Global Stocks On Track For Worst Quarter Since 2008

U.S. futures tied to the Dow Jones Industrial Average ticked up 0.8%, suggesting that the gauge may climb for a second consecutive day after the opening bell in New York. That may still leave the blue-chip index down by the most since the three months ended December 2008, when the Dow plummeted almost 20%.

The pan-continental Stoxx Europe 600 rose 2%, putting it on course for its worst quarterly performance in over 17 years. Major Asia-Pacific indexes were mixed by the end of trading, with Japan’s Nikkei 225 down 0.9%, while Hong Kong’s Hang Seng Index climbed 1.9%.


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Investors are taking stock after a tumultuous six weeks that saw a global rout in equities, bonds, commodities and many currencies, leaving some emerging markets at a heightened risk of default. The erosion of value in financial markets was exacerbated by factors including hedge funds’ increased use of computer-driven trading models, big asset managers’ push to divest even the safest assets and hold more cash, and investors urgently unwinding risky bets made with borrowed funds.

On Tuesday, signs of a rebound in the Chinese economy helped calm market sentiment. An official gauge of China’s manufacturing activity rebounded strongly in March as factories resumed work following months of a near-total shutdown, though economists warned that business activity remains far from normal.



“China has shown signs already that its economy may be picking back up. It’s leading the way and showing that the same could be achieved in other major economies if the virus is kept under control,” said Lee Hardman, a currency analyst at MUFG Bank in London. “Equity markets have stabilized over the last week in response to the powerful policy actions from central banks and governments.”

The containment measures in some parts of Europe may also be helping slow the spread of the virus, Mr. Hardman said. Meanwhile, the global economy is headed for a sharp contraction in the first half of the year, he cautioned.

“The data still paints a bleak picture,” Mr. Hardman said. “The hope is that in the second half of the year, the virus may be contained and it can recover. If the disruption continues in the back end of the year, that’s a different story.”

Oil prices rebounded Tuesday after hitting multiyear lows at the start of the week. The main U.S. crude-futures gauge rallied 6% to $21.32 a barrel, after settling at an 18-year low Monday. The index has lost almost two-thirds of its value this year. Brent crude, the global oil benchmark, rose 3.2%.

The yield on the 10-year U.S. Treasury note rose to 0.710%, from 0.667% Monday, signaling an increase in investors’ risk appetite as they left the perceived safety of government bonds. Yields move inversely to prices.

Many investors are in a wait-and-see mode, as the U.S., Europe and many Asian countries have rolled out very sizable fiscal stimulus packages, said Tai Hui, chief market strategist for the Asia-Pacific region at J.P. Morgan Asset Management.

“Whether we need more depends on whether the pandemic will force a longer period of social distancing and lockdown,” Mr. Hui said.

The decline in Australian equities helped the S&P/ASX 200 index conclude its worst-ever quarter, dropping more than 24%.

“The challenge has shifted from supply chains and domestic demand to external demand as the U.S. and Europe are going through probably their deepest contraction in history in the next few months,” said Mr. Hui. “That is going to have a knock-on effect on Chinese exports.”



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Economic Indicators: China Factory Activity Unexpectedly Expands

Factory activity in China unexpectedly expanded in March from a collapse the month before, but analysts caution that a durable near-term recovery is far from assured as the global coronavirus crisis knocks foreign demand and threatens a steep economic slump.

China’s official Purchasing Managers’ Index (PMI) rose to 52 in March from a plunge to a record low of 35.7 in February, the National Bureau of Statistics (NBS) said on Tuesday, above the 50-point mark that separates monthly growth from contraction.


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Analysts polled by Reuters had expected the March PMI to come in at 45.0.

The NBS attributed the surprise rebound in PMI to its record low base in February and cautioned that the readings do not signal a stabilization in economic activity.

That view was echoed by many analysts, who warn of a further period of struggle for China’s businesses and the broader economy due to the rapid spread of the virus across the world, the unprecedented lockdowns in several countries and the almost near certainty of a global recession.

“This does not mean that output is now back to its pre-virus trend. Instead, it simply suggests that economic activity improved modestly relative to February’s dismal showing, but remains well below pre-virus levels,” said Julian Evans-Pritchard, senior China economist at Capital Economics, in a note to clients.

The pandemic’s sweeping impact on production was underlined in two of Asia’s main export engines, Japan and South Korea. In Japan, industrial out rose at a slower pace in February and factories expect a plunge this month, while production in South Korea contracted the most in 11 years.

Economists are already forecasting a steep contraction in China’s first quarter gross domestic product, with some expecting a year-year slump of 9% or more – the first such contraction in three decades.

Nie Wen, economist at Shanghai-based Hwabao Trust, said given weak export orders, rising stockpile and soft prices, the underlying issue facing Chinese manufacturers has shifted to a lack of market demand, from production shutdowns forced by Chinese authorities.

The survey’s sub-index of manufacturing production picked up to 54.1 in March from February’s 27.8, but new export orders received by Chinese manufacturers were still mired in contraction, after ticking up to 46.4 from 28.7 in February.

Manufacturers are still facing big operational pressures, the survey showed, with over half of the respondents reporting a lack of market demand and 42% reporting financing issues, both up from the previous month.

“The biggest problem facing China’s economy in the second quarter is the slumping foreign demand,” said Nie, adding that authorities may roll out more policies on top of the billions of dollars pumped into the financial system since February to boost domestic consumption and tide over the shrinking overseas demand.

Markets reacted positively to the PMI survey, with Asian stock rising as investors seemed relieved by the rare good news as the pandemic showed few signs of abating.

China’s yuan, however, barely budged, reflecting analysts’ views that a sustainable bounce in manufacturing looked some way off despite a slowdown in China’s coronavirus infections from its peak in February.

GRIM OUTLOOK

Beijing, at great costs to the economy, had imposed draconian quarantine rules and travel restrictions to curb the pandemic that has killed more than 3,000 in the country.

While life for millions of people has started to slowly return to normal, the pace of business resumptions has been constrained by China’s efforts to guard against a second wave of infections from abroad.

The coronavirus, which originated late last year in China, has wreaked havoc along global supply chains and severely hurt foreign demand amid tight lockdowns in Europe, the United States and a number of other key economies where daily life has ground to a halt.

Already, Chinese exporters are seeing overseas orders being scrapped as the worldwide spike in coronavirus infections and deaths has forced many of the nation’s trading partners to slow or suspend production. Globally the outbreak has claimed the lives of over 37,000 people with more than 770,000 infections.

China should not set an economic growth target this year given the heightened uncertainty and avoid having to resort to “flood-like stimulus” to meet the goal, a central bank adviser said.

The service sector, which accounts for 60% of China’s GDP, also saw an expansion in activity, with the official non-manufacturing PMI rising to 52.3 from 29.6 in February, a separate NBS survey showed.

Analysts warn the outbreak could have a lingering impact despite the government loosening restrictions in recent weeks, as many people remain worried about the possibility of new infections or fretting about job security and potential cuts to wages as the economy struggles.

China’s urban jobless rate hit 6.2% in February, up one percentage point from the end of 2019, with analysts estimating about 5 million jobs lost in January-February period.

“The situation remains volatile as the trajectory of the COVID-19 virus outbreak in several key economies is still unpredictable,” ANZ analysts said in a note.






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Million of Americans Already Have Lost Their Jobs Amid The Coronavirus And The Worst Of The Damage Is Yet To Come

Economists at the Fed’s St. Louis district project total employment reductions of 47 million, which would translate to a 32.1% unemployment rate, according to a recent analysis of how bad things could get.

The projections are even worse than St. Louis Fed President James Bullard’s much-publicized estimate of 30%. They reflect the high nature of at-risk jobs that ultimately could be lost to a government-induced economic freeze aimed at halting the coronavirus spread.

“These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years,” St. Louis Fed economist Miquel Faria-e-Castro wrote in a research paper posted last week.


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There are a couple of important caveats to what Faria-e-Castro calls “back-of-the-envelope” calculations: They don’t account for workers who may drop out of the labor force, thus bringing down the headline unemployment rate, and they do not estimate the impact of recently passed government stimulus, which will extend unemployment benefits and subsidize companies for not cutting staff and extending unemployment benefits.

However, the jobless picture already looks bleak.

A record 3.3 million Americans filed initial jobless claims for the week ended March 21. Economists surveyed by Dow Jones expect another 2.65 million to join them this week. Friday’s nonfarm payrolls count for March is expected to show a decline of just 56,000, but that’s largely due to a statistical distortion because of the sampling period for the count happening before the government implementing social distancing practices.

The central part of Faria-e-Castro’s compilations comes from previous Fed research showing 66.8 million workers in “occupations with high risk of layoff.” They are sales, production, food preparation and services. Other research also identified people 27.3 million people working in “high contact-intensive” jobs such as barbers and stylists, airline attendants, and food and beverage service.

The paper then took an average of those workers and estimated a loss of just over 47 million positions. That would bring the U.S. unemployment rolls to 52.8 million, or more than three times worse than the peak of the Great Recession. The 30% unemployment rate would top the Great Depression peak of 24.9%.

The one potential bright side is the likelihood that the downturn could be comparatively brief.

During a CNBC interview last week, Bullard said the jobless number “will be unparalleled, but don’t get discouraged. This is a special quarter, and once the virus goes away and if we play our cards right and keep everything intact, then everyone will go back to work and everything will be fine.”





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Global Stocks Fall as Oil Dips Below $20


Today’s Stock Market News { Monday – 30 March – 2020 }


In Monday-afternoon trading in Hong Kong, S&P 500 futures rose about 1%, reversing earlier declines and suggesting that U.S. shares could rise at the start of the week. The yield on the 10-year U.S. Treasury note, a security that is seen as a haven, fell to 0.678%, according to Tradeweb, from 0.744% Friday. Yields move in the opposite direction of prices.




European equities wavered between small gains and losses, as gains for shares in chemical manufacturers and telecommunication firms offset losses for shares in banks and energy producers. The broad Stoxx Europe 600 index was down 0.1%.

Japan’s Nikkei 225, which logged its best week in its history last week, pulled back more than 1.5% as the yen strengthened slightly to 107.75 to the dollar. SoftBank Group, a major index constituent, pared some of its recent gains to fall more than 6% after a satellite venture it had backed, OneWeb Global, filed for bankruptcy.

Australia’s benchmark S&P/ASX 200 soared 7%, with gains intensifying late in the session after the government unveiled a 130 billion Australian dollars ($80.1 billion) wage-subsidy program.

Monetary authorities in the region also took further steps to shore up markets and economies. China’s central bank cut an interbank interest rate, while its counterpart in New Zealand said it would start buying corporate bonds to help companies stay afloat. Singapore, which uses foreign-exchange rates rather than borrowing costs as its main policy tool, also eased policy.

South Korea’s Kospi Composite added 0.2% while Hong Kong’s Hang Seng Index and the Shanghai Composite in mainland China fell less than 1%.

Monday’s moves followed a Friday pullback in U.S. stocks, which came after three days of solid gains. “We’ve had the rally, and now we might have a bit more of the reality,” said Sean Taylor, chief investment officer for Asia-Pacific at asset manager DWS.

The White House on Sunday extended its social-distancing guidelines for an additional 30 days, through the end of April. President Trump said the peak of the death rate from the new coronavirus was expected to hit in two weeks, predicting the U.S. would be on its way to recovery by June 1. Coronavirus cases world-wide have topped 718,000, with more than 33,000 deaths.

Mr. Taylor at DWS said the U.S. move to extend social distancing reflected how the focus of the pandemic had shifted from China to the U.S. and Europe, with public-health measures bringing economic activity to a near standstill and reducing global demand.

Brent crude, the global oil benchmark, pulled back more than 3.5% to $26.97 a barrel. West Texas Intermediate, the main U.S. crude gauge, fell below $20 a barrel at one point, before recovering slightly to stand 3.3% lower at $20.81 a barrel. WTI had hit an 18-year settling low of $20.37 earlier this month.

Crude prices have plunged on worries about reduced demand and a price war among major oil producers.

U.S. stocks last week posted their biggest weekly gain since 1938 after a roller-coaster ride, with the Dow surging 13% and the S&P 500 climbing 10%. But both indexes sold off on Friday and remain down more than 20% in 2020. Lawmakers in the U.S. agreed to the largest economic-relief package in U.S. history in response to the coronavirus pandemic.





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Financial Markets – Top 5 Things to Watch This Week

The negative impact of the coronavirus pandemic on the U.S. labor market will begin to become more apparent this week.

Friday’s nonfarm payrolls report for March is expected to show a large drop amid the lockdown in many cities and states that has shuttered businesses and sparked a massive wave of staff layoffs. Thursday’s jobless claims report will also be in focus after last weeks jump to historic highs.



President Donald Trump’s response will be closely watched for any indications of how much he is leaning towards easing restrictions, despite the ongoing healthcare crisis. Meanwhile, Chinese PMI data may offer indications that the world’s second- largest economy is starting to recover after slumping since the start of the year and the first quarter of 2020 is drawing to a close. Here’s what you need to know to start your week.


1 – U.S. labor market impact
Due to the timing of the survey period for the U.S. nonfarm payrolls report for March it likely preceded the worst of the impact on the labor market. Economists still expect Friday’s figures to show a loss of 100,000 jobs.

A significant overshoot of that and the unprecedented $2 trillion stimulus package approved by Congress could suddenly start to look inadequate. The government’s package includes a $500 billion fund to help hard-hit industries and a comparable amount to fund direct payments of up to $3,000 apiece to U.S. families.

Ahead of that, Thursday’s jobless claims report is expected to show another massive wave of new claims for unemployment benefits in the week to March 28, after they surged to a record 3.28 million in the preceding week.

2 – Trump walks back remarks about faster reopening
Investors will be closely following developments in the White House after President Trump appeared to back off from remarks he made last week about getting the economy going again by Easter Sunday.

Trump said Saturday he was unsure about whether the United States will reopen for business by April 12th following shutdowns in major cities across the country.

Some investors believe an earlier return to work would boost the U.S. economy, but health experts say a haphazard patchwork of restrictions across states could make the coronavirus impact worse. Cases in the U.S. soared past 115,000 on Saturday, the highest number in the world.

Trump, who is concerned about the economic repercussions of an extended shutdown of nonessential business has accused his Democratic critics of wanting to keep the economy in paralysis to improve their chances of ousting him in the Nov. 3 election.

3 – Chinese PMI data
Already Chinese factories’ Jan-Feb profits have hit their lowest in a decade and Tuesday’s PMI survey data for March will very likely reveal more pain. And just like everywhere else, job losses are mounting up, regardless of how many cheap loans are being offered to businesses.

While China seems to have contained the coronavirus, allowing work and travel to resume the major economic damage may still be to come. With infections climbing exponentially in the U.S., Europe and the other markets China exports to, and with supply chains in disarray, China being hit by a supply-demand shock.

4 – Eurozone data
There is a lot of economic data coming out of the Eurozone this week and Monday’s March economic sentiment data will offer insights into how businesses and consumers assess the situation, even though is predated new restrictive measures put in place since the survey was conducted.

The slump in oil prices means that March’s inflation will have tumbled, while reports on retail sales and unemployment are for February, so will still not show the full magnitude of the economic fallout from measures put in place to try to contain the coronavirus pandemic.

5 – Q1 wraps up
Few will regret the end of the first quarter of the year. Fears of a U.S.-Iran war gave way to the coronavirus pandemic which JPMorgan analysts have estimated will have pushed the world economy into a 12% contraction in the three months to March. The quarter saw the most brutal global equity collapse since the Great Depression, exacerbated by a 60% oil price slump.

The start of Q2 may not bring much relief, with coronavirus still spreading rapidly and keeping large parts of the global economy shuttered. Banks have rushed to slash Q2 forecasts too, so expect more turbulence on financial markets.

But markets have rebounded and may actually end Q1 on a high after governments pledged a $5 trillion stimulus effort and major central banks slashed rates and restarted asset purchases. Investors will be watching to see if infection rates are peaking, but there is still no certainty about when the coronavirus will be got under control.






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Trump Decides Against Quarantine for New York

“A lockdown is what they did in Wuhan, China, and we’re not in China,” Mr. Cuomo said on CNN Saturday evening.

President Trump late Saturday said he would not seek a quarantine on New York, New Jersey and parts of Connecticut after raising the idea earlier in the day and said his administration would instead issue a “strong travel advisory” for the area, as the nation’s largest city quickly becomes an epicenter of the coronavirus pandemic.

Mr. Trump said he had directed the Centers for Disease Control and Prevention to issue the travel advisory and that more details would be released later in the evening. He said he had made the decision in consultation with the governors of New York, New Jersey and Connecticut.

Later Saturday, the CDC issued a travel advisory urging residents of New York, New Jersey and Connecticut to “refrain from non-essential domestic travel” for 14 days, effective immediately. The advisory doesn’t apply to those in critical infrastructure industries, including truckers and health professionals.



The president’s assertion earlier in the day that he was considering imposing a quarantine on those states for a few weeks drew swift and harsh blowback from governors, who questioned why they hadn’t been consulted first and suggested they didn’t believe the move would be legal.

New York Gov. Andrew Cuomo had called the quarantine idea a “declaration of war on states” that would crash financial markets and results in legal challenges.

“A lockdown is what they did in Wuhan, China, and we’re not in China,” Mr. Cuomo said on CNN Saturday evening.

The president had indicated he didn’t plan to physically prevent people from leaving those states, telling reporters earlier in the day that it wouldn’t be necessary to bring in the military or the National Guard. The president’s advisers have told him that most people would listen to an order from the president not to leave the states, and that it wouldn’t be necessary to “bring the hammer” by physically blocking their exit, a person familiar with the discussions said.

A quarantine restricting people’s movement across state lines would have represented one of the toughest measures the federal government has taken yet to slow the spread of the coronavirus. Mr. Trump already has blocked flights from China and much of Europe and asked Americans to adhere to social-distancing recommendations, but the stay-home measures that affect people most deeply have been ordered by governors.

New York City alone has more than 23,000 cases, nearly a quarter of all the cases in the country. Overall, New York state leads the country in infections, with 52,318 confirmed cases and 728 deaths as of Saturday, Mr. Cuomo said during an afternoon briefing.

Mr. Cuomo and the Democratic governors of New Jersey and Connecticut, Phil Murphy and Ned Lamont, already have ordered all nonessential businesses in the state to close and called for residents to stay home. Essential services like hospitals, grocery stores and pharmacies remain open under the order, and residents still can go outside for exercise and to obtain groceries.

They each said their moves already represent aggressive action against the virus’s spread. “Until further notified we are going to keep doing exactly what we are doing,” said Mr. Murphy, whose state has 11,124 coronavirus cases as of Saturday afternoon and 140 deaths.

“I look forward to speaking to the President directly about his comments and any further enforcement actions, because confusion leads to panic,” Mr. Lamont said in a statement.

Mr. Trump’s idea also took federal transportation officials by surprise. Federal transportation agencies, airline officials and pilot unions that would have been an important component of a quarantine weren’t informed about Mr. Trump’s idea before the president revealed it to reporters Saturday, according to people tracking the issue.

Concerns have mounted in other parts of the country about people leaving the New York City area and possibly spreading coronavirus. Earlier this week, administration officials urged anyone leaving New York to self-isolate for 14 days.


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Florida Gov. Ron DeSantis issued an executive order on Monday directing travelers from New York, New Jersey and Connecticut to self-isolate for that period, and said violations of the order would amount to a criminal offense. Rhode Island Gov. Gina Raimondo on Thursday issued a similar order. Mr. Trump said on Saturday he had spoken to Mr. DeSantis.

“They’re having problems down in Florida. A lot of New Yorkers going down,” Mr. Trump said.

Mr. Cuomo said other states’ measures to keep New Yorkers out were “reactionary.” He said he would sue Rhode Island if it doesn’t stop enforcing travel restrictions on New Yorkers.

Legal experts differed on whether the federal government could restrict, en masse, the movements of New York City area residents.

Lawrence Gostin, a professor of global health law at Georgetown University, said the quarantine broached by Mr. Trump would be unconstitutional and unprecedented.

“The power to regulate interstate commerce, including the spread of infectious diseases, resides exclusively in Congress,” he said. “In this case, the president hasn’t even consulted Congress or the governor of New York. He’d be acting unilaterally in ways he has no power to do.”

Mr. Gostin said governors, like Mr. Cuomo, would have multiple ways to push back if Mr. Trump ordered a quarantine of their states. They could sue, and they could direct the state police and public-health authorities not to enforce the order.

“The Supreme Court has said expressly that the federal government has no power to direct a governor to execute the president’s orders,” Mr. Gostin said. “The president would have to call in the United States military to guard the border.”

Wendy Parmet, a public-health law professor at Northeastern University in Boston, said the executive branch has broad powers to protect the public health. Restrictions on interstate travel and commerce should, constitutionally, be put in place by the federal government, not individual states, she said.

“We’re not supposed to have Florida saying drop dead to New York,” she said. “States can’t set up borders. We have a Constitution.”

She said whether any plan to quarantine the tri-state area passed constitutional muster would depend on the details of how it was done, and would have to be grounded in science about the public health.

“The courts are deferential to public health powers in times of emergency,” she said.

Mr. Trump’s comments overshadowed his visit to Norfolk, where he sent the hospital ship, USNS Comfort, on its way to New York to help take pressure off the city’s health-care system. Standing in front of the vessel, Mr. Trump said it was “stocked to the brim with equipment and medicines and everything you can think of.”

“This great ship behind me is a 70,000-ton message of hope and solidarity to the people of New York,” he said. He reminded Americans that anyone leaving New York must self-isolate for 14 days.

The U.S. added more than 15,000 cases of the Covid-19 disease, pushing the total past 104,000 on Saturday, with a surge of cases in New York amid increased testing. There are now more than 2,000 deaths from the virus in the U.S., according to Johns Hopkins University.



In a sign that other states were coming under pressure, California Gov. Gavin Newsom said coronavirus patients admitted to intensive-care units had doubled to 410 on Saturday. Hospitalizations were up 38.6% from a day earlier, with more than 1,000 Covid-19 patients now in California hospitals.

“That’s a significant, sizable increase,” he said. “If trends continue on those lines, then we will begin to manifest conditions that are very familiar to people on the East Coast.”

Authorities also reported the death of a New York Police Department detective and an Illinois infant who had Covid-19, the disease caused by coronavirus.

The virus’s growth in the U.S. outstripped that of Italy and China, the countries with the second- and third-most infections, where confirmed cases stayed around 86,000 and 81,000, respectively, according to data compiled by Johns Hopkins.

As a result, the number of confirmed infections globally has more than doubled over the past week to more than 600,000. The death toll from the pathogen rose to more than 28,000 on Saturday, with roughly one-third of the fatalities in Italy, data from Johns Hopkins showed.

Italy’s death toll from the virus on Friday rose by 919 to 9,134, the highest daily tally on record. Total infections there rose to 86,498, a 7% increase from the previous day.





 

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Coronavirus Cases Pass 650,000 as Global Economic Fallout Grows

“It is now clear that we have entered a recession as bad or worse than in 2009,” Kristalina Georgieva, managing director of the International Monetary Fund, said Friday

The highest number of U.S. cases continues to be in the state of New York, where almost 45,000 people have been infected and 519 have died from the virus as of Friday, state officials said.

The U.S. added more than 15,000 cases of the Covid-19 disease, pushing the total past 104,000 on Saturday, with a surge of cases in New York amid increased testing. The growth outstripped that of Italy and China, the countries with the second- and third-most infections, where confirmed cases stayed around 86,000 and 81,000, respectively, according to data compiled by Johns Hopkins.

As a result, the number of confirmed infections globally has more than doubled over the past week to more than 650,000. The death toll from the pathogen rose to more than 28,000 on Saturday, with roughly one-third of the fatalities in Italy, data from Johns Hopkins showed.

Italy’s death toll from the virus on Friday rose by 919 to 9,134, the highest daily tally on record. Total infections there rose to 86,498, a 7% increase from the previous day.

Overlapping travel bans and lockdowns have hammered businesses and led to millions of job losses, punctuated by a spike in U.S. unemployment claims to more than three million this week and a warning of a deep recession this year in trade bellwether Singapore.

“It is now clear that we have entered a recession as bad or worse than in 2009,” Kristalina Georgieva, managing director of the International Monetary Fund, said Friday. Rising bankruptcies and layoffs could undermine any recovery and do long-lasting damage to the world economy, she said.

With the pneumonia-causing virus spreading across the U.S. and Europe, after it was first detected in central China three months ago, governments around the world have ramped up efforts to limit people’s movement and began imposing wide-ranging closures on businesses, restaurants and schools domestically in recent weeks.

Increasingly strict travel bans set up by large countries including the U.S. and China have put a dent in global commerce, complicating efforts to reignite growth.

France and Belgium on Friday extended their national lockdowns by two weeks, until mid-April. French Prime Minister Édouard Philippe said experts advising the government recommended the lockdown remain for at least six weeks. Russia on Friday suspended all passenger flights to and from the country.

The IMF warned that low-income countries will be hit particularly hard given a combination of a health crisis, sudden reversal of capital flows and in some cases a plunge in commodity prices. In Russia, where oil exports account for roughly one-third of government revenue, the ruble has fallen to its lowest level in four years. The IMF estimated that at least $2.5 trillion is needed to contain economic contraction for emerging markets.

The Chinese government is also wrestling with the economic blow from the SARS-like virus, first from a prolonged halt in domestic business activities and now from weaker consumer sentiment and shrinking export demand as the coronavirus engulfs Europe and the U.S.

On Friday, China’s top decision-making body said the government plans to boost spending by increasing its fiscal deficit this year, as well as speed up issuance of Treasury bonds and so-called local government special-purpose bonds to support funding of infrastructure projects, as part of the stimulus measures to curtail economic impact from the pandemic.



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“The fiscal policy needs to be more proactive, and the prudent monetary policy needs to be more flexible,” said a statement from Friday’s meeting of the Politburo Standing Committee, chaired by President Xi Jinping. The government also called for a gradual reopening of shopping malls and markets to boost consumer spending.

China’s National Health Commission reported 54 new infections Friday, saying all were imported from abroad, bringing the total to 81,394.

Other countries continue to tighten rules on social distancing. Iran this week closed shopping centers and banned road travel between cities, pledging to fine and impound the cars of offenders. Iranian officials have warned the population to brace for a second wave of infections. Afghanistan on Friday expanded restrictions by announcing a three-week lockdown on its capital, Kabul. Lebanon, which extended its nationwide lockdown until April 12, on Friday imposed a nighttime curfew.

In Turkey, President Recep Tayyip Erdogan introduced further travel restrictions this weekend to combat the spread of the virus, which has infected 5,698 people and killed 92 in the country, according to a tally by national health authorities. Intercity bus and air traffic will be reduced to a minimum while all international flights will be suspended.

Hong Kong banned public gatherings of four or more people beginning midnight Sunday, with those violating the rules facing fines of more than $3,000 and six months in jail. Singapore said it would fine people who violate its social distancing rules up to about $7,000.

Australia said it would quarantine citizens returning from overseas in hotels for 14 days beginning midnight Saturday.







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Stimulus Check Calculator

Congress just passed a $2 trillion stimulus bill to address the growing economic crisis caused by the coronavirus pandemic.

Included are direct payments to many Americans. Individuals are eligible for up to $1,200 and couples would receive up to $2,400 — plus $500 per child.

But the payments would start phasing out for individuals with adjusted gross incomes of more than $75,000. The amount would then be reduced by $5 for every additional $100 of adjusted gross income, and those making more than $99,000 would not receive anything. The income thresholds are doubled for married couples.

Income would generally be based on one’s 2019 or 2018 tax returns.

The money will likely be deposited directly into individuals’ bank accounts — as long as they’ve already authorized the IRS to send their tax refund that way over the past two years. If not, the IRS would send out checks in the mail.

The White House has said they hope to begin distributing cash quickly, but it may take weeks before the bulk of payments go out.


See how much you’re eligible for here


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Economic Indicators: Consumer Sentiment in U.S. Slumps by Most Since October 2008

U.S. consumer sentiment plummeted in March by the most since October 2008 as mounting Covid-19 cases nationwide and business closures elevated concerns about the economy.

The University of Michigan’s final sentiment index for the month slumped 11.9 points to a three-year low of 89.1, data Friday showed. The median forecast in a Bloomberg survey of economists called for a decline to 90 after a preliminary March reading of 95.9.

Ratings for current conditions also decreased by the most since 2008, and a measure of the economic outlook dropped to the lowest level in more than three years. Stocks fell and Treasuries advanced as investors assessed the pandemic’s impact on the economy.





“The outlook for the national economy for the year ahead changed dramatically in March, with the majority now expecting bad times financially in the entire country,” Richard Curtin, director of the Michigan sentiment survey, said in a statement. “Perhaps the most important takeaway is that the largest proportion of consumers in nearly 10 years anticipated that the national unemployment rate will increase in the year ahead.”

The report provides one of the more-sobering pictures yet of how the widespread economic halt, amid efforts to help contain the virus, is impacting consumers’ attitudes. The March figures represent a drastic departure from just a month earlier, when a strong job market and cheap fuel contributed to the second-highest sentiment reading since 2004.

The university’s final survey for the month included responses through March 24, a stretch that includes significant upheaval and uncertainty in day-to-day living and the labor market, as well as in financial markets. A report yesterday showed initial claims for unemployment benefits soared to a record 3.28 million last week.

“Stabilizing confidence at its month’s end level will be difficult given surging unemployment and falling household incomes,” Curtin said. “Mitigating the negative impacts on health and finances may curb rising pessimism, but it will not produce optimism.”

April consumer sentiment data will reflect the surge in dismissals and growing Covid-19 cases, as well as progress on Capitol Hill toward a $2 trillion economic-relief package that includes direct payments to many Americans.



Most notably, the number of confirmed cases nationwide continues to rise. There are currently more than 85,000 with the disease in the U.S., the most in the world, compared with 62 people at the end of February.

The Michigan data showed an index of buying conditions for durable goods dropped in March to the lowest level since 2014.

Year-ahead financial prospects declined across all age and income subgroups, though modestly as respondents anticipated the negative effects from the pandemic would be short-lived.

The impact of the virus on consumer sentiment are likely to become more evident as monthly reports capture the tectonic shift in economic and market conditions seen over the last month. The Conference Board will publish its March confidence reading on Tuesday. Meanwhile, Bloomberg’s weekly index fell to a four-month low.





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Coronavirus Shows Cash Is King, Even for Biggest U.S. Companies

The fast-spreading coronavirus has prompted even the biggest U.S. companies to cut their spending and bolster their balance sheets, proving once again how cash is king, especially in times of crisis.

After a decadelong U.S. economic expansion, not every company has entered this crisis with the same cash cushion. Apple Inc. ended the year with $247 billion in cash, securities and account receivables, enough to run its operations for more than a year even if it didn’t cut costs or sell a single iPhone. Discount retailer Dollar General Corp. had $240 million, enough for about four days, in the unlikely event it had to shut its doors and didn’t cut any costs.

Dollar General said its business model generates significant cash flow and has performed well in a variety of economic cycles, and the company can tap lines of credit and good access to the capital markets. Apple declined to comment.


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Technology companies generally operate with more cash on hand than retailers, which often have assets in unsold inventory. The median amount of cash and other readily available assets on an S&P 500 tech company’s books at year-end was enough to let it operate about 270 days in an extreme scenario without revenue or cost cutting, while the median was closer to 60 days for retailers, according to a Wall Street Journal analysis.

As companies prepare to close their books on a tumultuous first quarter, these measures can reveal how well-prepared they are for the sudden financial stress. Economists expect the crisis to cost the U.S. economy as much as $1.5 trillion in lost output over five years, including a decline in gross domestic product of 4% to 10% in the second quarter, a recent Journal survey of economists found.

“The investor mindset has shifted quickly to the balance sheet,” said Ron Graziano, an accounting and tax analyst at Credit Suisse. Sometimes factors that people don’t follow during a booming market suddenly become important. “The ones going into it with the bigger cushion are better positioned to survive.”

Delta Air Lines Inc. and Ford Motor Co. have stopped paying dividends. Boeing Co. has tapped out its credit lines, while General Electric Co. is cutting jobs. AT&T Inc.,  Intel Corp. INTC  and Chevron Corp. have shelved share buybacks.

In many cases, the crunch on corporate finances comes after years of cheap debt and easy credit that allowed companies to expand while building a $10 trillion mountain of debt. AT&T, following its 2018 takeover of Time Warner, had more than $150 billion in net debt at the end of 2019, though it has pledged to pay down its borrowings.

At the same time, many companies used spare cash to repurchase their own shares. In 2019, companies in the S&P 500 spent an estimated $729 billion on buybacks, second only to the record $806 billion spent in 2018, according to S&P Dow Jones Indices.

President Trump and Democratic lawmakers placed restrictions on share buybacks as part of the $2 trillion coronavirus stimulus package expected to pass Wednesday to help industries wounded by the pandemic.

Some of the companies that entered this crisis without big cash reserves sent much of the cash they produced from operations to shareholders, as dividends.

“Companies went into this situation with relatively limited cash balances,” said Torsten Slok, chief economist at Deutsche Bank Securities. “It is rather unfortunate they had lower cash balances and thereby became more vulnerable to this shock we have at the moment.”



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Economic Indicators: U.K. House Sales Set To Plunge 70% On Coronavirus Lockdown Impact

U.K. house sales are set to plunge by 70% in the next three months as the coronavirus outbreak batters the economy.

The slump in the second quarter, which is usually among the most active sales periods, will be followed by a further decline in the three months through September, according to a report on Thursday from real estate portal Zoopla. The hit to prices should feed through more slowly and will depend on the extent of the economic slowdown.

Covid-19 presents a major new challenge,” Richard Donnell, director of research and insight at Zoopla, said in an emailed statement. “The initial impact of external shocks is to reduce consumer confidence and put a brake on housing demand and the number of people moving home, which we can see in our latest figures.”

The partial lockdown of the country ordered by Prime Minister Boris Johnson has restricted people’s movements and closed all but essential businesses. That has made it nearly impossible for sellers to market homes, with potential buyers unable to view properties. And the government has warned that stricter rules could be imposed if necessary.

While the logistics of the lockdown impede deals, the economic fallout from the pandemic will dictate the impact on house prices, according to Zoopla. “The greater the economic shock and rise in unemployment, the greater the potential impact on house prices over the spring and into the summer months,” according to the report.

The U.K. economy will contract by at least 10% in the first half of the year, according to Bloomberg Economics’ estimates. Senior U.K. economist Dan Hanson said support provided by the Bank of England and the Treasury should prompt a turnaround in the second half of the year if the outbreak is contained by the summer.

The virus is already weighing on deals, with the number of homes placed under offer in the seven days through March 22 down 15% from the previous week, Zoopla data show.

