The World
The latest round of coronavirus-induced layoffs and furloughs soared by another 6.6 million in the first week of April, bringing total job losses in less than a month to 16.8 million. Initial jobless claims, a rough proxy for job losses, have now posted increases of 6.6 million, 6.9 million and 3.3 million in the last three weekly readings since the middle of March. The unprecedented surge in jobless claims has already pushed unemployment above 10%, economists say, more than double the officially reported 4.4% rate in March. The current pace of job losses suggest the unemployment rate will soon move past 15% and perhaps even exceed 20%, coming close to levels last seen in the 1930s. (MarketWatch)
The Federal Reserve unveiled an array of programs Thursday that it said would provide $2.3 trillion in loans, expanding the Fed’s operations to reach small and midsize businesses and U.S. cities and states. The Fed also said it would expand previously announced corporate lending programs to include some classes of riskier debt that had been excluded, including allowing firms that until recently had been rated as investment-grade to participate in those facilities. (Wall Street Journal)
The U.S. government’s $350 billion program to help ailing businesses took an important step forward on Wednesday, with the launch of a system that will allow hundreds of new lenders to participate in the unprecedented scheme. Lenders that have never previously registered with the Small Business Administration (SBA) could start to do so through the new online portal, addressing one of several problems with the scheme that banks say have delayed getting much-needed funds to customers. (Reuters)
The next two days will be pivotal for determining whether large oil-producing countries can partially stabilize an industry reeling from very low prices and the historic, coronavirus-fueled collapse in demand. The OPEC+ group led by Saudi Arabia and Russia begin meeting remotely later Thursday morning to discuss production cuts, to be followed by a virtual Friday meeting among G20 energy ministers that includes the U.S. Russia has signaled that it's willing to cut production by 1.6 million barrels per day, or roughly 15%, per multiple reports. Saudi Arabia was also discussing a cut of 15% to 17% on Thursday, delegates said, asking not to be identified because the talks were private, according to Bloomberg. (Axios)
The UK government is set to borrow billions of pounds from its emergency Bank of England overdraft to finance the fight against Covid-19. The government will draw money from the Bank's "ways and means" facility to help workers and businesses.It has not used the facility since the financial crisis. (BBC)
President Vladimir Putin announced an extension of the nationwide “non-working week” until April 30 after the country registered a sharp increase in coronavirus cases. Speaking in a televised address, he added that he would delegate the decisionmaking power on anti-coronavirus measures to regional authorities given the regional differences in infection rates. (Moscow Times)
Tokyo’s governor, Yuriko Koike, is poised to call for further business closures to contain the coronavirus outbreak, setting her on a collision course with the prime minister, Shinzo Abe. Disagreements between Koike and Abe over how far the emergency measures should go have quickly escalated since Tokyo’s 14 million residents were asked to stay home earlier this week amid record numbers of new cases. (The Guardian)
More than one million Canadians lost their jobs in March, as the country locked down to combat the coronavirus. The data, released by the federal statistics agency on Thursday, also pushes the unemployment rate to 7.8%.March saw the largest loss of jobs in a single month since the records began in 1976. (BBC)
When China’s economy crashed early this year, Western manufacturers with a strong presence there suffered. Now, as China gradually reopens for business, that presence is boosting auto makers including General Motors Co., Volkswagen AG, Daimler AG’s Mercedes-Benz and BMW AG. Daimler finance chief Harald Wilhelm said this week that sales of the company’s Mercedes-Benz luxury cars would continue falling in Europe and the U.S. through April. But sales rebounded in China last month, marking the beginning of a recovery that he said would help Mercedes post a profit in the first quarter. (Wall Street Journal)
Billions of dollars worth of food is going to waste as growers and producers from California to Florida are facing a massive surplus of highly perishable items. As US food banks handle record demand and grocery stores struggle to keep shelves stocked, farmers are dumping fresh milk and plowing vegetables back into the dirt as the shutdown of the food service industry has scrambled the supply chain. Roughly half the food grown in the US was previously destined for restaurants, schools, stadiums, theme parks and cruise ships. The impact could be up to $1.32bn from March to May in farm losses alone, according to a National Sustainable Agriculture Coalition report. (The Guardian)
