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Putin Says Russia Is Willing to Join Oil Production Cuts: Live Updates Putin Says Russia Is Willing to Join Oil Production Cuts: Live Updates
(about 1 hour later)
The United States should join with Russia and the Organization of the Petroleum Exporting Countries in cutting crude oil production to help prop up global oil prices, President Vladimir V. Putin of Russia said Friday, in a suggestion that would turn upside down decades of American oil policy.The United States should join with Russia and the Organization of the Petroleum Exporting Countries in cutting crude oil production to help prop up global oil prices, President Vladimir V. Putin of Russia said Friday, in a suggestion that would turn upside down decades of American oil policy.
Mr. Putin, speaking in a video conference with directors of Russian oil companies from his country residence, where he has been in seclusion because of the coronavirus outbreak, said Russia was willing to help stabilize the market by joining other countries in a cutting 10 million barrels of oil in output.Mr. Putin, speaking in a video conference with directors of Russian oil companies from his country residence, where he has been in seclusion because of the coronavirus outbreak, said Russia was willing to help stabilize the market by joining other countries in a cutting 10 million barrels of oil in output.
“I think we need to unite forces to balance the market and limit, with these coordinated actions, oil production,” he said.“I think we need to unite forces to balance the market and limit, with these coordinated actions, oil production,” he said.
The United States has cheered OPEC, the global oil cartel, when it increases output to lower prices, but as the world’s largest consumer of crude oil, it has never pursued policies to raise prices.The United States has cheered OPEC, the global oil cartel, when it increases output to lower prices, but as the world’s largest consumer of crude oil, it has never pursued policies to raise prices.
Mr. Putin noted that he had talked on the phone with President Trump about oil markets but did not say specifically whether they had discussed or agreed on an arrangement where the United States would join a production cut with OPEC and Russia.Mr. Putin noted that he had talked on the phone with President Trump about oil markets but did not say specifically whether they had discussed or agreed on an arrangement where the United States would join a production cut with OPEC and Russia.
Aleksandr Novak, Russia’s energy minister, said on the video conference that Russia would join a conference call of OPEC and other oil-producing nations on Monday. He did not specify a role for the United States in production cuts but said they would be coordinated with “partners” in the oil market.Aleksandr Novak, Russia’s energy minister, said on the video conference that Russia would join a conference call of OPEC and other oil-producing nations on Monday. He did not specify a role for the United States in production cuts but said they would be coordinated with “partners” in the oil market.
Mr. Trump has been leaning on Saudi Arabia and Russia to end the damaging price war that the Saudis started after Russia declined to agree to new production trims at a meeting in Vienna in early March.Mr. Trump has been leaning on Saudi Arabia and Russia to end the damaging price war that the Saudis started after Russia declined to agree to new production trims at a meeting in Vienna in early March.
The jousting between the two major producers has accelerated the collapse of oil prices, which fell about 55 percent in March.The jousting between the two major producers has accelerated the collapse of oil prices, which fell about 55 percent in March.
Wall Street ended a volatile week with a drop, as investors braced themselves for more bad news on the coronavirus pandemic and considered fresh data showing the economic damage that it has already caused.Wall Street ended a volatile week with a drop, as investors braced themselves for more bad news on the coronavirus pandemic and considered fresh data showing the economic damage that it has already caused.
The S&P 500 fell about 1.5 percent on Friday. Selling at the end of the week has become something of a routine on Wall Street lately, with analysts saying that it reflects caution over what news the weekend might bring. Since the stock market peaked in February, shares have fallen on every Friday, bar one.The S&P 500 fell about 1.5 percent on Friday. Selling at the end of the week has become something of a routine on Wall Street lately, with analysts saying that it reflects caution over what news the weekend might bring. Since the stock market peaked in February, shares have fallen on every Friday, bar one.
The exception was March 13, when President Trump held a late afternoon news conference in which he promised that a number of businesses, from Google to Walmart, would support the efforts to contain the coronavirus.The exception was March 13, when President Trump held a late afternoon news conference in which he promised that a number of businesses, from Google to Walmart, would support the efforts to contain the coronavirus.
