17Mar2020 Market Close: Wall Street Keeps Head Above Water, But For How Long, DOW Closes Up 1049, WTI Slips To 26.66, New Wall Of Worry Called Recession Hitting Investors.

Brent crude sinks below $30/bbl as recession fears weigh

Crude oil prices settled below $30 a barrel as the coronavirus pandemic slowed economic growth and oil demand on Tuesday while Saudi Arabia and Russia kept up their battle for market share.

Investors give thumbs down to potential shortened stock session

U.S. Treasury Secretary Steven Mnuchin’s suggestion on Tuesday that the country’s stock exchanges might shorten their trading hours did not go over well with investors reeling from Wall Street’s worst day in three decades and growing fears about the coronavirus.

Macy’s, Hudson’s Bay to temporarily close U.S. stores due to virus outbreak

Department store operators Macy’s Inc and Hudson’s Bay decided on Tuesday to temporarily close all its stores in the United States due to the coronavirus pandemic, but said their e-commerce sites would continue to operate.

Norwegian Air asks for similar help to regional rival SAS

Struggling Norwegian Air needs government support similar to that which SAS received from the Danish and Swedish governments if it is to protect jobs in Norway as demand is strangled by the coronavirus outbreak.

U.S. airlines face push-back in Congress on $50 billion bailout proposal

Some Democrats in Congress are pushing back on aspects of a proposal by major airlines seeking $50 billion in grants and loans in the face of the massive travel slowdown as a result of the coronavirus pandemic.

CFTC provides work-from-home relief for brokers, other market players

The U.S. Commodity Futures Trading Commission on Tuesday said it has issued temporary, targeted relief to futures commissions merchants, brokers, swap dealers, and other market players in response to the coronavirus pandemic.

Tiffany & Co to temporarily shut several stores, cuts hours at others

Luxury jeweler Tiffany & Co said on Tuesday it would temporarily close several stores, including its Fifth Avenue flagship store in New York, and reduce working hours at other outlets, in an effort to contain the spread of the novel coronavirus.

Exclusive: Amazon warehouses receive only vital supplies in U.S., Europe amid coronavirus

Amazon.com Inc will only receive vital supplies at its U.S. and UK and other European warehouses until April 5, its latest move to free up inventory space for medical and household goods in high demand as a result of the coronavirus outbreak.

Coronavirus-stricken airlines call for state aid to avert ruin

Airlines demanded urgent tax relief to avoid multiple bankruptcies as coronavirus disruption continued its spread across the global industry on Tuesday.

‘Helicopter Money’ Sparks Bond Backlash, Stocks Bounce On Fed Bailout, But Bank Liquidity Worsens

‘Helicopter Money’ Sparks Bond Backlash, Stocks Bounce On Fed Bailout, But Bank Liquidity Worsens

US futures traded limit up overnight, plunge back to the lows of the day, soared back above overnight highs, dumped again, ripped again, then slumped… 1000s of Dow points in the swings on the back of various political and monetary headlines of ever-increasing bailouts (and warnings)… that is malarkey!

Global Financial Crisis 2.0: CPFF Down, AMFL, MMIFF, PDCF And TAF On Deck

Global Financial Crisis 2.0: CPFF Down, AMFL, MMIFF, PDCF And TAF On Deck

Authored by Rabobank US rates strategist Phillip Marey

Today the Fed finally relaunched its Commercial Paper Funding Facility (CPFF). Through this facility the Fed finances a special purpose vehicle that purchases 3 month commercial paper from eligible users. In this way the Fed takes over the role of money market mutual funds and other buyers of commercial paper that stopped purchasing in recent days.

Going forward, with money market mutual funds in need of liquidity we may also see the return of AMLF and MMIFF, while the need for overnight funding by primary dealers could be met by PDCF. An extension of USD liquidity swap line arrangements with a wider set of central banks may also be necessary. And if the stigma attached to the discount window remains a problem, we could also see the return of TAF.

Introduction

Markets were screaming for it, but finally today the Fed relaunched the Commercial Paper Funding Facility (CPFF) in order to deal with the freezing up of the US commercial paper market. At present, the coronavirus outbreak is hitting the cashflow of businesses, who therefore need to raise cash. At the same time, the money market mutual funds ” the regular buyers of commercial paper ” are also trying to raise cash in anticipation of outflows from the MMMFs by investors. In other words, the commercial paper market had increasingly become dysfunctional. The reintroduction of the CPFF brings in the Fed as a large buyer of commercial paper and should help stabilize the market.

How does it work?

…

Zoltan Stares Into The Abyss: Here Is What The Fed Must Do Right Now To Avoid Global Devastation

Zoltan Stares Into The Abyss: Here Is What The Fed Must Do Right Now To Avoid Global Devastation

Two weeks ago, on March 3, before a liquidity panic had gripped capital markets, corporations and global banks, Credit Suisse repo icon and former NY Fed staffer, Zoltan Pozsar issued a recommendation to halt the funding crisis early in its tracks, writing that the Fed should “combine rate cuts with open liquidity lines that include a pledge to use the swap lines, an uncapped repo facility and QE if necessary.” Unfortunately, since then the coronavirus supply chain (and payments) crisis has been joined by the oil price war, which has crippled the petrodollar exchange system by sending the price of oil sharply lower and exacerbating the global dollar funding shock.

And even though the Fed belatedly followed through with all of Pozsar’s March 3 policy recommendations, going so far as throwing a commercial paper bailout facility which was also recommended by BofA’s Marc Cabana (another former NY Fed staffer), the market remains unconvinced that any of this is enough, especially with JPMorgan warning that the world is facing an unprecedented dollar margin call, as a result of the $12 trillion synthetic dollar short, some 60% of US GDP.

Japan Olympics Official Tests Positive For COVID-19 As Training Camps Canceled Across Country

Japan Olympics Official Tests Positive For COVID-19 As Training Camps Canceled Across Country

The deputy head of Japan’s Olympics Committee has coronavirus after reportedly experiencing a mild fever on Sunday after returning from a trip to Europe and the United States, according to the Wall Street Journal.

Coronavirus is the last thing bad loan-plagued Indian banks need

Coronavirus is the last thing bad loan-plagued Indian banks needThe coronavirus pandemic has sparked concerns about a fresh surge in bad loans at Indian banks.

The possible antidote for virus-hit economy

The possible antidote for virus-hit economyA mix of monetary and fiscal policy measures are need to salvage the economy from Covid-19, a SBI report said.

Covid-19: 25K auto execs to work from home

Covid-19: 25K auto execs to work from homeAutomobile sector will see as many as 25,000 office employees working from home for at least two weeks.

McDonald’s goes to takeout only, Dunkin’ removes seats as Trump encourages contactless restaurant transactions

McDonald’s, Dunkin’ and other fast-food chains are changing the way they do business in an effort to combat the coronavirus.

The Wall Street Journal: Hotel chain Marriott to put tens of thousands of staff on furlough

Maryland-based Marriott is the world’s largest hotel company, with nearly 1.4 million rooms worldwide.

Capitol Report: Mnuchin says Trump administration looking at sending checks to Americans, will allow deferred payments to IRS

Treasury Secretary Steven Mnuchin on Tuesday said the Trump administration is considering sending direct payments to Americans as the country grapples with the coronavirus crisis, and announced that individuals and businesses will be allowed to defer tax payments.