A Seattle small business closed due to the Coronavirus pandemic
The Stock Market
Yesterday, the Dow Jones fell 445 points, or 1.9%, while the S&P 500 index declined nearly 63 points, or 2.2%. As we write this, before the morning’s market opening, futures are pointing to a positive start to the trading day.
The Economy at Home and Abroad
The Labor Department will release its weekly report of new unemployment claims this morning, and economists predict the figure will exceed 5 million, the fourth consecutive weekly total in the millions. More than 22 million Americans have filed for unemployment in the past four weeks.
US manufacturing production in March suffered its biggest monthly drop since 1946. Makers of cars and auto parts fell the most, down 28%.
Overseas, Europe’s largest economy is ready to slowly reopen. German Chancellor Angela Merkel said the country will begin to gradually ease lockdown restrictions, with some shops opening next week and schools returning starting May 4. The businesses that open will have to follow strict social distancing and hygiene precautions. Germans are strongly encouraged to wear face masks when using public transportation or going shopping. Large public gatherings are still banned until the end of August.
The demand for oil has been crushed by the lockdowns intended to limit the spread of the Coronavirus. Canceled vacations and business trips mean there’s no need for fuel to propel planes. No one is commuting or attending events, so no one’s buying gas. The International Energy Agency (IEA) said the world is experiencing the biggest annual demand decline in history. Yesterday, crude oil prices fell to their lowest point since 2002. Oil producers have tried to limit the damage. On Sunday, OPEC+ reached a historic agreement to cut production in a desperate attempt to stabilize prices. That may help a little bit, but there is “no feasible agreement that could cut supply by enough” to counteract the demand collapse, the IEA said.
Public Health
Because testing was slow to begin in the United States, health officials agree that the number of reported cases is much lower than the actual number of people who have the disease, and even the count of fatalities is probably low because of differences in reporting by overwhelmed local jurisdictions.
Although testing capacity has improved in recent weeks, most of the country isn’t conducting enough tests to track the Coronavirus in a way that would let people return to work safely, public health officials say. Since the supply of tests is so limited, many tests are restricted to people who meet specific criteria. Antibody tests, to reveal whether someone has ever been infected with the virus, are just starting to be made available, and most have not been approved by the FDA.
It’s expected that President Trump will today issue guidelines to governors on how to reopen parts of the country, after spending much of yesterday consulting with business leaders on the economic impact of the Coronavirus pandemic.
The Fight Against the Coronavirus
The IRS has launched a website to help you track your stimulus payment.
It appears the Paycheck Protection Program – a $350 billion small business loan program established as part of the $2 trillion CARES Act – is close to empty. More than $296 billion in loans had been approved by yesterday afternoon, the SBA announced. Congress will have to act fast to replenish this fund, as there is still enormous demand for the program.
As we noted previously, Apple and Google are cooperating to build the software architecture for Coronavirus tracing apps on mobile phones. Only public health authorities may build apps on top of the Apple/Google software. The two companies are implementing verification measures, so a user’s self-reported positive COVID-19 diagnosis can be cross-referenced with public health data. This could address concerns that bad actors (or hypochondriacs) could log fake COVID-19 diagnoses.
Keep the faith, be safe and stay healthy.
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