Prior to the outbreak, the U.K. housing market was off to its best start in four years, with price growth of 1.6% in February, up from 1.2% a year earlier, according to Zoopla’s U.K. cities index.





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3 Food Delivery Stocks Set To Gain As COVID-19 Lockdowns Boost Demand

As the coronavirus continues to spread rapidly around the globe, infections in the U.S. are on the rise with at least 55,231 confirmed cases and 801 deaths reported.

To contain the pandemic in the U.S., states are taking lockdown measures to reduce the number of social interactions. The majority of states have prohibited dining at restaurants, permitting only delivery and pick-up options.



While Wall Street is on track to suffer its worst month since the Great Depression, some food delivery stocks are thriving on expectations that even more Americans will order in as they are confined to their homes in the weeks ahead. These three stocks are well-positioned to benefit:

1. Domino’s Pizza
Domino’s Pizza (NYSE:DPZ) is known for its delivery service, which accounts for about 55% of total orders. As an increasing number of people are opting for take-out, the Ann Arbor, Michigan-based pizza chain has been displaying robust relative strength amid the ongoing coronavirus market correction. Shares of the corporation, which are up about 22% over the past month-and-a-half, settled at $343.56 last night, giving it a market cap of roughly $13.4 billion.

The multinational pizza chain with 17,000 stores in more than 90 countries around the world officially began implementing its ‘Contact Free Delivery’ service due to the COVID-19 outbreak this week in the U.S. as well as other countries impacted by the virus, like India, the United Kingdom, Ireland, and Australia.

The company announced last week that it expects to hire about 10,000 workers in the U.S. alone to meet increased orders at a time when the coronavirus pandemic has resulted in restaurants across the country laying off thousands of workers.

“Our corporate and franchise stores want to make sure they’re not only feeding people, but also providing opportunity to those looking for work at this time, especially those in the heavily-impacted restaurant industry,” CEO Ritch Allison said in a statement on March 19.

2. Blue Apron
Blue Apron (NYSE:APRN) is a New York-based online meal-kit company that delivers pre-measured ingredients, with which customers cook recipes of their choice. By making home cooking easy and accessible, Blue Apron has gained as the coronavirus outbreak in the U.S. led more Americans to seek alternatives to shuttered restaurants and emptied grocery store shelves.

Even after Tuesday’s 15% drop, this month the stock has surged an astonishing 260%, bucking the broader market rout brought on by virus fears. Shares ended at $10.36 last night, giving the food-delivery service a market cap of $137.45 million.

Blue Apron said last week it has seen a “sharp increase” in demand for its meal kits and it is taking steps to meet the greater number of orders. “We are increasing our capacity for future orders and expect to fulfill this increased demand by the next available weekly cycle, starting on March 30,” Linda Findley Kozlowski, Blue Apron’s chief executive, said on March 19.

However, any boost in business for Blue Apron will likely taper off after the immediate threat of the COVID-19 outbreak passes and consumers return to eating out. Prior to its recent surge, shares of Blue Apron had fallen about 98% from its 2018 IPO price, plunging to $2 in late February, due to growing competition and disappointing revenue.

3. Chewy
Chewy (NYSE:CHWY) is the leading online seller of branded and private-label pet food and grooming supplies in the U.S. The Florida-based company allows customers to browse a wide variety of foods for different animals through its website and mobile applications, then receive the package directly to their door.

Like the two other companies mentioned above, Chewy has also seen its shares rise despite the broader market selloff. The online pet products retailer has benefitted as its in-home delivery model mitigates the public health concern of consumers shopping for their pets at brick-and-mortar retailers.

Shares of the online pet products seller, which are up more than 27% over the past two weeks, closed at $33.65 yesterday, giving it a market cap of $12.8 billion. The stock touched a record high of $34.99 on March 19.

Chewy next reports earnings on Thursday, April 2, after markets close. Consensus calls for a loss of 15 cents per share for the fourth quarter, while revenue is forecast to total $1.35 billion.



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Global Stock Markets Mixed After Lawmakers Agree On Coronavirus Rescue Deal

Stocks turned mixed Wednesday after building on a rally from the previous session in anticipation of a coronavirus rescue deal by Congress. The White House and Senate reached an agreement overnight.

While the Dow was up 450 points and the S&P 500 rose 0.6%, the Nasdaq slipped into the red. The Dow soared more than 2,100 points Tuesday, or over 11%, notching its biggest one-day percentage gain since 1933 and its best point increase ever. The S&P 500 rallied 9.4% for its best day since October 2008.

White House and Senate leaders agreed to a massive $2 trillion coronavirus stimulus bill in the middle of the night.

“At last we have a deal,” Republican Senate Majority Leader Mitch McConnell said around 1:37 a.m. ET from the floor of the Senate. “In effect, this is a war-time level of investment into our nation.”

Former Federal Reserve Chairman Ben Bernanke also said Wednesday the U.S. economy will experience a quick rebound after a “very sharp” recession. “If there’s not too much damage done to the workforce, to the businesses during the shutdown period, however long that may be, then we could see a fairly quick rebound,” Bernanke told CNBC’s “Squawk Box.” Bernanke added the current situation is “much closer to a major snowstorm” than the Great Depression.

He also acknowledged current Fed Chairman Jerome Powell moved quickly to stem the economic blow from the outbreak. “I think the Fed has been extremely proactive, and Jay Powell and his team have been working really hard and gotten ahead of this and shown they can set up a whole bunch of diverse programs that will help us keep the economy functioning during this shutdown period.”

Still, some investors think the number of global coronavirus cases needs to improve before the market can form a bottom.

Spain experienced a record spike in coronavirus deaths, with 504 reported for Tuesday. Globally, more than 400,000 cases have been confirmed, according to data from Johns Hopkins University. In the U.S., more than 55,000 cases have been confirmed along with over 69,000 in Italy.

Peter Oppenheimer, chief global equity strategist at Goldman Sachs, said there are four “components” to the market stabilizing from here:

″(i) A sign that the policy intervention is sufficient to prevent severe second- and third-round economic shocks; (ii) A sign that the infection rate is reaching a peak; (iii) A sign that the economic downturn may be slowing; and (iv) Cheap valuations,” Oppenheimer wrote in a note to clients. “In reality, we believe it will be a combination of these, and in some cases there are already signs these are in place.”



Some investors believed the stock market was overdue for a big bounce, having priced in a worst-case scenario regarding the economic damage being done by coronavirus-related shutdowns. They believe a bounce could occur here even as coronavirus cases continue to surge because the market was so oversold.









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Deal Reached On $2 Trillion Coronavirus Stimulus Bill

Lawmakers and the Trump administration reached an agreement on an estimated $2 trillion stimulus package aimed at shielding the U.S. economy from the worst consequences of the coronavirus pandemic.

The legislation, which congressional officials were set to continue to write throughout the early morning Wednesday, will provide direct financial checks to many Americans, drastically expand unemployment insurance, offer hundreds in billions in loans to both small and large businesses, and provide health care providers with additional resources as the virus spreads.


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“This is a wartime level of investment into our nation,” said Senate Majority Leader Mitch McConnell (R., Ky.) in the early hours of Wednesday after the two sides had reached a deal. “The men and women of the greatest country on Earth are going to defeat this coronavirus and reclaim our future. And the Senate is going to make sure they have the ammunition they need to do it.”

Mr. McConnell said the Senate would move to vote on the massive bill later on Wednesday, setting up a rapid approval of legislation that dwarfs the annual discretionary budget Congress spends much of the year crafting and approving. House Speaker Nancy Pelosi (D., Calif.) said Tuesday she hoped to quickly approve the eventual Senate agreement, though objections from lawmakers could slow the process in that chamber.

Treasury Secretary Steven Mnuchin said that he had spoken to President Trump about the agreement and that Mr. Trump would “absolutely” sign it as it is written today. “He’s very pleased with this legislation, and the impact that this is going to have,” Mr. Mnuchin said.

Senate Minority Leader Chuck Schumer (D., N.Y.) said the bill had been “improved substantially” since Democrats joined the negotiations. “To all Americans I say: Help is on the way, big help and quick help,” Mr. Schumer said.

The deal was announced several hours—and into the wee hours of the next day—after a stock market rally for the ages. The Dow Jones Industrial Average posted its largest single-day gain since 1933 on news Tuesday that a deal was coming together. Signs of a major injection of cash into the economy appeared to give investors some solace as the U.S. reported an uptick in confirmed Covid-19 cases and braced for unemployment claims, which are reported this week, that are expected to have soared.

Days of frantic negotiations on Capitol Hill between Senate Democrats and Republicans and the Trump administration produced an agreement less than a week after first Mr. McConnell introduced an opening offer. Lawmakers spent the weekend in Washington in dayslong marathon sessions to reach a deal, and Democrats twice blocked procedural steps as talks continued.

While the final terms of the bill remained under wraps early Wednesday, lawmakers had been eyeing sending one-time checks worth $1,200 to many Americans, with $500 available to children, with the assistance capped above certain income levels.



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Those payments would be in addition to a broad expansion in unemployment benefits, which would be extended to nontraditional employees, including gig workers and freelancers, according to a Democratic aide familiar with the negotiations. The agreement is also set to increase current unemployment assistance by $600 a week for four months.

The Senate is also poised to approve $350 billion in loans to small businesses in an effort to keep Americans on payrolls as economic activity across the country comes to a standstill.

A major challenge in the negotiations was roughly $500 billion in corporate aid, much of which will go toward backstopping Federal Reserve loans. The Treasury Secretary will have the authority to directly lend a slice of those funds, and Democrats had sought to place controls on the money. The agreement will create a new inspector general and oversight board to oversee the aid.

Mr. Schumer wrote in a letter to Senate Democrats Wednesday morning that the legislation will also invest $150 billion in the health care system, already straining to respond to the quickly expanding number of infections across the country, and send $150 billion to state and local governments saddled with costs related to the virus. Those funding increases are among several lawmakers had intended to include in the package.

In the same letter, Mr. Schumer said the legislation included a ban on stock buybacks for any company receiving a government loan from the stimulus package. The ban lasts the term of the government assistance plus 1 year.

Democrats also secured a provision in the agreement that bans businesses controlled by Mr. Trump, the vice president, members of Congress and heads of executive departments from receiving loans or other funds from the stimulus bill. Children and spouses of those people are also banned, according to a senior Democratic aid.

While both the senate leaders expressed confidence the measure would quickly pass the Senate as soon as Wednesday afternoon, it was less clear how quickly it could clear the House.

Mrs. Pelosi has said that she wants to pass the bill by unanimous consent—meaning she doesn’t have to recall members back to Washington from their districts for a floor vote.

But earlier Tuesday some of her Democratic colleagues expressed concern about what exactly was in the Senate bill, and Mrs. Pelosi herself said the quicker, unanimous consent option wasn’t a given. House Democrats introduced their own $2.5 trillion rescue plan that gave more generous direct payments to many Americans, and some House Democrats have indicated they prefer that bill.

Mr. Schumer and Mrs. Pelosi will now likely spend the coming days selling the agreement to other Democrats, with Mr. Schumer claiming victory on a number of fronts in the negotiations.

House Republicans, for their part, seem to have come on board with the Senate bill—despite complaints that Democrats were aiming to insert unrelated proposals like environmental protections into the stimulus package. One senior GOP House aide said Tuesday afternoon that there was strong Republican support for the bill. The aide said that though there was a “very real possibility” that one House member objects to passage via unanimous consent, it was also possible no Republican would do so.

Swift passage of the $2 trillion package would be the third time a deeply divided Congress had acted to pass legislation responding to the coronavirus pandemic in recent weeks. Lawmakers also quickly passed an $8.3 billion bill funding vaccine development efforts, among other issues, and a bill expanding paid leave measures that was estimated to cost more than $100 billion.



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Financial Markets: European Shares Jump Again On Stimulus Bump

European shares rose on Wednesday following a strong rally in the previous session, as investors bet on unprecedented stimulus measures to ease the economic pain on businesses and households from the coronavirus pandemic.

The pan-European STOXX 600 index (STOXX) was up 2.1% at 0804 GMT, with energy (SXEP), industrials (SXNP), financials (SXFP) and miners (SXPP) leading gains for a second straight day.



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The benchmark index has now recovered its losses from mid March on the back of extraordinary fiscal and monetary stimulus from Europe and the United States. On Wednesday, U.S. officials agreed on a whopping $2 trillion stimulus package.

Still, the European bourse is down more than 25% from its record high last month in the biggest rout since the financial crisis, with another global recession looming in the face of a collapse in business activity in March.

German conglomerate Thyssenkrupp (DE:TKAG) rose 12.6% after saying it would cut 3,000 jobs at its steel unit by 2026, with no forced layoffs until March 31, 2026, as part of a wage deal struck with powerful labor union IG Metall.









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Precious Metals: Traders Working From Home Exacerbate Big Swings, Analysts Say

Front-month gold futures jumped 5.9% to $1,660.20 a troy ounce in New York, extending a surge that began Monday. Tuesday’s advance was gold’s biggest one-day increase since March 2009. Silver, platinum and palladium all rose at least 7.6%, paring some of their recent declines.

The rally is a reversal for the metals, which had tumbled in recent weeks with investors liquidating easy-to-sell assets to meet margin calls and raise cash. For investors who had used stocks as collateral to buy other securities, banks can demand repayment when the value of those positions shrinks dramatically, resulting in the forced sale of unrelated assets.

This week’s surge has put gold back around a seven-year peak from March 9. Prices are up more than 30% from a low hit last April, with recent gains coming as traders brace for the coronavirus to tip the world economy into a recession.

“I’ve never seen anything like this,” said George Gero, managing director at RBC Wealth Management. “The demand is huge.” Mr. Gero still expects prices to remain volatile, with investors often needing to sell liquid assets to raise cash when markets fall rapidly.

The big moves up and down in precious metals are another sign of market fragility. Stocks, bonds and commodities have all been extremely volatile in recent weeks with the coronavirus halting the global economy and many traders working remotely.

There are also concerns about shortages of gold bars and coins because of heavy retail buying and refinery shutdowns in Switzerland, a major refining hub.

“This is an environment when most people work from home, even traders, and airlines aren’t flying, so there is some sort of discrepancy in the market,” said Frederic Panizzutti, managing director at MKS Dubai, part of refining and trading company MKS PAMP Group Co. “The market is in panic.”

One sign of stress: In the spot gold market, the gap between bid and offer prices has widened to around $25 an ounce, according to Mr. Panizzutti, when it would normally range between 20 and 30 cents. Meanwhile, the gap between futures prices in New York and spot prices in London, the world’s biggest wholesale gold market, jumped.

The London Bullion Market Association, the organization that oversees the U.K. capital’s gold market, said volatility in U.S. futures prices on the Comex division of the New York Mercantile Exchange had caused liquidity to decline. The LBMA and Comex discussed whether to allow traders to settle futures using gold from London without having it melted down and recast into a new set of bars, according to a person familiar with the matter.



This could ease a shortage of physical gold in New York but would require a rule change or relaxation. LBMA-approved bars weigh 400 troy ounces, while Comex futures must be settled using either one bar weighing 100 ounces or three bars weighing a kilogram each.

Hedge funds and other speculative investors sharply lowered net bets on higher gold prices during the week ended March 17, pushing them to a nine-month low, Commodity Futures Trading Commission figures show. Investors were liquidating bets on a range of assets to cover losses suffered in stocks and other riskier areas.

Data for the week ended Tuesday will be released on Friday.

The Federal Reserve’s pledge on Monday to buy an unlimited amount of government debt to shield the U.S. economy also drove gold prices higher. The opportunity cost for investors owning the precious metal, which pays no income, declines when bond prices rise and yields fall.

“We have now a lot of central banks with very, very low rates and quantitative-easing programs, which in general is positive for gold prices,” said Georgette Boele, a strategist at ABN Amro. “Investors are getting more concerned about the doom and gloom of the global economy and they want to have physical gold in their safe.”



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Extreme volatility in currency markets also drives gold, which is used in some countries as a liquid asset that can be turned into any currency depending on fluctuations. A weaker dollar was supporting Tuesday’s rally by making commodities denominated in the U.S. currency cheaper for overseas buyers.

Elsewhere in commodities Tuesday, U.S. crude oil added 2.8% to $24.01 a barrel, trimming a sliver of its recent declines. Tumbling demand and excess supply have sent prices crashing about 60% for the year. Brent crude, the global gauge of oil prices, ended the day up 0.4% at $27.15 a barrel.






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Stocks Rebounded Aggressively From A Three-Year Low

Stocks rebounded aggressively from a three-year low Tuesday as traders hoped U.S. lawmakers were close to an agreement on a stimulus bill to rescue the economy from the damage caused by the coronavirus.



The Dow soared more than 1,600 points, or 8.7%. The S&P 500 gained 7.6%, while the Nasdaq advanced 6.4%. On Monday, the Dow and S&P 500 closed at their lowest levels since late 2016.

Chevron gained more than 20% to lead the Dow higher. Boeing, McDonald’s and Disney also rallied more than 10%. Energy was the best-performing sector in the S&P 500, soaring 12.9%, while industrials jumped 8.5%.

House Speaker Nancy Pelosi told CNBC’s Jim Cramer there is “real optimism” in Congress over a stimulus deal being reached in the next few hours. Senator Chuck Schumer and Treasury Secretary Steven Mnuchin said they hope to have a deal by Tuesday morning. “There are still a few little differences. Neither of us think they are in any way going to get in the way of a final agreement,” Schumer said.

“From a market perspective . . . it feels like we’re coming to the end of it,” said Michael Novogratz, CEO of Galaxy Digital, on CNBC’s “Squawk Box.” Novogratz started buying into this market on Monday, he said. “It doesn’t necessarily mean the market’s going to go up, but a lot of that crazy volatility is kind of coming out.”

Tuesday’s moves followed yet another stormy day on Monday as investors swung back to pessimism and pushed the major indexes to new multiyear lows as a procedural vote in the Senate on a bill failed for the second time in 24 hours.

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The Dow dropped 582.05 points, or 3%, to a new three-year low on Monday and was on pace to clinch its worst calendar month since 1931. The S&P 500 dropped 2.9% and was more than 30% from a record close set on Feb. 19.

“The recent disorderly market action has left scars on most money managers,” said Sean Darby, global equity strategist, in a note. “Bear markets are brutal and they typically presage a recession.” However, Darby pointed out that a number of “risk indicators are peaking with only credit spreads misbehaving,” suggesting a bottom may be nearby.

Stocks hardest hit by the shutdowns resulting from the coronavirus led the gains Tuesday. Shares of Wynn and MGM Resorts were both up more than 13%. Delta Air Lines jumped more than 19%. General Motors shares, meanwhile, climbed nearly 11% after the automaker announced it will keep its dividend.

Democrats have criticized the $500 billion fund that the Republican proposal sets aside for distressed businesses, calling it a bailout fund “with no strings attached.”

Tuesday’s gains also came as President Donald Trump signaled he was eager to reopen the economy, despite concerns of public health officials.


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“At some point we’re going to open up our country, and it will be fairly soon,” Trump said during an evening press briefing on the fast-spreading virus.

Markets are getting support from the Federal Reserve, which said Monday it would embark on an open-ended asset purchase program. The central bank said the program will run in the “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”

“This market has been utterly dangerous since February,” Fundstrat’s Tom Lee wrote Tuesday. “But there are glimmers of hope.”





U.S. Futures And Global Equities Rise After Fed Move

U.S. stock-index futures and global equities rose after the Federal Reserve stepped up its assistance to the American economy, saying it would back lending to businesses and buy essentially unlimited amounts of government debt.

S&P 500 futures gained more than 3% in early afternoon trading on Tuesday in Hong Kong, suggesting U.S. shares could rise later in the day.



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Japan’s Nikkei 225 closed 7.1% higher, while South Korea’s Kospi rose more than 8%. A second day of sharp gains for SoftBank Group Corp. on a $41 billion asset-sale plan helped buoy the Nikkei. Benchmarks in Hong Kong, Australia, Shanghai, India and New Zealand also advanced.

On Monday, the Dow Jones Industrial Average fell about 3% after U.S. lawmakers failed for a second day to pass a rescue package to ease the blow from the coronavirus pandemic. U.S. stocks, however, pared earlier losses and investors took some solace from the Fed’s measures.

Sherwood Zhang, a portfolio manager at Matthews Asia, welcomed the Fed action. “Hopefully, the Fed’s latest move should be able to help tighten credit spreads globally, easing pressure on the cost of borrowing for corporations,” he said, adding that U.S. political gridlock mattered less internationally.

Mr. Zhang said he had used the recent market selloff to increase his holdings of high-quality stocks, including some consumer companies with long-term growth potential whose shares have been battered recently.

David Gaud, Asia chief investment officer and head of discretionary portfolio management at Pictet Wealth Management, said moves by the Fed and other central banks to keep interest rates low and ensure money was available for corporations were essential to prevent a complete economic meltdown.

“It’s moving in the right direction but it’s not sufficient,” to support world economies without decisive government action to address the economic fallout as well, he said. He said the longer the pandemic lasts, the greater its economic impact would be, in which case current fiscal and monetary policy responses might prove insufficient.

The global death toll from the novel coronavirus surpassed 16,000, with more than 367,000 confirmed cases. Cases in the U.S. alone grew 10-fold to cross 41,000 from a week earlier, as more state governors ordered residents to stay home. Meanwhile, the U.K. joined other European countries in lockdown under a raft of restrictions from the government.





The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, eased 0.6% Tuesday to 96.42. On Monday, the index hit its highest closing level since 2002. The gauge was created in 2012 but back-calculated to 2001. Regional currencies including the Australian dollar, Korean won and Chinese yuan strengthened against the dollar.

The 10-year U.S. Treasury note, which is seen as a haven, declined in price. The yield on the note, which moves in the opposite direction of its price, rose about 0.045 percentage point to 0.812%, according to Tradeweb.

Brent crude, the global oil benchmark, rose 4.1% to $30.49 a barrel. Crude prices have plunged on worries about reduced demand and a price war between major oil producers.


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Stock Market Today: Washington’s Delay Over An Economic Rescue Package Rattled Markets

U.S. lawmakers and administration officials had hoped to reach an agreement on a $1.3 trillion deal so both chambers of Congress could approve it Monday. But the package hit a procedural roadblock in the Senate Sunday, a sign of political discord amid a national emergency.

Mr. Maynard said this added to concerns stoked by rising infection figures, statewide restrictions on activity, and expectations for rising U.S. unemployment.

European markets opened lower. The Stoxx Europe 600 pan-continental index fell 3.8%, and the German Dax dropped 3.4%. German Chancellor Angela Merkel is self-isolating after coming into contact with an infected doctor. The government is set to adopt fiscal measures worth €500 billion ($535 billion) to help cushion Europe’s economic powerhouse from the impact of the pandemic.



While stocks were getting hammered, investors sought shelter in traditional safe-haven assets, such as bonds, gold and currencies like the Swiss franc and Japanese yen, a return to a more traditional trading pattern that gave some investors solace. For several days last week, those assets fell along with stocks, a sign that markets were coming under severe strain.

“We’re not at a turning point yet, we’re still seeing a crisis in markets. But, there are signs that some of the stress may be easing,” said Lee Hardman, currency analyst at MUFG Bank. He pointed to efforts central banks, including the Federal Reserve, made last week to calm markets.

The yield on the 10-year U.S. Treasury note fell 0.125 percentage point to 0.813%, according to Tradeweb, as investors sought the safety of government bonds. Yields move in the opposite direction to prices.

Adrian Zuercher, head of asset allocation for the Asia-Pacific region at UBS Global Wealth Management, said the Senate delay, the lockdown of New York and rising U.S. jobless claims had all pressured the market.


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“The key uncertainty is how long Europe and the U.S. will be locked down,” Mr. Zuercher said. “Lower interest rates and stimulus packages are not helping you if people can’t go out and spend or even if they can but they don’t want to because they’re scared.”

Brent crude oil fell 5.2% to $25.57 a barrel. That put the global oil benchmark close to the $24.88 level it hit Wednesday, which was the lowest since May 2003. Crude prices have plunged on worries about reduced demand and a price war among major oil producers.

In Asia-Pacific, most stock benchmarks dropped. Australia’s benchmark S&P/ASX 200 fell nearly 8% to levels last reached in 2012, despite the country’s federal government rolling out a stimulus package of 66 billion Australian dollars ($38 billion). Indian shares plunged, triggering trading halts, with the S&P BSE Sensex index falling more than 11%.

Japan’s Nikkei 225 bucked the downtrend, ending 2% higher. It had been closed Friday, when some other Asian markets had rallied. Shares in SoftBank Group, a major index constituent, soared on plans to sell up to ¥4.5 trillion ($41 billion) of assets to buy back shares and redeem debt.














 

Financial Markets – Top 5 Things to Watch This Week

This week market watchers will be looking at economic data releases for early indications of the scale of the impact from the coronavirus pandemic, but the main focus will continue to be on the response from governments and central banks who are ramping up stimulus measures amid market fears over whether steps announced so far will be adequate. Here’s what you need to know to start your week.

Data to show early economic hit from virus
Few doubt that the global economy will tip into recession as countries around the globe go into lockdown amid ongoing virus containment efforts. It goes without saying that large drops are likely in PMI data coming out this week in the U.S., Eurozone and the U.K.

The PMI surveys are typically conducted in the second half of a month and the data in the “flash” survey is usually collected in the week or so before the data is released, so economists reckon next week’s PMIs will provide the most comprehensive overview so far of the coronavirus impact.

Meanwhile, Thursday’s figures on initial jobless claims will be the first to show the full extent of the impact on the U.S. labor market. Economists at Goldman Sachs have estimated claims are set to jump to a record 2.25 million, according to an analysis of preliminary reports across 30 states.

U.S. government response awaited
Republicans and Democrats in the U.S. Senate on Saturday continued with efforts to reach a deal on a $1 trillion-plus bill aimed at mitigating the coronavirus pandemic’s economic fallout for workers and businesses.

White House economic adviser Larry Kudlow said he expects the final legislative package to be worth $1.3 trillion to $1.4 trillion.

Taken together with steps already taken by the U.S. Federal Reserve and the administration, the prospective bill would have a $2 trillion net impact on a U.S. economy, according to White House officials.

Liquidity squeeze to ease?
A liquidity squeeze prompted the Federal Reserve on Friday to enhance the dollar liquidity swap line arrangements it has with the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank.

To see if that does the trick, watch for dollar exchange rates to stabilize.



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Demand for the world’s reserve currency had jumped amid a rush for cash in anticipation of a prolonged pandemic, with there being a substantial liquidity mismatch between global demand for U.S. dollars and those on offer.

U.S stock valuation picture may become clearer
As the U.S. stock market has tumbled, valuations have also come down sharply.

The S&P 500’s price-to-earnings ratio, based on earnings estimates for the next year, has dropped from over 19 times in late February to 14.2 times as of last Wednesday, according to Refinitiv data, taking the valuation below its historical average.

But the picture is complicated by the fact that earnings estimates may have not come down enough to account for the coronavirus fallout.

The picture may become clearer in the coming weeks, as the first quarter comes to an end and companies start preparing their results. Last week, FedEx (NYSE:FDX) and Marriott (NASDAQ:MAR) withdrew their 2020 financial forecasts because of the outbreak.

Nike (NYSE:NKE), Micron Technology (NASDAQ:MU), and KB Home (NYSE:KBH) are among the U.S. companies due to report results this week.

Emerging markets
Emerging market assets have been hammered, with currencies plunging to fresh record lows, bonds plunging and stocks down nearly 10% last week. Several factors have contributed – the strong dollar, a darkening economic outlook, tumbling oil prices as well as rising borrowing costs.

Investors piling into the greenback have seen enduring stresses in dollar funding markets, with hurried swap lines between central banks earlier in the week doing little to alleviate the credit strains at the heart of the problem.

Central banks in the United States, the euro zone, Canada, Britain, Japan and Switzerland stepped in again on Friday, agreeing to increase the frequency of their one-week U.S. dollar credit facility.

In emerging markets, policymakers that lack the firepower to support currencies or face challenges to cut rates, will be keeping their fingers crossed that steps taken by major central banks will be enough to end the crisis.










Airbnb Racks Up Hundreds Of Millions In Losses Due To Coronavirus

Airbnb Inc. wrestles with escalating losses due to the devastating impact of the coronavirus pandemic on its global business. The pandemic has thrown into disarray Airbnb’s plans to go public this year, and the company’s board and investors are divided over the best path forward, according to people familiar with the matter.

The San Francisco-based startup, which lets people list their properties for rent on its marketplace, has racked up hundreds of millions of dollars in losses this year, one of the people said. A spokesman for Airbnb said the company has “$4 billion in liquidity” and is “focused with our board on ways we can help our community weather this crisis.”

It is unlikely that the company will be able to attract investors at its 2017 valuation of $31 billion, when it last raised money, the people familiar with the matter said. The management is mulling how low it is willing to go to seek an injection of capital.

The Wall Street Journal reported last month that Airbnb internally was already valuing the company at less than $31 billion.



Airbnb, one of the nation’s biggest private companies, had planned to make its widely anticipated debut on the public markets this year via a direct listing, which wouldn’t involve raising any additional money.

The company is now considering instead raising cash using an initial public offering, and has held several meetings with its board this month to discuss its approach, the people familiar said. Morgan Stanley and Goldman Sachs Inc. have been appointed as dual-lead underwriters. But an IPO could go ahead only when the virus crisis has eased, stock markets stabilize, and the company’s finances recover to a stable footing, the people familiar said.

An Airbnb spokesman said it “should come as no surprise that in these extraordinary times, like virtually every company in the world, we are regularly consulting with our board to discuss our work.”

Airbnb—caught in the crosshairs of the all-out crisis the virus has created in the global travel industry—now faces evaporating revenues, as well as a backlash from the hosts who are the backbone of its business.

All its major markets are getting hammered. Bookings last week were down year-on-year around 95% in Asia, 75% in Europe—the company’s biggest market—and 50% in the U.S., according to one of the people close to the business. A report last week by Airbnb-analytics firm AirDNA also showed bookings tanking in big cities world-wide. This week’s numbers are much worse, the person said.

A spokesman for the company said the figures weren’t accurate but declined to provide other numbers.

Airbnb’s board had already raised concerns about the company sliding into the red, even before the pandemic upended its business, the Journal previously reported. Executives were grilled at a board meeting late last year on why overheads such as its head office and employee expenses had been allowed to balloon, outpacing even the then-rapid growth in revenue.


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Some board members are unhappy that Airbnb didn’t go public last year, when a soaring stock market put premium prices on even unprofitable startups, the people close to the company said. Employees are concerned the listing could now be delayed beyond the end of the year, meaning many valuable stock options will expire, becoming worthless.

One person close to Airbnb said management and the board are working in sync but that outside investors are agitated about the company’s troubles and its response to them.

Brian Chesky, Airbnb’s chief executive, is under intense pressure from employees to go public, after more than 10 years as a private company. He recently sought to reassure staff that a delay won’t happen. In a staff meeting held earlier this month and on a separate phone call with employees last week, he said the company plans to stay the course of going public this year, the people close to the business said.

Some investors are skeptical this will be possible, or question what price the stock might achieve.

The price at which Airbnb shares are trading has fallen sharply, according to people who specialize in the market for private company shares.

Before the pandemic hit, shares were trading privately at more than $140, valuing the company around $45 billion to $47 billion, according to Jared Carmel, managing partner at Manhattan Venture Partners, a secondary-market specialist. Now, he said, “we’re seeing shares tick back to close to $105.” That’s what Airbnb’s shares priced at in its last funding round in 2017, which valued the company at $31 billion, according to Dow Jones VentureSource data.













These Five Warning Signs Highlight Virus’s Rapid Economic Impact

The economic losses from the coronavirus have transitioned from hints of serious difficulties just a week ago to a devastating stoppage at countless U.S. restaurants, hotels, movie theaters, gyms and other service providers, with millions of employees now idled.

While still largely invisible in the mostly dated official economic data, the destruction is clear in private reports on hotels, dining establishments and theaters, many of which are now closed. The key questions center around how much more deterioration remains and how long it will last.

Here are five indicators that give a sense of the emerging crisis for the nation’s businesses.

1. Hotels

The outlook for the lodging industry has quickly gone from bad to worse. In the week ended March 14, occupancy of U.S. hotels plunged to 53%, meaning rooms were about half empty for the week, according to data tracker STR. A year ago, the rate was 70%. The slump occurred even as the industry reduced prices, with average daily rates falling 11% from a year earlier.

With the virus spreading to all 50 states, the falloff in travel is likely to be just the beginning. Seattle, which was an early epicenter of the virus in the U.S., experienced just 33% occupancy, while San Francisco’s was 39%. New York City, which typically is packed with tourists and business travelers, saw a decline to 49%.

Cities that depend on conventions were especially hard hit, said Jan Freitag, STR’s senior VP of lodging insights. “Group cancellations were felt across the markets.”

2. Retail Sales

Retail sales show a somewhat deceptive picture of true demand as they are holding up primarily because Americans are racing to discount and grocery stores to stockpile food, toilet paper and paper towels and other emergency goods. While discounters saw a surge in sales, purchases slumped at department stores that offer discretionary items like clothing, according to Johnson Redbook data.

Gains were led by “canned food, bottled water, pharmaceuticals, cleaning and household products as consumers stocked up in anticipation of staying at home for the next several weeks,” Bloomberg Intelligence analysts wrote.

It will get even worse for department stores. The largest mall owner, Simon Property Group (NYSE:SPG), announced it was temporarily closing all of its retail malls in the U.S.

3. Jobless Claims

With state and local governments ordering restaurants, movie theaters, bars, gyms and other gathering places to close, economists are bracing for a once-in-a-lifetime surge in jobless claims. Applications for unemployment benefits rose 70,000 last week to 281,000, Labor Department data showed Thursday.

But that’s about to spike much higher. Pantheon Macroeconomics Chief Economist Ian Shepherdson said his preliminary estimate is 2 million claims for next week. Goldman Sachs Group Inc (NYSE:GS). economists project 2.25 million.

4. Consumer Comfort

If you are looking for a bright spot, by one measure, consumers’ attitude seem to be holding up reasonably well. The Bloomberg Consumer Comfort Index improved last week to 63 from 62.7 a week earlier, the first gain since January. The caveat is the CCI is reported on a four-week rolling average basis.



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Confidence remains well above levels of the past recession during 2007 to 2009. But with layoffs starting to occur in large numbers and the stock market deteriorating rapidly, there is reason to expect sentiment will weaken. Improved household attitudes will be vital for spending when the U.S. emerges from the crisis.

5. Movie Theaters

Theaters in the U.S. and Canada brought in just under $50 million over the weekend starting March 13, researcher Comscore Inc. said Monday. That’s a 61% decline from a year earlier and the smallest weekend tally since at least 1998. The three-largest chains in the U.S. are all closed this week, and almost every new film release has been postponed or is being made available for at-home rental early.

