Hertz Files For Bankruptcy



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Hertz Global Holdings Inc., filed for bankruptcy protection Friday, saddled with about $19 billion in debt and nearly 700,000 vehicles that have been largely idled because of the coronavirus.

The Estero, Fla.-based company entered chapter 11 proceedings in the U.S. Bankruptcy Court in Wilmington, Del., hoping to survive a drop-off in ground traffic from the pandemic and avoid a forced liquidation of its vehicle fleet.

The Wall Street Journal reported earlier Friday that Hertz had failed to reach a standstill agreement with its top lenders and was preparing to file for bankruptcy as soon as that evening.

The company’s collapse marks one of the highest-profile corporate defaults stemming from the pandemic’s impact on air and ground travel, though Hertz also had challenges before the current economic crisis. Even before the Covid-19 outbreak, Hertz had been struggling with competition from peers including Enterprise Holdings Inc. and Avis Budget Group Inc., as well as from ride-hailing services such as Uber Technologies Inc. and Lyft Inc. The company lost some $58 million last year, its fourth consecutive annual net loss.

But Hertz’s business was hammered by the onset of the coronavirus, as people world-wide bunkered in at home and global travel shriveled up. Going forward, as businesses adapt by conducting meetings remotely, business travel may not return to prepandemic levels, according to bankers and analysts who follow Hertz.

Hertz didn’t reach a deal with creditors before entering chapter 11, heightening the risk of a full liquidation of the fleet, although the company and investors have several weeks to work out an agreement avoiding that outcome, people familiar with the matter said.

Hertz has spent years trying to restructure its business, and has blown through four chief executives in less than a decade. Most recently, former Chief Executive Kathryn Marinello was replaced Monday by Paul Stone, who previously served as the company’s executive vice president and chief retail operations officer for North America.

Hertz has also had a debt problem that can be traced back to a 2005 leveraged buyout by private-equity firms.





Founded in Chicago in 1918 and originally known as Rent-a-Car Inc., Hertz opened its first airport car-rental facility at Midway Airport in 1932. The company’s owners have included RCA Corp. and later Ford Motor Co., which sold Hertz to a buyout group led by Clayton Dubilier & Rice in 2005 for $5.6 billion.

The company went public in 2006, and activist investor Carl Icahn, who started acquiring Hertz shares in 2014, now owns more than one-third of the company and has placed three of his representatives on the board.

The pandemic has diminished automotive traffic in the U.S., squelched car sales and cut into rental reservations at Hertz. The Wall Street Journal reported in early May that Hertz, the nation’s second-largest rental-car company by fleet size behind Enterprise, was preparing for a bankruptcy filing.

The bankruptcy is expected to be complex given the company’s vast debt and corporate structure, which includes $14.4 billion of vehicle-backed bonds at subsidiaries that aren’t part of the chapter 11 filing.

Like Avis and some other rental car companies, Hertz doesn’t own its vehicles. The company leases its rental-car fleet, nearly 700,000 vehicles in total, from separate financing subsidiaries. The lease payments are earmarked for investors that own bonds backed by the fleet.

Now that Hertz has filed for bankruptcy, investors with rights to the vehicle fleet have to wait for 60 days before they can foreclose on and sell the cars. Hertz and its creditors will likely aim to prevent a complete liquidation and strike a deal to downsize the fleet while keeping some vehicles in operation, said people familiar with the matter.

With the $14.4 billion in vehicle-finance bonds so widely held—by pension funds, mutual funds and structured-credit funds—the company has faced difficulty coordinating with bondholders, people familiar with the matter said.


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Rental-car companies play an important role in supplying newer models to the used-vehicle market. Hertz also is a major customer for U.S. auto makers, purchasing about half of its fleet from General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV in 2019, according to a financial filing.

Analysts were concerned that Hertz could be forced to sell part or all of its fleet into an unusually weak market. But the possible liquidation would come at a time when demand for used vehicles is rising slightly, and pricing in the market is showing signs of recovery after hitting historic lows in April.

“Any ripple effect will be less than it was six weeks ago,” said Zo Rahim, an analyst for Cox Automotive, which owns vehicle-auction operator Manheim Inc.



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Pandemic Triggers A Wave of Distress, Bankruptcy In Corporate America

What a time to be a restructuring specialist.

Practically overnight, bankers and lawyers who advise companies in distress have become some of the most in-demand workers on Wall Street, ending a long period in which rising markets and abundant capital consigned them to obscurity.

Stay-at-home orders and the shutdown of nonessential business have driven broad swaths of the economy into panic mode. In industries that were already in a precarious position before the crisis, including retail and energy, the coronavirus pandemic has tipped many companies over the edge. A host of oil companies have sought chapter 11 protection, while J.C. Penney Co. JCP 3.69% and Neiman Marcus Group Inc. are expected to file for bankruptcy soon.



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Companies in areas that were previously stable, such as the automotive, travel and leisure industries—and even health care—may soon face similar pressures.

U.S. corporate debt downgraded to selective default, meaning a borrower has failed to meet one or more of its obligations, totaled $64.1 billion for the 12 months ended April 17, according to S&P Global Ratings. That represents only a slight uptick over the pace at the end of January, but the numbers are about to get a lot more bleak.

In the coming months, that figure could top the roughly $340 billion reached at the height of the financial crisis, according to the worst-case scenario estimates from S&P. Even in a less grim scenario, the figure could approach levels reached after the dot-com bust in the early 2000s.

Companies of all stripes are scrambling to avoid a painful reorganization of their capital structures and operations, default or bankruptcy. Many have tapped lines of credit and slashed costs. Some, such as Carnival Corp., Expedia Group Inc. and Airbnb Inc., have issued new equity or debt to public investors or private-equity firms.

For some, those efforts could tide them over until conditions improve. But should the recession prove deeper than envisioned, there could be a second—potentially bigger—wave of corporate distress later this year as companies labor under the weight of additional debt taken on during the shutdown, advisers warn.

“We will definitely see an uptick in defaults and an uptick in restructurings,” said William “Tuck” Hardie of Houlihan Lokey Inc., one of the top banks in restructuring. “The question is: Is it a 2,000-foot mountain or is it Mt. Everest?”



U.S. companies drew down about $230 billion from revolving credit lines from the beginning of March through April 9, according to an analysis by Goldman Sachs Group Inc. The largest portion—around 17%—went to companies in the automotive industry, with about 15% going to retailers and 10% to travel and leisure purveyors.

Those figures don’t include new revolver borrowings by companies without publicly traded bonds or those financed by private lenders, many of which are private-equity-backed and were already highly indebted.

Hard-hit companies have taken on additional debt on top of using their credit lines—and some may have effectively boxed themselves in by doing so. Carnival earlier this month sold $4 billion worth of senior secured notes backed by assets like its cruise ships. Tying up those assets will make it difficult for the company to go back to the debt market if it needs to raise more cash, according to a person familiar with the company’s capital structure.

Another person close to Carnival said the cruise operator believes it still has a number of financing options available to it if cruising doesn’t return by early next year, and it expects to get access to government-backed loans in some of the markets where it operates.

For private-equity-backed companies, which are typically bought using a heavy helping of debt and a relatively small amount of equity, having little to no revenue can be even more painful. Loans to fund new buyouts had average debt of 5.93 times earnings before interest, taxes, depreciation and amortization in 2019—the highest since 2007, when the average was 6.23 times, according to S&P Global Market Intelligence’s LCD.

Working in their favor is the fact that 85% of so-called leveraged loans issued in 2019 were “covenant lite,” giving borrowers more breathing room. That figure has risen steadily over the past decade as investors clamored for yield. In 2010, only 10% of leveraged loans were covenant lite, according to data compiled by J.P. Morgan Asset Management.



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Also backstopping companies owned by buyout funds: Firms have around $2 trillion in unspent cash to invest in private markets, with most of that dedicated to private equity, according to alternative-investments manager Hamilton Lane Inc. Much of the dry powder is in the hands of the biggest firms, however, and companies’ fate will be determined by their owners’ willingness to inject more capital at a time when future prospects are highly precarious.



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And the universe of companies facing distress stretches well beyond the world of private equity, said Steve Zelin, head of restructuring at investment bank PJT Partners. “It doesn’t matter if you were five times levered or two times levered prior to the current crisis if you are now not generating any revenue.”

Investment firms that specialize in distressed investing have been gearing up for more action. Oaktree Capital Group LLC aims to raise $15 billion for what would be the biggest-ever distressed-debt fund, according to a person familiar with the matter.

Apollo Global Management Inc. has already invested more than $10 billion since the beginning of March in credit and private-equity.

James Zelter, the firm’s co-president who heads its $200 billion-plus credit business, says he sees three phases of distress playing out.

The first occurred during the early days of market turmoil in March, when even the debt of companies unaffected by the virus was trading at big discounts. The second is the industry-specific declines that led to the rescue financing companies like Expedia have been receiving.

“The third phase is just beginning,” Mr. Zelter said.




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When Will Disneyland And Other Parks Reopen?

Swiss banking giant UBS told clients Monday that Walt Disney Co. is likely to wait until Jan. 1 to open its theme parks and predicted the Burbank media company will see only about 50% of 2019 attendance.

“Moreover, we now believe the lingering effects of the outbreak — including crowd avoidance, new health precautions, etc. — will dramatically reduce the profitability of these businesses even after they are reopened until a vaccine is widely available,” the report said about Disney’s parks.

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Stay-at-home orders by state and local governments will dictate when parks can consider reopening. Disney said its parks will remain closed until further notice. Universal Studios Hollywood and Universal Orlando Resort announced plans to stay closed until at least May 31.

Theme park operators have been tight-lipped about what the future holds for their parks, but they have clearly been discussing plans for opening day.

Annual passholders for Universal Orlando Resort said they received a survey last week asking how likely they are to return to the park under various restrictions, such as requiring guests to wear masks or limiting park attendance to 50% of normal.

