Apr 1, 2020

Axios Markets

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Situational awareness: ADP's private payrolls report for March will be released this morning at 8:15.

🎙“If we fight a war and win it with H-bombs, what history will remember is not the ideals we were fighting for, but the methods we used to accomplish them." - See who said it and why it matters at the bottom.

1 big thing: Many Americans feel better about their finances

Data: Axios/Ipsos survey, margin of error ranges from ±5 to ±9 percentage points; Chart: Naema Ahmed/Axios

Americans have become more optimistic about the state of their finances in the last week, a new survey from Axios and Ipsos shows.

  • While some remain worried, particularly those at the lower end of the economic spectrum, data show people are more confident about the security of their jobs and ability to take care of expenses after the passage of the $2.2 trillion CARES Act.

Why it matters: Results show there's growing belief that the worst may have passed and that measures taken by Congress and the Fed have helped assuage fear that the COVID-19 outbreak will lead to prolonged economic calamity.

What's happening: "The stimulus news helped, along with the various payment forbearance, interest forgiveness, and eviction bans we have seen announced," Chris Jackson, public polling lead at Ipsos, tells Axios in an email.

  • "It’s not a large effect but does suggest anxiety on that aspect is flat for the time being."

Between the lines: Improved sentiment may have helped push the Dow to its best one-week gain since 1938 last week, and the S&P 500 and Nasdaq to their largest weekly gains since the end of the financial crisis in March 2009.

Keep it đź’Ż: The survey breaks down largely along economic lines, with wealthier white-collar workers much more confident than their lower-paid and less-educated cohort.

  • Particularly among respondents with high incomes and education levels, those who still have their jobs generally feel comfortable that they will keep them.

By the numbers: A survey from PwC taken before the bill's passage found that just 16% of CFOs said they were considering laying off employees in the next month, a testament to the confidence of large, well-heeled firms.

  • "We are excited and are inspired by the number of companies that have come up and talked about layoffs as a last resort," Tim Ryan, U.S. chairman and senior partner at PwC, tells Axios.

Yes, but: "What we’re hearing is if this drags out beyond three to four months those commitments will become more challenging," he adds.

Methodology: This Axios/Ipsos Poll was conducted March 27-30 by Ipsos' KnowledgePanel®. This poll is based on a nationally representative probability sample of 1,355 general population adults age 18 or older.

  • The margin of sampling error is +/- 2.8 percentage points at the 95% confidence level, for results based on the entire sample of adults.
  • The margin of error for each of the five socioeconomic segments is higher because the sample sizes are smaller. They ranged from +/- 5 percentage points for the middle-status group to +/- 9 percentage points for the upper-status group.
Bonus: Rich sheltered and poor shafted by pandemic

Data: Axios/Ipsos survey, margin of error of ±9 percentage points; Chart: Naema Ahmed/Axios

The coronavirus is spreading a dangerous strain of inequality, Axios' Margaret Talev writes.

Driving the news: Week 3 of our Axios-Ipsos Coronavirus Index finds Americans with less education and lower incomes are far more likely either to have to keep showing up at their workplaces — putting themselves at greater daily risk of infection — or more likely to have seen their work dry up.

Why it matters: "It's a tale of two Americas," said Cliff Young, president of U.S. public affairs at Ipsos.

  • "The rich and affluent have gone virtual. They’ve maintained their jobs through the virtual world," he said. "The working and the poor are more exposed."

Between the lines: Ironically, those with the most resources and the least exposure are significantly more likely to say their emotional health is taking a hit.

  • 47% of the upper status and 45% of the upper-middle group said their emotional well-being declined, while that was the case for just 34% of the lower and lower-middle groups and 36% of the middle group.

