Stock roller coaster continues: March 17, 2020

By CNN Business

Updated 7:26 a.m. ET, March 18, 2020
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3:46 p.m. ET, March 17, 2020

All is well for King Dollar

From CNN Business' Anneken Tappe

The US dollar is rallying against virtually every other currency and it seems like nothing can stop it.

The Federal Reserve's slashing of interest rates would ordinarily be a hurdle for the greenback, as currencies tend to weaken when local interest rates go down. But the rule of thumb didn't hold here.

A few factors have helped push the dollar higher.

First and foremost, it has assumed a safe-haven-like role in the currency world, helped by banks and businesses across the world struggling for dollar funding. The greenback is the No. 1 funding currency in the world -- all over the globe, debt and contracts are denominated in dollars -- and the market volatility has investors scrambling for it.

On top of that, most other currencies are struggling with issues of their own. That in turn helps the buck because currencies are traded in pairs: When the euro falls, for example, the dollar rises.

Currencies of commodity-reliant countries like Canada have been particularly hard-hit by the recent tumult in the oil market.

2:54 p.m. ET, March 17, 2020

Macy's will temporarily close all stores

From CNN's Amanda Wills

Department store Macy’s will be temporarily closing all stores by the end of business day today, according to a press release.

The closings include all Macy’s, Bloomingdale’s, Bluemercury, Macy’s Backstage, Bloomingdales the Outlet and Market by Macy’s stores.

According to the release, the company will continue to use e-commerce platforms:

“We will work with government and health officials to assess when we will reopen our stores and safely bring our colleagues back to work,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc.

1:52 p.m. ET, March 17, 2020

Remember when Treasury yields were nearly at zero?

From CNN Business' Anneken Tappe

Last week, the 10-year US Treasury bond yield fell as low as 0.3% as demand in the safe-haven investment drove prices up and the first emergency rate cut by the Federal Reserve weighed on interest rate expectations. Investors braced for a drop all the way to zero, or even into negative territory, as has happened with government bonds in places like Germany.

Now this feels like a distant memory: the 10-year yield is back above 0.8%, in spite of the Fed slashing rates to near zero. Bond prices and yields move opposite to each other.

Risk appetite has recovered and stocks climbed higher on Monday, giving the safe haven Treasury bonds some breathing room. But this might not last long.

"Erratic conditions will likely persist and right now it seems Treasuries remain the only true safe-haven," said Edward Moya, senior market analyst at Oanda, in a note this morning.

A real move above 1% in the 10-year yield could be a sign that investor appetite is stabilizing.

12:53 p.m. ET, March 17, 2020

Canopy Growth is shutting 23 cannabis dispensaries

From CNN Business' Alicia Wallace

Cannabis company Canopy Growth will temporarily close 23 of its dispensaries in Canada in response to the coronavirus outbreak.

The company announced its corporate-owned Tokyo Smoke and Tweed retail shops in Newfoundland, Saskatchewan and Manitoba would close at 5 pm local time on Tuesday. Canopy’s Tweed Visitor Centre in Smith Falls, Ontario, also will close.

The decision does not affect Spectrum Therapeutics’ medical sales nor certain e-commerce platforms.

Canopy did not immediately respond to requests for comment about the duration of the planned closures, how many employees would be affected and whether those workers would be paid. Canopy and other large cannabis operators in North America are in the throes of a downturn and have laid off employees and shuttered facilities to stem costs.

Canadian Prime Minister Justin Trudeau this week announced his country would close its borders to visitors except for Canadian citizens, permanent residents or US citizens. The country has not yet issued a mandate for cannabis operators. 

12:30 p.m. ET, March 17, 2020

Stocks are stronger at midday

From CNN Business' Anneken Tappe

It's been a volatile morning, but stocks are sharply higher around midday.

All three major US indexes advanced as President Donald Trump, Treasury Secretary Steven Mnuchin and Vice President Mike Pence gave a televised briefing, outlining the steps the administration is taking to mitigate the fallout from the coronavirus outbreak.

Mnuchin is expected to outline a $830 billion stimulus package with Senate Republicans later today.

“We’re looking at sending checks to Americans immediately,” Treasury Secretary Steven Mnuchin told reporters at the White House.

“I think it’s clear we don’t need to send people who make a million dollars a year checks. But we like -- that’s one of the ideas we like. We’re going to preview that today and then we’ll be talking about details afterwards,” Mnuchin said.

The new measures will also include up to 90-day deferrals of IRS tax payments up to $1 million.