In an interview with Barron’s, Disney Executive Chairman Bob Iger said his parks would require “more scrutiny, more restrictions” so customers would feel safe to return. He suggested the idea of taking the temperature of each visitor before allowing entrance.

“Just as we now do bag checks for everybody that goes into our parks, it could be that at some point we add a component of that that takes people’s temperatures, as a for-instance,” Iger said.

On several online Disney discussion forums, theme park fans say they have uncovered a plan, presumably leaked by a Disney employee, for allowing guests to return to the Walt Disney World Resort in Florida.

The plan, titled the Secure Circuit protocol, would reopen the park with limited capacity, no parades, no castle shows, no firework displays and health checks performed at every security checkpoint. In addition, the protocol would require guests to sign a form, clearing Disney of any liability for potential exposure to the novel coronavirus.

Disneyland representatives declined to discuss whether the Secure Circuit protocol is legitimate or any plans being developed to reopen the parks.

The process of taking temperatures of entering visitors (using non-contact thermometers) has already been adopted in theme parks in Asia that closed only briefly. At Janfunsun Fancy World in Taiwan, people who have a temperature of 99.5 degrees or higher are denied entry.

At Everland Resort in South Korea, workers take visitors’ temperatures and encourage them to wear masks.

The resort’s attraction queues include markings on the ground to show how far apart each person must stand to maintain social distancing. Rides and stores are disinfected hourly. Hand sanitizer dispensers are set up around the park.



Theme park insiders have been so focused on reopening after the crisis subsides that a webinar on strategies for reopening theme parks and other attractions drew nearly 500 industry workers this month.

The April 15 webinar was hosted by Gateway Ticketing Systems, a Pennsylvania company that develops ticketing systems and consults for theme parks, zoos, museums and other attractions. “Everyone is just spinning out large contingency plans,” said Randy Josselyn, a principal at Gateway Ticketing who hosted the webinar.

Among the speakers on the webinar was Eddie Jones, a support specialist at Atlanta Botanical Garden, who said the garden has already devised a plan for reopening by allowing only 50 people to enter the gardens every 15 minutes.

The plan would cut capacity in the gardens from the normal daily attendance of about 7,000 to about 2,500, he said. A back gate would be opened so that guests could leave without creating a bottleneck at the entrance.

Industry experts say putting limits on capacity would almost certainly be a requirement so that people do not crowd together at reopened parks.

Bill Coan, chief executive of Itec Entertainment, a developer of theme park attractions and shows, said he doesn’t think capacity limits will be difficult to enforce because park fans will not be rushing back once the theme parks reopen.

“I don’t think those numbers are going to occur for some time,” he said of previous attendance numbers.

Coan echoed other theme park experts who said parks will probably open in stages, with some attractions closed in the early stages and rules imposed on how tightly packed visitors can be in lines and in stores.

But limiting capacity and hiring additional workers to take temperatures, enforcing anti-crowding rules and sanitizing rides would be expensive and could make operating theme parks unprofitable, said Martin Lewison, a business administration professor and theme park expert at Farmingdale State College in New York.



Some parks might be able to get by with fewer workers if capacity is vastly reduced, and higher ticket prices might become a profit-bolstering option, but it’s difficult to know for sure because theme park operators aren’t talking.

“These are the kind of practical ideas that I imagine operators are working through, deciding what is practical,” he said.

Whatever procedures are adopted by theme parks, Lewison said some fans will stay away but many others will be ready to return quickly.

“There is a chunk of America who says, ‘Let’s take that risk.’” he said.

For Alexandria Grable, 19, who had an annual pass for the Disneyland Resort for the last three years, the closing of the resort in mid-March convinced her that the coronavirus outbreak was a serious health threat.

But the Santa Clarita teen said she would return if Disneyland reopens.

“I think I would go,” Grable said. “I trust Disneyland enough to know they would not put their guests in harm’s way.” Other theme park devotees are less likely to rush back even if health and social distancing restrictions are added.

“Will anyone want to spin their teacup or the Roger Rabbit taxicab or Buzz Lightyear blasters, knowing how many other hands have touched them?” asked Matthew Gottula, a longtime Disneyland fan from Altadena, who said he doesn’t go anywhere without a container of hand sanitizer attached to his belt.

Another Disneyland fan, Aaron Goldberg, who has written several books on Disney parks and the Disney family, said he wouldn’t return to the parks without wearing a mask and gloves. “Maybe I’m a bit more neurotic, but it’s impossible to avoid touching just about everything at Disneyland and all of the parks,” he said.



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Euro Zone Business Activity Crashes To ‘Shocking’ Lows On Coronavirus Pandemic

Euro zone business activity hit another record low during April in another sign that the coronavirus pandemic is causing severe economic damage across the region.

The IHS Markit Purchasing Managers’ Index, which measures both the services industry and manufacturing, dropped to 13.5 in April, according to preliminary data. In March, the same index had already recorded its biggest ever single monthly drop to 29.7. A contraction in PMI figures — a figure below 50 — indicates a likely fall in economic growth overall.

Earlier in the session, Germany’s flash index came in at 17.1, a record low, versus a figure of 35.0 the month before. This was worse than analysts had been expecting with Phil Smith, principal economist at IHS Markit, saying it “paints a shocking picture of the pandemic’s impact on businesses.”




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European Central Bank Headquarters And Frankfurt's Financial District Ahead Of Comprehensive Bank Assessment


Bets Against the Stock Market Rise to Highest Level in Years

Short sellers have revived their wagers against the stock market in recent weeks, taking their most aggressive positions in years.

Bets against the SPDR S&P 500 Trust, the biggest exchange-traded fund tracking the broad index, rose to $68.1 billion last week, the highest level in data going back to January 2016, according to financial analytics company S3 Partners. That was up from $41.7 billion at the beginning of 2020 and $41.2 billion a year ago.

Short sellers borrow shares and sell them, hoping to repurchase them at lower prices and keep the difference as profit. Among the individual companies they have targeted in recent weeks are travel-related firms, including Carnival Corp., Royal Caribbean Cruises Ltd., Marriott International Inc. and Wynn Resorts Ltd.


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Those bets come during a wild year for investors who are struggling to reconcile the impact of the coronavirus pandemic on the population and economy. The S&P 500 suffered its fastest drop from a record to a bear market in history—ultimately falling 34% between Feb. 19 and March 23. Its 28% rebound since then has also been brisk, leaving some investors anxious about the strength of the rally when so much remains unknown.

“We’ve really seen a significant bounceback in the last three weeks at levels that I think are too quick,” said Jerry Braakman, chief investment officer at First American Trust. His firm recently bet against the Nasdaq-100, on the belief that technology stocks have fallen too little to reflect the probability of a recession. The index is up 1.1% in 2020.

“When we see a strong move in one direction, where we think the fundamentals and the news can turn ugly, especially during an earnings cycle, we think that’s an opportunity where we could see a 5, 10% selloff again,” he said.

Investors are bracing for the possibility of more volatility this week, as earnings reports from companies including Coca-Cola Co., Netflix Inc. and Delta Air Lines Inc. give another glimpse at how the coronavirus is reshaping the landscape for U.S. business.

The outsize market swings of late require vigilance from investors who sell shares short because they can face losses when prices rise. Short sellers incurred total mark-to-market losses of $108.8 billion over three days in late March when the S&P 500 surged 18%, according to Ihor Dusaniwsky, head of predictive analytics at S3 Partners.

But with the potential for additional declines ahead, many investors have decided that the ability to hedge their portfolios—or simply bet on a selloff—is wise.

“Things will go back to normal eventually and these positions will decrease but not until we start seeing less volatility in the market,” Mr. Dusaniwsky said of the rise in short positions against the SPDR S&P 500 Trust. “No one’s going to give up their insurance until they see the chances of catastrophe are in the rearview mirror.”

The portion of available shares sold short against the SPDR S&P 500 Trust has also risen, climbing to 27% in early April, the highest level since November 2016 and up from 14% at the beginning of 2020.

The increase in bets against the market coincides with a push in other countries to temporarily curb short selling. At times of heightened volatility, critics often argue that the practice exacerbates downward pressure on stock prices. But Jay Clayton, the chairman of the Securities and Exchange Commission, has argued short selling is needed to facilitate ordinary market trading.

To be sure, coronavirus has upended entire industries in recent weeks, leaving investors scrambling to reassess the growth prospects of companies from Marriott to Clorox Co. to Amazon.com Inc. to Carnival.

With the pandemic devastating global travel, hotel, casino and cruise stocks have been among the hardest hit—and seen some of the biggest additions to the short positions against them.

Many hotels and casinos temporarily closed their doors when demand evaporated, furloughing employees and curbing spending plans, and the Centers for Disease Control and Prevention has extended a no-sail order for cruises into July.



Short sellers have added a collective $797 million to their short positions against Carnival, Royal Caribbean, Marriott and Wynn over the past 30 days, according to data Friday from S3 Partners.

Alex Lee, a San Francisco resident who manages a family sandwich shop in Oakland, Calif., and his wife had previously dabbled in short selling but have recently devoted more attention there. They made bets against Marriott, along with other stocks.

“Because of Marriott’s price at the time, it seemed like it had more room to fall and because of its heavy presence in Europe and the United States, we just thought that that company itself would be more vulnerable to falling more,” he said.

Over two rounds of shorting Marriott stock in March and April, they made a profit of about $15,000, Mr. Lee said. Marriott recently said about 25% of its hotels are temporarily closed, and North American occupancy levels are around 10%. Its shares are down 44% this year.


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Among the stocks that saw big drops in short positioning in March were stodgy consumer-staples shares, which got a bounce as Americans stocked their pantries to wait out the pandemic at home.

“We had a lifetime of trading in the month of March,” said Mitch Rubin, chief investment officer at RiverPark Funds. He said he had previously bet against shares of Kroger Co., Walmart Inc., Clorox and Campbell Soup Co. but covered those positions in late February and early March as it became clear those companies would perform well with consumers sheltering in place.

