Fed Slashes Interest Rates in Bid to Protect Economy: Live Updates
Economists at Goldman Sachs slashed their forecasts for economic growth in the United States. The bank believes world’s largest economy won’t have grown at all in the first quarter, and will shrink in the second quarter.
“Even with monetary and fiscal policy turning sharply further toward stimulus … these shutdowns and rising public anxiety about the virus are likely to lead to a sharp deterioration in economic activity in the rest of March and throughout April,” Goldman’s economists wrote in a research note.
An economic hit from ‘all sides.’
For weeks, forecasters have warned of the coronavirus’s potential to disrupt the American economy just as it has done elsewhere. But there was little hard evidence beyond delayed shipments of goods from China and stomach-churning volatility in financial markets.
Now the effects are showing up in downtown nightspots and suburban shopping centers from coast to coast.
Not since the attacks of Sept. 11, 2001, has a crisis enveloped so much of the economy so quickly. Broadway is dark. The college basketball tournaments are canceled and professional sports are on indefinite hold. Conferences, concerts and St. Patrick’s Day parades have been called off or postponed. Even Disneyland — which stayed open through a recession a decade ago that wiped out millions of American jobs and trillions of dollars in wealth — is shuttered.
“This hits the heart of the economy, and it hits the economy on all sides,” said Diane Swonk, chief economist at Grant Thornton. “It’s not just that we’re slowing down things. We’re actually hitting the pause button, and there is no precedent, there is no mold for that.”
Hollywood may have just had a historically bad weekend.
Seemingly every aspect of American life has been disrupted by the coronavirus pandemic, and the weekend ritual of watching a movie in the dark sitting with strangers has been no exception. Most cinemas in the United States remain open, with the two biggest chains, AMC and Regal, reducing seating capacity in auditoriums by 50 percent so that people could leave at least one empty seat between them. But fears about the coronavirus kept the masses at home: Domestic ticket sales totaled about $55.3 million, a 44 percent drop from last weekend, despite three new films — “Bloodshot,” “The Hunt” and “I Still Believe” — arriving in wide release.
It was the worst period for movie theaters in two decades, according to Comscore, which compiles box office data. The next lowest weekend was Sept. 15 to 17 in 2000, when ticket sales totaled $54.5 million and the primary draws were holdovers like “The Watcher,” a serial-killer movie, and “Nurse Betty,” a dark comedy starring Renée Zellweger. In today’s money, however, the 2000 weekend generated roughly $83 million in ticket sales.
Why stock prices surged on Friday.
Just 30 minutes before trading on Wall Street came to a close on Friday, President Trump declared a national emergency and said he’d speed up testing for the coronavirus in the United States with the help of private companies.
Speaking outside the White House — surrounded by chief executives from a number of companies — Mr. Trump said Google would help create a website to screen coronavirus cases, and Walmart, Target and others would help with testing.
Investors had been waiting all week to see Washington take action, so they didn’t wait to hear the finer details: Stocks surged some 6 percent as the President spoke about the plans, to end the day up 9 percent. The gain nearly matched the stock market’s decline on Thursday.
Catch up: Here’s what else is happening.
Retailers started closing stores: Apple said it would shutter more than 450 stores across 21 countries for two weeks. Nike said it would shut all of its stores in the United States, Canada, Western Europe, New Zealand and Australia for the same period.
Spain and France announced drastic restrictions: On Saturday, Spain ordered all citizens to confine themselves to their homes — and to leave only to buy food, go to work, seek medical care or assist the elderly and others in need. France announced the closing of all “non-indispensable” businesses as of midnight, including restaurants, bars, and movie theaters.
Saudi Aramco’s profit fell. The world’s largest oil company, said on Sunday that its profit last year fell more than 20 percent, primarily because of lower oil prices.
Volkswagen will temporarily close factory in Chattanooga, Tenn. The factory will close for the day on Monday as managers assess how to handle a shortage of workers who have child care problems.
Jeanna Smialek, Ben Casselman, Jack Ewing, Stanley Reed, Jack Nicas, Liz Alderman, Brooks Barnes and Matt Phillips contributed reporting.
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