A16 EZ RE THE WASHINGTON POST.WEDNESDAy, MARCH 18 , 2020
The coronavirus outbreak
BY TAYLOR TELFORDU.S. authorities on Tuesday ac-
celerated testing to gauge the
spread of the coronavirus as
stumped investors struggled to di-
agnose the deadly virus’s economic
fallout. Markets sloshed in big,
nail-biting swings that have be-
come commonplace in recent days.
The Dow Jones industrial aver-
age jumped more than 1,
points, or roughly 5.2 percent, after
a volatile day of trading. The Stan-
dard & Poor’s 500 index climbed
nearly 6 percent, and the Nasdaq
composite finished up about
6.2 percent after the Federal Re-
serve and the U.S. government
rolled o ut plans to blunt the spread
of the disease and its effect on
American lives, from a reported
$1 trillion stimulus to a $10 billion
credit infusion to a pledge to belea-
guered Boeing.
“The volatility shows the des-
peration on Wall Street to find fair
value,” said Michael Farr, chief ex-
ecutive of Farr, Miller & Washing-
ton, an investment management
firm. “Each news release and sta-
tistic is greeted with 1,000-point
swings.”
One big fix came Tuesday morn-
ing, when the Fed announced
plans to launch a special fund to
keep credit flowing during the cor-
onavirus crisis. That gave the Dow
a 1,100-point lift, though the blue-
chip index gave up more than half
those gains by midafternoon.
Starting Tuesday, the central
bank will buy significant amounts
of commercial paper, the short-
term loans on which businesses
rely for funding to pay bills and
other expenses. The Fed did the
same thing during the Great Re-
cession and ended up buying about
$350 billion worth of these loans,
or about 20 percent of this market.
Treasury Secretary Steven
Mnuchin also announced that the
White House was looking at g iving
direct cash payments to Americans
as part of an $850 billion stimulus
package, which the administration
hopes will stanch the economic
free fall caused by the coronavirus.
President Trump initially support-
ed a payroll tax holiday but said
Tuesday that it would take too long
to deliver relief to Americans.
“We’re looking at sending
checks to Americans immediately,”
Mnuchin said Tuesday at a brief-
ing. “A nd I mean now, in the next
two weeks.”
The news delivered a much-
needed break for U.S. markets,
which had been bouncing wildly
between positive and negative ter-
ritory on the heels of their worst
day of trading since the 1987 Black
Monday crash. All 11 S&P stock
sectors were positive. All but five of
the Dow 30 components were posi-
tive, with Dow Inc., Intel and Trav-
elers the big winners. The yield on
the 10-year U.S. Treasury note, a
key fixture of global finance, flew
above 1 percent — a sign of happy
investors.
Boeing and McDonald’s werethe losers. The fast-food giant ex-
pects to take a hit because nearly
all its franchises are operating only
drive-through, takeout and deliv-
ery services.
The decline of Boeing stock,
once a Dow powerhouse, in some
ways reflects the fall of the 11-year
bull market that ended last week.
At $125 per share, it was trading at
a fraction of the $400 it command-
ed a year ago, before problems
surfaced in the aviation company’s
737 Max jet.
Volatility has reigned as inves-
tors have struggled to parse the
coronavirus’s increasingly disrup-
tive presence in the United States,
as well as the growing threat of a
recession. The closely watched
Cboe Volatility Index, Wall Street’s
“fear gauge,” saw its highest-everclose Monday after the Dow
plunged 3,000 points. The index’s
new high eclipsed the one set dur-
ing the 2008 financial crisis.
“This is unlike anything we have
ever seen,” said Jeffrey Kleintop,
chief global investment strategist
at Charles Schwab. “The impact
this is having, not only on energy
markets but financial services, the
travel industry and people’s every-
day lives, is really immeasurable.”
Monday’s rout came after the
Federal Reserve slashed interest
rates to zero and said it would
revive “quantitative easing,” a rem-
nant of the financial crisis. Last-
minute losses came after Trump
warned that disruption from the
coronavirus pandemic could last
through August and issued new
public health guidance, sayingAmericans should limit gatherings
to no more than 10 people.
