Wall Street is set for another strong day.
US stocks rose on Tuesday and global markets have extended the recovery of Wall Street since the previous day, amid continued signs that the coronavirus outbreak may be peaking in several affected locations.
The S&P 500 rose about 3% at the beginning of the negotiations.
Tuesday's gains added to a rather strong, albeit disjointed, recovery that lifted stocks from the lowest point in March. Initially fueled by Washington's $ 2 trillion effort to combat the economic effect of the pandemic, the rally has now taken on a more hopeful tone – reflecting glimpses of progress in fighting the spread of the pandemic in the United States and Europe.
In total, until Monday, the S&P 500 was up 19% from the March 23 low. (It is still more than 20% below the historic high, reached on February 19th.)
In New York, the epicenter of the global outbreak, Governor Andrew M. Cuomo offered some signs that the city was beginning to make progress in controlling the crisis. China reported its first day since January with no deaths.
Still, the global economy still faces daunting challenges before it gets back on track, and many companies continue to announce employee leave and continued shutdown after an uncertain path. For example, real estate developer D.R. Horton said on Tuesday that it withdrew its previous financial forecasts for 2020.
Major European markets were trading 2 to 4 percent higher after Asian markets regained strength at the end of the trading day.
There were signs of greater investor confidence in other markets. US Treasury bond prices fell, signaling a stronger appetite for riskier investments. Oil prices have also risen, in the hope that Russia and Saudi Arabia could achieve a price war truce.
On Monday, investor optimism raised US stocks sharply. The S&P 500 rose 7%, its biggest gain since March 24, when it rose more than 9%.
Even so, there was a strong defensive inclination in the negotiations. The utilities sector – usually an area dominated by risk-averse investors – was one of the best performers on the S&P 500, with a gain of almost 8%.
This suggests that investors still see many reasons to be cautious.
Cruise ship companies have virtually no revenue. They became symbols of deadly contagion. AND despite guarantees from President Trump, they were left out of the $ 2 trillion stimulus package that Congress passed last month.
Carnival Corporation, which serves nearly 11.5 million travelers a year, or approximately 50% of the global cruise market, is at the center of the crisis. In the past two months, the company has had highly publicized outbreaks on several of its ships, including the Diamond Princess and Zaandam, which tries to unload sick passengers in Florida.
Since the beginning of the year, the company's stock price has plunged more than 80%, although it rose to $ 10.21 per share on Monday after Saudi Arabian State Investment Fund said it acquired an 8% stake in the company. And last week, Carnival, which already used bank credit lines, began an attempt to raise $ 6 billion from the sale of shares, bonds and other securities. He was selling some of these bonds with a suggested 12.5% interest payment to investors, a surprisingly high number.
Carnival chief executive Arnold Donald said in an interview that the sale would generate enough money for the company to survive without revenue for the rest of the year and until 2021.
"If you run out of money, you lose the company and we can't live with that," said Donald. "So, we want to make sure that we are prepared for an extreme case."
The two main cruise lines, in addition to Carnival – Royal Caribbean and Norwegian Cruises – are also looking for money. Norwegian took advantage of an existing $ 1.55 billion credit line. In March, Royal Caribbean secured a $ 2.2 billion loan, using its ships as collateral, an unusual step for a cruise line.
Trapped at home during the coronavirus pandemic, with movie theaters closed and no restaurants to eat, Americans are spending more of their lives online.
An analysis of the New York Times on Internet usage reveals that our viewing and browsing habits have changed, sometimes quite a bit, as the virus has spread and taken us to our devices to work, play and connect.
The new data suggests that we are hungry for news (especially local news) and looking for new ways to connect (mainly through videos) at a time when we cannot see each other in person.
Of course, we're also looking for streaming entertainment, but we're moving our phones away and remembering the joys of using an old-fashioned computer instead of a tiny smartphone screen. Behavior changes give an indication of some of the more subtle ways that the current crisis is changing the way we live.
