The Fed suspends Wells Fargo's growth constraint.
The Federal Reserve said on Wednesday that it temporarily lifted a growth constraint that it imposed on Wells Fargo after the bank's fake account scandal in another effort to expand small business owners' access to emergency loans.
The Fed said in an announcement that the move was a response to "extraordinary interruptions to the coronavirus", which caused a widespread economic shutdown and resulted in the loss of millions of jobs. The federal government is trying to keep small businesses in business through the $ 349 billion Check Protection Program, which provides forgivable loans that can be used to pay its employees, rent and mortgages. The program got off to a rough start.
Wells Fargo, which is the country's fourth largest bank, said on Sunday that its balance sheet had hit a $ 1.95 trillion limit, which prevented it from taking out more loans. That limit was imposed two years ago and should have existed until bank leaders could demonstrate that they were being executed in a way that no longer put their customers at risk.
The bank has not yet made the necessary changes, according to regulators, but reaching the limit meant it could not fully participate in the program.
Wells Fargo's small business banking accounts for 20% of the United States market. But the growth cap limited loans to just $ 10 billion, well below the amount of business he was able to do. The Fed's announcement means that it can now continue to lend, but only under the program.
Wall Street shares are higher as investors evaluate the latest economic data.
US equities rose on Wednesday, with investors evaluating data showing the extent of the economic damage caused by the coronavirus pandemic against signs of progress in the effort to contain it.
The S&P 500 rose more than 2%, while Europe's main indices were slightly lower.
Investors had found solace in recent days in signs that the outbreak was coming in some of the hardest hit parts of the United States and Europe. On Wednesday, China lifted its blockade in the city of Wuhan, where the virus emerged.
As of Tuesday, the S&P 500 was up almost 19% from the March 23 low.
But sentiment remains fragile and there are many reasons for investors to worry about the economy. European Union leaders late on Tuesday failed to agree on financial tools to help the bloc's countries tackle the pandemic, and new data predicts a deep recession in France and Germany. Japan and South Korea have joined other countries in preparing major economic rescue packages.
Oil prices have risen in futures markets, partly in the hope that major producing countries, such as Russia and Saudi Arabia, could set aside their differences. This helped to increase the actions of energy producers. Noble Energy, for example, gained 6% and was one of the stocks with the best performance in the S&P 500.
FedEx shares rose 6% and UPS rose 3% after a report that Amazon would stop handle third party shipments. Amazon is suspending the service to focus on orders from its own customers, the Wall Street Journal said.
The demand for food assistance in the United States is increasing, as millions of Americans are unemployed and the closure of the school means that many families who relied on them for free or subsidized meals need to move elsewhere.
The growing need is coming, just as food banks face shortages of donated food and volunteer workers.
It is a national phenomenon:
At Heart Food Bank in Omaha, the amount of food donated for March has almost halved. The food bank typically buys $ 73,000 in food for a month at this time of year, but has spent $ 675,000 in the past four weeks.
In Jonesboro, Arkansas, after a powerful tornado, a food bank received less than half of the donations it expected, because nervous families kept what they had.
In Washington state and Louisiana, the National Guard was called in to help pack food boxes and ensure that distributions run smoothly.
Feeding America, the country's largest food bank chain, with more than 200 affiliates, projected a deficit of $ 1.4 billion in just the next six months.
"I've never seen anything like it," said Stacy Dean, vice president of food assistance policy at the Center on Budget and Policy Priorities, a left-wing research organization in Washington. She has been studying food security for more than a quarter of a century. "People love the phrase" the perfect storm, "" he added, "but nothing was built for it."
The World Trade Organization said Wednesday that global trade is set to fall sharply this year, as the spread of the coronavirus halts factories, suppresses consumer demand and disrupts global remittance markets.
In a video interview, Roberto Azevedo, the organization's general director, said that the global volume of trade could shrink from 13% to 32% or more, compared to the previous year.
"Trade in 2020 will fall sharply in all regions of the world and basically in all sectors," he said.
Global trade may recover quickly after that, but it will depend on how quickly the pandemic is controlled and the political choices adopted by governments to support their economies, said Azevedo.
Global trade growth had already slowed down last year to the weakest level since the financial crisis, hit by a trade war between the United States and China and the slowdown in economies in Europe and Asia.
But the pandemic has hit the brakes on various segments of global trade. The volume of containers in Shanghai, the busiest port in the world, fell 20% from the previous year in February, while the volume of cargo sank 23% at the port of Los Angeles in the same period.
Amazon will stop its pilot shipping program.
Amazon said on Wednesday that it plans to discontinue a pilot program that sends products to sellers in its market in another move to ease pressures on its logistics operations, which are reduced by the increase in online purchases, while Americans crouch.
The pilot program, called Amazon Shipping, picked up packages that were already packaged and labeled at a seller's warehouse, and then delivered the items to customers through Amazon's delivery network. Competed with U.P.S. and FedEx's ground service. Started in 2018, Amazon Shipping had expanded to several cities, including Los Angeles, New York and Chicago. The last shipments will be on June 5th.
The break was first reported by Business Insider.
Europe's largest economies are gearing up for the sharpest decline since World War II.
The pandemic-induced blockages in Europe were expected to lead the continent into a deep recession. Germany and France, the largest economies, said on Wednesday they were heading for the sharpest slowdowns since World War II, a warning that showed how bad it is going to get.
France officially entered a recession after suffering one of the worst quarterly contractions in more than 50 years. Growth fell estimated 6% from January to April, starting in the fourth quarter, the central bank said. Every two weeks the population remains confined, the economy shrinks by at least 1.5%, he added.
And Germany is sliding towards its deeper recession on record, with growth expected to drop nearly 10% from April to June, five top economic institutes said on Tuesday.
Tesla plans to cut wages and grant some employees as of Monday, according to an internal memo seen by The New York Times.
"This is a shared sacrifice across the company that will allow us to progress through these difficult times," said Valerie Workman, Tesla's head of human resources for North America, in the memo. The automaker expects to resume normal operations at its US facilities on May 4, she said.
Salaries will be reduced by up to 30% for vice presidents and more senior executives and by 20% for employees at director level and above. Pay will be reduced by 10% for the rest of Tesla's salaried workforce. Tesla employees who are unable to work from home and have not been transferred to another job at the site would be excluded, according to the memo.
News of wage cuts and licenses at Tesla was first reported by Bloomberg News. The company did not respond to a request for comment.
Tesla suspended operations at its plant in Fremont, California, on March 23, under pressure from local officials. The automaker appeared to continue making cars for several days, defying a county order, disrupting all non-essential activities.
Workers who face difficulties face challenges to obtain unemployment assistance.
The $ 2 trillion relief account made contractors eligible for unemployment assistance during the coronavirus pandemic. But a variety of obstacles – including the difficulty of accelerating the state's unemployment systems and strict Department of Labor eligibility guidelines – have left most tour drivers and other workers unable to take advantage so far.
Few states seem ready to sue concert worker applications and some are declining. Critics also expressed concern that guidance from the Department of Labor issued over the weekend may exclude workers who must qualify.
The guidance seemed to leave out drivers who could, theoretically, choose to work on a certain day, but they don't because few passengers are hitchhiking. It also seemed to exclude certain workers who choose not to work because they are at high risk of suffering the coronavirus.
A representative from the Department of Labor said that the situations set out in the guidelines "are not exhaustive and we expect many workers who travel on a shared basis to be eligible". The two major hitchhiking companies, Uber and Lyft, also said they expected many drivers to qualify.
A week after the first of the month, tenants are struggling with rents.
The National Council for Multifamily Housing, a commercial group for large landowners …