Shares fall when investors support to get more damage.
Wall Street is back in sales mode.
Faced with dismal new forecasts of the potential scale and financial impact of the coronavirus pandemic, investors dumped shares on Wednesday. The S&P 500 fell by more than 4 percent, resulting in a two-day decline to 6 percent.
The decline, which followed sales in Europe and Asia, came after President Trump said at a news conference on Tuesday that the United States would face a “very, very painful two weeks.” US government researchers estimated that the outbreak could kill up to 240,000 people in the country. On Wednesday, the UN warned of “improved instability, increased concerns and intensified conflict.”
The financial readings also continue to deteriorate. On Wednesday, surveys of manufacturing and factory activities in the US, Europe and Japan showed activity that declined to levels not seen in a decade or more. In the United States, factory orders and employment measures fell to their lowest since 2009, the Institute for Supply Management said.
Fears are growing that the global downturn may be much more punitive and lasting than originally feared – potentially lasting into next year, and even beyond that – as governments intensify restrictions on companies to stop the spread of the pandemic, and fear of the virus hinders consumer economic growth.
“The market is gearing up for attacks on bad news in the coming weeks,” says Julian Emanuel, head of equity and derivatives strategy at the brokerage firm BTIG.
On Thursday, the US government will report how many people applied for unemployment last week, and the data can show as many as 5 million workers lost their jobs when people stay at home and factories are shut down.
“There was an expectation that April 30 was perhaps a feasible date for opening the economy again,” Emanuel said. “I think the market is trading today as if that date is more like the end of May.”
On Wednesday, the downturn was led by companies that have become well-known targets for investor concerns during the crisis. The airlines were the sector with the worst performance in the S&P 500, as government data showed a dwindling reduction in passenger traffic through airports. United Airlines fell 19 percent, and American Airlines fell 12 percent.
cruise Operator Carnival was the worst performing stock in the S&P 500, down 33 percent, while rival Royal Caribbean fell 20 percent.
Leaders in the oil industry will meet with Trump.
Top oil company executives will meet with President Trump on Friday to discuss possible government steps to take pressure off the industry at a time of declining energy requirements, according to one person close to a business manager.
The chiefs are not fully united, with some preferring tariffs on imported oil and others preferring exemptions from regulations and royalties on federal lands.
The plan for the meeting was previously reported by The Wall Street Journal.
The meeting comes after Saudi Arabia tried to limit production as the coronavirus outbreak loomed on global markets, but failed to get Russia to agree to it. As a result, both countries pump more oil to gain market share from US producers and drive prices to two decades. West Texas intermediate crude, the US benchmark, trades at just under $ 20 a barrel.
Warren pushes delivery companies over workers.
Senator Elizabeth Warren of Massachusetts urged food delivery startups to reclassify workers delivering their orders as employees rather than independent contractors, a move that would make workers eligible for health care and other benefits.
In a letter sent on Wednesday to the CEOs of Door Dash, Uber eats, Instacart and GrubHubMiss Warren said the companies had misclassified their workers for several years but the coronavirus pandemic increased the urgency with which they had to act. California and Massachusetts have passed legislation requiring the so-called gaming economy companies to classify their workers, but the companies have resisted doing so.
“The Coronavirus pandemic has illustrated how much your company is completely dependent on these workers to provide essential services to the public,” Warren wrote. “Delivery workers experience serious health and financial vulnerabilities as a result of their job, and your company fails to provide appropriate and necessary protection.”
Speakers for Instacart and DoorDash said their companies had offered quarantine wages to delivery workers and wanted to work with Warren to protect workers. Uber said Congress should enact new laws to protect gambling for gaming economy. A representative for GrubHub said the company also offered quarantine pay and sanitation materials.
Car manufacturers report a sharp decline in sales.
Car manufacturers reported a step in sales of new vehicles such as fear of coronavirus and home orders kept consumers from dealers, which increased the problems in the country’s largest manufacturing sector.
General Motors said sales by 7 percent during the first quarter and Fiat Chrysler said sales in the first quarter were up 10 percent. Both companies said that a significant fall in March compensated for strong sales in January and February.
Hyundai reported a decrease of 42 percent in March and Mercedes-Benz had a 50 percent reduction. Other car manufacturers will report monthly and quarterly totals later on Wednesday.
Industry forecasts expect to produce a total for March after all car manufacturers have reported. ALG, a company that follows the trends in car sales, estimated that sales in March across the industry decreased by 37 percent from a year ago.
The decline in sales is the second major blow for car manufacturers. Most of the industry has closed factories in North America to prevent the spread of the virus among workers.
“The market right now is really shocked,” said Brian Benstock, head of Paragon Honda in Queens. He said that his service department is “in a limp position” and that his sales area is dark.
Information on airport impressions shows the decline in air travel.