“I remember some breathtaking
sell-offs after 9/11,” said Kristina
Hooper, Invesco’s c hief global mar-
ket strategist. “But this more close-
ly resembles the crazy moves I saw
during the global financial crisis.”
When asked if there was a
100 percent chance of the U.S.
economy tipping into a recession,
as some economists have predict-
ed, Trump said, “It may be.” Rat-
ings company S&P Global is now
forecasting a worldwide recession
this year, with global gross domes-
tic product growth of just 1 to
1.5 percent in 2020.
“The initial data from China
suggests that its economy was hit
far harder than projected, though a
tentative stabilization has begun,”S&P Global’s chief economist, Paul
Gruenwald, said in comments
emailed to The Washington Post.
“Europe and the U.S. are following
a similar path, as increasing re-
strictions on person-to-person
contacts presage a demand col-
lapse that will take activity sharply
lower in the second quarter before
a recovery begins later in the year.”
Ed Yardeni of Yardeni Research
has joined the pessimist camp. He
estimates a 4 to 6 percent GDP
drop in the second quarter, fol-
lowed by a decline of as much as
4 p ercent in the third quarter.
“That would be a severe reces-
sion,” Yardeni said in his morning
briefing. “The question is whether
it will be a short one. Needless to
say, that depends on the virus. I’m
of the opinion that the worst will be
over by midyear.”
Industries that have been wal-
loped by the coronavirus are ask-
ing for government assistance to
weather the storm. U.S. airlines are
seeking more than $50 billion in
federal aid amid the economic un-
certainty caused by the dramatic
decrease in passenger traffic. That
would be more than three times
what the industry received after
the Sept. 11, 2001, terrorist attacks.
Casinos are also asking Con-
gress for emergency financial help.
The American Gaming Associa-
tion issued a statement to The Post
on Monday, saying that with the
$260 billion industry at a “near
standstill,” additional funds are
needed to support casino compa-
nies and their employees.
Major retailers, including Ap-
ple, Patagonia and Abercrombie &
Fi tch, are shutting their doors
through March to try to contain
the coronavirus. Though store clo-
sures could be crucial to slowing
the spread of the disease, they also
sap consumer spending, which
powers 70 percent of the U.S. econ-
omy.
More than half the jobs in the
economy — a bout 80 million — a re
at moderate or high risk of being
negatively affected by the corona-
virus outbreak, according to
Moody’s Analytics, through de-
creased hours, lower pay or job
loss.
[email protected]Markets surge as economic stimulus plan takes shape
SPENCER PLATT/AGENCE FRANCE-PRESSE/GETTY IMAGES
Things were looking up at the New York Stock Exchange as the Dow Jones industrial average, the S&P 5 00 and the Nasdaq all saw gains.BY ABHA BHATTARAIThe novel coronavirus has
pitched grocers onto the front lines
of an accelerating public health cri-
sis, forcing many chains to reduce
hours and put buying caps on such
high-demand foods as ground beef
and frozen pizzas. Now some
chains and independent grocers
are restricting the number of shop-
pers in t heir stores or offering h ours
only for t he e lderly.
Industry experts and trade
groups say it’s only a matter of time
before supermarkets take even
more drastic measures, as they look
for ways to curb the spread of the
highly contagious virus among cus-
tomers and employees. Many are
looking a broad f or g uidance.
In Italy, Lidl is capping stores to
20 shoppers at a time, who are
limited to 10-minute slots. In the
United Kingdom, some supermar-
kets are opening an hour early, at
8 a.m., to accommodate elderly
shoppers, who are at higher risk if
they contract the v irus.
In China, at the height of its
outbreak, stores checked custom-
ers’ temperatures at the door and
required them to stand at least
three feet a part f rom others in l ine.
U.S. chains like Kroger, Walmart
and Dollar General have already
begun shortening store hours to
allow employees enough time to
restock and disinfect at the end of
the day. Costco said in an email to
members on Tuesday that it would
begin restricting the number of
shoppers in stores in the interest of
social distancing but did not pro-
vide details on how it would do so.
Ta rget announced it would reserve
an hour on Wednesday mornings
for e lderly shoppers a nd t hose with
underlying health c onditions.