On Friday, investors were presented with more painful — if no longer surprising — economic data. The monthly employment report from the Labor Department that showed the nearly decade-long run of job growth had ground a halt in March. And a new reading of economic activity in Europe for last month registered its biggest ever drop.On Friday, investors were presented with more painful — if no longer surprising — economic data. The monthly employment report from the Labor Department that showed the nearly decade-long run of job growth had ground a halt in March. And a new reading of economic activity in Europe for last month registered its biggest ever drop.
Oil remained a bright spot, with crude futures continuing a rally that began on Thursday on hopes that the world’s major oil producers might cut supply.Oil remained a bright spot, with crude futures continuing a rally that began on Thursday on hopes that the world’s major oil producers might cut supply.
Small businesses flooded lenders with emergency loan applications on Friday morning as the spigot opened on $350 billion in relief money. A Friday night tradition — crisis-driven bank failures — may be returning to the United States.
Treasury Secretary Steven Mnuchin said that community banks had processed 700 loans for $2.5 million before 9 a.m. By the afternoon, Treasury said $1.8 billion for more than 5,200 loans had been processed so far by community banks. The Federal Deposit Insurance Corporation on Friday took control of the First State Bank, based in Barboursville, W.Va. The agency sold the bank’s deposits and most of its assets to a neighbor in the same state, MVB Bank of Fairmount.
First State Bank’s president was the great-grandson of its founder. As of late Friday afternoon, its website still displayed a video that narrated its 115-year history. But its $140 million in deposits were no longer its own.
“The First State Bank has experienced longstanding capital and asset quality issues, operating with financial difficulties since 2015,” the F.D.I.C. said in a news release on Friday.
As economic activity continues to plunge and millions of borrowers struggle to make payments on mortgages and other loans, more lenders are likely to fall.
And there’s a reason the failures become known on Friday nights. When a bank fails, employees from the F.D.I.C. essentially rush the building at closing time, take control of its systems to prevent any illicit money transfers by employees, and begin a preplanned ownership transition that is meant to ensure the bank’s customers never experience an interruption in service.
In January 2008, small banks began to succumb to what was eventually called the Great Recession, and by the following year, there was at least one failure — but often several — every Friday night for months.
Small businesses flooded lenders with emergency loan applications as the spigot opened on $350 billion in relief money.
Treasury Secretary Steven Mnuchin said that banks had processed 10,000 loans for $3.2 billion . By the afternoon, Treasury said $1.8 billion for more than 5,200 loans had been processed so far by community banks.
A senior Treasury official said that Mr. Mnuchin has been receiving continuous updates from counterparts at the Small Business Administration throughout the morning. The community banks were ready to go first thing, then Bank of America went live at 9 a.m. Other larger banks have been lagging in their readiness, the official said.A senior Treasury official said that Mr. Mnuchin has been receiving continuous updates from counterparts at the Small Business Administration throughout the morning. The community banks were ready to go first thing, then Bank of America went live at 9 a.m. Other larger banks have been lagging in their readiness, the official said.
The program is the centerpiece of the Trump administration’s economic stabilization effort and comes as government figures showed that 701,000 jobs were lost last month.The program is the centerpiece of the Trump administration’s economic stabilization effort and comes as government figures showed that 701,000 jobs were lost last month.
Lenders and borrowers have been bracing for a chaotic start to the program, which was assembled by the Small Business Administration and the Treasury Department in just a week. There has been mass confusion about the terms of the loans and the application form that borrowers are supposed to use.Lenders and borrowers have been bracing for a chaotic start to the program, which was assembled by the Small Business Administration and the Treasury Department in just a week. There has been mass confusion about the terms of the loans and the application form that borrowers are supposed to use.
The Treasury Department changed the terms of the loans, increasing the interest rates that banks get to 1 percent from 0.5 percent, on Thursday evening. Mr. Mnuchin posted the final version of the form on Twitter at 10:43 p.m. on Thursday. Mr. Mnuchin posted the final version of the form on Twitter at 10:43 p.m. on Thursday.
“I expect it to be a train wreck,” Brock Blake, chief executive of the small business lending marketplace Lendio, said of the first day of the program.
