The Federal Reserve has launched a series of programs to support the financial system since the coronavirus pandemic arrived on America’s shores and interest rates are now at zero.
Just last week, the central bank rolled out a $2.3 trillion loan package.
Such drastic measures aren’t confined to the United States. Central banks around the world have also stepped in to bolster their regional financial systems.
“Our work is not done,” New York Fed President John Williams told the Economic Club of New York in remarks delivered via a video conference.
The economy is experiencing distress that nobody has seen in their lifetime. Getting through it will require “innovative thinking and bold action,” he said.
Williams also stressed that the Fed cannot act alone to help the economy back on its feet: “fiscal policy is also playing a critically important role,” he said.
US stocks closed higher on Thursday, clinging to gains despite a row of weak economic reports.
Weekly jobless claims showed another 5.2 million Americans filed for first-time unemployment benefits last week, bringing the total number of initial claims to around 22 million since mid-March.
Neiman Marcus didn’t pay the interest on its outstanding debt, according to a letter from Marble Ridge Capital obtained by CNN Business. Marble Ridge is one of Neiman’s creditors.
“The improper actions taken to date by Neiman Marcus, its board of directors and the company’s conflicted legal counsel have made the company’s failure to meet its financial obligations entirely foreseeable and unavoidable,” Marble Ridge said in the letter.
Neiman failed to pay the coupon on an $81 million 8% unsecured bond and a $57 million 8.75% unsecured note, both due in 2021, according to Marble Ridge.
The luxury department store is considering filing for bankruptcy to ease its $4.3 billion debt load, Bloomberg reported last month.
Neiman declined to comment.
Read more about retailers that might not survive coronavirus here.
Stocks are mixed in the early afternoon, with only the tech-heavy Nasdaq Composite clinging to its gains, up 0.5%.
The Dow, meanwhile, slid more than 220 points, or 0.9%. The index was driven lower by a more than 7% drop in Boeing (BA) shares.
The S&P 500 was down 0.3%.
Impossible Foods, which makes the meatless Impossible Burger, is rolling out its flagship product in 777 Albertsons, Jewel-Osco, Pavilions, Safeway and Vons locations in California, Nevada and other states in the Midwest this week.
Impossible had already been planning a big push into retail this year. But the coronavirus pandemic, which has prompted a massive shift in demand away from restaurants and cafeterias to grocery stores, prompted an acceleration in Impossible Food’s plans, the company said in a virtual press conference Thursday.
Up until this week, the Impossible Burger grounds were available in over 200 grocery locations. The increase makes the plant-based grounds available in over 1,000 supermarkets throughout the United States.
They are priced between $8.99 and $9.99 per 12-ounce package.
Verizon (VZ) on Thursday announced the acquisition of video conferencing company BlueJeans, a competitor to Zoom and Cisco’s (CSCO) Webex.
BlueJeans is an enterprise video conferencing service founded in 2009. Its customers include Facebook (FB), Nordstrom (JWN) and Zillow (Z).
The coronavirus pandemic has forced companies to transition much or all of their workforces to remote working, making video conferencing and other communications tools essential. The BlueJeans acquisition will expand the suite of services Verizon offers to its business customers.
Verizon also said the purchase will aid in its transition — and its business customers’ transitions — to 5G. The new network technology will provide increased opportunities for use of video tools.
The terms of the deal were not disclosed.
Hilton (HLT) is the latest hotel chain to reveal how crushing the coronavirus crisis is.
In a regulatory filing, the company said that “travel restrictions and stay-at-home directives that have resulted in cancellations and significantly reduced travel around the world.”
Hilton, which has roughly 6,000 global hotels, has temporarily shut down 16% of its hotels. Occupancy rates in North America are hovering around 17% and 13% in Europe and the Middle East.
However, it’s seeing early recovery in Asia: Occupancy levels have grown to 22%, up from 9% in early February.
In total, Hilton expects revenue per room to decline as much as 25%. On Tuesday, Marriott (MAR) issued similarly dire numbers.
Less than half an hour into the trading day, the Dow has pared its initial, modest gains and turned red.
The index was last down 0.6%, or some 150 points.
The S&P 500, a broader measure of the stock market, also pared its earlier gains and was flat.
The Nasdaq Composite was the best performer out of the three this early in the session, up 0.8%.
