“The presence of a backstop only helps restore the flow of private credit,” said chief economist Jan Hatzius.

The policy has proven “very strong” to fight this crisis, Goldman Sachs said. But it is not clear the Fed should use it as a regular tool to fight future recessions, according to investment banks.

This crisis is expected to be severe but brief, reducing the risk of sustaining inefficient “zombie” companies that should be left to fail. That might not happen next time.

Plus, there is concern that ongoing commitment to the purchase of corporate bonds can create so-called “moral hazard,” prompting companies to borrow more from less selective lenders in hopes that Fed intervention will limit risk.

“It is unlikely that the cost-benefit tradeoff will be profitable enough in the next recession,” Goldman Sachs said.

The Fed’s actions also did not make the credit market fully resistant to complex and rapidly changing views. If the pandemic forces another wave of blackouts that could thwart recovery, the conditions of the loan could tighten again.

“The risk of re-locking is very high, and monetary policy stimulus that explains most of the recovery in asset prices from March lows will be less effective going forward if it does not translate into a rebound in economic activity and a better outlook for corporate earnings,” Hussein Sayed, the chief market strategist at FXTM, told his client Monday.

The Facebook boycott garnered a lot of attention among advertisers

Most recently: Facebook shares fell more than 8% on Friday, noting their worst day since March. They fell by almost 4% in premarket trading.

The plunge removed more than $ 50 billion from the company’s market value.

CEO Mark Zuckerberg announced an expanded policy on hate speeches on Friday, which included a ban on advertisements to blame minorities, immigrants and asylum seekers. Facebook will also implement warning labels for user posts that are newsworthy but violate platform policies.

Most of them come from small and medium businesses. Tens of thousands will need to act over a significant period of time to reduce Facebook’s profits, my CNN Business colleague Brian Fung reports.

Watch this space: Twitter shares also fall when companies stop social media advertising. The company’s shares fell more than 7% on Friday and fell 3% in premarket trading.

Pioneering destroyer Chesapeake Energy went bankrupt

Chesapeake was once the number two producer of natural gas in the country thanks to initial speculation. Aubrey McClendon, founder and CEO of Chesapeake, is considered one of the boom shale leaders who turned the United States into the world’s largest supplier of oil and natural gas.

But rumors of bankruptcy revolve when companies wrestle with depressed energy prices and piles of debt.

The coronavirus crisis exacerbates these challenges. Despite the recent recovery of $ 40 a barrel, oil prices have fallen sharply this year due to oversupply and falling demand caused by orders staying at home.

“In the current commodity price environment, Chesapeake is burning cash at the same time that production is declining, which is not sustainable,” said Spencer Cutter, credit analyst at Bloomberg Intelligence.

What it means: Demand is starting to recover, helping the price of crude oil rise again. But they are still too low to guard against a series of bankruptcies because producers struggle against bankruptcy.

Next

Pending home sales in the US for May post at 10 a.m. ET

Coming tomorrow: Will consumer confidence in the United States continue to improve in June?