Stock market today: biggest 3-day surge since 1931

After the Senate passed a $2 trillion economic relief package, the stock market has increased more than 1,300 bps in three days. Companies like Netflix, Google, Amazon, Facebook, and Walgreens have all jumped dramatically. There is no surprise that these companies are on the rise since many people are using these companies more because of the virus. The Dow and S&P 500 have both increased for the past 3 days, with the Dow being up by more than 20%. Even though this is a huge improvement since the LARGE drop since COVID-19 has come into the U.S., the main thing on peoples mind is if this increase is going to continue, or if this will just lead to another dramatic decrease. Many portfolios are getting hit with this drop in the economy. Do you think that the market will continue to increase, or do you think that it will once again decrease as the pandemic continues to hit the U.S.?

https://www.cnbc.com/2020/03/25/stock-market-futures-open-to-close-news.html

New World Economic Order?

As of March 25, the World Health Organisation (WHO) reported that 196 countries, areas and territories are affected by Covid-19. That brings us to the biggest worry associated with Covid-19, after its harmful impact on the human health — its long-term impact on the global economy. While most economic reports on the Internet today circle around the Western concern over the lifting of lockdown in Wuhan on April 8, an objective argument can also be made that China, as the first nation impacted by the virus, is also in the position of being the first to be able to manage the spread of the virus, and thus, resume its economic activities.There is a sense of economic solidarity in China’s move. Through the supply of medical equipment, medic teams and low interest loans, China’s economic revival strategy also caters to the livelihood of its Asian and Western trade partners. This is where the game-changing elements of Covid-19 can be found, especially in the observable shifts in global leadership and its potential impact on trade dependency and the realignment of Asian trade markets. With the strategic support given, China is effectively playing its role in reducing the economic and societal impact felt not only by its Belt and Road Initiative-friendly countries such as Malaysia, the Philippines, Pakistan and Sri Lanka, but also other severely affected Western countries like Italy and Spain. The countries assisted would not easily forget the aid given by China in their darkest moments, and this could influence their future decision on trade preferential treatment. Therefore, even while certain media are making reports on how there would be an economic shock following the resumption of economic activities in Asian countries post-Covid-19, in reality, the Asian markets have made a strategic choice of not putting all our eggs in one basket, hence ensuring that their trade operations would not be severely affected by the virus.  

For that reason, should the economic restriction in Western countries be prolonged, the Asian market could undergo a massive realignment, from serving the Western market to serving their Asian counterparts solely in the name of economic survival? 


https://www.msn.com/en-my/money/other/new-world-economic-order/ar-BB11NL9a

Asian economies may ride out the coronavirus crisis better than the West, analysts say

Investors hunting for safe spots to park their money should look to Asia now amid the current pandemic, analysts said, highlighting that the region is much more prepared economically to ride out the current crisis compared to the West. “It does make sense to tilt your portfolio towards China or towards Asia generally because the virus is moving from that region ... to the West where it is unfortunately not yet contained,” said Andrew Harmstone, a senior portfolio manager at Morgan Stanley.  

However, he pointed out that the West is still China’s biggest customer, so a global recovery will be needed for China to make a full comeback. He said the economic impact of the pandemic has hit businesses in the U.S., and many small businesses which employ about 60% of the country’s workforce  have only a month’s worth of cash flow. Severe outbreaks are not new to countries in Asia. The latest coronavirus outbreak has often been likened to the SARS epidemic in 2003, which hit mainland China, Hong Kong, and Singapore particularly hard, and plunged their respective economies into recession.That led governments to position themselves strongly for the next disaster. 

 Global interest rates are already low, with some countries already in negative territory. But central banks in Asia generally have more ammunition to cut borrowing costs to support their economies, compared to their U.S. and European peers, analysts suggested.

That implies that Asian central banks have more room to use monetary policy to boost their economies.  

