With many people out of work during the coronavirus pandemic, large banks around the world are setting aside billions of dollars to brace for expected defaults. Unemployment and the shutting down of tens of thousands of small businesses are making it impossible for people around the globe to meet their normal loan payments. The longer the pandemic continues, the more loans there are that can be expected to stop producing revenue for the banks. Although the lockdowns around the globe are starting to be released, it will be a long road until businesses can operate as before.
Two banks, Citigroup and Bank of America have lost more than 40% of their profits in the first quarter. Goldman Sachs had lost more than 45% of its profit compared to the previous year. Larger losses are expected by the big banks in the next quarter.
The Gig Economy
Along with many other industries, the gig economy is also taking a hard hit during the pandemic. Companies such as Lyft and Uber are down considerably. Uber has tried to adopt some to the situation with UberEats, but it has to split possible profits with others already doing the same thing. Airbnb is also suffering from a lack of travelers and its profit is expected to be less than 50% of what it was last year. Other companies involved in the gig market are all expected to lose at least 30% profit.
The Meat Industry
The Justice Department has been asked by President Trump to investigate the possibility of price-fixing. There is concern that meat prices may have been fixed by the meatpackers. Attorneys in 11 states have asked for an investigation. Four of the largest beef producing companies control and produce about 80 percent of the beef in the U.S.
Researchers from Oregon and Florida have been working with a company called Limbitless Solutions to make a ventilator that does not require any electricity and has no electronic components. All of the parts are made by a 3-D printer and it only costs between $10 and $50 to make.
The device uses a very simplistic design and each ventilator can be made in about five hours. The design is awaiting approval from the FDA, but about 10 models have been sent to various hospitals for testing. Because ventilators are desperately needed around the world and they are in short supply, the president of the company wants to help hospitals around the world be able to print their own as needed.
A new illness has been spreading in NYC that may be related to coronavirus. 64 children have been hospitalized so far with symptoms that are similar to toxic shock syndrome and Kawasaki disease. They typically have inflamed blood vessels, fever, abdominal pain, and a rash. So far the new disease is a mystery but all of the children have also tested positive for COVID-19. The disease first started in Europe.
The Stock Market
While companies such as Disney are showing a severe loss of over a billion dollars of profit, some other companies continue to show a profit. Shopify has gained 6.91% and Beyond Meat gained 26.00% in shares. General Motors shares rose 3% and earnings were not as severe as estimated.
New Bailout Bill on the Way
The Democrats are looking to create another bill that would end up costing $1 trillion or more. It appears to be largely in the Democrats camp with Republicans not yet behind it. Money will be sought to be given to state and local government agencies, testing, contact tracing, rent and mortgage deferment, food stamps, the U.S. Post Office, possibly more money for individuals, and vote-by-mail. Money for front line workers is also expected to be in the bill.