Wall Street set to open higher after global markets fall.
U.S. stock futures wavered and global markets retreated on Wednesday, as investors weighed fresh data showing the extent of the economic damage wrought by the coronavirus pandemic.
Futures for the S&P 500 gained after trading flat, pointing to a slightly higher open on Wall Street.
Most indexes in Europe were 1 to 2 percent lower, after a generally down day in Asian markets. U.S. stocks had ended slightly lower on Tuesday after a rally throughout the day. Through Tuesday, the S&P 500 is up nearly 19 percent from its March 23 low. It’s still more than 21 percent below its high, reached on Feb. 19.
Investors had in recent days found solace in signs that the outbreak was peaking in some of the hardest-hit parts of the United States and Europe. On Wednesday, China lifted its lockdown on the city of Wuhan, where the virus emerged, in another sign of progress.
But markets remain fragile. European Union leaders on Tuesday night failed to agree on financial tools to help countries in the bloc struggling with the pandemic, and new data forecast a deep recession in France and Germany. Japan and South Korea this week joined other countries preparing big economic rescue packages.
Prices for U.S. Treasury bonds, a traditional investment safe haven, were largely higher in Asia trading on Wednesday. On the positive side, oil prices rose on futures markets, in part on hopes that major producing countries like Russia and Saudi Arabia could put aside their differences.
French economy contracts at a rate not seen in decades.
France suffered the worst quarterly contraction in growth since the aftermath of World War II as the impact of the coronavirus froze activity across large swaths of the economy and consumers locked indoors slashed spending, the French central bank reported Wednesday.
Economic output shrank by an estimated 6 percent from January through March, and is shrinking by around 1.5 percent for every two weeks that the population remains under confinement, the Bank of France said. Prime Minister Édouard Philippe said on Tuesday that France’s lockdown would be extended beyond an original April 15 deadline, without specifying a date.
With nonessential workers ordered to stay indoors, construction activity declined by 75 percent and industrial activity shrank by half during the quarter. One in four workers has been put on paid furlough, part of a massive support program funded by the government in a bid to reduce a surge in unemployment.
Finance Minister Bruno LeMaire this week warned that the magnitude of the situation faced by France may be “comparable to 1929,” a reference to the Great Depression.
Similarly grim data was released in Germany, where the gross domestic product is expected to shrink almost 10 percent from April through June, five leading economic institutes said Wednesday in a report prepared for the German government. That would be the biggest decline since quarterly record-keeping began in 1970, the institutes said.
Tenants are having rent problems, and that may mean trouble for landlords.
One week after the first of the month, tenants are struggling with rents.
The National Multifamily Housing Council, a trade group for big apartment owners and developers, compiled data tracking rent payments across some 13.4 million units nationwide. It showed that through the first five days of April, 31 percent of tenants had so far failed to pay their rent, compared with 18 percent in the same period a year ago.
“It’s only going to get worse,” said Bruce Brunner, a Minneapolis landlord. Of his 130 tenants, two dozen have been laid off or had their hours cut.
The $2 trillion CARES Act, signed by President Trump on March 27, should in theory help laid-off tenants keep up with the rent through expanded unemployment insurance benefits and one-time stimulus payments.
But much of the aid is directed to those already attached to some government program — like tenants who live in subsidized or public housing or landlords with mortgages backed by federal agencies.
“Landlords and renters will share in the pain, but we don’t yet know what the sharing balance will look like,” said John Pawlowski, an analyst with Green Street Advisors, a research firm in Newport Beach, Calif.
The European Union recommends coordinated contact-tracing apps.
As governments around the world look ahead to lifting the lockdown orders now in place to halt the spread of the coronavirus, mobile apps are seen as playing an essential role in tracking the movements of those who are infected.
Yet one of the biggest challenges in deploying such technology is ensuring the apps all work seamlessly together and that different countries use tools that can share information. The apps will not do much good if they are incompatible, particularly in a region like Europe where countries share open borders.
On Wednesday, the European Union issued recommendations for countries within the 27-nation bloc to build contact-tracing apps with common technical standards.
Already, apps are being used or developed in Britain, France, Germany, Poland and elsewhere. Some are being created in collaboration with governments, while others are being built by private companies and research groups.
“A fragmented and uncoordinated approach risks hampering the effectiveness of measures aimed at combating the COVID-19 crisis,” the European Commission said in a 12-page document.
An added challenge is building these tracking apps without violating people’s privacy rights. Many privacy-rights groups have raised concerns about overly-intrusive measures being used to fight the virus.
The European Commission, the bloc’s executive arm, said anonymous and aggregated mobile location data should be used to model and predict the evolution of the virus. It also urged countries to ensure any apps developed to track the virus get users consent beforehand.