Of course, the cinema isn’t alone within the arts and entertainment industry. Broadway is dark too, having been shut down by order of New York Governor Andrew Cuomo more than a week ago. And all major sports — remember this should have been a week for NCAA basketball’s March Madness tournament — have canceled games or suspended seasons indefinitely,












 

Coronavirus Deaths Top 10,000 Globally

The number of deaths from the novel coronavirus world-wide doubled in a week to more than 10,000 on Friday.

Deaths from the pneumonia-causing pathogen have more than quadrupled in the U.S. over the past week to 205, while confirmed infections in the country have surged to 14,250 from around 1,700 on March 13. The majority of U.S. cases are in three states: New York, Washington and California.



New York Gov. Andrew Cuomo took more significant steps Friday to contain the growing number of cases, ordering residents to stay indoors “to the greatest extent” and requiring all nonessential workforce employees to stay home. He said the measures will be enforced, with fines and mandatory closures for businesses that don’t comply.

“This is the most drastic action we can take,” Mr. Cuomo said. New York has 7,102 infections, thousands more than any other U.S. state.

In the largest lockdown in the U.S. to date, California Gov. Gavin Newsom ordered the state’s 40 million residents to shelter in their homes, except for essential activities. Mr. Newsom’s order followed similar measures implemented earlier this week in San Francisco and the Bay Area, where residents were ordered to stay in their homes for three weeks. The state has 1,030 confirmed infections.

The State Department advised U.S. citizens not to travel internationally and urged those currently overseas to return home immediately or remain abroad indefinitely.

As the number of reported infections grew across the U.S. this week, everyday life fundamentally changed as more state and local leaders moved to limit its further spread. Large gatherings were prohibited; school, work and worship moved online; and bars and restaurants shut down. On Friday, the Scripps National Spelling Bee postponed its 2020 championships, scheduled to take place in Maryland in late May.

As the economic disruption caused by the virus becomes more apparent, lawmakers in the nation’s capital were set to begin negotiations over a stimulus package, the first version of which proposes direct cash payments to many Americans as part of a larger plan also designed to help struggling businesses and health-care professionals. Treasury Secretary Steven Mnuchin said the U.S. will extend the individual tax filing deadline to July 15.

U.S. stocks were mixed Friday after the Federal Reserve on Thursday offered to temporarily provide billions of dollars at near-zero rates to central banks, easing market strains.

Globally, there were more than 247,000 confirmed cases of the disease known as Covid-19, according to data compiled by Johns Hopkins University, with two-thirds of the cases outside of mainland China, where the new respiratory virus was first identified in late 2019.



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Europe has become the epicenter of the coronavirus pandemic, with a relentless rise in new cases forcing border closures and nationwide quarantines and stretching health-care systems to their outer limits.

France, where cases grew to 10,891, is likely to extend its two-week lockdown, authorities said on Friday.

“It’s a race against the virus, and we are just at the beginning,” said French President Emmanuel Macron, who convened a defense council on Friday with his cabinet.









 

Goldman: U.S. Measures Could Support Oil Prices Near Term

Supply restraint by core-OPEC producers could push second-quarter Brent oil prices up to $30 a barrel, while U.S. measures to support the market could underpin prices in the near term, Goldman Sachs (NYSE:GS) said in a research note.

Citing Wall Street Journal reports that the United States was considering intervening in the ongoing Saudi-Russian price war and Texas regulators may curb oil output, the U.S. investment bank said such action would reduce global and U.S. domestic supplies.



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U.S. crude oil prices rose more than $1 on Friday, extending steep gains from the previous session, after U.S. President Donald Trump said he would “get involved” in the price war at an “appropriate time”.

While any U.S. measures could support the oil market into the second half of the year, however, Goldman Sachs said accompanying supply cuts would still not be enough to offset the 8 million barrels per day (bpd) demand loss – brought about by countries slowing economic activity to halt the spread of the coronavirus which has caused nearly 10,000 deaths worldwide.

“Medium-term, the impact of such policies will depend on their political viability given the upcoming presidential election,” Goldman Sachs said in the note issued on Thursday.

U.S. production quotas could create a $5 to $10 upside to Goldman Sachs’ West Texas Intermediate price forecast of $40 to $45 a barrel in 2021, the bank said.

While a return to U.S. oil supply management policies of the 1970s and 80s would “help support prices in the third and fourth quarter above our $30 and $40 a barrel Brent forecast, they would simply replace OPEC’s artificial price support policy with another,” the bank said, referring to the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is a key member.



Oil extends recovery as Trump hints at intervening in Saudi-Russia price war

Oil prices recovered further on Friday, following steep gains in the previous session after U.S. President Donald Trump hinted he may intervene in the price war between Saudi Arabia and Russia at an “appropriate time”.

Prices were also supported by United States’ plans to buy up to 30 million barrels of crude oil for its emergency stockpile by the end of June, while regulators in the country’s largest oil-producing state Texas were reportedly considering curtailing production.

The more active West Texas Intermediate (WTI) crude futures contract for May was up 43 cents, or 1.7% at $26.34 a barrel by 0540 GMT. The contract rose as much as 5.5% to $27.34 per barrel earlier in the session.

U.S. crude futures for April (CLc1) also rose 43 cents to $25.65 a barrel. The front-month April contract, which spiked 24% on Thursday, expires later on Friday.

“An astonishing rebound in crude oil prices overnight was primarily driven by U.S’s consideration to intervene in the oil market by increasing strategic reserves, while slashing some oil production,” said Margaret Yang, market analyst at CMC Markets.

“The underlying issue is that global energy demand is falling sharply as more countries join the ‘lockdown’ club. The severity of Covid-19 for the macro-economy could exceed anyone’s expectation, and it could last for a long period of time.”

Brent crude futures (LCOc1) climbed 28 cents, or about 1%, to $28.75 per barrel.

The international benchmark rose 14.4% on Thursday in its biggest one-day gain since September, but was on track for its fourth consecutive weekly drop on Friday.

U.S. crude and Brent have both collapsed about 40% in the last two weeks since talks between the Organization of the Petroleum Exporting Countries and its allies, including Russia, broke down, which led Saudi Arabia to ramp up supply.

The Trump administration is considering a diplomatic push to get Saudi Arabia to close its taps and using the threat of sanctions on Russia to force them to reduce output, the Wall Street Journal reported, quoting unidentified sources.


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“The outsized gains by WTI reflect the hope and not the reality of the U.S. shale industry. Russia and Saudi Arabia have zero interest in helping US shale survive. Just the opposite, in fact,” said Jeffrey Halley, senior market analyst at OANDA.

“Once this reality finally sets in, I expect the rally in oil to disappear as quickly as it began.”





Stock Market Today: Technology Sector Leads A Turnaround

Stocks turned higher Thursday, erasing losses from earlier in the day as sharp gains in tech shares led to a turnaround. The Dow was up more than 400 points, or 2.1%. The S&P 500 was up 1.5%, while the Nasdaq outperformed with a 3.2% surge. Shares of Netflix and Facebook rose 7.6% and 5.8%, respectively. Amazon gained 4.1%.

Earlier in the session, the Dow was down 721 points, or more than 3%. The S&P 500 briefly fell more than 3% as well.

“This is a day trader’s market,” said Christian Fromhertz, CEO of Tribeca Trade Group. “That’s not my favorite type of trading, but the day-to-day swings and the overnight moves are pretty insane.”

Among the industries trading in positive territory Thursday morning was energy, with the S&P sector up more than 0.5%. Big oil producers like Diamondback Energy and Apache rose more than 8% each as futures contracts tied to the price of West Texas Intermediate crude rallied more than 15% to $23.47, on pace for its fourth-best day ever.







The moves followed yet another violent day on Wall Street on Wednesday. The Dow dropped 1,338.46 points, or 6.3%, on Wednesday and clinched its first close below 20,000 since February 2017. The Dow was down more than 2,300 points at the lows of the session. The S&P 500 dropped 5.2% to 2,398.10 and closed nearly 30% below a record set last month as both indexes sank further into bear markets.

Markets are clearly in a state of panic and forced liquidations – but risks remain skewed to the upside and this should become much more apparent once some of the solvency issues are addressed,” Adam Crisafulli, founder of Vital Knowledge, said in a note.

Wall Street has been on an unprecedented roller-coaster ride amid the coronavirus turmoil, with the S&P 500 swinging 4% or more in either direction for eight consecutive sessions.

An eye-watering spike in Treasury yields has also kept investors anxious. The 10-year Treasury rate hovered at 1.1% after jumping more than 50 basis points in two sessions as it rebounded from record lows.

Gregory Faranello, head of U.S. rates trading at AmeriVet Securities said swift reversal in yields comes amid strong dollar demand amid the coronavirus crisis.

“There’s a dollar strain on the system, globally,” said Faranello. “Whether it’s Asia, Brazil, emerging markets, Europe or here in the U.S., the dollar is in demand right now.”

“If you look at everything across the board, it’s all going down together. The one thing that’s going up that’s dollar denominated is the U.S. dollar,” he added.

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The dollar index, which tracks the greenback’s performance against a basket of other currencies, jumped to its highest level since January 2017 on Thursday. It last traded up 0.7% at 101.83 after breaking above 102.

More central bank stimulus

On Wednesday evening, the European Central Bank (ECB) announced a new Pandemic Emergency Purchase Program that will deploy €750 billion ($819 billion) to purchase securities to help support the European economy. The central bank said purchases will be conducted until the end of 2020 and include a variety of assets including government debt.

The ECB’s action follows similar initiatives by the Federal Reserve, its U.S. counterpart. The Fed announced earlier this month plans to pump an additional $1 trillion into the U.S. economy through asset purchases and cut the federal funds rate to zero. The Fed also said Wednesday night it will create a backstop for prime money market funds.

Those announcements came as the number of confirmed coronavirus cases around the world topped 200,000, according to Johns Hopkins University. In the U.S. alone, more than 9,400 cases have been confirmed along with over 100 deaths.







U.S. lawmakers appeared to inch closer to implementing fiscal stimulus measures. The Senate had enough votes to pass a bill expanding paid leave and unemployment benefits in response to the virus as part of what’s expected to be a whopping governmental response to avoid a downturn.

Senate Majority Leader Mitch McConnell said Wednesday he would vote for the plan despite what he called “real shortcomings.” With the urgent need to take action, “I do not believe we should let perfection be the enemy of something that will help even a subset of workers,” he said.






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World Leaders Rush In To Shore Up Panic-Hit Global Financial System

World leaders raced to shore up panic-stricken global markets on Thursday, pouring liquidity into the financial system as investors everywhere dumped assets, switching to dollars in cash amid the escalating coronavirus pandemic.

Policymakers in the United States, Europe and Asia resorted to emergency action as the pandemic left their economies virtually comatose, with quarantined consumers, broken supply chains, paralyzed transportation and depleted shops.

There were almost 219,000 cases of coronavirus reported globally, including over 8,900 deaths linked to the virus. Over 20,000 of those cases were reported in the past 24 hours, a new daily record.



The European Central Bank launched new bond purchases worth 750 billion euros ($817 billion) at an emergency meeting late on Wednesday, in a bid to prevent a deep recession that threatened to outdo the 2008-09 global financial crisis.

“Extraordinary times require extraordinary action,” ECB President Christine Lagarde said, amid concerns that the strains from burgeoning crisis could eventually tear apart the euro zone as a single currency bloc.

In the United States, the Federal Reserve rolled out its third emergency credit program in two days, aimed at keeping the $3.8 trillion money market mutual fund industry functioning if investors made rapid withdrawals.

On Sunday, the Fed slashed interest rates to near zero and pledged hundreds of billions of dollars in asset purchases, while President Donald Trump’s administration drew up a $1 trillion stimulus and rescue proposal.

The desperate state of industry was writ large in Detroit, where the big three automakers – Ford Motor Co (N:F), General Motors Co (N:GM) and Fiat Chrysler Automobiles NV (MI:FCHA) (N:FCAU) – confirmed they would be shutting U.S. plants, as well as factories in Canada and Mexico.

The British pound plunged to its lowest level against the dollar since 1985, as Bank of England Governor Andrew Bailey said he would not rule anything out when asked about printing money to give to individuals. Britain ordered all schools to close from Friday as the number of confirmed coronavirus cases rose 48% on Wednesday. Australia made a historic foray into quantitative easing after an out-of-schedule meeting on Thursday and cut interest rates for the second time in a month.


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South Korea warned of a global credit crunch and said it was setting up crisis funds to stabilize its financial markets.

Central banks in emerging countries from Brazil to India have stepped in this week to buy government bonds to prevent a jump in borrowing costs that would put more pressure on their economies.

Despite those moves, which together with other liquidity injections and stimulus announced in recent weeks reached levels unseen since World War Two, nearly every stock market in Asia was in the red, with Seoul, Jakarta and Manila hitting daily loss limits that trigger the suspension of trade.

At one point the Philippines bourse was down 24%. In currency markets, everything except the dollar and the euro collapsed.

J.P. Morgan economists forecast the U.S. economy to shrink 14% in the next quarter, and the Chinese economy to drop more than 40% in the current one, one of the most dire calls yet on the potential scale of the fallout.

“We’re in this phase where investors are just looking to liquidate,” said Prashant Newnaha, senior interest rate strategist at TD Securities in Singapore.

WAR OF WORDS

It was not just the dire state of the economy that panicked investors. Tensions between the world’s two biggest superpowers reached some of their most elevated levels and other powers were locking heads over their reactions to the outbreak.

U.S. President Donald Trump on Wednesday ratcheted up his rhetoric against China over the coronavirus, saying Beijing should have acted faster to warn the world and dismissing criticism that his labeling it the “Chinese virus” was racist.

Trump’s tougher language marked an escalation in a bitter war of words between the world’s top two economies that has widened to include the global pandemic and media freedoms.

A European Union document seen by Reuters said Russian media have deployed a “significant disinformation campaign” against the West to worsen the impact of the coronavirus, generate panic and sow distrust.

U.S. infections were closing in on 8,000, with the death toll climbing to at least 151. Millions of Americans were staying at home.

In contrast, China, which has been the first country to lock down large swathes of its territory, was slowly coming back to life. Chinese scientists and health experts involved in the fight against the virus believed the worst was over, downplaying warnings that the disease could become seasonal or that a deadlier “second wave” could hit later in the year.



They were wary, however, of new cases from overseas.

New local transmissions in China fell to zero, while imported cases surged by a record, accounting for all 34 new cases on Wednesday.

Germany, Iran and Spain reported over 12,000 cases each, while 12 other countries confirmed between 1,000-10,000 cases each. The virus has reached 172 countries and territories.

Governments around the globe, from the United States and Britain to the emerging world have been criticized for acting too slowly to stop the spread.

In Brazil, where President Jair Bolsonaro initially labeled the virus “a fantasy”, more members of the country’s political elite fell ill. On Wednesday night, housebound protesters banged pots and pans, shouting “Bolsonaro out!” from their windows.





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New York Stock Exchange Move To Electronic Trading Because Of Coronavirus

The New York Stock Exchange said Wednesday it will temporarily close its historic trading floor and move fully to electronic trading after two people tested positive for coronavirus infection at screenings it had set up this week.



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All-electronic trading will begin on March 23 at the open, the exchange said. The facilities to be closed are the NYSE equities trading floor and NYSE American Options trading floor in New York, and NYSE Arca Options trading floor in San Francisco.

The closure was in part as a result of positive coronavirus tests of two people, Stacey Cunningham, President of the NYSE, told CNBC. The entrants were stopped at the medical screenings at the Big Board.

The stock market has closed at times over the years, such as during World War II and in the wake of 9/11, but this is the first time the physical trading floor of the Big Board has ever shut independently while electronic trading continues.

“We implemented a number a number of safety precautions over the past couple of weeks, and starting on Monday this week we started pre-emptive testing of employees and screening of anyone who came into the building,” Cunningham said on “Closing Bell.” “If that screening warranted additional testing, we tested people and they were sent home and not given access to the building. A couple of those test cases have come back positive.”

“While those people were not in the building this week and the building had been cleaned and addressed prior to start of trading on Monday, I think it’s reflective we’re seeing things evolve,” Cunningham added.

The NYSE is operated by the electronic trading group Intercontinental Exchange, which acquired it in 2012. The exchange moved into its location at 18 Broad St. in lower Manhattan in 1903.



Wall Street has been on an unprecedented volatile ride during the coronavirus crisis. Just this week, a market-wide circuit breaker was triggered twice by the NYSE due to the massive sell-off, resulting in brief trading halts.

On Wednesday, the Dow Jones Industrial Average closed below 20,000 for the first time since February 2017. The S&P 500 was now nearly 30% below a record set last month.

The exchange said in a release that it was implementing its business continuity plan and “trading and regulatory oversight of all NYSE-listed securities will continue without interruption.”





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Coronavirus Infections Pass 200,000 Globally, Death Toll Tops 8,000

The rapid increase in world-wide cases reflects, in part, how people in many countries were unwittingly transmitting the respiratory virus before governments grasped the scale of the problem.


There were more than 205,000 confirmed cases of the disease known as Covid-19 on Wednesday, with infections outside of mainland China—where the epidemic began—now above 124,000, according to data compiled by Johns Hopkins University.

Deaths globally have also more than doubled over the past two weeks to 8,248. In Europe, the death toll reached 3,415, overtaking China for the first time and cementing the continent’s position as the new epicenter of the pandemic.

Italy, the second worst-hit country after China, has seen infections top 31,500 and deaths reach 2,503. Scientists expect the number of fatalities in Italy to overtake those in China within days.

The U.S. plans to close its northern border with Canada to nonessential traffic, President Trump said. The president, who made the announcement on Twitter, said the decision was made by “mutual consent.”

A Canadian official said talks with the U.S. are aimed at targeting nonessential travel like tourism, while allowing trade and commerce to continue between the two countries. Canada on Monday banned most nonresidents from entering the country, although it made an exception for U.S. citizens.

U.S. stocks dropped sharply Wednesday, following declines in international markets. In a tweet, Mr. Trump said he would hold a news conference later in the day to announce “very important news from the FDA about coronavirus.”

The U.S. has more than 6,500 confirmed cases in all 50 states and Washington, D.C., including 115 deaths. Case numbers are expected to grow as testing capabilities expand. U.S. hospitals are already facing a shortage of masks, gowns and other equipment needed to care for patients.

States and local officials took more aggressive measures to promote social distancing in recent days, closing restaurants, bars and nonessential businesses. New York City Mayor Bill de Blasio said he is weighing whether to require residents to shelter in place, while New York Gov. Andrew Cuomo said he didn’t intend to impose such a quarantine. Meanwhile, officials in San Francisco and the Bay Area ordered residents to stay home for three weeks, and the city of Hoboken, N.J., imposed a self-isolation policy.


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Officials in Chicago, the biggest city within the three states that voted Tuesday, said election-day turnout was low as nervous voters stayed home. Democratic National Committee Chairman Tom Perez called for states with coming primaries and caucuses to use mail-in ballots and other alternatives, after Ohio’s abrupt cancellation of its primary caused confusion.

In an effort to cushion households and businesses amid this economic slowdown, the Trump administration on Tuesday backed a plan to send checks directly to Americans as part of a $1 trillion stimulus package. The Senate is expected to vote Wednesday on a second coronavirus response bill, focused on free virus testing and two weeks of paid emergency leave for people dealing with its effects.

Many economists say it is looking more likely that there will be a global recession. Deutsche Bank AG said gross domestic product could shrink 24% in the eurozone and 13% in the U.S. in the second quarter on an annual, seasonally adjusted basis—declines that would be the biggest in recorded history.





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Financial Markets Tumbles Again On Recession Fears

Trading in U.S. stock was again suspended almost immediately after the opening on Wednesday, after another huge wave of selling driven by fears of a coronavirus-induced recession.

By 10 AM ET (1400 GMT), the Dow Jones Industrial Average was down 980 points, or 4.6% at 20,257 points, having tried and failed to break through the 20,000 psychological support level at the opening. The S&P 500 was down 3.7% and the Nasdaq Composite was down 2.9%.

The indices had risen by between 5.2% and 6.2% on Tuesday in response to outlines of a $1.2 trillion package of government stimulus measures.

Analysts at Deutsche Bank (DE:DBKGn) said Wednesday they still expected the U.S. economy to contract by annualized 12.9% in the second quarter as the pandemic hits its expected peak.

Newswires reported New York City Mayor Bill de Blasio as calling for military assistance, saying that the number of confirmed cases in the city would top 1,000 by the end of the day. It had stood at 923 on Tuesday.

Globally, the number of confirmed cases has now topped 204,000, with some 6,500 of those in the U.S., according to Johns Hopkins data. The number of deaths globally has risen to 8,241, with the virus still accelerating in the U.S. and much of Europe.

Among individual stocks, Boeing (NYSE:BA) was among the biggest losers, falling 16.4% after the company said it would ask the government for up to $60 billion in support for the aerospace sector.

Boeing has spent $43 billion on share buybacks since 2013, a figure that may put pressure on the government to dilute current shareholders heavily as part of any taxpayer-funded bailout.

Crude oil was also sharply lower as traders priced in an increasingly severe hit to demand for fuel due to lockdown measures. U.S. crude futures fell 9.7% to $24.77 a barrel, their lowest since 2002.



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Amazon Stops Receiving Nonessential Products From Sellers

Amazon is suspending sellers from sending nonessential products to its U.S. and U.K. warehouses until April 5 in the latest move to free up inventory space for much-needed supplies that are in shortage as a result of the coronavirus outbreak.

In a note sent to sellers Tuesday, Amazon said it is seeing increasing online shopping demand from consumers. As its household staples and medical supplies are running out of stock, it will prioritize certain categories in order to “quickly receive, restock, and ship these products to customers.”

Amazon defined five categories as essential products that can continue shipping, including Baby Product, Health & Household, Beauty & Personal Care, Grocery, Industrial & Scientific, Pet Supplies.

The move follows Amazon’s announcement it will hire 100,000 workers for its warehouses on Monday, as the Seattle-based giant is trying to meet growing online shopping need from people who stay home amid the coronavirus outbreak.

Third-party sellers account for over half of the sales on Amazon. Amazon has been courting sellers to use its own fulfillment system, enabling many of them with faster delivery without the risks of sitting on inventories.







It is especially popular for sellers who use a dropping shipping method, meaning sellers import products from manufacturers in countries including China and directly send them to an Amazon warehouse. Amazon earns fees from managing the storage and delivery process.

Sellers supplying products that are deemed nonessential could see their products run out of stock and they will be unable to restock as a result of the measure. Still, they can use other fulfillment methods to directly mail products to customers.

Amazon did not immediately replied to request for comment.



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Traders Bet On Falling ‘Fear Gauge’

The volatility gauge tends to rise when markets fall and investors reach for stock protection through the options market. The VIX climbed to 82.69 Monday, topping its high of about 80 in 2008. After the financial crisis, trading derivatives tied to the VIX took off as people sought to profit from its swings.



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Many are wagering its recent jump won’t be long-lived. Betting on its fall through what is known as the short volatility trade has been particularly popular in recent years. This can be a risky tactic that backfires when stocks slide as sharply as they have in recent weeks as the spread of coronavirus has raised the risk of a recession.

As stock markets staged a modest rebound Tuesday, some of the most popular contracts were tied to VIX falling to 27 or 20, Trade Alert data show, closer to levels hit earlier this year when major indexes hit records.

Still, turbulence in markets has been high, triggering diverging views on the gauge’s path. Analysts at Credit Suisse Group AG said another steep selloff similar to Monday’s could push the VIX above 100. The S&P 500 fell 12% that day, one of the worst sessions in its history.

Some options traders have already been positioning for that, scooping up contracts tied to the VIX jumping as high as 100 or even 130, Trade Alert data show. Those are among the smaller positions outstanding but were some of Monday’s most popular trades, according to Trade Alert.

“While this is surely possible, we believe it is highly improbable,” wrote Jonathan Golub, an analyst at Credit Suisse.

Cboe Global Markets Inc., the exchange operator that oversees VIX options trading has added new strike prices—or levels at which options can be exercised—during the recent market tumult. Cboe added options with a strike of 100 on March 2 and more strikes were added the following week, a spokeswoman for the exchange said.






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Stock Market Today: Wall Street Attempts Rebound From The Dow’s Third-Worst Day Ever

Stock futures and premarket trading in exchange-traded funds pointed to a bounce on Tuesday following the Dow Jones Industrial average’s third-worst day ever.

Trading overnight, however, was very volatile with futures giving back more than 1,000 points as investors try to weigh the uncertain economic impact of the coronavirus outbreak.

Around 6:14 a.m. ET, Dow Jones Industrial Average futures indicated an implied open of more than 400 points. The S&P 500 SPDR ETF gained more than 2% in premarket trading.

Earlier in the session, futures contracts tied to the S&P 500, Dow Jones Industrial Average and Nasdaq 100 hit their upside limit, triggering a halt. In non-U.S. trading hours, stock futures are halted if they hit their downside or upside limits, pinning those contracts to their upper or lower bounds. The halt is meant to ensure that opening trade is orderly and not emotional.




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Those moves came after President Donald Trump tweeted: “The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before!”

The Dow Jones Industrial Average and S&P 500 had their worst day since the “ Black Monday” crash of 1987 , falling 12.9% and 12%, respectively. It was also the Dow’s third-worst day ever. The Nasdaq Composite had its biggest one-day plunge ever, tumbling 12.3%.

Trading halts typically occur amid extremely abnormal market volatility.

The Cboe Volatility Index — Wall Street’s preferred fear gauge — posted its highest-ever close at 82.69 . That tops the financial crisis’ peak of 80.74.

Wall Street’s drop came even after the Federal Reserve slashed interest rates to near-zero on Sunday and announced a $750 billion asset-purchasing program. It also came as the number of coronavirus cases jumped in the U.S.

At least 4,281 cases have been confirmed in the U.S. along with more than 70 deaths, according to data from Johns Hopkins University. President Donald Trump also said the crisis could stretch into August, adding the administration may look at locking down “certain areas.”

“Although the contemporary crisis is loaded with bad news, this has not been its primary problem. It’s the ‘unknown,’” said Jim Paulsen, chief investment strategist at The Leuthold Group, in a note. “Not even health experts understand what this is or where it is headed, and that is the worst possible outcome for investors.”

“Give me bad news any day over complete uncertainty,” he said.

The S&P 500 closed Monday at its lowest level since December 2018. The Dow ended the session at its levels not seen since early 2017.

“For now until there is improvement in the trend … it’s tough to consider being long and it’s right to be in Cash on the sidelines,” Mark Newton, managing member at Newton Advisors, said in a note to clients.



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Euro 2020 Football Tournament Set To Be Postponed

Uefa, European football’s governing body, will on Tuesday postpone this summer’s Euro 2020 Championships as the flagship tournament becomes the latest casualty of the coronavirus outbreak that has upended the global sporting calendar.

The tournament will be delayed in an effort to allow the continent’s domestic leagues to finish their seasons and avoid multibillion-euro hits to their businesses, said multiple people familiar with the matter.



Its organisers will meet on Tuesday with representatives of national football governing bodies, clubs, and leagues and players across the continent to plot their response to the crisis. Almost every football division in Europe has suspended matches or started playing matches in empty stadiums in response to the pandemic.

Consultancy KPMG predicted the “Big Five” football leagues in England, Spain, Germany, France and Italy face a hit of almost €4bn from lost match day, broadcasting and sponsorship revenues if the remaining games in their seasons are not completed.

The hope would be that by postponing the tournament, which is set to start in June and be hosted by 12 European cities, national leagues will be able to resume games later this summer after the peak of the outbreak has passed, the people said.

“We are waiting for the solution from federations and Uefa for future calendars,” said the owner of one of Europe’s biggest clubs, who declined to be named. “Then we can understand exactly the losses in order to prepare for our financial problems.”

Uefa declined to comment. The tournament would join a long list of global sporting fixtures that have been cancelled, with the National Basketball Association in North America joining Formula One, golf, tennis and rugby organisations halting their seasons over recent days.

The stakes for the domestic European leagues are high. Revenues from broadcasting, sponsorship and ticketing were worth €28.4bn across Europe in the 2017/18 season, according to the consultancy Deloitte. However, some countries are in a stronger position to cope with a sudden dip in income.

Over the 2017/18 season, English top division clubs made aggregate operating profits of almost €1bn, but Italian clubs made a combined operating profit of just €50m, while in France, clubs made an aggregate operating loss of €298m.

Karren Brady, vice-chairman of West Ham United of the Premier League, the world’s most valuable domestic football competition, has said the season should be declared “null and void because if the players can’t play the games can’t go ahead”.



Such a decision would trigger huge financial liabilities, as broadcasters will not have to pay for cancelled matches. In the UK alone, Sky and BT Sport currently pay more than £1.3bn each year to be the competition’s domestic TV broadcasters, with each match costing up to £9m.

Leading football clubs from across the continent warned their insurance policies are unlikely to cover the expected impact from lost broadcasting and ticketing revenue from cancelled league fixtures.

Executives at some of the Premier League’s leading clubs said their insurance policies covered cancellation of one or two matches covering a few million pounds, but not the cancellation of a whole season.

Insurance experts said that while many companies buy protection if an event is cancelled, communicable diseases such as Covid-19 are usually excluded and are only covered via an add-on, which not everybody buys.

One senior insurance executive said that add-ons for communicable diseases are often bought by US event organisers, but that is not the case in other parts of the world. Insurance cover for the Olympics, which its organisers still insist will continue in July as planned, could run to about $2bn, according to analysts at Jefferies.

“The big, global events will have a very comprehensive policy,” said Edel Ryan, of the special risks practice at insurance broker Marsh JLT Specialty. “In football, the appetite for cancellation cover is mixed,” added Ms Ryan. “Many won’t have it at all.”






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European Union Ban Entry All Schengen Area Borders

The European countries have discussed today the idea of introducing a ban on entry to the 26-state Schengen passport-free travel zone, which would cover all non-essential visits from third countries, with exemptions including for citizens of the Schengen area, people familiar with the work.

The proposal was announced by the President of the EU Commission Ursula von der Leyen.


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“The less travel, the more we can contain the virus. Therefore, I propose to the heads of state and government to introduce temporary restriction on non-essential travel to the EU.” … “These travel restrictions should be in place for an initial period of 30 days, but can be prolonged as necessary.”

Later on, she also tweeted about the decision.

“The EU Commission presents guidelines on border measures & proposes:
1. Green lanes/fast lanes giving priority to essential transport to keep the mobility sector going & ensure economic continuity
2. Temporary restriction on non-essential travel to the EU (30 days),”

The move comes after several EU and Schengen Area Member Countries started introducing border checks on their own, banning from entering all travellers that were not their passport holders, including Germany and Estonia.

If it comes into force, the ban will apply to all non-essential travel to the Schengen area. The EU but non-Schengen countries of Ireland, Cyprus, Croatia, Romania and Bulgaria will also be invited to also implement the restrictions.

The idea of such a measure has been discussed on a phone call this morning between French president Emmanuel Macron, German chancellor Angela Merkel and the heads of the European Commission and Council.

The news related to the decision comes just a few hours after the Civil Liberties Chair Juan Fernando López Aguilar demanded proportionality and coordination within the EU on the reintroduction of border controls at some Schengen internal borders due to coronavirus.



“In the last days, several EU member states have reintroduced border controls at their internal borders within the Schengen area or even closed them for certain categories of travellers while some further member states are considering such measures,” the Chair said.

He further urged all member states to take their measures in full respect of the principles of proportionality and, above all, solidarity among EU Member States, non-discrimination and the applicable Schengen rules.






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Emergency Measures Taken By The Federal Reserve May Not Be Enough To Ward Off A Coronavirus-Induced Great Recession

The decline underscores the level of worry among investors since the coronavirus pandemic escalated and disrupted supply chains, sidelined workers and infected tens of thousands of people. To combat the potential economic fallout, central banks and governments have put in place various stimulus measures.

Those efforts, so far, have yet to stem the selloff. The S&P 500 is down 30% from its peak reached less than a month ago. Shares in the two largest U.S. companies by market value—Apple Inc. and Microsoft Corp.—each dropped more than 12% Monday.

“This is what panic looks like,” said Patrick Healey, president and founder of Caliber Financial Partners. “It doesn’t matter what the Fed did over the weekend or what they could have done, the trading activity in the market is reflective of fear and uncertainty.”

“The only thing that is going to calm markets is seeing the number of [coronavirus] cases go down,” he said.

The blue-chip index plummeted 2997.10 points, or 13%, to 20188.52, marking the second worst day in the index’s history. The S&P 500 dropped 324.89 points, or 12%, to 2386.13. And the Nasdaq Composite tumbled 970.28 points, or 12%, to end the day at 6904.59—the tech-heavy index’s steepest ever one-day fall.

All three major indexes are in a bear market.

Bank stocks were among the hardest hit Monday, with Citigroup Inc. falling 19%. Bank of America Corp. and JPMorgan Chase & Co. both declined 15%. The Fed, which took a range of actions to support bank lending, noted companies around the world are drawing down their credit lines for working capital as economic activity slows, putting pressure on lenders.

Those efforts were part of the central bank’s broader bid to stabilize the economy. It slashed its benchmark interest rate to near zero—the second emergency rate cut this month and said it would buy $700 billion in Treasurys and mortgage-backed securities, among other things.

The news sent stock futures and global stocks sliding, with some investors viewing the move as too much stimulus, too soon.

“It’s basically using up all their ammunition within a three-week span,” said Terence Wong, chief executive of Azure Capital, a Singapore-based fund management firm. “There’s nothing left. They can’t use monetary loosening as part of their arsenal anymore.”

U.S. stock trading was halted for 15 minutes shortly after Monday’s opening bell when the S&P 500 tumbled more than 7%, triggering a marketwide circuit breaker. The automatic curb on trading marked the third time in six sessions that U.S. stocks have been halted intraday.



The declines accelerated in the final hour of trading after President Trump said the virus may not be under control until July or August.

The losses were broad: Only nine stocks in the S&P 500 ended the session in the green.

Yet there were surprising bright spots, too. American Airlines Group Inc. surged 11% on talks between U.S. airlines and the government to obtain as much as $50 billion in financial assistance. Moderna Inc. skyrocketed 24% after the biotechnology company said it had tested its coronavirus vaccine on one participant involved in its clinical trial. Clorox Co. also continued climbing, rising 4.1%, on increased demand for cleaning products.

Several U.S. states and cities have said in recent days that they were closing nonessential businesses, such as movie theaters and nightclubs, to encourage social distancing and help prevent the spread of coronavirus. Public and private schools closed for nearly 30 million U.S. children. The governors of New York, New Jersey and Connecticut tightened restrictions on the public, including banning gatherings of over 50 people, shutting down bars and instituting a recommended curfew.