“Their business is healthier than it was before the crisis because the demand for their products has increased,” he said. “The amount of times you clean high-touch surfaces with a chemical disinfectant is going to go up for some period of time, maybe for the rest of our lives.”



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Global Stocks And U.S. Futures Gain Despite China GDP Plunge

Stock benchmarks in the Asia-Pacific region rose, while S&P 500 stock futures traded higher, pointing to a strong session for U.S. shares on Friday.



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Market watchers said a range of factors helped power the rally, including the prospect of the U.S. gradually getting back to work and some encouraging news on potential treatments for the new coronavirus. Investors were able to look past data showing an unprecedented—but widely expected —plunge in Chinese economic activity.

In early-afternoon trading in Hong Kong, E-mini S&P 500 futures gained more than 3%. Australia’s S&P/ASX 200, Japan’s Nikkei 225 and South Korea’s Kospi rose by about 2% to 3% each, and the Shanghai Composite Index added 0.9%, while Hong Kong’s Hang Seng Index advanced 2.3%.

Andy Maynard, managing director of equities sales and trading at China Renaissance Securities, said news about possible coronavirus treatments had buoyed markets. He said that while effective drugs might take years to develop, the developments were catalysts to say the situation isn’t as bad as feared and that markets would recover.

Shares of Gilead Sciences rose 15.1% in late U.S. trading after a report that one of its experimental drugs might be performing well in clinical trials of patients with Covid-19, the respiratory disease caused by the new coronavirus.

Ben Luk, senior multiasset strategist at State Street Global Markets, said other factors were also boosting sentiment in regional markets. Those included the prospect of the U.S. gradually reopening its economy and better-than-expected export figures from Singapore.

Singapore said Friday that exports, excluding oil, rose 17.6% in March from a year earlier, far better than the median 7.9% contraction forecast in a Wall Street Journal poll of 11 economists. “There’s more comfort that China continues to recover based on those export numbers,” Mr. Luk said.



Markets remained strong even as official statistics showed China’s economy shrunk 6.8% from a year earlier in the first quarter. That was the first year-over-year contraction since Beijing began reporting the quarterly figure in 1992, but it was less sharp than the 8.3% median forecast of economists polled by The Wall Street Journal.

“Everybody was expecting a very bad first quarter,” said Chi Lo, senior economist for Greater China at BNP Paribas Asset Management. Mr. Lo said the Chinese government’s goal of doubling the economy in size from 2010 to 2020, in real terms, or after adjusting for inflation, is now out of reach.

He added that the speed with which China’s economy returned to full strength would depend partly on how badly the pandemic hit overseas demand for its goods and services.

In the U.S., President Trump released new federal guidelines on reopening the economy that would leave decision-making largely up to governors. Mr. Trump said: “We must have a working economy, and we want to get it back very, very quickly.”

The Dow Jones Industrial Average and the S&P 500 on Thursday posted modest gains even after data showed another sharp rise in Americans seeking jobless benefits, and slumping construction of new homes.

Globally, confirmed cases of the new coronavirus reached nearly 2.2 million, with the U.S. accounting for nearly one-third of the cases, according to data from Johns Hopkins University. The number of deaths world-wide has topped 143,000.



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Stock Markets Around The World Rose On Optimism That Economic Activity May Improve In The Near Future

Futures tied to the Dow Jones Industrial Average rose 1.5%, suggesting U.S. stocks could gain ground later in the day. The pan-continental Stoxx Europe 600 advanced 1.2%. Asia-Pacific stock indexes also rose Tuesday. The benchmark Shanghai Composite Index closed up 1.6%.

Global coronavirus infections topped 1.9 million, with more than 119,000 deaths, according to Johns Hopkins University data. The number of new cases each day appeared to level off in the U.S., and President Trump told reporters his administration is nearing completion of a plan to reopen the country “hopefully ahead of schedule.” But in Europe, France, Italy and Spain extended lockdowns to curb the spread of the virus.



Investors are watching for news about the length of the lockdowns to try to call when the market has reached a trough and could be set to rise again, said Georgina Taylor, a multiasset fund manager at Invesco.

“Anything that suggests that it’s not a complete catastrophe, people will take that as the bottom,” she said.

Stocks in mainland China were buoyed by better-than-feared trade data, which showed exports in March down 6.6% from a year earlier, and imports down just 0.9%. Economists polled by The Wall Street Journal had forecast declines of 15.9% and 10%, respectively.

Daniel Gerard, senior multiasset strategist at State Street Global Markets, said the pandemic presents investors with an economic calamity unlike either the Great Depression or the global financial crisis, and markets are cycling between fear and relief as headlines change.

“The market may be excited today about China’s trade data being better than expected, but tomorrow it may think it is not enough,” he said.

While China’s trade figures were much better than expected, there were no serious lockdowns outside the country until mid-March, and since then orders have been cut back, said Iris Pang, chief economist for Greater China at ING Bank NV in Hong Kong.

“This will heavily weigh on export and import figures for April and May, at least,” she said.

Elsewhere, Hong Kong’s Hang Seng Index edged up by 0.7%, Japan’s Nikkei 225 closed 3.1% higher, boosted by electronics and retail stocks, while South Korea’s Kospi Composite advanced 1.9%.

Mr. Gerard at State Street said any global economic recovery would be uneven, and while panic-selling had ceased, fundamental questions about corporate profits remain. Investors will need to distinguish temporary damage to earnings from longer-term hits, something that won’t be easy until the second half of the year, he said.

Oil prices edged up. The global benchmark Brent crude climbed 1%, trading at $32.04. The Organization of the Petroleum Exporting Countries and its allies agreed to jointly reduce production by 9.7 million barrels a day after a marathon series of talks from Thursday to Sunday.


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The rally is modest because the fall in energy demand from the economic slowdown still outweighs the production cuts made over the weekend, said Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB.

“It’s very clear that demand loss is tremendous. They [OPEC] are not cutting enough in the short term to prevent inventory build.’’

Earnings season will begin this week, with some of the largest U.S. banks reporting in the coming days. JPMorgan Chase & Co will release its financial statements Tuesday, followed by Goldman Sachs, Bank of America and Citigroup Wednesday.

Also Tuesday, the International Monetary Fund will put out its world economic outlook, which will kick off a week of virtual meetings with a focus on the downturn caused by the coronavirus.


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Stocks Climb, Trying To Extend Winning Streak

U.S. stocks rose sharply Tuesday, buoyed by early indications that the spread of the coronavirus pandemic was slowing in some hot spots around the world.

The Dow Jones Industrial Average rallied 2.8% in midday trading, a day after rising almost 8%. The S&P 500 and the Nasdaq Composite also jumped, climbing 2.3% and 1.5% respectively. All three indexes are attempting to rally for the third time in four sessions, though they remain down about 20% from their mid-February highs.

New York Gov. Andrew Cuomo said Tuesday that the state’s hospitalization rate has showed signs of slowing, and other hard-hit countries in Europe, including Italy and Spain, have reported a slowdown in new infections following strict containment measures.


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“It’s hard to reject the view that things are improving,” said Paul O’Connor, head of multiasset at Janus Henderson. “Markets have been celebrating this in the last couple of days.”

Still, the trends are preliminary and authorities have warned that the coronavirus infections in the U.S. and U.K. are likely to worsen in the coming week. Even as demand for intensive care units has flattened in New York, Mr. Cuomo said Tuesday that deaths related to the virus hit a record Monday. So far, nearly 5,500 people have died from the virus in the state, representing almost half of all U.S. deaths.

Even more, economic indicators have shown that a deep recession may be looming. The Mortgage Bankers Association said Tuesday that mortgage forbearance requests grew 1,896% between the weeks of March 16 to March 30. The spike comes as millions of Americans have sought unemployment benefits after the pandemic shuttered businesses.

Markets have swung sharply in recent weeks as investors have tried to make sense of a fast-spreading pandemic that has warranted unprecedented responses by the Federal Reserve and U.S. government. Monday’s gain marked the 12th consecutive trading day that the Dow moved up or down at least 1%.

All 11 sectors of the S&P 500 marched higher Tuesday. Only two of the 30 stocks in the Dow Jones Industrial Average, Merck and Pfizer, ticked lower.

Travel and leisure stocks were again among the best performers in the U.S. and Europe. United Airlines Holdings jumped 8.3%, American Airlines Group rose 15% and Delta Air Lines added 4.2%. Among cruise stocks, Royal Caribbean Cruises gained 21% and Carnival rose 17%. All five stocks remain down more than 50% for the year.

Meanwhile, in London, EasyJet soared 20% after the carrier tapped a U.K. government-aid program for short-term credit. The company’s ability to access the funding suggests that it could withstand the economic downturn, provided that the spread of the coronavirus continues to slow, according to Michael Hewson, chief market analyst at brokerage CMC Markets.

“Markets are pricing in a return to normality for airlines sooner rather than later,” Mr. Hewson said. That optimism is also driving hotel stocks higher, he added.
The rise in risk appetite led some investors to sell the safest government bonds. The yield on the 10-year U.S. Treasury note rose to 0.749%, from 0.675% Monday. Yields rise as bond prices fall.

Oil prices also ticked higher, with the global benchmark Brent crude advancing 0.3% to $33.15 a barrel.


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In currency markets, the ICE Dollar Index slipped 0.7%. The greenback has been wavering amid renewed risk appetite, according to Jordan Rochester, a currency strategist at Nomura.

“It’s definitely a risk-on day,’’ leading some investors to sell the dollar, he said.





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French Manufacturing Plunges Into Deepest Slump In Seven Years

French manufacturing activity fell in March at the fastest pace in more than seven years as a nationwide lockdown to contain the coronavirus outbreak hits companies and their clients, a monthly survey showed on Wednesday.

Data compiler IHS Markit said its final Purchasing Managers’ Index (PMI) fell to 43.2 points from 49.8 in February, slightly higher than a preliminary reading of 42.9.

The plunge to its lowest point since January 2013 brought the index far away from the key 50-point line dividing expansions in activity from contractions.