Mnuchin also said the stock market will remain open despite the recent volatility, although he said its hours could be shortened if needed. "Americans should know that we are going to do everything to make sure they have access to their money at their banks, to the money in their 401(k)s, and to the money in stocks," Mnuchin added.

11:48 a.m. ET, March 17, 2020

Fed revives 2008-era program to unfreeze critical borrowing market

From CNN Business' Matt Egan

The Federal Reserve launched a new program Tuesday that will seek to unfreeze a crucial market that allows American businesses to borrow.

The US central bank said the commercial paper funding facility will keep credit flowing to households and businesses. The Fed was similarly forced to rescue the commercial paper market in 2008 during the financial crisis.

Analysts had warned the commercial paper market, which provides short-term funding for businesses, had frozen in recent days and urged the Fed to immediately step in.

The commercial paper facility and several other steps taken by the Fed are aimed at preventing a credit crisis that deepens the disruptions caused by the coronavirus outbreak.

"The commercial paper market has been under considerable strain in recent days as businesses and households face greater uncertainty in light of the coronavirus outbreak," the Fed said in a statement.

The Fed said that the new program will be backed by the Treasury Department, which is providing $10 billion of credit protection to the Fed from the exchange stabilization fund.

11:36 a.m. ET, March 17, 2020

Amazon is treating coronavirus demand like a 'seasonal surge'

From CNN Business' Clare Duffy

Amazon has seen a major surge in online shopping as people stock up during the coronavirus outbreak. The company said Monday it is adding 100,000 additional fulfillment center and distribution center positions to accommodate the demand.

The company is prioritizing shipments of essential goods, such as "medical supplies" and "household supplies," Amazon senior vice president Jay Carney told CNN's Poppy Harlow Tuesday.

Carney said Amazon is treating the situation like a "seasonal surge" in demand, and the new positions will be treated like seasonal workers. That means "there's no guarantee" that the jobs will remain when the demand abates, though "many of them" will, he said.

Additionally, Amazon said Monday it is raising pay for distribution and warehouse workers to better compensate them amid the rush. It is raising base pay for workers by $2 — from $15 to $17 — though pay is higher in many parts of the country. Carney said that pay increase will least at least through April.

Carney said Amazon fulfillment centers around the world have had a "handful" of workers test positive for coronavirus. He said those workers are receiving paid sick leave while they quarantine, and the company is taking steps including limiting gatherings in fulfillment centers to prevent further spread.

Watch the interview here:

10:51 a.m. ET, March 17, 2020

Another day, another $500 billion from the NY Fed to calm markets

From CNN Business' Matt Egan

Just an hour into Tuesday's trading day, the NY Fed announced it will pump up to $500 billion into the financial system later this afternoon through an unscheduled overnight repurchase (repo) operation.

The move comes on top of the NY Fed's previously announced repo operations, including one already completed early Tuesday morning, after Monday's precipitous slide in stocks including Dow's worst day since 1987.

The cash injections are aimed at calming panicky markets and responding to a surge in demand for the US dollar, the world's safe haven currency.

"This action is taken to ensure that the supply of reserves remains ample and to support the smooth functioning of short-term U.S. dollar funding markets," the Fed's statement said.

On Sunday the Fed slashed interest rates to zero and relaunched its 2008 crisis-era bond-buying program.

But the US central bank is likely not nearly done.

Analysts say the Fed may need to provide lending to industries threatened by the coronavirus outbreak, such as airlines.

Bank of America is warning the commercial paper market is "frozen." US companies rely on that market for short-term borrowing. To calm markets, Bank of America said the Fed may need to launch the same kind of commercial paper lending facility it used in 2008.

11:01 a.m. ET, March 17, 2020

Coronavirus has plunged the world into a recession, according to S&P

From CNN Business' Chris Isidore

The coronavirus outbreak has plunged the world's economy into a global recession, according to S&P Global.

The credit-rating agency, which determines the credit worthiness of governments and companies around the world, said Tuesday that the virus has severely disrupted economic activity -- far more drastically than previous estimates. It said the damage to economic activity is about to get worse in United States and Europe.

The initial data from China suggests that its economy was hit far harder than projected, though a tentative stabilization has begun," said S&P Global's Chief Economist Paul Gruenwald. "Europe and the United States are following a similar path, as increasing restrictions on person-to-person contacts presage a demand collapse that will take activity sharply lower in the second quarter before a recovery begins later in the year."

Read more about a possible global recession here.