Trump: Oil Has Become “Less Valuable Than Water”

(Associated Press) The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments on Wednesday related to the global economy, the work place and the spread of the virus.

THINGS WE VALUED: The outbreak has reshuffled the pecking order of what holds value and there are few places where that is more evident than oil.

Over the last quarter the price of crude has fallen harder than at any point in history, plunging almost 70%, to around $20 per barrel. Those are levels not seen since 2002.

During a press conference, President Donald Trump bemoaned the oil war that has broken out between Saudi Arabia and Russia. Trump said he spoke this week with Russian President Vladimir Putin, and that he has also spoken with Saudi Crown Prince Mohammed bin Salman.

“There’s so much oil,” Trump said. “In some cases, it’s probably less valuable than water.”

With millions of job losses expected already because of the pandemic, a shock to the energy sector would mean thousands of jobs lost.

CAR CRASH: Auto sales are evaporating with people on every continent shutting in, and certainly not haggling on car lots.

On Wednesday, Fiat Chrysler, which only reports quarterly numbers, said its U.S. sales fell 10%. Hyundai reported that March sales fell 43% and sales for the quarter dropped 11%.

Auto makers will report sales throughout the day. The Edmunds.com auto pricing site expects March sales to fall more than 35% from a year ago.

Quarterly sales are expected to fall about 12% despite a strong start to the year before the virus took root in the United States.

“The market took a dramatic turn in mid-March as more cities and states began to implement stay-at-home policies due to the coronavirus crisis, and consumers understandably shifted their focus to other things,” said Jessica Caldwell, director of insights for Edmunds, which provides content to

Many automakers are rolling out big discounts, home delivery of autos, and 0% financing in an effort spur sales.

DID NOT EXPECT THAT: Knowing the number of people who are infected has become crucial in the global fight against the coronavirus. Some countries, the U.S. among them, have had trouble making enough tests available. A number of diagnostic companies, including Quest Diagnostics, have become critical in tracking the spread of the virus.

But COVID-19, the disease caused by the coronavirus, is doing more harm to the New Jersey company than good, despite its essential role.

Quest expects its overall testing volume to decline because other types of testing that it does is plunging. The company said in a regulatory filing that it experienced a more than 40% drop in testing volumes during the last two weeks of March, including COVID—19 testing. The company noted a significant drop in doctor office visits and the cancellation of elective medical procedures.

BAD NEWS: News Corp. is suspending printing operations for 60 local papers in Australia, where it is the biggest media group, as advertising revenue vanishes. Local newspapers in New South Wales, Victoria, Queensland and South Australia will be digital-only from next week. The newspapers depend heavily on advertising related to real estate auctions, house inspections, community events and restaurants — all of which have been closed.

The virus outbreak has resulted in a surge in new online subscriptions, however. The journalists’ union has urged the government to help several rural newspapers in New South Wales and Victoria that have already stopped printing due to lack of advertising.

START-UP SHUTDOWN: The German government is launching a 2 billion-euro ($2.2 billion) aid package to help startups through the crisis. It is intended to aid access to venture capital and help them replace funding from one-time investors who drop out. The government says the package is needed because other types of credit aid may not help such younger companies that rely less on traditional bank loans.

TRADITION ON HOLD: Sony Corp. and other Japanese companies canceled ceremonies that traditionally welcome new job recruits, customarily held April 1. Last week, the Japanese electronics and entertainment company ordered all of its 20,000 employees in Japan to work from home, including 927 new hires. Sony Chief Executive Kenichiro Yoshida sent a video message, saying, “What we value most are people …. You will be creating the future Sony.” Tokyo-based Sony, which makes Spider-Man movies, said employees in the U.S. and Europe are also working from home. Production was temporarily shut down at its four plants in China but resumed in February.

MARKETS: Stocks are sinking again on Wall Street as more signs piled up of the economic and physical pain being caused by the coronavirus outbreak. The S&P 500 dropped roughly 3% Wednesday after Trump warned the country to brace for “the roughest two or three weeks we’ve ever had in our country.” The selling was widespread, and all 11 sectors that make up the S&P 500 fell.