“We’re all having conversations,
but we want to make sure we don’t
implement these [measures] too
early,” said Doug Baker, who heads
crisis management for the Food
Marketing Institute, a trade group
for food retailers and wholesalers.
“We’ll probably have to start limit-
ing the number of people, but how
do we do that so they’re not all just
waiting i n the parking l ot?”
Smaller grocers in some part of
the country have begun experi-
menting with ways to curb t he f lowSome grocers
limit entry,
trying to stop
virus’s spread
of shoppers. In Youngsville, La.,
NuNu’s Fresh Market has a 15-per-
son limit from 6:30 to 7:30 a.m. — a
move aimed at protecting vulnera-
ble g roups. M anagers a re also l imit-
ing essentials like bread, rice, eggs
and baby formula to two per cus-
tomer and have asked shoppers to
limit the number of people they
bring a long on shopping trips.
“We started seeing t he fear in o ur
customers’ eyes, wondering how
th ey could stay safe,” said Blaine
Broussard, the company’s presi-
dent. “We don’t h ave a ton of people
coming in a t 6:30 a s it is, so we said,
why not set aside this time for the
people who need i t?”
On Tuesday, the first morning of
the new arrangement, Broussard
stood at the door and greeted cus-
tomers as they walked in. A couple
of times, he had to ask shoppers to
wait until others were done, but
overall the approach moved
smoothly. At its most crowded, the
18,000-square-foot store had 15
shoppers.
Imposing shopper limits at larg-
er stores, grocery managers say,
could prove more challenging. Re-
tailers like Dollar General and Stop
& Shop, a regional chain based in
Quincy, Mass., are starting to offer
hours for only those age 60 and up,
without limiting the actual number
of people who can be in stores.
Stores could soon move to even
more segmented schedules — with
specific blocks for families with
children, say, or those with weak-
ened immunity, in coming days,
said Brittain Ladd, a consultant to
Kroger and other retailers.
“This virus doesn’t treat every-
body the same, so grocery retailers
can’t e ither,” h e said.
The discussions on how to sepa-
rate shoppers are part of a broader
reckoning for supermarket opera-
tors being faced with unprecedent-
ed levels of demand and loominguncertainty, as entire cities and
states order residents to shelter in
place. Many are also worried about
labor shortages, as tasks increase
and workers fall Ill. Walmart and
Kroger — the nation’s two largest
grocers — are rapidly recruiting
store workers and truck drivers to
meet demand, while Amazon has
said it will hire 100,000 warehouse
and delivery workers. (Jeff Bezos,
the founder and chief executive of
Amazon, owns The Washington
Post.)
The shifts are also accelerating
grocers’ efforts to automate their
fulfillment centers and make on-
line ordering more efficient by in-
vesting in drones and autonomous
delivery vehicles, industry consul-
tants said. Online delivery has typi-
cally accounted for just 2 to 3 per-
cent of a grocer’s business, said
Ladd, “but if this thing keeps going
the way it is, we could be looking at
a situation where 50 to 60 percent
of g rocery retailers’ b usiness comes
from online.”
At G iant Food, demand f or deliv-
ery services — which include a new
“contactless option” — has tripled
in recent days, as customers look
for ways to limit exposure, interim
president Ira Kress said.
Retailers have often used their
stores t o fulfill o nline orders. But as
demand skyrockets — both in
stores and online — many are find-
ing there’s little inventory left for
delivery orders. Some have started
talking about quickly opening
“dark stores” — locations where in-
ventory is picked for online orders
but c losed to the public, L add s aid.
“Grocery retailers are saying,
‘How quickly can we open dark
stores and automate as much as
this as possible, before the virus
gets w orse?’ ” h e said. “This is unlike
anything the industry has ever
seen.”
[email protected]JUSTIN LANE/EPA-EFE/SHUTTERSTOCK
Shoppers wait to check out in a Brooklyn supermarket last week.
Some stores are offering hours only for the elderly.Call today to connect wi th aSENIOR LIVING ADVISORINDEPENDENT LIVING • ASSISTED LIVING • MEMORY CAREA Place for Mom has helped over a million families find senior livingsolutions that meet their unique needs. Our Advisors are trusted ,local experts who can help you understand your options.LOCAL KNOWLEDGE —Our Advisors have the local knowledge to
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