The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments on Wednesday related to the global economy, the work place and the spread of the virus.
THINGS WE VALUED: The outbreak has reshuffled the pecking order of what holds value and there are few places where that is more evident than oil.
Over the last quarter the price of crude has fallen harder than at any point in history, plunging almost 70%, to around $20 per barrel. Those are levels not seen since 2002.
According to the API, U.S. crude inventories rose by 10.5 million barrels last week, well over twice what energy analysts had been expecting, and prices are falling again Wednesday.
With millions of job losses expected already because of the pandemic, a shock to the energy sector would mean thousands of jobs lost.
On Wednesday Whiting Petroleum, one of the biggest drillers in the Bakken shale formation, sought Chapter 11 bankruptcy protection. Energy demand was already in retreat before the emergence of the virus and there have been 208 bankruptcy filings in the past five years after oil and gas companies racked up $121.7 billion in debt, according to law firm Haynes and Boone. Few expect Whiting will be the last to file for protection with oil costing more to pull from the ground than what it fetches on the market.
TROUBLED HOME: Any activity requiring proximity to another human is being cut out. If you are trying to sell a house, that includes you.
Mortgage applications tumbled 24% compared with the same week last year as showings are all but shut down. Last week, that year-over-year figure fell 11%, though applications to refinance are soaring.
CAR CRASH: Auto sales are evaporating with people on every continent shutting in, and certainly not haggling on car lots.
The Edmunds.com auto pricing site estimates that U.S. new vehicle sales plunged 40% last month compared with a year ago. First quarter sales dropped an estimated 13.6%, erasing gains from January and February.
Toyota sales plummeted 37% in March and 8.8% for the quarter. Hyundai reported March sales fell 43% and for the quarter, dropped 11%. Subaru, which usually reports growth, saw a 47% plunge in March and a 16.7% drop so far this year. Fiat Chrysler, which only reports quarterly numbers, said sales fell 10%, while General Motors was off 7%.
Not all automakers reported sales Wednesday. Edmunds made estimates for Ford, Mercedes-Benz, Tesla and others that will report later.
DID NOT EXPECT THAT: The pandemic has delivered unforeseen consequences, good and bad, for business across almost every sector.
The U.S. is among the countries unable to deliver enough tests for the coronavirus. A number of diagnostic companies, including Quest Diagnostics, have become critical in tracking its spread.
But COVID-19, the disease caused by the coronavirus, is doing more harm to the New Jersey company than good, despite its essential role.
Quest expects its overall testing volumes to decline as other types of testing plunge. The company reported a testing volume decline exceeding 40% during the last two weeks of March, including COVID-19 testing. The reason is that visits to the doctor and elective medical procedures have almost come to a halt.
OUTCRY GROWS AGAINST AMAZON: Amazon drew more criticism for its decision to fire a worker who organized a walkout at a New York City warehouse to demand greater protections against the coronavirus.
Top labor unions and more than 40 elected New York City officials wrote a letter Wednesday to Amazon CEO Jeff Bezos demanding the reinstatement of Chris Smalls, who led the walkout to demand the Staten Island warehouse be closed for cleaning after a co-worker tested positive for the coronavirus.
The officials and unions, including the AFL-CIO, also called on Amazon to close its warehouses to allow independent health and safety inspections.
Amazon spokesperson Kristen Kish said the company has implemented "proactive measures at our facilities to protect employees," including increased cleaning at facilities and social distancing measures.
Amazon said Smalls was fired for flaunting social distancing guidelines, including by showing up at the walkout Monday despite being put on a 14-day paid leave after he had contact with the infected worker. Smalls said he believed Amazon put him on leave to get him out of the way.
BAD NEWS: News Corp. is suspending printing operations for 60 local papers in Australia, where it is the biggest media group, as advertising revenue vanishes. Local newspapers in New South Wales, Victoria, Queensland and South Australia will be digital-only from next week. The newspapers depend heavily on advertising related to real estate auctions, house inspections, community events and restaurants — all of which have been closed.
NO RETURN: Reversing an earlier position, the government is now saying Social Security recipients who are not required to file a tax return will not need to file a simplified tax return to receive a government stimulus check. The Treasury Department said Wednesday that the IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate the $1,200 checks to Social Security recipients who did not file tax returns in 2018 or 2019.
MARKETS: The S&P 500 lost 4.4% after the White House said anywhere from 100,000 to 240,000 Americans could die from COVID-19, even if current social-distancing guidelines are maintained.