Amazon says the Pentagon’s JEDI revision keeps Microsoft in the driver’s seat

WASHINGTON – Amazon.com Inc. accused the Pentagon of trying to manipulate its review of a huge cloud computing deal to drive the award to rival Microsoft Corp.

In a court made public on Tuesday, Amazon urged a federal judge to request the Department of Defense to conduct a larger review than it proposed.

Judge Patricia Campbell-Smith …

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Gas prices may soon drop to 99 cents a gallon in parts of the United States

Although many Americans increasingly see pump prices below $ 2 a gallon, the drop may soon worsen. This is especially true in the Great Lakes region, where prices could soon be 99 cents a gallon at hundreds of gas stations.

Here’s how Patrick De Haan, head of GasBuddy’s oil analysis, believes that: the Chicago spot price, the benchmark for prices in the surrounding states, plummeted to 34 cents a gallon. It is a nickel at one cent more in other regions and 52 cents on the west coast. Add taxes on gas, he says, and you’re getting closer to where retail prices may soon be.

Prices are particularly low in the Great Lakes, he says, because there is no easy way to unload extra supplies. “The only real way is to offer discounts, and that’s the state we are in today,” he said.

Yeah, a station in Kentucky is selling gas for 99 cents a gallon. You can get gas in Oklahoma City for around 6 cents more. Among states, Ohio may be the first with many stations selling below 99 cents, given low state fuel taxes.

Who is driving?

The downside, of course, is that demand is collapsing amid the coronavirus pandemic. Illinois last week was one of the first states to tell people to stay home and forget about unnecessary travel. On Monday, Michigan and Indiana, among others, joined together. De Haan said that what is turning into a national closure should shame the slump in demand during the Great Recession.

The drop in demand has not yet appeared in the data, including the weekly report of the US Energy Information Administration.

Oil prices in the United States
CL.1,
+ 4.40%

CL00,
+ 4.40%

they are already at a minimum of 18 years due to a price war between Russia and Saudi Arabia. But even if an agreement is reached to end that fight, “the future is still pretty bleak for gasoline,” he added.

The first month contract for gasoline
RBJ20,
+ 5.90%

RB00,
+ 5.90%

plummeted over 27% on Monday to 44.11 cents a gallon. The contract price for the first month has plummeted 75% in the past month.

“The national average could drop 30, 50 to 75 cents a gallon in the next two, three, four weeks,” he predicted. But retailers will try to hold out as long as possible because right now they are enjoying some of their best margins even as their sales drop.

Gas on Monday was sold for an average of $ 2.07 at the pump nationwide. However, more than one in four stations sold it for less than $ 2 a gallon and 5% had prices below $ 1.75, according to GasBuddy. Compare this to early 2016, when the drop in oil prices pushed the national average of $ 1.66 and 2008, when average prices bottomed out at $ 1.59. Given that two thirds of states have increased gas taxes since then, a drop below the 2008 low would be particularly significant.

Even in California, traditionally one of the most expensive places to buy a gallon of gas, prices could drop dramatically, De Haan said. While the average price is $ 3.16 per gallon, one station is at $ 2.25 and another at $ 2.29.

The lesson for all consumers: do not rush to fill the tank.

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Countries introduce restrictions on the coronavirus curb

Governments around the world are increasingly imposing mandatory restrictions on residents to force people to keep away from each other, intensifying efforts to slow the global spread of coronavirus while cases exceed 350,000.

New Zealand said it would impose a blockade and move to the highest alert level, closing schools on Tuesday. Colombia has ordered a three-week blockade nationwide and sealed its borders. India has initiated a blockade on a number of states and Australia has imposed the closure of restaurants and bars …

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The US mortgage bond market is in an uproar, awaiting the Fed’s sinking relief

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Times Square in New York City as coronavirus deaths rise. Getty Images

Getty Images

Investors say it looked very similar to 2008 in most of the $ 11 trillion US home finance market, only without the defaults.

Many of them attribute credit to the Federal Reserve’s swift action last week, which opened its time to unleash trillions of dollars, calming some of the shocks of the spread of the coronavirus epidemic and its expected tribute to the nation and ‘economy.

SeeHere is a breakdown of the Fed’s bailout programs to maintain credit flow during the pandemic

The central bank’s initial plan was to purchase at least $ 700 billion in Treasury debt and agency mortgages, or where most of all home loans are grouped in securities with public support.

But investors continue to recover from the quickest selloff of their careers and also claim that safe haven activities, including agency mortgage bonds, continue to be a sales target as investors seek to accumulate liquidity in the event of market carnage and the last week’s record bond fund outflows are not over yet.

“There are still many more people who sell for liquidity, which is first and foremost,” Steven Oh, global manager of fixed income at PineBridge Investments in Los Angeles told MarketWatch. Although “the cost of transactions has improved,” he said. “It’s still not ideal.”

