Monday Market Recap: March 16, 2020
Market Recap
Highlights
Markets have their best day of 9.29% on Friday following its worst day since 2008 the previous day before.
The Fed cuts interest rates to a range of 0-0.25% and announces $700B in Quantitative Easing in an effort to establish early stages of stimulus.
Global cases of COVID-19 top 180,000. I expect the US to top 10,000 cases by end of the week at current growth rates.
Market Summary
The full global economic impact of the virus is still not entirely known, at least numerically. What we do know: Containment measures and social distancing bring economic activity to a standstill, as seen in China and Italy. While employees are returning to work in China (under close observation), the economic impact will be felt heavily long after. What has yet to be seen is data on rising unemployment numbers, manufacturing declines, and the real effects on consumer spending. Several industries that will be hit hardest by the outbreak: airlines with a possible bailout on the table; auto factories and auto parts; hotels, resorts and cruises; and oil and gas. OpenTable, the restaurant-reservation website, said the number of diners has fallen more than 20% in recent days compared with a year earlier. Some data show reservations are down closer to 50%. The impact on economic activity will likely be sharp – and deep. Yet the sharper the containment measures taken and the deeper the economic hit in the near-term, the more confident we should be about the rebound after such measures are lifted. However, without worldwide government participation, the effects from COVID-19 will last well beyond 2020.
Policy makers will need to act together to stabilize economies and forestall any cash-flow crunches that could lead to financial stresses and tip the economy into a financial crisis. The Fed on Sunday cut rates to near zero, announced up to $700 billion in bond purchases and set up arrangements with other central banks to inject additional liquidity in the markets. The White House earlier unlocked $50B in federal funding, and Congress is set to pass a bill to cover health care and paid leave for some workers. Additional possibilities for the next round of government measures include broad tax cuts, cash payments or tax rebates to households, targeted assistance and increased federal spending. Also on the table: suspension of student-loan payments. A more sizable fiscal response and additional collaboration with local governments is possible amid growing recognition in Congress that this is needed.
What I’m Reading – Work From Home Company Playbook
According to data from the Census Bureau’s Statistics of U.S. Businesses, 84.9 percent had fewer than 20 employees, 96.4 percent fewer than 100, and 99.0 percent had less than 500 workers. If we add in non-employer corporations, then those with fewer than 20 workers come in at 89.5 percent of all C corporations.
As many of my clients and readers are business owners themselves, I know there are many questions surrounding the topic of remote work and the right protocols to implement for their businesses. This is the best company playbook I’ve seen so far. It includes templates, checklists, and a variety of resources that enable companies of any size to enact the right steps while simultaneously doing right by their employees.
What I’m Watching – Teacher Uses Song to Build Self Esteem
As a break from the constant Corona coverage this is something wholesome. With school currently cancelled for over 35 million children nationwide, here is a great reminder for all of us to appreciate great teachers and utilize this time to think about what we can teach our kids outside of the classroom.
What I’m Listening To – E0 All-In With Chamath Palihapitiya: COVID-19 Political, Economic, & Social Ramifications
Chamath Palihapitiya is a venture capitalist and minority stake owner of the Golden State Warriors. Chamath has been known to have relatively strong and sometimes controversial viewpoints in the realm of venture capital. This is an “off the cuff” podcast on the coronavirus and while timestamps are here, it really starts to pick up after the 20 minute mark with a simple question:
Why hasn’t India been affected?
Quick Take – Cut Through The Noise
Did you know you can eliminate Coronavirus by simply gargling salt water? How about holding your breath for 10 seconds in place of a test kit? The virus hates the heat, a hairdryer up the nose should do the trick.
Over the last several days I have seen a large uptick in news stories and a push on social media with content containing false or misleading information. In the case of COVID-19 and distributing knowledge efficiently, I believe less is more.
I have compiled a list of resources that I personally follow and utilize in my research on a daily basis. I find that utilizing a few core resources provides more than enough information without being subject to the data overload provided by dozens of media outlets.
This should be more than enough to check in with and I will update this list periodically as relevant information is released. I assume with the abundance of coverage and exposure, I have left out any major news sources such as CNN, The Wall Street Journal, MSNBC, World Health Organization etc. to reduce redundancy.
The next time you read something online or receive a tip from a friend use this page before you take any action.
Quote of The Week
"Beware the quiet man. For while others speak he watches. And while others act he plans. And when they finally rest... he strikes" - Anonymous