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Dow soars as investors take in $2 trillion stimulus deal: March 25, 2020
By CNN Business
US stocks finished mostly higher on Wednesday, booking their first back-to-back gains in weeks.
Congress agreed to a deal on the economic relief bill, which eased investors’ fears.
It was both benchmark’s first consecutive session of gains since early February.
- The Nasdaq Composite didn’t manage to hold onto its gains and ended down 0.5%.
Apple has "sourced, procured and is donating" 10 million masks to the US medical community battling the coronavirus outbreak, CEO Tim Cook announced in a video posted to Twitter. The company will also donate millions more masks to the hardest hit regions in Europe, Cook said in a tweet on Wednesday.
The iPhone maker is the latest tech company to throw its weight behind helping to increase the supply of respirator masks. Cook's announcement comes a day after Japanese conglomerate SoftBank said it would give 1.4 million masks to the state of New York, where the number of coronavirus cases has now crossed 30,000.
Tomorrow's jobless claims data will shine a bright light on the ugly economic fallout from the coronavirus crisis.
Economists expect 1 million people to have filed for unemployment benefits in the week ended March 21, which would be the highest figure ever recorded. But the number could be even higher. Goldman Sachs (GS) estimated more than 2 million people have filed claims. Morgan Stanley (MS) and the Economic Policy Institute expect as many as 3.4 million claims.
State labor departments across the the country are struggling to cope with the influx of claims.
The coronavirus outbreak has forced businesses across the country to shut down and lay off workers, at least temporarily.
Following tomorrow’s report, investors will attempt to quantify the total losses to be experienced, and the corresponding impact on the unemployment rate," said Jonathan Golub, chief US equity strategist at Credit Suisse. "While neither is knowable, an extremely rough rule of thumb would be a 1% increase in the unemployment rate for every 1.5 million jobs lost."
The US Department of Labor will release the weekly claims data tomorrow at 8:30 am ET.
Pink slips will soon be flying in the oil patch.
The crash in oil prices to 18-year lows is forcing energy companies to slash costs, including by laying off workers.
Rystad Energy estimates that 1.6 million jobs in the oil industry will ultimately get wiped out around the world.
The bulk of those jobs will be in the oilfield services sector, which provides the technology, equipment and manpower to drill for oil. Rystad anticipates 1 million oilfield services jobs disappearing as oil companies rapidly slash spending to cope with cheap oil.
The economic stimulus bill agreed to on Wednesday in Washington will place restrictions on businesses that receive loans as part of the $500 billion loan, investment and liquidity program, according to a draft of the bill obtained by CNN.
The loan recipients won't be allowed to pay dividends for a year after the loan is repaid, and must retain 90% of employment levels as of March 24, "to the extend practicable," through September 30.
$25 billion are earmarked for the airline industry, plus another $4 billion for cargo air carriers and $17 billion for businesses that work in national security.
A new congressional oversight commission will monitor the administration's handling of the loans. Trump's businesses are not eligible for any of them.
Wall Street's broadest index, the S&P 500, is on track for its first back-to-back gains in more than a month.
That's just one way of looking at how wild the past few weeks have been for the stock market.
The S&P gained a whopping 9.4% yesterday, its best performance since 2008, and is up 3.2% this afternoon.
But for the month, things look less rosy. The index has dropped nearly 15% so far in March, putting it on track for its worst month since October 2008 -- the peak of the financial crisis.
A group of 33 attorneys general from called out leading online marketplaces for failing to adequately protect consumers from price gouging amid the coronavirus outbreak.
As the coronavirus outbreak escalated and consumers stocked up on essential goods, listings for exorbitantly priced face masks, sanitizers and other products began popping up on online marketplaces. Earlier this month, Amazon said it removed more than 1 million products for price gouging or falsely advertising effectiveness against coronavirus.
"As COVID-19 spreads throughout the country, it is especially important unscrupulous sellers do not take advantage of Americans by selling products at unconscionable prices," a letter from the group to Amazon CEO Jeff Bezos reads.
The attorneys general from many states, as well as Washington DC and Puerto Rico, recommended several actions:
- Set policies against price gouging that take into consideration historical seller prices, and enforce restrictions.
- Trigger price gouging protections ahead of an official emergency declaration; for example, ahead of pending weather events.
- Create a complaint portal for customers.
Independent contractors and so-called “gig” workers will be eligible to receive federal aid under the $2 trillion emergency package being considered by the US Senate, according to a CNN review of the document
The language in the draft bill could provide additional certainty to millions of part-time workers who drive for Uber (UBER) or deliver for Amazon (AMZN), in what has become a major part of the digital economy.
The provisions are responsive to requests by tech execs including Uber CEO Dara Khosrowshahi, who this week wrote to President Donald Trump asking for economic support for Uber drivers.
"My goal in writing to you is not to ask for a bailout for Uber, but rather for support for independent contractors and, once we move past the immediate crisis, the opportunity to legally provide them with a real safety net going forward,” Khosrowshahi wrote.
Gig economy businesses such as Uber have battled fiercely at the state level, especially in California, to avoid having to classify their drivers as employees who would be eligible for corporate benefits.
The draft bill is not yet final.