Archives of “March 24, 2020” day

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G7: “We will do whatever is necessary” to restore confidence

  
  Analysis
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G7 statement

  • We are taking action and enhancing coordination on domestic and international policy efforts to respond to epidemic
  • We pledge to promote global trade and investment
  • Says they are pushing liquidity support and fiscal expansion
Here is the full text:

Statement of G7 Finance Ministers and Central Bank Governors

Consistent with the direction from G7 Leaders, we are taking action and enhancing coordination on our dynamic domestic and international policy efforts to respond to the global health, economic, and financial impacts associated with the spread of the coronavirus disease 2019 (COVID-19). Collectively, G7 nations have already enacted a wide-ranging set of health, economic, and financial stability measures.  We will do whatever is necessary to restore confidence and economic growth and to protect jobs, businesses, and the resilience of the financial system. We also pledge to promote global trade and investment to underpin prosperity.

Our nations are working together to fight the COVID-19 outbreak and mitigate its impact, treat those affected, and prevent further transmission. G7 finance ministries are helping advance this effort by providing the funding needed to respond to the situation. In particular, we recognize the urgent need to increase support for the rapid development, manufacture, and distribution of diagnostics, therapeutics, and a vaccine for COVID-19. We are providing bilateral and multilateral assistance to strengthen foreign governments’ prevention efforts and their health and emergency response systems.

The G7 is committed to deliver the fiscal effort necessary to help our economies rapidly recover and resume the path towards stronger and more sustainable economic growth. Alongside our nations’ efforts to expand health services, G7 finance ministries are undertaking, and recommend all countries undertake, liquidity support and fiscal expansion to mitigate the negative economic impacts associated with the spread of COVID-19.

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Nikkei 225 closes higher by 7.13% at 18,092.35

  
Analysis, Global Indices

Asian equities rise after Fed launches unlimited QE overnight

Nikkei 24-03

The promise of the Fed backstopping the US economy and Washington said to be closer to a stimulus package agreement is boosting investor hopes in Asian trading today.

The Hang Seng is up by 3.8% while the Shanghai Composite is up by 1.1% on the day, as US futures are keeping over 3% gains for the time being after a bit of a subdued reaction to the events from overnight trading.
But with the dollar easing a little today, it is also helping to give some reprieve to the market in general as risk is faring better to start the session.
This sets up a positive platform for European stocks to build on but the question is, can this stay the course until the end of the day? Things are still far from certain at this stage.
For now, the dollar is keeping weaker across the board with USD/JPY down to 110.32 and EUR/USD sitting just under the 1.0800 handle.

Major US airlines are drafting plans for a potential shutdown of virtually all passenger flights in the US

  
  Analysis

Wall Street Journal reports, citing industry and federal officials:

  • Major U.S. airlines are drafting plans for a potential voluntary shutdown of virtually all passenger flights across the U.S.
  • government agencies also consider ordering such a move
  • amidst the air-traffic control system “ravaged by the coronavirus contagion”
  • No final decisions have been made by the carriers or the White House
Wall Street Journal reports, citing industry and federal officials: 

Here are the US companies who are hiring

  
  Analysis
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This via Bloomberg, some hiring to offset the job losses elsewhere

Instacart 300,000
Walmart 150,000
Amazon 100,000
Dollar General 50,000
CVS 50,000
Albertsons 30,000
Pizza Hut 30,000
Dollar Tree 25,000
Papa John’s 20,000
7-Eleven 20,000
Dominos 10,000
Kroger 10,000
Walgreens 9,500

Pepsi 6,000
Service, delivery workers. There will be similar developments on other economies (scaled to the size of those economies of course).
These will not entirely offset the job losses ahead. Initial claims this week are seeing estimates, some of 3 million (BoA)

US FDA grants orphan drug designation for potential Covid-19 treatment Remdesivir

  
  Analysis
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This will hasten use of the drug to combat coronavirus

  • OOPD provides incentives for sponsors to develop products for rare diseases
  • program enables the development and marketing of drugs, biologics, and medical devices for rare diseases
  • Orphan Drug Designation Program provides orphan status to drugs and biologics which are defined as those intended for the safe and effective treatment, diagnosis or prevention of rare diseases/disorders that affect fewer than 200,000 people in the U.S., or that affect more than 200,000 persons but are not expected to recover the costs of developing and marketing a treatment drug.
Remdesivir is a nucleotide prodrug that blocks a key enzyme needed for viral replication

UK PM Johnson announces lock down effort in response to coronavirus threat

  
  Analysis
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A pre-recorded speech from UK Prime Minister Johnson being broadcast now

  • coronavirus is the biggest threat UK has faced for decades
  •  “Without huge national effort to halt the growth of this virus, there’ll come a moment when no health service in the world could possibly cope; because there won’t be enough ventilators, enough intensive care beds, enough doctors, enough nurses”
Says people should remain at home, only go out for essentials, medical reasons
  • critical thing is to stop the disease spreading between households
  • people will only be allowed to shop for basic necessities
  • people only allowed one form of exercise a day alone or with members of your household
  • people allowed out for any medical need, or to provide care or to help a vulnerable person
  • people can travel to and from work, but only where this is absolutely necessary and cannot be done from home
  • people should not be meeting friends or family who live outside their home
  • police will have the powers to enforce rules, including through fines and dispersing gatherings

Without a huge national effort, will come a moment when no health service in the world could possibly cope

  • says if too many people become seriously unwell at one time, the health service will be unable to handle it

More:

  • closing immediately all shops selling non-essential goods,​including clothing and electronic stores and other premises including libraries, playgrounds and outdoor gyms, and places of worship
  • will stop all gathering of more than two people, except people you live with
  • we’ll stop all social events​, including weddings, baptisms and other ceremonies, but excluding funerals
  •  restrictions will be kept under constant review
  • we will look again at restrictions in three weeks
  • we will relax restrictions if the evidence shows we are able to
  •  says the way ahead is hard, and it is still true that many lives will sadly be lost

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US Stocks end the day lower in volatile trading

  
Analysis, US Market

Dow was down -960 at the lows

The major indices close lower on the day. The Dow is on pace for the worst month since 1931.  The major indices to close off session lows. The Dow was down -960 points and is closing down -597.94 points.  Other indices had similar rebounds.

The NASDAQ index tried to close higher, but gave up small gains in the last few minutes of trading to end down -0.27%.
The final numbers are showing:
  • S&P index fell -67.52 points or -2.93% to 2237.40.  The low for the day was down -4.91%. The high was down -0.18% on the day.
  • Nasdaq fell -18.846 points or -0.27% at 6860.67. The low for the day fell -3.61%. The high for the day extended up to +1.53% on the day.
  • The Dow close down -558.05 points or -3.04% to 18591.93. The low for the day was down -5.01%. The high reached up to -0.28% on the day.
Price action is getting increasingly volatile. Each of the indices jumps up and down at large increments suggesting liquidity conditions are not right. Today, the New York Stock Exchange traded all shares electronically as their floor was closed to specialists and traders.
Dow was down -960 at the lows
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