Stock sectors with the heaviest amount of passive ownership—by index funds and sector-focused ETFs—fell even more than the broad market during the selloff this year, a study found.
Jun Zhu, a portfolio manager at Leuthold, analyzed data from the early weeks of the rapid market slide prompted by the pandemic.
香蕉视频苹果下载Stocks with the highest ownership levels by passive funds fell nearly 3 percentage points more than those most likely to be owned by active managers (40.4% versus 37.5%). Ms. Zhu studied the peak-to-trough period of Feb. 19 through to March 23.
“Stocks with high passive ownership in the sectors with the greatest selling pressure underperformed,” she wrote. Examples include financial stocks, real-estate holdings, the energy sector and consumer-discretionary stocks. The sole exception to the rule appeared to be health care, which lost “only” 30.3% during the meltdown period, compared with 60.7% for energy companies or 45.2% for the financial services sector.
- India’s postal workers have become unlikely front-line fighters against the ravages of the coronavirus, assisting consumers, companies and even the government. They are stepping up to deliver medicines, medical equipment and even food and cash to millions of homes—in part because they are the only ones allowed.
- Dozens of American students have chosen to remain on study-abroad programs during the pandemic, vexing both parents and college administrators who worry about their ability to help if the worst happens.
- More than four million Italians are getting ready to go back to work after eight weeks of lockdown. But with schools and day-care centers remaining closed until the fall, many parents are facing a dilemma: Who will look after the children?
- Florida seems to have dodged a potentially devastating wave of infections that could have imperiled its senior population, despite not following advice to impose measures such as an early lockdown. Was Florida smart or lucky? The answer may be a bit of both. Gov. Ron DeSantis restricted visitation to nursing homes but left early lockdown decisions to local authorities. Mayors in some hard-hit large communities shut down faster and more aggressively than the state, gaining valuable time.
- Long a symbol of free-spirited life, Southern California’s beaches have been transformed into ground zero in the fight over coronavirus lockdown rules in the state. Scenes across Orange County this weekend revealed both protests over the orders, and the challenge of keeping people away from the ocean.
- Millions of substandard masks are entering the U.S. supply chain. As a result, hospital workers and other front-line personnel—already at high risk of catching Covid-19—may be even more exposed than they think.
- With most people staying home because of coronavirus lockdowns, the nation’s roads and highways have emptied. Instead, they are being taken over by an assortment of speeders, students, skateboarders and birds.
香蕉视频苹果下载Entrepreneur Elon Musk has roiled social media and the international space community by railing against what he calls excessive social-distancing mandates even as the National Aeronautics and Space Administration, his major customer, resorts to extraordinary measures to protect astronauts against Covid-19 contagion.
香蕉视频苹果下载In a series of irate messages on Twitter, the chief of Space Exploration Technologies Corp. has equated strict mandatory state lockdowns with "de facto house arrest" and urged authorities to "give people back their freedom." Such sentiments conflict sharply with some of the painstaking precautions used by NASA, which is slated to fly two veteran astronauts into orbit on SpaceX hardware later this month, to protect that crew against transmission of the virus. Astronauts Doug Hurley and Bob Behnken are being carefully shielded from the pandemic: wearing face masks, avoiding most NASA employees and traveling to training sessions only on board the agency's own planes.
Long before the novel coronavirus spread, NASA routinely provided some brief quarantine protections for astronauts ahead of blastoff in order to protect crews already on board the international space station from infection. But now, agency officials said, the latest crew members routinely wear masks and gloves during launch-preparation meetings, as do NASA personnel. The agency is minimizing the size and frequency of such sessions and at some point before the historic mission, even family members will be off limits to the crew. Slated for May 27, the launch is intended to be the first time a U.S.-built rocket and capsule transporting Americans to the international orbiting laboratory since the retirement of NASA's space shuttle fleet in 2011. Since then, the agency has had to pay for rides on Russian rockets and capsules.