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Meanwhile, manufacturers’ output and the flow of orders for new business fell to their lowest levels since the 2008-2009 global financial crisis that unleashed one of the deepest recessions in decades in many major economies.

As the coronavirus spread in France, the government imposed a lockdown on March 17, forcing large swathes of the euro zone’s second-biggest economy to shut down.

“The supply of goods is diminished, with supplier delivery times lengthening sharply and staff unable to work amid factory closures,” IHS Markit economist Eliot Kerr said.



“Meanwhile, restricted movement of people and social distancing has acted to stifle demand, delivering a double-barrelled blow to the economy,” he added.

The INSEE official statistics agency estimated last week that the economy was operating at two-thirds of its normal level, which was likely to knock 3 percentage points off growth for each month the country spends in lockdown.


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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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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.













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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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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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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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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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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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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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.

Stock-Market-Corrections-2020

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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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.

Discover 7 Ways to Create a Sustainable, Passive Income for Life – By Robert Kiyosaki.

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.

Discover 7 Ways to Create a Sustainable, Passive Income for Life – By Robert Kiyosaki.

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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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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Pandemic Fears Pummel Stocks

Stocks sunk deeper into the red on Thursday, oil prices fell and U.S. Treasuries rallied into record territory as more signs of the global spread of the coronavirus heightened fears of a pandemic.

Global markets have dropped for six straight days, wiping out more than $3.6 trillion in value. Much remains unknown about the virus that originated in China, but it is clear the ramifications of the world’s second biggest economy in lockdown for a month or more are vast.

Analysts have sharply downgraded their China and global growth forecasts, while policymakers from Asia, Europe and the United States have begun to prepare for a potentially steep economic downturn than initially anticipated.

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E-mini futures for the S&P 500 were down 1.4% (ESc1) and Europe appears set for a catch-up slump. EuroSTOXX 50 futures fell 2.7% (STXEc1) and FTSE futures skidded 2.3% (FFIc1).

Oil, sensitive to global growth given the vast energy consumption in a many countries, fell more than 1% to its cheapest in over a year. [O/R]

MSCI’s broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) fell 0.5% and is down more than 4% for the week.

The yield on U.S. Treasuries, which falls when prices rise, dropped in to uncharted waters underneath 1.3% (US10YT=RR). Bets on monetary easing in the United States have surged. [US/]

“I think the market is just pushing the Fed to cut rates,” said Stuart Oakley, Nomura’s global head of flow FX in Singapore.

“It’s a flight to quality as well,” he said.

“The news seems to be creating this mass hysteria everywhere, there’s panic that the world’s about to end, so people are getting out of risk and putting their money in safe havens and the biggest one of those are 10-year Treasury bond.”

China accounts for about 96% of cases but most new infections are now being reported elsewhere.

News on Thursday of a jump in cases in South Korea was accompanied by a warning that the virus may be spreading in California.

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Taiwan raised its epidemic response level to the highest possible. Japan’s Nikkei dropped 2% to a four-month low amid more worries that the Tokyo Olympic Games could be cancelled or shifted. (T)

And on top of that a tour-bus guide in Japan also tested positive to the virus for a second time, raising questions about how the pathogen spreads.

“This feels like a consolidation, potentially before another leg down,” said Jeffrey Halley, Senior Market Analyst at brokerage OANDA by phone from Jakarta.

The only bright spot, ironically, was China’s stock market, which climbed in relief that domestically, at least, the containment efforts are showing signs of working. (SS)

NO EQUIVALENT SHOCK

At the same time as the breadth of the virus’ spread has knocked markets, analysts have been steadily revising their estimates of the economic damage higher.

J.P. Morgan now expects Chinese GDP to shrink 3.9% this quarter, while Capital Economics sees it contracting this year.

“There is no equivalent exogenous shock the world has gone through in the post-Bretton Woods period,” said Deutsche Bank (DE:DBKGn) analyst Alan Ruskin in a note.

“Work place disruption, trade interlinkages, business uncertainties, profit warnings, inability to pay, and capacity to service credit are all related supply-side issues that, in turn, generate demand effects on employment, disposable income, wealth and confidence.”

Only a dramatic ratcheting higher of bets on interest rate cuts in the United States has given pause to the huge flow of money from Asia into greenbacks in the currency markets.

From almost nothing a week ago, markets are pricing a roughly even chance of a Federal Reserve interest rate cut next month and have almost fully priced a cut by April. <0#FF:>

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That was enough to help drag the China-sensitive Aussie dollar from an 11-year low and lend support to the euro (EUR=). [FRX/]

The Aussie last traded at $0.6550 and the euro lifted through $1.09 for the first time in two weeks to buy $1.0908.

The safe-haven Japanese yen firmed to 110.02 per dollar.





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Moderna Inc. Ships First Experimental Coronavirus Vaccine For Human Tests

Drugmaker Moderna Inc. has shipped the first batch of its rapidly developed coronavirus vaccine to U.S. government researchers, who will launch the first human tests of whether the experimental shot could help suppress the epidemic originating in China.

Moderna on Monday sent vaccine vials from its Norwood, Mass., manufacturing plant to the National Institute of Allergy and Infectious Diseases in Bethesda, Md., the company said. The institute expects by the end of April to start a clinical trial of about 20 to 25 healthy volunteers, testing whether two doses of the shot are safe and induce an immune response likely to protect against infection, NIAID Director Anthony Fauci said in an interview. Initial results could become available in July or August.

Moderna’s turnaround time in producing the first batch of the vaccine—co-designed with NIAID, after learning the new virus’s genetic sequence in January—is a stunningly fast response to an emerging outbreak.

If a trial starts as planned in April, it would be about three months from vaccine design to human testing. In comparison, after an outbreak of an older coronavirus, severe acute respiratory syndrome, in China in 2002, it took about 20 months for NIAID to get a vaccine into the first stage of human testing, according to Dr. Fauci.

“Going into a Phase One trial within three months of getting the sequence is unquestionably the world indoor record. Nothing has ever gone that fast,” Dr. Fauci said.

Public-health authorities say advances in vaccine technology, aided by government and private investments, are shortening development timelines when outbreaks occur. In the past, researchers scrambled to develop vaccines in response to outbreaks such as SARS, Ebola and Zika with mixed results. Older types of vaccines are developed from viral proteins that must be grown in eggs or cell cultures, and together with animal testing it can take years before a vaccine can be used in humans.

Newer approaches rely on what are known as platform technologies—building blocks that can be tweaked quickly with the genetic information from a newly emerged pathogen.

The fast production of a vaccine and plans to test it soon don’t guarantee its success. “You’re never sure until you’re at the end what you have,” said Bruce Gellin, president of global immunization at the Sabin Vaccine Institute. Saying there are other coronavirus vaccines in the works, he added: “The sequence of testing is designed to sort out what works from what doesn’t. That’s why it’s important to try as many things as possible that seem feasible, because not all horses will finish the race.”

It is uncertain whether Moderna’s vaccine will work because its gene-based technology hasn’t yet yielded an approved human vaccine. And even if the first study is positive, the coronavirus vaccine might not become widely available until next year because further studies and regulatory clearances will be needed, Dr. Fauci said.

But health authorities say it is worth placing bets on these new technologies in the face of fast-moving outbreaks. Since early January, when only a few dozen cases were confirmed in central China, the virus has spread to more than 79,000 people, including more than 2,600 who have died. The vast majority of the cases are in China, according to the World Health Organization.

Dr. Fauci said it is possible the spread of coronavirus could lessen during warmer months, but then return next winter and become a seasonal virus like the flu, making a vaccine useful even if it isn’t ready for widespread distribution until next year.

“The only way you can completely suppress an emerging infectious disease is with a vaccine,” Dr. Fauci said in his office in Bethesda. “If you want to really get it quickly, you’re using technologies that are not as time-honored as the standard, what I call antiquated, way of doing it.”

Moderna, which has more than 800 employees, was founded in 2010 to develop drugs and vaccines based on what is known as messenger RNA, the genetic molecules that carry instructions from DNA to the body’s cells to make certain proteins. The company is targeting cancer, heart disease and infectious diseases. It hasn’t brought any drugs or vaccines to market.

Moderna Chief Executive Stephane Bancel said he got in touch with NIAID after hearing about the new China virus while vacationing with his family in France in early January, to discuss collaborating on a vaccine.

Chinese scientists found the genetic sequence of the new virus and published it online around Jan. 10. Researchers at NIAID and Moderna analyzed the sequence and homed in on a section they believed was most likely to induce the desired immune response if incorporated into a vaccine. NIAID agreed to run a clinical trial if Moderna could supply a vaccine.

Moderna didn’t need actual samples of the virus or its proteins. The company’s vaccines instead contain nucleic acids with genetic codes that instruct the body’s own cells to make certain proteins from the virus that don’t infect a person, but trigger an immune response.

Moderna in 2018 opened a manufacturing site in the shell of a former Polaroid plant in Norwood, near the company’s Cambridge, Mass., headquarters. In the plant, employees wearing white lab gowns, hair nets and safety goggles work amid lab hoods, robotic machinery and steel tanks to produce drugs and vaccines for clinical trials. Meeting rooms are named after famous scientists such as Curie and Pasteur.

To make the coronavirus vaccine, Moderna repurposed some of the robotic equipment that was making cancer vaccines tailored to the genetic mutations of patients’ tumors.

As many as 100 manufacturing and quality-control employees were involved in the effort, many working nights and weekends. As manufacturing ramped up, the company’s leaders had frequent meetings, calls and WhatsApp messaging chains to monitor progress, and stayed in close contact with NIAID.

After Moderna’s effort became public in January, friends and family members became interested.

Juan Andres, Moderna’s head of technical operations, said, “I wasn’t used to my kid thinking I did anything cool,” but his 15-year-old son began asking questions about the project at dinner.

