Wednesday marks the first day of the second quarter amid the COVID-19 pandemic, what one market executive sees as a challenging time that may have been mitigated from actions by the Federal Reserve and the U.S. government.
With unprecedented figures such as the Federal Reserve Bank of St. Louis predicting unemployment to rise to 32 percent representing 47 million jobs lost, Tal Cohen, executive vice president and head of Nasdaq's North American Markets, told Cheddar Wednesday that the markets grasping how to function during the outbreak.
"Investors are beginning to understand the contours of this crisis and have been encouraged by the Fed and the government's actions that have lifted some of the uncertainty for the markets," Cohen said.
The Nasdaq saw heightened volatility in the options market beginning in the middle of February but it has come down a bit since then, according to Cohen. "We see less dislocation, less gapping in both equities and options over the last week," he said. "We closed down our floor on the options side, and we haven't seen a degradation of liquidity. And that speaks to our ability to run those markets fully electronically."
Last week, President Trump said he wanted to reopen the economy by Easter but on Tuesday night the White House revealed estimates of between 100,000 and 240,000 deaths in the next few weeks from COVID-19, compelling the administration to extend its social distancing guidelines. While Cohen said the markets will have to absorb unprecedented numbers like such a death toll or the unemployment figures, he expressed a belief that the federal government is capable of blunting the fallout.
"I think the markets will be tested in terms of their ability to process this information and make sense of this information. I think what's helped is what the Fed has done and the government has done, and I think it signals to the market they will do whatever is necessary," Cohen said.
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Spain's government has fined Airbnb 64 million euros or $75 million for advertising unlicensed tourist rentals. The consumer rights ministry announced the fine on Monday. The ministry stated that many listings lacked proper license numbers or included incorrect information. The move is part of Spain's ongoing efforts to regulate short-term rental companies amid a housing affordability crisis especially in popular urban areas. The ministry ordered Airbnb in May to remove around 65,000 listings for similar violations. The government's consumer rights minister emphasized the impact on families struggling with housing. Airbnb said it plans to challenge the fine in court.
Roomba maker iRobot has filed for Chapter 11 bankruptcy protection, but says that it doesn’t expect any disruptions to devices as the more than 30-year-old company is taken private under a restructuring process. iRobot said that it is being acquired by Picea through a court-supervised process. Picea is the company's primary contract manufacturer. The Bedford, Massachusetts-based anticipates completing the prepackaged chapter 11 process by February.
Serbia’s prosecutor for organized crime has charged a government minister and three others with abuse of position and falsifying of documents related to a luxury real estate project linked to U.S. President Donald Trump’s son-in-law Jared Kushner. The charges came on Monday. The investigation centers on a controversy over a a bombed-out military complex in central Belgrade that was a protected cultural heritage zone but that is facing redevelopment as a luxury compound by a company linked to Kushner. The $500 million proposal to build a high-rise hotel, offices and shops at the site has met fierce opposition from experts at home and abroad. Selakovic and others allegedly illegally lifted the protection status for the site by falsifying documentation.
