General
EU unveils plan to borrow 750 billion euros to aid coronavirus recovery Silvia Amaro, CNBC
The European Commission has unveiled plans for a 750 billion euro ($826.5 billion) recovery fund as the region faces the worst economic crisis since the 1930s. The announcement came after France and Germany opened the door to issuing mutual EU debt last week, suggesting that the Commission, the EU’s executive arm, should raise 500 billion euros on the public markets.
Hoyer Says House and Senate Close on PPP Loan Extension Erik Wasson and Billy House, Bloomberg
House Majority Leader Steny Hoyer said the House and Senate should be able to quickly agree on changes to the Small Business Administration’s popular Paycheck Protection Program to give loan recipients more flexibility in using funds. The House is poised to pass a bill on Thursday that would extend the current eight-week period during which businesses must use funds to have loans forgiven to 24 weeks or Dec. 31, whichever comes sooner.
The Stock Market and Consumer Sentiment Are Telling Different Stories Paul Vigna, The Wall Street Journal
Stocks have rebounded dramatically off their March lows, while consumer sentiment is hovering near the lowest level in nearly a decade. The divergence is one of many realities investors are struggling to reconcile.
Should the Child Care Industry Get a Bailout? Claire Cain Miller, The New York Times
It has become agonizingly clear to parents of young children that the economy cannot fully reopen without child care. Yet a significant share of child care providers have not been able to survive the lockdown.
The Financial Catastrophe That Coronavirus Brought to Small Towns Lisa Song, ProPublica
Kevin Smith, the mayor of Helena-West Helena, Arkansas, feels abandoned by the federal government. On Easter Sunday, a storm hit his city of 10,000, one of the poorest in the state.
Here’s who would profit most from a $600 unemployment extension Greg Iacurci, CNBC
Certain jobs and industries are benefiting from enhanced unemployment pay more than others — and have the most to gain from an extension of benefits. Workers in lower-paying sectors of the economy, such as accommodation and food services, benefit more from the unemployment increase than those in finance and insurance that pay workers better.
How lawmaker ties helped shape Fed chairman’s COVID-19 response Sylvan Lane, The Hill
Federal Reserve Chairman Jerome Powell’s deep ties with lawmakers are paying off as the central bank deploys trillions of dollars in financial support for the economy with the blessing of Congress. With the coronavirus crisis, Powell has drawn from years of experience negotiating with lawmakers, nudging them toward his preferred policy outcomes while showing deference to their treasured oversight responsibilities.
Landlords Were Never Meant to Get Bailout Funding. Many Got It Anyway. Will Parker and Konrad Putzier, The Wall Street Journal
Real-estate companies are cashing in on the government’s emergency-spending program, despite rules meant to bar landlords and other property owners from the funds. Congress created the Paycheck Protection Program to help smaller companies keep workers on payroll during the coronavirus pandemic, but not so-called passive businesses that collect rent and businesses that profit primarily off of price speculation.
Stocks, U.S. Futures Extend Gains; Oil Slips: Markets Wrap Constantine Courcoulas, Bloomberg
European stocks and U.S. equity futures extended their advance as investors looked past fresh tensions between Washington and Beijing and focused on progress in relaxing lockdowns and reopening economies. Crude oil slipped.
Banking
Jamie Dimon says no immediate return of share buybacks Laura Noonan, Financial Times
JPMorgan chief says US banks will wait for evidence of recovery before resuming payments.
Bank of America Staff Will Return to Office in Phases With 30 Days’ Notice Lananh Nguyen, Bloomberg
Bank of America Corp. is making plans for employees to return to their offices in phases. The moves will vary by role, department and location, and workers will be notified at least 30 days before they’re scheduled to return, according to a memo seen by Bloomberg.
Bank of America, Citi, Chase, and Wells Fargo have shifted employees to deal with defaulted loans Rachel Green, Business Insider
The top four US banks by assets — Bank of America (BofA), JPMorgan Chase, Citi, and Wells Fargo — are reportedly restructuring employees’ roles so they can handle troubled or defaulted loans, per Business Insider. Employees are also being shifted to help process the rise in demand for new loans, with regulators encouraging lenders to move employees around.
