This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. Yesterday’s late afternoon fade in U.S. markets is rippling across the globe this morning. It’s choppy trading out there.
Let’s spin the globe, and take a look.
Markets update
We start in Asia where markets are mixed. Japan’s Nikkei is up more than 2%, but the Chinese indices are trading lower, even as China arrives at a major milestone. The lockdown of Wuhan, the epicenter for the coronavirus outbreak, is officially over. Weary citizens stepped into the sunshine after 76 days of home confinement. (There’s talk of a gradual reopening of businesses here in Italy after Easter, so we’re all watching Wuhan closely.)
***
On to Europe, where the major bourses all opened in the red. Dutch brewer Heineken on Wednesday was the latest company to withdraw all guidance for 2020, saying Q1 beer volumes were down 2% and that Q2 will be even worse. These are “very trying times,” the company soberly noted.
Meanwhile, Britain reported its worst spike in coronavirus deaths yesterday. The country is still on edge as Prime Minister Boris Johnson spent a second night in intensive care, being treated for his COVID-19 symptoms. Over in France, the country released Q1 GDP figures. The contraction was the worst since World War 2.
Hopes that EU finance ministers would strike a deal on how to fund the huge hole in national finances, and get companies back to work, failed to materialize overnight. The impasse sunk Italian bonds. Equities traders too were hardly assured.
***
The U.S. futures have been flat much of the morning, ticking down as I type. The Dow and S&P 500 both opened yesterday like gang-busters but dropped in the afternoon session to close in negative territory. As in the U.K., New York reported its worst 24-hour stretch of coronavirus deaths. And former Fed chairman Ben Bernanke issued a stern warning Tuesday afternoon on the health of the U.S. economy: “I don’t think it’s going to be a rapid” bounce back.
***
Elsewhere, the dollar and gold are up, as is oil. All eyes will be on tomorrow’s OPEC+ meeting to see how crude responds should the Saudis and Russians ever agree on production cuts.
***
In Washington, as in every national capital, the debate continues over the appropriate size of rescue packages. How many trillions will we need?
One of the rockier bailout measures has been the $350 billion small-business loan program. To recap: The so-called Paycheck Protection Program is part of the the $2.2 trillion CARES Act, passed by Congress late last month. The aim is to help small businesses shore up balance sheets with loans so they can pay (directly or indirectly) vendors, rent, utilities and staff.
But it looks like lawmakers massively underestimated how much small businesses will need to stay afloat in this period. Washington is now scrambling to make more money—possibly another $250 billion—available.
Make no mistake, small businesses are a huge part of the American economy, as today’s chart shows.
***
A vital engine of the economy
You can see why lawmakers are so determined to keep this sector of the economy above water in—to borrow a phrase from Heineken—these very trying times.
Small businesses employ 135 million Americans and have annual sales of roughly $8.8 trillion, according to Dun & Bradstreet. They not only keep the American economy afloat, they keep communities big and small alive. Mass layoffs would send unemployment rates soaring and GDP plunging.
There’s nothing small about small business.
Postscript
Postscript will be back tomorrow. A domani!
Have a good day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
Looking for more detail on coronavirus? Fortune has a new pop-up newsletter. The aptly named Outbreak will keep you up to date on the latest news surrounding the coronavirus outbreak and its impact on business and commerce globally. Sign up here.
And, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
What's better than cash? Once the coronavirus crisis ends, the dollar’s position as the world’s dominant unit of payment could be challenged by the emergence of new digital currencies. The People’s Bank of China, which has been working on a digital currency for over five years, is in pole position in the competition to define a new era of programmable money. “China is winning the digital currency battle by a long shot—and if the U.S. doesn’t catch up soon, it’s going to lose the war,” writes Michael J. Casey, chief content officer at CoinDesk, in Fortune.
Dollar daze. King dollar is in tragically high demand in the world's emerging markets as the coronavirus pandemic worsens. Exhibit A would be in Zimbabwe where an already acute shortage of dollars is delaying sales of tobacco, a vital source of foreign exchange. Africa’s biggest tobacco producer needs foreign currency to pay for goods from food to fuel but it has just $109 million of foreign exchange reserves, enough for one week of imports, Bloomberg reports.
The value trap. Optimists who snapped up shares this week based on their apparently deeply discounted valuations may have fallen into a trap, writes Robert Burgess in a Bloomberg Opinion piece. Stocks did look cheap, with the S&P 500 going from trading at close to 20 times this year’s estimated earnings down to 14 on March 13. But that was before analysts started cutting their 2020 profit estimates. Stocks now no longer look so cheap, with the S&P 500’s price-to-forecasted earnings multiple jumping to a somewhat expensive 18 times.
Market candy
$1.2 billion
That’s how much personal finance platform SoFi is splashing out to buy Galileo, a technology company that powers a range of financial upstarts including Robinhood, Revolut, and Chime. It’s a rare case of a company confident enough to launch a takeover in the depths of the coronavirus gloom.