Moderna finished manufacturing about 500 vials on Feb. 7, a Friday. Normally, the company would have waited until Monday to start quality-control tests, but about 10 to 15 workers spent the weekend testing samples for potency and other features. The batch cleared most tests that weekend, but it took about two weeks to complete sterility testing. Moderna stored the supply in freezers set to minus-70 degrees Celsius.



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One risk of moving so fast is that Moderna and NIAID won’t know for sure they picked the best fragment of the virus’s genetic sequence to target until the human study is completed.

“It is possible it’s going to work, but we have to wait and see,” said Mr. Bancel, Moderna’s CEO.

The first trial will be conducted at NIAID’s clinical-trials unit in Bethesda. If the first one is successful, a second trial of hundreds or thousands of participants could begin, which could take six to eight months, Dr. Fauci said. This trial could be conducted partly in the U.S. but also in China or a region where the virus is spreading, so the testing could gauge whether the vaccine reduces infection rates.

If the second trial is positive, the vaccine could be ready for widespread use, he said. How widely the virus has spread by then will determine whether it is given to targeted groups such as health-care workers, or more broadly to the general population, Dr. Fauci said.





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Pandemic Fears Grip Wall Street

Wall Street plunged into the red in early trading Monday as a spike in the number of Covid-19 virus cases confirmed outside of China pushed money out of riskier investments.

The Dow dove 905.27 points, or 3.12%, to 28,087.04 at 9:35 AM ET (14:35 GMT) and the S&P 500 fell 93.63, or 2.8%, to 3,245.62. The Nasdaq Composite plunged 341.72, or 3.6%, 9,234.87, with tech stocks particularly hard hit.

The U.S. Treasury yield curve inverted the most since October and the 10-Year yield fell below 1.37%. Its all-time low is 1.32% hit in 2016 after the Brexit vote.

Worries snowballed over the weekend as the numbers of cases of Covid-19 jumped in Italy, South Korea and Iran. Authorities in Italy imposed a quarantine in the north of the country and its benchmark MIB index tumbled nearly 6%.

The Covid-19 shock is a test of the fear-of-missing-out (FOMO) and buy-the-dip conditioning that has helped stocks overcome the headwinds of valuations, Allianz (DE:ALVG) Chief Economic Adviser Mohamed El-Erian tweeted.

“A key element is whether markets distinguish between Central Banks’ willingness (high) and ability (low) to counter the economic shock,” he said.

Among individual stocks, Dow component Apple (NASDAQ:AAPL) sank 6% after the latest data showed shipments of mobile phones in China dove 36.6% in January from the year-ago period.



High-flying Tesla (NASDAQ:TSLA), which has a factory in Shanghai, was also hit on virus worries, with shares dropping 8.6%.

Chip stocks were also hard hit. Advanced Micro Devices (NASDAQ:AMD) lost 10.2%, Nvidia (NASDAQ:NVDA) tumbled 8.4% and Micron Technology (NASDAQ:MU) slumped 7.4%.

Expectations that the Federal Reserve would stop in with a rate cut to help the economic situation rose today, with the odds of a March cut rising to more than one in four.

“Growing consensus among economist(s) I am speaking to at (the National Association for Business Economics 2020 conference) is that the Fed will have to cut and do so soon – March – in response to COVID-19,” Grant Thornton Chief Economist Diane Swonk tweeted. “It may not be called a health pandemic yet but it is an economic pandemic.”




Diane Swonk@DianeSwonk

Growing consensus among economist I am speaking to at is that the Fed will have to cut and do so soon – March – in response to COVID-19. It may not be called a health pandemic yet but it is an ecomomc pandemic.









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Shares Drop, Gold Surges As Investors Scurry For Safety

Global shares and oil slid on Monday while safe-haven gold surged as the spread of the coronavirus outside China darkened the outlook for world growth with infections and deaths rising in South Korea, Italy and the Middle East.

The large spike in Italian cases has especially rattled investors on concerns about the potential for the virus to spread deeper into Europe and cause economic disruption there.

The selloff in Asian markets and U.S. and European stock futures on Monday was financial markets’ first reaction to the weekend news, which analysts described as game-changing developments in the outbreak.

South Korea put the country on high alert while the number of infections jumped to 763 and deaths rose to seven. In Italy, officials said a third person infected with the flu-like virus had died, while the number of cases jumped to above 150 from just three before Friday.

Iran, which announced its first infections last week, said it had confirmed 43 cases and eight deaths, with most of the infections in the Shi’ite Muslim holy city of Qom. Saudi Arabia, Kuwait, Iraq, Turkey and Afghanistan imposed travel and immigration restrictions on the Islamic Republic.

“There is lots of bad news on the coronavirus front with the total number of new cases still rising,” AMP chief economist Shane Oliver wrote in a note.

“Of course, there is much uncertainty about the case data, new cases outside China still looks to be trending up and the economic flow on has further to go with the Chinese economy likely to have contracted in the March quarter.”

U.S. stock futures were dumped with E-minis for the S&P500 falling 1.4% while Nikkei futures stumbled 2.7%. EuroStoxx 50 futures declined about 2% while futures for London’s FTSE skidded 1.3%.

Asian share indexes were also a sea of red.

Australia’s benchmark index slid 2.3% while New Zealand was about 1.8% lower.

South Korea’s KOSPI index fell about 3.4%. Chinese shares opened down with the blue-chip CSI300 index easing 0.5%.

That left MSCI’s broadest index of Asia-Pacific shares outside Japan off 1.9% at its lowest since early February. Japanese markets were closed for a public holiday.

The virus has killed 2,592 people in China, which has reported 77,150 cases, and slammed the brakes on the world’s second largest economy.

It has spread to some 28 other countries and territories, with a death toll of around two dozen, according to a Reuters tally.

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Economists have roundly downgraded growth forecasts for China as well as the world as travel restrictions and lockdowns have already hit tourism, supply chain and factory output in a number of countries.

Oxford Economics estimated world economic output growth would fall to nearly zero in the first half of 2020 if the coronavirus outbreak became a global pandemic.

‘MESSY DATA RELEASES’

As investors wagered central banks would step in with policy stimulus to support economic growth U.S. Fed fund futures surged signalling more rate cuts later this year.

The dollar paused at 111.58 against the Japanese yen after falling steeply on Friday.

The losses came as data showed American business activity stalled in February, signalling a contraction for the first time since 2016. The manufacturing sector also clocked its lowest reading since August.

“The data was a wake-up call for the U.S. equity market, hitherto complacent about the impact of the virus,” NAB currency strategist Rodrigo Catril said, adding it “was probably too early to throw the towel” on the greenback.

Despite losses since Friday, the greenback rose 1.7% last week and is still up more than 2.7% so far this year.

“We are likely entering a period of messy and potentially misleading data releases,” Catril said.

“The U.S. had a bad data day, but we think that is just a taste of what is yet to come with other major economies likely to show bad economic numbers too.”

The Australian dollar, considered a liquid proxy for China plays, was down 0.4% at $0.6601 as it languished near an 11-year low.

The euro fell 0.2% to $1.0817.

That left the dollar index slightly higher at 99.581.

Analysts expect the Korean won to stay on its downward spiral against the dollar as one of the favourite risk proxies for investors.

The won has fallen more than 4.5% on the dollar so far this year. It was last down 1% at 1,219.06 after hitting its weakest since August 2019.

In commodities, oil prices slid as investors fretted about crude demand being pinched by the impact of the coronavirus outbreak, while leading producers appeared to be in no rush to curb output.




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Brent crude slumped 2.4%, or $1.4, to $57.09 a barrel while U.S. crude dropped 2.3%, or $1.25, to $52.13 a barrel.

U.S. gold futures climbed 1% to $1,665.1 an ounce. Spot gold jumped to a seven-year high of 1,678.58 after marking its biggest weekly gain last week since early August.




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Financial Markets – Top 5 Things to Watch This Week

While China is slowly getting back to normal, fears over the economic fallout from the spread of coronavirus beyond its borders remain to the fore, so remarks by central bank officials from the U.S. and Europe will be watched for their outlook on the global economy. It’s a quiet week for data with durable goods orders, consumer confidence, and the second reading of fourth quarter growth due out in the U.S. Investors will continue to monitor the U.S. dollar’s progress after it was last week’s big winner in foreign exchange markets (despite Friday’s declines). And while most of earnings season is already in the books, this week will bring results from consumer facing companies. Here’s what you need to know to start your week.

G20 calls for coordinated response to coronavirus
Finance officials from the world’s 20 biggest economies on Saturday called for a coordinated response to the coronavirus outbreak, which the International Monetary Fund predicted would pull down China’s growth this year to 5.6% and cut 0.1% from global growth.

“But we are also looking at more dire scenarios where the spread of the virus continues for longer and more globally, and the growth consequences are more protracted,” said IMF Managing Director Kristalina Georgieva at the G20 Finance Ministers and Central Bank Governors Meeting.

China reported another fall in new cases on Sunday, but world health officials warned it was too early to make predictions about the outbreak as the number of new cases continued to increase in other countries.

Chinese PMI data on Saturday will show the first signs of the outbreak on the world’s second largest economy.

Can the dollar index breach the 100 level?
Leaving aside Friday’s declines, triggered by disappointing U.S. PMI data for February, last week saw the greenback rally to a near three-year high versus the euro, a 10-month high against the yen and an 11-year peak versus the Aussie. So far this month it has risen more than 2% against a currency basket.

The U.S. economy’s relative resilience to coronavirus has made the greenback the safe-haven of choice, at least temporarily.

The weak economic outlook in the eurozone and Japan against the background of the coronavirus epidemic is likely to continue to weigh on the euro and the yen.

The selloff in the yen marks a departure from the pattern in recent years where the Japanese currency rises in times of geopolitical or market turmoil due to Japan’s status as the world’s largest creditor nation.

“All considered we think the dollar should at least retain its strength, with a chance for more appreciation,” FX analysts at ING said in a note. “At this stage, we suspect that a break above 100 in DXY is just a matter of time.”