The closures weighed heavily on markets Monday, some investors said, and exacerbated existing concerns that the U.S. economy could slip into a recession. Consumer spending accounts for nearly two-thirds of the U.S. economy, and it remains unclear what effect a sharp reduction in shopping and dining out will have. Goldman Sachs Group projected Sunday that U.S. gross domestic product will shrink 5% in the second quarter.


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“There is going to be a significant hit to economic activity for any country with containment measures,” said Seema Shah, chief strategist at Principal Global Investors. “We’re not going shopping, we’re not going to buy lunch. The impact on smaller and medium-sized businesses is going to be enormous.”

In China, where the virus spread rapidly in early 2020, evidence of economic fallout is a little more clear. Economic statistics for January and February showed that Chinese retail sales, investment in fixed assets and industrial output all fell sharply, and more than economists expected. Output at China’s factories was 13.5% lower in the combined January-February period, compared with the year before.

“It is sending a frightening signal to the other economies,” said Jim McCafferty, joint head of Asia-Pacific equity research at Nomura in Hong Kong. “We will see a similar impact on global GDP numbers.”

Stocks in Shanghai and Hong Kong ended the day down more than 3%. The pan-continental Stoxx Europe 600 closed down 4.9%, paring earlier declines. And Japan’s Nikkei 225 index closed 2.5% lower, even after the Bank of Japan rolled out new measures, including doubling its purchases of exchange-traded equity funds, and said it wouldn’t hesitate to take more action if needed.

The steep fall in stocks globally sent investors scrambling toward U.S. government bonds. The yield on the benchmark 10-year U.S. Treasury note dropped to 0.722% from 0.946% on Friday, the largest one-day yield decline since 2009.


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Meanwhile, Brent crude, the global gauge of crude prices, fell 11% to $30.05 a barrel, its lowest level since January 2016. Oil prices have lost more than half their value since the start of the year as investors have grown concerned about waning demand for energy, including jet fuel.

And the Cboe Volatility Index, or VIX, surged higher, surpassing its 2008 record. The index is a closely watched measure of volatility in U.S. stocks. Monday marked the third day in a row that the S&P 500 swung by more than 9%.





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European Union Plans Shutdown On Nonessential Travel For At Least 30 Days

The European Union plans an unprecedented 30-day ban on nonessential travel into the bloc in a bid to restrict the spread of the coronavirus, European Commission President Ursula von der Leyen said Monday.

The significant escalation of EU measures needs to be approved formally by EU leaders when they talk on Tuesday. Ms. Von der Leyen said she had spoken to the majority of EU leaders over the weekend and had their backing.

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The proposal covers the EU’s border-free Schengen zone, which includes 22 EU countries and four non-EU countries. The proposed ban doesn’t affect travel within the EU, but as of Monday morning, seven countries in the bloc had imposed their own unilateral travel restrictions on EU and non-EU foreign nationals.

“These travel restrictions should be in place for an initial period of 30 days, which can be prolonged if necessary,” she said in a video statement.

The Commission chief said that non-EU Schengen associate members—Switzerland, Iceland, Norway and Liechtenstein—would be encouraged to join the ban. Switzerland and Norway already have similar measures in place.

She also encouraged Britain and Ireland, which share a common travel area but aren’t in the Schengen zone, to align with the others. U.K. citizens will still be able to travel to the EU, she said, despite Britain exiting the bloc in January.

The ban will allow for a number of exemptions for long-term residents, medical staff and others dealing with coronavirus, diplomats and frontier workers. In a bid to ensure the continent isn’t blocked off from global supply chains, people transporting goods will also be exempt, Ms. Von der Leyen said.

The Commission chief said she had informed the EU’s Group of Seven developed nations partners of the proposed measure in a call Monday afternoon.

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She said the EU was also implementing fresh exemptions to the bloc’s state aid rules to allow unprecedented government support to local companies.

Last week, the Trump administration banned most EU citizens from travelling to the U.S. Washington extended that ban to include Britain and Ireland over the weekend.






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Wall Street Sees Worst Drop Since 1987

U.S. stock markets fell the most since 1987 in early trading on Monday, having been suspended, limit down, almost immediately after trading started, as the shutdown of increasing swathes of public life in the U.S. brought home the scale of the coronavirus outbreak.

By 9:50 AM ET (1350 GMT), the Dow Jones Industrial Average was down 2,773 points or 12% at 20,393 points. The S&P 500 was indicated down 10.7% and the Nasdaq Composite was down 11.5%.





Investors weren’t reassured by the emergency measures taken on Sunday night by the Federal Reserve, which cut the target range for fed funds to near zero and signalled $700 billion in asset purchases to keep financial markets orderly.

The Fed also said it would extend the availability of dollars internationally through swap facilities with other central banks.

“The Fed has pulled out all the stops. But in the end the underlying driver of this crisis is very different from 2008/9, i.e. this is about COVID-19,” said Robin Brooks, an economist with the Institute for International Finance in Washington, DC. “That means the Fed can alleviate the symptoms, but it’s unreasonable to expect the crisis to go away on Fed action.”

Earlier on Sunday, Treasury Secretary Steven Mnuchin urged investors to look beyond the short-term hit to the economy, telling CNBC that “There will be a huge amount of pent up demand when this is done. And it will be done.”

However, Mnuchin also warned that “the goal is not to bail out companies,” a line that appeared to raise the risk of near-term bankruptcies, especially in the transport and oil sectors.

Among the worst hit were airline stocks. United Airlines stock fell over 15% after saying it would slash capacity by 50%, while Delta Air Lines (NYSE:DAL) stock and American Airlines (NASDAQ:AAL) stock also fell heavily after the Trump administration expanded restrictions on arrivals from Europe to include the key routes serving London and Dublin.

Apple (NASDAQ:AAPL) stock fell as much as 13% before rebounding to be down only 9.7% after the company said it will shut all its stores outside China. It was also hit by a $1.2 billion antitrust fine in France.

Oil and gas stocks tumbled again as crude prices fell below $30 a barrel and U.S. gasoline prices fell to an all-time low of 69 cents a gallon.

Banks were also badly hit, as the Fed’s action threatened to crush lending margins without, at least in the short term, supporting income from currency and securities markets. Bank of America (NYSE:BAC) stock fell 14.6%, while JPMorgan (NYSE:JPM) stock fell 15.1% and Citigroup (NYSE:C) stock fell 19.7%.


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Casino operators MGM Resorts (NYSE:MGM) and Wynn Resorts (NASDAQ:WYNN) also both fell after the pair announced they would temporarily close their casinos in Las Vegas, essentially putting much of the famous strip under lockdown.



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Oil’s Spectacular Collapse Continues

Oil prices extended the gloom on Monday after a Saudi-Russian price war and an equities meltdown sparked by the coronavirus pandemic saw their biggest weekly losses in more than a decade. US benchmark West Texas Intermediate (WTI) briefly fell below $30 a barrel, or 5.5 percent, in morning Asian trade before regaining its footing.


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It was trading at $31.13 a barrel at around 0530 GMT, down nearly two percent from Friday’s close. The Brent global benchmark was down 3.28 percent at $32.74 a barrel.

Last week’s price war began after Saudi Arabia and other members of an informal alliance of major crude producers led by the OPEC oil cartel pushed for an output cut to combat the impact of the virus outbreak.


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But alliance partner and non-OPEC member Russia, the world’s second-biggest oil producer, refused — prompting Riyadh to drive through massive price cuts and pledge to boost production.

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The COVID-19 outbreak added to downward pressure as it throttled global equities, with growing concerns over a potential worldwide recession and escalating travel restrictions prompting a crash in demand forecasts.

Prices made a feeble rally late last week after US President Donald Trump announced $50 billion in Federal spending to stem the damage from the coronavirus and plans to buy “large quantities of crude oil” to top up strategic reserves.

But both benchmarks still fell by around 25 percent in the biggest weekly drop since the global financial crisis in 2008, and more losses are expected.

Rallies will likely continue to fade so long as the market continues to weigh the double-whammy of the COVID-19… and the massive jump in supply,” said Stephen Innes, global chief markets strategist at AxiCorp.

“The rare combination of severe shocks to both supply and demand has caused the crude market to collapse as producers… steel themselves for an unexpected glut of oil in coming weeks,” added Sukrit Vijayakar of Trifecta Consultants.








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Coronavirus Effect On The Stock Exchange: Stocks Will Start The Week About 1,000 Points Lower

Stocks globally plunged even after the Federal Reserve slashed its benchmark interest rate to near zero as investors remained concerned that the emergency measures won’t suffice to ward off a recession caused by the coronavirus pandemic.


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Futures tied to the Dow Jones Industrial Average dropped almost 5%, signaling that the gauge of U.S. blue-chip stocks will start the week about 1,000 points lower. Trading limits prevent futures from losing more than about 5% in out-of-hours trading.

Investors shifted funds into the shelter of U.S. government bonds, reflecting continued anxiety about global growth prospects. The yield on the benchmark 10-year U.S. Treasury note dropped to 0.794%, from 0.946% at Friday’s close. The Fed took several steps last week to calm the Treasury market, which is the most liquid and actively traded bond market in the world, as outsize swings in yields and other safe-haven assets added to the global turbulence.



The Fed’s second emergency rate cut this month—disclosed Sunday evening—hasn’t been well-received since it appeared to investors to be a “sign of desperation,” said Terence Wong, chief executive of Azure Capital, a Singapore-based fund management firm.

“It’s basically using up all their ammunition within a three-week span,” said Mr. Wong. “There’s nothing left. They can’t use monetary loosening as part of their arsenal anymore.”

In addition to slashing borrowing costs, the Fed said it would buy $700 billion in Treasurys and mortgage-backed securities, cut the rate charged to banks for short-term emergency loans from its discount window and activate swap lines with five other central banks.

The pan-continental Stoxx Europe 600 declined 7.8%. Equity indexes in Hong Kong, Shanghai, South Korea and Japan all closed lower, falling between 2.5% and 4%.

Investors are continuing the digest of the severity of the downturn that we’re experiencing in real time across the world,’’ said Rick Lacaille, chief investment officer at State Street Global Advisors. “It’s hard to process how temporary that shortfall is going to be.’’

Projections like Goldman Sachs Group’s forecast of a 5% drop in U.S. gross domestic product in the second quarter is weighing on market sentiment, with investors questioning whether the fallout from the outbreak will continue into 2021, Mr. Lacaille said.

The reaction in U.S. markets showed investors were already looking past the Fed and waiting for the federal government to act with bigger stimulus measures, said Joseph Brusuelas, chief economist at RSM U.S.

“Until they signal that they understand the magnitude of the coming demand shock, markets will continue to sell off and be subject to significant volatility,” Mr. Brusuelas said.

Jerome Powell told reporters that plunging oil prices were a factor in the Fed’s decision. Brent crude, the global gauge of crude prices, fell 7.6% to $31.27 a barrel, leaving the benchmark down in value by about half since the start of the year.

Chinese data showing the scale of the country’s virus-induced slowdown also fed a regional selloff. Economic statistics for January and February showed Chinese retail sales, investment in fixed assets and industrial output all fell sharply, and more than economists expected. Industrial output was 13.5% lower year-over-year.

In Australia, whose economy is heavily reliant on Chinese demand, the equity benchmark S&P/ASX 200 index fell a record 9.7%, to end the day some 30% below its highest close less than a month ago.

The figures showed the economic costs of an effective virus-containment strategy, according to Jim McCafferty, joint head of Asia-Pacific equity research at Nomura in Hong Kong.

“It is sending a frightening signal to the other economies. We will see a similar impact on global GDP numbers,” Mr. McCafferty said, as infection control takes priority over growth targets. In turn, corporate earnings and growth estimates will start to fall, he projected.

Japan’s Nikkei 225 index closed 2.5% lower on Monday, even after the Bank of Japan rolled out measures to blunt the impact of the novel coronavirus, including doubling its purchases of exchange-traded equity funds, and said it wouldn’t hesitate to take more action if needed.


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Japanese Prime Minister Shinzo Abe said that the Group of Seven leaders would hold an extraordinary videoconference at 10 a.m. EST to coordinate their response to the coronavirus outbreak.

The WSJ Dollar Index, which tracks the dollar against a basket of 16 others, fell 0.2%.



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Small-Business Confidence Plunged In March To Near Its Lowest Levels In The Past Seven Years

Small-business confidence plunged in March to near its lowest levels in the past seven years, as business owners grappled with the effects of the novel coronavirus on their companies and the broader economy.

Owners of businesses from restaurants and yoga studios to marketing and manufacturing firms are already making tough choices, as the fallout spreads from industries dependent on Chinese manufacturers to the broader U.S. economy.

“We’re going into a period no one has been through before,” said Jay Foreman, chief executive of Basic Fun Inc., a small Boca Raton, Fla., toy maker. “It feels like 9/11, Katrina and the financial crisis all in one.”



The company last week laid off about 10% of its 175 employees to conserve cash, after its bank advised Mr. Foreman to reduce overhead to avoid violating the terms of its loan agreements. “They have been working with us; they are telling us the realities,” Mr. Foreman said. “If you think your income will be reduced, you need to reduce your expenses.”

The pain began in February, when the Chinese government ordered factories to remain closed after the traditional Lunar New Year holiday and restricted the movement of workers, disrupting the toy company’s supply chain. Chinese production is now coming back online, but Mr. Foreman fears the pandemic will mean fewer sales of its Tonka trucks, Lite Brite, Lincoln Logs and other offerings.

Companies with fewer than 500 workers employ roughly 60 million people, or about 47% of the private sector workforce, according to the Small Business Administration. The challenges these businesses face and the steps they take in response, such as furloughing or laying off workers or pulling back on investment, will quickly ripple through the broader economy.

The coronavirus outbreak is likely to be particularly challenging for small companies because they tend to operate on thinner margins and with smaller cash reserves. A 2019 report by the JPMorgan Chase Institute looked at 1.4 million small businesses with a business banking deposit account at the bank and found 29% of businesses in a typical community were unprofitable, and 47% had less than two weeks of cash liquidity.

Many of them simply can’t afford to follow much larger companies like Apple Inc., which said it would close all its retail stores outside Greater China for the next two weeks and continue to pay its hourly workers.

The March drop in small-business confidence reversed four months of gains. More than twice as many business owners said they expected the economy would weaken rather than improve in the coming year, according to a monthly survey of more than 900 businesses with $1 million to $20 million in revenue for The Wall Street Journal by Vistage Worldwide Inc., a business coaching and peer-advisory firm.

The outlook dimmed over the course of the weeklong poll, with 38% of business owners who responded on March 9 reporting that overall economic conditions in the U.S. had worsened compared with a year earlier, up from 25% on March 2 when the survey began. The portion of companies that expect sales to increase in the next 12 months dropped to 57% from 70% over the week.

Small-business confidence will likely decline further as the impact of the virus intensifies, said Richard Curtin, a University of Michigan economist who analyzed the data. “The policy options to contain the virus will make the economy worse,” he said. “I think small businesses are really caught in the middle.”

MBX Systems, a 180-person manufacturer of custom-computing hardware, recently reviewed each area of its business to determine minimum staffing levels, figure out who is cross-trained and determine who can be taught additional skills in case they need to cover for someone else.

MBX has told the 50% of workers who can work remotely to do so, increased paid time off to 15 days from 10, and largely walled off its Libertyville, Ill., facility. “For the most part, we are not having [visitors] come in unless there is something like an audit or something required for us to sustain our business,” said Justin Formella, chief strategy officer.

Businesses that rely on steady customer traffic are getting hit especially hard. At Bonanno Concepts, a Denver restaurant operator with 500 employees, customers began canceling private parties and other events when conferences started getting called off and travel was restricted. Then on Tuesday, traffic to the company’s 10 restaurants began falling.

“We are writing schedules for everything from only doing 30% of business to 50% of business,” said co-owner Frank Bonanno, who now doesn’t go to bed until he receives the day’s reports from each manager.

Mr. Bonanno and his wife Jacqueline, a co-owner, are encouraging employees to work together to split up shifts to reduce the need for layoffs. They have begun making their own hand sanitizer and now ring a cow bell every half-hour to remind employees to wash their hands.

Magda Sayeg, the owner of Magdalene, a month-old restaurant and cocktail bar in Brooklyn, N.Y., said several of her employees have offered to work just for tips, but her attorney said that would violate the law. “I just opened a restaurant. I don’t think there is anything that will help me, government-wise,” she said.

Ms. Sayeg said she is still feeding younger diners who have cabin fever and want to support the local eatery. But the decline in traffic has forced her to pare her staff to six from 20, cutting anyone working just one or two shifts.


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“I have had to take some drastic measures,” she said. “I put myself a lot more on the schedule, put my 22-year-old son and my 17-year-old daughter on the schedule, to help us pay really essential employees.”

Indigo Yoga Inc., which operates two yoga studios in Fort Worth, Texas, said Friday it would reduce capacity by nearly 60% to 50 students per class. The company, which has a staff of 50, has invested about $10,000 in software and equipment so it can begin live-streaming 72 classes a week from its flagship studio. It also plans to set up ways for instructors who can’t come into the studio to teach from home.

“One hundred percent of our revenue is at the will of our customers,” said Indigo president John Cornelsen. “If they choose not to come to yoga for 60 days, the hit to us would be more than significant,” he said.

For some firms, projections of sales growth have vanished.

24G LLC, a digital marketing, training and communications agency in Troy, Mich., first revised sales projections downward a month ago when shutdowns in China’s supply chain reduced demand for its Amazon.com Inc. marketing-services team. A few weeks later, conference cancellations and travel bans hit demand for the 108-person company’s mobile marketing displays. Though it expects to get a boost in its distance learning and virtual events business, 24G says sales are likely to be down slightly instead of growing 20% as it had planned for.

“It is really stunning how dimensional this is and how it is affecting every aspect of the business, even though we are so well-diversified,” said Chief Executive Scott Wiemels. The wave of event cancellations happened so fast, he added, “it’s like watching one of our division’s work dry up in a matter of days.”

Not everyone is hurting.

The Maintenance Management Group, in Livonia, Mich., which provides cleaning services to hospitals and other facilities and consultations on cleaning procedures, has received nearly three-dozen calls in the past two weeks from companies looking for advice on cleaning procedures. One hospital customer asked whether TMMG could lend workers if the hospital becomes understaffed. “If the last two weeks have been any indication, I think we are in great shape,” said Sean Murphy, chief executive of the 160-person company.

But even he is remaining cautious. With so much uncertainty, “we could double our business or we may have to shut down for a period,” he said. “We are trying to be prepared both ways.”


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Rescue Bids By Fed Fail To Calm Panicky Markets

Stock markets were routed and the dollar stumbled on Monday after the Federal Reserve slashed interest rates in an emergency move and its major peers offered cheap U.S. dollars to ease a ruinous logjam in global lending markets.

European markets were also poised to open sharply lower, with EUROSTOXX 50 futures down 3.4% and FTSE futures down down 2.7%. E-mini futures for the S&P 500 index hit their downlimit in the first quarter-hour of Asian trade as investors rushed for safety.

The Fed’s emergency 100 basis point cut on Sunday was followed on Monday by the Bank of Japan easing policy further with a pledge to ramp up purchases of exchange-traded funds and other risky assets.

New Zealand’s central bank also shocked by cutting rates 75 basis points to 0.25%, while the Reserve Bank of Australia (RBA) pumped more money into a strained financial system.

Japanese Prime Minister Shinzo Abe said G7 leaders would hold a teleconference at 1400 GMT to discuss the crisis.

The drastic maneuvers were aimed at cushioning the economic impact as the breakneck spread of the coronavirus all but shut down more countries, though they had only limited success in calming panicky investors.

MSCI’s index of Asia-Pacific shares outside Japan tumbled 4% to lows not seen since early 2017, while the Nikkei fell 2% as the Bank of Japan’s easing steps failed to stabilize market confidence.

Data out of China also underscored just how much economic damage the disease had already done to the world’s second-largest economy, with official numbers showing the worst drops in activity on record. Industrial output plunged 13.5% and retail sales 20.5%.

“By any historical standard, the scale and scope of these actions was extraordinary,” said Nathan Sheets, chief economist at PGIM Fixed Income, who helps manage $1.3 trillion in assets. “This is dramatic action and truly does represent a bazooka.”

“Even so, markets were expecting extraordinary action, so it remains to be seen whether the announcement will meaningfully shift market sentiment.”

He emphasized investors wanted to see a lot more U.S. fiscal stimulus put to work and evidence the Trump administration was responding vigorously and effectively to the public health challenges posed by the crisis.



“The performance of the economy and the markets will be mainly determined by the severity and duration of the virus’ outbreak.”

Shanghai blue chips fell 3% even as China’s central bank surprised with a fresh round of liquidity injections into the financial system. Hong Kong’s Hang Seng index tumbled 3.4%.

Australia’s S&P/ASX 200 plunged, finishing down 9.7% for its steepest fall since the 1987 crash.

UNDER STRAIN

Markets have been severely strained as bankers, companies and individual investors stampeded into cash and safe-haven assets, while selling profitable positions to raise money to cover losses in savaged equities.

Such is the dislocation the Fed cut interest rates by 100 basis points on Sunday to a target range of 0% to 0.25%, and promised to expand its balance sheet by at least $700 billion in coming weeks.

Five of its peers also joined up to offer cheap U.S. dollar funding for financial institutions facing stress in credit markets.

U.S. President Donald Trump, who has been haranguing the Fed to ease policy, called the move “terrific” and “very good news.”

“It may be a shot in the arm for risk assets and help to address liquidity concerns…however, it also raises the question of whether the Fed has anything left in the tank should the spread of the virus not be contained,” said Kerry Craig, global market Strategist at J.P. Morgan Asset Management.

“We really need to see the fiscal side…to prevent a longer than needed economic slowdown.”

The Fed’s rate cut combined with the promise of more bond buying pushed U.S. 10-year Treasury yields down sharply to 0.68%, from 0.95% late on Friday.

That pressured the U.S. dollar at first, though it regained some ground as the Asian session wore on. The dollar was last down 1.4% on the Japanese yen at 106.37. The euro was flat at $1.1123.

The commodity-exposed Australian dollar fell 0.3% to $0.6166 while the New Zealand dollar slipped 0.2% to $0.6044.

Oil prices fell on concerns about global demand. Brent crude was last off $1.31 at $32.54 per barrel while U.S. crude slipped 78 cents to $30.94 a barrel.

Gold rallied 0.8% to $1,541.34.






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Financial Markets – Top 5 Things to Watch This Week

After a week that saw global stock markets crash with the coronavirus outbreak ending a years-long bull run global central banks will be under more pressure to act in order to maintain the flow of support for economies and for those most hard hit by the virus.

The Federal Reserve is expected to slash its target rate to near zero on Wednesday, after a rare emergency rate cut at the start of the month. Other central banks, including in Japan, Switzerland and Russia are also due to hold policy meetings this week.

Wall Street will be bracing for more alarming headlines concerning the virus’ spread in the U.S. and European Union finance ministers are to discuss the impact of the virus on Monday. Meanwhile, economic data from the U.S., China and the eurozone will be in focus. Here’s what you need to know to start your week.

Just how deep will the Fed cut?

Ahead of the Fed’s upcoming rate setting meeting on Wednesday the main question is just how deeply it will cut interest rates and what other measures in the form of quantitative or credit easing might be announced.

The Fed is seen cutting rates by as much as three quarters of a percentage point, with financial markets predicting policymakers will be forced to cut to zero by April to boost the economy.

The Fed will also update its forecasts for economic growth, and this will give investors an insight into whether any officials foresee a recession, and if so, how deep and how long it might be. The range of forecasts, which are anonymous, will also offer clues on how divided policymakers are.


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Central bank headaches

On Thursday the Bank of Japan and the Swiss National Bank are to hold rate setting meetings, just hours after the Fed decision is announced.

The SNB will have to decide whether its regular interventions to push down the Swiss franc are still tenable without lowering its interest rates even further.

The BOJ is expected to ease policy to cushion the economic fallout from the coronavirus and shore up business confidence in the world’s third-largest economy. In conjunction, the government is working on a new spending package of up to 20 trillion yen ($190 billion), as it tries to fend off a recession.

Russia, so far considered one of the better placed emerging economies due to its solid central banking credentials, has suddenly found itself grappling with a $30-per-barrel fall in oil prices, which has sent the ruble reeling. Its central bank meets on Friday.





Heightened market volatility set to continue

With one of Wall Street’s wildest weeks in recent memory now in the history books, investors are bracing for more uncertainty and big market swings ahead.

Overwhelmingly, caution remains the watchword for investors and analysts reeling from a week that saw all three U.S. exchanges confirm bear markets, oil prices plummet to multiyear lows and wild fluctuations in bond yields and currencies.

U.S. President Donald Trump declared a national emergency on Friday. The U.S. has recorded more than 2,000 cases and 50 deaths but has been criticized for slow testing.

Investors are hoping actions by the Fed will help to soothe the roiled stock market, but rate cuts may not help equities. The S&P 500 ended up falling 2.8% on March 3 despite the Fed’s surprise half-percentage point cut, which boosted sentiment but also led investors to speculate on what other actions the Fed could take.

Whatever actions the Fed takes, some investors said they are ultimately secondary to the responses of the world’s governments.

“While we think central bank policy is important, we think the fiscal is much more important at this stage,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.

European Union finance ministers to hold talks

European Union finance ministers will meet on Monday to discuss the impact of the coronavirus and measures to restart their economies, but by video call rather than in person after France and Spain joined Italy in imposing lockdowns on tens of millions of people.

Mario Centeno, the chair of the “Eurogroup” of euro zone finance ministers, said in a tweet late on Saturday that the sense of urgency and coordinated effort was unprecedented.

A focus of discussions is likely to be the European Commission plan unveiled on Friday to boost spending on sectors of the economy hit by the coronavirus and to let EU nations run bigger deficits to help cushion businesses.

The EU executive, which predicted the outbreak would lead to a recession in the bloc this year, wants to channel 37 billion euros ($41 billion) of existing EU funds to companies in greatest need and take a lenient approach to state aid rules.

Monday will also see a G7 video conference call where French President Emmanuel Macron will continue to call for a coordinated fiscal response.

Economic data

On Monday, China is to release data on industrial productionretail sales and fixed asset investment for February, which will give investors an insight into damage the coronavirus lockdown inflicted on the world’s second-largest economy.

In the U.S. figures on industrial production and retail sales for last month will indicate how the economy was doing as the coronavirus outbreak emerged, while manufacturing indexes and housing sector data may point to effects from the virus.

In the eurozone, Tuesday’s Germany’s ZEW investor confidence indicator is expected to decline sharply amid major economic disruption caused by the pandemic to one of the world’s most trade-dependent economies.





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Investors Prepare For More Market Swings As Virus Spreads

With one of Wall Street‘s wildest weeks in recent memory now in the history books, investors are bracing for more uncertainty and big market swings ahead.

Overwhelmingly, caution remains the watchword for investors and analysts reeling from a week that saw all three U.S. exchanges confirm bear markets, oil prices plummet to multiyear lows and wild fluctuations in bond yields and currencies.

stocks

Investors still have little clarity on the possible trajectory of the coronavirus outbreak in the United States, the effectiveness of the government response and the eventual damage the virus will cause to the nation’s economy and individual companies.

Many are awaiting the start of trading in U.S. stock futures on Sunday night, a session that has proven volatile in recent weeks.

“Right now, we view investing in the current environment using the hackneyed phrase of ‘catching a falling knife,'” said Richard Bernstein, chief executive of Richard Bernstein Advisors in a note to investors and conference call. “We see no need to rush into markets.”

Bernstein said the rush into U.S. government bonds sparked by recent market swings has overstretched the prices of Treasuries, which now sport yields near record lows. His portfolio holds shorter-dated U.S. debt and equities in the consumer staples and health care sectors, among others.


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The White House on Saturday said it would extend a travel ban to include the United Kingdom and Ireland, a move that could further hurt oil prices and airlines already battered by a ban announced last week.

Analytics firm Oxford Economics also discouraged dip buyers, noting in a report that companies’ price-to-earnings ratios remain elevated and corporations may eventually find it difficult to service their debt at a time when leverage is near all-time highs. The firm urged investors to trim exposure to a broad variety of asset classes, including European stocks and the local currency debt of emerging markets.

They are also warning investors to brace for more alarming headlines concerning the virus’ spread in the United States.

“In the foreseeable future, and with a vaccine for the virus still nowhere in sight, it is reasonable to assume that Western containment strategies are unlikely to succeed and the peak in the incidence is at least some weeks, if not months, away,” the firm said.

Others are continuing to watch for signs of stresses across markets.

Analysts at Bank of America wrote that the Federal Reserve may announce measures on Sunday night aimed at bolstering liquidity in the commercial paper market, used by companies for short-term loans.

The measures, if taken, would be aimed at buffering the market ahead of potentially large outflows from money market funds in coming days, the Bank of America analysts wrote.

The United States has in recent days received a taste of the types of disruptions that the virus has wrought in other countries, including Italy and South Korea.

Daily routines have been upended as businesses including Amazon.com urge employees to work from home, schools and universities close, and sporting events and church services are paused across the country. In response to the run on certain items, major retailers have imposed some purchase limits.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said on Saturday that the country has recorded 2,226 case of the new coronavirus but has not yet reached the peak of the outbreak.

Investors have cheered moves by the Federal Reserve to add liquidity to markets and promises of fiscal support from the U.S. government, with markets ripping higher on Friday as President Donald Trump declared a national emergency.

The central bank is expected to announce an interest rate cut of at least three quarters of a percentage point, with financial markets predicting the Fed will be forced to cut to zero by April to boost the economy.

Retail investors appear to be somewhat more optimistic than their institutional counterparts, a poll by wealth management research firm Spectrem Group showed.

Fewer than 10% of investors polled by the firm earlier this month sold equities while 17% purchased stocks in the recent selloff, the poll showed.

“This infers that institutional investors are causing the market volatility rather than retail investors,” the firm said in a report.

Meanwhile, business owners saw the coronavirus as a serious threat to the economy, a survey from Wilmington Trust showed.

Thirty-six percent of the respondents in the survey, which targeted owners with businesses generating more than $5 million in revenue, said they anticipated reducing employment levels in the first half and 39% said they would cut back capital expenditures.




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Coronavirus Measures Put New Limits on Daily Life

Governments have imposed a series of measures to limit gatherings of large numbers of people in an effort to slow the spread of the coronavirus, which has killed 5,829 and infected 156,169 since emerging late last year in China, according to data compiled by Johns Hopkins University.


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France and Spain imposed tough new restrictions, with Spain nearly grinding to a halt as a nationwide lockdown closed schools and universities and stopping religious services. In the U.S., where Louisiana, New York, Oregon and Virginia reported their first deaths tied to the coronavirus on Saturday, new travel measures caused hourslong waits in some airports and some cities banned large gatherings.

The Catholic Church in Seattle and New York canceled Masses, including at Manhattan’s famed St. Patrick’s Cathedral. The Vatican announced Easter services would be held without audiences. Mormon Church leaders have indefinitely stopped services around the world.

New infections in Europe were surging as the continent increasingly became the center of the outbreak and Spain emerges as a new hot spot, with 6,391 confirmed cases and 196 deaths. That makes Spain the second worst-hit country in Europe after Italy.

Spanish residents will only be permitted to leave their homes for essential reasons, including for medical services or to buy food. The Spanish government said the wife of Prime Minister Pedro Sanchez had tested positive for the virus.

The French government closed down cafes, restaurants and all other nonessential shops in response to a doubling of infections over the past 72 hours. Residents were urged to stay at home unless they needed to use essential services such as grocery stores and pharmacies.

French officials said they had identified 4,500 coronavirus cases and 91 deaths.

The Trump administration on Saturday broadened restrictions on travelers from Europe to include the U.K. and Ireland, as the White House said President Trump tested negative for the virus.

Travelers returning to the U.S. from abroad on Saturday night faced hourslong waits in crowded conditions in some airports as officials took extra measures aimed at preventing the spread of the novel coronavirus.

Some passengers arriving at Chicago’s O’Hare International Airport on Saturday night described long, hot waits to get through customs, where some airport and security workers distributed snacks.



Australian Prime Minister Scott Morrison said Sunday the country would enforce a mandatory 14-day self-quarantine for all travelers from overseas, including Australians, effective at midnight. Australia has reported 249 confirmed cases of coronavirus, including five deaths.

Alphabet Inc.’s Google said on its official Twitter account that it was partnering with the federal government to combat the virus. The company is working on a pilot project to help people navigate coronavirus testing in the Bay Area.

The number of deaths from the novel coronavirus in Iran rose by 113 over the past 24 hours, the highest single-day death toll since the virus was first confirmed in the country on Feb. 19, bringing the total number of fatalities to 724. Iran’s Health Ministry spokesman Kianoush Jahanpour announced on state television Sunday that the number of infected cases had reached 13,938, an increase of 1,209 since Saturday.

Iran’s Guardian Council, an electoral watchdog, said Sunday the second round of parliamentary elections, slated for April, has been postponed to September due to the health crisis, at the request of the Ministry of Interior.

New Zealand reported two new cases on Sunday. Both of the patients are travelers who recently arrived in the country.

Hong Kong reported four additional cases by Saturday night, taking the city’s total to 142. Two of the four new patients have recent travel histories to the Middle East. One of them was in London before returning to Hong Kong earlier this week.

The Hong Kong government evacuated six floors at a public housing estate Saturday and put the residents under quarantine after it confirmed a new case living in the same block as two earlier cases.

Japan confirmed 62 new infections on Saturday—the country’s highest daily increase excluding those linked to the cruise ship Diamond Princess. The new infections pushed total confirmed cases in the country to 772, NHK World reported.

South Korea reported 76 new cases and three more deaths on Sunday, bringing the country’s total to 8,162, with 75 deaths. China reported 20 new cases by the end of Saturday, and 10 additional deaths.



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Aramco Profits Plunge

Saudi Aramco on Sunday said it plans to cut capital spending in the wake of the coronavirus outbreak, and also posted a plunge in profit for last year, missing forecasts in its first earnings announcement as a listed company.


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Saudi Arabia‘s decision last year to float shares in its state oil company – the most profitable company in the world – was one of the central elements in Crown Prince Mohammed bin Salman’s program for economic and political reform.

The record-setting IPO was touted as making the world’s biggest energy exporter more professional and transparent.

The 21% decline in net profit for last year means it fell short of analysts’ forecasts for the period that culminated in the share sale, months before the coronavirus pandemic became a factor for oil prices.

In recent weeks, Riyadh has announced that it is ramping up production in an oil price war with Russia that has sent global prices plunging and contributed to the coronavirus rout on international financial markets.

The company said it expects capital spending for 2020 to be between $25 billion and $30 billion in light of current market conditions and recent commodity price volatility, compared to $32.8 billion in 2019.

Aramco has already taken steps to “rationalize” its planned 2020 capital spending, CEO Amin Nasser said in a statement.

“The recent COVID-19 outbreak and its rapid spread illustrate the importance of agility and adaptability in an ever-changing global landscape,” he said.