The Labor Department on Friday reported the first monthly job loss in almost a decade, reflecting the virtual economic standstill wrought by the coronavirus outbreak.The Labor Department on Friday reported the first monthly job loss in almost a decade, reflecting the virtual economic standstill wrought by the coronavirus outbreak.
It was an abrupt end to a landmark stretch of job creation — 113 months in a row, more than twice the previous record.It was an abrupt end to a landmark stretch of job creation — 113 months in a row, more than twice the previous record.
Compared with the numbers of people recently applying for unemployment benefits — nearly 10 million in the previous two weeks — the figure announced Friday was modest: a loss of 701,000 jobs. But the data was mostly collected in the first half of the month, before stay-at-home orders began to cover much of the nation.Compared with the numbers of people recently applying for unemployment benefits — nearly 10 million in the previous two weeks — the figure announced Friday was modest: a loss of 701,000 jobs. But the data was mostly collected in the first half of the month, before stay-at-home orders began to cover much of the nation.
“This is nothing compared to what we’re going to see,” said Stephanie Pomboy, president of MacroMavens, an independent research firm. Indeed, the March unemployment rate of 4.4 percent may be replaced by double digits as soon as next month. But it was the largest monthly increase in the rate, by 0.9 percentage points, since January 1975.“This is nothing compared to what we’re going to see,” said Stephanie Pomboy, president of MacroMavens, an independent research firm. Indeed, the March unemployment rate of 4.4 percent may be replaced by double digits as soon as next month. But it was the largest monthly increase in the rate, by 0.9 percentage points, since January 1975.
The Congressional Budget Office said on Thursday that it expected unemployment to top 10 percent for the second quarter of 2020 — as high as the peak in the last recession — and to remain at 9 percent at the end of 2021.The Congressional Budget Office said on Thursday that it expected unemployment to top 10 percent for the second quarter of 2020 — as high as the peak in the last recession — and to remain at 9 percent at the end of 2021.
The manufacturing giant 3M said Friday that it had been “working closely” with the White House to shore up its supply of face masks to the United States after President Trump took aim at the company on Twitter.The manufacturing giant 3M said Friday that it had been “working closely” with the White House to shore up its supply of face masks to the United States after President Trump took aim at the company on Twitter.
“The administration requested that 3M increase the amount of respirators we currently import from overseas operations into the U.S.,” the company said in a statement. “We appreciate the assistance of the administration to do exactly that.” For example, the company said, it had received approval from China to export 10 million N95 masks to the United States earlier in the week.“The administration requested that 3M increase the amount of respirators we currently import from overseas operations into the U.S.,” the company said in a statement. “We appreciate the assistance of the administration to do exactly that.” For example, the company said, it had received approval from China to export 10 million N95 masks to the United States earlier in the week.
But 3M also said that the White House had asked it to stop exporting respirators that are manufactured domestically. Such a request, the company said, would put health care workers in Canada and Latin America at risk, and could cause other countries to retaliate by cutting off important supplies of protective equipment to the United States.But 3M also said that the White House had asked it to stop exporting respirators that are manufactured domestically. Such a request, the company said, would put health care workers in Canada and Latin America at risk, and could cause other countries to retaliate by cutting off important supplies of protective equipment to the United States.
The response from 3M, one of the world’s largest suppliers of masks, comes after Mr. Trump criticized the company in a late-night tweet on Thursday.The response from 3M, one of the world’s largest suppliers of masks, comes after Mr. Trump criticized the company in a late-night tweet on Thursday.
“We hit 3M hard today after seeing what they were doing with their Masks. ‘P Act’ all the way.’ Big surprise to many in government as to what they were doing - will have a big price to pay!” the president tweeted. Hedge funds and private equity firms are pursuing ways to profit off the current crisis much as they did during the 2008 financial meltdown, as the recent misfortune of American businesses creates new moneymaking opportunities for big investors that have been relatively unscathed by the pandemic.
Earlier in the day, at a White House press briefing, Mr. Trump had announced he was invoking the Defense Production Act, a 1950s-era law, to spur companies to increase their production of masks. With hundreds of billions of dollars sitting in reserve, these firms are plotting strategies to extend high-interest loans to companies, especially smaller, already troubled ones that banks have largely shunned over the past decade. Private equity firms, in particular, are also exploring buying minority stakes in public companies, which would provide them with an immediate cash infusion.