“Investors should not forget that real interest rates remain positive and nominal rates even higher among many Asian and emerging markets – in stark contrast to developed markets,” said Aberdeen’s Leong. I agree with this article as Asian countries seem to be in the further through in the pandemic, they will be better off than the Western countries which are yet to face the extremes of the pandemic. 

https://www.cnbc.com/2020/03/25/coronavirus-asia-may-ride-out-crisis-better-than-us-europe-analysts-say.html

Pandemic Class Divide

This recent pandemic has obviously affected many people around the world including the U.S. A major issue that has been brought up is the wage separation gap in terms of the coronavirus. With many businesses closing and schools unable to teach anymore apart from online courses, the middle and upper class appear to be the ones least affected with the sudden change to an online system. The article states that it appears that roughly 30% of the American population does not have reliable access to internet or computers that perform on the platforms needed for online schooling systems. This lockdown has been named "the white-collar quarantine" because it is the essential blue-collar workers that are picking up the need for work and still needed in the industries during this pandemic. The white-collar people in the U.S. appear to be less affected and more capable of adapting to the changes that have come in the recent months. Unlike the lower class citizens, upper and middle class citizens are able to even build bunkers and moving to places they feel fit, while lower class people are still working and unable to do what they feel they need in order to protect themselves and their loved ones.

What do you think may be a solution to this gap in our system? Is there a solution? Will this have a long-term impact on the people in this country?

https://www.nytimes.com/2020/03/27/business/economy/coronavirus-inequality.html

House Passes $2 Trillion Aid Package

As of today, March 27, 2020, the House has voted to pass a $2.2 trillion aid package with the intention of aiding the economy and protecting the healthcare system that is vital during this pandemic. An article by New York Times states that this bill, the largest economic bailout in history, will give direct payments to taxpayers, provide jobless benefits, and give a $500 billion fund to struggling businesses. The jobless aid will include an additional thirteen weeks of enhancements of benefits. Families that makes up to $75,000 can expect $1,200 in direct payment along with an additional $500 per child. There is also an expected $377 billion in loans to businesses including airline companies and a $100 loan to hospitals that are considered to be on the front line of fighting the virus. This aid package is intended to encourage employers to keep their workers on their payroll, while also helping those who have been laid off or are experiencing cuts in wages or hours.

The article raises the possibility of more aid packages in the future. Do you think this package will be enough to stimulate the economy or can we expect more like it in the future?  

https://www.nytimes.com/2020/03/25/us/politics/coronavirus-senate-deal.html

Restaurant Workers Hit The Hardest By Coronavirus

Many servers and bartenders who have lost work amid the coronavirus outbreak are now contending with a challenging economic reality: how to make up for lost tips. Tipped employees are especially vulnerable who work paycheck to paycheck, the amount of unemployment benefits they can get has often been a fraction of what other workers can receive. The stimulus bill making its way through Congress this week will provide some much-needed relief, including a $600 increase in weekly unemployed benefits, and funds for those who normally struggle to qualify for unemployment. But a four-month boost in benefits, as the bill stipulates, may be inadequate.

Is there going to be a shortage for unemployment benefits as more and more people file after the majority of businesses have stalled operations? What is enough to satisfy individual's needs?

Fed balance sheet hits record high

The Federal Reserves' balance sheet hit a record $5.3 trillion. The two emergency lending programs are the primary dealer credit facility and the money mutual fund liquidity facility which made their first appearance on the Fed's balance sheet. Their balance sheet is expected to continue to grow in order to keep credit flowing through all corners of the financial market including Treasurys, commercial paper, and municipal bonds. In an interview with Fed Chairman Jerome Powell said there is basically no limit to the Fed's emergency lending ability.

https://www.marketwatch.com/story/fed-balance-sheet-hits-record-as-powell-says-there-is-no-limit-to-lending-power-2020-03-26?mod=economy-politics

China Tries to Restart its Economy Without Risking Lives

China was mostly shutdown in late January. Since then, the number of coronavirus cases have decreased due to their drastic measures. Now, China is preparing to restart their economy. Lockdown of Hubei province, ground zero, is being lifted. While all of this is a risky move, it will provide information to other countries on how long the epidemic will last.

China's economy has suffered throughout these past 2 months. Their GDP is predicted to fall by 9% in the first quarter. This is due to the measures they took to contain the virus. While they are preparing to restart business and production, they have to find a good balance of work and safety. The new fear is the potential of a second wave of the virus through China.

Policies and campaigns are being implemented to encourage people to go back to work, and to help prevent businesses from failing. Money is being spent on medical supplies, treatment, and infrastructure projects. This is an attempt to help promote jobs in China. Other countries will most likely follow similar policies based on how China recovers. Hopefully, China will show us how long quarantine will last.