Starbucks (SBUX) is adopting a “monitor and adapt” strategy to reopen some cafes in the US following their closures since mid-March.
CEO Kevin Johnson told employees in an open letter that the initiative means “every community will continue to monitor the Covid-19 situation” and decide when to fully reopen their cafes depending on local conditions.
Some have shifted to being drive-thru only while other locations are offering to-go ordering with customers’ drinks being handed out by employees at entryways.
“We are finding new, innovative ways to serve our communities safely while working hard to exceed public health requirements and adjust to new customer expectations,” Johnson said.
Starbucks warned last week that its upcoming earnings will be slashed in half because of the virus. Shares are down 17% this year.
US stocks opened higher on Thursday, following a slew of economic reports.
Weekly jobless claims showed another 5.2 million Americans filed for first-time unemployment benefits last week, bringing the total number of initial claims to around 22 million since mid-March.
The Philadelphia Federal Reserve’s manufacturing index for March dropped to its lowest level on record, and March housing starts were lower than expected.
New residential construction slowed sharply in March as the coronavirus pandemic swept across the United States.
Privately-owned housing starts declined last month to an annualized rate of 1.2 million, the US Census Bureau said Thursday. That represents a 22% decline from the pace in February.
All four geographical segments in the United States were down, led by a 43% plunge in the Northeast, which is getting hit hardest by the health crisis.
The worse-than-expected declines in housing starts reflects the economic impact caused by the health restrictions and general uncertainty from the pandemic.
Manufacturing is getting crushed.
The Federal Reserve Bank of Philadelphia reported that manufacturing activity in its region is now below the levels seen at the depths of the Great Recession.
All of the data for March was negative. The indexes for new orders, current shipments and the average workweek all fell to their lowest readings since record-keeping began in 1968.
The reading on manufacturing jobs also fell sharply, to its lowest reading since March 2009.
The index is based on a survey of manufacturers in Central and Eastern Pennsylvania, Southern New Jersey and Delaware, and it’s a source of more recent economic data. Many other economic reports are based on readings that are a month or two old.
Stocks are set for a slightly higher open today following a slew of economic reports, including another steep increase of weekly unemployment claims.
Dow futures are up 0.4%, while those for the S&P 500 are up 0.5%. Nasdaq Composite futures are up 0.9%.
Futures for all three indexes bounced slightly higher after the economic data. Market participants have repeatedly said that a lot of the bad economic news is already priced into stocks.
Another 5.2 million Americans filed for unemployment benefits in the week ended April 11.
In total, around 22 million people, or 13.5% of the labor force, have filed first-time claims since mid-March as the coronavirus pandemic is forcing businesses to close and lay off workers.
The plight of the American worker continues.
Today’s economic data is expected to show another 5.1 million people filed for first-time unemployment claims in the week ended April 11.
That would bring initial claims to nearly 22 million over the past month as the coronavirus pandemic is forcing businesses to remain closed.
US stock futures were also higher ahead of another crucial report on US unemployment. Here’s where they stand as of 6:15 am ET:
Nearly 17 million people have filed for initial unemployment benefits since the middle of March, as businesses closed to minimize the spread of the virus.
Thursday’s data is expected to show another 5.1 million people filed for their first week of unemployment in the week ended April 11
A stark warning on Asia’s economy pushed stocks in the region down on Thursday as investors braced for another report on the American labor market that could snuff out a rebound by European markets and US stock futures.
The sell-off came as the International Monetary Fund warned that Asia will register zero growth this year because of the coronavirus.
European markets opened higher, rebounding from a drubbing on Wednesday:
Chancellor Angela Merkel on Wednesday said Germany would gradually ease some restrictions on business starting next week, and Volkswagen (VLKAF) announced a phased reopening of its European plants.
Half of the world’s countries have approached the International Monetary Fund for emergency loans to weather the financial crisis sparked by the global coronavirus pandemic.
More than 100 countries so far have asked for emergency assistance, Kristalina Georgieva, IMF’s managing director, told a meeting of G20 finance ministers and central bank governors on Wednesday.
She said the IMF is ready to use its “full toolbox and $1 trillion firepower” of lending capacity, noting that 10 countries have so far received emergency funding, and half of the remaining countries should receive their requested financial lifelines by the end of April.