Many Companies Ask Lenders to Give Them a Break Nina Trentmann, The Wall Street Journal
Finance chiefs are asking lenders to waive some financial requirements or give them additional flexibility in how they account for coronavirus-related expenses so their companies don’t violate loan terms. Many companies have suffered severe declines in revenue and earnings amid the coronavirus pandemic, hurting balance sheets and potentially resulting in violations of loan and debt agreements, or covenants.
Financial Products and Investments
Borrower, Beware: Credit-Card Fraud Attempts Rise During the Coronavirus Crisis AnnaMaria Andriotis and Orla McCaffrey, The Wall Street Journal
Fraudsters are increasingly using pilfered credit-card numbers and phishing attacks to prey on overwhelmed consumers and banks during the coronavirus pandemic. There has been a big jump in attempted credit- and debit-card fraud since coronavirus shut down the U.S. economy earlier this year, according to Fidelity National Information Services Inc., known as FIS, which assists about 3,200 U.S. banks with fraud monitoring.
Top-rated companies raise $1tn in 5 months to fill ‘war chests’ Anna Gross and Joe Rennison, Financial Times
Investment-grade borrowers take advantage of low yields to boost Covid-19 balance sheets.
Housing and GSEs
U.S. Home-Price Growth Accelerated in March Nicole Friedman, The Wall Street Journal
Home-price growth accelerated in March, even as home sales dropped after the coronavirus pandemic shut down economic activity in some regions. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 4.4% in the year that ended in March, up from a 4.2% annual rate the prior month.
Is the housing market already rebounding from COVID-19? Logan Mohtashami, HousingWire
Cabin fever is a real thing. And you don’t have to live in a cabin to get it.
Mortgage demand from homebuyers shows unexpectedly strong and quick recovery, as applications spike 9% from a year ago Diana Olick, CNBC
It’s not as if the coronavirus pandemic has gone away, but after a sharp pullback, homebuyers are now piling back into the housing market much faster than expected. Mortgage applications to purchase a home rose 9% last week from the previous week and from a year earlier, according to the Mortgage Bankers Association’s seasonally adjusted index.
Taxes
The IRS isn’t taking your calls now. But it’s happy to take your money. Michelle Singletary, The Washington Post
What a difference a year makes. This time last year, the IRS was processing federal returns with few problems — nearly 138 million by the third week in May.
Financial Technology
Facebook Renames Blockchain Division After Libra Confusion Kurt Wagner, Bloomberg
Facebook Inc. has renamed its blockchain division, called Calibra, to distance it from the Libra digital currency that Facebook created. The blockchain team is building a digital wallet for Facebook’s apps, which will eventually hold the Libra digital currency, but Facebook won’t control the coin.
Coronavirus accelerates shift away from cash Daniel Thomas and Nicholas Megaw, Financial Times
Pandemic encourages more businesses to move to contactless payments.
Opinions, Editorials and Perspectives
Get Ready for the ‘Careful’ Economy John H. Cochrane, The Wall Street Journal
Ready or not—mostly not—the reopening is at hand. The economic carnage of a continued lockdown is simply too great to sustain.
Research Reports
The COVID-19 Fiscal Multiplier: Lessons from the Great Recession Daniel J. Wilson, Federal Reserve Bank of San Francisco
The United States enacted a series of fiscal relief and stimulus bills in recent weeks, centered around the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The current fiscal response shares key similarities to the fiscal stimulus enacted during the Great Recession.
Can the World’s Poor Protect Themselves from the New Coronavirus? Caitlin S. Brown et al., The National Bureau of Economic Research
We propose an index of the adequacy of home environments for protection (HEP) from COVID-19, and we compare our index across developing countries using data for one million sampled households from the latest Demographic and Health Surveys. We find that prevailing WHO recommendations for protection posit unrealistic home environments. 90% of households have inadequate HEP by one or more dimensions considered.
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