Tuesday Morning Briefing: U.S. stimulus: Looking for the "big number"

Coronavirus

Looking for the “big number”

The race is on to launch the third – and largest yet – package of stimulus measures in the United States as economic activity stalls. Treasury Secretary Steven Mnuchin said he was seeking a “big number” for additional legislation that would trigger support for small companies, aid for whole industries – read airlines and hotels – and general stimulus. One Senate Democrat urged an additional $750 billion to address the crisis.

While some hope the Senate would be in a position to pass such bills this week – not least because of uncertainty about its work schedule caused by the coronavirus outbreak – it was not clear whether such a timetable was viable. “I don’t think we can assume that we can keep reconvening the Senate every week,” Republican Senator Marco Rubio said.

UK response jolted by new research

Britain meanwhile is expected later to unveil more help for businesses after the government told people to avoid pubs, clubs, restaurants, cinemas and theaters, raising the risk of companies collapsing. Boris Johnson’s government has been jolted into tougher measures by new research painting a worst-case picture of hundreds of thousands of deaths and a health service overwhelmed with severely sick patients. Separately, London mayor Sadiq Khan said the city would begin operating a reduced service over the next few days.

Traders ‘flying blind’

Many traders working from out-of-town offices or in unfamiliar dealing rooms fear that despite the best-laid contingency plans, communication problems and technical glitches risk adding to already spiraling volatility.

One investment strategist struggling to work with two screens instead of the normal five or six described it as “flying blind”.

The spread

Cases outside China surpassed 100,000 for the first time overnight, with a majority of infected countries in Europe reporting over 100 cases each. Five countries globally reported over 1,000 new cases each: Italy, Spain, France, Germany and Iran.

The earlier major outbreak in South Korea continues to ease, while China reported just 12 new cases. Europe is firmly the center of most new cases, though Africa, South America and Southeast Asia are reporting steady increases in patterns similar to Europe weeks ago.

There are now over 101,000 cases and 7,165 deaths linked to the coronavirus across 163 countries and territories. China now accounts for less than half of all cases and deaths. Around 44% of cases have reportedly recovered.

Social distancing is hard

In Paris, some cafes have taken to selling only takeaway coffee instead of seating patrons, leading to their clientele moving to the pavement, much to the despair of at least one cafe owner.

“I’d thought they’d buy their coffee and leave. But no, they linger and talk!” said Frederic Monnier of Le Cafe Tabac.

Tempers have started flaring in some U.S. cities as well over people trying to go about their normal lives and those committed to complying with public health officials urging people to stay home to prevent the spread.

“Flatten the curve, go home! Flatten the curve, go home!” a man in New York’s Brooklyn borough yelled out the window of a four-story apartment building, as people walked on the street below.

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Parisians rushed to rail stations and took to the highway on Tuesday to escape the French capital before a lockdown imposed to slow the rate of coronavirus contagion kicked in at midday. Those who stayed behind descended on supermarkets and pharmacies even as these were due to remain open under the sweeping restrictions on public life announced by President Emmanuel Macron.

The Roman villa is booked, the guests are invited and their hotel rooms reserved. The gown is purchased and deposits for the honeymoon in Africa are paid. Now Dan Salganik, a partner at a digital marketing agency in Chicago, is not so sure he is still going to get married in Italy in June. He didn’t get cold feet. But coronavirus has thrown cold water on his best laid plans and those of many other couples around the world.

Amazon said it would hire 100,000 warehouse and delivery workers in the United States to deal with a surge in online orders, as many consumers have turned to the web to meet their needs during the coronavirus outbreak. Retailers are racing to keep food and hygienic items in stock and have employees on hand for in-store work or delivery.

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Joe Biden will look to build on his dominant lead in the Democratic presidential race when three states cast votes on Tuesday, but Ohio postponed its planned primary over health concerns amid the coronavirus outbreak. Biden hopes big victories in nominating contests in Florida, Illinois and Arizona can help him amass a nearly unassailable edge over rival Bernie Sanders in the race.

South Korea will announce measures on Wednesday to ease dollar funding shortages in its local market, two government officials familiar with the matter told Reuters. The measures will aim to address heightened funding stress involved with the increased cost of raising U.S. dollar funds in Korean financial markets, officials said on Tuesday, without elaborating.

Uber began suspending shared rides on its ride-hailing platform in the United States and Canada to limit the spread of the coronavirus. The pooled option, which allows riders to book trips at lower prices by sharing the car with up to three other passengers traveling in the same direction, has been disabled for users opening the apps in the two countries.

Volkswagen will suspend production this week at plants in Italy, Portugal, Slovakia and Spain and is preparing to shut down the rest of its factories across Europe due to the spread of coronavirus. The German carmaker said the uncertainty about the fallout from the pandemic meant it was impossible to give any forecasts for its performance this year.

Business

Futures turn higher after another 'Black Monday' plunge

U.S. stock index futures turned higher in volatile trading, following Wall Street’s steepest fall since 1987 in the previous session, as drastic efforts to contain the coronavirus pandemic paralyzed supply chains and crushed business sentiment.

1 min read

'D' word rears head as coronavirus-hit markets brace for recession

The coronavirus shockwaves rippling through U.S. stocks are forcing investors to contemplate outcomes more dire than a recession, including several quarters of declining economic activity, a credit crisis or even a depression.

5 min read

'Single biggest shock': Aviation battles coronavirus cash crunch

Boeing and other U.S. aviation companies are seeking billions of dollars in aid as they battle to survive a plunge in demand caused by the coronavirus pandemic, while Airbus is pausing production at two sites to bolster health and safety measures.

6 min read

Top Stories on Reuters TV

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