The Fed now owns Walmart's debt. Here's why it matters

London(CNN Business) Coca-Cola. Berkshire Hathaway. Marriott. Philip Morris. Walmart.

These are just some of the companies whose debt was snapped up by the Federal Reserve as of mid-June, part of the central bank's unprecedented intervention in credit markets. CNN parent company AT&T is another.

What's happening: The Fed disclosed hundreds of millions of dollars in purchases of individual corporate bonds on Sunday, while identifying nearly 800 eligible issuers whose bonds it could buy down the line.

The action by the Federal Reserve has been lauded by investors for easing conditions in credit markets after they rapidly deteriorated in March, avoiding a potentially catastrophic corporate cash crunch that could have triggered a wave of bankruptcies.

In a note to clients Monday, Goldman Sachs said the Fed's announcement that it would buy corporate bonds in the primary and secondary markets was enough to quickly provide relief.

"The mere presence of the backstops helped to restore the flow of private credit," chief economist Jan Hatzius said.

The policy has proved "remarkably powerful" to fight this crisis, Goldman Sachs said. But it's not clear the Fed should use it as a regular tool to fight future recessions, per the investment bank.

This crisis is expected to be severe but short, lowering the risk of propping up inefficient "zombie" firms that should be allowed to fail. That may not be the case next time around.

Plus, there are fears that an ongoing commitment to corporate bond purchases could create a so-called "moral hazard," encouraging companies to borrow more from less-selective lenders on the expectation that Fed intervention would limit risks.

"It is unlikely that the cost-benefit tradeoff will be quite as favorable in the next recession," Goldman Sachs said.

The Fed action has also not made credit markets completely impervious to a complex and fast-changing outlook. Should the pandemic force another wave of bruising shutdowns that could derail the recovery, lending conditions could tighten again.

"The risks of reimposing lockdowns are high, and monetary policy stimulus which explains most of the recovery in asset prices from the March lows will become less effective going forward if it doesn't translate into a rebound in economic activity and better prospects for corporate earnings," Hussein Sayed, chief market strategist at FXTM, told clients Monday.

Facebook boycott gathers steam among advertisers

Big corporate names like Unilever, Starbucks and Verizon are signing onto an advertising boycott in protest of Facebook's policies on hate speech — raising the stakes for the company and hitting its stock.

The latest: Facebook shares plunged more than 8% on Friday, logging their worst day since March. They're down nearly 4% in premarket trading.

The plunge wiped more than $50 billion off the company's market value.

CEO Mark Zuckerberg announced an expanded policy on hate speech Friday, which includes banning ads that scapegoat minorities, immigrants and asylum seekers. Facebook will also apply warning labels to user posts that are newsworthy but violate the platform's policies.

But the moves don't appear to have satisfied many advertisers. Hershey's said it would join the boycott following the announcement. Fox Business reports that PepsiCo is adding its name to the list, too.

Reality check: Nearly all of Facebook's roughly $70 billion in revenue last year came from advertising dollars. But the highest-spending 100 brands account for only 6% of income, according to Pathmatics, a marketing intelligence firm.

The bulk comes from small and medium-sized businesses. Tens of thousands would need to act over a significant period of time to put a big dent in Facebook's bottom line, my CNN Business colleague Brian Fung reports.

Watch this space: Twitter shares are also falling as companies pause social media advertising. The company's stock dropped more than 7% on Friday and is down 3% in premarket trading.

Fracking trailblazer Chesapeake Energy goes bust

Chesapeake Energy, a pioneer of US fracking, filed for bankruptcy protection over the weekend — the largest oil and gas company to do so during the coronavirus pandemic, my CNN Business colleagues Clare Duffy and Matt Egan report.

Chesapeake was once the nation's number two natural gas producer thanks to early bets on fracking. Aubrey McClendon, Chesapeake's late founder and CEO, was considered one of the leaders of the shale boom that transformed the United States into the world's largest oil and natural gas supplier.

But bankruptcy rumors swirled as the company grappled with depressed energy prices and a mountain of debt.

The coronavirus crisis exacerbated those challenges. Despite a recent recovery to $40 per barrel, the price of oil has fallen sharply this year because of excess supply and plunging demand caused by stay-at-home orders.

"In the current commodity price environment, Chesapeake is burning cash at the same time production is declining, which is not sustainable," said Spencer Cutter, credit analyst at Bloomberg Intelligence.

What it means: Demand is starting to recover, helping crude prices rise again. But they're still too low to guard against a string of bankruptcies as producers fight insolvency.

Up next

US pending home sales for May post at 10 a.m. ET.

Coming tomorrow: Did consumer confidence in the United States continue to improve in June?