Japan provides more details of its nearly $ 1 trillion stimulus package.
On Tuesday, Japan said it would move ahead with an almost trillion-dollar stimulus package designed to ease pressure on the country's economy while trying to slow the accelerated spread of the coronavirus.
Direct spending will reach 39.5 trillion yen (US $ 362 billion), as the country makes cash payments to families and small businesses and invests in its ability to fight the virus. The balance will come from other measures, such as tax incentives and interest-free loans.
With the pace of infections in Japan rising, Prime Minister Shinzo Abe declared a state of emergency for seven prefectures on Tuesday afternoon, warning that the country must cut social contacts by 80 percent or risk an explosive spread of the virus.
At a news conference after the statement, Abe warned that "when we take action under a state of emergency, it is impossible to avoid a substantial impact on economic activity".
"Japan's economy is currently facing its biggest crisis since the end of the war," he added.
Abe said the government would deliver 300,000 yen ($ 2,700) to families, with modest additional payments for each child. Small businesses that have seen a huge drop in revenue will be eligible to receive 2 million yen ($ 18,300), and companies run by individuals can receive half that amount.
The country would also postpone the payment of a variety of taxes for a year, in an effort to make it possible for companies to "continue business operations with the capital at hand," said Abe.
Renewable energies are still growing, despite the drop in oil prices.
Industry executives and analysts expect the renewable energy business to continue to grow in 2020 and next year, even with the coronavirus outbreak delaying some projects and oil, gas and coal companies struggling financially or seeking bankruptcy protection.
In many parts of the world, including California and Texas, wind turbines and solar panels now produce electricity cheaper than natural gas and coal. This made them attractive to both electricity utilities and investors. It also helps that, while oil prices have halved since the pandemic, forcing most state governments to order people to stay at home, natural gas and coal prices have not fallen nearly as much.
Even the decline in electricity usage in recent weeks, as companies have stopped operations, could help renewable energy, according to analysts at Raymond James & Associates. This is because utility companies, as revenue grows, try to get more electricity from wind and solar farms, which cost little to operate and less from plants powered by fossil fuels.
"Renewable energies are on a growth path today that I think will not be delayed in the long run," said Dan Reicher, founding executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University and a former energy assistant. Clinton administration secretary. "This will be an obstacle on the road."
Will the pandemic lead to an apocalypse accordingly?
Many deals agreed before the outbreak are now at risk, writes Steven Davidoff Solomon of U.C. Berkeley School of Law in today's DealBook newsletter. It is more common, he says, for one side of an agreed deal – the buyer – to try to unplug the plug during crises.
Last week, when auto supplier Delphi Technologies maximized its corporate credit line, BorgWarner said it was a reason to terminate its $ 3 billion deal signed in January, but not yet closed. Other acquirers may seek to unleash "material adverse changes" clauses as the value of targets falls during market turmoil. Regulators can also give buyers an opinion: privacy concerns hang over Google-Fitbit, while antitrust issues threaten Mellanox-Nvidia and Cypress-Infineon. If the economic logic of these and other businesses does not survive the crisis, buyers may not regret seeing them undone.
Everyone wants to know when we can leave our homes and reopen the United States. This is the wrong way to frame it.
The best question is, "How will we know when to reopen the country?"
Any date that is currently being posted is just a guess. It is pulled out of the air.
Up to this point, Americans have reacted, often too late, and rarely with data. How the virus appears to be everywhere, we have to turn everything off. It is unlikely that this is how we will leave.
Some cities or states recover earlier than others. It is useful to have criteria by which cities or states can determine whether they are ready.
A recent report by Scott Gottlieb, Caitlin Rivers, Mark B. McClellan, Lauren Silvis and Crystal Watson highlighted some goals that involve hospitals' ability to treat patients; the ability to test everyone who has symptoms; monitoring of confirmed cases; and a sustained reduction in cases.