Spain’s stock market lost 14 percent of its value on Friday, capping a record one-month fall of more than 30 percent. The government has seized the authority to regulate the prices of medical products, is making 2.8 billion available to regional health authorities to fight the coronavirus outbreak, and is taking €1 billion from its contingency fund to help cover...
CORONAVIRUS “WINNERS” AND LOSERS
“Survival Mode” Lifts Sales, Share Prices Consumers hunkering down at home to wait out the COVID-19 scare are boosting sales and share prices for companies making and selling canned food, toilet paper, survival gear, and video games. Clorox, which makes disinfectant wipes, has seen its share price gain 7 percent. Video game maker Electronic Arts’ stock price has edged up...
PANDEMIC HIGHLIGHTS U.S. PHARMA’S CHINA DEPENDENCE
China supplies more than 90 percent of the hydrocortisone, antibiotics, and antibiotic ingredients consumed in the U.S. as well as 70 percent of the ibuprofen and large proportions of other drugs and nutritional supplements, according to the Council on Foreign Relations. The COVID-19 pandemic has stirred concerns about the U.S.’s ability to sustain its pharmaceutical supply in the case of...
MNUCHIN WRONG: WORSE THAN ’08 PANIC
On 13 March, U.S. Treasury Secretary Steve Mnuchin said, “There is a lot of liquidity” in the markets and that the current financial panic “isn’t like the financial crisis” of 2008. Perhaps he was referring to the current panic’s cause as being sparked by a virus rather than financial, as it was 12 years ago. As we have long noted,...
USA LOCKDOWN, GOING DOWN
Last Thursday, the Dow dove 2,350 points, triggering an automatic, 15-minute shut down. On Friday the 13th, following President Trump declaring a Covid-19 State of Emergency, the Dow Jones Industrial Average snapped back with its greatest point gain since 2008, up 2,710 points. However, the market closed down almost 9 percent on the week. Despite the Federal Reserve’s surprise interest...
BEAR VANQUISHES BULL
Major sectors of the U.S. and world economies are now in a bear market, defined as a 20-percent drop from recent highs. As of 13 March, financial, industrial, materials, and information tech stocks were, in order, down 27 percent, 23 percent, 21 percent, and 20 percent from the top of their recent runs. The Dow has fallen more than 30...
EUROPE: MONEY PUMPING 2020
Governments across Europe are putting together bailouts for industries and workers harmed by the coronavirus’s economic shutdown. Germany’s government announced a plan to help suffering businesses and will make investments totaling €12.4 billion. The plan will make cash available to strapped businesses and pay workers for a short while in some jobs. The Bank of England cut its benchmark interest...
CENTRAL BANKSTERS RUNNING DRY
After refusing at its 12 March meeting to cut interest rates deeper into negative numbers, the European Central Bank (ECB), has few tools left to keep propping up the Eurozone’s economy. ECB president Christine Lagarde admitted the negative interest rates “have significantly reduced the scope” to cut rates deeper. Even if the bank were to further cut rates, the effect...
OIL: PRODUCE MORE MAKE LESS
Although oil prices rose more than 5 percent on Friday after President Trump said the Department of Energy would buy crude to pump into the nation’s oil reserves, on the week, oil prices tanked some 24 percent, its deepest price plunge since the 2008 financial crisis. Yesterday, as the equity market tanked across the globe, WTI fell 9.5 percent to...
BUSINESS CASUALTIES
Early estimates have forecast that the coronavirus will cost the global economy at least $2.7 trillion, a figure that seems more and more conservative as the panic grows. The losses will be spread across all sectors in virtually all countries. Among the hardest hit: Airlines. Millions of flights already have been canceled around the world. Carriers’ stock prices, already suffering,...