Despite Mr. Musk's tweets, SpaceX officials said company engineers and technicians also are wearing personal protection gear while limiting their contacts with the astronauts. Government and SpaceX officials are urging space aficionados to watch the liftoff from home instead of flocking to the Florida launch site. NASA chief Jim Bridenstine has emphasized his agency has temporarily closed many offices, is taking the pandemic very seriously and still worries that Covid-19 could derail preparations for the long-anticipated launch.
Corrections & Amplifications
香蕉视频苹果下载An earlier version of this blog post incorrectly gave the name of the National Aeronautics and Space Administration as the National Aeronautics Administration. (Corrected on May 3)
With fewer claims to pay out, some health insurers are using their improved balance sheets to help struggling providers secure loans, pay claims earlier and, in some cases, underwrite patients’ outstanding bills. And they have good reason to ensure providers survive the pandemic: “There is a risk that there is a smaller provider network after this,” said Brad Ellis, a senior director at Fitch Ratings. “So health insurers are trying to maintain the network.”
Here's what a few of the insurers are doing:
- Blue Shield of California has set aside $200 million to act as a guarantor on loans for hospitals, doctor’s offices and clinics and to purchase expected insurance claims in advance. The company also is helping certain fee-based providers switch to fixed monthly payments to ensure a steadier stream of income, and it is underwriting some patients’ financial obligations to improve cash flow.
- CareFirst BlueCross BlueShield, a nonprofit health-care insurer that operates in the Baltimore metro area, is spending $110 million to provide interest-free financial support to hospitals and independent providers. The funds will have to be repaid at a later time.
- UnitedHealth Group, the parent company of the nation’s biggest health insurer, has accelerated about $2 billion of payments to help alleviate pressure on doctors and hospitals. It also is offering as much as $125 million in small-business loans to health-care providers in which it holds a stake, according to an April 15 earnings statement.
The Federal Reserve has scrapped plans to use the $600 billion Main Street Lending Program to promote the use of its preferred replacement for the troubled London interbank offered rate, or Libor, the benchmark used to underpin more than $200 trillion of financial contracts around the world.
The Fed’s retreat, in the face of opposition from some of the country’s biggest banks, highlights the challenges of shifting debt markets to a new short-term, interest-rate benchmark. Regulators globally are pushing to replace Libor, which fell into disrepute after a manipulation scandal, before the end of next year. But markets have been slow to embrace the Fed’s replacement choice, known as the secured overnight financing rate, or SOFR.
The American Bankers Association last month asked the Fed to allow banks to either continue using Libor or another alternative, such as the prime rate, for loans being advanced under the Fed’s business-loan facilities. The ABA warned that it might undermine the program’s effectiveness. Others said it put too much burden on banks in the middle of a crisis. “It’s like rebuilding the engine while the car is barreling down the highway,” said Brian Reynolds, chief market strategist for Reynolds Strategy LLC. But some early adopters of SOFR say the Fed and other regulators need to make a push to replace a rate whose credibility has been irreparably damaged.
Meanwhile, Libor's days are still numbered. The U.K.’s Financial Conduct Authority, which regulates Libor, said in March that it has no plans to delay the expiration of the benchmark in December 2021, even though the pandemic has upended many parts of the financial system and the economy. The regulator repeated that stance last week.
The coronavirus lockdowns deterred activities like driving and flying that involve burning fuel. The resultant glut of oil sent prices into a tailspin. One consequence: A race is under way to store the surplus gasoline, diesel and jet fuel at sea, and the cost to ship gasoline, diesel and jet fuel around the world has soared to record levels. The number of available “clean tankers,” smaller ships that move refined petroleum products, has plummeted. “Dirty tankers” transport unrefined crude.
London-based Signal Ocean Ltd. tracks the location of tankers and where they could travel to if needed. As of Thursday, no Long Range 2 vessels, the largest kind of clean tanker, were in a 15-day range of Jubail, a port city on Saudi Arabia’s east coast that is home to a major refinery run by Saudi Aramco and Total SA. At the start of March, 21 of the tankers were available
Charter prices for vessels that transport refined oil products have tripled since the start of March, according to the Baltic Clean Tanker Index, a gauge of freight rates along 11 shipping routes. The index, calculated daily from estimates submitted by shipbrokers, hit its highest level on record early last week before slipping in recent days.
