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Wall Street Plunges With Global Markets in Turmoil: Live Updates Wall Street Plunges With Global Markets in Turmoil: Live Updates
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Stocks tumbled on Wednesday as the coronavirus continued its relentless spread, governments ramped up efforts to contain it and investors continued to wait for lawmakers in Washington to take action on proposals to bolster the American economy.Stocks tumbled on Wednesday as the coronavirus continued its relentless spread, governments ramped up efforts to contain it and investors continued to wait for lawmakers in Washington to take action on proposals to bolster the American economy.
The S&P 500 fell more than 5 percent. Major European markets were also sharply lower, following a late-day slump in Asian shares. The S&P 500 fell more than 6 percent. Major European markets were also sharply lower, following a late-day slump in Asian shares.
Those significant drops represented another swing in sentiment on Wall Street. Stocks jumped on Tuesday as the White House called for urgent action to pump $1 trillion into the economy. But the calls so far haven’t been met with tangible action in the Senate. Treasury Secretary Steven Mnuchin met with Republican lawmakers on Tuesday and warned them that the unemployment rate in the United States could approach 20 percent without the intervention of robust economic stimulus measures.Those significant drops represented another swing in sentiment on Wall Street. Stocks jumped on Tuesday as the White House called for urgent action to pump $1 trillion into the economy. But the calls so far haven’t been met with tangible action in the Senate. Treasury Secretary Steven Mnuchin met with Republican lawmakers on Tuesday and warned them that the unemployment rate in the United States could approach 20 percent without the intervention of robust economic stimulus measures.
The Trump administration’s $1 trillion proposal includes two rounds of direct payments to Americans, one in April and one in May, at a total cost of $500 billion, according to a summary obtained by The New York Times on Wednesday.The Trump administration’s $1 trillion proposal includes two rounds of direct payments to Americans, one in April and one in May, at a total cost of $500 billion, according to a summary obtained by The New York Times on Wednesday.
The renewed selling showed how fragile any gains have become as long as the virus continues to spread and the number of cases continues to grow at a staggering rate. Analysts continue to downgrade their expectations for the global economy and corporate profits as measures to contain the virus become more extreme.The renewed selling showed how fragile any gains have become as long as the virus continues to spread and the number of cases continues to grow at a staggering rate. Analysts continue to downgrade their expectations for the global economy and corporate profits as measures to contain the virus become more extreme.
Wednesday’s turmoil was evident in other markets as well. The British pound fell to its lowest level in 35 years against the American dollar, and oil prices tumbled.Wednesday’s turmoil was evident in other markets as well. The British pound fell to its lowest level in 35 years against the American dollar, and oil prices tumbled.
Rystad Energy, a consulting firm, said that supply of oil worldwide would exceed demand by about 3 million barrels a day in April as air travel and other transportation grind to a halt.Rystad Energy, a consulting firm, said that supply of oil worldwide would exceed demand by about 3 million barrels a day in April as air travel and other transportation grind to a halt.
“With each day there seems to be yet another trap door lying beneath oil prices, and we expect to see prices continue to roil,” said Louise Dickson, a Rystad analyst.“With each day there seems to be yet another trap door lying beneath oil prices, and we expect to see prices continue to roil,” said Louise Dickson, a Rystad analyst.
The American oil benchmark West Texas Intermediate dropped to less than $24 a barrel in early trading, the lowest price since 2003, before recovering a tad. The global Brent benchmark fell below $27 a barrel, a level not seen since January 2016. Oil prices are roughly 60 percent below where they were at the beginning of the year. The American oil benchmark West Texas Intermediate dropped to less than $24 a barrel on Wednesday, the lowest price since 2003.
Get an informed guide to the global outbreak with our daily coronavirus The global Brent benchmark fell below $27 a barrel, a level not seen since January 2016. Oil prices are roughly 60 percent below where they were at the beginning of the year.
newsletter.
The American economy is poised for the worst quarterly contraction ever, with a sudden slowdown in economic activity that’s more akin to what happened in wartime Europe than during previous American slowdowns like the financial crisis more than a decade ago or even the Great Depression.The American economy is poised for the worst quarterly contraction ever, with a sudden slowdown in economic activity that’s more akin to what happened in wartime Europe than during previous American slowdowns like the financial crisis more than a decade ago or even the Great Depression.
