The daily business briefing: March 4, 2020

1. Fed cuts rates to counter coronavirus economic damage

The Federal Reserve announced Tuesday that it was cutting interest rates by half a percentage point to counter economic damage caused by the global coronavirus outbreak. "The fundamentals of the U.S. economy remain strong," but "the coronavirus poses evolving risks to economic activity," the Fed said in a statement. The U.S. central bank's benchmark funds rate fell to a range from 1 to 1.25 percent. CNBC characterized the cut as an "emergency" measure since it came between the policy meetings where Fed leaders usually make adjustments. This was the first emergency rate cut since the 2008 financial crisis. It came after the stock market saw a dramatic fall last week, followed by a big rebound on Monday and another plunge on Tuesday.

Federal Reserve CNBC

2. Stock futures rise after Super Tuesday

U.S. stock index futures gained early Wednesday, bouncing back after closing sharply down on Tuesday despite an emergency interest-rate cut by the Federal Reserve to counter economic fallout from the coronavirus outbreak. Analysts said investors were showing relief at the surge by former Vice President Joe Biden in the Super Tuesday Democratic presidential primaries. Biden is considered more moderate toward business than Sen. Bernie Sanders (I-Vt.), the progressive rival frontrunner who has called for breaking up banks and imposing a wealth tax. Asian markets stabilized somewhat, with Hong Kong's Hang Seng Index closing down by 0.2 percent while China's Shanghai Composite closed up 0.6 percent.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

CNN

3. Corporate travel bans hit airlines hard

Facebook on Tuesday confirmed that it would not send representatives to the South by Southwest conference in Austin, Texas, next week, joining a wave of major companies canceling business trips due to the rapidly spreading coronavirus outbreak. Amazon has told its nearly 800,000 workers to postpone non-essential travel, and Swiss food giant Nestle has ordered its 291,000 global employees to limit domestic business travel and avoid international travel until March 15. French cosmetics maker L'Oréal, which employs 86,000 people, banned international trips for all of March. The cancellations are a "big deal" for travel businesses, said industry analyst Henry Harteveldt, who estimates that business travelers account for 55 percent of airlines' revenue.

The Associated Press

4. Amazon confirms 1st U.S. coronavirus case

Amazon on Tuesday announced the first coronavirus infection of one of its employees in the United States. The employee works in one of the online retail giant's Seattle office complexes, and the company said all of the worker's colleagues had been informed. "We're supporting the affected employee who is in quarantine," a company spokeswoman told Reuters in an email. The company is urging employees with symptoms to "please stay home and seek medical attention." It also is cleaning and sanitizing the office where the employee worked. Amazon announced Sunday that two workers in Milan, Italy, had been quarantined after testing positive.

Reuters USA Today

5. China auto sales plummet as coronavirus keeps customers away

China's car sales dropped by 80 percent in February as coronavirus fears and restrictions kept customers away, according to data released Wednesday by the China Passenger Car Association. It was biggest monthly drop ever for the world's largest car market. The Passenger Car Association said sales from automakers to dealerships dropped by 86 percent. China's auto industry was already struggling to come back from a two-year decline when the outbreak hit. The virus has hurt sales for everyone from market leader Volkswagen to Tesla to smaller local manufacturers. Some local governments have started offering rebates to car buyers. The national government's options for countering the slowdown are limited, although it could cut its 10 percent car-purchase tax or ease restrictions on congestion-related purchases.

Bloomberg