The World
Treasury Department officials are preparing to ask Congress to swiftly commit another $200 billion to replenish a new small business coronavirus program that is being overwhelmed by surging demand, according to two people briefed on the pending announcement. Treasury’s request could come as soon as Tuesday, though details remained in flux as policymakers scrambled to evaluate the program’s design. The two people spoke on the condition of anonymity as the deliberations remain ongoing. Under some scenarios, Treasury could seek more than $250 billion for the program, but that was still being discussed. (Washington Post)
Senate Majority Leader Mitch McConnell (R., Ky.) said he would aim to approve more funding this week for a small-business loan program that Congress created last month to help firms hit by the coronavirus pandemic. McConnell will need the consent of Senate Minority Leader Chuck Schumer (D., N.Y.) to pass the funding this week. With lawmakers out of town, Mr. McConnell said he hoped to pass the measure through unanimous consent or a voice vote. “It is quickly becoming clear that Congress will need to provide more funding or this crucial program may run dry. That cannot happen,” he wrote. (Wall Street Journal)
Exxon Mobil Corp throttled back investment in shale, natural gas and deep water production, cutting planned capital spending by 30% this year as the coronavirus pandemic saps energy demand and oil prices tumble. Oil companies have pulled back 2020 spending plans by an average of 22% as countries limit air travel, order businesses closed and tell residents to stay home to combat the pandemic that has killed more than 76,000 worldwide. (Reuters)
The U.S. cut its 2020 oil production forecast by more than 1 million barrels a day, as collapsing crude prices and plummeting demand threaten to shutter production in the country’s biggest fields. Production is expected to average 11.76 million barrels a day through December, down from a previous forecast of 12.99 million barrels, the Energy Information Administration said on Tuesday. The agency also trimmed its 2021 output expectations by 1.6 million barrels a day to just over 11 million daily barrels. (Bloomberg)
Japanese car giants Nissan and Honda are furloughing thousands of workers as North American auto plants continue to be shuttered because of the coronavirus pandemic. Honda has extended closures through the start of May, covering auto plants in Alabama, Indiana, Ohio, Canada and Mexico, as well as other plants assembling engines and ATVs. Honda had initially been paying employees to stay home during the shutdown, but a spokesman tells NPR the company now has "no work available" for more than 14,000 hourly workers. Honda employees will continue to receive their benefits while they are going without pay. Nissan, which has plants in Mississippi and Tennessee, has extended closures through late April. The company says it is implementing "temporary layoffs" that will affect some 10,000 hourly workers. (NPR)
China will establish new pilot zones for cross-border e-commerce, support the processing trade and host an online Canton Fair to stabilize foreign trade and investment amid the novel coronavirus pandemic (COVID-19), according to an executive meeting of the State Council.
The meeting, presided over by Premier Li Keqiang, also decided to continue preferential tax policies for inclusive financial service and micro-loan companies in a bid to help small- and micro-businesses, self-employed individuals and farmers tide over. In addition to the 59 cross-border e-commerce pilot zones already set up, China will establish 46 new ones and exempt retail export goods in all pilot zones from value-added tax and consumption tax, while encouraging companies to jointly build and share overseas warehouses. (Xinhua)
Even the best-managed small businesses are in a very vulnerable position as they try to weather the shutdown of much of the U.S. economy during the coronavirus crises, according to the Federal Reserve Bank of New York. A report released Tuesday by the bank said that among “healthy” small businesses in late 2019, about 20% of them had enough cash saved to operate normally for only two months if their revenue were to dry up. Among less financially secure companies, only 10% could operate normally on savings alone for two months. The report said that if small firms were forced to cut back, healthy firms would most likely cut staff or pay, while troubled firms would more likely try to borrow to stay in business. (Wall Street Journal)
Foreign Secretary Dominic Raab has said he is "confident" Boris Johnson will recover from coronavirus, describing the prime minister as a "fighter". Speaking at the daily coronavirus briefing, Mr Raab said Mr Johnson remained in "good spirits" and was breathing without assistance.Later in the evening, No 10 said the PM remained in critical care but his condition was "stable." (BBC)