Sales at big box stores like Walmart, Target and Costco have been booming, as shoppers stock up on food. But for companies exploring these so-called alternative lending options, the relief may come at a high cost.
At the same time, these retailers, which have been deemed essential businesses by state and federal governments, are also able to sell nonessential items like toys, video games and beach towels. “The problem for companies today is everybody has less money, and the cost of capital has just gone up a lot,” said Marc Lasry, co-founder of Avenue Capital Group, a $14 billion investment firm that specializes in distressed assets and loans to medium-size businesses.
That’s changing in Vermont. This week, state officials ordered all big-box retailers to block off aisles or sections of their stores selling nonessential goods, or to remove those items to the shelves. The retailers must limit their sales to items like food, fuel and pharmaceutical supplies.
The purpose of the directive by the Vermont Agency of Commerce and Community Development is to limit the number of people coming into the stores. But the measure, particularly if other states follow suit, could put a significant dent in the retailers’ bottom line.
Food sales have been booming by more than 30 percent during the pandemic, but grocery items have lower profit margins than nonessential goods like electronics and clothing. And big-box retailers are incurring additional expenses by giving raises to store employees and providing protective gear, so the surge in sales may not translate into big profits.
Companies that spent big on advertising before the pandemic have hit the brakes.Companies that spent big on advertising before the pandemic have hit the brakes.
Facebook has described its advertising business as “weakening.” Amazon has reduced its Google Shopping ads. Coca-Cola, Kohl’s and Zillow Group have stopped or limited their marketing. Marriott’s advertising, in the words of the company’s chief executive, has “gone dark.”Facebook has described its advertising business as “weakening.” Amazon has reduced its Google Shopping ads. Coca-Cola, Kohl’s and Zillow Group have stopped or limited their marketing. Marriott’s advertising, in the words of the company’s chief executive, has “gone dark.”
“A lot of advertisers are just pulling back — the tide’s going out,” said Garrett Johnson, an assistant marketing professor at Boston University’s Questrom School of Business.“A lot of advertisers are just pulling back — the tide’s going out,” said Garrett Johnson, an assistant marketing professor at Boston University’s Questrom School of Business.
Ads became an unavoidable part of modern life for a simple reason: They work. Each dollar that companies spent on advertising in the United States last year led to $9 in sales, the research firm IHS Markit estimated.Ads became an unavoidable part of modern life for a simple reason: They work. Each dollar that companies spent on advertising in the United States last year led to $9 in sales, the research firm IHS Markit estimated.
The ad industry employs about 500,000 people in the United States. Companies that regularly buy ads are the lifeblood of TV networks, podcast companies, news outlets, lifestyle publications and pretty much all of the internet — and when they spend less on marketing, there is a ripple effect.The ad industry employs about 500,000 people in the United States. Companies that regularly buy ads are the lifeblood of TV networks, podcast companies, news outlets, lifestyle publications and pretty much all of the internet — and when they spend less on marketing, there is a ripple effect.
During the Great Recession, more than $60.5 billion in global ad spending evaporated, according to the WARC research group. It took eight years for the industry to fully recover.During the Great Recession, more than $60.5 billion in global ad spending evaporated, according to the WARC research group. It took eight years for the industry to fully recover.
Industry observers say the new crisis may be worse.Industry observers say the new crisis may be worse.
“It was a seismic shock, possibly the biggest we have faced, ever,” said Harris Diamond, the chief executive of the advertising company McCann Worldgroup.“It was a seismic shock, possibly the biggest we have faced, ever,” said Harris Diamond, the chief executive of the advertising company McCann Worldgroup.
The Federal Reserve Bank of New York has retained Pacific Investment Management Company, known as PIMCO, to run a program meant to calm the market for short-term business debt. Walmart announced new steps to encourage social distancing in its stores. Starting Saturday, the retailer will limit the number of customers who can be in a store at the same time, and next week, it will put into place a system of one-way movement through the aisles.