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Aramco listed its shares in Riyadh in December in a record $29.4 billion initial public offering that valued it at $1.7 trillion. Its shares fell below the IPO price last week for the first time, as oil prices crashed after the collapse of an output deal between OPEC and non-OPEC members. Oil prices have fallen nearly 50% from highs reached in January and had their biggest one-day decline on March 9 since the 1991 Gulf War.

Brent crude (LCOc1) futures last traded at $33.85 per barrel on Friday, down from about $64 when Aramco listed its shares.

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Saudi Arabia’s strategy to gain market share by flooding the markets with cheap oil has revived investor concerns that the profitability of the company would come second to government-led strategies to influence oil markets.

“Foreign investors may view recent events as confirmation that the strategic direction of Aramco is driven by its majority shareholder, driven by national development and geopolitics, not simply value maximization of this company’s returns,” said Hasnain Malik, head of equity strategy at Tellimer.

Despite a drop in income, Aramco said it paid a dividend of $73.2 billion in 2019 and intends to declare a cash dividend of $75 billion in 2020, paid quarterly.

Aramco, which is 98% owned by the Gulf kingdom, reported a net profit of $88.2 billion in 2019, down from $111.1 in 2018.


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Analysts had expected Aramco to post a net profit of 346.6 billion riyals ($92.6 billion) in 2019, according to an estimate of 15 analysts polled by Refinitiv.

Aramco said the drop in earnings was mainly due “lower crude oil prices and production volumes, coupled with declining refining and chemical margins, and a $1.6 billion impairment associated with Sadara Chemical Co.”

“Assuming the price of $35 per barrel, Aramco’s revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) could contract by 20-30% compared to our previous forecasts and to the company’s performance in 2018-2019,” said energy analyst Dmitry Marinchenko at Fitch Ratings.

Biraj Borkhataria, a London-based energy analyst at RBC Capital Markets, said a $10 a barrel change in prices hits Aramco’s cash flow from operations (CFFO) by $15 billion, while each 100,000 barrels change in output impacts CFFO by $1.1 billion, assuming a price of $60 per barrel. “Lower price more than trumps higher production volumes,” he said.

Saudi Arabia has long acted as the global oil market‘s swing producer, the only country capable of substantially and rapidly cutting or raising output to match demand and prop up prices.

Aramco could easily fund the dividend for minority shareholders, which own 1.7% of the company, even if oil prices slump to $10-$20 a barrel as the share of minorities is about $1.3 billion, said RBC’s Borkhataria.

Aramco remains the world’s most profitable company, beating Western oil majors such as Exxon Mobil Corp (N:XOM), and Apple Inc (O:AAPL), which made $55 billion in its last financial year that ended in September.

Mazen al-Sudairi, head of research at Al Rajhi Capital, said that despite the economic headwinds and low oil prices, Aramco will be able to maintain “good dividends” at a Brent crude price of $40 or even $20 per barrel.

Aramco said it had total hydrocarbon production of 13.2 million barrels per day of oil equivalent in 2019, compared to 13.6 million barrels per day of oil equivalent in 2018. Aramco shares were flat at 29 riyals at 0845 GMT, 9% below the IPO price if 32 riyals.




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American Airlines Cutting International Flights By 75%

American Airlines Inc said Saturday it plans to cut 75% of its international flights through May 6 and ground nearly all its widebody fleet, as airlines respond to the global collapse in travel demand due to the coronavirus pandemic.


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The dramatic announcement by the largest U.S. airline came hours after the White House said the United States would widen new travel restrictions on Europeans to include travelers in the United Kingdom and Ireland, starting Monday night.

The Trump administration also signaled Saturday it wanted Congress to quickly back financial support for troubled U.S. airlines.

American’s sweeping cuts include suspending nearly all long-haul international flights to Asia, Australia, Europe, New Zealand and South America.

It will still operate two flights a day to London and just three flights to Asia per week — to Tokyo. It will continue short-haul international flying.

American confirmed it is parking nearly all widebody aircraft and anticipates its domestic capacity will be reduced by 20% in April and 30% in May versus the same period in 2019.

United Airlines Co said late Saturday it would begin cutting flights to the United Kingdom, Southwest Airlines moved toward flight cuts and Delta Airlines Inc plans to start cutting flights to the United Kingdom.

Southwest, one of the few U.S. airlines still flying a full schedule, said it was “seriously considering” cutting flights.

While airlines scrambled to stem losses and protect jobs, U.S. Treasury Secretary Steven Mnuchin said the government would “immediately” start working with Congress to support the airline and cruise industries, both hard hit by the spiraling crisis.

U.S. Vice President Mike Pence said restrictions on the UK and Ireland will begin Monday at midnight, barring most non-U.S. citizens from entering the United States who have been in those countries within the last 14 days.

They do not bar flights to and from the United States, and Americans and permanent residents can still travel.

United said it would suspend flights to London from Houston and Denver starting Monday. United said it expects to fly three daily flights to London and one daily flight to Dublin through the end of April.

United said it would give a credit for the value of the ticket for any customer whose international travel is disrupted by more than six hours because of schedule changes resulting from government restrictions. Customers who do not use the credit for 12 months will get a refund.

Washington first imposed restrictions on China and expanded them this week to continental Europe, prompting U.S. airlines to cut numerous flights and scramble to shore up capital.

Among cost-cutting measures, U.S. airlines are offering employees voluntary unpaid leaves of absence to match staffing with flights.

The outbreak came as Delta and its pilots’ union were in contract negotiations, and the sides reached an agreement on coronavirus-related sick leave and managing overstaffing for April with partially paid schedules. United and Southwest could reach deals with their pilots soon, sources said.

On Friday, Delta said it would cut capacity 40% in the next few months, the largest reduction in its history. It will eliminate nearly all flights to continental Europe for 30 days and will park up to 300 aircraft.

United also announced cuts to European service this week. On Friday, major U.S. airlines confirmed they had been in talks with the White House and Congress about financial assistance.


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The U.S. Chamber of Commerce on Friday called on the government to “turn next to a package to assist impacted employers… No business should go bankrupt because of a temporary loss in revenue as a result of the coronavirus.”

Airlines are reeling from a plunge in bookings and traffic, as the fast-spreading pandemic prompts travel restrictions and event cancellations around the world.

U.S. passenger railroad Amtrak said on Saturday it was scaling back services due to reduced demand. Last week the company said bookings had plunged 50% since the coronavirus outbreak.




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Apple Closes All Its Stores

Apple said the stores would be closed until March 27 in light of the worsening spread of the virus, which according to figures from Johns Hopkins University has killed 5,429 and infected 145,369.

Hourly workers will continue to be paid, and workers across the company will be allowed to work remotely if their jobs permit it, Apple Chief Executive Tim Cook said in a note on the company’s website.


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The note said Apple stores inside Greater China, closed previously, were all open Saturday, highlighting how the coronavirus center of gravity has shifted to Europe and the U.S. China reported 11 new infections and 13 new deaths for Friday.

Apple has around 500 retail stores world-wide, including hundreds in the U.S., which along with the company’s website and direct sales force accounted for 31% of the company’s $260 billion in sales in the year ended September 2019.

The closures are part of a broad shutdown of business activity in an effort to slow the spread of the new virus. President Trump has broadly barred people arriving from Europe. Factories in China’s Hubei province, where the disease first appeared, remain largely shut. Italy clamped down on commercial activity across the country. The world’s four biggest cruise lines are suspending U.S. sailings for a month.

The tightening patchwork of border controls and office closings are in some cases making business all but impossible, whether in professional fields that require client contact or hourly occupations that can’t be done off-site.

Governments have sought to ease the impact with a range of measures to ease liquidity for financial markets and shore up economies with more spending. Apple said it has expanded its leave policies to accommodate illness, caring for loved ones, mandatory quarantines and child-care issues.


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The tech giant reported that its revenue in the December quarter was up 9% to $91.82 billion, driven by sales of devices and services connected to the iPhone such as smartwatches and streaming-TV subscriptions. Sales of iPhones, which account for more than half of its revenue, rose 8% to $55.96 billion.

Outdoor gear retailer Patagonia also said it would shut its stores, offices and operations for at least two weeks and will reassess March 27. Employees will receive their regular pay, the company said.





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How A Virus Upended The World Economy

The virulent invader, which swept through Asia and Europe, is leading many U.S. businesses to hoard cash, pare spending and rethink how they operate without knowing how long the troubles will last. Some that lost business may never get that revenue back. Thinner profit margins and a focus on cost cutting mean some firms may lose key workers, vendors and the ability to invest for the future.

The pain is acute at companies with high levels of debt or that were struggling before the outbreak. Already, shale oil driller Occidental Petroleum Corp., OXY 19.93% laden with debt from its $38 billion purchase last year of a rival, has slashed its dividend and spending plans. Boeing Co., BA 9.92% wounded by the grounding of its 737 Max jet, has frozen its hiring and maxed out its credit lines.


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“If this lasts a few months, we will start seeing retail casualties pile up,” said Jerry Storch, the former chief executive of Toys “R” Us Inc. and Hudson’s Bay Co.

The respiratory illness, which first paralyzed many of China’s factories, has now frozen businesses across industries. Airlines have cancelled thousands of flights. Americans are now expected to buy 1.5 million fewer cars this year, one analyst predicted. Major sports leagues have suspended play indefinitely, dealing a blow to venues and broadcasters.

“I’m tossing and turning at night about it,” said Aron Ain, chief executive of Kronos Inc., a software maker with 6,000 employees. “I’m uncomfortable because I haven’t been through it before.”

The spread of the virus has led to a nearly endless stream of hard-to-answer questions from Kronos staff, like whether or not to travel to client meetings. Some clients are starting to put off purchasing decisions, Mr. Ain said, adding that, a week from now, it could be more.

There have been few mass layoffs so far in the U.S., which before the outbreak had the lowest levels of unemployment in decades. During the 2008 financial crisis, nearly six in 10 companies stopped hiring or decreased staffing, while 35% froze pay, according to executive search firm Korn Ferry.

“Cutting muscle and hurting your ability to recover is far more damaging to an organization than limping along with a couple of quarters of extra expense,” said Bob Wesselkamper, a vice chairman at Korn Ferry.

Declared a global pandemic on Wednesday, the new coronavirus had infected more than 125,000 people in more than 100 countries. More than a third of the infections globally have been outside of China. They include a Fiat Chrysler Automobiles NV worker at an Indiana plant and the CEO of British telecom giant BT Group PLC.

Inside China, the rate of infection has slowed after the government locked down much of the country for more than a month. Factories are restarting production and workers are returning to their jobs. Apple Inc. reopened all 42 of its stores in China on Friday.


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Businesses are adapting to the rapidly changing public-health guidance, sending workers home, canceling events and switching to teleconferencing. BT said its chief executive, 53-year-old Philip Jansen, has self-isolated and will work remotely. It will deep-clean its London headquarters. Fiat Chrysler said it would quarantine some workers from the Indiana factory but the transmission plant would continue normal operations.

U.S. consumer spending was strong before the virus surfaced, and not all business activity has stalled. PepsiCo Inc. struck a nearly $4 billion deal this week to acquire the maker of Rockstar energy drinks. Insurance broker Aon PLC agreed to buy a rival for nearly $30 billion, the biggest deal of the year on one of the wildest days for markets.

Just as households are stocking up on supplies and preparing for an uncertain future, companies are making similar moves by making sure they have credit lined up and cash they may need, said Gregory Daco, chief U.S. economist at Oxford Economics. “The shock has morphed in the last couple of weeks,” he said.






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Global Stocks Rise After Governments And Central Banks Announced Measures To Cushion The Impact Of The Coronavirus

Futures tied to the Dow Jones Industrial Average rose as much as 4.5% in early morning trading Friday. U.S. stocks plunged Thursday, with the Dow falling 10% as the rapidly spreading coronavirus drove fears of a global slowdown despite action from the Federal Reserve.

The pan-continental Stoxx Europe 600 rose 2.3% at the open Friday. Italy’s financial regulator suspended short selling of 85 Italian companies until the end of the trading day. The U.K.’s regulator also banned the trading activity on the same companies dual-listed on British exchanges.


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Oil prices rose, with global benchmark Brent crude climbing 4% to trade at $34.55. Some investors sold off liquid assets. The benchmark 10-year U.S. Treasury yield rose to 0.964% from 0.842% on Thursday. The Japanese yen declined 1.3% and gold lost 0.4%.

In Asia, most major indexes closed down after a volatile day that prompted some exchanges to impose short trading halts. Japan’s Nikkei declined 6.1%. Australia’s ASX 200 index closed up 4.4% after its central bank provided A$8.8 billion to its banks in short-term borrowing known as the repo market. India’s Sensex index rose 4.8% after the Reserve Bank of India also said that it would inject cash into markets.

These policy moves followed packages announced by the Federal Reserve and the European Central Bank to try to support the economies from the coronavirus fallout and a recent crash in oil prices. The Fed said it would provide $1.5 trillion to banks in the repo market. The ECB announced a series of measures that included a temporary expansion to its bond-buying program and loans for banks at interest rates as low as minus 0.75%.

Today is about “central bank credibility’’ and could mark the “beginnings of a stabilization process,” said Philip Saunders, co-head of multiasset at Investec Asset Management. Asset prices were marked down heavily after Thursday’s selloff, likely prompting some investors to buy.

While central banks had moved quickly to cut interest rates and make sure funding was available for banks and companies, that wasn’t enough, according to Tai Hui, chief market strategist for Asia at J.P. Morgan Asset Management.

“Governments will need to accelerate their fiscal support…to limit the negative impact on businesses and low-income families” and investors are now pricing in a U.S. recession, Mr. Hui said.

Markets are likely to stay volatile and global infection rates for the novel coronavirus have shown no signs of peaking, said Eli Lee, head of investment strategy at the Bank of Singapore.

“The rout started from valuations at fairly rich levels, and deep value has not sufficiently emerged for bargain hunters to show up in force,” he said, noting that global stocks had been comparatively expensive before the recent selloff began, which may explain its severity.

The MSCI All Country World index, which covers stocks in more than 70 developed and emerging markets, had fallen more than 16% Monday through Thursday, FactSet data showed. That puts it on track for its worst weekly performance since the global financial crisis in 2008.


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Some Asia-Pacific currencies fell sharply against the U.S. dollar, with the Korean won dropping to a four-year low and the New Zealand dollar hitting its weakest level in a decade.

Later Friday, the University of Michigan in the U.S. will put out a report on March consumer sentiment, which will provide insight into the impact of the coronavirus outbreak on the public. The Bank of England will also release minutes from its latest meeting, when it enacted an emergency rate cut.




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U.S. Stocks Extend Losses After Trading Halt

The global market selloff that plunged U.S. stocks into a bear market continued at a furious pace Thursday, as investors absorbed news of a travel ban between the U.S. and Europe and fear over the impact of coronavirus continued.

The S&P 500 shed 7% shortly after the opening bell, plunging the index into bear market territory and triggering a 15-minute halt in trading. The drop marked the second time this week that a rarely-used circuit breaker was triggered.

After reopening, the S&P 500 was down 7.3%, while the Nasdaq Composite was down 6.9%, putting the tech-heavy index on track for a bear market as well. The Dow Jones Industrial Average dropped 1,869 points, or about 8%.

The steep drops Thursday morning followed a tumultuous session of futures trading. Futures tied to the Dow Jones Industrial Average dropped 5% before markets opened. Contracts linked to the S&P 500 and the Nasdaq also hit the 5% limit, halting trading for the second time this week.

European equities also fell, with the Stoxx Europe 600 shedding 7.8%, putting the pan-continental gauge on course for its worst one-day performance in over 32 years.

On Thursday evening, President Trump announced a 30-day ban on most travel from Europe to the U.S., triggering fresh speculation about the disruption to business operations.


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Markets simply don’t know what the next steps are in terms of the virus spread,” said Edward Park, deputy chief investment officer at Brooks Macdonald. “We will see a dip in global growth in Q1 and Q2 and all the fiscal stimulus out there can’t avoid that.”

The Cboe Volatility Index, a closely watched measure of turbulence in the U.S. equity market, rose to its highest since December 2008.





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Markets News: U.S. Travel Ban Stoked Renewed Worries About The Coronavirus’s Economic Toll


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S&P 500 futures were down 4%, suggesting U.S. shares could be set for another punishing session later Thursday, a day after the Dow Jones Industrial Average slid into a bear market. European indexes fell at the start of trading Thursday, with the pan-continental Stoxx Europe 600 shedding 5.4% and Italy’s FTSE MIB falling 5.8%.

Benchmarks in Australia, Hong Kong, India, Japan and South Korea fell to multiyear lows, crude-oil prices dropped and U.S. government bonds rallied.

On Wednesday night, President Trump issued a 30-day ban on most travel from Europe to the U.S., a new serious disruption to everyday activity. Mr. Trump said he would offer financial assistance to those affected by the coronavirus and that the pandemic isn’t a financial crisis.

Daryl Liew, head of portfolio management at REYL Singapore, said markets were reacting negatively to “drastic containment strategies,” such as those introduced by the U.S. and Italy, which are likely to hurt economic activity and business operations.

Italy has ordered all restaurants and bars, and most stores, to close as it races to contain the worst coronavirus outbreak outside China.

Investors were disappointed Mr. Trump didn’t clearly articulate details of how he planned to roll out an economic stimulus package, said Takeo Kamai, head of execution services at CLSA Securities Japan Co. in Tokyo.

U.S. 10-year Treasury yields fell to 0.747%, according to Tradeweb. Bond yields fall when prices rise. Brent crude, the global oil benchmark, fell nearly 5% to $34.01 a barrel.

In Tokyo, Japan’s Nikkei 225 plunged 4.4%, joining the Dow and numerous international counterparts in a bear market—a measurement defined as a retreat of more than 20% from a recent peak.

Australia’s benchmark S&P/ASX 200, whose performance is heavily influenced by financial and natural-resources stocks, fell 7.4% to its lowest in more than three years.

Banks were notable losers across the region. For lenders, tough economic times can mean less new business, more bad loans, and thinner margins on lending because both short- and long-term interest rates are low. Japan’s Mitsubishi UFJ Financial Group fell 5.3%, while Commonwealth Bank of Australia dropped 7.9%.

The outlook for the world economy is dimming rapidly due to the pandemic. This week IHS Markit slashed its forecast for global growth this year by 0.8 percentage point to 1.7%, saying it expects zero growth in the eurozone, a contraction in Japan and expansion of just 4.3% in China this year.

On Monday, U.S. stocks suffered their biggest drop since the 2008 global financial crisis. They rebounded a day later, and then sold off again steeply on Wednesday, with declines intensifying after the World Health Organization declared the coronavirus crisis a pandemic.

Paul Sandhu, the Asia-Pacific head of multiasset quant solutions and client advisory for BNP Paribas Asset Management in Hong Kong, said markets would remain volatile. “The fear coming off from the coronavirus is going to be something that continues over the next few weeks at least,” he said.


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By midafternoon Thursday in Hong Kong, the Hang Seng Index dropped more than 3%. Stocks in mainland China, which have proved resilient recently, dropped modestly, with the Shanghai Composite retreating 1.7%.

Elsewhere in the region, Thailand’s SET Index plummeted more than 8% to the lowest since 2012. “Thailand’s economy is vulnerable to the pandemic because it is heavily reliant on tourism,” said Joanne Goh, investment strategist at DBS Bank in Singapore.





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World Health Organization Declares COVID-19 a ‘Pandemic’


◊ Coronavirus Declared Global Pandemic ◊

U.S. stocks headed back towards lows Wednesday as investors awaited further details on stimulus measures proposed by the White House to curb the impact of the novel coronavirus, which has become a pandemic, according to the the World Health Organization.

The S&P 500 slipped 3.91%, Nasdaq Composite lost 3.58% and the Dow Jones Industrial Average fell 4.39%.

After weeks of downplaying the potential effects of the virus, President Donald Trump has called an emerging meeting of top U.S. health officials at a time when the coronavirus spread continues to gather momentum.

The World Health Organization declared Covid-19 a global pandemic as the virus has spread globally, with infections now topping 120,000.


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Financial Markets – Volatility Increases

The Dow Jones Industrial Average dropped 822 points, or 3.3%. The S&P 500 fell 3.1%, and the Nasdaq Composite lost 2.7%. The declines continued a volatile week that saw stocks plunge Monday only to recover much of their losses Tuesday. A closely watched measure of turbulence in U.S. stocks, the Cboe Volatility Index, was hovering around its highest level in a year.

“For private investors, getting into markets at the moment is like juggling with knives: it’s just far too risky,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “For short-term traders, this volatility is very exciting, but for long-term investors, it’s worrying.”

After an 11-year run, the bull market in S&P 500 stocks is coming to an end, equity analysts at Goldman Sachs Group said in a note Wednesday. Lower crude-oil prices and interest rates are likely to erode earnings for energy and finance companies, and business activity will probably be weaker than previously anticipated in other sectors, they wrote.

“Both the real economy and the financial economy are exhibiting acute signs of stress,” Goldman Sachs said in the note.

European stocks drifted lower, shedding much of the gains posted in the morning after an unexpected rate cut by the Bank of England. That left the Stoxx Europe 600 index wavering between gains and losses. The easing of monetary policy in the U.K. came with other measures to support the economy, including cheaper borrowing for small businesses.

The BOE made its move just over a week after the Federal Reserve cut its key interest rate. The European Central Bank is expected to ease policy Thursday as authorities take steps to shield economic growth from the impact of the epidemic as business activity and travel is curtailed.

“The U.K. was the first example of truly coordinated action from the central bank and the Treasury,” said James Smith, developed markets economist at ING Bank. Markets are now poised to see if countries and central banks would follow the U.K. ‘s lead. “The Fed will be under a lot of pressure with rates so low elsewhere,” Mr. Smith said.

The yield on 10-year U.S. Treasurys edged down to 0.704%, from 0.743% on Tuesday. Bond yields, which move inversely to prices, have careened in recent days: the widely watched benchmark tumbled to a record intraday trough near 0.4% on Monday as investors sold off equities and raced for the shelter of government bonds.

“When we talked about recession fears over the years since the financial crisis, we’ve always been comforted by relatively narrow credit spreads,” said Seema Shah, chief strategist at Principal Global Investors. “Now we’re seeing those start to widen, and corporate debt levels have risen recently, risks of defaults are that bit higher.”

“Nobody trusts the numbers at this point in the U.S., because of the failure to get testing kits out,” Mr. Shepherdson said. “What if the U.S. next week reports 2,000 new cases in a day? Markets would look at that and see it as a sharp uptick and we could have a very messy day again if that happens.”

In the Asia-Pacific region, major markets reflected investors’ continued concerns about global growth prospects. Japan’s Nikkei 225 index declined 2.3% to close at its lowest level since December 2018. Australia’s S&P/ASX 200 dropped 3.6% to enter a bear market, typically defined as a decline of at least 20% from a recent peak.

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“It’s too early to call this stabilization, and it’s too early to position for a rebound here,” said Mayank Mishra, a global macro strategist at Standard Chartered Bank in Singapore. “Financial markets will continue to focus on the economic implications from the virus, and right now the global outlook for growth is not rosy.”

While markets had already priced in likely interest-rate cuts and other support from central banks, government action moves at a slower pace, according to Mr. Mishra. “The fiscal response is a slower-moving beast, so let’s see how that helps stabilize global financial markets,” he said.







 

Financial Markets Buffeted Again By Virus Concerns

U.S. stock futures, world shares and Treasury yields all headed lower on Wednesday, pointing to sustained doubts about the ability of governments and central banks to combat the economic headwinds caused by the novel coronavirus.

The fresh downdraft in Asian trading hours followed two tumultuous days marked by a violent global selloff and a sharp rebound.




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Japan’s Nikkei 225 declined 2.3% to close at its lowest level since December 2018. Australia’s S&P/ASX 200 dropped 3.6%, hitting its lowest since January 2019, and entering a bear market, typically defined as a decline of at least 20% from a recent peak.

By midafternoon in Hong Kong, the Hang Seng Index stood 0.6% lower and the Shanghai Composite had also shed 0.6%.

U.S. stocks had soared in frenetic trading Tuesday, wiping out much of the losses they suffered just a day earlier in their biggest selloff since the financial crisis. The S&P 500 rose 4.9%.

“It’s too early to call this stabilization, and it’s too early to position for a rebound here,” said Mayank Mishra, a global macro strategist at Standard Chartered Bank in Singapore.

Financial markets will continue to focus on the economic implications from the virus, and right now the global outlook for growth is not rosy. Those are the forces that markets are reacting to,” said Mr. Mishra.

E-mini S&P 500 futures dropped 2.5%, suggesting U.S. stocks could be weaker when they start trading later on Wednesday.


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The 10-year U.S. Treasury yield stood at 0.684%, down from 0.743% on Tuesday. Bond yields, which move inversely to prices, have swung wildly in recent days, with the widely watched 10-year yield tumbling from above 1% last Thursday to a record intraday trough below 0.4% on Monday.

Mr. Mishra said while markets had already priced in likely interest-rate cuts and other support from central banks, government action moved at a slower pace. “The fiscal response is a slower-moving beast, so let’s see how that helps stabilize global financial markets,” he said.

The Federal Reserve earlier this month cut its key interest rate by 0.5 percentage point to a range of 1% to 1.25%. Many investors expect a further cut at the Fed’s scheduled meeting next week, which concludes on March 18.

A push by President Trump to suspend the payroll tax to boost the economy fell flat on Capitol Hill on Tuesday, as lawmakers of both parties said they preferred targeted measures to assist hourly workers and the battered travel industry.





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Warren Buffett Is Still Bullish On Stocks And The Long-Term Market

The Oracle of Omaha is still bullish on stocks and the long-term market. The recent coronavirus-related volatility in the stock market was enough to rattle even the most confident market bull. However, beloved investing guru and Berkshire Hathaway (BRK.A, BRK.B) CEO Warren Buffett is always around to deliver his textbook calm, pragmatic advice and reassurance about the long-term outlook for the stock market. In his recent annual interview with CNBC during the Berkshire annual meeting in Omaha, Buffett shared his thoughts on a wide range of topics from stocks to interest rates to value in the market.




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Coronavirus shaping the narrative.
Even during the worst week for stocks since 2008, Buffett said long-term investors shouldn’t be stressing out too much about news headlines. Buffett said he didn’t have specific thoughts on the virus itself, but investors should always remember that they are buying companies when they invest in stocks. “The real question is: Has the 10-year or 20-year outlook for American businesses changed in the last 24 hours or 48 hours?” Buffett says. Buffett said he has owned American Express Co. ( AXP) for more than 20 years and Coca-Cola Co. ( KO) for more than 40 years through plenty of negative headlines.

Don’t try to time the market.
Many popular stocks have dropped more than 10% from recent highs thanks to the market volatility, but Buffett advised against trying to time the market and said investors should instead focus on the value of the companies they are buying. “I don’t think anybody knows what the market’s going to do. I think you … know whether you’re making an intelligent purchase at a given price,” he says. Buffett said investors shouldn’t worry about where a stock’s share price has been or where it is going and simply consider the current valuation of the company.

The legacy auto industry isn’t dead.
Tesla (TSLA) has been one of the hottest stocks in the market in the past six months while legacy automaker General Motors (GM) has lagged. Buffett doesn’t own a single share of Tesla, but he has a $2.3 billion stake in GM. Buffett said there’s no question the auto market will slow down someday, but there’s still plenty of opportunity for investors at current valuations. “If you get your money’s worth in terms of future earning power over the next 10 or 20 or 30 years, you’re going to have made a good investment,” Buffett says.

Stocks are better investments than long-term Treasurys.
Buffett said it’s not always true that stocks are better long-term investments than bonds, but it has been the case throughout most of American history. Buffett said 30-year Treasury bonds yield around 2% today, and they have no chance for earnings growth for three decades. He says few investors would jump at an opportunity to buy a stock trading at 50 times earnings with zero earnings growth potential. “People really have three basic alternatives, short-term cash, which is an option of doing something later, long-time bonds or long-term stocks. And stocks are cheaper than bonds,” he says.


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There is value in bank stocks. Five of Berkshire’s eight largest stock holdings are financial sector stocks, including banks such as Bank of America Corp. (BAC), Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM). In that sense, it’s not surprising Buffett sees value in bank stocks, even in today’s low-interest-rate environment. “I feel very good about the banks we own. They’re very attractive compared to most other securities I see,” he says. Berkshire has been decreasing its stake in Wells Fargo while buying shares of Bank of America and others, but Buffett refused to reveal specifics about why he is selling Wells Fargo.

Stance on cryptocurrencies unchanged.
Buffett has been one of the most vocal critics of cryptocurrencies like bitcoin, which he once famously called “rat poison squared.” He reiterates in the new CNBC interview that his bearish stance still has not changed. “Cryptocurrencies basically have no value,” Buffett says. He compared cryptocurrencies to stocks of companies that don’t produce anything. “It doesn’t reproduce,” he says. “It doesn’t deliver. It can’t mail you a check. It can’t do anything.” The only hope for a bitcoin investor is that someone will pay even more for it down the line, he says, and then it will be the buyer’s problem.





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International Markets Regained Ground After The Worst Day In 12 Years

International markets regained ground after Monday’s bruising selloff, with American stock futures gaining 2.6%, as investors welcomed the prospect of new U.S. tax cuts and other measures to counter the economic pain caused by the coronavirus.

President Trump said Monday his administration would discuss several proposals with Congress, including a possible payroll-tax cut and help for hourly wage earners.

The Stoxx Europe 600 index rose 1.2%, following its biggest one-day decline since October 2008. Futures tied to the S&P 500 jumped 2.6%, suggesting U.S. stocks could claw back some of their losses when trading begins later in the day.

Major U.S. stock indexes suffered their steepest single-day falls since 2008 on Monday, tumbling more than 7%, after oil prices slid the most since the Gulf War in January 1991. Indexes in Germany, France and Britain slid into bear markets, as did some sectors of the U.S. market.

In another sign of improving investor confidence Tuesday, the yield on the benchmark 10-year Treasury rose to 0.651%, suggesting demand for the safest assets had abated somewhat. The yield hit a historic low of 0.339% on Monday as investors rushed for cover, before settling at 0.501%. Yields rise as bond prices fall.

“What we see today on global markets is led by U.S. stock futures,” said Frank Benzimra, head of Asia equity strategy at Société Générale in Hong Kong. “Markets are welcoming some policy shifts that seem [likely] to be taken by the U.S. government, including payroll tax cuts, or targeted measures easing cash-flow issues for some companies.”

However, Mr. Benzimra said markets would remain volatile and the collapse in oil prices, plus the stock-market selloff, would hurt the real economy.

In the Asia-Pacific region, Australia’s benchmark S&P/ASX 200 index rebounded to close up 3.1%, after an initial fall that would have left it in bear-market territory had it held through the day.

Japan’s benchmark Nikkei 225 pared steep early losses to add 0.9%. The yen, which had soared against the dollar on Monday in another sign of investor anxiety, weakened 1.4%, with $1 buying about ¥103.80.

Brent crude, the global oil benchmark, recouped some of the previous session’s losses, rising about 4.8% to $35.95 a barrel.

In China, President Xi Jinpingarrived in Wuhan for a surprise visit. This was his first trip to the epicenter of the coronavirus epidemic since the health crisis began, and comes as China reports a steep decline in the number of new cases.

“President Xi’s trip to Wuhan is declaring China has largely brought the coronavirus under control,” said Bruce Pang, head of macro and strategy research at China Renaissance Securities. Mr. Pang said that in turn had helped shore up investor confidence in China’s economic outlook.

In mainland China, the benchmark Shanghai Composite Index closed 1.8% higher. The Hang Seng Index in Hong Kong added 2%.

“It is quite normal for the market to have a minor revision after the brutal selloff on Monday, but it is far from a rebound,” said Hong Hao, chief strategist at Bocom International Holdings.

Mr. Hong said the Trump administration proposals appeared to reassure investors by suggesting “the government still has measures to contain the damage brought by the coronavirus.”

However, Mr. Hong added, many uncertainties remained, including energy prices, and what the U.S. Federal Reserve will do to follow its emergency interest-rate cut last week.



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Virus Fears Push Stocks Closer To A Bear Market

The Dow Jones Industrial Average suffered its worst decline since 2008 and at one point came within 65 points of touching a bear market.

For the day, the Dow sank 2,013.76 points, or 7.8%, to 23851.02. It was the first time the Dow lost more than 2,000 points in a session. The S&P 500 fell 225.81 points, or 7.6%, to 2746.56, also its worst day since 2008. And the Nasdaq Composite slid 624.94 points, or 7.3%, to 7950.68.


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All 11 sectors in the S&P 500 were down, led by energy, which slid 20%. Financials were down 11%. Industrials and materials both fell 9.2%.

By day’s end, the Dow, S&P and Nasdaq were all down roughly 19% from record highs set earlier this year. A drop of 20% from those highs would halt a bull-market run that began after the financial crisis. Stocks bottomed out 11 years ago, on March 9, 2009.

The 11-year bull market is over,“ said Peter Cecchini, the chief market strategist at Cantor Fitzgerald, noting that it isn’t just about an official 20% drop.

Mr. Cecchini said central banks suppressed interest rates over the years, and that became a big narrative investors used to justify buying stocks. Meanwhile, signs have emerged that global growth was slowing, like the inverted yield curve late year, but were ignored, he said.

“That underlying backdrop of fragility is one of the reasons why this has unwound so quickly,” he said. “When a bubble extends this far, it doesn’t take much to prick it.”

Saudi Arabia’s decision over the weekend to instigate a price war as it escalates a clash with Russia sent oil prices down by the most since the Gulf War in January 1991. Crude prices, along with U.S. government bond yields, are typically viewed as key barometers of economic health and confidence, said Gregory Perdon, co-chief investment officer at private bankers Arbuthnot Latham.


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“There has always been an assumption that when the oil price collapses the world is going to become a darker place, whether that is driven by the demand side or supply side,” Mr. Perdon said. The latest tensions put the oil market in somewhat uncharted territory with pressure in terms of both supply and demand as the coronavirus epidemic threatens to sap businesses’ appetite for energy.

The plunge in crude added to two weeks of turmoil in equity and credit markets as investors have grown increasingly concerned about economic growth stalling. It also raised fresh concerns about the risks tied to heavily indebted energy companies in the high-yield market, and the fallout for other companies if broader credit markets tighten.

U.S. government bonds, which have already rallied to unprecedented highs, extended gains. The yield on the 10-year Treasury, which moves inversely to bond prices, dropped to 0.577%. The 30-year yield fell below 1%, and more recently was at 1.003%.

“The fear today is about a global recession,” said Thomas Hayes, chairman of Great Hill Capital, a hedge fund-management firm based in New York. “If Russia does not come back to the table soon, investors worry the default risk and credit spreads widening will lead to tighter credit and even a recession.”