By the numbers: Pollster Chris Jackson analyzed the findings by five groups of socioeconomic status:

  • Lower (20%, high school education, $15,000 median household income)
  • Lower middle (21%, high school education, $40,000 median household income)
  • Middle (32%, some college, $75,000 median household income)
  • Upper middle (20%, bachelor's degree, $125,000 median household income)
  • Upper (8%, master's degree, $200,000 median household income)

Go deeper: Axios-Ipsos Coronavirus Index: Rich sheltered, poor shafted amid virus

2. Catch up quick

The White House and congressional Democrats are preparing a fourth round of stimulus with President Trump calling for a $2 trillion infrastructure bill. (Reuters)

Spain reported the highest number of COVID-19 deaths since the crisis started while the number of Italian cases rose for the second straight day, but the WHO says the outbreak in Europe may be approaching its peak. (Bloomberg)

The Caixin/Markit survey of China's manufacturing activity was 50.1 in March, better than consensus 45.0, and close to the country's official reading. (CNBC)

HSBC, Standard Chartered, Royal Bank of Scotland, Barclays and Lloyds all announced they would cancel dividends and stock buybacks at the urging of a British bank regulator. (Bloomberg)

Iraq plans to boost oil output by around 200,000 barrels a day as OPEC's oil production cuts end. (Bloomberg)

3. The new labor movement

Illustration: AĂŻda Amer/Axios

Axios' Joann Muller writes: The coronavirus pandemic has had a big impact on working people, who are increasingly banding together to put pressure on employers and raise public awareness about health and safety issues they're facing on the job.

Why it matters: After years of declining union membership, a new labor movement is rising, amplified by the power of social media and fueled by concerns that workers deemed essential during the crisis are putting their lives at risk to ensure the well-being of others.

Driving the news: Some Whole Foods employees used an online petition to organize a so-called sick out Tuesday, demanding double hazard pay, a day after workers at Amazon and Instacart staged other actions.

Unionized nurses, flight attendants and auto workers have all leveraged their collective voices in recent weeks to try to influence policy and corporate decision-making during the crisis.

The intrigue: Social media is proving to be a new avenue for workers to organize.

  • "I think we could be on the cusp of a whole new wave of worker actions, and organizing, though not necessarily through traditional unions," MIT Professor Thomas Kochan tells Axios.
  • "Yesterday’s break room is today’s Slack chat," agrees AFL-CIO spokesperson Tim Schlittner. "It's an incredible tool in bringing people together and can serve a really important role in growing the labor movement."

Yes, but: Noisy protests don't necessarily result in lasting change, Kochan notes.

  • "The upside of these actions is they get the attention of the public. The downside is they don’t build sustainable, ongoing organizations like unions. "

Context: The increased activism comes just as the National Labor Relations Board is taking steps to limit union organizing, according to the AFL-CIO.

  • "In two weeks' time, in the middle of a pandemic, President Trump’s NLRB suspended representation elections and then made it harder for employers to voluntarily recognize unions," said AFL-CIO president Richard Trumka.
  • "The board is effectively sealing off any viable path to unionization at a time when workers need a voice on the job more than ever."
  • Union membership among private sector workers fell to 7% in 2019, from 23% in 1977.

Go deeper: The new labor movement

4. The coming shale patch pain
Reproduced from Wood Mackenzie; Chart: Axios Visuals

U.S. oil producers are cutting back spending significantly as the industry moves to crisis footing, Axios' Ben Geman writes.

The big picture: What's already announced — from both independent producers and giants like Chevron — is eye-popping, according to data from consultancy Wood Mackenzie.

  • And there's more to come as companies deal with prices at their lowest levels in two decades due to COVID-19 crushing demand and the Saudi-Russia price war.

Driving the news: "22 U.S. independents have cut investment for 2020 by a total of US$20 billion, an average of 35%, and three by 50% or more," they write. The chart above shows some of those announcements.

Quote: “If we fight a war and win it with H-bombs, what history will remember is not the ideals we were fighting for, but the methods we used to accomplish them."

Why it matters: On April 1, 1948, the Big Bang theory of the universe's creation was proposed in "Physical Review" by the team of Alpher, Bethe and Gamow.

April fools! Hans Bethe, who said the above quote decrying the use of H-bombs (he was a noted critic of nuclear proliferation during World War II), didn't actually contribute to the paper. Ralph Alpher added Bethe's name because their initials were A, B, and G, or alpha, beta and gamma in the Greek alphabet — commonly used symbols in physics.

Best April Fools' Day joke ever!