The Wall Street Journal - 09.03.2020

** MONDAY, MARCH 9, 2020 ~ VOL. CCLXXV NO. 56 WSJ.com HHHH $4.

Last week:DJIA 25864.78À455.42 1.8% NASDAQ 8575.62À0.1% STOXX 600 366.80g2.4% 10-YR. TREASURY À4 2/32, yield 0.709% OIL $41.28 g$3.48 EURO $1.1286 YEN 105.

The novel coronavirus is lay-

ing bare a central problem for

the global manufacturing in-

dustry: China’s shadow has

grown so long that even indus-

tries that have shifted produc-

tion beyond the country can’t

wriggle free of its grip on sup-

ply networks.

A year and a half ago, a lin-

gerie manufacturer set up a

factory in eastern Bangladesh

as part of a push to move pro-

duction away from China due

to rising labor costs and higher

tariffs from the trade fight with

the U.S. At the plant, 16 experi-

enced Chinese supervisors usu-

ally oversee 500 Bangladeshi

workers attaching bra straps to

cups for brands such as Hanes-

brands Inc.’s Wonderbra.

Half the Chinese staff has

been quarantined back home

for weeks, slowing production.

Musical Hit: Heavy Metal Sounds

From Tiny Metal Boxes

iii

Guitar heroes rely on push-button

devices for waves of music and noise

Electric-guitar players strive

for a trademark sound. Jamie

Stillman has one that is patent

protected.

His patent, US 9,899,013 B1,

isn’t for the licks he’s played

over galloping drums in his

punk band, Party of Helicop-

ters. It is for the electrical engi-

neering recipe that sculpts his

guitar sounds and those of

players around the world.

Mr. Stillman, 43 years old,

and his wife, Julie Robbins,

own and operate EarthQuaker

Devices, one of the top-selling

brands of guitar-effects pedals,

the small metal boxes strung

between electric guitars and

amplifiers like the ones Jimi

Hendrix famously cranked for

Woodstock’s “The Star-Span-

gled Banner.”

Since the ’60s, guitar players

have used the sandwich- and

half-sandwich-size devices to

distort, sustain, reverberate or

create shimmering echoes with

a toe tap. Mr. Stillman never

made it big playing music. But

among musicians, he is a rock

Please turn to page A

BYRYANDEZEMBER

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CONTENTS

Business & Finance B2,

Business News... B3,

Crossword.............. A

Heard on Street..... B

Life & Arts...... A11-

Markets.................. B8,

Opinion.............. A15-

Outlook....................... A

Sports....................... A

Technology................ B

U.S. News............. A2-

Weather................... A

World News....... A9-

s2020 Dow Jones & Company, Inc.

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>

What’s

News

 The number of confirmed

coronavirus cases globally ex-

ceeded 105,000 as infections

spread to new parts of the

U.S., and Italy quarantined

some 17 million people in an

attempt to get a handle on

the epidemic. A1, A6-A

 Trump plans to skip an

annual St. Patrick’s Day

luncheon on Capitol Hill

this week, with the White

House citing tensions with

Pelosi in his decision. A

 Sanders is focusing on

Michigan to reinvigorate his

bid for the Democratic pres-

idential nomination. A

 Harris endorsed ex-ri-

val Biden for president. A

 U.S. Soccer and the

women’s national team

butted heads over pay as a

trial date in their legal

battle approaches. A

 Taiwan’s main opposi-

tion party is rethinking its

longstanding support for

closer ties with China. A

 The trial of four men in

connection with the shoot-

ing down of an airliner

over Ukraine in 2014 is set

to open in a Dutch court. A

 Saudi authorities began

releasing officials and royal

family members questioned

in a security clampdown. A

O

il prices plumbed

their lowest levels in

years after Aramco said it

plans to cut prices, a move

that escalates Saudi Ara-

bia’s clash with Russia. A

 China’s shadow in

global manufacturing has

grown so long that even

industries that have

shifted production beyond

the country can’t escape its

grip on supply networks. A

 Employers are imple-

menting contingency plans to

minimize disruption to busi-

nesses from the coronavirus

while protecting workers. A

 An old metal hook could

help determine whether PG&E

faces criminal charges for

starting the deadliest wild-

fire in California history. B

 Regulators are poised to

order wires relocated inside

Boeing’s 737 MAX, another

potential delay to the jet’s re-

turn to commercial service. B

 The emergence of the

coronavirus has thrown a

wrench into attempts to fore-

cast how the rest of the year

in markets will unfold. B1, B

 Tech firms are pushing

for laws that would restrict

the use of facial-recognition

systems as cities and states

weigh bans or curbs. A

Business&Finance

World-Wide

JOURNAL REPORT

Investing in Funds: 20

Years Later, Lessons

From the Dot-Com

Bust. R1-

The number of confirmed

coronavirus cases globally ex-

ceeded 105,000 on Sunday, as

infections spread to new parts

of the U.S. and Italy quaran-

tined some 17 million people

in an attempt to get a handle

on the epidemic.

Connecticut, Missouri,

Washington, D.C., and Ver-

mont disclosed their first

cases over the weekend. The

virus is now in well over half

of U.S. states, with about 540

cases and a total of 21 deaths,

according to data compiled by

Johns Hopkins University as of

Sunday afternoon.

The majority of deaths have

occurred in Washington state,

where the outbreak has cen-

tered at an elder-care facility

associated with 16 deaths.

coast of San Francisco for days.