Greg Daco, chief U.S. economist at Oxford Economics, thinks the economy could shrink by 12 percent next quarter, with unemployment hitting 10 percent in April.Greg Daco, chief U.S. economist at Oxford Economics, thinks the economy could shrink by 12 percent next quarter, with unemployment hitting 10 percent in April.
As it rose to record heights, the stock market had perhaps no bigger cheerleader than President Trump, who has saw the rally as an endorsement of his economic policies and crowed about the gains throughout his presidency.
But stocks have been falling for a month, and the severity of that drop has all but wiped out all of the gains that followed Mr. Trump’s inauguration. In intraday trading on Wednesday, the Dow Jones industrial average fell below its pre-inauguration closing level of 19,804. The S&P 500, a better measure of the broader market, is still slightly above its pre-inauguration level of 2,263.69.
Mr. Trump’s victory in 2016, along with the Republican Party’s control of Congress, set off a surge in share prices as investors looked forward to the prospect of steep cuts to corporate tax rates and an administration stocked with industry-friendly faces.
In December 2017, Mr. Trump delivered a sweeping tax overhaul. By the following month, the S&P 500 was up more than 30 percent, and the gains kept coming for much of the year. For Mr. Trump, this was a surefire barometer of his success as president.
There was one other nasty dip along the way: In late 2018, investors grew increasingly worried about Mr. Trump’s trade war with China and the prospect that the Federal Reserve would raise interest rates. But with the economy still growing, the job market strong, and the Fed reversing course on its plan to raise interest rates, the market overcame that dip and climbed nearly 30 percent.
The White House is asking Congress to allocate $500 billion for two separate waves of direct payments to American taxpayers in the coming weeks and an additional $300 billion to help small businesses continue to meet payroll, according to a Treasury Department proposal circulating on Capitol Hill and among lobbyists.The White House is asking Congress to allocate $500 billion for two separate waves of direct payments to American taxpayers in the coming weeks and an additional $300 billion to help small businesses continue to meet payroll, according to a Treasury Department proposal circulating on Capitol Hill and among lobbyists.
The outline, a copy of which was obtained by The New York Times, calls for a total of $1 trillion in spending for those programs, which would also include $50 billion for secured loans for the airline industry, and another $150 billion for secured loans or loan guarantees for other parts of the economy hard hit by the unfolding financial crisis.The outline, a copy of which was obtained by The New York Times, calls for a total of $1 trillion in spending for those programs, which would also include $50 billion for secured loans for the airline industry, and another $150 billion for secured loans or loan guarantees for other parts of the economy hard hit by the unfolding financial crisis.
It would allow for the use of the Exchange Stabilization Fund, an emergency reserve account that is usually used for intervening in currency markets, to cover those costs, and also temporarily allow it to guarantee money market mutual funds.It would allow for the use of the Exchange Stabilization Fund, an emergency reserve account that is usually used for intervening in currency markets, to cover those costs, and also temporarily allow it to guarantee money market mutual funds.
Lawmakers were moving swiftly on Wednesday to try to incorporate the proposal and others from senators into legislation that could be put to a vote in the coming days. But the details remained far from complete.Lawmakers were moving swiftly on Wednesday to try to incorporate the proposal and others from senators into legislation that could be put to a vote in the coming days. But the details remained far from complete.
The Treasury Department proposal calls for the authority to send two $250 billion rounds of checks directly to American taxpayers, the first on April 6 and the second May 18. Payments would be fixed, and their size dependent on income and family size, the summary said.The Treasury Department proposal calls for the authority to send two $250 billion rounds of checks directly to American taxpayers, the first on April 6 and the second May 18. Payments would be fixed, and their size dependent on income and family size, the summary said.
The proposed program to increase loans to small businesses would allow any employer with 500 employees or fewer to receive loans equaling six weeks of their payroll up to $1,540 per employee under the condition that companies must keep paying their employees for eight weeks after receiving the loan.The proposed program to increase loans to small businesses would allow any employer with 500 employees or fewer to receive loans equaling six weeks of their payroll up to $1,540 per employee under the condition that companies must keep paying their employees for eight weeks after receiving the loan.
One of the biggest business lobbying groups, which spoke by phone with President Trump on Wednesday, has asked the administration and Congressional leaders to relax tax policies and cut regulations in response to the coronavirus pandemic.One of the biggest business lobbying groups, which spoke by phone with President Trump on Wednesday, has asked the administration and Congressional leaders to relax tax policies and cut regulations in response to the coronavirus pandemic.
