🚨Extra-long weekend alert! Courtenay Brown will be in your inbox tomorrow as I squeeze an extra day into Memorial Day weekend. (Yes, it's this Monday.)
Situational Awareness: At least 2.4 million people are expected to have applied for initial jobless claims last week.
🎙 “Societies are only as strong as the stories we leave behind and that innovation isn’t possible without imagination. The moral infrastructure of this country is doomed unless we let culture lead.” - See who said it and why it matters at the bottom.
Illustration: Eniola Odetunde/Axios
Barely five months into the year, U.S. investment-grade companies already have issued more than $1 trillion in debt — nearly as much as in all of 2019, which was well above average.
What's happening: "Nearly $200 billion in debt has been issued in May so far as companies capitalize on growing risk-on attitudes," Bank of America research analysts said in a recent note to clients.
What to watch: Despite warnings of widespread downgrades, defaults and bankruptcies from various ratings agencies, credit analysts and the Fed itself, bond spreads are narrowing, indicating bullishness from investors as more of the U.S. economy opens for business.
Driving the news: Minutes from the Fed's latest policy meeting released Wednesday showed the central bank contemplating a program to cap the yields on short- and medium-term Treasuries known as yield-curve control — a policy employed by the Bank of Japan and Reserve Bank of Australia.
What could go wrong: Already warning that the economic damage from the pandemic will be deep and long-lasting, the Fed's latest financial stability report highlights the risk added by the growing corporate debt binge to exacerbate the coronavirus-driven recession.
Of note: Highly indebted “zombie” companies — firms that don't earn enough revenue to pay the interest on their debt — are one out of every six U.S. companies and currently control nearly 2.2 million jobs.
Flashback: "High levels of corporate debt likely won’t cause an economic downturn, but they may accelerate one as highly leveraged companies fail, forcing layoffs, decreasing aggregate demand and creating a downward spiral of bankruptcies and further layoffs," the U.S. Joint Economic Committee wrote in October 2019.
National restaurant chains including Starbucks, Chipotle and Shake Shack are lobbying property owners to renegotiate leases or offer deferred rent payments. (WSJ)
The U.S. may tighten restrictions on global chip sales to blacklisted Chinese telecom companies including Huawei. (Reuters)
The Senate passed legislation to boost oversight of foreign companies listed on U.S. stock exchanges, largely aimed at Chinese firms. (CNBC)
The U.S. pledged as much as $1.2 billion to AstraZeneca to help make the University of Oxford's coronavirus vaccine. (Bloomberg)
The total number of confirmed global coronavirus cases topped 5 million, with cases in Brazil jumping by nearly 500%, making it the nation with the third-most total cases. (Axios)
The number of borrowers not making payments on their credit cards and auto loans rose by thousands of percentage points in April as nearly 15 million credit cards and 3 million auto loans were placed in “financial hardship” programs.
Yes, but: The programs allow borrowers to temporarily stop making payments, suggesting voluntary elections rather than missed payments.
The big picture: TransUnion notes that its measure of consumer liquidity has increased as forbearance programs reduce monthly minimum payment obligations and free up capital for Americans.
Between the lines: Mortgage delinquency rates declined slightly, with 94.4% of loan holders current in April, up from 93.7% in March, and the foreclosure rate has ticked down from March by 9.7 percentage points.
Axios' Stef Kight reports: Nearly half of U.S. households have lost income since mid-March — but the suffering varies widely by state, according to survey data released Wednesday by the Census Bureau.
Why it matters: Income losses are particularly common in states that have borne the brunt of the coronavirus pandemic, like New York and New Jersey.
The big picture: The Census Bureau released the first two weeks of data on Wednesday from its new weekly survey intended to gauge how Americans are faring during the pandemic.
More than half of respondents in Hawaii, New Jersey, Nevada, Louisiana, Michigan, California, New York and Oregon said they or someone in their household had experienced a loss in employment revenue.
Yes, but: Despite the widespread loss of income since mid-March, 72% of respondents in a new Quinnipiac University poll say their own financial situation is "excellent" or "good."
Meanwhile, a handful of Southern states saw more people struggling with essential basics like food and shelter, according to the Census survey, even though fewer people there reported experiencing pay cuts.
Methodology: The experimental Census survey is based on responses provided by 74,413 people for week one results and 41,996 people for week two results.
Thanks for reading!
Quote: “Societies are only as strong as the stories we leave behind and that innovation isn’t possible without imagination. The moral infrastructure of this country is doomed unless we let culture lead.”
Why it matters: Deana Haggag is an artist, cancer survivor and the president and CEO of United States Artists. She describes herself on her website as a disabled first-generation Egyptian-American Muslim woman of Afro-Arab descent.
See you Tuesday!