Good news for U.S. bank shareholders: Some former U.S. regulators are of the opinion that the Federal Reserve should order the largest banks to suspend dividend payments to preserve capital as the gripping effects of the pandemic heighten.
However, as per the Wall Street Journal, U.S. banks will likely continue to give payouts to shareholders even though the pandemic is at its peak and threatens to weaken the power of lenders.
The great unwinding: Dozens of businesses have closed down and hundreds of people have lost their jobs due to the coronavirus pandemic. After WanderJaunt, a short-term home rental start-up in San Francisco faced multiple travel cancellations, the company laid off 56 of its 240 employees.
“This is the great unwinding,” said Martin Pichinson, head of Sherwood Partners, a Silicon Valley advisory firm. Read more here from the New York Times as to how startups and businesses are fast becoming a victim of the pandemic.
Big tech scores off the pandemic: The pandemic has wreaked havoc on global economies. However, with most services moving online as social distancing practices are observed, the tech industry is as busy as ever. Digital platforms like Alphabet and Facebook are expected to come out of this crisis stronger than before, reports The Economist.
A recession is coming: The global economy is expected to be hit by a recession as the Covid-19 outbreak continues to shutter businesses, reports Barron’s. According to experts, the effects of the oncoming recession are expected to be greater than those felt during the 2008 financial crisis, but will last for a shorter amount of time.
Morgan Stanley chief economist Chetan Ahya wrote that he, “expects the Covid-19 outbreak to peak in April and May and that global economic growth will trough in the second quarter of 2020 with a 5.2% year-over-year decline.”