To read: Unemployment could reach 30% in the United States, says the Fed’s Bullard of St. Louis

US Treasury Bonds and Mortgage Bonds have been rewarded for safer and more liquid havens during stormy periods so far.

This chart by BofA Global Research shows how terrible Treasury market liquidity has been in the past few days:

Trying to trade agency mortgage bonds has been slightly better, unless an investor is willing to sell bonds at a value lower than their recent value.

But hope remains that the Fed’s combination of emergency loan programs and asset purchases will be sufficient to bring further calm, although the Senate failed to remove the first hurdle of a massive coronavirus stimulus measure and equity futures on Sunday. Americans have plummeted again.

In addition, President Donald Trump, in the face of criticism for his response to the coronavirus, also on Sunday ordered the National Guard in California, New York and Washington to help manage the pandemic. New York City, the center of global finance, also ordered its 8.5 million residents to stay home from work as the state prepared to become a hot spot in the global pandemic.

“I think the Fed will continue to buy mortgage bonds until there is some sort of normalcy,” said John Kerschner, head of the United States’ structured products at Janus Henderson Investors in Denver, in an interview with MarketWatch. “Who knows when it will be.”

The $ 6.9 trillion agency mortgage bond market is typically one of the most sought after havens in U.S. finance, largely because government guarantees provide investors with significant coverage of losses, with the exception of any premium on bonds that trade above their $ 100 repurchase price.

Last week alone, the Fed purchased more than $ 300 billion in government bonds and agency bonds, or MBS, pledging to buy at least $ 500 billion in assets on Sunday night.

While this makes the Fed (again) the “lender of last resort”, analysts at BofA Global Research said Sunday they expected the central bank to further increase its market intervention and implement a “full and unlimited backstop on the MBS market. of the agency “in the days and weeks ahead, as well as other stabilization measures.

It is “time to unleash the entire Fed arsenal,” urged the BofA team led by Mark Cabana, in a client note. “What started as a health crisis quickly turned into an economic crisis and is likely to quickly become a housing / financial crisis.”

Check out: Here’s how a Fed plan would work to support the corporate and municipal bond market

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Airbnb accumulates hundreds of millions of losses due to the coronavirus

Airbnb Inc. is considering raising capital from new investors as the home sharing giant struggles with growing losses due to the devastating impact of the coronavirus pandemic on its global business, according to people close to the company.

The pandemic also threw Airbnb’s plans to make public this year into chaos, and the company’s board of directors and investors are divided on the best way to go, according to people familiar with the matter.

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Online gaming stands ready for casino closure

With casinos closed and many Americans confined to their homes, the online gambling industry is looking to expand in the United States

An industry group, iDevelopment & Economic Association, is pushing states to allow online casino games to replace missing revenue from temporarily closed casinos, including exploring how governors can use large emergency powers to quickly allow online casinos to operate, group leaders said. Online casino games include virtual slots and roulette, along with poker, played for real money.

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The New Orleans restaurant kicks off Coronavirus insurance coverage litigation

The first wave of early insurance coverage disputes began as arrests for coronaviruses spread across the United States.

An important seafood restaurant in New Orleans’ French Quarter, Oceana Grill, asked a state court to confirm that its policy with London’s Lloyd’s would cover revenue lost due to civilian actions with restrictions on coronavirus.

The…

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Canada launches tax increase and tax deferrals for coronavirus reduction

OTTAWA – Canada has announced a package of tax incentives and tax deferral of almost 4% of its gross domestic product, marking an aggressive effort to contain the economic damage caused by the coronavirus pandemic and lower oil prices.

Officials added Tuesday further financial aid is likely in sight, including direct aid for the tourism, airline and energy sectors, which are starting to lay off workers, suspend operations and scale back investment plans. . Canada asked people to work from home if possible and to abstain …

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The European tax antidote to the coronavirus crisis risks deepening economic gaps

European governments have pledged hundreds of billions of euros to help coronavirus-affected economies, businesses and workers by applying tools developed during the euro crisis and putting severe bans aside on state subsidies.

Stimulus moves, in addition to the increase in public spending triggered automatically during a recession, could help fiscally healthy countries, including Germany and the Netherlands, overcome the growing economic crisis. But it may not alleviate the difficulties for weaker countries like Italy whose …

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The Federal Reserve will launch the commercial paper financing facility amid the uncertainty of the coronavirus

The Federal Reserve said Tuesday that it will establish a loan facility to support short-term commercial debt markets to prevent escalating financial tensions from accelerating the economic damage of coronavirus.

The Fed said it had established the new commercial paper financing instrument, a version last used during the 2008 financial crisis, after obtaining the approval of the Treasury secretary.

“The…

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