The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Monday related to the global economy, the work place and the spread of the virus.
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BOTTOM LINE: Hundreds of companies have withdrawn all financial projections for the year given the unprecedented disruption to the economy and to consumers. But details of the extent of the damage are beginning to surface.
— Ford Motor Co. expects to post a $600 million first-quarter pretax loss and said Monday that it has enough cash to get through the end of September even if vehicle production doesn’t resume.
The Detroit automaker is considering a phased restart of its factories sometime in the second quarter with enhanced safety standards. Only Ford’s joint venture in China is producing vehicles right now. The company suspended its dividend and drew $15.4 billion from two credit lines to bolster cash reserves.
PANTRIES, GROCERS & RESTAURANTS: The coronavirus has upended the entire food and beverage industry, from grocery shelves to oysters on the half shell.
— A least 30 members of the United Food and Commercial Workers International Union have died and nearly 3,000 have self-isolated after becoming sick or being exposed to the virus, according to union president Marc Perrone. The union represents grocery workers, among others.
— Amazon is now requiring anyone signing up for deliveries from Amazon Fresh or Whole Foods Market delivery to sign up for an invitation. The crush isolated home-grocery shoppers has created a shortage of delivery slots available despite a 60% increase in capacity put into place by Amazon since the outbreak.
— After the first blast of coronavirus wilted orders, GrubHub, is bouncing back. The online order company said Monday that it’s seeing record numbers of new diners.
Delivery numbers were flat in the first quarter, it conceded, but orders accelerated after the first wave of the virus overtook major markets like New York City. This month, compared with last year, deliveries are up 10%.
AIR, LAND & SEA: The world was immobilized at lightning speed this year and conditions in the travel sector continue to deteriorate.
— Traffic an U.S. airports hit new lows daily, and fell below 100,000 last week for likely the first time since the jet age began. The Transportation Security Administration said it screened 90,510 people on Sunday, or 3.7% of the nearly 2.5 million people who passed through checkpoints on the corresponding Sunday a year ago.
The airline sector was among the hardest hit Monday on signs of growing tensions with the administration over terms of a rescue package. Shares of American, Delta and United fell between 6% and 8%.
— Carnival is cancelling all North American cruises until at least late June. Cruises out of New York and San Francisco have already been cancelled for all of 2020, but late last month Carnival still hoped to resume North American operations in mid-May. The Miami company said it is focused on taking care of crew that remains aboard its ships and getting non-essential workers home.
CRUDE AWAKENING: OPEC, Russia and other oil-producing nations finalized an unprecedented production cut of nearly 10 million barrels per day over the weekend, or a tenth of global supply, in a bid to halt plunging crude prices.
— U.S. crude prices bounced almost 2% Monday, as did Brent crude, used broadly in Europe. Crude prices, already in decline as the global economy slowed, have been in free fall since the outbreak began, tumbling 62% since the beginning of the year.
— OPEC has historically had a difficult time reining in members and enforcing those cuts. Bank of America says that means the actual cut may be closer to 7 million barrels per day. Energy analysts with the bank believe because the world is so flush with oil, it could mean an extended period of lower prices, particularly in the U.S.
MARKETS: Stocks fell broadly on Wall Street on Monday after logging their best week since 1974. Every sector on the S&P went negative by midday.
Markets in Europe are closed because of a holiday.
