The daily business briefing: March 20, 2020

1. At least 2 GOP senators dumped stocks after coronavirus briefings

Senate Intelligence Committee Chair Richard Burr (R-N.C.) sold up to $1.56 million in stocks in February after receiving a briefing on the expected severity of the coronavirus outbreak. During that period, Burr was assuring the public that the Trump administration had everything under control, although a secret recording emerged in which he warned well-connected constituents to prepare for a dire economic situation. Burr called an NPR report on the matter a "tabloid-style hit piece," and a spokesman said the senator fully disclosed the trades. Sen. Kelly Loeffler (R-Ga.) also sold stock before the market crashed as the outbreak began spreading rapidly in the U.S. She bought $100,000 to $250,000 worth of shares in Citrix, a technology company that provides teleworking software.

NPR The Daily Beast

2. Economists' estimate of recession risk rises sharply

Economic damage caused by the coronavirus crisis has resulted in a median 80 percent estimated chance that the U.S. will see a recession in the next 12 months, according to analysts polled by Reuters. A survey two weeks ago predicted a 30 percent chance. Economists mostly believe that the hit from the pandemic will be temporary but severe enough to end the longest U.S. expansion ever recorded. The Federal Reserve has made two emergency interest rate cuts, dropping rates to near zero, and resumed asset purchases to boost the economy. Economists expect a slight rebound later in the year. Michelle Meyer, U.S. economist at BofA Merrill Lynch, said she expected gross domestic product to contract by 12 percent in the second quarter, then return to growth in the third.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Reuters

3. Stock futures rise as volatility continues

U.S. stock futures surged early Friday after closing higher on Thursday. At 5:30 a.m., futures for the Dow Jones Industrial Average were up by 4.6 percent. Those of the S&P 500 and the Nasdaq were 4.4 percent and 4.9 percent higher, respectively. Thursday's gains of nearly 1 percent for the Dow and 0.5 percent for the S&P 500 were relatively muted, coming after much larger swings in recent days as the coronavirus pandemic brought many businesses to a halt and ended Wall Street's longest bull market on record. Despite the gains, the Dow remained down 13.4 percent on the week as economists warned the unemployment rate could rise more due to the pandemic than it did in the last recession. "This is a body blow to the economy unlike anything we've experienced in recent memory," said Patrick Anderson, an economist in East Lansing, Michigan.

CNBC The New York Times

4. Senate Republicans unveil relief bill seeking checks for U.S. adults

Senate Majority Leader Mitch McConnell (R-Ky.) on Thursday introduced an emergency economic stimulus bill to counter economic damage from the coronavirus crisis. The legislation calls for sending $1,200 checks to most adults, along with $500 for every child, with the amounts decreasing for those making more than $75,000. The plan also includes loans for small businesses. Democrats say the plan doesn't go far enough to help individuals, and they want to bar corporations receiving bailouts from buying back their own stock. Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow are expected to meet with lawmakers from both parties on Friday to discuss a bipartisan deal.

The Washington Post Reuters

5. Stores add special hours for elderly shoppers to lower coronavirus infection risk

Target, Whole Foods, Walmart, Dollar General, and other grocery store chains have started offering shopping times reserved for senior citizens in order to reduce their risk of coronavirus infection. The death rate from COVID-19 is highest for elderly patients. Some older shoppers reported that the exclusive hours worked well in small shops but can backfire in larger stores. Roger Glenn Miller, 82, said he went to a Stop & Shop grocery store in Rhode Island on Thursday and found himself in a crowd of 200 seniors. "If you didn't have coronavirus before you got there, you probably do now," he said.

The Associated Press