Pleased Monday and welcome again to On The Cash, the place we might actually use a moisturizing hand sanitizer proper now. I am Sylvan Lane, and this is your nightly information to all the pieces affecting your payments, checking account and backside line.
THE BIG DEAL– Coronavirus, oil costs drive market meltdown: The dual menace of an increasing coronavirus outbreak and an oil value warfare hammered markets on Monday, elevating the stakes of a world financial slowdown.
- A burgeoning battle between Russia and Saudi Arabia to flood world markets with low-cost oil despatched shockwaves by means of monetary markets and rattled traders already reeling from panic pushed by the worldwide unfold of the coronavirus.
- As costs for Brent crude fell 24 %, all main inventory indexes closed with heavy losses. The Dow Jones Industrial Common sank 2,014 points, or 7.eight %, its worst day since 2008, whereas the S&P 500 index and Nasdaq composite fell 7.6 and seven.three % respectively. U.S. Treasury bond yields additionally plunged to report lows.
The climbing variety of confirmed coronavirus instances within the U.S. and a lockdown imposed in northern Italy have additionally fueled fears that efforts to mitigate the virus’s unfold might trigger a world recession. The Hill’s Rachel Frazin and I clarify what occurred over the weekend and the toll it’s taking on the U.S. economy.
Influence of the oil value battle:
- A flood of oil might imply cheaper gasoline costs for shoppers, however it might additionally intestine a vital drive behind world financial development.
- American oil producers might be hit onerous, and oil trade firms might discover it more durable to get financing by means of the credit score and bond markets. General, the drop in costs might additionally sign a more durable slide for the worldwide financial system.
“What I am taking a look at right here is the market making ready for a a lot bigger shock to the financial system and uncertainty for the rebound that may comply with,” mentioned Joe Brusuelas, chief economist at audit and tax agency RSM.
Antoine Halff with Columbia College’s Heart on World Vitality Coverage instructed The Hill that he believes the drop will lead to short-term job losses and might be disastrous for small firms however that enormous firms will in all probability come out stronger.
Trump waives off oil turmoil, coronavirus menace: President TrumpDonald John TrumpThis week: Surveillance, travel ban fights play out amid growing coronavirus concerns Juan Williams: Democratic voters rebuff Bernie’s revolution Judd Gregg: Trump sails into the perfect political storm MORE sought to downplay the specter of the coronavirus and the impression of an oil glut on the U.S. financial system, dismissing the struggle between petroleum exporting nations and accusing the information media for drumming up pointless panic.
“Saudi Arabia and Russia are arguing over the value and stream of oil. That, and the Faux Information, is the rationale for the market drop!” Trump tweeted.
Trump additionally defied the warnings of public well being officers in a sequence of tweets sprinkled all through the market rout.
“So final yr 37,000 People died from the widespread Flu. It averages between 27,000 and 70,000 per yr. Nothing is shut down, life & the financial system go on. At this second there are 546 confirmed instances of CoronaVirus, with 22 deaths. Take into consideration that!” Trump tweeted.
However Monday’s market meltdown can also be ramping up stress on policymakers to pump fiscal stimulus into the U.S. financial system because it faces more and more dire threats.
Trump on Monday mentioned the White Home will ask Congress to approve a payroll tax cut and aid for hourly staff to fight the financial fallout of the coronavirus.
“This was one thing that we had been thrown into and we will deal with it, and we have now been dealing with it,” Trump instructed reporters within the White Home briefing room.
Trump additionally mentioned that he could be asking the Small Enterprise Administration (SBA) to concern loans to small companies and that the administration was working with airways, the lodge and cruise industries, which have been particularly impacted by the unfold of the virus.
Learn extra on the coronavirus outbreak and market meltdown:
On faucet tomorrow:
- Wells Fargo chief government Charles Scharf testifies earlier than the Home Monetary Companies Committee, 10 a.m.
- Client Monetary Safety Bureau (CFPB) Director Kathy Kraninger testifies earlier than the Senate Banking Committee, 10 a.m.
- The Home Small Enterprise Committee holds a listening to entitled “The Influence of Coronavirus on America’s Small Companies,” 11:30 a.m.
LEADING THE DAY
Wells Fargo administrators resign underneath stress from Home Democrats: Two Wells Fargo administrators have resigned three days earlier than lawmakers had been set to grill them over their conduct whereas main the scandal-ridden firm, the financial institution introduced Monday morning.
Former Wells Fargo Chairwoman Elizabeth “Betsy” Duke and James Quigley resigned from the financial institution’s board, efficient Sunday, to “keep away from distraction that might impede the financial institution’s future progress,” based on an announcement from the 2 launched by the financial institution launched Monday.
“Because the markets face rising volatility, a robust Wells Fargo is required now greater than ever,” Duke and Quigley mentioned within the assertion.
“We imagine that our resolution will facilitate the financial institution’s and the brand new CEO’s means to show the web page,” they continued.
I’ve received more on their decision here.
GOOD TO KNOW