Fedspeak, U.S data
Federal Reserve Vice Chairman Richard Clarida is to speak at an economic policy conference in Washington on Tuesday, where other speakers include IMF Chief Economist Gita Gopinath and Cleveland Fed President Loretta Mester. Minneapolis Fed President Neel Kashkari and Dallas Fed President Robert Kaplan are also set to make appearances this week, with investors on the lookout for any comments on the virus impact.

Also on Tuesday, a report on U.S. consumer confidence will be closely watched for any indications that the global coronavirus outbreak is hitting sentiment.

Thursday’s durable goods orders data is forecast to be weaker amid a slowdown in factory output in Asia, while the halting of Boeing (NYSE:BA) 737 Max production in mid-January is also likely to weigh. Meanwhile, the second reading of U.S. fourth quarter growth is not expected to be subject to a major revision.




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Eurozone data
Monday’s German IFO report will be central to the direction of the euro this week. The Investing.com consensus is for a reading of 95.3 in the Business Climate Index, down from 95.9 in January. Other key releases will be Friday’s inflation numbers for Germany and France which will be closely watched ahead of the upcoming European Central Bank meeting in March.

ECB President Christine Lagarde is due to deliver remarks at an event in Germany on Wednesday, while several other ECB officials, including Chief Economist Philip Lane will also give speeches this week.

Earnings results
Estimates from Refinitiv point to growth of 3.1% in the S&P 500’s fourth-quarter earnings, defying expectations for a year-over-year decline. In January analysts had forecast a 0.3% fall.

Those figures don’t reflect damage from coronavirus and earnings growth has been boosted by stronger-than-expected results from tech giants including Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL).

This week investors will get results from more consumer-facing companies, including retailer Macy’s (NYSE:M), whose credit rating was cut to junk last week by S&P Global (NYSE:SPGI). Results also are due from Marriott International (NASDAQ:MAR), but that won’t reflect the hit it and other hotel chains are currently taking throughout Asia.




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Financial Markets News: Stocks under pressure as Apple sounds warning on coronavirus

The warning from the most valuable U.S. company sobered investor optimism that stimulus from China and other countries would protect the global economy from the effects of the epidemic.

Asian shares fell and Wall Street was poised to retreat from record highs on Tuesday after Apple Inc (O:AAPL) said it would miss its March quarter revenue guidance as the coronavirus slowed production and weakened demand in China.


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S&P500 e-mini futures (ESc1) slipped as much as 0.4% in Asian trade while Nasdaq futures fell 0.6%.

European stocks were expected to follow suit, with major European stock futures (STXEc1) (FDXc1) (FFIc1) trading 0.5-0.6% lower.

MSCI’s broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) fell 1.0%, while Tokyo’s Nikkei (N225) slid 1.4%, dragged down by tech stocks.

China’s CSI300 (CSI300) blue chip shares gave up 0.5%, following a strong rally that was fueled by hopes Beijing would introduce more policy stimulus.

China’s central bank cut the interest rate on its medium-term lending on Monday, paving the way for a likely reduction in the benchmark loan prime rate on Thursday.

However, sentiment took a subsequent knock as Apple said factories in China were re-opening but ramping up more slowly than expected, reinforcing signs of a broader hit to businesses from the epidemic.

“Apple is saying its recovery could be delayed, which could mean the impact of the virus may go beyond the current quarter,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE:MS) Securities.

“If Apple shares were traded cheaply, that might not matter much. But when they are trading at a record high, investors will be surely tempted to sell.”

Asian tech shares were also hit. Samsung Electronics (KS:005930) dropped 2.9%, Taiwan Semiconductor Manufacturing Co (TSMC) (TW:2330) lost 2.9% and Sony Corp (T:6758) shed 2.5%.

In China, the number of new Covid-19 cases fell to 1,886 on Monday from 2,048 the day before. The World Health Organization cautioned, however, that “every scenario is still on the table” in terms of the epidemic’s evolution.

As China’s authorities try to prevent the spread of the disease, the economy is paying a heavy price. Some cities remained in lockdown, streets are deserted, and travel bans and quarantine orders are in place around the country, preventing migrant workers from getting back to their jobs.

Many factories have yet to re-open, disrupting supply chains in China and beyond, as highlighted by Apple.

“Lifting travel restrictions is taking longer than expected. Initially we thought lockdowns would end in February and factory output would normalize in March. But that is looking increasingly difficult,” said Ei Kaku, currency strategist at Nomura Securities.

Nomura downgraded its China first-quarter economic growth forecast to 3% from a year earlier, half the pace of the fourth quarter, from its previous forecast of 3.8%.

Nomura says there was a risk it could be even weaker.

Also hurting market sentiment was news that the Trump administration is considering changing U.S. regulations to allow it to block shipments of chips to Huawei Technologies from companies such as Taiwan’s TSMC, the world’s largest contract chipmaker.

Bonds were in demand, with the 10-year U.S. Treasuries yield falling 4.2 basis point to 1.546% (US10YT=RR) after a U.S. public holiday on Monday.

Safe-haven gold also rose 0.3% to its two-week high of $1,587.00 per ounce.

In the currency market, the yen ticked up 0.15% to 109.69 yen per dollar while the risk-sensitive Australian dollar lost 0.4% to $0.6686 . The yuan was steadier for now, trading at 6.9950 yuan per dollar .

The euro, grappling with worries about sluggish growth in the euro zone, edged down 0.1% to $1.0833 (EUR=), near its 33-month low of $1.0817 touched on Monday.

Oil prices slipped on fresh concerns over the economic impact of the coronavirus outbreak in China.

Brent crude (LCOc1) fell 0.6% to $57.30 a barrel, while U.S. West Texas Intermediate (WTI) crude (CLc1) slipped 0.3% to $51.90 a barrel.

London copper prices also retreated 0.3% to $5,797 a tonne, slipping from Monday’s three-week high.


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Intesa Sanpaolo launches €4.9bn bid to buy UBI Banca


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Intesa Sanpaolo launches €4.9bn bid to buy UBI Banca <


Intesa Sanpaolo, Italy’s biggest domestic lender, has launched a €4.86bn ($5.26bn) takeover bid for its rival UBI Banca in an audacious attempt to kick-start consolidation in Italy’s fragmented banking sector.

Just before midnight on Monday local time, Turin-headquartered Intesa unveiled an all-share offer to buy Italy’s fourth-biggest lender through a series of notices detailing its plans to issue new shares to fund the deal.

If successful, the combination would create the seventh-largest bank in the eurozone with €1.1tn in assets and give Intesa an additional 3m retail, small business and private-banking clients, the company said.

Intensa has offered to pay 17 new shares for every 10 UBI Banca shares tendered. It said the bid corresponds to a value of €4.25 per share in UBI Banca, or a 27.6 per cent premium to the Bergamo-based lender’s share price at the end of last week.

Shares in UBI Banca rose 5.5 per cent in Monday’s trading and have climbed 28 per cent since the start of February. Intesa shares are up nearly 11 per cent in the same period giving the company a market value of €44bn.

“Intesa considers UBI amongst the best Italian banks . . . [it] has local entrenchment in the most dynamic regions of the country, enjoys outstanding results that have been achieved thanks to the excellent job of both its CEO and its management team, and has a sound business plan,” the lender said in a statement.

The bid makes Intesa chief executive Carlo Messina the first to act decisively among the country’s largest lenders, responding to supervisors’ repeated appeals for Italian banks to consolidate to reduce excessive competition, cut costs and boost the sector’s persistently low profitability.

The country’s banks have been on the front line of tensions between Italy and Europe, not only over bad loans during the European debt crisis but also over its expansionary budget. Investor concerns over the package caused spreads on sovereign debt to balloon in 2018, reviving fears of a vicious cycle between banks and the sovereign, known colloquially as a “doom loop”.

Intesa will have to get permission from the European Central Bank for the deal to go ahead, and negotiate with the Italian government and unions over 5,000 jobs reductions it plans as part of the deal. The acquirer forecasts the deal could lead to €730m in annual expense and revenue synergies, but will cost €1.3bn before tax to execute.


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To address competition concerns, Intensa said its offer includes a binding agreement to sell between 400 and 500 branches of the combined group to Modena-based BPER Banca.

More than a decade on from the 2008-09 financial crisis, most banks across continental Europe are still battling to revive returns amid a raft of new capital regulations and misconduct fines. The vast majority trade at a significant discount to the book value of their assets, but despite this there have been relatively few transformational deals.

Executives have become increasingly vocal about the need for consolidation after the already struggling sector was dealt a further blow when the ECB cut interest rates further into negative territory for the foreseeable future, shrinking already small margins on lending.

While keen on domestic deals, Mr Messina has been a vocal critic of cross-border European consolidation in contrast to his counterpart at Milan-based rival UniCredit, Jean Pierre Mustier. The Frenchman has explored deals with France’s Société Générale and Germany’s Commerzbank, the Financial Times has previously reported.

In the past UBI held takeover talks with Banca Popolare di Milano and Banco Popolare, before its two other rivals merged in 2016, the FT reported at the time.


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Alstom Confirms Talks On Potential $7 Billion Bombardier Deal

French train maker Alstom (PA:ALSO) has confirmed it is in talks on the possible acquisition of the train business of Canada’s Bombardier (TO:BBDb), a potential $7 billion deal that could help it build scale in the increasingly competitive rail sector.

A deal could be important for Alstom, maker of the TGV bullet trains which speed between French cities such as Paris and Nice, as it looks to compete with China’s CRRC Corp (SS:601766), the world’s largest train maker.

0321 biz Bombardier breakup

Alstom was blocked last year by European regulators from merging with Germany’s Siemens (DE:SIEGn).

“Alstom confirms being in discussions with Bombardier regarding a possible acquisition of Bombardier Transportation … No final decision has been made,” Alstom said in a statement on Monday.

A source familiar with the matter had told Reuters on Sunday that Alstom was close to agreeing to buy Bombardier’s train business in a deal giving the unit a value of $7 billion on an enterprise basis combining equity and debt.

Alstom shares were up 1.9% by 0855 GMT.

