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Situational Awareness: S&P 500 futures rallied by more than 3% this morning ahead of the market open, after gaining 7% Monday.
🎙"There are negotiations being made that are going to answer all of your questions and solve all of your problems. That's all I can tell you right now." - See who said it and why it matters at the bottom.
Illustration: Sarah Grillo/Axios
The U.S. and global economy will be forever changed by the COVID-19 outbreak and the measures that have been taken in response to it, experts say.
State of play: "Fundamentally there are going to be huge changes in household consumption patterns, business patterns and global supply chains," Kevin Warsh, a former Fed governor and current economics lecturer at Stanford, said during a Reuters teleconference.
The big picture: "History is now on fast forward," Robert D. Kaplan, managing director at Eurasia Group, said during a separate teleconference hosted by the Council on Foreign Relations.
What it means: Many of the changes to the world order that have been slowly creeping in will now be accelerated.
What to watch: No matter who wins the U.S. presidential election in November, the challenges will be unprecedented, Kurt M. Campbell, a former assistant secretary of state and current CEO of Asia Group, said during the CFR teleconference.
The last word: The changes resulting from the virus are likely to be extreme, but induced over time.
As hard as COVID-19 is going to hit the industrialized world, the impact on the developing world is going to be significantly more severe, analysts warn.
One level deeper: If outbreaks of the virus get severe in poorer, developing countries, many don't have the same ability to take social distancing measures because of limited technology and much larger household sizes, Kaplan added.
British Prime Minister Boris Johnson was moved into intensive care Monday night after his condition from the coronavirus infection worsened. (FT)
Japanese Prime Minister Shinzo Abe declared a national state of emergency for Tokyo and six other prefectures for one month starting April 7. (Bloomberg)
Congressional leaders and the White House are moving forward on a fiscal relief package that House Democrats led by Speaker Nancy Pelosi say would "easily" cost more than $1 trillion. (The Washington Post)
Airbnb raised $1 billion in a new round of funding, but did so at a lower $26 billion valuation and with no public guidance on when it would go public. (CNBC)
Americans are more worried than ever about losing their jobs, their household income and the equity in their homes, but one thing they are not worried about is the stock market.
Driving the news: The Fed's latest survey of consumer expectations shows "a significant deterioration in households’ expectations regarding their labor market and financial situation, a decline seen across all age, education, and income groups."
Market analysts don't agree: Even in a best-case scenario in which coronavirus cases peak in the next week and the economy starts to reopen later this month, analysts at JPMorgan believe the losses in equity prices will only recover next year.
Of note: JPMorgan CEO Jamie Dimon warned, “At a minimum, we assume that [COVID-19] will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008,” in his annual letter to shareholders.
Wells Fargo reiterated that it would not be opening up its small business Paycheck Protection Program loans to companies with more than 50 employees Monday night, despite an announcement from the Fed that it would set up a facility to buy the loans from banks.
Why it matters: The Fed's facility is designed take the loans off of banks' balance sheets, freeing them up to provide loans to more firms.
Background: Because of restrictions placed on Wells Fargo after its fake accounts scandal, the bank has told customers it must turn away struggling small business customers, Axios' Courtenay Brown noted.
What we're hearing: The faulty rollout and bank issues associated with PPP have put the futures of companies and employees in serious jeopardy as many were counting on the program to survive the next couple months.
Gold futures rose to their highest since late 2012 on Monday, surging above $1,700 an ounce and pushing out the spread over spot prices, even as U.S. stock indexes rose by more than 7%.
The big picture: Investors continue to buy gold even on days that equity prices soar, in part because of worries about the COVID-19 outbreak but also because of the prospect of untold trillions in spending from global governments and central banks, decreasing the value of the dollar and fiat currencies.
Watch this space: The market is experiencing a divergence between spot gold prices and futures reminiscent of the period about two weeks ago during a historic squeeze in New York futures.
Quote: "There are negotiations being made that are going to answer all of your questions and solve all of your problems. That's all I can tell you right now."
Why it matters: Francis Ford Coppola, who directed "The Godfather," the greatest film ever made, was born on April 7, 1939. The quote is from Michael Corleone.