Many hospitals are stretched beyond capacity by the COVID-19 pandemic and on top of a scarcity of beds and equipment, will face financial volatility that could upend systems running on relatively thin profit margins. Two of the biggest for-profit systems, Tenet and Community Health Systems, pulled 2020 guidance amid the outbreak. Executives say loss of revenue from elective procedures postponed for at least a few months to free up supplies and staff for COVID-19 treatment coupled with rising expenses have pushed them to expect revised earnings projections. Tenet also furloughed about 500 full-time employees not directly involved in patient care. Moody's and Fitch Ratings downgraded their outlooks for the nonprofit hospital sector. (Healthcare Dive)
Treasury Secretary Steven Mnuchin said that he believed it was possible that the U.S. could open back up for business next month, following the effective halt of the economy because of the coronavirus. “I do, Jim,” Mnuchin said after CNBC’s Jim Cramer asked about reopening the economy in May. The comments came during an interview on CNBC’s “Squawk on the Street.” (CNBC)
Yelp co-founder and CEO Jeremy Stoppelman announced in an internal email that the company has to cut expenses, which means a large round of layoffs and some additional measures. 1,000 employees have been laid off. According to an SEC filing, Yelp had 5,950 employees as of December 31, 2019. Today’s layoffs represent a 17% staff reduction. (TechCrunch)
WeWork has stopped paying rent at some U.S. locations, in the latest sign that the co-working company is aggressively trying to cut costs as the economic downturn eats into its revenue. People briefed on the matter say WeWork has yet to mail in its April rent check at numerous properties while it tries to renegotiate leases. The company recently hired brokerage firms JLL and Newmark Knight Frank to negotiate rent relief or convert lease deals into profit-sharing agreements in a bid to drive down its fixed monthly expenses. (MarketWatch)
Airbnb told investors it expects revenue to fall 54% this year, The Information reported, which explains why it borrowed money at the exorbitant 11%-12% interest rate from two private equity firms this week. But Airbnb’s management also believes we’ll see a V-shaped recovery once the pandemic ends. The company has told investors that next year, it thinks revenue could bounce back to a level that is 15% higher than 2019. In the meantime, it is looking at plenty of red ink. The company expects to lose $1 billion through the first half, The Wall Street Journal reported. Meanwhile, Airbnb will block all British bookings on its platform except for those made by key workers from today after criticism that some hosts were allowing guests to travel to holiday destinations during the lockdown. (The Information & The Times (UK))
New research indicates that the coronavirus began to circulate in the New York area by mid-February, weeks before the first confirmed case, and that travelers brought in the virus mainly from Europe, not Asia. “The majority is clearly European,” said Harm van Bakel, a geneticist at Icahn School of Medicine at Mount Sinai, who co-wrote a study awaiting peer review. A separate team at N.Y.U. Grossman School of Medicine came to strikingly similar conclusions, despite studying a different group of cases. Both teams analyzed genomes from coronaviruses taken from New Yorkers starting in mid-March. (New York Times)
Finance
China’s central bank may be re-pegging the yuan’s exchange rate against the US dollar to avert the threat of a financial crisis and create a sense of stability amid the huge economic and financial uncertainties resulting from the coronavirus pandemic, according to analysts. While the central bank has never publicly admitted that it would peg the yuan to the US dollar, in the current economic and financial environment, Chen Yulu, a deputy governor at the PBOC, said late last month that the yuan would fluctuate around the level of 7 yuan “in the future”. (South China Morning Post)
Muni bond issuers and investors call for rapid relief from the Fed. City of San Francisco complains that coronavirus fears have turned market ‘crazy.’ (Financial Times)
Blackstone Group Inc. has finished raising a 9.8 Billion-Euro fund that will target European real estate. The fund swells the firm’s uninvested capital for opportunistic property bets to about $30 Billion just as the coronavirus roils markets worldwide. It’s also the largest private equity capital raising to complete since the pandemic’s outbreak, according to data compiled by Bloomberg. (Crain’s New York)
