As the coronavirus pandemic rips through countries, it’s upending everything in the global economy from junk bonds to prices for orange juice. Governments are shutting down whole commercial sectors to stop the spread of Covid-19, putting a massive crimp in gross domestic product for months to come.
Brits, like just about everyone these days, are stripping supermarket shelves bare of everything from loo roll to tinned food. One thing they don’t seem to be stockpiling is cold hard cash.
Companies that could benefit from the US government’s vast $2 trillion package of aid are among the leaders in stock market gains today. The rally in cruise line and airline stocks comes as more than 150 economists urge congress to bailout workers before companies.
The White House and the Senate have agreed on a $2 trillion stimulus package to bolster the US economy, which is being ravaged by widespread business closures to contain the spread of the coronavirus. The measures are more than twice the size of the stimulus injection after the financial crisis in 2008.
Millions of people in the US are likely to lose their jobs during the next few months, but the pain won’t be spread out evenly. People of color and younger workers are the most at risk of becoming unemployed.
For the first time in its 228-year history, the New York Stock Exchange will tomorrow open without its trading floor. The disruption is symbolic, underscoring how the new coronavirus has run riot through the world, though the floor closure itself will likely have little if any impact on the $28 trillion stock market.
Politicians from Washington to Berlin are readying their bazookas, preparing to unleash trillions of dollars of spending and loans as coronavirus brings parts of the economy to a standstill. Government bond yields are climbing as investors brace for a level of borrowing seldom seen outside of wartime.
This report was updated on March 30 and will continue to be amended as stimulus measures are announced.
The Trump administration plans to ask Congress for $850 billion of stimulus spending to bolster the US economy from a coronavirus-induced disruption. Kenneth Rogoff, former chief economist at the IMF, says those kinds of eye-popping numbers could be reasonable—for round one.
A measure of volatility in the US stock market is closing in on heights last seen during the 2008 financial crisis, as worries grow that the new coronavirus’s spread will take a major bite out of global economic growth.
The US Federal Reserve knows its “bazooka” doesn’t work on everything. But it might be able to buy some time as measures to contain the spread of coronavirus are implemented.
Robert Shiller won the Nobel prize in 2013 for his work on financial bubbles, and more recently he has written about the narratives and popular stories that affect the economy.
Stock markets went into freefall after government policy makers from Frankfurt to Washington failed to reassure investors that they would be able to contain the economic damage from the spread of coronavirus. The drop in US equities triggered circuit breakers for a second time in a week, while an index of European stocks was on pace for its worst daily drop on record.
Would Brits like a digital fiver? The Bank of England is considering whether to issue an electronic version of its banknotes.
As the spread of coronavirus weakens the global economy, investors are monitoring interest rates for signs that growth could stall. Many traders and policy makers pay particular attention to the US yield curve—the gap between short-term and long-term Treasury bond yields—for clues that the world’s biggest economy could tip into recession.
The word “biggest” is carrying a heavy burden.
Russian officials have wounded the US shale industry by starting a full blown oil price war. While the standoff could cause enduring damage to the American energy sector, some analysts think the price war is temporary.
What do a satellite company, a rural hospital chain, and an oil driller have in common? They are all considered zombie companies.
Visa is locking down part of an office in London because an employee may have been contracted Covid-19, according to people familiar with the matter. The containment effort at the payment giant takes place as the world’s biggest financial companies take measures to restrict the spread of the disease.
Oil markets are crashing at the worst rate since the first Gulf war in 1991, amid a price war between Russia and Saudi Arabia. That means global markets could soon be dripping in oil supply, even as demand for energy plummets. Those events are already reverberating around the world, from emerging market currencies to US junk bonds.
The spread of Covid-19, the disease caused by a novel coronavirus, started rippling through the US economy last month, according to a Federal Reserve survey. The report shows the disruption affecting things like demand for heavy machinery, even as the overall economy has been powering ahead.
Interest rates are in new territory.
Robinhood, a brokerage app, was beset by outages for a second day as trading volumes soared. The disruptions come as the platform is tested by swift customer growth and heavy market turmoil.
Cash may not always be king. That’s why, as apps and payment cards become more popular, officials at central banks are considering how and whether to create a digital form of cash.