Do you think China should continue to raise lockdowns, or wait until the virus is eradicated in China before they restart their economy?

https://www.cnn.com/2020/03/24/economy/china-economy-coronavirus/index.html

Coronavirus’ horrific toll on Ohio economy

As the coronavirus continues to spread, Ohio's economy (along with others) continue to deteriorate since the stay-at-home order has been in effect. Due to many citizens being ordered to be on lock down as well as the suggestion of social distancing to help prevent the spread, establishments such as "restaurants, bar, retail, hotel, entertainment and event businesses have been hit [the] hardest".

The closing of national restaurant chains who rely on dine-in services have hoped to survive with carry-out options with the consequence of laying off thousands of employees from that industry. The hotel industry was the first hit as well as the worst. Many resort-style resorts in the state have closed meaning that "18,700 hotel workers in Ohio had lost their jobs and another 78,000 hotel supplier jobs had been lost" with anticipation of another "17,000 industry jobs will dry up in Ohio as more hotels reduce operations or close altogether".  All in all, it has been reported that up to "139,468 Ohioans applied for unemployment help" this week and those are those that have been reported since Ohio has stopped releasing unemployment figures on a daily basis.

This is only just the beginning of the virus outbreak and as these trying times continue, unemployment rate may reach into the double digits if establishments continue to close.

https://www.dispatch.com/business/20200323/coronavirusrsquo-horrific-toll-on-ohio-economy

Comparing Coronavirus Aid Packages Around the World

With a lot of talk about the $2 Trillion Aid Package in the US, Deutsche Welle has put together a list of other aid packages from around the world. While it may be tempting to compare the amounts that each country is contributing to their economies and citizens, one must also keep in mind that the virus is affecting each country different, and the population of each varies.

First is Germany, which has approved a stimulus package worth 750 billion Euros ($814 billion), making it the first time the German government has taken on new debt since 2013. This includes 600 billion Euros for business loans and investments, and 156 billion euros in debt to finance higher social spending.

France has put out a 45 billion euro aid package for businesses and workers, with more yet to come. France's national debt will exceed 100% of their GDP in 2020, which is far above the EU guideline of 60%.

The European Commission has suspended debt and deficit requirements for members, helping less economically-stable countries like Italy to fight the virus. the European Central Bank also announced the "Pandemic Emergency Purchase Program", a bond-buying scheme worth 750 Billion Euros to provide EU member states with liquidity.

Lastly, Mainland China has yet to fight the virus economically as hard as it did during the 2008 crisis or their slowing economy in 2015. They have increased available loans to banks by 500 billion CNY ($71 billion), along with cutting interest rates for banks and large organizations.

Do you think that these stimulus packages and aid will be enough to support those heavily affected by virus? Will they be enough to get the economies of the world going again?

Coronavirus: Tump Seals Deal Worth Trillions

Trump and the Senate have finally agreed on an economic relief package worth more than $1.8 trillion dollars. The package is expected to include bail out money for industries that have been impacted by the virus, as well as measures to help people pay bills if they are laid off due to the virus. Mitch McConnell said the package would "stabilize" key industrial sectors and give money to hospitals and supplies that they may need. However, there has been conflict amongst democratic senators like Elizabeth Warren who have protested against Republican edits to who the relief package will help. Elizabeth Warren voted against the stimulus package because it did not support workers' payroll and benefits, instead she argues that the relief package only enriches the wealthy executives of giant corporations. What do you think should be included in the relief package? https://www.bbc.com/news/business-52030034

Coronavirus Recession Looms, Its Course 'Unrecognizable'

The United States today has never experience something quite like the coronavirus. The almost overnight spiral it has sent our economy into is making history. Unemployment is slowly rising from previous record low numbers and smaller businesses won’t have the savings to weather this storm. Treasury Secretary Steven Mnuchin estimates 20% unemployment in the next few months if effective intervention does not happen. Assistant professor at American University Gabriel Mathy stated this is probably the world’s first recession that started in the service sector and not the goods sector. The severity of this down turn all depends on the seriousness and length of this virus. Consumer confidence is low, consumption is low, and people are increasing their savings for another raining day. Only time will tell where this pandemic takes our economy. How do you believe the virus will impact unemployment? 

https://www.nytimes.com/2020/03/21/business/economy/coronavirus-recession.html?searchResultPosition=23

