Live updates: Wall Street falls despite Fed action to shore up economy

The coronavirus crisis is about to blow up a cascade of U.S. economic charts.

If the latest projections are even close to correct, the U.S. economy will see numbers so big and bad in coming months that we’ll be forced to stretch the vertical scale on charts to fit them. The highs and lows of the past decade, which seemed so critical at the time, will recede into relative flatness, dwarfed by the moves of 2020.

Here are nine charts that, taken together, show how we’re entering difficult territory.

Boeing announced a temporary suspension of production operations at its Puget Sound area facilities, where nearly 70,000 workers are employed, citing the need to protect employees from the growing threat of coronavirus.

The company said in a release it plans to begin reducing production activity Monday and that company sites across the Puget Sound area of Washington state will draw down production through Wednesday. The suspension will last 14 days and the company said it would “continue to monitor government guidance and actions on COVID-19 and its associated impacts on all company operations.”

“During this time, we will be conducting additional deep cleaning activities at impacted sites and establishing rigorous criteria for return to work,” Boeing’s release states.

“This necessary step protects our employees and the communities where they work and live,” said Boeing President and CEO Dave Calhoun.

“We continue to work closely with public health officials, and we’re in contact with our customers, suppliers and other stakeholders who are affected by this temporary suspension. We regret the difficulty this will cause them, as well as our employees, but it’s vital to maintain health and safety for all those who support our products and services, and to assist in the national effort to combat the spread of COVID-19,” Calhoun added.

The company said employees based in the region who can work from home will continue to do so. Other employees will receive paid leave “for the initial 10 working days of the suspension – double the company policy – which will provide coverage for the 14 calendar day suspension period,” Boeing’s release states.

“We will keep our employees, customers and supply chain top of mind as we continue to assess the evolving situation,” Calhoun said.

General Electric’s aviation wing will cut 10 percent of its domestic workforce in the coming months because of the novel coronavirus, becoming the latest in a string of companies — especially in the hard-hit aviation sector — announcing massive drawbacks in response to the economic downtown.

In a letter to employees Monday, G.E. Chairman and CEO H. Lawrence Culp Jr., announced that he and David Joyce, the company’s vice chairman and head of its aviation unit, will forgo their salaries for the rest of 2020. He also said the company had instituted a hiring freeze, canceled scheduled merit raises and will furlough half of the company’s maintenance, repair and engine overhaul workers for 90 days.

The layoffs, which will affect 2,600 hourly and salaried workers, and other moves will save the company $500 million to $1 billion, Culp wrote.

The race to beat the coronavirus is reaching into every corner of American business.

Baltimore-based Marlin Steel, which makes specialized metal containers for big names like General Electric, Pratt & Whitney and Rolls-Royce, got the call on Friday.

“We got a huge emergency order ‪at 6:15 Friday night for ‬test tube racks to test for Covid-19, racks we never made before,” said Drew Greenblatt, 53, president and majority owner of Marlin. The buyer is a giant health provider based in the Midwest. “We asked for volunteers who worked all week long to stay late and work Saturday and Sunday so we can ship ASAP to save lives,” he said.

“My team is amazing and we finished before 1:45 p.m. Sunday. We then put on truck after the plane was canceled to ship 1,100 miles to get to our client’s facility at 8 a.m. Monday.”

Privately held Marlin has 40 employees and roughly $6 million in revenue. It has been very busy and has all its employees going full-time, Greenblatt said. Its specialty containers are used on assembly lines at Pfizer, Ford Motor Co. and hundreds of other clients in 39 countries.

The Federal Reserve announced Monday an unlimited expansion of bond purchasing programs to backstop the U.S. economy, as millions of American households and businesses are getting crushed by the near total shutdown of daily life to fight the coronavirus.

The central bank is taking swift and unprecedented action to ensure businesses, individuals and local governments can get loans to tide them over until the economy bounces back. As part of these efforts, the Fed said Monday it would purchase Treasurys and mortgage-backed securities “in the amounts needed to support smooth market functioning” — effectively putting no limits on how many assets the Fed is willing to buy. This extraordinary move goes beyond the 2008-09 financial crisis playbook.

Economists have dubbed this the “do whatever it takes” moment for the Fed. Some analysts on Twitter compared it to when talk show host Oprah gave everyone in the audience a car.

Monday was shaping up to be a rainy day for global markets amid continuing fears about the novel coronavirus and its logjam on the economy. Then Prime Minister Shinzo Abe told Japan’s parliament that canceling the coming Summer Olympic was “not an option,” and that the Games would be postponed, if necessary.

If the International Olympic Committee’s decision makes it impossible to hold the Olympics in a “complete form” then it may be neces to postpone them, Abe said, according to the Nikkei Asian Review. That sent Tokyo’s Nikkei index soaring 2 percent.

European and Asian markets were otherwise red across the board, though they temporarily beat back some losses after the Federal Reserve announced new steps to shore up the U.S. economy. By midday, Britain’s FTSE 100 was tanking 3.5 percent and the benchmark Stoxx was down more than 3 percent.

Hong Kong’s Hang Seng shed more than 1,100 points, or nearly 4.9 percent. That was led by losses in the energy, IT and real estate sectors. The past 30 days, the index has plunged 4,000 points, or nearly 15 percent. But India’s BSE Sensex took the worst beating, tumbling more than 13.1 percent.

The late senator Paul Tsongas of Massachusetts used to remind fellow Democrats that you can’t be pro-jobs and pro-worker without being pro-business and pro-employer. It’s an admonition that Congress should keep in mind as it considers how to use public resources in the most effective and efficient manner to get the economy through a month or two of virtual shutdown.

When done right, pro-business subsidies can not only be pro worker, but can help avoid triggering the vicious economic cycle of unemployment, defaults, bankruptcies and business failures known as a recession.

The key to “doing it right” is forbearance.

Forbearance is giving businesses that have suddenly lost all or most of their sales a reprieve on paying their landlord and their lenders. Instead, the money owed now — over the next three months, let’s say — would be paid back once business has returned to normal.

So how could the government give lenders and landlords the incentive and the liquidity to offer widespread forbearance? The quickest and most efficient way is by offering them tax credits, sending them enough money to make them whole if they are willing to do the socially responsible thing.

The Justice Department this weekend brought its first fraud allegation tied to the coronavirus crisis, persuading a federal judge in Texas to issue a restraining order to block a website that claimed to be distributing vaccines.

In court documents, the department alleged the operator of the site, coronavirusmedicalkit.com, was facilitating a wire-fraud scheme, “intentionally making false statements” about the vaccines, which do not exist.

“The website falsely claims that the World Health Organization is giving away free vaccine kits and that individuals who visit the website can order such a kit by paying $4.95 for shipping,” the Justice Department wrote. The WHO is not offering such kits for covid-19, the agency said, nor is there a vaccine known to be effective against the disease caused by the coronavirus.

U.S. District Judge Robert Pitman granted the temporary restraining order against the site and the entity that registered it on Sunday.