️ Unprecedented

MARKETS

• U.S. markets: Nothing makes sense anymore. On a day when an avalanche of weekly unemployment claims stunned the country, stocks staged their third straight rally. After surging more than 20% since Monday, the Dow is back in a bull market.
  Fed: You know you’re in an economic crisis when the chairman of the Federal Reserve is doing morning television. Appearing on the Today Show, Jerome Powell urged patience, saying “The first order of business will be to get the spread of the virus under control and then resume economic activity.”

JOBS

A Chart You'll Never Forget

Imagine the entire state of Utah filing for unemployment. Yesterday morning, the Labor Department reported something pretty darn close: almost 3.3 million Americans filed for unemployment last week, the department’s biggest spike on record.

Unemployment applications generally mirror the rate of layoffs. So when claims jump by 3 million in a week, it’s safe to say coronavirus is ravaging the U.S. economy.

Is this everyone?

Not even close. Gig workers, freelancers, and the self-employed aren’t eligible for unemployment yet. Nor do jobless claims account for the millions of workers who’ve had hours dramatically reduced or their pay cut.

The pace is unprecedented. In February, unemployment hit a half-century low of 3.5%. Last week’s filings are expected to push that to 5.5% and, if the pandemic and economy worsen, near 13%.

By the end of May, the U.S. could lose twice as many jobs as it did during the Great Recession. Globally, the UN predicts up to 25 million jobs lost.

Stimulus to the rescue?

Treasury Sec. Steve Mnuchin said yesterday’s unemployment numbers are “not relevant” since claims were filed before the Senate passed a $2.2 trillion stimulus package. He said businesses that receive stimulus benefits “hopefully will be able to hire back a lot of those people.”

Speaker of the House Nancy Pelosi pledged to pass the stimulus today. The bill would expand unemployment benefits including 13 additional weeks of benefits, extra weekly payments of up to $600 for four months, and benefits for individuals not on company payrolls, like gig economy workers.

• Those changes should allow the average worker to receive roughly 100% wage replacement, NPR reports.

A separate bill provides $1 billion to states to help process claims. Many unemployment agencies are working with historically low funding and staffing, and the influx of applications has crashed some systems.

Big picture: “As today's report shows, the coronavirus outbreak is economically akin to a major hurricane occurring in every state around the country for weeks on end," Glassdoor Senior Economist Daniel Zhao told CNN.

WORK

A CEO’s Coronavirus Diary

On Wednesday night, we got a colorful account of the early days of the coronavirus crisis for an exec in the eye of the hurricane. Slack CEO Stewart Butterfield posted a Twitter thread detailing his experience of the past few weeks. Some choice excerpts:

Monday, March 2—might as well be cautious: Slack cancels its annual Global Sales Offsite...and the CTO of a huge asset manager emails Butterfield they’re signing a contract to “go wall-to-wall” on Slack before “tightening up” overall due to the virus.

Wednesday, March 11—so this is serious: After 10pm on the eve of Slack’s third earnings call as a public company, Butterfield and other c-suiters decide to revise guidance as it becomes clear the U.S. outbreak isn’t going to subside.

Thursday, March 12—yes, very serious: Butterfield helms the call as the stock market imitates a mechanical bull. Butterfield describes waiting for the call to start as “completely surreal.”

Looking ahead...Butterfield is feeling conflicted.

SMALL BIZ

Businesses Hit by Coronavirus Go Fund Themselves

As the social distancing measures required to limit the spread of the coronavirus bulldoze the economy, many individuals and small businesses are turning to the crowdfunding site GoFundMe, the NYT reports.

• GoFundMe said it’s experiencing the most demand since it was founded 10 years ago.
• Between last Friday and Tuesday, coronavirus-related campaigns on the platform jumped 60% to 35,000.

Behind those efforts are artists, bartenders, and other workers whose jobs evaporated. But a higher-than-usual number of campaigns were started by business owners trying to stay afloat. The site had over 14,000 verified campaigns by small businesses as of Tuesday.

GoFundMe’s trying to help. It partnered with Yelp to embed campaigns on restaurants’ Yelp sites and match the first $500 small businesses raise.

Big picture: In non-pandemic times, 27% of all GoFundMe campaigns hit their goals, per research from the University of Rochester. But the need for support is growing rapidly. Struggling small firms will have to hone their marketing and promotional tactics in order to stand out.

RETAIL

The South Is Warning Us

If that devastating unemployment report wasn't enough to alarm economists, there's another indicator flashing red: the Waffle House Index.

What that is: The Waffle House Index (WFI) measures to what extent Waffle House locations remain open. It’s typically used to measure the severity of a natural disaster since the restaurant chain, revered in the American South, is incredibly resilient.

• In 2011, a tornado tore through Joplin, MO, killing 158 people and injuring over 1,000. The Waffle House remained open.

But now...the WHI is in the red, the company announced on Wednesday. Waffle House has closed more than a fifth of its locations in response to the crisis, and its sales are down 70% nationwide, per the WaPo.

Bottom line: This is the first time analysts have used the Waffle House Index to evaluate the damage of a non-weather-related event.

MARKETS

Get Well Soon, Peter

New York Stock Exchange trader Peter Tuchman, the beloved face of a thousand Dow plunges, said yesterday he tested positive for the coronavirus.

• "Good team of doctors good spiritual support I will see you on the other side crazy guys stay home you do not want to get this," he wrote on Twitter.

The NYSE trading floor has been completely empty since Monday, when the exchange went fully electronic.

Wishing you a speedy recovery, Peter.

WHAT ELSE IS BREWING

• Treasury Sec. Steve Mnuchin suggested the U.S. government would take equity stakes in airlines in exchange for grants, per the WSJ.
• The U.S. charged Venezuelan president Nicolás Maduro and other senior government officials with drug trafficking.
• The SEC halted trading for the tiny Zoom Technologies in part because people keep getting it confused with Zoom, the huge videoconferencing company.
• Epic Games, the creator of Fortnite, is getting into videogame publishing with its new Epic Games Publishing label.

FRIDAY PUZZLE

Pick the three letters that, when placed in the same order, complete the following words:

1. E _ _ _ P
2. _ _ _ C K
3. S _ _ _ S H
4. L I _ _ _ D
5. T E _ _ _ L A

Friday puzzle answer