Train makers are eyeing consolidation to reduce costs through scale and improve thin rolling stock margins as they face competition from CRRC.


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An Alstom acquisition of Bombardier Transportation, which is headquartered in Berlin and which has plants worldwide including at Derby in the English midlands and at Mannheim in Germany, would likely attract antitrust scrutiny, though some analysts have said there could be less of a regulatory barrier to a deal since the pair has a lower European market share in high-speed rail and signaling.

LESS RESISTANCE

The French government, which had criticized the EU’s veto on the Siemens merger, is looking on the deal with Bombardier with a favorable eye and expects less EU resistance, a source familiar with the government’s thinking said.

European regulators had argued the Alstom-Siemens deal could have hurt competition and led to higher prices for consumers despite concessions made buy the companies.

A potential agreement with Bombardier would unite companies with an estimated $17 billion in combined revenues.

Deutsche Bank (DE:DBKGn) analysts said in a note that a takeover of Bombardier’s rail division would be accretive to Alstom’s earnings per share by around 17 percent.

A deal would also follow Bombardier’s decision last week to sell off its stake in the A220 passenger jet program to Airbus (PA:AIR) and the Quebec government.

Bombardier has been struggling to contain higher rail costs generated by problematic contracts in its nearly $36 billion order backlog.

The Canadian group has been shedding businesses to improve its financial position after it faced a cash crunch in 2015 while bringing a new plane to market. Bombardier has $9.7 billion in outstanding bonds, according to Refinitiv data.


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Stock Market: 3 Things Under The Radar This Week

Attention remained on China and the coronavirus this week as stocks and commodities swung on differing reports of the numbers of new cases.

Among those headlines and another busy week of earnings, investors may have missed a potential opportunity in the luxury sector, with Wall Street expressing confidence in an Italian-French conglomerate.

While Fed chief Jay Powell was on Capitol Hill, there was plenty of other comments from Fed governors.

And looking to commodities, traders may see the effects of a Chinese slowdown all through the end of the year.

Here are three things that flew under the radar this week.

1. The View is Bright at EssilorLuxottica

Turning to the luxury goods sector for investment ideas at this point in time may not sound like clear thinking, but EssilorLuxottica could be the company to turn to for serious upside.

Known for brands such as Ray-Ban, Oakley and Michael Kors, the Italian-French eyewear conglomerate was formed by a merger in late 2018 and swiftly became one of the darlings of a sector heavily exposed to the big-spending Asian consumer.

From a low of 97.38 euros at the start of 2019, the share price soared almost 50% to 144 euros by November.

The news since hasn’t been so good.

Firstly, the company was the target of a 190-million-euro fraud at a Thai factory. As a company with a market capitalization of more than 60 billion euros, this shouldn’t make a big difference, but it highlighted industry concerns about the way the company was being run with the European management teams of the two newly-merged companies clashing.

Then came the ongoing coronavirus outbreak in China, now officially called Covid-19. With entire cities in the world’s second-biggest economy cordoned off and travel severely curtailed, the luxury industry faces a major sales hit.

Chinese consumers account for more than a third of global spending on luxury goods, while consultancy Bain & Company estimated they accounted for 90% of last year’s increase in revenues to 281 billion euros.

Finally, earlier this month EU antitrust regulators opened an in-depth investigation into the company’s 7.2-billion-euro bid for Dutch opticians group GrandVision on the grounds the deal could push up prices. It will decide by June 22 whether to clear or block the deal.

EssilorLuxottica’s share price has rebounded back a touch to 138 euros, after falling to 134 euros at its low point in 2020. And Morgan Stanley (NYSE:MS) sees plenty more upside.

“EssilorLuxottica looks set to be the winning player in the consolidating and structurally growing eyewear industry,” is said in a research note this week.

The bank has a conservative 12-month price target of 150 euros. This is based on synergies from the original merger in the region of 800 million euros, at least 200 million euros ahead of company guidance; the GrandVision acquisition getting full regulatory approval by the final quarter of this year and adding another 350 million euros of synergies; and a positively skewed risk/reward basis as the stock has underperformed all other best-in-class global consumer players over the past year.

But Morgan Stanley (NYSE:MS) also sees upside to 200 euros over the next 12 months in a blue-sky scenario of impeccable execution.

2. Powell Didn’t Do All the Fed Talking

There were two days of testimony (with Q&A) from Federal Reserve Chairman Jerome Powell this week. Powell appeared before Congress for his semiannual appearance and naturally most of the Fed headlines were about the chief of the FOMC.

But there were plenty of other Fed officials offering insights.

The comments were mostly positive, chiming with Powell’s analysis that the U.S. economy still looks solid.

Cleveland Fed President Loretta Mester said Covid-19 was a risk to her forecast, but stuck by her view of GDP up 2% this year. New York Fed President John Williams (NYSE:WMB) said the U.S. economy is in a “very, very good place,” while St. Louis Fed President James Bullard said rate cuts had set the stage for a soft landing to 2% growth with no deeper slowdown.


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But Minneapolis Fed President Neel Kashkari thinks there’s plenty more Fed ammunition, suggesting the FOMC should still be cutting rates from the current level of 1.5% to 1.75%.

Monetary policy is “close to neutral or slightly accommodative today, but not very accommodative,” Kashkari said at a town hall.

As for Covid-19, “(i)f it really was large enough to hit the U.S. economy, one could imagine monetary policy responding, not to the virus itself but to just to try to help the U.S. economy manage its way through until the public health officials can get their arms around it,” he said.

And Kashkari had a Valentine’s Day wish for all the Fed Heads on Twitter.

Roses are red

Violets are blue

Last year I said there’s slack in the labor market

Today it’s still true

3. The Biggest Oil Shock Since 2008?

Oil prices managed a weekly gain on hopes that OPEC and Russian will come through with production cuts that balance the demand destruction that’s already being seen from China’s slowdown due to Covid-19.

But some are arguing that OPEC’s plan of cutting 600,000 won’t be enough to help prices when facing what could be the biggest disruption since the Financial Crisis.

“The economic shut-down in China will cause the largest negative oil demand shock since 2008,” Bjørnar Tonhaugen, Rystad Energy’s senior vice president and head of oil markets, said in a note.

“Even though the chaos unfolding in Libya has wiped out most of its oil production, and even if OPEC’s output cuts are fully applied, they will not be enough to fill the demand gap now exacerbated by the coronavirus,” Tonhaugen said.

Rystad predicts a first-quarter surplus of 700,000 bpd and a stock build of 1.3 million bpd.

And while “the third quarter looks a bit better for balances … fourth quarter balances suggest continued pressure on the market and OPEC+ despite the warranted extension of the current output agreement through year-end,” it said.


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Day Trading: 3 Things Under The Radar This Week


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Although closing Friday on a down note, stocks rallied sharply this week as the coronavirus, earnings and employment data took most of investors’ attention (along with the wild swings in Tesla). But among things that may have gone overlooked, two U.K. companies that could be surfing the sustainability wave came into view.


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The Trump administration kept coal as a talking point. And the Fed indicated that while the sidelines is still where it feels most comfortable, the impact of the coronavirus isn’t being ignored.

Here are three things that flew under the radar this week.

1. Will the Plastic Purge Create a Cardboard Boon?

With environmental and sustainability considerations playing an ever-greater role in the decisions of big institutional investors, it’s worth taking a moment to think how all those big passive bucks could move a stock that checks the right boxes.

Boxes being the operative word. Cardboard boxes, to be precise.

Two London-listed stocks offer interesting exposure to one of the great megatrends of the coming years: the shift away from plastic packaging.

Irish-based Smurfit Kappa (LON:SKG) and U.K.-based DS Smith (LON:SMDS), which is also Europe’s largest recycler of paper, both stand to benefit.

Smurfit stock rose more than 8% this week on the back of results that showed margins widening and debt (a perennial concern, given the cyclicality of the business) falling to the middle of its target range. While the breadth of its operations throws up a fair amount of problems – in the last two years it was expropriated in Venezuela and was fined $136 million for anti-competitive behavior in Italy – its core operations in Europe, the U.S. and emerging markets are solid.

DS Smith is arguably the more stable business by virtue of its concentration on fast-moving consumer goods, less prone to downturns than discretionary packages delivered by Amazon (NASDAQ:AMZN). It’s also less exposed to exotic places like Venezuela. It stands to be a big beneficiary of initiatives like that announced by U.K. supermarket chain Sainsbury’s, which promised last week to throw 1 billion pounds at getting plastic out of its supply chain, initiatives that are likely to become ever more common as the revolt against plastic spreads.

2. U.S. Sends $64 Million Canary Into Coal Mines

It sounded just like the kind of thing that would have gotten green groups all up in arms — a coal-first energy policy that conjures images of more carbon emissions in a world that needs exactly less.

Yet the U.S. Coal-FIRST — yes, in caps — initiative floated by Energy Secretary Dan Brouillette was clever enough in language that it got the attention it wanted without the bad press.

What Brouillette really announced was a $64 million “Flexible, Innovative, Resilient, Small, Transformative” initiative to develop the coal plant of the future needed to provide secure and reliable power to the U.S. grid.

“Coal is a critical resource for grid stability that will be used in developing countries around the world well into the future as they build their economies,” Brouillette said in a statement issued by the Department of Energy.

While from the text we could see where the energy secretary was going, those hearing the policy the first time — an announcement Brouillette chose to make during a speech at the Atlantic Council in Washington Friday morning — would be forgiven for thinking that President Donald Trump was trying to throw coal miners yet another lifeline ahead of his November reelection bid.

As Keith Johnson at foreignpolicy.com observed in an October post, “Trump came into the White House vowing to end the Obama administration’s so-called war on coal and Make Anthracite Great Again.”

“Instead, Trump is overseeing a cascading collapse of America’s coal industry, a trend that could have political consequences for him in the 2020 U.S. presidential election,” Johnson wrote, noting that there were eight bankruptcies filed by coal mining companies last year alone.