The European Union plans to impose tariffs on lighters and plastic fittings from the U.S. in retaliation over controversial American duties on imported steel and aluminum, according to EU officials. The EU intends to apply a 20% tariff on lighters and a 7% levy on plastic fittings for furniture in response to a U.S. decision in February widening the scope of metal levies introduced in 2018 on national-security grounds, the officials said on the condition of anonymity. (Bloomberg)
Nearly three-quarters of Americans say the coronavirus pandemic has reduced their family’s income, with nearly half saying they would be without any income at all if they were unable to work because of illness, according to a new poll for the Financial Times. The survey of likely voters for the FT and the Peter G Peterson Foundation found 73 per cent of Americans said the outbreak had reduced their family’s income, with 24 per cent saying their household income had been cut “very significantly”. Some 48 per cent said they would lose pay if they fell ill and were unable to work. In a sign of how widespread the pandemic’s economic impact has become, almost as many families making more than $100,000 a year reported a hit to their income (71 per cent), as those making less than $50,000 (74 per cent). Similarly, 53 per cent of those making less than $50,000 said they would lose their pay if illness forced them to stop work, while 47 per cent of those making more than $100,000 were in the same boat. (Financial Times)
More than 1,000 companies responded to the Federal Emergency Management Agency’s call about two weeks ago to provide needed supplies to fight the coronavirus pandemic, according to a person familiar with the matter. As of early Monday, only three companies had supplies the agency could actually buy. Many of the offers, for items ranging from protective medical gear to tests and body bags, didn’t work out, according to people familiar with the matter, because some companies have asked for payment up front, something FEMA can’t agree to. Another issue: Some companies have oversold what they can actually get to FEMA. “There’s a lot of disappointment in how the business community is responding,” the person said. (Wall Street Journal)
Rail journeys in the UK are now at just 5% of normal levels, according to the latest government figures, as passengers heed calls to avoid non-essential travel due to coronavirus. Bus passenger numbers outside London are down 88% from the same time in 2019, with just under half of normal services running, while air traffic is down 92% compared with last year – with the few remaining flights mostly for either repatriation or cargo. The transport minister Chris Heaton-Harris told the Commons transport select committee that overall road traffic was also down 71% for last year, falling by 83% on the strategic road network (motorways and trunk roads). In London, tube journeys were down by 94%, while there were 80% fewer bus journeys than this last year, the minister said. The number of Cross-Channel Eurostar journeys was now just 1% of those taken daily in 2019. (The Guardian)
German airline group Lufthansa said it was permanently removing some of its large aircraft from service and reducing capacity for the long term, saying it will take years for demand for air travel to return to levels seen before the coronavirus pandemic. The company said in a statement Tuesday that it was retiring six Airbus A-380s, five Boeing 747-400s and seven Airbus A340-600 aircraft, a step that anticipates less traffic long term at its Frankfurt and Munich hubs in Germany. The company said it was ceasing operations for its Germanwings brand, speeding up a move already decided before the crisis. Its Eurowings low-cost division would retire 10 Airbus A320s, while its SWISS, Austrian Airlines and Brussels Airlines group members would also reduce their fleets, in the case of SWISS by foregoing delivery of already ordered aircraft. (Associated Press)
Hudson Yards scrutinises finances of rental refuseniks. Three-quarters of Manhattan site’s retailers fail to pay amid rising tenant-landlord tensions. (Financial Times)
A growing number of property investors are preparing for what they believe could be a once-in-a generation opportunity to buy distressed real-estate assets at bargain prices. Investment firms like Blackstone Group Inc., Brookfield Asset Management and Starwood Capital Group are sitting on billions of dollars in cash and capital commitments they have raised from pensions, sovereign-wealth funds and other big institutions in recent years. Many of these firms are eyeing hotels, retail properties, mortgage-backed securities and other assets that have come under stress in recent weeks as the spread of the coronavirus pandemic has closed businesses across the country, leaving them unable to pay rent and their landlords unable to pay their mortgage bills. (Wall Street Journal)