Last week, it cost just under $170,000 a day to charter a vessel from the Persian Gulf to Japan, a busy route, according to Claire Grierson, head of tanker research at shipbroker Simpson Spence Young. That is a high for Simpson Spence Young’s records and 10 times the rate in early March of $17,000.
- Researchers are investigating whether a common blood-plasma product used in treating immune-system disorders could also be effective in coronavirus patients. The product, intravenous immunoglobulin, is made from antibodies taken from the blood plasma of donors in the general population. These antibodies aren’t expected to specifically target the coronavirus, because there isn’t yet widespread immunity to it, but they are believed to help regulate the immune system overall. Researchers hope they can tamp down the out-of-control immune response that appears to be the cause of death in many coronavirus patients.
- The drop in driving and factory activity is giving scientists the opportunity to see what would happen to the planet if the world’s economy went on hiatus. Air pollutants have dropped to levels not seen in at least 70 years, offering easier breathing and clear views of landmarks often obscured by smog. One of the biggest airborne pollutants to fall off has been nitrogen dioxide, a byproduct of fossil-fuel emissions that most scientists believe is contributing to climate change.
- As businesses begin to reopen, some safety tips emerge: Commute by foot, bike or car, staying off subways and buses if possible; the office bathroom is a big danger zone; and continue to avoid nonessential shopping trips.
Many farmworkers do their jobs outdoors, and sometimes harvest crops at a distance from one another. Yet crowded housing and buses that transport workers to and from fields pose a severe coronavirus risk, labor advocates say. Last year, Isabel Rafael Pérez, a Florida farmworker, stayed with her sister’s family, squeezing 11 people into a trailer where their combined seven children slept on the living room floor and lined up to use a single bathroom. Federal housing standards require beds to be spaced at least 3 feet apart, with one shower and one stove for every 10 people. Some states require more.
In California’s Monterey County, fresh-vegetable behemoth Taylor Farms is paying two local hotels for 20% of their rooms each night, an arrangement that gives the company access to the full hotels if needed to quarantine workers or family members who may have been exposed to the virus. So far, only one out of the 5,000 people Taylor Farms employs in the county has tested positive for the virus and is recovering at home, according to CEO Bruce Taylor.
In April, United Farm Workers and other groups sued Washington state, saying farmworkers there lacked sufficient protections against Covid-19. State officials last month issued a draft of emergency rules for housing temporary farmworkers, including requirements to space beds 6 feet apart and in many cases only use the bottom bunk on bunk beds. Robert Kershaw, president of Domex Superfresh Growers, a major Washington fruit producer, said his company has spent millions of dollars in recent years to build government-approved apartment complexes. Domex said the new rules would cut its housing capacity by 60%, potentially resulting in it not being able to harvest more than 400,000 bins--or $200 million--of apples. Statewide, industry losses could be $2 billion for apples, Domex said.
The application deadline for a $17 billion federal loan program set up to help companies crucial to national security weather the coronavirus crisis passed Friday香蕉视频苹果下载--with few takers. The fund was once widely believed to be aimed at supporting Boeing, but the aerospace giant said last week it had no plans to seek federal funds after raising $25 billion from private investors. And a senior Pentagon official has questioned whether the Treasury Department’s conditions for the loans align with the needs of Defense Department contractors.
The Treasury Department requirements, published last month, focused on companies working on what is known as DX programs, which include Pentagon priorities such as refreshing nuclear weapons systems, classified satellite programs, missile defense and replacing presidential aircraft and helicopter fleets. Boeing had a leading role in some of those areas. However, the Pentagon’s undersecretary for defense acquisition, Ellen Lord, said that the program may not be suitable for public companies. “I am not sure DX entities are the ones that have the most critical needs,” Ms. Lord said on Thursday.
She said only around 20 companies had at the time expressed interest in the Treasury loan program, which carries strings such as limiting layoffs to 10% of a company’s workforce and barring stock buybacks, as well as government equity stakes that may be inappropriate for some national security contractors. Defense contractors also said they were concerned about the conditions and the small number of applications. The Pentagon has more than 10,000 primary contractors.