PIMCO managed a similar program during the 2008 financial crisis. The chief executive of Delta told employees on Friday that the airline expected revenue in the second quarter to be 90 percent lower than the same quarter last year, a downward revision from just two weeks ago when the company warned of an 80 percent decline. And the chief executive of JetBlue warned that April revenue was expected to be about 95 percent lower than last year. Both companies, along with United Airlines, said they had submitted applications for federal stimulus funds to pay employees through September.
The investment manager has been retained on a short-term basis for “its knowledge and experience in the commercial paper market and in credit risk management and its operational and technological capabilities,” according to the New York Fed. State Street Bank & Trust Company will act as custodian.
PIMCO has many connections at the central bank. Richard H. Clarida, the Fed vice chair, formerly worked at the company. Ben S. Bernanke, who was Fed chair during the Great Recession, is now a senior adviser.
The New York Fed is in charge of running several of the Fed’s emergency lending programs, which it has been unveiling since mid-March in a bid to calm troubled markets. It has previously announced that it will appoint BlackRock to set up other programs related to longer-term corporate debt.
The Treasury Department is also tapping Wall Street to help roll out its programs.
At a news conference on Thursday, Treasury Secretary Steven Mnuchin said he picked PJT Partners, Moelis and Perella Weinberg Partners to serve as outside advisers.
PJT will be focused on the airlines, Moelis will focus on cargo carriers and Perella Weinberg will concentrate on other companies, such as Boeing. Mr. Mnuchin said that the firms would be charging the rate they use for work for charities, and the contracts would be made public.
Grupo Modelo, the brewer behind Corona, Modelo and other beers, said in a statement on Thursday that it was suspending its beer production after the Mexican government ordered nonessential businesses to close in an attempt to stop the spread of the coronavirus.Grupo Modelo, the brewer behind Corona, Modelo and other beers, said in a statement on Thursday that it was suspending its beer production after the Mexican government ordered nonessential businesses to close in an attempt to stop the spread of the coronavirus.
Hobby Lobby, which had defied stay-at-home orders by opening some stores, said it would close the remainder of its stores at 8 p.m. on Friday. The retailer also said it would furlough most of its employees without pay.Hobby Lobby, which had defied stay-at-home orders by opening some stores, said it would close the remainder of its stores at 8 p.m. on Friday. The retailer also said it would furlough most of its employees without pay.
The sportswear giant Under Armour said Friday that it was laying off 6,700 employees that work in its retail stores as well as some in its distribution centers, beginning April 12. Employees who continue to work at the distribution center will receive bonuses. Under Armour had been struggling well before the coronavirus crisis.The sportswear giant Under Armour said Friday that it was laying off 6,700 employees that work in its retail stores as well as some in its distribution centers, beginning April 12. Employees who continue to work at the distribution center will receive bonuses. Under Armour had been struggling well before the coronavirus crisis.
Google said in a blog post early Friday that it was using the data it collects about where people go to help governments and public health officials evaluate the effectiveness of policies — like sheltering in place and working from home — that are intended to thin crowds in public places. It said it was publishing “mobility reports” for 131 countries based on aggregated and anonymized location data from Google Maps users to show recent changes in travel patterns.Google said in a blog post early Friday that it was using the data it collects about where people go to help governments and public health officials evaluate the effectiveness of policies — like sheltering in place and working from home — that are intended to thin crowds in public places. It said it was publishing “mobility reports” for 131 countries based on aggregated and anonymized location data from Google Maps users to show recent changes in travel patterns.
Reporting was contributed by Michael Corkery, Nelson D. Schwartz, Patricia Cohen, Alan Rappeport, Stanley Reed, Peter Eavis, Andrew E. Kramer, Rachel Abrams, Tiffany Hsu, Niraj Chokshi, David Gelles, Daisuke Wakabayashi, Keith Bradsher, Jim Tankersley, Julie Creswell, Mohammed Hadi, Carlos Tejada and Daniel Victor.Reporting was contributed by Michael Corkery, Nelson D. Schwartz, Patricia Cohen, Alan Rappeport, Stanley Reed, Peter Eavis, Andrew E. Kramer, Rachel Abrams, Tiffany Hsu, Niraj Chokshi, David Gelles, Daisuke Wakabayashi, Keith Bradsher, Jim Tankersley, Julie Creswell, Mohammed Hadi, Carlos Tejada and Daniel Victor.