Ohio Orders Abortion Clinics to stop "Nonessential Abortions" because of Coronavirus

The Ohio Attorney General ordered abortion clinics to stop performing nonessential abortions and surgeries. This decision was made in order to preserve medical equipment for health care providers who are on the front lines of the COVID-19 pandemic. It was also done in order to preserve hospital capacity for those who are infected. A spokesperson for the Attorney General expressed that the term "non-essential" describes any procedure that can be delayed without risking the current and future health of a patient. Furthermore, the White House recommended canceling all other non-essential surgeries nationwide. There is currently a "stay at home" order in the State of Ohio and 247 confirmed coronavirus cases.https://www.cnn.com/2020/03/22/us/ohio-abortion-coronavirus/index.html

Global economy will suffer for years to come, says OECD

Angel Gurria, who is the secretary-general of the OECD has said that this economic crisis caused by the COVID-19 will be bigger than the 2001 terror attacks and the 2008 financial crisis. He said: "And the reason is that we don't know how much it's going to take to fix the unemployment because we don't know how many people are going to end up unemployed. We also don't know how much it's going to take to fix the hundreds of thousands of small and medium enterprises who are already suffering."Governments around the world have been taking unprecedented actions to support the workers and businesses during this outbreak.

So, how much do you think this global outbreak is going to last and how big of an impact do you think it will have on the global economy?

https://www.bbc.com/news/business-52000219

How covid-19 is interrupting children’s education

In an article published by the Economist, an in depth look is given to how children around the world are going to be affected academically by covid-19. We hear a lot about how this virus is affecting students in the US and we see personally how we are being affected day after day but it's also important to consider how children are going to be affected globally. Time spent in school can be beneficial to students and every second counts but on the other hand online learning may be a blessing in disguise for children who attend school in less fortunate areas.
How much do you think to virus is going to affect students globally and what do you think the repercussions will be to the public education system?

Coronavirus Fallout Puts Italy at Risk of Recession

The main epidemic area of ​​this epidemic was in northern Italy. The origin of the outbreak can be traced back to December. In fact, Italy's early measures are very timely. On January 30 local time, Italy was diagnosed with two new cases of new pneumonia for the first time, a pair of Chinese tourists. On the same day, Italian Prime Minister Giuseppe Conte announced the suspension of all flights to and from China; on January 31, Italy declared a six-month state of emergency across the country. Everything was calm afterward, but the epidemic broke out on February 22 in an instant. The most prosperous economy in Lombardy was the first to bear the brunt. Overwhelmingly overnight, part of the reason was that no one realized that the virus had actually spread silently in Italy for a long time. According to Al Jazeera, a Milan-based hospital tested three samples of the virus from Lombardy after the outbreak and found that the virus may have occurred weeks before February 20, even before the ban on flights to and from China was issued. It already exists in Italy.

Northern Italy has always been an important economic area of ​​Italy since Italy is a tourist country. A large part of the economy comes from the tourism industry. One of the most important reasons that I think why Italy could be the area most affected by the outbreak is because of the high death toll. If there were high numbers of death rates, people were less likely to travel to Italy. There is a saying in Italy: "Be free and don't wear masks". Many articles also report the reasons why Italian people don't like to wear masks. Even when Italian President Conte urgently issued a new decree prohibiting traditional ways of meeting, such as kissing, the public doesn’t buy-in.  A young couple interviewed said: "The virus is not terrible, and we will kiss each other even if we die." Since the elderly people are more vulnerable to the virus, the aging population structure increases the risk of severe illness and death

The high-risk population in this outbreak is elderly people with underlying diseases. The aging social structure in Italy is undoubtedly worse. According to demographic data from the United Nations Department of Economic and Social Affairs, as of 2019, Italy's population aged 65 and over accounted for 23%, the highest in Europe.

https://www.wsj.com/articles/virus-onset-puts-italy-at-risk-of-recession-11583422759?emailToken=3048f583a23071952bf5e20272fa0101fIKzG+VtkvCJvapnw+Jx8kp69wgNxouYBeqLO119zRNRuUAKvb+k0cmn9AgmsVUsE42LJ1O2xOsMXmls1WlTdbdqb/dGN4LH6Cpqt3lgDJQ%3D&reflink=article_gmail_share