On Wednesday, the president was expected to call into the quarterly meeting of Business Roundtable, which is chaired by Walmart’s chief executive and whose board includes companies like IBM, Apple and AT&T. The group also sent a letter to the president and top lawmakers in Congress calling for a payroll tax holiday for employers and tax credits for companies that retain employees as the economy contracts, as well as relief from tariffs, according to copies of the letters reviewed by The New York Times.On Wednesday, the president was expected to call into the quarterly meeting of Business Roundtable, which is chaired by Walmart’s chief executive and whose board includes companies like IBM, Apple and AT&T. The group also sent a letter to the president and top lawmakers in Congress calling for a payroll tax holiday for employers and tax credits for companies that retain employees as the economy contracts, as well as relief from tariffs, according to copies of the letters reviewed by The New York Times.
The companies are asking for breaks from regulations governing global supply chains, including “regulatory flexibility and, if necessary, direct resources to sustain port infrastructure and multimodal transportation and delivery networks.”The companies are asking for breaks from regulations governing global supply chains, including “regulatory flexibility and, if necessary, direct resources to sustain port infrastructure and multimodal transportation and delivery networks.”
Andrew Ross Sorkin writes:
I chronicled the 2008 financial crisis and spent the past week on back-to-back telephone calls with many of the experts who crafted that bailout, as well as the programs put in place after 9/11, Katrina, the BP oil spill and other crises. Now here is a thought experiment that could prevent what is quickly looking like the next Great Recession or even, dare it be mentioned, depression.
The fix: The government could offer every American business, large and small, and every self-employed — and gig — worker a no-interest “bridge loan” guaranteed for the duration of the crisis to be paid back over a 5-year period. The only condition of the loan to businesses would be that companies continue to employ at least 90 percent of their work force at the same wage that they did before the crisis. And it would be retroactive, so any workers that have been laid off in the past two weeks because of the crisis would be reinstated.
President Trump reassured airline executives on Wednesday that the country would “support them and their amazing employees” as his administration proposed a new loan program for the industry to Congress.President Trump reassured airline executives on Wednesday that the country would “support them and their amazing employees” as his administration proposed a new loan program for the industry to Congress.
The president spoke in a conference call with chief executives of the biggest American airlines and UPS and FedEx. The call came as an administration proposal for $1 trillion in economic stimulus measures was circulating on Capitol Hill. The proposal included $50 billion in secured loans for the airline industry, which has asked for $58 billion in grants and loans.The president spoke in a conference call with chief executives of the biggest American airlines and UPS and FedEx. The call came as an administration proposal for $1 trillion in economic stimulus measures was circulating on Capitol Hill. The proposal included $50 billion in secured loans for the airline industry, which has asked for $58 billion in grants and loans.
As the effects of the coronavirus pandemic hit the U.S. job market, the damage to the labor market looks likely to be much deeper and longer lasting than seemed possible even a week ago.As the effects of the coronavirus pandemic hit the U.S. job market, the damage to the labor market looks likely to be much deeper and longer lasting than seemed possible even a week ago.
Most small businesses do not have the financial buffer to pay workers for long if revenue dries up. And while larger public companies may have access to cash, they also have shareholders who want executives to watch the bottom line.Most small businesses do not have the financial buffer to pay workers for long if revenue dries up. And while larger public companies may have access to cash, they also have shareholders who want executives to watch the bottom line.
“It’s simple math,” said Deborah Weinswig, founder of Coresight Research, an advisory and research firm that specializes in retail and technology. “You can’t have all expenses and no revenue.”“It’s simple math,” said Deborah Weinswig, founder of Coresight Research, an advisory and research firm that specializes in retail and technology. “You can’t have all expenses and no revenue.”
The Economic Policy Institute, a progressive research group, estimated on Tuesday that the outbreak could eliminate three million jobs by summer.The Economic Policy Institute, a progressive research group, estimated on Tuesday that the outbreak could eliminate three million jobs by summer.
The Federal Reserve has already slashed interest rates, promised to buy up huge amounts of government debt, and stepped into more esoteric markets to ensure that the financial system keeps functioning.The Federal Reserve has already slashed interest rates, promised to buy up huge amounts of government debt, and stepped into more esoteric markets to ensure that the financial system keeps functioning.