Major League Baseball and its players are increasingly focused on a plan that could allow them to start the season as early as May and has the support of high-ranking federal public health officials who believe the league can safely operate amid the coronavirus pandemic, sources told ESPN. Though the plan has a number of potential stumbling blocks, it has emerged above other options as the likeliest to work and has been embraced by MLB and MLB Players Association leadership, who are buoyed by the possibility of baseball's return and the backing of federal officials, sources said. The plan, sources said, would dictate that all 30 teams play games at stadiums with no fans in the Phoenix area, including the Arizona Diamondbacks' Chase Field, 10 spring training facilities and perhaps other nearby fields. Players, coaching staffs and other essential personnel would be sequestered at local hotels, where they would live in relative isolation and travel only to and from the stadium, sources said. (ESPN)
Finance
The CEO’s coronavirus conundrum: how much pay to sacrifice? After calls to ‘share the pain’, bosses are taking lower salaries to quell investor anger. (Financial Times)
Fintechs, small banks do their part in coronavirus fight despite risks. Leaders at Chime, Moven, Citizens Bank of Edmond are getting inventive as they try to help those hurt economically by the pandemic. (American Banker)
The number of U.S. homeowners with mortgages who have stopped making payments is surging under the federal government’s new forbearance program, according to a survey from the Mortgage Bankers Association. The total number of loans in forbearance grew to 2.66% as of April 1, according to the MBA’s Forbearance and Call Volume Survey. On March 2, the rate was 0.25%. For loans backed by Ginnie Mae, which serves low- and moderate-income borrowers, the rate was 4.25%. (Crain’s New York)
Private equity firms worldwide pulled in a near record amount of capital during the first quarter amid the spreading coronavirus outbreak and government-mandated shutdowns. But fundraising experts say that the momentum will be short lived. Investors pledged about $132.2bn to private equity funds globally during the just-ended quarter, or around 11.5% more than the $118.6bn collected by the industry in the same period of last year, data from Preqin shows. (Private Equity News)
Technology
Tiny digital businesses play key role in local economies:New research, based on data from 20 million websites, found that small-scale entrepreneurs generate significant spillover benefits to their communities. The analysis also concluded that counties with more of these ventures experienced stronger recoveries from the last recession than elsewhere, suggesting that “these small web businesses can be an important buffer for individuals and local communities facing economic challenges,” said Marcela Escobari, an economic development expert and a senior fellow at the Brookings Institution, who was not involved in the new study. (New York Times)
Airbnb has raised $1bn in debt and equity from new investors as the global coronavirus outbreak hampers business on its site ahead of a planned public listing this year. The short-term rental company said on Monday that the private investment firms Silver Lake and Sixth Street Partners had committed the new capital, without providing details on financial terms. (Financial Times)
WeWork sues SoftBank for backing out of $3bn deal. Move escalates hostilities between investors who helped drive sky-high valuation of office group before its crash last year (Financial Times)
As the coronavirus pandemic sweeps the world, Europe-based tech workers so far have largely been spared the abrupt layoffs—and loss of benefits—that have hit many of their U.S. colleagues. (The Information)
WhatsApp has said it will implement new limits on message forwarding amid growing concerns that it is being used to spread misinformation about the coronavirus pandemic. From today, people can only forward messages identified as “highly forwarded” to a single person, as opposed to five, the company, which is owned by Facebook, said in a blog post. The idea is to slow the spread of viral information, giving truth a chance to catch up with falsehoods. (MIT Technology Review)
Smart Links
What Thoreau, Godot and Camus can teach us today. (Washington Post, Washington Post, New York Times)
A team of blood transfusion experts from across Canada is planning the world’s largest clinical trial of a potential treatment for COVID-19. (Globe & Mail)
Wisconsin votes. (Milwaukee Journal Sentinel)
Texas closes its state parks. (Texas Parks & Wildlife)
The coronavirus dashboard put together by researchers at Johns Hopkins University in Baltimore has become a cornerstone of our knowledge about the outbreak. (Nature Index)
Robots replace Japanese students at graduation. (Reuters)
Gannett stock has now fallen to 65 cents a share. (Poynter)