In the U.S.:
- The Washington Post reported Senate Majority Leader McConnell (R-KY) released a coronavirus stimulus bill on Thursday, paving way for negotiations to begin on Friday. The bill will face some hurdles as some lawmakers have expressed reservations regarding the direct check payments to families and some of the corporate bailouts included in the bill.
- The Federal Reserve announced that it would drop interest rates to zero and buy at least $700 billion in government and mortgage-related bonds. The move is part of a growing emergency action to protect the economy from the impact of the coronavirus outbreak.
- Both California and New York issued stay at home orders to combat the coronavirus. The orders are meant to be in place till further notice and will require all dine-in restaurants, bars/clubs, gyms, and entertainment venues to close.
Simon Property Group (SPG) announced on Wednesday that, after extensive discussions with federal, state and local officials, it would close all of its retail properties, including Malls, Premium Outlets and Mills in the U.S. The closures are currently set to end on March 29.
- PBOC left the one-year LPR unchanged at 4.05% against expectations of a 5-10 bp cut. The move comes as the country reported no domestic transfers of the virus for two consecutive days.
- Nikkei reported that the ruling coalition and opposition parties met to discuss a potential record breaking stimulus package. The deal, which is slated for early April, would aim to help low-income families, secure equipment and disinfectant for hospitals, and expand testing.
The Scentre Group announced that all Westfield Centers in Australia would remain open. The centers include supermarkets, grocery stores, food markets and retail stores.
- Italy’s death toll rose higher than those reported by China this week. Italy’s Prime Minister Conte has called on the EU to release the European Stability Mechanism’s €500B fund via credit lines on top of the ECB stimulus announced earlier in the week.
- According to Der Spiegel, the German government is looking to set up an extensive rescue package for companies and banks impacted by the coronavirus outbreak. The fund, worth ~€500B, will save companies from bankruptcy by issuing guarantees for their liabilities or actually funding capital, which would amount to partial nationalization.
- The ECB announced a new Pandemic Emergency plan that would utilize 750B euros to purchase securities. The ECB stated that it would ensure that all sectors of the economy would benefit from the plan.
- The BoE announced another rate cut this week to an all time low of 0.1%. The central bank also added an additional $230B to its asset purchase program.
Pan-European shopping center operator Unibail-Rodamco-Westfield (URW) provided a couple of market updates this week regarding the impact of COVID-19. URW reinforced its primary focus in the current environment to take measures to protect the health and safety of its employees, tenants and visitors by carefully monitoring the latest guidelines issued by the World Health Organization (WHO), national, regional and local governments so that it can be adapting its operations accordingly. Many governments in a number of countries they operate have required all non-essential stores to close To that effect, URW announced that many of its shopping centers in countries such as Austria, France, Germany, Poland, Spain and the U.S. are substantially closed (supermarkets, food stores and pharmacies are typically allowed to open). URW’s Convention & Exhibition business in France has also been affected with the French government restricting any events of more than 100 people as of the time of URW’s update. URW also indicated that it remains unclear as to the duration of the above preventative measures and therefore the impact on URW’s earnings remains uncertain. URW also issued a separate press release confirming its liquidity position with €10.2 bn of cash on hand and undrawn credit lines.
The views expressed in this update are as of the date of this blog entry. These views and any portfolio holdings discussed in the update are subject to change at any time based on market or other conditions. The adviser disclaims any duty to update these views, which may not be relied upon as investment advice. In addition, references to specific companies’ securities should not be regarded as investment recommendations or indicative of the Adelante products, strategies, or portfolios.