Public-health authorities are escalating efforts to contain the coronavirus outbreak, leading to a drop in business activity and curtailing global trade. The number of confirmed coronavirus cases has exceeded 110,000, with over 3,800 fatalities globally. At least eight American states including New York have declared states of emergency as infections spread to new parts of the U.S., and Italy quarantined some 17 million people.

Brent crude, the global gauge of oil prices, shed 18% to $37.19 a barrel, while U.S. crude futures dropped 17% to $34.37 a barrel.

U.S. energy producers were among the hardest hit. Chevron dropped 13% and Exxon Mobil fell 8.3%. Occidental Petroleum slid 33%.

Rising defaults among U.S. energy producers may make it harder for companies in other sectors to access credit markets, analysts said. “That ultimately is the negative aspect to lower oil,” said Viktor Hjort, head of credit strategy at BNP Paribas. “There is a real risk, and that is tighter credit conditions.”

The price war between major oil producers is “throwing petrol on the fire” at a time when investors are struggling to understand how deeply the outbreak will impact global supply chains and consumer spending, according to Lyn Graham-Taylor, a rates strategist at Rabobank.


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“We have got a massive demand decline brought about by the virus and now you’ve got headline inflation going through the floor: all combinations that say we need to do more easing,” Mr. Graham-Taylor said.

Stocks in the European energy sector led markets lower in the region, with BP plummeting 18% in London. Anglo-Dutch firm Royal Dutch Shell, Norway’s Equinor, Italy’s Eni, the U.K.’s BHP Group and France’s Total were also among the big decliners. That led the pan-continental Stoxx Europe 600 index down 6.3% with key equity benchmarks in the U.K. and France entering bear-market territory.

Foreign-exchange markets also faced renewed volatility on Monday, as steep drops in oil sparked a flight from commodity-linked currencies. The Russian ruble lost 7.2%, while the Norwegian Krone dropped 2.5%.

In the Asia-Pacific region, the S&P/ASX 200 index in Australia dropped 7.3%, suffering its worst day since October 2008, during the depths of the global financial crisis. That puts the gauge close to bear-market territory, which is typically defined as a peak-to-trough decline of more than 20%. Japan’s Nikkei 225 index closed down 5.1%, its biggest daily drop since 2016, while the benchmark stock index in Shanghai dropped more than 3%.

The Japanese yen, which often rallies in times of market stress, surged 2.8% to trade below 103 to the dollar, at its strongest levels since 2016. Gold, which is also normally considered a haven asset during times of turmoil, slipped 0.3%.


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“We are in uncharted territory now,” according to Hubert de Barochez, markets economist at Capital Economics. “Up until last week, what we were seeing was bond yields lower, stocks hurt and riskier currencies getting hit, but the idea was that if good news were to come all these moves would revert.”

The question now is where markets—and especially interest rates—go from here, said Dan Alpert, an investment banker and managing partner of advisory firm Westwood Capital.

“I cannot believe, that now that confidence in the market has been destroyed, that interest rates remain at 0.4%,” he said, referring to the rate on the 10-year yield. What’s more likely, he said, is a period of disinflation, or even outright deflation, that would ripple across markets and economies.

That will hurt companies, he said, especially those that are suffering in the current selloff. Firms will be talking about conserving resources, which could affect factors ranging from buybacks to wages, he said. That would cut into employment and consumer demand, he said.

“This is going to change the entire inflationary outlook,” he said.


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Bull Market Is Over …

“The 11-year bull market is over,” said Peter Cecchini, the chief market strategist at Cantor Fitzgerald, noting that it isn’t just about an official 20% drop.

Mr. Cecchini said central banks suppressed interest rates over the years, and that became a big narrative investors used to justify buying stocks. Meanwhile, signs have emerged that global growth was slowing, like the inverted yield curve late year, but were ignored, he said.

“That underlying backdrop of fragility is one of the reasons why this has unwound so quickly,” he said. “When a bubble extends this far, it doesn’t take much to prick it.”

Saudi Arabia’s decision over the weekend to instigate a price war as it escalates a clash with Russia sent oil prices down by the most since the Gulf War in January 1991. Crude prices, along with U.S. government bond yields, are typically viewed as key barometers of economic health and confidence, said Gregory Perdon, co-chief investment officer at private bankers Arbuthnot Latham.

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“There has always been an assumption that when the oil price collapses the world is going to become a darker place, whether that is driven by the demand side or supply side,” Mr. Perdon said. The latest tensions put the oil market in somewhat uncharted territory with pressure in terms of both supply and demand as the coronavirus epidemic threatens to sap businesses’ appetite for energy.

The plunge in crude added to two weeks of turmoil in equity and credit markets as investors have grown increasingly concerned about economic growth stalling. It also raised fresh concerns about the risks tied to heavily indebted energy companies in the high-yield market, and the fallout for other companies if broader credit markets tighten.

U.S. government bonds, which have already rallied to unprecedented highs, extended gains. The yield on the 10-year Treasury, which moves inversely to bond prices, dropped to 0.577%. The 30-year yield fell below 1%, and more recently was at 1.003%.

“The fear today is about a global recession,” said Thomas Hayes, chairman of Great Hill Capital, a hedge fund-management firm based in New York. “If Russia does not come back to the table soon, investors worry the default risk and credit spreads widening will lead to tighter credit and even a recession.”



Public-health authorities are escalating efforts to contain the coronavirus outbreak, leading to a drop in business activity and curtailing global trade. The number of confirmed coronavirus cases has exceeded 110,000, with over 3,800 fatalities globally. At least eight American states including New York have declared states of emergency as infections spread to new parts of the U.S., and Italy quarantined some 17 million people.

Brent crude, the global gauge of oil prices, shed 18% to $37.19 a barrel, while U.S. crude futures dropped 17% to $34.37 a barrel.

U.S. energy producers were among the hardest hit. Chevron dropped 13% and Exxon Mobil fell 8.3%. Occidental Petroleum slid 33%.

Rising defaults among U.S. energy producers may make it harder for companies in other sectors to access credit markets, analysts said. “That ultimately is the negative aspect to lower oil,” said Viktor Hjort, head of credit strategy at BNP Paribas. “There is a real risk, and that is tighter credit conditions.”

The price war between major oil producers is “throwing petrol on the fire” at a time when investors are struggling to understand how deeply the outbreak will impact global supply chains and consumer spending, according to Lyn Graham-Taylor, a rates strategist at Rabobank.


Market Trends – TradeMiner Software Identifies Historical Seasonal Trends And Market Cycles


“We have got a massive demand decline brought about by the virus and now you’ve got headline inflation going through the floor: all combinations that say we need to do more easing,” Mr. Graham-Taylor said.

Stocks in the European energy sector led markets lower in the region, with BP plummeting 18% in London. Anglo-Dutch firm Royal Dutch Shell, Norway’s Equinor, Italy’s Eni, the U.K.’s BHP Group and France’s Total were also among the big decliners. That led the pan-continental Stoxx Europe 600 index down 6.3% with key equity benchmarks in the U.K. and France entering bear-market territory.

Foreign-exchange markets also faced renewed volatility on Monday, as steep drops in oil sparked a flight from commodity-linked currencies. The Russian ruble lost 7.2%, while the Norwegian Krone dropped 2.5%.

In the Asia-Pacific region, the S&P/ASX 200 index in Australia dropped 7.3%, suffering its worst day since October 2008, during the depths of the global financial crisis. That puts the gauge close to bear-market territory, which is typically defined as a peak-to-trough decline of more than 20%. Japan’s Nikkei 225 index closed down 5.1%, its biggest daily drop since 2016, while the benchmark stock index in Shanghai dropped more than 3%.

The Japanese yen, which often rallies in times of market stress, surged 2.8% to trade below 103 to the dollar, at its strongest levels since 2016. Gold, which is also normally considered a haven asset during times of turmoil, slipped 0.3%.

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“We are in uncharted territory now,” according to Hubert de Barochez, markets economist at Capital Economics. “Up until last week, what we were seeing was bond yields lower, stocks hurt and riskier currencies getting hit, but the idea was that if good news were to come all these moves would revert.”

The question now is where markets—and especially interest rates—go from here, said Dan Alpert, an investment banker and managing partner of advisory firm Westwood Capital.

“I cannot believe, that now that confidence in the market has been destroyed, that interest rates remain at 0.4%,” he said, referring to the rate on the 10-year yield. What’s more likely, he said, is a period of disinflation, or even outright deflation, that would ripple across markets and economies.

That will hurt companies, he said, especially those that are suffering in the current selloff. Firms will be talking about conserving resources, which could affect factors ranging from buybacks to wages, he said. That would cut into employment and consumer demand, he said.

“This is going to change the entire inflationary outlook,” he said.



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Coronavirus Cases Outside China Tripled In Past Week

There were 29,306 cases outside mainland China, versus around 10,000 a week ago. The U.S. tally rose to 554 cases, with 21 deaths.



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The world-wide death toll stood at 3,825—the bulk of it in China, especially in the central city of Wuhan, which first reported the pneumonia-causing virus in December. Italy has the second-highest number of deaths at 366, and the total number of confirmed infections in the Mediterranean country climbed to 7,375 over the weekend, almost catching up with South Korea’s 7,478 cases.

Stock markets around the world plunged again on Monday, though a large trigger for the selloff was the prospect of an energy glut that could make a global recession more likely during the epidemic. Oil prices fell more than 25%, and the 10-year Treasury note yield dipped below 0.4%, a historic low.

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In China, health authorities reported 40 new cases on the mainland in the past day, bringing its total number of confirmed infections to 80,735, up about 1% from a week ago. More than two-thirds of the sickened people have recovered.

While China also has by far the highest death toll from the respiratory disease, at 3,119 fatalities, its officials have said lockdowns of cities, strict quarantine measures, and widespread workplace and school closures have helped limit infections across the country.

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A few weeks ago, China was reporting thousands of new cases daily. In late January the government locked down much of Hubei province, where Wuhan is, to stem the spread of the virus, and hasn’t lifted those restrictions.

In recent days, major cities including Shanghai and Beijing have seen people returning to malls, shops reopening and other business activities gradually resuming. On Monday, Shanghai government officials said some major tourist spots and sports facilities had reopened after being closed for more than a month.

Walt Disney Co.’s Shanghai Disney Resort said it would partially resume operations as a first step in reopening in phases, while the main Shanghai Disneyland theme park would remain closed until further notice.

Some facilities in Disneytown—the resort’s shopping, dining and entertainment complex—as well as its hotel and nearby park grounds began operating under limited capacity and reduced business hours. The resort said guests would have to undergo temperature checks and wear masks during their visits, and would be reminded to “maintain respectful social distances.”

Governments are preparing for a new wave of coronavirus cases among people who have traveled to countries other than China. Health authorities in Hong Kong, which has 114 confirmed cases, said several people who tested positive for the virus that causes Covid-19 in recent days had been on a tour to India in February. India has reported 39 coronavirus infections.

On Monday, South Korean Vice Health Minister Kim Ganglip said the spread of the coronavirus appears to be slowing in the country but that new infections could come from people returning from abroad.

The country added 165 cases, the lowest daily new numbers since Feb. 25, according to the Korea Centers for Disease Control and Prevention.

China said it has a total of 67 imported cases, including people who recently traveled to Italy and Iran.

In Japan, a new rule kicked in Monday that effectively bans tourists from China, Hong Kong, Macau and South Korea until the end of March, as the country seeks to prevent more new imported infections. Japan reported 488 cases on Monday, up 33 from a day earlier.





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Global Markets In Turmoil As Oil Plunges

Oil plunged more than 25%, 10-year Treasury yields dipped below 0.4%, stocks dropped, and currencies swung as the prospect of an energy glut ratcheted up turmoil across markets world-wide.

Investors are responding to Saudi Arabia’s decision over the weekend to cut most of its oil prices and boost output, despite existing threats to demand from the coronavirus epidemic. The move escalates a clash with another major oil producer, Russia.

“The fear today is about a global recession,” said Thomas Hayes, chairman of Great Hill Capital, a hedge fund-management firm based in New York. He said lower oil prices make it more likely some companies would default on their debts.



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If Russia doesn’t come back to the negotiation table soon, investors worry companies will default, making banks less willing to lend, and causing the economy to stutter, he said.

Trading in futures tied to the S&P 500 fell by the maximum 5% allowed in a single session. This meant trading was limited for the first time since shortly after President Trump’s 2016 election victory. By early afternoon in Hong Kong on Monday, S&P 500 e-Mini contracts were 4.9% lower at 2,819.00, about 16.8% below a recent high registered on Feb. 19.

U.S. government bonds, which have already rallied to unprecedented highs, extended gains. The yield on the 10-year Treasury tumbled to 0.387%. Yields move inversely to prices. In Europe, the pan-continental Stoxx Europe 600 index dropped 2.8% with France’s CAC 40 benchmark dropping 2.7% and the U.K.’s FTSE 100 off 8.4%.

In the Asia-Pacific region, the S&P/ASX 200 index in Australia dropped 7.3%, suffering its worst day since October 2008, during the depths of the global financial crisis. The Australian dollar, which is sensitive to shifts in demands for commodities, fell more than 1%, with one Australian dollar buying 65.35 U.S. cents.

Japan’s Nikkei 225 declined 5.1%, its biggest daily drop since 2016. The yen, which often rallies in times of market stress, surged to trade below 103 to the dollar, at its strongest levels since 2016.

Benchmark stock indexes in Hong Kong and Shanghai dropped more than 4% and 2%, respectively. China’s onshore markets, in Shanghai and Shenzhen, have been comparatively resilient in recent weeks.

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Saudi Arabian state oil giant Aramco said in a notice to buyers sent Saturday that it was cutting most of its prices, while preparing to boost crude output. Oil prices dropped after the market reopened Sunday evening in New York. Brent crude, the global gauge of oil prices, fell about 27.5% to $32.84 a barrel, and U.S. crude futures fell by a similar amount.

Last week, Saudi Arabia was unable to persuade Russia to join its plan for deeper crude production cuts at a gathering of the Organization of the Petroleum Exporting Countries and its allies in Vienna. The failure signaled the end of a four-year collaboration between OPEC’s member nations and 10 nonmembers led by Russia.

“The collapse of the talk between Russia and OPEC crushed investors’ confidence,” said Alvin Ngan, a strategist with Zhongtai International Holdings in Hong Kong, adding that sentiment was already fragile given the uncertainties created by the novel coronavirus.

In Australia, large energy stocks plunged by double-digit percentages on fears of a prolonged period of low crude-oil prices. Shares in Woodside Petroleum Ltd. fell by 18% while mining giant BHP Group Ltd. dropped by 14%.

The ASX 200 has now fallen 19.6% since hitting an all-time high on Feb. 20, putting it close to bear-market territory, which is typically defined as a peak-to-trough decline of more than 20%. The Nikkei 225 has fallen more than 18% from its highest closing level this year.




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Financial Markets – Top 5 Things to Watch This Week

All eyes will be on the European Central Bank this week as global central bankers try to respond to the economic risk posed by the coronavirus threat. The ECB, which meets on Thursday, has less room to act than the Federal Reserve but market watchers still see a good chance of a rate cut. The UK government will present its new budget on Wednesday, which is expected to contain a package of measures in response to the crisis.

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Economic data from China, the U.S., Japan and the Euro Zone will give investors a chance to gauge the impact of the virus crisis on the global economy. Oil will also be in focus after a pact between OPEC and Russia to curb production collapsed on Friday, sending prices into freefall. Here’s what you need to know to start your week.


ECB meeting
Thursday’s ECB meeting will be a test case for Christine Lagarde. The ECB needs to strike a balance between demonstrating its ability to act and the awareness that supporting the economic recovery might need large doses of government spending rather than more monetary stimulus.

Some ECB policymakers have cautioned against a quick move; where rates are already deeply negative further cuts may have limited impact.

“We could see a mix of several smaller measures like a 10bp rate cut, tweaks to collaterals, targeted longer-term refinancing operations (TLTRO) and an increase of the Corporate Sector Purchase Program (CSPP),” analysts at ING wrote in a note.

UK budget
Britain’s new Chancellor of the Exchequer Rishi Sunak will present his first budget on Wednesday. He was already expected to announce a stimulus package targeting poorer regions, but the spread of coronavirus means he may have no choice but to boost public spending further.

Those expectations were further raised when incoming Bank of England Governor Andrew Bailey suggested a coordinated response between the government and central bank to help small businesses caught up in the coronavirus fallout.

Bailey also said that he would want to see more evidence of the impact of the virus before considering a rate cut at the BoE’s next scheduled policy meeting on March 26.

Fed blackout, U.S. data
Fed policymakers will be in their traditional “blackout” period before their upcoming meeting, during which they avoid making policy pronouncements of any kind, just as global markets are hanging on to every clue about the upcoming decision. Fears over spreading coronavirus have fueled expectations that the central bank will cut rates again after last week’s emergency cut. Investors are trying to gauge whether policymakers are seriously worried about a sharp economic downturn or simply want to insure against that possibility.

On the data front, investors will be focusing on Friday’s preliminary March reading of the University of Michigan consumer sentiment index. The consensus forecast is for a substantial decline given the plunge in equity markets and the negative coronavirus headlines and this could underline worries about the prospect of weaker economic activity in the coming months.

The calendar this week also features data on jobless claims, inflation and trade, but the reports are mainly from the period before virus fears really took hold in the U.S., so will likely take more of a back seat.

Chinese data
Chinese data published Saturday showed that exports contracted sharply in the first two months of the year, and imports declined, amid the health crisis triggered by the coronavirus outbreak.

Chinese inflation figures, due out on Tuesday will likely indicate that supply disruptions saw producer prices contract last month.

Looking ahead, authorities will want to address the growth risks, so expect more cuts in bank reserve ratios, money market yields and benchmark rates. Beijing is also likely to speed up infrastructure projects to get economic momentum going.

Meanwhile, foreign investors are rushing into Chinese equities and rich-yielding yuan bonds as other markets tumble. But they are also questioning the shape of China’s recovery and whether that could be undermined by the global spread of the virus.

Oil price war
A three-year honeymoon between OPEC and Russia collapsed on Friday after Moscow refused to support deeper oil cuts to cope with the outbreak of coronavirus and OPEC responded by removing all limits on its own production.

Oil prices plunged 10% as the development revived fears of a 2014 price crash, when Saudi Arabia and Russia fought for market share with U.S. shale oil producers, which have never participated in output limiting pacts.

All limits will expire at the end of the month, meaning that OPEC members and non-OPEC producers can in theory pump at will in an already oversupplied market.

“This is an unexpected development that falls far below our worst-case scenario and will create one of the most severe oil price crisis in history,” said Bjoernar Tonhaugen of Rystad Energy.






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Coronavirus: The Italian Government Is Locking Down 17 Million People

A decree from the Italian Prime Minister’s office says people living in Lombardy, where Milan is the capital, and the named provinces in Lombardy’s nearby regions must “absolutely avoid any movement into and out of the areas.”

Police, emergency services and if needed the army will be available to enforce the quarantine. People violating the lockdown can be punished with a fine or jail terms, according to the draft decree.

Prime Minister Giuseppe Conte announced the measures in a press conference in the early hours of Sunday morning. He said the final decree would be published “in the coming hours.”

The quarantine will be effective from Sunday until April 3.

“We are confronting a national emergency,” Mr. Conte said in the televised press conference. “Don’t worry. We will get through this.”

A draft decree seen by The Wall Street Journal said the lockdown would involve 11 provinces in addition to all of Lombardy. Mr. Conte didn’t give a reason for the late addition of three more provinces.

Italy, which has had the largest number of infections outside Asia, is a test of how far Western countries are willing and able to curtail personal freedom of movement and lifestyle to contain the epidemic.

The move by the Italian government is reminiscent of measures taken in China, which put about 500 million people under full or partial lockdown. China’s moves appear to be having success as the number of new cases reported by the government has fallen steeply in the past week, and the daily number of new cases is less than in several other countries including Italy.


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Italy had confirmed 5,883 coronavirus cases by Saturday, of which 233 people had died. Italy has tried to respond with moderate restrictions, such as banning many public events; before Saturday it had only imposed lockdowns on small areas in the country’s north, with a population of around 50,000.

The new measures planned from Sunday in much of northern Italy include tight restrictions on travel within the affected areas, where people will be told to move about only for emergencies and work obligations that can’t be postponed. The draft decree asks all private and public employees to take their leave allowance during the quarantine period, if they can, to stay at home.

The decree forces the closure of ski resorts in the affected areas. Museums, which were forced to close last month and then allowed to reopen, will once again be closed. Churches can remain open, but religious and civil ceremonies including funerals are suspended. Shopping malls and outdoor markets will be closed on weekends.

The Lombardy regional government asked the Italian government in Rome to enact the new draconian steps because the containment measures currently in place haven’t blocked the spread of the virus, according to member of Lombardy’s regional council. Italian regions are roughly equivalent to U.S. states administratively, though they have less autonomy.

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Italy has already suspended all schools and universities throughout the country. Sports events are allowed only behind closed doors. The government has urged the elderly to stay home, and everyone else to keep about 3 feet away from others when they are outside. Bars and restaurants have stayed open, but their clients must respect the minimum distance requirement or they would be forced to shut.

But the rapid daily rise of infections and deaths now is forcing more drastic action.

The government is walking a difficult line, trying to contain the virus while not suffocating the economy—which shrank in the fourth quarter of 2019 and is forecast to shrink again this quarter, pushing the country into recession.

Lombardy, in addition to being the country’s most populous region with 10 million people, is Italy’s industrial heartland, and putting it under full quarantine is likely to deal a severe economic blow.

About 85% of the virus cases in Italy have been in Lombardy as well as Emilia-Romagna and Veneto, the two regions where most of the 14 provinces to be put under lockdown are located. Those provinces include Venice, Parma and Modena.

Together, the three regions account for 40% of the country’s economic output.




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Stock-Market-Corrections-2020


COVID-19 Risk Rises For U.S. And Global Economies

Financial markets and economic forecasters are warning of rising risks for the U.S. and global economy, which were improving before the novel coronavirus spread from China around the world.

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A buoyant U.S. job market had fueled strong consumer spending and cushioned the economy through choppy waters created by the trade war with China, a manufacturing contraction and weakening momentum abroad. But markets flashed warning signals this past week showing investors see dangers ahead, particularly in the bond market, with Treasury yields tumbling to historic lows, and in commodities, with crude prices on Friday logging their worst day since the financial crisis.

The U.S. labor market remains a bulwark, with employers adding a robust headcount of 273,000 last month, the Labor Department said Friday. But that will be tested as the virus spreads and governments try to contain it. China and Japan, the world’s second- and third-largest economies, are already flirting with recession from the coronavirus shock. The U.S. is the largest world economy.

“The good news is the U.S. has a lot of momentum heading into this,” said Diane Swonk, chief economist at accounting and advisory firm Grant Thornton. She expects the economy to slow sharply in the first half of 2020 but avoid a recession. “The risk is this mutates into a more vicious cycle.”

Ms. Swonk projects U.S. economic growth to cool to a 0.5% annual pace in the first half—a marked slowdown from last year’s 2.3% expansion, which itself marked an easing from a more robust 2018. She expects layoffs at restaurants, hotels and airlines, and for the unemployment rate to edge up from a half-century low.

The widening impact of the spreading virus, including into financial markets, caused Oxford Economics economists to cut their global economic growth forecast further to 2% in 2020. “The effects of financial market weakness and the disruption to daily life around the world will trigger lower consumer spending and investment on top of the disruptions to the global supply chain,” said Ben May, Oxford’s director of global macro research, in a note to clients.

The Organization for Economic Cooperation and Development said this past week its “best case” scenario would be for global economic growth to slow by a half-percentage point this year due to the epidemic.

The business sectors where demand could suffer the most initially include air transportation, conference venues and hotels.

Southwest Airlines Co., which primarily flies domestic U.S. flights, said Thursday it has experienced “a significant decline in customer demand” and an increase in trip cancellations. United Airlines Holdings Inc., Germany’s Deutsche Lufthansa AG and Hong Kong-based Cathay Pacific Airway are encouraging employees to take unpaid leave at a time when airlines are reducing their flight schedules.

Restaurants, entertainment and retail—industries that rely on discretionary spending and foot traffic—also are at risk.

“Businesses that are primarily dine-in businesses may need to close temporarily if things get really bad,” said Erik Herrmann, head of restaurant investment at CapitalSpring, which invests in and owns casual-dining restaurants. Mr. Herrmann expects drive-through services to benefit if the coronavirus spurs hesitancy among customers to eat inside restaurants.

Companies in vulnerable industries are adjusting. United and Hyatt Hotels Corp. plan hiring freezes. General Motors Co. and Nestlé SA are restricting employee travel. Events such as South by Southwest, a two-week tech, film and music festival in Austin, Texas, have been called off.

Facebook Inc. and Amazon.com Inc. have announced office closures in Seattle. While those high-tech workers can operate from home, Uber drivers and sandwich shops that served them could suffer.

“Workers can’t all work from home, and you’ll see lost output that can never be made up,” Ms. Swonk said. “You can’t attend a canceled sporting event later and you won’t buy a sweater you wanted in March in late April.”

One question for the U.S. is whether the impact spread to other business sectors. Manufacturers are reporting supply disruptions due to an extended shutdown of Chinese factories. Small businesses are concerned about whether they will have access to financing to bridge a slowdown in demand. And a temporary economic slowdown could put some heavily indebted firms at risk of default.

Before the recent market volatility, the U.S. economy was on a solid footing. In February, unemployment returned to a 50-year low and wages rose, the Labor Department said in its Friday report. Other recent readings showed layoffs at historic lows, steady consumer spending, low inflation and rising household income.

Then came the coronavirus. While the extent of economic harm isn’t yet clear—with damage contingent on how long it lasts, how widely it spreads and how people respond—initial signs are already showing up.

Business activity by service providers contracted in February for the first time since October 2013, private data firm IHS Markit said Wednesday. Surveyed firms reported declining client demand and new business from abroad. The University of Michigan’s gauge of consumer sentiment rose for all of February, but a fifth of respondents in the survey’s closing days raised concerns about the coronavirus. The Institute for Supply Management said manufacturing activity cooled in February, as coronavirus effects rattled supply chains.

Products coming from China are facing backlogs, which weigh on U.S. sales. Keith McGee, owner of Black Sail Market LLC, said wait times for orders in China have recently grown to six weeks from two. Mr. McGee buys components from China and then assembles them into lights for the cannabis industry.

“I’m definitely starting to worry about it,” he said. “I can’t afford to be running out of inventory for a month. It basically means I have no revenue.” Crude prices notched the largest one-day decline since the recession on Friday after Saudi Arabia and Russia, two of the world’s biggest oil producers, failed to agree on whether to reduce global supply in the face of the coronavirus’s effect on demand. Lower oil and gasoline prices could be a boon for U.S. consumers, though the impact would be lessened if fewer commute and travel. However, plunging prices could hurt parts of Texas and the Midwest where the local economies are increasingly tied to energy production

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Policy makers in the U.S. and abroad took steps this past week to blunt the impact of the spreading virus, including an emergency half-percentage-point rate cut by the Federal Reserve and rate cuts in Canada and Australia. The Bank of Japan, which already has negative short-term rates, offered to lend 500 billion yen ($4.6 billion) to financial firms.

The Fed has signaled it could cut rates further, but officials also have called for more U.S. government fiscal stimulus measures.

Boston Fed President Eric Rosengren said Friday that a stronger fiscal-policy response is the “obvious alternative” to constrained monetary policy in the current low-rate environment. “Somewhat surprisingly, there seems to be little movement” to implement those steps, he said.

Officials from the Group of Seven countries said this past week they stand ready to cooperate on actions, including fiscal-stimulus measures to guard against economic risks from the virus.

In the U.S., President Trump signed an $8.3 billion emergency spending bill Friday to combat the virus, funding efforts to develop a vaccine and assisting local and state responses.

A much larger fiscal response may be needed to safeguard the U.S. economy, said Megan Greene, an economist at Harvard University’s Kennedy School of Government. Those steps could include reducing payroll taxes and providing more direct support to businesses and individuals, including steps such as loans and increased food-assistance payments.

White House economic adviser Larry Kudlow on Friday said the administration was considering “timely and targeted” measures aimed at helping workers and sectors affected by coronavirus. That includes measures such as deferring taxes for the industries hardest hit by the virus—primarily hospitality and travel, an administration official said.

“There should be a pretty sharp drop off in economic activity,” Ms. Greene said. “How long it lasts depends on epidemiology—and we don’t have any answers to that.”



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Berkshire Hathaway Backs Away From Canadian Gas Project

Berkshire Hathaway Inc. has backed out of financing a major gas project in the Canadian province of Quebec, prompting worries that international investors are increasingly shunning the country after protests over another energy project.

Warren Buffett’s conglomerate pulled out of providing roughly 4 billion Canadian dollars ($2.99 billion) in equity financing for the Énergie Saguenay Project, a proposed Canadian natural gas export facility to be built 130 miles north of Quebec City, according to three people familiar with the matter.

Berkshire’s move was spurred by a series of rail blockades set up to oppose construction of a natural-gas pipeline in British Columbia, said a person with knowledge of the decision.




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Canada has been roiled by activists and indigenous groups who have obstructed the country’s rail network and its supply chain since early February to protest the pipeline. Such strident opposition to big energy projects has worried investors that the investment climate in Canada is too risky for large deals.

Berkshire’s decision to scrap the deal, first reported on Thursday by the Montreal-based newspaper La Presse, comes despite the conglomerate’s earlier willingness to invest in Canadian energy. The company’s energy arm owns AltaLink Transmission, the largest regulated energy transmission company in the province of Alberta. Berkshire also owns a large stake in Suncor Energy Inc., Canada’s largest crude-oil producer.

Énergie Saguenay confirmed in a blog post on its website that a “potential private investor” had decided at the last moment to step away, though it declined to name the firm.

“This decision was taken because of the political context that has prevailed for a month now in Canada,” said the post, which was written in French.

The energy project, jointly owned by California-based investors James Illich and James Breyer through their investment companies Freestone International and Breyer Capital, said the project is still on track. It is seeking other potential investors ahead of a final decision to proceed in 2021.

According to one person familiar with Berkshire’s decision, the company had initially agreed to invest a few hundred million dollars in the project, ramping up to C$4 billion in stages. But during the second week of the rail blockades, the company signaled it was concerned by the uncertainty caused by the disruption and was losing interest in the investment. Berkshire walked away a week later, this person said.

Canadian police dismantled the most disruptive blockade, which had choked off east-to-west freight rail traffic, late last month. The last remaining major blockade, in the Montreal area, was taken down on Thursday.

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The Énergie Saguenay Project is just one of several Canadian projects that hit hurdles recently, creating doubts about Canada as a place to invest. Prime Minister Justin Trudeau’s Liberal government failed to get approved energy projects completed, such as the expansion of the Trans Mountain energy pipeline. The pipeline has been mired in court cases for years.

Houston-based Kinder Morgan Inc. became so frustrated with opposition to the Trans Mountain expansion that it sold the pipeline to the Canadian government in 2018, and sold its Canadian assets to Pembina Pipeline Corp. a year later.

“There’s a question vis-à-vis domestic and international investors if Canada is open for business,” said Pat Fiore, president of GNL Quebec, the company that runs the Énergie Saguenay project. “Can we get these large projects across the line?”

The concern isn’t limited to international investors.

Last month, Canadian mining company Teck Resources Ltd. announced it was shelving a proposed C$20 billion energy project in the Canadian oil sands, home to the world’s third-largest oil reserves. Teck Chief Executive Don Lindsay said the company was withdrawing from the project because of the widening schism in the country between resources development and environmental policy.

Mr. Trudeau on Thursday noted that foreign investment in Canada rose more than 18% last year, but acknowledged the country needs to send a unified message to investors, emphasizing environmental policy.

“We need to do more to show that the jobs we’re creating and the investments we are making and attracting will allow us to succeed in a world where climate change is hitting us harder and harder,” he said. “That is why we need to have a united message across this country in terms of our leadership and the leadership we can show on fighting climate change.”




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Most Reliable Online Broker In 2020

What is the best stock trading platform for 2020? ….  How To Choose The Most Reliable Online Broker in 2020



To evaluate brokers, you should look at the following factors:

>>> Commissions
>>> Account Minimum
>>> Account Fees
>>> Your Trading Style and Tech Needs
>>> Promotions

Look at commissions on the investments you’ll use most… Brokers generally offer a similar menu of investment options: individual stocks, options, mutual funds, exchange-traded funds, and bonds. Some will also offer access to futures trading and forex (currency) trading.

The investments offered by the broker will dictate two things: whether your investment needs will be satisfied, and how much you’ll pay in commissions. Pay careful attention to the commissions associated with your preferred investments:

Individual stocks: You’ll typically pay a per-trade commission of $4 to $7. Some brokerages also offer per-share pricing.

Options: Options trades often incur the stock trade commission plus a per-contract fee, which usually runs $0.15 to $1.50. Some brokers charge only a commission or only a contract fee.

Mutual funds: Some brokers charge a fee to purchase mutual funds. You can limit mutual fund transaction costs or avoid them completely by selecting a broker that offers no-transaction-fee mutual funds. (Mutual funds also carry internal fees called expense ratios. These are charged not by the broker, but by the fund itself.)

ETFs: ETFs trade like a stock and are purchased for a share price, so they are often subject to the broker’s stock trade commission. But many brokers also offer a list of commission-free ETFs. If you plan to invest in ETFs, you should look for one of these brokers.

Bonds: You can purchase bond mutual funds and ETFs at no charge by using no-transaction-fee mutual funds and commission-free ETFs. Brokers may charge a fee to purchase individual bonds, with a minimum and maximum charge.

Pay attention to account minimums… You can find highly ranked brokers with no account minimum. But some brokers do require a minimum initial investment, and it can skew toward $500 or more. Many mutual funds also require similar minimum investments, which means even if you’re able to open a brokerage account with a small amount of money, it could be a struggle to actually invest it.

Watch out for account fees… You may not be able to avoid account fees completely, but you can certainly minimize them. Most brokers will charge a fee for transferring out funds or closing your account. If you’re transferring to another broker, that new company may offer to reimburse your transfer fees, at least up to a limit.

Most other fees can be sidestepped by simply choosing a broker that doesn’t charge them, or by opting out of services that cost extra. Common fees to watch out for include annual fees, inactivity fees, trading platform subscriptions and extra charges for research or data.

Consider your trading style and tech needs… If you’re a beginner investor, you probably won’t need extras, like an advanced trading platform. But you may want an education and a little hand-holding. This could include videos and tutorials on the broker’s website, or in-person seminars at branches. Many brokers offer these services free to account holders.

Active traders, on the other hand, will want to look for a brokerage that supports that kind of frequency. That includes weighing a broker’s trading platforms, analysis tools, research and data offerings in addition to commissions — including discounts for high-volume traders — and fees.

