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Boom to Bust
U.S. oil futures closed at their lowest level in 21 years Tuesday and prices remained under pressure this morning. The chaos in the world’s busiest commodity market is weighing on economic prospects for large energy producers—from the U.S. to Saudi Arabia—and compounding worries about fallout from the coronavirus pandemic.
Tumbling oil prices will have broad regional impacts on the U.S. economy. Wyoming, Alaska, Oklahoma, North Dakota and West Virginia all depend more on mining and energy extraction than Texas, which was the engine of a national energy boom during the past decade. Ohio and Pennsylvania increased their exposures to energy as they jumped on the fracking revolution. Pain in the oil and gas industry will likely ripple through those state economies. People who lose jobs in energy will spend less, with spillovers on housing markets, service industries and state coffers. The blow from plunging oil prices might outlast the pandemic shock, Kim Mackrael, Katherine Blunt and Dan Frosch report.
WHAT TO WATCH TODAY
The European Commission’s preliminary consumer confidence indexes for April are out at 10 a.m. ET.
Japan’s Nikkei manufacturing and services indexes for the first part of April are out at 8:30 p.m. ET.
Note: This is a partial listing of events and subject to change.
TOP STORIES
Single Market
Covid-19 is raising questions about the viability of a European economic system built on borderless migration and a single marketplace. Nowhere is that more apparent than in the sudden reordering of the EU’s agricultural industry. France, for example, has deployed thousands of locally recruited workers to the country’s fields. Normally, workers from poorer parts of the European Union, particularly Central and Eastern Europe, would take many of these jobs. Each spring they hopscotch the continent on buses, moving from farm to farm to plant and pick crops. Now, with many borders closed because of the coronavirus pandemic, many in Western Europe are rethinking the dependence on distant pools of labor—and are trying to spur an interest in farm work among people closer to home, Nick Kostov, Stacy Meichtry and Bojan Pancevski report.
Trump Suspends Immigration
President Trump said his administration would temporarily bar new immigrants for 60 days under a new executive order. Mr. Trump said the suspension is designed to reduce immigration at a time when tens of millions of Americans have lost jobs, Michelle Hackman and Rebecca Ballhaus report.
Congressional leaders struck a deal with the White House Tuesday to send fresh aid to small businesses and hospitals. The Senate passed the $484 billion bill by a voice vote, sending it to the House for an approval expected Thursday, Kristina Peterson and Andrew Duehren report.
Here’s a guide to what is in the new coronavirus stimulus bill.
Economic Anxiety
About one-fourth of Americans think it’s at least fairly likely they’ll lose their job in the next year. That’s a record high and a stark reversal from last April’s record-low 8%, according to a new Gallup poll. About 41% of those surveyed said they would experience financial hardship after a month of unemployment. Only 12% could go more than a year.
Scheduled Departure
U.S. governors are pursuing different routes to restart local economies hit by the coronavirus pandemic, with several Southern leaders moving to reopen businesses while others voice concern about taking such steps without more robust testing capacity. Public-health experts have asked state leaders to heed reopening guidelines including a decline in infection rates for at least 14 days, a strong testing regime and adequate health-care capacity, Jennifer Calfas, Arian Campo-Flores and Ruth Bender report.
In Georgia, gyms, bowling alleys, barbers and other nonessential businesses were preparing to open as early as Friday. Some retailers in South Carolina were already open, and affected businesses in most Tennessee counties will be able to open their doors on May 1.
Businesses in different parts of New York state will reopen on separate schedules, Gov. Andrew Cuomo said Tuesday, as a growing number of upstate elected officials and employers made the case for a regional approach to easing restrictions.
What do we know about coronavirus tests, treatment and vaccines? Read the WSJ’s guide here.
No Sale
Americans pulled back from purchases of previously owned homes last month as the coronavirus pandemic shut down much of the U.S. economy. Existing-home sales decreased 8.5% in March from the prior month, the biggest such decline since November 2015, Harriet Torry and Nicole Friedman report. The numbers will likely get worse: “The next few months are going to be bad. … We look for existing-home sales to fall 54% (not annualized) in the second quarter,” said Moody’s Analytics economist Ryan Sweet.
Clothing retailers are sitting on tens of billions of dollars of unsold merchandise, and the usual methods for clearing it out aren’t working. Retailers are discounting heavily on their websites, but consumers aren’t rushing to buy spring clothes. Off-price chains like T.J. Maxx that would normally snap up the excess are also closed. Liquidators, often a last resort, are already saddled with goods from bankrupt retailers that have halted their going-out-of-business sales, Suzanne Kapner reports.
Anyone Else Watch ‘Tiger King?’
Netflix ended the first quarter with nearly 16 million new subscribers as people around the globe hunkered down at home. With the pandemic leading to the shutdown of movie theaters, professional sports leagues, concerts and other events, streaming services such as Netflix have emerged as one of the rare video-entertainment options still available, Joe Flint and Micah Maidenberg report.
WHAT ELSE WE’RE READING
Former Bank of England Gov. Mervyn King says governments need to weigh damage to mental health, increased suicides and job losses, and patients going untreated in hospitals against additional deaths from Covid-19. “They need to be honest, they have to balance the right strategy to prevent the infection reaching higher levels against damage done not just to income levels and ability to finance healthcare in the future but also wellbeing, especially for generations whose income has been disrupted,” he said in an interview with The Australian’s Adam Creighton. “The only easy exit route is a vaccine and that’s so far away that we cannot afford to keep disrupting people’s lives.’’
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