, which attributed the strong performance in part to Americans receiving stimulus payments.

Samsung’s handset business has also been buoyed of late by the U.S. campaign against Huawei, one of the company’s main rivals in smartphones. The Chinese tech giant’s device sales have plummeted because American sanctions prevent its phones from running popular Google apps and services, limiting their appeal to many buyers.

Another competitor, LG Electronics, said this week that it was getting out of the smartphone business to focus on other products.

Samsung’s first-quarter revenue was likely hurt by February’s winter storm in Texas, which caused the company to halt production for a while at its manufacturing facilities in Austin.

The company is expected to report detailed financial results later this month.

U.S. stock indexes were mostly higher on Wednesday after a stream of mostly upbeat economic data and the progress on vaccinations.

The S&P 500 gained 0.2 percent, while the Nasdaq composite index fell less than 0.1 percent. The Stoxx Europe 600 and DAX index in Germany both fell about 0.2 percent after climbing to new highs on Tuesday.

On Tuesday, the International Monetary Fund upgraded its forecast for global economic growth and said some of the world’s wealthiest countries would lead the recovery, particularly the United States, where the economy is now projected to grow by 6.4 percent this year.

The rollout of vaccines is a major reason for the rosier forecast in some countries, the I.M.F. said. President Biden said that he wanted states to make all adults eligible for vaccines by April 19, two weeks earlier than his previous deadline. In Britain, the Moderna vaccine was administered for the first time on Wednesday, making it the third vaccine available.

Still, the I.M.F. warned on Tuesday against an unequal recovery because of the uneven distribution of vaccines around the world with some lower-income countries not expected to be able to vaccinate their populations this year.

The yield on U.S. 10-year bonds ticked up to 1.67 percent.

Oil prices rose slightly, with futures for West Texas Intermediate, the U.S. benchmark, up 0.7 percent to $59.77 a barrel.

• Saks Fifth Avenue will stop selling products made with animal fur by the close of its 2022 fiscal year, and shut all its fur salons by the end of fiscal 2021, the retailer said Wednesday. Retailers’ fiscal years typically end in January or February to encompass the holiday selling season. The retailer said that it would eliminate products made from animals that were raised for the use of their fur or made with the fur of wild animals, but it would keep selling shearling, goatskin, cattle hide, down, feathers, leather and faux fur goods. It is the latest retailer to take a stand against fur, joining Macy’s, Michael Kors, Gucci and California.