17 minutes ago
Eurozone Government Debt Was at Decade Low Before Coronavirus Changed Everything
The eurozone spent most of the past decade trying to reduce government debt, even when that hampered economic growth. But that work has been undone in a few weeks as programs to support businesses and households through the coronavirus lockdowns send borrowing surging.
The European Union’s statistics agency today said that across the currency area as a whole, government debt fell to 84.1% of annual economic output in 2019 from 85.8% in 2018, reaching its lowest level since 2009, when repairing the damage caused by the global financial crisis sent debts soaring.
There will be few celebrations in the treasuries of Europe. According to the International Monetary Fund, government debt in the eurozone is set to surge in 2020 as tax revenues fall and the costs of supporting businesses and workers mount. It expects governments to owe 97.4% of economic output by the end of this year, well above the 2014 peak of 92.8%.
The Fund expects Italy’s debts to soar to 155.5% of gross domestic product from 134.8% in 2019, and Germany’s debts to rise to 68.7% of GDP from 59.8%.
2 hours ago
Ericsson Keeps Financial Targets Despite Economic Slowdown
Ericsson said it currently had no reason to change its financial targets for 2020 because of the coronavirus pandemic that has slowed the global economy while also making people more reliant on its products.
The Swedish telecom-equipment maker said the pandemic had a limited impact on its first-quarter operating income and cash flow, but said the economic slowdown could force wireless carriers to postpone plans to buy hardware and software to upgrade their networks to next-generation 5G.
Still, Ericsson Chief Executive Borje Ekholm said his company’s underlying business remained strong.
“With growth in data in general and with working from home as the new normal in many countries, good connectivity is more important than ever,” he said.
Ericsson, which competes primarily against Nokia and market-leading Huawei, on Wednesday reported a first-quarter net profit of 2.16 billion Swedish kronor ($214.2 million), down from 2.32 billion Swedish kronor in the year-earlier period. Sales rose 1.7%.
4 hours ago
Global Markets Steadier After Two Days of Oil-Driven Turbulence
International markets regained some poise Wednesday, as investors came to terms with the effects of this week’s spectacular collapse in U.S. oil prices.
In morning trading in Hong Kong, E-mini S&P 500 futures wavered between positive and negative territory, suggesting moves in U.S. shares on Wednesday could be muted.
Japan’s Nikkei 225 and South Korea’s Kospi Composite retreated around 1% while stock-market benchmarks in Hong Kong and Shanghai logged smaller declines. Australia’s S&P/ASX 200 was little changed.
Oil futures remained under pressure. Prices for West Texas Intermediate crude for June delivery fell about 2.3% to $11.30 a barrel, a day after the U.S. oil benchmark’s lowest close in 21 years. Brent crude, the global equivalent, erased early gains, falling 12% to $17.09 a barrel.
5 hours ago
This Is What Is in the New Coronavirus Stimulus Bill
The $484 billion interim emergency bill passed by the U.S. Senate on Tuesday includes expanded funding for small businesses and hospitals, and money for coronavirus testing.
What is in the bill for small businesses? How did it change from last time?
The bill refills two exhausted funds for small business aid: the Paycheck Protection Program and the Economic Injury Disaster Loan program. The bill puts about $310 billion more toward the PPP. The bill also tweaks the fund, amid complaints that some mom-and-pop businesses were crowded out in favor of larger businesses.
What is in the bill for health-care providers and hospitals?
The legislation provides an additional $75 billion to hospitals and health-care providers, whose budgets have been squeezed by the costs of responding to the pandemic and the collapse of other revenue.
How does the bill address coronavirus testing?
The bill provides new funds to ramp up testing across the country and calls for the Trump administration to create a national plan on testing. In the bill, $25 billion will fund manufacturing and purchasing of tests. Of those funds, $11 billion is allocated to states and localities to administer tests and conduct contact tracing, and the Centers for Disease Control and Prevention will receive $1 billion for surveillance measures.
5 hours ago
Top Business Developments
About this page
Last Updated: Apr 22, 2020 at 5:09 am ET