24 March 2020

1) The International Monetary Fund stated the global recession caused by the coronavirus pandemic could be worse than the global financial crisis of 2008-9. However, the world economic output should recover in 2021 because of the extraordinary fiscal actions already being taken by many countries and their central banks. But for a 2021 recovery, countries need to prioritize containment and strengthen health systems.

2) The U.S. is entering a recession, but the ultimate fear is a protracted malaise akin to a depression. Some prominent economy watchers are drawing comparisons to the Great Depression, although falling short of forecasting another one, based on the fact that the world has not seen a synchronized interruption in economic output in decades as was seen with the Great Depression. The U.S. will suffer a huge economic contraction as businesses close and Americans stay home, with some estimates that the economy will have the worst quarter since 1947.

3) Most U.S. small businesses have only days to stay afloat amid the coronavirus crisis. Only about half of the 30 million small businesses in America have a 15 day cash reserve needed to survive. The shelter in place orders have cut business revenues to near zero almost over night. Particularly hard hit is the service industries such as restaurants, landscaping, personal services and salons. These small businesses employ about 60 million people, or half of American’s work force. Many of the businesses were already operating on razor thin margins before the virus crisis. With so little cash reserves, they are forced to immediately reduce hours or layoff employees to survive.

4) Stock market closings for – 23 MAR 20:

Dow 18,591.93 down 582.05
Nasdaq 6,860.67 down 18.84
S&P 500 2,237.40 down 67.52

10 Year Yield: down at 0.76%

Oil: up at $24.24

13 March 2020

1) The popular theme parks Disneyland and Disney World have been closed until April because of the threat of coronavirus. The closure commences on 14 March, but the hotel resort will remaining open until 16 March to allow guess to make travel arrangements for returning home. Walt Disney Co. will continue to pay cast members during the closure. Disney Cruise Line will suspend all new departures beginning Saturday until the end of the month. At this time, it is uncertain how adversely this will financially effect Walt Disney Co.

2) A global recession, driven by the coronavirus pandemic, may result because of the flow of goods, services and people becoming more restricted. In the past day, President Trump has restricted travel from Europe, Italy has closed almost every shop, India suspended most visas and Ireland partially shut down. Many sporting events have been closed to public spectators with major lost of revenues. Many nations fear a contraction, with China the first in decades, thus ending the 11 year expansion. The Federal Reserve’s emergency interest rate cut of March 3 failed to boost investor’s confidence.

3) The Federal Reserve has announced its plan to ease market strain and halt its downward spiral. The Feds will offer a huge injection of liquidity to the Treasury market to counter market dysfunction. Government bonds are liquid assets making them the easiest thing to sell in turbulent times when investors need to raise cash. The New York Feds have been buying Treasury bills in what is called repurchase agreements or repos. This added liquidity is intended to bring stability to the markets and arrest the downward movements.

4) Stock market closings for – 12 MAR 20: The markets continue their drastic downward spiral.

Dow 21,200.62 down 2,352.60
Nasdaq 7,201.80 down 750.25
S&P 500 2,480.64 down 260.74

10 Year Yield: up at 0.85%

Oil: down at $30.88