Now, two of the central bank’s former leaders have floated another idea to help bolster the American economy. In an opinion article published by the Financial Times, Ben S. Bernanke and Janet Yellen, who led the Fed through the 2008 financial crisis, suggested that the central bank should consider trying to buy corporate bonds as well.Now, two of the central bank’s former leaders have floated another idea to help bolster the American economy. In an opinion article published by the Financial Times, Ben S. Bernanke and Janet Yellen, who led the Fed through the 2008 financial crisis, suggested that the central bank should consider trying to buy corporate bonds as well.
That would help a crucial market to continue functioning normally, allowing companies to roll over their debt and get the cash that they need to function through tough times.That would help a crucial market to continue functioning normally, allowing companies to roll over their debt and get the cash that they need to function through tough times.
The suggestion is a dramatic one. Congress would have to change the law that empowers the Fed for the central bank to buy corporate debt, inviting partisan meddling. The idea is something that current Fed chair Jerome H. Powell has said he’s not currently pursuing.The suggestion is a dramatic one. Congress would have to change the law that empowers the Fed for the central bank to buy corporate debt, inviting partisan meddling. The idea is something that current Fed chair Jerome H. Powell has said he’s not currently pursuing.
It’s also notable that the former Fed chairs are weighing in at all. Both Mr. Bernanke and Ms. Yellen have generally avoided giving the central bank explicit advice on monetary policy. The fact that they are willing to make suggestions hints at how dire the economic fallout from coronavirus could become.It’s also notable that the former Fed chairs are weighing in at all. Both Mr. Bernanke and Ms. Yellen have generally avoided giving the central bank explicit advice on monetary policy. The fact that they are willing to make suggestions hints at how dire the economic fallout from coronavirus could become.
“If critical economic relationships are disrupted by months of low activity, the economy may take a very long time to recover,” they wrote.“If critical economic relationships are disrupted by months of low activity, the economy may take a very long time to recover,” they wrote.
BMW of Germany became the last major European carmaker to shut down manufacturing in Europe, saying on Wednesday its factories would remain closed until April 19. The company will also stop production in South Africa. Toyota also said on Wednesday that it would close its European plants.BMW of Germany became the last major European carmaker to shut down manufacturing in Europe, saying on Wednesday its factories would remain closed until April 19. The company will also stop production in South Africa. Toyota also said on Wednesday that it would close its European plants.
A broad group of bankers and other mortgage industry participants is working on a plan to offer a temporary pause in payments on home loans, according to the Housing Policy Council, a trade group that includes Citigroup, Wells Fargo, JPMorgan Chase and Quicken Loans.A broad group of bankers and other mortgage industry participants is working on a plan to offer a temporary pause in payments on home loans, according to the Housing Policy Council, a trade group that includes Citigroup, Wells Fargo, JPMorgan Chase and Quicken Loans.
Philippine financial markets are set to reopen on Thursday, after becoming the first to shut down because of the coronavirus outbreak. The Philippine stock exchange, which shut on Tuesday, will keep reduced hours, it said in a statement.Philippine financial markets are set to reopen on Thursday, after becoming the first to shut down because of the coronavirus outbreak. The Philippine stock exchange, which shut on Tuesday, will keep reduced hours, it said in a statement.
ConocoPhillips said on Wednesday that it would cut its 2020 capital spending by $700 million, or about 10 percent. Late Tuesday, Halliburton, which provides drilling and related services to oil producers, said it would furlough 3,500 workers for 60 days.ConocoPhillips said on Wednesday that it would cut its 2020 capital spending by $700 million, or about 10 percent. Late Tuesday, Halliburton, which provides drilling and related services to oil producers, said it would furlough 3,500 workers for 60 days.
Reporting and research were contributed by Jack Ewing, David McCabe, Cecilia Kang, Alan Rappeport, Ben Casselman, Sapna Maheshwari, Nicholas Fandos, Jim Tankersley, Amie Tsang, Kate Conger, Adam Satariano, Mike Isaac, Jason Gutierrez, Carlos Tejada, Kevin Granville, Daniel Victor and Nelson Schwartz.Reporting and research were contributed by Jack Ewing, David McCabe, Cecilia Kang, Alan Rappeport, Ben Casselman, Sapna Maheshwari, Nicholas Fandos, Jim Tankersley, Amie Tsang, Kate Conger, Adam Satariano, Mike Isaac, Jason Gutierrez, Carlos Tejada, Kevin Granville, Daniel Victor and Nelson Schwartz.