Plenty of high-quality online brokers offer free demo access to trading platforms.

Take advantage of promotions… Online brokers, like many companies, frequently entice new customers with deals, offering a number of commission-free trades or a cash bonus on certain deposit amounts.

It isn’t wise to choose a broker solely on its promotional offer — a high commission over the long term could easily wipe out any initial bonus or savings — but if you’re stuck between two options, a promotion may sway you one way or the other.


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


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◊ Plus500 Review ◊


Plus500 is a streamlined broker that focuses on trading in a wide range of financial markets with relatively low spreads and no commissions but without offering many extra services. Plus500 has been in the forex and CFD business since 2008. They are registered in the U.K. and licensed by the Financial Conduct Authority (FCA).

The company offers access to a comprehensive product line including forex, stock indexes, equities, commodities, cryptocurrencies, ETFs and options. Plus500 is the first broker to introduce a bitcoin CFD in 2013. The company does not charge commissions on any of its trades.

All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Plus500 Ltd. (PLUS.L) is a publicly traded company on the AIM section of the London Stock Exchange since 2013 with a £1.73 billion ($2.25 billion) market capitalization and clients in more than 50 countries around the world. Plus500 offers access to more than 2,000 trading instruments.




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Trust … The company is registered with the Financial Conduct Authority (FCA), CySEC, ASIC, FSCA, FMA, MAS, and the ISA, which provides good accountability and visibility. The company is required to take steps to ensure client funds are not comingled with corporate funds – ensuring that client money and assets are protected in the unlikely event that Plus500 becomes insolvent – by holding those funds in segregated accounts at regulated banks.

If Plus500 defaults, any shortfall of funds of up to £50,000 may be compensated for under the Financial Services Compensation Scheme (FSCS). If the custodian bank holding client funds goes into liquidation, any shortfall of funds of up to £85,000 may be compensated for under the FSCS.

Plus500 also offers Negative Balance Protection, ensuring that clients cannot lose more than they have put into their account. Guaranteed stop losses can be used on some instruments depending on market conditions but they are subject to a wider spread.

The company does not charge commissions on any of its trades. All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Large volume traders do not get a trading discount at Plus500 and the spread is the same whether you trade one lot or 1,000 lots.

There are no charges for normal withdrawals or terminating an account. However, inactivity fees kick in after an account has been idle for three months. Beginning traders can open an account with as little as £100.

Traders can qualify for a “professional” account, which offers a higher level of maximum leverage, but the costs are the same. Investors with a professional account may increase their maximum leverage ten-fold, from 1:30 to 1:300.

Plus500 also offers access to options trading on many markets. These are very similar to plain call and put options traded on exchanges, but they are not standardized which means that the option premium can be customized for your risk tolerance and strategy objectives.




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China January-February Exports Tumble




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China’s exports contracted sharply in the first two months of the year, and imports slowed, as the health crisis triggered by the coronavirus outbreak caused massive disruptions to business operations, global supply chains and economic activity.

The gloomy trade report is likely to reinforce fears that China’s economic growth halved in the first quarter to the weakest since 1990 as the epidemic and strict government containment measures crippled factory production and led to a sharp slump in demand.

Overseas shipments fell 17.2% in January-February from the same period a year earlier, customs data showed on Saturday, marking the steepest fall since February 2019.

That compared with a 14% drop tipped by a Reuters poll of analysts and a 7.9% gain in December.

Imports sank 4% from a year earlier, but were better than market expectations of a 15% drop. They had jumped 16.5% in December, buoyed in part by a preliminary Sino-U.S. trade deal.

China ran a trade deficit of $7.09 billion for the period, reversing an expected $24.6 billion surplus in the poll.

Factory activity contracted at the fastest pace ever in February, even worse than during the global financial crisis, an official manufacturing gauge showed last weekend, with a sharp slump in new orders. A private survey highlighted similarly dire conditions.

The epidemic has killed over 3,000 and infected more than 80,000 in China. Though the number of new infections in China is falling, and local governments are slowly relaxing emergency measures, analysts say many businesses are taking longer to reopen than expected, and may not return to normal production till April.

Those delays threaten an even longer and costlier spillover into the economies of China’s major trading partners, many of which rely heavily on Chinese-made parts and components.

China’s trade surplus with the United States for the first two months of the year stood at $25.37 billion, Reuters calculation based on Chinese customs data showed, much narrower than a surplus of $42.16 billion in the same period last year.

Soybean imports in the first two months of 2020 rose by 14.2% year-on-year as cargoes from the U.S. booked during a trade truce at the end of 2019 cleared customs.

After months of tensions and tariff hikes that dragged on bilateral trade, the world’s two biggest economies agreed an interim trade deal in January that cut some U.S. tariffs on Chinese goods in exchange for Chinese pledges to massively increase purchases of U.S. goods and services.

The U.S. expects China to honor these commitments despite the coronavirus outbreak, a senior U.S. official said in February.

VIRUS THREATENS GLOBAL RECESSION

The supply and demand shocks in China are likely to reverberate through global supply chains for months, and the rising number of virus cases and business disruptions in other countries is raising fears of a prolonged global slowdown or even recession.

In response, global policymakers have stepped up efforts to cushion the economic blow of the epidemic, with the U.S. Federal Reserve delivering an emergency rate cut last week.

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Shortages of vital parts and components from China last month cost other countries and their industries $50 billion, a United Nations agency said on Wednesday.

The virus outbreak escalated in late January just as many businesses were winding down operations or closing for the long Lunar New Year holidays, and as hundreds of millions of Chinese were returning to their hometowns.

China customs said last month it would not release separate figures for January and would combine January and February instead, in line with how some of the country’s other major indicators are released early in the year, which is intended to smooth distortions created by the holidays.

Tough public measures such as restrictions on travel and quarantines meant many of these people were unable to return to their jobs in offices, factories and ports until only recently.

Some firms which have reopened have faced shortages of parts and other raw materials as well as labor, while others report inventories of finished goods such as steel are piling up as downstream customers like car plants slowly crank up production again.

Iron ore imports rose 1.5% over the first two months, supported by firm demand at steel mills even though the coronavirus outbreak had disrupted downstream sectors.

Parts of central Hubei province, the epicenter of the outbreak and a major transport and manufacturing center, are expected to remain under lockdown well into March.

Analysts at Nomura estimate only 44% of the businesses worst affected by the outbreak had resumed operation as of March 1, and 62.1% across the economy as a whole. As such, they forecast economic growth will slump to 2% in the first quarter year-on-year, from 6% in the previous quarter.

Beijing has already stepped up support measures, including offering cheap loans to affected businesses, and policy sources have told Reuters that more steps are expected as authorities try to cushion the epidemic’s impact on the economy.

China’s commerce ministry said on Thursday that more than 70% of foreign trade companies in the coastal provinces have resumed work.

But financial magazine Caixin reported this week that some companies were keeping machines running and lights open throughout the day even though they have no goods to produce, in a bid to allow managers and local officials to inflate the official work resumption rate. Reuters wasn’t able to verify this report.




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Market-turbulence-news




Market Turbulence: Investors Sell Bonds And Bank Stocks In Europe On Fears Of A Deeper Slowdown

The market rout in stocks spilled into the corporate-debt markets Friday after investors began to more fully assess the harm that prolonged economic disruption from the coronavirus could do to highly indebted companies.

Reaction to the virus had been relatively muted in credit markets, where yields on even riskier junk bonds and loans had remained below levels seen during the selloff in late 2018. However, data on Thursday showed accelerating withdrawals from U.S. high-yield bond and loan funds in the past week, which was followed by a drop in European bank stocks driven by investors’ concerns over loan losses.

In Europe, the cost of protection on risky corporate credit jumped to its highest level in nearly four years on the leading IHS Markit index of riskier credit derivatives, the iTraxx Crossover. The cost rose to more than €388,000 ($436,000) annually to cover €10 million of bonds.

Market-turbulence-news

 

This followed a sharp rise in the U.S. CDX High Yield index, showing that it cost more than $409,000 annually to protect $10 million of bonds at the close on Thursday. The price of a BlackRock Inc. exchange-traded fund that often serves as a proxy for the high-yield market—known by its ticker symbol HYG—fell to about $84.68 from $86.02 Thursday.

While selling was broad-based, bonds of companies in sectors that could be most affected by the spread of the coronavirus, such as travel and energy, fell especially sharply. The yield investors demanded to hold short-term bonds of American Airlines Group Inc. jumped as high as 12.4% from 5% earlier in the week, with prices falling as low as 86 cents on the dollar from 92.75 cents Thursday, according to MarketAxess.

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Amid a steep decline in oil prices, a Laredo Petroleum Inc. 9.5% bond due in 2025, which was issued at par in January, fell to 57.5 cents on the dollar from 69 cents Thursday.

Friday’s selling is notable because credit markets are critical to the functioning of the economy. Earlier this week, companies of varying credit quality were still issuing bonds, and the average yield of U.S. speculative-grade bonds remained below levels from last summer, according to Bloomberg Barclays data. But extended volatility could make it difficult for companies to borrow, exacerbating any economic hit from the coronavirus.

Today was the day when it flipped from equity market leadership of the selloff to credit market leadership,” said Barnaby Martin, head of European credit strategy at Bank of America Merrill Lynch. “We were building up vulnerabilities…this is what happens when the market reaches for yield, which is hubris.”

The rush to buy protection and withdrawal from bonds was driven by dedicated credit funds being forced to cut back positions, amplified by a lack of liquidity in the markets, according to one senior credit trader in London.

This follows a wave of withdrawals from U.S. funds that invest in riskier credit, according to LCD, the loan research arm of S&P Global Market Intelligence. More than $5 billion was pulled from U.S. high-yield bond mutual funds and exchange-traded funds in the week to March 4, up from $4.2 billion the week before, according to Refinitiv Lipper. There had been net inflows, year to date, before last week.

Funds that invest in risky loans, typically used to fund private-equity-backed companies, have also seen growing outflows, with $2.3 billion pulled in the week to March 4, bringing the total outflow over the past seven weeks to $4.7 billion, according to LCD.

After two weeks of equity market declines, corporate debt investors and analysts are growing more concerned about how economic disruption brought about by the coronavirus will hurt the cash flow and the credit quality of weaker companies, and particularly of smaller companies that typically have less capacity to bridge a drop on cash flows.

This is also one reason why bank stocks are getting hit, particularly in Europe, where there is already wide disruption to travel and one U.K. airline has been pushed into insolvency. The Euro Stoxx Banks index has dropped 7.5% in the past two days and is now down 24% since cases were reported in Italy in late February.

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Some analysts are now beginning to worry more about highly indebted businesses, and where exposures to them lie through the system of investment funds and structured products known collectively as the shadow banking sector.

“We are concerned that there are skeletons out there in closets we may not be aware of that come out in times like this, particularly leverage from the shadow banking system,” John Briggs, head of Americas strategy at NatWest Markets in New York, wrote in a Friday morning note. “I also worry about the small and medium sized businesses in particular.”





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Coronavirus Cases Globally Exceed 100,000 As Countries Fail To Contain Spread

There were 100,329 confirmed cases of the virus world-wide, more than a fifth of which were in countries other than China, according to data compiled by Johns Hopkins University. South Korea, the second worst-hit country, reported another jump in infections, bringing its tally to 6,593. The novel coronavirus is now in around 90 countries, less than three months after it was first identified in the central Chinese city of Wuhan in December.

Chinese health authorities on Friday reported 143 new infections, but said that for the first time there were no new cases in the wider Hubei province outside of its capital of Wuhan in the previous day. The vast majority of China’s 80,555 cases have been in Hubei province, and authorities in late January locked down Wuhan and neighboring cities to help contain the disease’s spread.

corona-virus-Vaccine

Globally, 3,406 individuals have died from the illness known as Covid-19 and 55,694 have recovered. In the U.S., there have been 233 confirmed cases and 12 deaths, mostly in the state of Washington, where some schools in the Seattle area will be closed for two weeks and companies have told employees to work from home.

On Friday, a top Hong Kong university released research that surmised the “fatality risk” for symptomatic Covid-19 patients was 1.4%, based on data its researchers analyzed from the city of Wuhan.

That is lower than the 3.4% mortality rate cited earlier this week by the World Health Organization, which was calculated from the number of deaths relative to the total number of confirmed infections.

U.S. health officials, in contrast, have said they think the mortality rate for the novel coronavirus is likely between 0.1% and 1%, in part because there could be many unreported cases or asymptomatic carriers of the virus.

Gabriel Leung, dean of the Li Ka Shing Faculty of Medicine at the University of Hong Kong, said that the estimated 1.4% mortality rate among people who showed symptoms means Covid-19 is deadlier than the 2009 swine flu epidemic, though less so than the 1918 influenza pandemic.

And given the large and rising global tally of coronavirus infections, “that means a lot of lives,” he added.

Dr. Leung’s organization—which is a WHO Collaborating Center for Infectious Disease Epidemiology and Control—calculated the disease’s mortality rate from its own estimates of how many people in Wuhan had symptoms of the disease before Feb. 25, rather than using case numbers reported by the Chinese government, which some experts suspect are understated. During the period they studied, there were 2,080 reported deaths.

On Friday, global stocks fell again and investors piled into safe government bonds on rising expectations that central banks will take more decisive action to cushion the economic blow from the coronavirus epidemic.

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A day earlier, a top WHO official warned that many countries weren’t doing enough to help contain the epidemic. Tedros Adhanom Ghebreyesus, the WHO’s director general, said that while the bulk of coronavirus cases are currently concentrated in a few countries, other governments need to respond more forcefully to the global spread by activating emergency plans, educating the public, readying hospitals and increasing their capacity for testing for the virus.

“This epidemic can be pushed back, but only with a collective, coordinated and comprehensive approach that engages the entire machinery of government,” Mr. Ghebreyesus told a briefing at the U.N. health agency’s Geneva headquarters late Thursday. “This is not a drill,” he added.

Other countries in Asia reported higher case numbers on Friday. Japanese authorities said there were 31 new cases, taking the country’s total to 348. Of those, 35 showed no symptoms.

A report from the Asian Development Bank on Friday estimated the coronavirus epidemic could reduce the world’s economic output by $77 billion-$347 billion, or 0.1%-0.4%, of global gross domestic product.

It said the virus will have a significant impact on developing Asian economies through numerous channels, including sharp declines in domestic demand, lower tourism and business travel, trade and production linkages, supply disruptions and health effects.






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Financial Markets – Investors Retreat From Stocks

Investors continued to pile into safe-haven assets Friday, pushing the yield on long-term U.S. government bonds to unprecedented levels and setting gold up for its best week in over a decade.





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The yield on the benchmark 10-year Treasury sank below 0.8% for the first time. Stock futures also retreated, with contracts linked to the Dow Jones Industrial Average declining 2.3%, pointing to a decline of over 600 points when the blue-chips index opens for trading in New York. On Thursday, all three major U.S. stock indexes had retreated more than 3%.

Oil prices added to the market turmoil Friday, with the global benchmark, Brent crude, declining 3.8% to $48.09 a barrel. Russia disagrees with OPEC’s preliminary agreement Thursday to cut output by 1 million barrels a day, The Wall Street Journal reported. OPEC members and their allies, led by Russia, are continuing to meet Friday in Vienna. Brent has declined 27% since the beginning of the year as the coronavirus has hammered demand.

The pan-continental Stoxx Europe 600 gauge also dropped 3.4% to its lowest level since August. Asia’s major equity benchmarks closed lower Friday, with the Shanghai Composite Index losing 1.2%.

“People are accepting the size of the crisis: they know the governments are doing the right thing but what your brain tells you logically isn’t always how you feel about something emotionally,’’ said Sebastien Galy, a senior macro strategist at Nordea Asset Management. NDA.FI -4.02% “We’re seeing the market’s emotional brain leading today.”

Investors sought out assets that are considered low in risk — such as government bonds and gold — on worries about the economic impact of the coronavirus. The yield on 10-year Treasurys slipped to 0.755%, after earlier notching a record intraday level of 0.701%. It had closed Thursday at 0.924%. The yield on the 30-year benchmark dropped to 1.352%.

The continued market jitters — even after the Federal Reserve unexpectedly cut rates and U.S. lawmakers approved roughly $8 billion in emergency spending — is focusing attention now on potential government measures to counteract the economic impacts of the coronavirus. But President Trump and White House officials have said they don’t see an immediate need to craft a broader fiscal-policy response because the economy has been faring well.




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Futures markets suggest the Fed’s key rate is likely to be in a range of just 0.25% to 0.5% by the end of April. That would be just 0.25 percentage points higher than the near-zero level that held from the depths of the global financial crisis until December 2015.

Investors are expecting rate cuts now and they are expecting [the cuts] to persist in the next two to three years,” said Homin Lee, Asia macro strategist at Lombard Odier. He said markets were pricing two to three further interest-rate reductions this year, and that these moves would only be partially reversed in the next three years.

Safe-haven assets gained, with the Japanese yen rising 0.9% against the dollar. Gold also rose 0.9%, and is on track for its best one-week performance since December 2008.

The ICE Dollar Index, which tracks the U.S. dollar against a basket of six major currencies, dropped 0.9% Friday.

Later in the day, the U.S. jobs report for February will offer fresh insights into the health of the U.S. economy before the coronavirus epidemic started to affect business activity. Economists surveyed by The Wall Street Journal are expecting 175,000 jobs to have been added last month and for the unemployment rate to be at 3.5%, a 50-year low.

The U.S. Commerce Department will also release data on the trade deficit, which is expected to have fallen to $46 billion in January from $48.88 billion the previous month.


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OPEC Agrees To Drastic Oil Cuts

The plan approved Thursday by the Organization of the Petroleum Exporting Countries would involve production cuts of 1 million barrels a day through the end of June to be shared among its 13 member nations. It also calls for another 500,000 barrels of daily cuts to be divided among the cartel’s 10 Russia-led oil-producing allies.

OPEC earlier in the day had agreed to only a three-month cut. But Saudi Arabia decided it wanted to force Russia into a more ambitious effort. Other OPEC members worried that the plan announced earlier in the day had failed to stimulate flagging prices, cartel delegates said.

“It’s a gamble,” one delegate said.

Brent crude, the global benchmark oil price, ended the day down 2.2%.

The production cuts would come on top of 500,000 barrels a day of existing curbs, which OPEC has agreed to carry through the end of the year, the cartel said. Saudi Arabia and other Persian Gulf producers are also considering additional production cuts outside the group, delegates said.

The coronavirus’s impact on oil demand has weighed heavily on recent talks among members of the so-called OPEC+ alliance led by Saudi Arabia and Russia. Brent is down 23% so far this year, as the virus outbreak hammers global demand.

The epidemic is expected to diminish global crude demand by as much as 2.1 million barrels a day in the first half of 2020, according to an estimate from Goldman Sachs. Meanwhile, IHS Markit and Standard Chartered forecast a decline in demand for 2020’s first two quarters by around 2 million barrels a day from the same period a year earlier. Gulf nations’ additional cuts would take OPEC+’s cuts to 2.1 million barrels a day.

“It’s not just about bleeding demand growth,” said Mohammad Darwazah, director for geopolitics and energy at Medley Global Advisors. “We’ve had inventories building through this whole period and it’s about cleaning up the market and 2.1 [million barrels in cuts] would go a long way to reversing these builds.”

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The OPEC plan needs the approval of Russia and other non-OPEC allies, which are set to weigh the proposal on Friday. Russia has agreed in principle to reduce its output but hasn’t approved any production figure, OPEC officials said.

“Tomorrow, everything depends on a non-OPEC agreement,” Iran’s oil minister, Bijan Zanganeh, told reporters as he exited the meeting. “If [Russia] doesn’t accept it, we have no deal…We have no plan.”

Russian Energy Minister Alexander Novak refused to endorse the Saudi-backed plan at a technical meeting Wednesday and flew back to Moscow to consult with President Vladimir Putin, according to OPEC delegates. Mr. Novak also wants Russia to increase output this summer, a move that contradicts the cartel’s nine-months plan, according to one delegate.


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An OPEC official who attended Wednesday’s gathering said Moscow’s delays are negotiation tactics aimed at securing a deal that would have Russia cut relatively little. Russia is now seeking cuts of about 100,000 barrels a day, leaving Saudi Arabia to bear the brunt of the reduction effort, OPEC officials said.

Russia’s hard bargaining is increasingly wearing down Saudi Arabia and its Gulf allies, casting a cloud on the future of their four-year alliance. “Maybe it’s time to consider the whole point of non-OPEC,” said one Persian Gulf official.

The Saudis’ commitment to carry the bulk of the cuts on their own could lead to further complacency among OPEC nations, some of which have historically flouted production cut agreements.

“The Saudis want collective action, and going above and beyond means they may only encourage more free-riding,” said Medley Global Advisors’ Mr. Darwazah.

Oil prices swung higher following the news that Saudi and its Gulf neighbors were considering their own additional cuts, before quickly reversing those gains.





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U.S. Stocks And Bond Yields Dropped As Anxiety About Virus Fallout Returns

The Dow Jones Industrial Average fell more than 650 points, or 2.5%, erasing much of the gains notched Wednesday. A strong Super Tuesday performance by former Vice President Joe Biden and growing signs of a coordinated response to the coronavirus had led to a sharp rally in U.S. stocks.

That enthusiasm quickly dissipated Thursday. The S&P 500 fell 2.3%. The Nasdaq Composite shed 1.8%. Losses in the stock market were broad, with all 11 of the S&P 500’s sectors falling in early trading Thursday.



It has been a dizzying week on Wall Street. Sharp stock swings up and down have dominated the week, continuing a bout of volatility that led to the worst selloff since the financial crisis last week.

“I know that these wild swings are overwhelming for all of us,” said Amy Kong, chief investment officer at Barrett Asset Management. “The situation is still unfolding.”

Still, some investors said they expected the stock market gyrations to continue, with much remaining unknown about how far the coronavirus will spread and its ramifications on economic growth around the globe.

In recent days, the outlook for corporate earnings and economic growth this year has darkened, weighing on the stock market. Many have been worried that the virus will harm consumer sentiment and business investment around the world.

Investors will analyze fresh economic data this week for signs of wilting growth. Data on Thursday showed that U.S. factory orders fell in January. New orders for manufactured goods decreased 0.5%, the Commerce department said, more than what economists surveyed by The Wall Street Journal had expected.


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On Friday, investors will be parsing the monthly jobs report to see if U.S. hiring remained strong in February. The number of Americans applying for first-time unemployment benefits fell last week, the Labor Department said Thursday, suggesting anxiety about the spread of the coronavirus haven’t yet affected layoffs.

The early stock decline Thursday suggests that steps by the Federal Reserve and U.S. lawmakers this week to bolster economic growth are failing to assuage investors.

Health authorities are warning that it may be impossible to fully contain the pathogen as infections are spreading within many communities. Meanwhile, steps taken to halt the outbreak have curtailed travel and business activity in the epicenters of the disease.

“There is a sense that there is only so much monetary policy can do, given markets have priced that in already,” said Jonas Goltermann, senior markets economist at Capital Economics. “Even with all the stimulus measures, those are not going to stop the virus and until there are signs the rate of infection is slowing we don’t think there will be a sustained rally.”

Investors are betting on more interest-rate cuts later this year, CME Group data show.

As stocks fell, investors sought the relative safety of government bonds, pushing the yield on the benchmark 10-year U.S. Treasury note down to 0.930%, from 0.994% at the close on Wednesday. Yields fall as bond prices rise.

The falling yields reflect high anxiety in markets as investors seek traditionally safer investments. They also have wide-ranging effects on borrowing costs and bank profitability. Shares of financial companies were some of the hardest hit in the stock market Thursday. Falling yields can crimp profits for big banks.

Meanwhile, mortgage rates fell to their lowest level on record Thursday as yields fell.

European stocks also fell, with the pan-continental Stoxx Europe 600 index down 1.6%. The basic resources sector and aerospace and defense companies were among the hardest hit.

U.S. stocks are poised to remain turbulent with the Cboe Volatility Index, or VIX, climbing to over 35. The index, sometimes known as Wall Street’s fear gauge, last week topped 40 to hit its highest level since 2011.
With volatility elevated and gauges of investor confidence low, markets are likely to keep swinging, according to Olivier d’Assier, head of applied research for the Asia-Pacific region at financial analytics firm Qontigo.

“We are going to be stuck in this for a while” Mr. d’Assier said. “You’ve got short-term traders buying on the stimulus and then you have medium- and long-term investors de-risking.”

Investor sentiment had shown signs of improvement Wednesday after U.S. lawmakers passed an $8 billion-emergency spending package on Wednesday to combat the coronavirus. Meanwhile, the International Monetary Fund detailed the $50 billion in lending programs it has that could help countries grappling with the virus.

Travel and leisure stocks continued to take a beating. Cruise line operator Norwegian Cruise Line Holdings fell about 9.8%, while Royal Caribbean Cruises dropped 12% as travelers continue to back out of planned cruises because of virus fears. American Airlines retreated 8.4%.

In contrast, most Asian markets rose Thursday, with the Shanghai Composite Index and Hong Kong’s Hang Seng Index both closing up around 2%.
Eli Lee, head of investment strategy at Bank of Singapore, said he viewed recent market action as noise. “The rebound is the latest in a series of gyrations we’ve seen, and reflects the fact equities were likely oversold,” he said.


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Mr. Lee said a coordinated international monetary and fiscal response would help boost financial conditions and investor sentiment, but added: “These are ultimately very blunt tools against a medical crisis that is poised to cause a sharp shock to consumer demand and production.”

In commodities, Brent crude, the global oil benchmark, wavered between gains and losses before edging down 0.6% in recent trading. OPEC has reached a preliminary agreement to cut crude output amid a global glut and eroding demand, The Wall Street Journal reported, as members of the oil-exporting group and their allies gather for a two-day meeting in Vienna. The collective plan, in response to the virus outbreak, still needs to be approved by Russia.

“In order for this to succeed, they need Russia to be onboard or they would just pass over market share to a major competitor,” said Ole Hansen, head of commodity strategy at Saxo Bank.





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Coronavirus Fears Hammer Europe’s Tourism Industry

The long line to get into St. Peter’s Basilica in Rome is gone. The coronavirus outbreak in Europe is scaring away travelers and hammering tourism just as the high season is getting under way.

Thousands of people have canceled their trips to the region since the disease began to spread in Italy last month, drying up revenue for hotels, restaurants, nightclubs and conference planners across the continent. Those businesses are the economic lifeblood of many regions in Europe, clustered around its famed cultural attractions. The outbreak is costing the European Union’s tourism industry €1 billion ($1.1 billion) a month, said Thierry Breton, the EU’s internal market commissioner.

“It gets worse and worse. The cancellations are piling up,” said Franck Trouet, spokesman for France’s Group of Independent Hoteliers and Restaurateurs. A third of its members have seen their revenue fall in February compared with a year ago, when business was already suffering because of the yellow-vest protests in France. In Paris, some cafes and nightclubs have seen a 40% drop in sales, he said.

Authorities around the world have told people not to travel to northern Italy, the site of Europe’s largest outbreak. That warning, however, is having a ripple effect far beyond the canals of Venice.

“The damage this is causing has the potential to be way out of proportion to the threat posed by the virus,” says Tom Jenkins, chief executive of ETOA, which represents European tour operators.


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The outbreak comes at a particularly bad time for the industry: The start of the period when people book their spring and summer travel plans. That includes pilgrims coming to the Vatican for the Holy Week leading up to Easter Sunday, and tourists from the U.S. and Asia coming to the continent over summer vacation.

Flight bookings to Europe the last week of February, when the Italian outbreak emerged, fell 79% compared with the same period a year earlier, according to ForwardKeys, which tracks travel data. In Italy, cancellations have exceeded new bookings over that time, the firm said.

The Louvre reopened Wednesday after closing for several days, because staff refused to work. They were spooked by the French government’s decision to ban indoor gatherings of more than 5,000 to contain the spread of the virus. The museum, which is the most visited in the world, welcomes more than 26,000 visitors on a typical day.

Given bottles of hand sanitizer by management, staff were back at work, watching small groups of visitors drift through the museum. The Dutch masters section—stocked with Rembrandts and Vermeers—was nearly empty. Michelangelo’s “Slaves” sculptures weren’t surrounded as usual.

And inside the room housing the Mona Lisa, there was plenty of space to gaze at Leonardo da Vinci’s masterpiece and other paintings of the Italian Renaissance.

“Normally, you almost don’t see the paintings there are so many people,” says Luis Filipe De-Souza, an attendant at the Louvre.


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The Vatican is facing a sharp drop in visitors to the Vatican Museums, which bring in €40 million in profit in a normal year and are a key revenue source for the church. Vatican officials declined to comment on a report in an Italian newspaper saying the museums had experienced a 60% drop in attendance.

Organizers of ITB Berlin, the travel industry’s main annual conference, announced last week that they had canceled the meeting because of the coronavirus outbreak. German health authorities feared the event, which draws tens of thousands of people from around the world, could lead to a spike in cases in the country.

The cancellation has led to grumbling that the travel industry itself is feeding into global panic about the virus.

“It sends a dreadful signal,” said Mr. Jenkins, head of the tour operators’ group.





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U.S. Index Futures Drop With Investors Weighing Virus Threat

U.S. equity-index futures extended drops as investors weighed whether global efforts to contain the coronavirus outbreak will be enough to soften its economic impact.

S&P 500 index futures contracts expiring in March slid 1.3% at 8:50 a.m. in London. Contracts dropped 1.2% for the Dow Jones Industrial Average and 1.1% for the Nasdaq 100.

In Europe, the Stoxx 600 Index erased earlier gains of as much as 0.7% to trade little changed as cyclical sectors slid, with miners, carmakers and banks dropping the most.




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“A sense of caution remains on top of investors’ minds as the virus situation continues to escalate in North America,” said Margaret Yang, a strategist at CMC Markets Singapore. “The Fed cut effect is fading and can be overtaken by virus concern.”

California has declared a state of emergency to give authorities greater leeway in combating the coronavirus, while the death toll from the disease surpassed 3,000 in China.

The S&P 500 had surged into the close Wednesday, nearly matching Monday’s rally that was the best in 14 months. Health-care firms led the spike, rising the most since November 2008, as the weak performance in Tuesday’s primaries by Bernie Sanders dented the threat of policies that would upend the industry.


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Australian Economic Growth Picks Up But Outlook Cloudy On Virus Fears

Australia’s economy expanded by more than expected last quarter, erasing the risk of a recession even as raging bushfires and the coronavirus crisis wreaked havoc with tourism and travel at the start of the new year.

Wednesday’s data from the Australian Bureau of Statistics (ABS) showed the A$2 trillion ($1.3 trillion) economy accelerated by 0.5% last quarter. Encouragingly, the previous quarter was revised upwards to show 0.6% increase from 0.4% earlier.

That took the annual pace to 2.3%, still well below the 2.75% that policy makers consider “trend”.

Economists had predicted a quarterly rate of 0.3%, according to a median of 16 economists polled by Reuters.

The stronger-than-expected data sent the local dollar rising 0.4% to $0.6611 from $0.6577 before.

The outlook is murkier though, as the coronavirus epidemic is seen dealing a greater blow to world economies than earlier expected.

Such are the risks that the Reserve Bank of Australia (RBA) cut interest rates to an historic low of 0.5% this week, just part of an urgent global response to the virus that saw the Federal Reserve spring an emergency policy easing.


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Prime Minster Scott Morrison has also flagged an imminent burst of targeted fiscal stimulus, a major u-turn for the conservative government that has long scorned such action.

“We view this shift in fiscal policy as a very positive development, but still expect further support from the RBA will be required given the extent of the shock and since the economy was underperforming prior to the outbreak,” said Alan Oster, chief economist at NAB.

He sees another quarter point rate cut in April and suspects the central bank would then have to consider quantitative easing including buying government bonds.


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This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions… The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

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Federal Reserve Delivered A Half Percentage Point Rate Cut Tuesday, But Markets Slumped On The News

The Federal Reserve’s extraordinary rate cut Tuesday is likely only the first of multiple efforts to stem fear over the threat the coronavirus poses to global growth and financial markets.

No sooner had the U.S. central bank announced a half percentage point reduction than market participants began speculating about what was next. Wall Street broadly expects the Fed to follow up with another cut in a few weeks followed by more monetary easing in April.

In fact, if reaction from Tuesday’s move is any indication, it will take a lot more for the Fed to assuage heightened worries over a virus-induced threat to the longest expansion in U.S. history.

“The question from here is what further adjustments do they make,” said Bill English, former head of monetary policy for the Fed and now a professor of finance at the Yale School of Management. “The answer to that is when their outlook for the economy changes, it may be appropriate to do something more. That’s going to be a hard thing to communicate over the next few months.”

Markets, indeed, will be demanding more action even if the coronavirus damage doesn’t show up in the data.

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A Powell letdown
Fed Chairman Jerome Powell sought to quell some anxiety Tuesday when, during a news conference after the cut, he said he and the Federal Open Market Committee are “prepared to use our tools and act appropriately, depending on the flow of events.”

The market didn’t like it, though, and sold off sharply during and after his comments.

One source of disappointment may have come when Powell indicated that he doesn’t foresee the Fed expanding its balance sheet through asset purchases — quantitative easing — in response to current conditions.

“What they should have done is said we’re going to do whatever it takes,” said George Selgin, director of the Cato Institute’s Center for Monetary and Financial Alternatives. “It’s the path forward that’s more important than the step taken immediately.”

The “whatever it takes” approach would echo then-European Central Bank President Mario Draghi’s promise in 2012 to pull out all the stops to address the Continent’s debt crisis. The pledge was widely seen as helping to stem a panic that the euro zone was about to sink into a deep recession.


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Selgin said the Fed should have taken a similar approach, with adopting just a quarter-point cut but with a vow that it would deploy all its tools to make sure the coronavirus situation doesn’t create greater havoc.

“It was fine for the Fed to act immediately. But the less it does now in the way of actual cuts and the more it signals its willingness to make further cuts if necessary with clear goals of what ‘necessary’ means, it would have been all the better,” he said. “For one thing, you don’t want to waste your ammunition.”

Cuts in March and April
Indeed, with Tuesday’s announced cut the Fed now only has another percentage point, or 100 basis points, left to go. And Wall Street expects the central bank not to waste time in using up that remaining space.

Both Citigroup and Bank of America Global Research expect the Fed to do at least 25 basis points more at the March meeting. BofA sees another similar reduction in April; Citi sees either 50 basis points in March or 25 basis points in each month.

“Further cuts may be more controversial as some on the committee will want to wait-and-see how the 50bp (and 75bp from last year) work their way through the economy,” Citigroup economist Andrew Hollenhorst said in a note. “But either soft data or tighter financial conditions will likely convince most to cut further.”

Communicating further action will be complicated.

Tuesday’s emergency reduction was met with a sharp rally on Wall Street that quickly evaporated. Major indexes suffered losses in excess of 2% and the benchmark 10-year Treasury note yield fell below 1% for the first time ever.



