6 The EconomistApril 4th 2020
The world this week Business
After a few days of relative
calm, stockmarkets were once
again beset by volatile trading.
Manyglobal marketsrecorded
their worst quarter since the
start of the financial crisis in- Thes&p500 fell by 20%
over the three months; the Dow
Jones Industrial Average was
down by 23%. London’sftse
100 dropped by 25%, its worst
quarter since 1987. Commodity
prices also slumped. The price
ofBrent crude oilplunged by
55% in March, but rose this
week amid hopes that Saudi
Arabia and Russia might end
their price war.
We’re all in this together
The European Central Bank
told banks in the euro zone to
suspend dividend payments
so that they can increase their
lending capacity. After the
Bank of England mooted simi-
lar rules, big British banks did
the same. Non-financial com-
panies are under no such
obligation. Shell took out a
$12bn credit facility, which
should ensure it continues its
shareholder dividends.With investors flocking to the
haven of the dollar, the Federal
Reserve created a new facility
to help many foreign central
banks access the greenback
and stabilise the market.The British government
expanded its rescue package
for workers and companies to
include paying employers’
national-insurance and sta-
tutory pension contributions
up to a wage cap of £2,
($3,100) a month.India’scentral bank
announced a raft of measures
to help exporters and state
governments. This came after
it cut its benchmark interest
rate by three-quarters of a
percentage point, to 4.4%.More than 80 emerging-mar-
ket economieshave turned to
theimffor help in recent
weeks, according to the fund,
and more are likely to follow
suit. Its current estimate for
the finance needs of emerging
markets is $2.5trn.China’sofficial manufacturing
index rose sharply in March,
bouncing back from a record
low in February. The national
statistics agency said that more
than half of the businesses it
surveyed had resumed produc-
tion, though the situation was
still far from normal. Similar
indices for Japan, South Korea
and other Asian countries
pointed to sharp contractions
in their factory output.Australia tightened its rules
on foreign takeovers amid
concern that businesses strug-
gling because of covid-
restrictions, particularly in the
airline industry, could be
snapped up cheaply.New York’s attorney-general
reportedly asked Zoomto beef
up its security and privacy
procedures. Now that most
office workers are based at
home demand for the video-
conference app has soared. The
fbiwarned separately that it
had received many reports of
Zoombombing, where online
meetings are hijacked by trolls
to display pornographic or hate
images.Using civil-defence powers
enacted during the Korean war,
Donald Trump ordered General
Motors to start making hospi-
tal ventilators, and criticisedthe carmaker for being slow in
its response and wanting “top
dollar”. gmhad already begun
working on plans to produce
the life-saving machines.Under pressure from American
sanctions, Rosneft, a Russian
oil firm, sold its assets in
Venezuela to the Russian
government.More American retailers who
have had to close their stores
during the coronavirus out-
break forced their shop work-
ersto take a leave of absence.
Gap said it was “pausing” staff
pay but would continue to
offer benefits. Macy’s, which
was struggling before the
crisis, told its 125,000 employ-
ees that it would continue to
pay health insurance until at
least the end of May.OneWeb, a startup seeking to
provide cheap internet con-
nectivity through a network of
satellites, filed for bankruptcy
protection pending a sale of
the business. It blamed
covid-19, having reportedly
failed to secure a loan from
SoftBank, one of its investors.
Meanwhile, it emerged that
SoftBank has pulled out of a
deal to buy back $3bn-worth of
shares from investors in We-
Work, a startup that saw its
planned ipoimplode last year.Xeroxabandoned its $30bn
hostile takeover bid for hp
because of market uncertainty.How to spend itMarch was the best month on
record for British supermar-
kets, with sales rising by a fifth
compared with the same
month in 2019, according to
retail research. Sales of frozen
food were up by 84% (Iceland’s
revenue rose the most among
the big chains). With pubs
closed, alcohol sales jumped
by an intoxicating 67%. An
analysis of global search trends
over March showed a sharp rise
of interest in eco toilet paper,
bidets, weights equipment and
bulk ammunition.Covid online
Worldwide internet searches
% increase, Mar 2nd-Apr 1st 2020Source: GLIMPSE0 500 1,000 1,DIY haircutPulse oximeterResistance bandsOnline churchBread makerBidetCigarette deliveryTyvel suitBulk ammunitionAlcohol prep pads (wipes)Bulk flourDumbbellsRV toilet paper (eco-friendly)