Many small businesses could have another thing to worry about when they come out of a coronavirus coma: higher credit-card fees. Visa and Mastercard had planned to raise swipe fees on many merchants this year, and the changes in some cases would be hardest on small businesses, according to people familiar with the situation. It is unclear if the fee changes, in the works for months, will be rolled out if the pandemic persists. (Wall Street Journal)
FASB voted Wednesday to add a project to its technical agenda to propose delaying the effective dates of its standards on revenue recognition and lease accounting for certain entities because of challenges related to the coronavirus pandemic. The board voted unanimously to consider amending the effective date of FASB Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers, including subsequent amendments, for franchisors that are not public business entities. (Journal of Accountancy)
US executives rush in record numbers to ‘buy the dip’. As the stock market plummeted last month, managers of big companies saw value. (Financial Times)
Technology
US Senate tells members not to use Zoom. The organisation is latest to warn over data security worries on videoconferencing platform. Meanwhile, Google has banned the popular videoconferencing software Zoom from its employees’ devices. (Financial Times & Buzzfeed)
Over the last month, the Zoom videoconferencing service has emerged as the communication lifeline of the coronavirus pandemic. But the convenience fueling Zoom’s explosive popularity has come at a price. Now the company is scrambling to deal with privacy and security issues that keep popping up. On Wednesday morning, Zoom announced that it had formed a council of chief information security officers from other companies to share ideas on best practices. The company also announced that it had hired Alex Stamos, the former chief security officer of Facebook, as an outside adviser. (New York Times)
Disney Plus has surpassed 50 million subscribers — up more than 22 million since the last time Disney disclosed numbers two months ago. Disney’s new subscriber numbers follow a series of rollouts in international territories, including the UK, India, Germany, Italy, Spain, Austria, and Switzerland. To compare, Netflix has 167 million subscribers around the world, or just under one-third of Netflix’s total subscriber base. Hulu, Disney’s other streaming service, has 30 million subscribers. (The Verge)
The Federal Communications Commission (FCC) on Wednesday approved Alphabet Inc unit Google’s request to use part of an U.S.-Asia undersea telecommunications cable after the company warned it would face significantly higher prices to carry traffic by other means. Google agreed to operate a portion of the 8,000-mile Pacific Light Cable Network System between the United States and Taiwan, but not Hong Kong. Google and Facebook Inc helped pay for construction of the now completed telecommunications link but U.S. regulators have blocked its use. (Reuters)
Foursquare and Factual bet that the future of location data Is about more than advertising: It’s been a big week for location data-related deals. PlaceIQ acquired location data and measurement company Freckle IoT on Tuesday. And a day before, Foursquare said it would merge with Factual. Together, Foursquare and Factual have more than $150 million in combined revenue, data derived from over 500 million devices worldwide and 400+ employees. (AdExchanger)
Two leading universities are trying to develop apps that listen to users' coughs and voices to predict whether they are infected with the coronavirus. But the two projects are taking different approaches to privacy.The Cambridge University effort seeks to keep volunteers anonymous, but says this is currently limiting its work.Meanwhile, a team at Carnegie Mellon University says it is critical that users register themselves, but it has had to temporarily go offline. (BBC)
Thousands of technology enthusiasts and others are flocking to a new wave of hackathons created to fight against the coronavirus pandemic. The low-sleep, high-octane sessions have attracted participants world-wide to team up online and suggest solutions to problems such as the equipment shortage for health providers or a better way to track the spread of Covid-19, the respiratory disease caused by the virus. (Wall Street Journal)
Smart Links
Broadway shows to remain closed through at least June 7. (New York Daily News)
The Los Angeles Philharmonic has canceled the remainder of its 2019-20 season. (Los Angeles Times)
Senator Bernie Sanders of Vermont ended his presidential candidacy. (New York Times)
Dr. Fauci: No shaking hands ‘ever again.’ (Fox News)
Hand sanitizer will be hard to find for a long time (Bloomberg)
New Delhi residents clearly see (finally) Himalayan peaks. (Times of India)