Varney on coronavirus and small business: The little guy is getting clobbered
FOX Business’ Stuart Varney on how the coronavirus is impacting small businesses.
Governments and central banks are scrambling to find ways to keep businesses from going bankrupt as the virus outbreak grinds the world economy to a halt.
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A day after Wall Street endured its worst daily drop since the crash fo 1987, markets were somewhat more stable in European trading hours, though volatility is huge as investors try to understand what will happen to the economy as business and travel is put on lock down around the world.
Here is a look at how the outbreak is reshaping the global economy and how individuals, businesses and authorities are responding.
A woman walks through a lightly trafficked Times Square in New York, Monday. (AP Photo/Seth Wenig)
AID: France's government is pledging 45 billion euros ($50 billion) in aid for small businesses hurt by the spreading virus. That's in addition to tens of billions already promised for French workers forced to stop working because of store and restaurant closures and strict new confinement measures.
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French Finance Minister Bruno Le Maire announced the new aid will include tax breaks and a "solidarity fund" for struggling small businesses across the economy. "This epidemic will be a catastrophe for all countries of the world," he said. "The shock will be violent."
Sweden’s central bank will buy securities for up to an additional 300 billion kronor ($31 billion) and offer more loans to banks on favourable terms.
A person walks past a closed store in a empty street in Lausanne, Switzerland, March, Tuesday 17, 2020. (Jean-Christophe Bott/Keystone via AP)
The moves are part of a wave of efforts to help the economy. The Fed on Sunday made an emergency cut to its key interest rate. U.S. airlines are asking the government for grants, loans and tax relief that could easily top $50 billion. Other European governments have pledged tens of billions of euros (dollars) in aid and relief, as well as hundreds of billions in guaranteed loans.
INDUSTRY: Volkswagen said it will close most of its European plants for two weeks due to uncertainty about demand for cars and supplies of parts amid the virus outbreak.
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The German automaker had said it expects a 4% increase in sales this year but Chief Financial Officer Frank Witter said Tuesday that uncertainty about the severity and duration of the virus outbreak made it impossible to give a reliable prediction. Volkswagen last year made net profit of 14.02 billion euros, up 15% from 12.2 billion euros in 2018. The dpa news agency, citing employee representatives, said that the last shifts would run this Friday in most locations.
Plane maker Airbus said it will pause production at its French and Spanish sites for the next four days to implement tougher health and safety conditions such as cleaning and imposing greater distance between workers.
Security personnel wait for the few passengers at the baggage control area at Munich Airport, March 12. (Peter Kneffel/DPA via AP)
Qantas, Australia's largest airline, and Hong Kong's Cathay Pacific Airways both said they will cut international passenger capacity by 90%. Qantas's cuts will last until the end of May, Cathay Pacific's apply in April.
MARKETS: Global financial markets have bounced back after a brutal sell-off that gave the U.S. stock market its worst loss in more than three decades.
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Benchmarks in Paris, London, Hong Kong and Sydney logged solid gains on Tuesday while Tokyo's benchmark was flat.
Monday's 12% drop for the S&P 500 came as voices from Wall Street to the White House said the coronavirus may be dragging the economy into a recession. Huge swaths of many economies are coming close to a standstill as businesses and travel shut down. The Philippine stock market was closed as of Tuesday after the government imposed restrictions on movement in the capital.
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