Nearly 1,000 passengers

who are California residents

will complete the mandatory

quarantine at Travis Air Force

Base and Miramar Naval Air

Station, and residents of other

states will complete the man-

datory quarantine at Joint

Base San Antonio Lackland in

Texas or Dobbins Air Force

Base in Georgia, the Depart-

ment of Health and Human

Services said on Sunday.

Across the country, New

York state officials said the

number of people infected

with coronavirus rose to 105,

up from 89 on Saturday.

At least eight states have

declared states of emergen-

cies, granting governors addi-

tional powers to combat the

spread: New York, California,

Florida, Kentucky, Maryland,

Utah, Washington, and Oregon,

which declared it on Sunday.

“We have been expecting for

some time that a Connecticut

Please turn to page A

Thousands of passengers

aboard the Grand Princess

cruise ship are scheduled to

dock in the Port of Oakland in

California on Monday, amid an

outbreak on board. At least 21

people, including 19 crew mem-

bers, tested positive for the dis-

ease. The roughly 3,500 passen-

gers and crew remained off the

By Talal Ansari ,

Chun Han Wong

and Erin Ailworth

Global Effort to Contain Virus Widens

Well over half of U.S.

states have confirmed

cases; Italy quarantines

some 17 million people

Affluent Americans who marry are more

likely to pool six-figure incomes, buy homes

and watch their assets grow. Among people

ages 25 to 34, the median wealth of married

couples is four times that of couples who

live together but aren’t married, according

to research by the Federal Reserve Bank of

St. Louis. The divide reflects another facet of

the nation’s income gap.

More couples are deciding to live together

instead of marrying, and strained finances

are a top reason many cite. A survey last

year by the nonpartisan Pew Research Cen-

ter found that among those who live with a

Please turn to page A

Middle-class Americans are forsaking

marriage amid financial insecurity, effec-

tively making the institution more of a lux-

ury good enjoyed by prosperous Americans.

The middle three-fifths of U.S. earners

have experienced the sharpest declines in

marriage rates over the past four decades

compared with people at the bottom of the

income ladder and those at the top, accord-

ing to a Wall Street Journal analysis of cen-

sus data from 1980 to 2018, the most recent

available. These households earned from

$25,000 to $125,000 in 2018.

BYJANETADAMY ANDPAULOVERBERG

Shipments of bra cups and

straps are delayed, and the fac-

tory is stocking up on knitting

needles, anticipating short-

ages. They all depend on sup-

pliers in China.

“We’re already facing de-

lays,” said Ramiz Khalid-Islam,

the executive director of the

Onus Group, which co-owns the

factory with China-focused P.H.

Garment Manufacturing Co.

“It’s just going to keep getting

worse if China cannot deliver us

materials on time.”

Tech and consumer electron-

ics, industries nurtured in China

on huge state incentives, have

been hardest hit by the stalled

production lines, supply-chain

consultants say. Autos and

pharmaceuticals are more mod-

erately exposed, while older in-

dustries like apparel, where ca-

pacity already has begun to

leave China, have lower risk—

yet producers dependent on

Chinese materials and expertise

such as the Bangladesh lingerie

factory haven’t been spared.

A persistent epidemic would

compound price pressures and

weigh on corporate profit as

manufacturers refocus their re-

sources on searching for substi-

tutes in the supply chain.

China became the world’s

largest exporter in 2009. It ac-

counted for one-third of global

Please turn to page A

BYJONEMONT

ANDCHUIN-WEIYAP

Supply Crunch Ripples Past China

Oil prices plumbed their

lowest levels in years after

Saudi Arabia’s state oil giant

said it plans to cut prices, a

move that escalates the king-

dom’s clash with Russia and

threatens to unleash a torrent

of crude into well-supplied en-

ergy markets.

Oil fell sharply to fresh mul-

tiyear lows when futures trad-

ing opened Sunday evening in

New York, with U.S. crude fu-

tures sliding 31% to a $28.56 a

barrel. Brent crude, the global

gauge of prices, fell 29% to

$32.28 a barrel on the heels of

a big drop on Friday, which was

its worst day since the financial

crisis more than a decade ago.

Analysts cautioned that the

moves late Sunday were likely

to shift due to thin trading vol-

umes and notoriously volatile

crude prices. If they held, they

would mark some of the big-

gest one-day swings ever.

The Saudis’ move also ex-

tended the global stock-market

selloff early Monday overseas

and lifted prices of U.S. Trea-

surys and reduced the yield on

the benchmark Treasury note

to below 0.5%, its lowest level

Please turn to page A

BYBENOITFAUCON

ANDSUMMERSAID

Oil Sinks

As Saudis,

Russia

Clash

Marriage Is Becoming More

Like a Luxury Good in U.S.

Affluent Americans still say ‘I do.’ More in the middle class, amid

financial insecurity, are forsaking the institution and its benefits

Note: As of 9:30 p.m. Sunday

Source: FactSet

Brentcrude-oilfutures

$

30

40

50

60

abarrel

Jan. Feb. March

On Alert

 Businesses plan for

disruptions........................ A

 Holes emerge in Italy’s

lockdown............................ A

 U.S. blocks several

Princess cruise ships..... A

 Mixed technical signals

feed stock volatility....... B

 Saudis release royal

detainees...................................... A

In Bow to Epidemic Fears, Pope Delivers Virtual Prayer at the Vatican

AT A DISTANCE: Cautious over the spread of the coronavirus, Pope Francis led the weekly Sunday Angelus prayer with livestreaming

shown on a giant screen in St. Peter’s Square at the Vatican. The Italian government has asked people to avoid large gatherings.

RICCARDO ANTIMIANI/SHUTTERSTOCK