Amid shortage, California strikes deal for masks.
Gov. Gavin Newsom of California said late Tuesday that the state had secured nearly 200 million masks a month for California health care workers, an extraordinary sum amid the severe shortage of masks, though his office was short on specifics on how it pulled off such a deal.
A spokesman for Mr. Newsom said the state would purchase the masks from overseas manufacturers in two separate deals with a California nonprofit and a California company. The spokesman declined to name the nonprofit and the company, declined to say which companies were making the masks, and declined to disclose the price California would pay.
Demand for masks has far outstripped supply in recent weeks, driving some prices 10 times higher than before the pandemic.
Mr. Newsom said the state had previously purchased smaller amounts on a case-by-case basis but decided to pool its resources for bigger deals.
“We decided enough of the small ball,” he said on MSNBC on Tuesday. “Let’s use our purchasing power. Let’s go at scale.”
He said the deal would include about 150 million N95 masks a month, the top-line masks medical workers need around coronavirus patients. In comparison, the federal government said last month that it signed deals to buy 600 million N95 masks over 18 months.
California is also acquiring a machine that can clean nearly 2.5 million N95 masks a month for reuse, Mr. Newsom’s spokesman said. The masks are set to start arriving in the next few weeks, he said.
Puzzle makers are struggling to keep up with a holiday-level surge in sales.
With much of the world under lockdown and looking to kill time, jigsaw puzzles have taken on a new role: a tool to save humanity. Australia’s prime minister even referred to jigsaws as essential and allowed people to leave the house to buy them.
The rush to get hold of a jigsaw puzzle has transformed this quiet hobby and put companies under pressure as demand surges.
Ravensburger, a German puzzle maker with global sales of about $600 million a year, has been trying to meet the sudden blizzard of orders even as social-distancing measures have limited the number of puzzles it is able to produce.
The company can’t easily ramp up production, because each new puzzle takes weeks to create.
Each puzzle piece must be uniquely shaped, to avoid one accidentally fitting into the wrong place. That means 1,000 different shapes for a 1,000-piece puzzle, each drawn by hand. Before a puzzle is cut for the first time, each piece is sketched on a sheet of paper draped over the finished image.
Pieces of metal are then shaped to form an elaborate cookie cutter made just for that jigsaw puzzle; it takes about four weeks to build one. The cutter can be used only a limited number of times before its edges are dulled. It can be resharpened once and must then be discarded. At busy times of the year, the company will go through several cutters a day.
But before any pieces are cut, the company chooses the right image for a puzzle.
“Very rarely does it work well to just take a good-looking image and put it on a puzzle package,” said Filip Francke, the chief executive of Ravensburger in North America.
South Korea boosts stimulus measures to help exporters.
South Korea announced a new 36 trillion won — or $29.5 billion — stimulus package on Wednesday aimed at cushioning its export-driven economy from the impact of the coronavirus pandemic.
The new package added to a series of economic rescue measures totaling more than $80 billion that South Korea has announced in recent weeks to shore up its battered economy and help self-employed people and small- and medium-size businesses that have been hit the hardest.
The package announced on Wednesday will come in the form of cheap loans for the country’s exporters.
During an emergency meeting of senior economic policymakers, President Moon Jae-in said his government had also drawn up new measures worth 17.7 trillion won, or about $14.5 billion, to boost domestic consumption. He didn’t provide details.
“The global economy is being sucked into a severe depression and, as a result, our economy, heavily dependent on the external conditions, is facing a tsunami-like shock,” Mr. Moon said. “This is a tunnel, the end of which we cannot see yet.”
Mr. Moon revealed the new stimulus package as political parties in South Korea were campaigning for a crucial parliamentary poll next Wednesday. His governing Democratic Party had once appeared to face a tough campaign as Mr. Moon’s diplomacy with North Korea remained in a stalemate and discontent over a slowing economy deepened.
But the approval ratings of Mr. Moon and his party have been on the rise in recent weeks as South Korea was praised by other nations for its effective handling of the epidemic.
South Korea has aggressively deployed test kits and other disease-control resources to isolate patients and contain the virus. The number of new cases, once as high as 813 on Feb. 29, has dropped to around 50 in the past three days. The country had recorded a total of 10,384 coronavirus cases as of midnight Tuesday, with 200 deaths.
Catch up: Here’s what else is happening.
Jack Dorsey, the chief executive of Twitter and Square, said that he planned to donate $1 billion, or just under a third of his total wealth, to relief programs related to the coronavirus pandemic.
Reporting was contributed by Liz Alderman, Jack Ewing, Conor Dougherty, Adam Satariano, Choe Sang-Hun, Jack Nicas, Austin Ramzy, Katie Robertson, Carlos Tejada and Amie Tsang.