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🎙“I'm waiting for the date for the man who demands respect because he was great. I'm on the one mission to get a politician to honor or he's a goner by the time I get to Arizona.” - See who said it and why it matters at the bottom.
Illustration: Eniola Odetunde/Axios
In its latest repricing of the economy, the market sees the now-expected global recession caused by the COVID-19 outbreak morphing into an economic depression unlike any the world has seen in generations.
What they're saying: JPMorgan wrote down its expectations for global GDP to -1.1% in 2020, expecting the world's economic growth will reverse for the full year, including a second quarter contraction of -14% in the U.S. and -22% in the eurozone.
The most dire warning came from Pershing Square Capital Management CEO Bill Ackman, who went on CNBC to beg President Trump to shut down the U.S. economy for 30 days and put the country in a nationwide lockdown.
What's happening: Even traditional safe havens were not seen as safe enough during Wednesday's selling.
The last word: “What people are doing is looking at things that they can sell to raise cash, and that’s part of the crisis market situation," Jim Caron, head of fixed income global macro strategies for Morgan Stanley Investment Management, told CNBC. "When these things happen, people sell what they can sell, not what they want to sell.”
The growing excess of crude and the price war between Russia and Saudi Arabia could see oil prices turn negative, Mizuho Securities managing director Paul Sankey warned. (Fox Business)
The NYSE will close its trading floor after two traders tested positive for coronavirus. (WSJ)
Tesla CEO Elon Musk volunteered to join Ford and GM in making medical equipment including ventilators that could help combat the COVID-19 outbreak. (Axios)
Walmart stock rose to a new all-time high Wednesday thanks to its booming grocery delivery business. (Investor's Business Daily)
Panic in financial markets has grown to the point that many now believe the only safe asset is the U.S. dollar.
Driving the news: The value of the dollar index rose to near its highest level in 18 years, as banks, traders and businesses made a rush for cash, fearful they could run out as the economy sinks into recession.
What it means: The worried wave of dollar demand has pushed the greenback to new record highs against high-risk currencies like the Mexican peso and Norwegian krone, its highest since 2003 against the Australian dollar, and highest against the British pound since the 1980s.
Be smart: The run on dollars is happening despite the Federal Reserve providing literally trillions of dollars in liquidity in just the past two weeks and slashing interest rates to zero.
Between the lines: Without a clear idea of whether or not the world's largest economy will pass a major stimulus package or lead a coordinated global rescue effort, confidence is fading fast in spite of the Fed's actions, Schamotta says.
Don't sleep: For the week ending March 17, government money market funds drew $195.5 billion of inflows, according to Crane Data.
The last word: The zealous demand for dollars was perhaps best illustrated by a report from the Wall Street Journal that "Some branches of U.S. banks and credit unions have run low on cash as customers make big withdrawals," largely in wealthy neighborhoods, sometimes reaching $100,000 or more.
A major part of the worry in markets is that so many industries could be affected by the coronavirus outbreak.
Driving the news: President Trump has pledged to help the airline industry, and the administration’s $1 trillion proposed rescue plan includes $300 billion for small businesses, $50 billion for the airline industry and $150 billion to prop up hotels and other sectors.
Who's asking now:
Investors will get their first look at how the coronavirus outbreak in the U.S. has impacted the labor market when the government releases its latest initial jobless claims report today.
Why it matters: There have been widespread reports of layoffs over the past two weeks, as municipalities began shutting down restaurants, bars and large public gatherings.
What they're saying: "Given the job destruction that we are witnessing, policymakers and investors should anticipate first-time claims to soar toward the five-year moving average of 242,300 in the next few weeks," Joe Brusuelas, chief economist at tax advisory firm RSM, says in a note to clients.
Yes, but: While economists at the left-leaning Economic Policy Institute expect the economy to lose 3 million jobs by this summer, they point out that there is often a lag between when people are laid off and when they apply for benefits.
Quote: "I'm waiting for the date for the man who demands respect because he was great. I'm on the one mission to get a politician to honor or he's a goner by the time I get to Arizona.”
Why it matters: Those lyrics are from Public Enemy's seminal protest anthem, "By the time I get to Arizona." On March 19, 1991, NFL owners stripped Phoenix of the 1993 Super Bowl due to Arizona's refusal to recognize Martin Luther King Day.