The daily business briefing: March 9, 2020
Stock futures plummet as coronavirus fears continue, Saudi Arabia signals an oil price war, and more
1. U.S. stock futures dive as coronavirus fears continue
Dow Jones Industrial Average futures plummeted by as much as 1,300 points, or nearly 5 percent, overnight on escalating fears of economic damage from the coronavirus outbreak, which is disrupting global supply chains. Futures for the S&P 500 and the Nasdaq also fell by as much as 5 percent. Shares in Europe and Asia fell sharply too. The CME FedWatch tracker indicated that traders overwhelmingly expect the Federal Reserve, which last week announced an emergency half-point interest rate cut, will slash rates by another 75 basis points at its March meeting as it tries to boost the economy to offset the coronavirus fallout. Stocks have been swinging widely but losing considerable ground overall for more than a week as the outbreak spreads faster outside of China, where it started.
2. Saudi Arabia's price war sends oil prices down by nearly 30 percent
Oil prices crashed late Sunday after Saudi Arabia unexpectedly started a price war against Russia, once an ally. U.S. oil prices plunged by as much as 27 percent to $30 a barrel, a four-year low. Global benchmark Brent crude fell by 22 percent to $35 a barrel. Saudi Arabia triggered the turmoil by signaling it would cut prices by up to $8 a barrel and flood the market with oil after Russia refused to join OPEC's call for the world's big producers to cut production to prop up prices in the face of declining demand caused by the coronavirus outbreak. "The signal is Saudi Arabia is looking to open the spigots and fight for market share," said Matt Smith, director of commodity research at ClipperData. "Saudi is rolling up its sleeves for a price war."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
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.
3. Treasury yields hit record lows
The benchmark 10-year Treasury yield fell below 0.4 percent for the first time, hitting 0.35 percent in overnight trading. The plunge came as investors fled stocks in search of safer assets as Saudi Arabia launched an oil price war and the coronavirus outbreak threatened broader economic fallout. Bond yields move inversely to prices, which rise with a surge in demand. The 30-year Treasury also dropped to a record low of 0.71 percent, falling under 1 percent for the first time. "There has been an extreme 'risk-off' move in the financial markets due to the fear surrounding the COVID-19 virus and the most recent Saudi oil decision," Canaccord Genuity market strategist Tony Dwyer said in a note. Dwyer added that yields should rebound sharply as they did after plunging in the financial crisis.
4. FAA rejects Boeing request to leave non-compliant wiring unchanged
The Federal Aviation Administration has rejected Boeing's proposal that it make no changes to wiring bundles in 737 Max airplanes that regulators flagged as "not compliant," CNBC reported Sunday, citing people familiar with the decision. "The FAA continues to engage with Boeing as the company works to address a recently discovered wiring issue with the 737 Max," an FAA spokesman said. "The manufacturer must demonstrate compliance with all certification standards." Boeing said it was continuing discussions with the agency about the wire bundles, a separate issue from the problems with a flight control system that got the jets grounded after two deadly crashes. Boeing said that its estimate of a mid-year return to service for the planes was unchanged no matter how the wiring issue is resolved.
5. Costco halts free samples as coronavirus precaution
Costco is going to temporarily stop offering customers free food samples as it becomes the latest major company to take precautions to fight the spread of the coronavirus. The decision followed the cancellation of the South by Southwest festival in Austin, one of many major events affected by the outbreak. Costco and other major retailers have been affected in other ways, with shoppers rushing to buy disinfectant, bottled water, and other goods they see as necessary to prepare for the coronavirus, either to avoid infection or keep supplied while staying home. "We're getting deliveries daily, but still not enough given the increased levels in demand on certain key items," Costco's CFO Richard Galanti, said last week in an earnings call.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
-
Geoff Capes obituary: shot-putter who became the World’s Strongest Man
In the Spotlight The 'mighty figure' was a two-time Commonwealth Champion and world-record holder
By The Week UK Published
-
Israel attacks Iran: a 'limited' retaliation
Talking Point Iran's humiliated leaders must decide how to respond to Netanyahu's measured strike
By The Week UK Published
-
Crossword: November 2, 2024
The Week's daily crossword puzzle
By The Week Staff Published
-
Has the Taliban banned women from speaking?
Today's Big Question 'Rambling' message about 'bizarre' restriction joins series of recent decrees that amount to silencing of Afghanistan's women
By Harriet Marsden, The Week UK Published
-
Cuba's energy crisis
The Explainer Already beset by a host of issues, the island nation is struggling with nationwide blackouts
By Rebekah Evans, The Week UK Published
-
Putin's fixation with shamans
Under the Radar Secretive Russian leader, said to be fascinated with occult and pagan rituals, allegedly asked for blessing over nuclear weapons
By Harriet Marsden, The Week UK Published
-
Chimpanzees are dying of human diseases
Under the radar Great apes are vulnerable to human pathogens thanks to genetic similarity, increased contact and no immunity
By Harriet Marsden, The Week UK Published
-
Deaths of Jesse Baird and Luke Davies hang over Sydney's Mardi Gras
The Explainer Police officer, the former partner of TV presenter victim, charged with two counts of murder after turning himself in
By Austin Chen, The Week UK Published
-
Quiz of The Week: 24 February - 1 March
Puzzles and Quizzes Have you been paying attention to The Week's news?
By Sorcha Bradley, The Week UK Published
-
Will mounting discontent affect Iran election?
Today's Big Question Low turnout is expected in poll seen as crucial test for Tehran's leadership
By Sorcha Bradley, The Week UK Published
-
Sweden clears final NATO hurdle with Hungary vote
Speed Read Hungary's parliament overwhelmingly approved Sweden's accession to NATO
By Peter Weber, The Week US Published