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US stocks closed in the red on Wednesday. April and the second quarter of the year are not off to a great start.
Investors continue to grapple with the fallout from the coronavirus outbreak ahead of more data on the US labor market on Thursday and Friday.
Three flight attendant unions are urging the government against taking an ownership stake in airlines when it distributes $25 billion to fund payroll for aviation workers.
The leaders of the nation's flight attendant unions wrote a letter to Treasury Secretary Mnuchin saying that if he demands the airlines give taxpayers stock in their companies in return for help, it would threaten "whether workers will ever see the promised relief."
The unions are worried the airlines may turn down the grants meant to pay employees during the next 6 months if the government insists on essentially becoming a stockholder in the airlines. They wrote the $25 billion figure could equate to a 40% ownership stake in the airlines.
“This effectively renders the payroll grants a poison pill that will cost us our jobs and push us onto taxpayer-funded unemployment insurance – the opposite of what this bipartisan agreement intended,” they wrote.
Airlines for America, the industry group representing major U.S. airlines, has not commented on how it counseled the government to disburse the aid, and no airline has publicly said that it will turn down the aid if it is forced to give taxpayers a stake.
BAML sees three reasons for the spike:
The Economic Policy Institute expects some 20 million American jobs to be lost between March and July, via a combination of furloughs and lay-offs.
"I have watched with great interest as the market has experienced an 11-year spectacular bull run largely through piling up debt while the economy grew at its slowest rate of any expansion over the last fifty years," Tice wrote in the letter. "Now, after this hiatus, it has become obvious to me that another secular bear market lays in front of us."
Stocks opened lower today -- the first day of a new month and a new quarter. At midday, not much has changed and the three main US equity indexes remain down.
This is the third out of the past four trading sessions that stocks are down.
"All of this points to a sudden stop in EM due to the combination of uncertainty around the spread of COVID-19, and large oil price and financial shocks," Fortun and Hilgenstock said.
At least one retailer had a decent March: Kroger.
Kroger said in a press release that it experienced "dramatically heightened demand" in mid-March, which tapered but "remained higher than normal in the final week."
Not surprisingly, Kroger's best-selling items were boxed meals, and cleaning and paper products. Its fresh food departments also had an increase in sales.
As a result, Kroger said it expects its first quarter results to be better than expected.
The coronavirus pandemic has thrown the world into an unprecedented crisis. In many ways, it's like a war, according to the International Monetary Fund.
And wars need war-time policies.
Then comes phase two: the post-war recovery.
To ensure a swift and sustainable upswing, the public sector needs to be on top of things.
All of this will come at a price of higher public debt balances across the world, and lower interest rates for a longer period -- but it will ensure that the economy can start up again properly after the virus is defeated.
America's factories fell into a recession in the second half of 2019, but started to do better in the first months of the year. This respite was short-lived because of the coronavirus pandemic's crippling impact on the economy.
The Institute of Supply Management's manufacturing PMI for March slipped to 49.1, its first drop below 50 in two months. Any reading below 50 indicates a contraction, whereas a reading above 50 denotes an expansion.
Manufacturers are getting squeezed from two sides: There's decreasing demand and issues with supply chains as well as volatility in energy markets.
Still the March PMI was better than expected. Much of last month's economic data is not expected to show the full impact of the coronavirus crisis, which really took hold in the second half of the month.