As the coronavirus pandemic spread throughout the world in February and March, demand for flights began to rapidly collapse. World governments adopted travel bans, limits were closed and travelers chose to stay home in efforts to contain the outbreak. These efforts have almost completely stopped air travel in the United States.
The number of people shown by the federal government during airport controls dropped dramatically every day in March compared to the same weekday a year earlier, ending the month at just 7 percent of last year’s volume, according to Transportation Security Administration data.
On March 1, the agency screened about 99 percent of the 2.3 million passengers, flight crew and airport workers who filtered past its checkpoints the same day last year. But by Tuesday’s end of the month, only about 146,000 people were passing the checkpoints, or about 7 percent of the 2 million people shown last year.
Fear is growing because the downturn is affecting the global economy can be much more punitive and long-lasting than originally feared – potentially lasting into next year and even afterwards.
The pandemic is above all an acute public health. As long as human interaction remains dangerous, the company cannot return to normal in a responsible manner. And what was normal before may no longer be. People may be less likely to get caught in crowded restaurants and concert halls even after the virus contains.
The sudden cessation of commercial operations threatens to inflict economic pain so deep and lasting in all regions of the world at one time that the recovery may take years. The losses for companies, many already saturated with debt, risk triggering a financial crisis of cataclysmic proportions.
“I feel that the 2008 financial crisis was just a dry run for this,” said Kenneth S. Rogoff, a Harvard economist and co-author of A History of Financial Crises, “This time is different: eight centuries of financial folly.”
“This is already shaping up as the deepest dive on record for the global economy for over 100 years,” he said. “It all depends on how long it lasts, but if this goes on for a long time, it will surely be the mother of all financial crises.”
The US government reads out loans for medium-sized companies.
The Treasury Department and the Federal Reserve are competing to complete the development of a Main Street lending program aimed at helping middle-market businesses along with a new program to strengthen states and municipalities suffering financially from the coronavirus pandemic.
Treasury Secretary Steven Mnuchin told CNBC on Wednesday that the programs were part of the Trump administration ongoing efforts to stimulate an economy facing a deep recession. Mr Mnuchin said he also talked to members of Congress about legislation that would increase investment in the country’s infrastructure and that he was prepared to ask for more money to support small business loans.
“Jay Powell and I work around the clock to provide liquidity in the economy,” Mnuchin said.
Mr Mnuchin would not reveal the timing of the new Fed programs, but said they would be soon.
“We want to get started so that they are accessible to American companies and American workers quickly,” he said.
Start-ups have always been risky, designed to grow quickly or die, but the coronavirus pandemic is turbocharging Silicon Valley’s natural selection and causes a shaking so suddenly that it has defied comparison.
In just a few weeks, more than 50 start-ups have reduced or surpassed about 6,000 employees, according to a compilation by The New York Times. Plans for initial public offers are delayed. And funding is drying up for many young tech companies.
New start-ups in certain areas – telemedicine, food delivery, online learning, remote work, games – thrive in the middle of the quarantines.
But at ClassPass, which offers a fitness class membership program, more than 95 percent of its revenue was evaporated in just 10 days when studios and gyms around the world shut down.
The fallout also hits prominent start-ups. Airbnb, the $ 31 billion rental home, has stopped hiring and canceled 800 million marketing. Bird, an electric scooter startup, laid off 30 percent of its staff last week, while Everlane, a clothing company, cut or lost hundreds of workers.
There were signs that boom times were shaky even before the corona virus stopped major US economies. But the pain is now deeper and likely just beginning, especially as investors, who have already disappeared from a series of disappointing initial public offerings last year, are even more cautious.
What else happens:
Whiting Petroleum, an oil company focused on shale projects in North Dakota and Colorado, said it was filed for Chapter 11 bankruptcy protection, citing “the severe decline in oil and gas prices driven by uncertainty surrounding the Saudi / Russia oil price war and the Covid-19 pandemic.” Whiting, which has about $ 1 billion in debt due in the coming year, said it had basically reached an agreement with some creditors on a major restructuring.
Investors pulled more than $ 83 billion from capital and debt investments in emerging markets, according to new data from the Institute of International Finance. “This record-breaking section is significantly larger than the one seen during the global financial crisis,” economists at IIF wrote in a note on Wednesday.
Banks in the UK, including Barclays, HSBC and RBS, said they would not pay a dividend or repurchase shares this year. The board arm too Bank of England, which had requested the move, also encouraged the banks not to distribute cash bonuses to older employees this year. The European Central Bank has issued a similar request to the euro area banks.
Reporting was contributed by Clifford Krauss, Erin Griffith, Alan Rappeport, Neal E. Boudette, Kate Conger, Ben Dooley, Peter S. Goodman, Niraj Chokshi, Li Yuan, Keith Bradsher, Noam Scheiber, Amie Tsang, Jason Karaian, Carlos Tejada, Stanley Reed, Quoctrung Bui, Katie Robertson, Mohammed Hadi, Kevin Granville and Daniel Victor.