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A fearful Fed
While markets wanted policy easing, the execution didn’t go very well.

“The communication of this stuff is always hard. No one ever knows what markets are thinking and doing,” English said. “But partly the lack of [positive] effect today is that maybe people thought they learned that the Fed was more worried than they thought.”

Cleveland Fed President Loretta Mester entered the conversation later in the day, saying during a speech in London that she thought the cut would help but noted that actions from other officials, particularly on the fiscal side and in health care, “would likely do more to support confidence and spending by helping to contain the spread of the virus.”

She did not indicate whether she would support further easing.

That decision will come down to the evaluation of a number of factors that will go behind the stock market and economic reports, which operate on a lag and don’t always represent current conditions, said Lou Crandall, chief economist at Wrightson ICAP.

“They do need to see more evidence of actual concrete distractions to the business environment,” Crandall said. “If the contours of the virus impact on the U.S. economy become more clear, a rate cut won’t solve all our problems, but it will be helpful.”


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World Finance Officials To Consider How To Cushion Economies Against Coronavirus

G7 finance officials will on Tuesday discuss ways to bolster their economies against the impact of the spreading coronavirus outbreak, but are not expected to specifically call for new spending or coordinated interest rate cuts, a G7 official said.


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Finance ministers and central bank governors from the group will hold a conference call at 1200 GMT to discuss the outbreak. But according to the official, who declined to be identified, a statement they are crafting does not detail any fiscal or monetary steps

Global stocks and oil prices have made some recovery afters policymakers indicated willingness to help ease the economic fallout from the coronavirus, while worries about the outcome of the Group of Seven heads’ discussion kept a lid on gains.

“This is a tug of war between hope and fear. Central banks are giving hopes with their potential stimulus,” said Vasu Menon, senior investment strategist at OCBC Bank Wealth Management.

“The question is what they will do? Monetary policy is already very loose and interest rates are very low,” he said.

Global stocks suffered a rout last week on growing fears that the disruption to supply chains, factory output and global travel caused by the epidemic could deal a serious blow to a world economy trying to recover from the U.S.-China trade war.

The G7 official, who has direct knowledge of the deliberations, told Reuters the officials would pledge to work together to mitigate the damage to their economies from the fast-spreading epidemic.

The language of an expected statement was subject to change as it was under discussion, the official said.

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The coronavirus, which emerged in the central Chinese city of Wuhan late last year, has spread rapidly around the world over the past week, with more new cases now appearing outside China than within.

There are more than 90,000 cases globally, with more than 80,000 of them in China, and infections appearing in 77 other countries and territories, with Ukraine the latest country to report its first case.

China’s death toll is at 2,943 with more than 75 deaths elsewhere.

New cases in China have been falling sharply, with 125 reported on Tuesday, thanks to its aggressive measures to stop the spread of the disease.

After what critics said was an initially hesitant response to the virus, China imposed sweeping restrictions, including suspensions of transport, sealing off communities affecting tens of millions of people, and extending a Lunar New Year holiday across the country.

QUARANTINE ORDERS

Now China is increasingly concerned about the virus being brought back into the country by its citizens returning from new hot spots elsewhere, and authorities on Tuesday asked overseas Chinese to reconsider or minimize their plans to travel home.

All travelers entering Beijing from the hot spots of South Korea, Japan, Iran and Italy would have to be quarantined for 14 days, a top city official said. Shanghai has introduced a similar quarantine order.

The most serious outbreak outside China is in South Korea where President Moon Jae-in declared war on the virus, ordering additional hospital beds and more face masks as cases rose by 600 to nearly 5,000. Thirty-four people have died in South Korea.

In the United States, the virus is now believed to be present in at least four communities in the Pacific Northwest – two in northern California, one in Oregon and one in Washington state – and authorities there are having to go well beyond the quarantine of infected travelers and tracing of close contacts, which until now had been the response.

Six people have died in the Seattle outbreak. The U.S. Centers for Disease Control and Prevention lists more than 90 cases across the United States, a large bulk of them patients who were repatriated from the Diamond Princess cruise liner that had been quarantined in Japan.

Iran, another badly hit country, reported infections rising to 1,501, with 66 deaths, including a senior official.

The death toll in Italy jumped to 52 on Monday from 34 the day before and the total number of confirmed cases in Europe’s worst-affected country climbed past the 2,000 mark.

Germany reported 31 new infections, taking its tally to 188.


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Is It A Currency? A Commodity? Bitcoin Has An Identity Crisis

So bitcoin’s a currency, right? Well, yes, it can be used to buy, sell and price goods much like dollars and euros.

A commodity? Come to think of it, it does behave a lot like oil and gold – it can be bought and sold in cash markets or via derivatives such as futures.

What about a security? Many cryptocurrencies are, in a way. They’re issued like stocks in “initial coin offerings” and used to represent shares in online projects.

The debate may appear abstract, with little bearing on the hard-boiled world of finance, but it is attracting increasing interest from economists and lawyers who say it could have major implications for the future of cryptocurrencies.

How bitcoin and other digital coins are defined could shape how they are regulated around the world. In turn, the rules they are subject to could determine whether they make the leap from a niche to a mainstream asset.

So how will regulators treat them?

In the United States, federal watchdogs say they see elements of both securities and commodities, but like most major economies have not come up with a set of rules. The European Union, however, will outline a framework this year, which could see crypto wedged into existing regulations, or a whole new set of rules created.

For market players, how bitcoin and its kin are regulated will have serious ramifications.

Commodity markets operate with relatively little regulatory oversight. Securities, on the other hand, are typically subject to more onerous rules on price transparency, trade reporting and market abuse.

“When we’re going through the security process, we spend a lot of fees and lawyers to make sure we’re in compliance,” said Benjamin Tsai, president of Wave Financial, an investment manager in Los Angeles overseeing $40 million in crypto.

“It’s a lot more of a pain in the butt.”



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CHARACTER CLUES

Some of the cryptocurrency identity crisis lies in the fact that bitcoin was originally conceived as a means of payment, but now rarely bears the hallmarks of dollars, euros or pounds.

It’s of little use as a store of value because of its volatility, and is hampered as a means of exchange by its slow network and high transfer costs.

A booming bitcoin lending market is offering clues to its character.

Bitcoin lending offers lines of credit to crypto firms earning money in cryptocurrencies, such as payment processors or miners, looking to secure traditional money for covering expenses. Also, traders who don’t want to sell their bitcoin holdings use them as collateral to borrow cash for use in algorithmic or high-frequency trading.

For those lending money, relatively high yields are an attractive proposition in an era of rock-bottom rates.

Key characteristics of this market, such as market-led price discovery and the motivation to seek liquidity, mirror that of commodities leasing, according to market players and economists.

“The commodities markets (analogy) is very fitting,” said Deeksha Gupta, an assistant professor of finance at the Carnegie Mellon University in Pittsburgh who has researched crypto.

“One of the biggest similarities is that they are also driven by people wanting to be able to get liquidity.”

The bitcoin lending market has grown quietly as an opaque corner of the cryptocurrency sector, which itself is notorious for its lack of transparency. While there’s little data with which to gauge the size of the lending market, it is widely seen to have expanded rapidly over the past year.

New York-based Genesis Capital, one of the biggest lenders in the market, said its outstanding loans soared late last year to around $545 million compared with $100 million a year earlier.

Implied interest rates in these markets – the price of borrowing bitcoin – stand at around 4-5%, Genesis CEO Michael Moro said. On platforms for people to lend cash against bitcoin, rates are as high as 8%.

FINANCIAL INSTRUMENTS

Cryptocurrencies’ kinship to securities arises largely from their issuance and function in initial coin offerings, or ICOs, where they are used to raise traditional money.

ICOs are often held by companies seeking to raise funds for blockchain-related or other online projects. They raise capital by issuing digital coins, which grant holders access to the new system or software or a share in profits generated.

For instance, Switzerland-based Aragon – a management platform for decentralised organizations – raised about $25 million in 2017 issuing tokens that gave voting rights on how the system is developed.


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Regulators may choose to treat different cryptocurrencies differently, depending on their specific characteristics, an approach taken by Britain last year.

Some players say any designation of cryptocurrencies as financial instruments akin to securities may be positive, with burdensome oversight balanced by the potential to allow funds to market cryptocurrencies to a wider pool of investors.

“If they were somehow classified as a financial instrument, then that would have the knock-on effect that they would be eligible for retail funds,” said Nic Niedermowwe, CEO of crypto fund Prime Factor Capital in London.



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Wall Street Tries To Recover From Massive Sell-Off

Stocks rose sharply on Monday in volatile trading as Wall Street attempted to pare losses incurred during the worst week since the financial crisis amid fears of the coronavirus outbreak.

The Dow Jones Industrial Average traded 576 points higher, or 2.3%. The S&P 500 and the Nasdaq Composite climbed 2% each.

“The market has been conditioned to buy on any weakness,” said Keith Buchanan, portfolio manager at GLOBALT. “I think we’ll look back at these past few years at some point as some level of complacency.”

“Buying the dip takes more bravery now,” Buchanan said.

Stocks briefly came off their highs after a key measure on the U.S. manufacturing showed a slowdown last month. The ISM manufacturing index fell to 50.1 in February, the lowest level since the end of 2019. It also came below an estimate of 50.8.

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Apple shares led the Dow higher with a 7% jump; Merck and Walmart gained 4.6% and 6.5%, respectively. Consumer staples, utilities and real estate were the best-performing S&P 500 sectors, advancing more than 3% each. Tech, meanwhile, jumped 2.9%.

Monday’s moves mirrored the volatile overnight session where Dow futures traded in a range of more than 1,000 points, indicating this week may be as volatile as last week as well.

The Dow, S&P 500, and Nasdaq Composite all fell more than 10% last week, their biggest weekly declines since October 2008. They also entered correction territory, down more than 10% from all-time highs notched earlier in February. Both the Dow and S&P 500 have fallen for seven straight days.

Those declines came after a sharp increase in coronavirus cases outside of China. The number of cases continued to increase over the weekend, including in the U.S.

“The outbreak of Covid-19 has certainly changed the near-term narrative,” said Chetan Ahya, global head of economics at Morgan Stanley, in a note to clients Sunday. “It is an untimely shock, considering that the starting point of global growth was weak, and the recovery was very nascent.”

As of Sunday, more than 89,000 cases have been confirmed around the world along with more than 3,000 virus-related deaths. Australia, Thailand and the U.S. reported over the weekend their first coronavirus-related deaths. Rhode Island was the first U.S. state on the East Coast to report a coronavirus case. The number of cases in England rose to 35 after 12 new cases were confirmed on Sunday. Cases in China also reported more than 500 new cases on Saturday. New York Gov. Andrew Cuomo confirmed Sunday night the state’s first positive coronavirus case.



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Horrible China economic data
Wall Street got its first look over the weekend at the economic toll the virus has taken on China, the epicenter of the outbreak.

A private survey on Chinese manufacturing activity released during Asian trading hours on Monday came in at its weakest level ever. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 40.3 for February, far below expectations of a reading of 45.7 by economists in a Reuters poll. PMI readings above 50 indicate expansion, while those below that level signify a contraction.

That came after an official data released Saturday showed China’s official manufacturing PMI plunging to 35.7 in February, a record low, from 50 in January. A reading below 50 indicates contraction in a sector.

The plunge “shows the extent to which an outbreak can hit an economy,” said Ed Hyman, a widely followed economist on Wall Street and Evercore ISI chairman, in a note to clients. “All this is quite uncertain, and we may be overreacting. But we also don’t want to underreact.”

Gaming revenues in Macau also plunged nearly 88% last month.

Worries over the coronavirus’ impact on corporate profits and the global economy led investors to seek safer alternatives to stocks, pushing U.S. Treasury yields to all-time lows. On Sunday night, the benchmark 10-year rate broke below 1.04% for the first time ever. It was last at 1.07%.

“Global investors will be prone to panic as the virus arrives at their doorstep, underscoring the need for near-run prudence and patience before augmenting favored holdings,” strategists at MRB Partners wrote in a note. “The outlook is uncertain, or rather certainly bearish in the near term as quarantining spreads around the world, but with considerable doubt as to the duration and depth of the economic fallout.”

The virus’ quick spread has raised expectations for easier monetary policy from global central banks, including the Federal Reserve.

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CME Group’s FedWatch tool shows traders have priced in a 100% probability of a 50 basis-point rate cut later this month. Expectations for another rate cut in April are around 70%.

“The ultimate risk factor in our view is the U.S. consumer,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “We have coronavirus cases showing up in the U.S. To the extent that that continues to spread, which we all hope will not be the case, the risk factor for the Fed grows because this now is no longer something that they can point the finger to relative to tariffs and say the global economy is slow, but we’re okay.”



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China Economy Seen in Deeper Contraction on Factory Drop

China’s economy could be heading for a worse-than-expected first-quarter contraction after the country’s manufacturing sector reported activity at a record low in February due to the coronavirus outbreak.

The manufacturing purchasing managers’ index plunged to 35.7 in February from 50 the previous month, according to data released by the National Bureau of Statistics on Saturday. Even before that data, the median forecast of economists surveyed by Bloomberg News was that the economy would shrink in the three months through March from the last quarter of 2019, and the surprisingly weak data prompted further cuts to that view.

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Gross domestic product may now shrink by 2.5% in the first quarter from the previous period, Nomura Holdings Inc. economists led by Lu Ting said in a report Saturday after the data release. That was a cut from their previous forecast of -1.5% in a Bloomberg survey last week. Standard Chartered (LON:STAN) Plc already expected a 1.5% contraction before the data, while Australia & New Zealand Banking Group Ltd. is forecasting a 2% drop, according to reports after the release.

Bloomberg Economics now expects a contraction of 3%, but cautioned that it’s subject to considerable uncertainty.

“The extent of the slump in China, the blow to global supply chains, and the trajectory of the outbreak in China and globally are all difficult to gauge with a high degree of accuracy,” Bloomberg economists led by Chang Shu wrote in a report.

China Factory Activity Weakest on Record Due to Coronavirus

If the economy were to contract, it would be the first time that’s happened in comparable data dating back to 2011.

Pacific Investment Management Co. also sees the virus outbreak causing a contraction, forecasting a 6% annualized drop in China’s first-quarter GDP, while Barclays (LON:BARC) Bank Plc economists see an 8.9% drop, followed by a quick recovery. Pimco’s view gels with Goldman Sachs Group Inc (NYSE:GS). economists, who said in a report Friday that global GDP will shrink on a quarterly basis in the first two quarters of this year before rebounding in the second half.




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The factory PMI data may improve in March, CICC analysts including Yue Yan wrote in a note Saturday.

“Strenuous containment measures were taken after the outbreak of COVID-19, which understandably dampened economic activities in the short term,” they wrote. “With the outbreak gradually under control, government agencies have been clearing the unwanted obstacles for production resumption.”

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Nomura’s Lu also expects the March PMIs to rebound, but says activity data will be zero or negative as businesses won’t be completely back.

On a year-on-year comparison, the median forecast for first-quarter GDP growth is 4.3%. That was before Saturday’s data. Nomura and ANZ both now see it rising 2%, while Standard Chartered expects a 2.8% expansion.


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Global Markets – Top 5 Things to Watch This Week

The week will start after Saturday’s data showing a record contraction in China’s manufacturing and service sectors because of the coronavirus outbreak, underlining the extent of the potential impact on the broader global economy.

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Investors will also be closely watching comments from Federal Reserve policymakers this week, with the prospects of a March rate cut on the rise. Friday’s U.S. jobs report is likely to be overshadowed by the market turmoil, but the race for the Democratic U.S. presidential nomination could divert some attention from the spread of the coronavirus. OPEC is to meet later in the week and with oil prices now down 25% so far this year pressure for additional output cuts is mounting. And the Bank of Canada may surprise investors with a rate cut at its meeting on Wednesday. Here’s what you need to know to start your week.




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1 – China PMI data to shock markets
Data on Saturday showed factory activity in China contracted at its fastest ever in February, even worse than during the global financial crisis of 2008. The shockingly weak data is likely to add to fears that the world’s second largest economy may not rebound as quickly as investors had initially hoped.

Another report on Sunday showing that South Korean exports snapped a 14-month losing streak in February masked disruptions from the coronavirus, reflected outside the headline figures.

The coming days will reveal whether the outbreak is accelerating in the United States, the world’s biggest economy, how much the U.S. government is prepared to deal with an epidemic, and the economic damage in other countries.

“Right now the market is saying that this is unbounded. We don’t know what the limits are and we don’t know where it’s going to peak,” said Graham Tanaka, chief investment officer at New York-based Tanaka Capital.

2 – The Fed and U.S. data
Surveys of U.S. manufacturing activity from Markit and the Institute of Supply Management on Monday will give investors a chance to assess the economic impact of the virus. Friday’s U.S. nonfarm payrolls report for February will be watched for indications on the strength of the labor market before coronavirus spread more widely. The consensus forecast points to non-farm payrolls gaining 175,000, slowing from 225,000 in January.

Several Fed speakers are due to make appearances this week, Including Cleveland Fed President Loretta Mester, St. Louis Fed chief James Bullard, Dallas Fed head Robert Kaplan, Minneapolis Fed President Neel Kashkari and New York Fed President John Williams.

The likelihood of a March rate cut by the Fed has risen in the past week with the U.S. economy looking increasingly vulnerable to the outbreak. Fed Chairman Jerome Powell said Friday that the U.S. central bank will “act as appropriate” as the virus poses “evolving risks” to the economy.

3 – Super Tuesday
Investors will be looking ahead to Tuesday, when 14 states will cast ballots as the race for the Democratic U.S. presidential nomination intensifies.

Market watchers are waiting to see whether progressive Senator Bernie Sanders consolidates his lead or if moderates such as former Vice President Joe Biden or former New York Mayor Michael Bloomberg can make inroads.

Sanders campaign promises to break up big banks, take on drug companies and essentially abolish private insurance in favor of a single government-run plan have rattled some investors.

Shares of health insurers such as UnitedHealth Group (NYSE:UNH) and Centene Corp. (NYSE:CNC) have sold off in recent months amid growing concerns over the potential nomination of Sanders or fellow candidate Elizabeth Warren.

While investors have been more focused on coronavirus developments, some analysts have said Sanders’ rise in the polls also contributed to the recent sell-off. Some investors also noted that continued volatility in markets or an economic downturn could erode support for U.S. President Donald Trump.

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4 – Bank of Canada to make preemptive rate cut?
The Bank of Canada is to hold its latest policy setting meeting on Wednesday, the second to last such meeting before Stephen Poloz steps down as Governor.

Heightened financial market volatility amid fears over the coronavirus outbreak mean that the odds of a rate cut are rising, despite a strong domestic jobs market and inflation that is running roughly in line with the bank’s target.

Growing concern about the economic impact of protests opposing the Coastal GasLink pipeline that have severely affected the country’s rail network have also fed into expectations for a rate cut.

“The BoC has a reputation for moving early and occasionally providing surprises and we certainly think they could choose to pre-emptively cut this coming week. After all, they have much more room to offer support than most other developed markets, given their policy rate,” analysts at ING wrote.

5 – OPEC facing challenge of slumping demand outlook
The Organization of the Petroleum Exporting Countries and its allies including Russia – known as OPEC+ – meet in Vienna on Thursday and Friday as the spread of coronavirus around the world stokes fears that a slowing global economy will hit energy demand.

Friday saw the lowest closes for both Brent and WTI since December 2018. For the week, Brent lost almost 14%, its biggest weekly percentage decline since January 2016, while WTI fell over 16% in its biggest weekly percentage drop since December 2008.

“OPEC+ will have to deliver a deeper production cut as oil prices remain in freefall,” Edward Moya, senior market analyst at OANDA in New York, said in a report.

The group has already slashed oil output by 1.7 million bpd under a deal that runs to the end of March. In an initial response to counter the hit of the virus, an OPEC+ committee has recommended deepening output cuts by 600,000 bpd, but that figure is now seen as not enough by some in the group.




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Day Trading – Stock Market: 3 Things Under the Radar This Week

It was no ordinary week on Wall Street. The broader market recorded its fastest correction in history and its biggest loss since the Financial Crisis as the spread of the coronavirus gathered pace.

But there are questions on how much the Federal Open Market Committee really can help equities.

Retail sales may be the helping hand to the U.S. economy and there’s evidence some market players just don’t know which ticker is the right one.

Here are three things that flew under the radar this week.



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1. Little Hope Fed’s Easing Medicine a Match for Coronavirus Fallout

Wall Street’s fast-paced selling strengthened calls for a Federal Reserve rescue mission. And at long last, Fed Chairman Jerome Powell appeared to answer the call — at least partly.

In what may be the strongest indication yet that rate cuts are coming soon, Powell flagged the coronavirus as “evolving risk” and pledged to support the broader economy.

Powell said the “fundamentals of the U.S. economy remain strong,” but vowed that the central bank would use its tools and “act as appropriate to support the economy,” as “the coronavirus poses evolving risks to economic activity”

But with the bulk of damage from the outbreak, particularly in China, expected to hit supply more than demand, some have cast doubt on the power of monetary policy to take on the virus-led crisis.

“The problem with doing monetary stimulus is that it will have limited impact on the effects of the virus,” said Jens Peter Sorensen, chief analyst at Danske Bank A/S, in Copenhagen. “The Covid-19 virus is keeping people from work, the supply chain is disrupted and tourists are not going to Italy. Monetary policy can do very little.”

While others agree that monetary policy will do little to speed up the opening factories and ease travel restrictions, they argue that not only inaction, but a lack of bold action from the Fed may prove economically detrimental.

“Although moderate Fed rate cuts are unlikely to be very powerful, the committee will probably be reluctant to disappoint market expectations for substantial rate cuts for fear of tightening financial conditions further,” Goldman Sachs said in a note.

The investment bank said it expected the Fed to cut interest rates by 75 basis points by June, with first cut coming as soon as March.

2. Shoppers Gonna Shop?

With Covid-19 threatening to become a pandemic and countries looking at various quarantine measures, service-heavy economies are looking at a sharp drop in economic activity.

But the U.S. National Retail Federation released a report this week that expresses confidence that the consumer will remain resilient, even in the face of Black Swan events.

Retail sales will rise 3.5% to 4.1% to between $3.93 trillion and $3.95 trillion in 2020, the NRF said. Online sales will be up between 12% and 15%.

“With gains in household income and wealth, lower interest rates and strong consumer confidence, we expect another healthy year ahead,” NRF President and CEO Matthew Shay said in a statement.

“There are always wild cards we cannot control like coronavirus and a politically charged election year,” Shay said. “But when it comes to the fundamentals, our economy is sound and consumers continue to lead the way.”

On Friday, the University of Michigan said its February consumer sentiment index came in at 101, up from 99.8 in January.

3. Pushing the Panic Button

Is Covid-19 dealing with not just “panic selling,” but also “panic buying”?

The money pouring into any stock with Zoom in the name says so.

With companies facing possibly protracted times with employees staying at home, video conferencing will be essential to keeping businesses running. With that in mind, investors have been buying shares of Zoom Video Communications (NASDAQ:ZM).

The company “is widely considered the leader in modern enterprise video communications, with an easy, reliable cloud platform for video and audio conferencing, online meetings, chat and webinars,” Investing.com’s Jesse Cohen wrote.

The stock is up about 40% year to date.

But less-than-fastidious buyers have also been snapping up shares of Zoom Technologies (OTC:ZOOM), an over-the-counter stock that isn’t really in business anymore and hasn’t reported earnings since 2011.

Because it has the catchier ticker of “ZOOM,” it’s up 140% in the last five trading days.

While Zoom Technologies has seen ancillary benefits, Constellation Brands (NYSE:STZ) is dealing with reports of consumers being afraid of its Corona beer due to the similarity of the beer’s name and the coronavirus.

But Constellation said reports sales are plunging are “unfounded” and that sales of Corona are climbing in the U.S.




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Financial Markets – Panic Selling Continues as Dow Tumbles Below 25,000

Panic selling continued in the U.S. stock market on Friday, putting the market on course for its biggest weekly loss since 2008 amid growing signs that the coronavirus outbreak will ultimately cause an economic shock in Western economies as well as in China and its Asian trading partners.

The Dow Jones Industrial Average opened with another loss of 627 points, or 2.6%, taking it below the 25,000 mark. By 10:33 AM ET (1533 GMT), the DJIA was down 4%, or 1,034 points.

The S&P 500 was down 3.4%, at its lowest since October 2019. The Nasdaq Composite, meanwhile, fell 2.7%.


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Overnight, another sharp jump in the number of confirmed Covid-19 cases in South Korea and Iran, coupled with new emergency virus containment measures in Germany, Switzerland and elsewhere, all contributed to keeping the mood negative. A better-than-expected monthly rise of 0.6% in U.S. personal income in January was of little consolation.

“The landscape remains very uncertain,” said Mark Dowding, chief investment officer of BlueBay Asset Management in a weekly note. “For now, there is a sense with the coronavirus that things will need to get worse before they can get better.”

He argued that the point of “maximum bearishness” could be another couple of weeks away.

“This could coincide with the moment that Covid19 is officially declared a pandemic by the World Health Organization,” something that could lay the groundwork for a coordinated response of policy stimulus, Dowding argued. Such hopes seem far away at the moment, with the U.S. and German governments both playing down the seriousness of the situation.



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The bond market is now betting heavily on the Federal Reserve riding to the rescue. The2-Year Treasury bond yield dipped below 1% overnight and then roared lower to 0.91% after St. Louis Fed President James Bullard indicated that the Fed, if not fiscal policy, would react to a global pandemic.

“Further policy rate cuts are a possibility if a global pandemic actually develops with health effects approaching the scale of ordinary influenza, but this is not the baseline case at this time,” Bullard, who doesn’t vote on monetary policy this year, said Friday in prepared remarks to be delivered in Fort Smith, Arkansas.

Hot money continued to flood out of Tesla (NASDAQ:TSLA), which lost another 7.1%, taking its losses for the week to over 30%.

Beyond Meat (NASDAQ:BYND) suffered similar problems following a surprise quarterly loss after the bell Thursday, losing 17.6%. It’s now down 25% for the week.

Apple (NASDAQ:AAPL) was also the subject of some heavy profit-taking, falling 5.1% to its lowest since December. None of the companies mentioned released any news of note.

One stock emphatically bucking the trend was Zoom Video Communications (NASDAQ:ZM), the maker of software for video conference calls. Zoom Video stock has been flying as participants price in a boom in such calls as Covid-19 spawns a global outbreak of working from home and restrictions on business travel.

JPMorgan (NYSE:JPM), L’Oreal (PA:OREP) and Nestle (SIX:NESN) have all said this week they intend to limit staff travel as a result of the outbreak.



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Stock Market Corrections: How Bad Can They Get And How Long Can They Last?

With the stock market sliding lower as coronavirus fears rise, all the talk about a so-called “correction” can cause nervousness and confusion.




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A correction is a mechanical-sounding term to describe when a major stock market index like the Standard & Poor’s 500 falls 10% or more from a recent closing high. The recent losses on Wall Street officially pushed all three benchmarks into correction territory during trading Thursday.

The Dow Jones industrial average tumbled as much as 1,190 points, while the S&P 500 and the Nasdaq Composite both dropped more than 4%.

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It took just eight calendar days for the S&P 500 index to meet the 10% threshold — its fastest such drop since World War II, according to Sam Stovall, chief investment strategist at financial-research company CFRA.

“The swiftness of this decline signals the magnitude of uncertainty being expressed by investors,” Stovall said. “Even though history says that other viruses haven’t been a major event to corporate bottom lines, investors are thinking this time might be different.”

How bad were the biggest corrections?

Since a correction is a drop between 10% and 19.99%, there’s always a chance we’re only about halfway through this recent scare. The market fell more than 19 percent in corrections in 2018, 2011, 1998 and the 1976-78 period, CFRA data shows.

But even so-called “garden variety” corrections can cause fear levels to spike.

The good news? Not every correction morphs into a more feared bear market, a 20% or higher drop. The average bear since 1929 has sliced nearly 40% off the S&P 500.

Most bear markets coincide with a recession.

In the 23 corrections since World War II the average price drop for the S&P 500 has been 14 percent, according to data from CFRA. They normally last around 4.4 months.

Greg McBride, a chief financial analyst for Bankrate.com, thinks a recession is an unlikely, but “ever-present threat.”

“We’re not immune from the economic cycle. Disruptions to economic expansion can certainly be the catalyst for a recession,” McBride said. He added that the jumpy stock market is a reflection of uncertainty surrounding the spread of coronavirus.

“In the face of uncertainly, markets and valuations are being subjected to a rapid reevaluation. That’s what’s underpinning the selling action that’s been prevalent this week,” McBride said.



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China Makes Bad Loans Disappear as Virus Pummels Banks

Chinese banks are taking extraordinary measures to avoid recognizing bad loans, seeking to shield themselves and cash-strapped borrowers from the economic fallout of the coronavirus outbreak.

Some of the measures, which include rolling over loans to companies at risk of missing payment deadlines and relaxing guidelines on how to categorize overdue debt, have the explicit approval of regulators in Beijing. Some lenders are also refraining from reporting delinquencies to the country’s centralized credit-scoring system and allowing borrowers to skip interest payments for as long as six months, according to people familiar with the matter, who asked not to be named discussing internal decisions.


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The moves will buy time for both Chinese companies and the nation’s $41 trillion banking industry, after the outbreak brought much of the world’s second-largest economy to a standstill. But they’re also fueling concern about a buildup of hidden risks on lenders’ balance sheets. Some analysts worry that China is reversing a multi-year push to increase the transparency of its financial system and undermining the long-term health of banks.

“This will provide breathing space,” said Harry Hu, a credit analyst at S&P Global Ratings. “It will also likely undermine standards, making some Chinese banks less creditworthy in the long run.”

Earlier this month, S&P said a prolonged health emergency could cause China’s non-performing loan ratio to more than triple to about 6.3%, amounting to an increase of 5.6 trillion yuan ($800 billion) in bad debt.

The push by banks and regulators to tamp down NPLs is part of a broader effort by President Xi Jinping’s government to shore up the Chinese economy, which some forecasters say may suffer a rare quarter-on-quarter contraction in the first three months of this year. In addition to pumping billions of yuan into the banking system to make it easier for lenders to extend credit, authorities have cut interest rates, reduced taxes and pledged to adopt more “proactive” fiscal policies.

Shares of Chinese banks continued to under-performer the benchmark index this year in Hong Kong. The four biggest state-owned banks are trading at an average 0.5 times their estimated book value for this year, near the record low.

The NPL measures mark an abrupt shift in China’s approach toward financial regulation. Authorities in Beijing have spent the past three years trying to instill more discipline in the banking system and develop credit markets that more accurately price risk. As part of that effort, they’ve encouraged banks to be more diligent when accounting for bad loans.

The outbreak has changed the government’s priorities. In a press conference this week, Ye Yanfei, an official at the China Banking and Insurance Regulatory Commission, said policy makers need to be more tolerant when it comes to bad loans. “Saving corporates now is saving banks themselves,” Ye said.

China isn’t the only country to have relaxed accounting standards for banks during a crisis. In April 2009, during the depths of the global recession, mark-to-market rules in the U.S. were eased after banks complained that they resulted in bigger-than-warranted writedowns on thinly traded mortgage securities. While critics of the decision said it reduced transparency, it arguably helped big American lenders recover more quickly from the crisis.

China’s ability to control the pace of NPLs during economic shocks is an advantage of its centralized financial system, according to Leland Miller, the chief executive officer of China Beige Book.

“When you have a party that controls all the counterparties in the economy — you have state banks loaning to state enterprises and you have state banks loaning to small- and medium-sized enterprises — you can tell them to lend,” Miller said in an interview on Money Undercover with Bloomberg TV’s Lisa Abramowicz. “You never have to freeze up liquidity in the same way that a commercial financial system would work.”

Yet even if China’s banks turn on the credit taps, lots of businesses may struggle to secure the funding they need to stay afloat.

A survey of small- and medium-sized Chinese companies conducted this month showed that a third of respondents only had enough cash to cover fixed expenses for a month, with another third running out within two months. About two-thirds of the country’s 80 million small businesses, including many mom-and-pop shops, lacked access to loans as of 2018, according to China’s National Institution for Finance & Development.

It remains to be seen whether the benefits of delaying NPLs will outweigh the costs. Much depends on how quickly Chinese authorities can contain the outbreak and get the country back to work. In the week to Feb. 21, the economy was likely running at 50%-60% capacity, according to Bloomberg Economics.



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A sharp recovery in coming months would likely ease concerns that banks are obscuring the true health of their balance sheets. “If they can tide the virus over, then the delinquent loans will disappear,” said Zhang Shuaishuai, a banking analyst at China International Capital Corp.

But that’s far from a given. S&P analysts see scope for caution, saying last week that it may take years for the industry to revert to normal standards for recognizing NPLs and that some banks may see their long-term health suffer as a result.



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Wall Street Slips Into Correction Territory

Wall Street‘s main indexes fell for the sixth straight session and slipped into correction territory on Thursday, as the rapid spread of the coronavirus outside China intensified fears about the hit to economic growth and corporate earnings.

The S&P 500 and Nasdaq are now more than 10% below their intraday record highs hit on Feb. 19, while the Dow Jones Industrials is 10% off its Feb.12 peak.

The indexes were set for their steepest weekly pullback since the global financial crisis as rising number of new infections outside China raised fears of a pandemic.

Adding to worries, the U.S. Centers for Disease Control and Prevention confirmed an infection in California in a person who reportedly did not have relevant travel history or exposure to another known patient.

“In the recent week, markets have come to realize that the outbreak is much worse and are now realistically pricing in the impact of the virus on the economy,” said Philip Marey, senior U.S. strategist at Rabobank.

“In that sense it’s a bit of a catching up from the relative optimism that was there in the beginning when markets thought (the virus) will be contained to China with some minor outbreak outside.”

Industry analysts and economists continued to sound the alarm as they assessed the impact of the coronavirus, with Goldman Sachs (NYSE:GS) saying U.S. firms will generate no earnings growth in 2020.

Bank of America (NYSE:BAC) slashed its global growth forecast to the lowest level since the peak of the financial crisis.

At 10:08 a.m. ET, the Dow Jones Industrial Average was down 573.93 points, or 2.13%, at 26,383.66, the S&P 500 was down 67.33 points, or 2.16%, at 3,049.06. The Nasdaq Composite was down 221.07 points, or 2.46%, at 8,759.70. All of the 11 S&P sectors were deep in the red with energy losing the most, down 4.1%. Technology, financial, industrials, consumer discretionary, materials and communication services sectors dropped more than 2% each.

Declining issues outnumbered advancers for a 8.83-to-1 ratio on the NYSE and for a 8.65-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and 90 new lows, while the Nasdaq recorded 15 new highs and 361 new lows.



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