To be sure his words weren’t taken out of context, Brouillette said soon after announcing his Coal-FIRST policy that “the efforts we’re undertaking is not to subsidize the industry and preserve their status, if you will, as a large electricity generator.”

“It is simply to make the product cleaner and to look for alternative uses for this product or this commodity,” he said. “No one is going to deny the fact or argue with the point that coal as a percentage of U.S. electricity generation is declining and will probably continue to decline.”

“The evolving U.S. energy mix requires cleaner, more reliable, and highly efficient plants,” Steven Winberg, the DOE assistant secretary for fossil, added in the statement. “Technologies developed for the Coal FIRST initiative will lead to just that — reliable, highly efficient plants with zero or near-zero emissions.”

3. Fed Factoring in Coronavirus

For months, traders have been eager to find out what additional factors, apart from the pace of inflation, will drive a material risk to the Federal Reserve’s outlook and force it off the sidelines. But Fed Chairman Jerome Powell has given little away.

That all changed early this week when the Fed chief identified a new risk to the central bank’s outlook on the economy: the coronavirus.

“More recently, possible spillovers from the effects of the coronavirus in China have presented a new risk to the outlook,” Powell said in the latest monetary policy report, submitted to Congress on Friday

“The recent emergence of the coronavirus, however, could lead to disruptions in China that spill over to the rest of the global economy. Amid weak economic activity and dormant inflation pressures, foreign central banks generally adopted a more accommodative policy stance,” the Fed chairman added.

The Fed’s worries about the risk to its outlook are not without merit, with analysts predicting that the virus will do most of its damage in the first quarter of this year.

Goldman Sachs said the impact of the disease would lower global GDP by up to 2% in the first quarter, 1% directly from China and about 1% from spillover effects.

Whether the impact of the virus will represent a material risk to the U.S. central bank’s outlook remains a hot topic of debate.

“The near-term impact is quite large,” Goldman Sachs said. “What happens to 2020 as a whole really depends on how quickly the episode is brought under control.”

The Federal Reserve fingerprints are all over the more-than-decade-long bull run in stocks. Its efforts to steady the repo market, which began in October, have coincided with a sharp upswing in stocks. But those hoping for the Fed to act sooner rather than later could be left disappointed.

“The new coronavirus outbreak abroad has created some new risks to the near-term external growth backdrop, but there is little apparent reason for monetary policymakers to consider rate cuts at the moment, and we continue to expect the Fed to sit on the sidelines through 2020,” RBC said in a note.




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⇑⇓ Best Trading Platform Europe ⇓⇑


what is the best stock trading platform in Europe for 2020? ….


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


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.


A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today


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.


 

Tesla Resume Production In Shanghai


◊ Tesla Production In Shanghai ◊


⇑⇓ StockMarketNews.Today ⇓⇑


U.S. electric carmaker Tesla‘s factory in China’s financial hub of Shanghai will resume production on Feb. 10 with assistance to help it cope with a spreading epidemic of coronavirus, a Shanghai government official said on Saturday.

Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future

Many factories across China shut in late January for the Lunar New Year holiday that was originally due to end on Jan. 30 but which was extended in a bid to contain the spread of the new flu-like virus that has killed more than 700 people.

Tesla warned on Jan. 30 that it would see a 1-1.5 week delay in the ramp-up of Shanghai-built Model 3 cars as a result of the epidemic, which has severely disrupted communications and supply chains across China.

Tesla Vice President Tao Lin said this week that production would restart on Feb. 10.

“In view of the practical difficulties key manufacturing firms including Tesla have faced in resuming production, we will coordinate to make all efforts to help companies resume production as soon as possible,” Shanghai municipal government spokesman Xu Wei said.

The $2 billion Shanghai factory is Tesla’s first outside the United States and was built with support from local authorities. It started production in October and began deliveries last month.

The Shanghai government also said on Saturday it would ask banks to extend loans with preferential rates to small companies and exempt firms in hard-hit sectors like hospitality from value-added tax, among other measures to prop up businesses during the epidemic.

Such assistance would also apply to foreign companies, it added.







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Best Books For Making Money In The Stock Market


#1 – The Intelligent Investor. (Revised Edition)

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.

Over the years, market developments have proven the wisdom of Graham’s strategies. While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.

Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.



#2 – Encyclopedia of Chart Patterns

In this revised and expanded second edition of the bestselling Encyclopedia of Chart Patterns, Thomas Bulkowski updates the classic with new performance statistics for both bull and bear markets and 23 new patterns, including a second section devoted to ten event patterns. Bulkowski tells you how to trade the significant events — such as quarterly earnings announcements, retail sales, stock upgrades and downgrades — that shape today?s trading and uses statistics to back up his approach. This comprehensive new edition is a must-have reference if you’re a technical investor or trader. Place your order today.
“The most complete reference to chart patterns available. It goes where no one has gone before. Bulkowski gives hard data on how good and bad the patterns are. A must-read for anyone that’s ever looked at a chart and wondered what was happening.”
— Larry Williams, trader and author of Long-Term Secrets to Short-Term Trading.



#3 – How to Make Money in Stocks

Anyone can learn to invest wisely with this bestselling investment system!… Through every type of market, William J. O’Neil’s national bestseller, How to Make Money in Stocks, has shown over 2 million investors the secrets to building wealth. O’Neil’s powerful CAN SLIM® Investing System―a proven 7-step process for minimizing risk and maximizing gains―has influenced generations of investors.

Based on a major study of market winners from 1880 to 2009, this expanded edition gives you:

>Proven techniques for finding winning stocks before they make big price gains
>Tips on picking the best stocks, mutual funds, and ETFs to maximize your gains
>100 new charts to help you spot today’s most profitable trends
>PLUS strategies to help you avoid the 21 most common investor mistakes!

“I dedicated the 2004 Stock Trader’s Almanac to Bill O’Neil: ‘His foresight, innovation, and disciplined approach to stock market investing will influence investors and traders for generations to come.’”
―Yale Hirsch, publisher and editor, Stock Trader’s Almanac and author of Let’s Change the World Inc.

“Investor’s Business Daily has provided a quarter-century of great financial journalism and investing strategies.”
―David Callaway, editor-in-chief, MarketWatch

“How to Make Money in Stocks is a classic. Any investor serious about making money in the market ought to read it.”
―Larry Kudlow, host, CNBC’s “The Kudlow Report”.





Wall Street Slips After Jobs Report


◊ Stock Market News Jobs Report ◊


StockMarketNews.Today


Wall Street pulled back from record levels on Friday, as investors assessed the U.S. employment report that showed jobs growth accelerated in January but included a downward revision to some previous numbers.

Nonfarm payrolls increased by 225,000 jobs last month, the Labor Department’s data showed, much higher than 160,000 jobs additions expected by economists polled by Reuters. However, the economy created 514,000 fewer jobs between April 2018 and March 2019 than originally estimated, suggesting job growth could significantly slowdown this year.

“Where the market is right now, it likes to see an economy that’s not too hot and not too cold because a much stronger economy suggests higher interest rates,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

“When you get the kind of upward move in markets, it’s not surprising to see people wanting to go into the weekend quite as long.”

Technology stocks, which outperformed broader markets this week, slipped 0.7%, weighing the most on the S&P 500. A strong four-day rally this week has put the benchmark index on pace for its best week in eight months as investors took comfort from China’s efforts to limit the economic damage from the coronavirus outbreak.

The new infections in mainland China on Thursday were down from Wednesday and Tuesday’s figures, but experts warned it was too early to identify a trend.

At 9:48 a.m. ET, the Dow Jones Industrial Average was down 0.58% at 29,208.83. The S&P 500 fell 0.44% to 3,331.09 and the Nasdaq Composite dropped 0.56% to 9,519.02.

More than 300 S&P 500 companies have reported fourth-quarter results so far, of which about 70% have topped earnings estimates, according to IBES data from Refinitiv.

Take-Two Interactive Software Inc (O:TTWO) slumped 10.6% after the videogame publisher missed estimates for quarterly adjusted revenue. AbbVie Inc gained 4.3% after the drugmaker forecast 2020 earnings above analysts’ expectations.

Uber Technologies Inc (N:UBER) shares gained about 5.7% after the ride-hailing company moved forward by a year its target to achieve a measure of profitability to the fourth quarter of 2020. Declining issues outnumbered advancers for a 2.51-to-1 ratio on the NYSE and a 2.64-to-1 ratio on the Nasdaq.

The S&P index recorded 18 new 52-week highs and one new low, while the Nasdaq recorded 31 new highs and 31 new lows.








Amazon Says It Will Create 15,000 Jobs In Bellevue

StockMarketNews.Today — Amazon said it expects to bring the 15,000 jobs to Bellevue over the next few years. More than 2,000 employees currently work in Bellevue, and the company has about 700 job openings in the city.

The company opened its first office building in Bellevue in 2017. The city is also where Amazon got its start. Amazon CEO Jeff Bezos founded the company in 1994 out of a 1,540-square-foot house in West Bellevue.

Amazon, which is headquartered in nearby Seattle, has continued to expand there despite rising tensions with local officials. Last month, the Seattle City Council council passed a bill that establishes new restrictions on corporate donations in local elections, which serves as a blow to Amazon, after it donated a record $1.5 million into Seattle’s city council races in 2019. Additionally, Seattle city council member Kshama Sawant has recently reignited efforts to enact a “head tax” on the city’s largest companies, such as Amazon, with the goal of using it to fight Seattle’s housing crisis.

The company has been growing its overall headcount and footprint. In its annual filing submitted last week, Amazon disclosed that it now has 798,000 workers across the globe, which is a 23% increase from the year-ago period. On the company’s fourth-quarter earnings call, Amazon CFO Brian Olsavsky said some of the hires were delivery workers, as it builds out one-day and same-day delivery for Prime subscribers.

Amazon is also growing in New York, where it recently signed a deal to lease more than 335,000 square feet of office space in Hudson Yards and expects to hire more than 1,500 employees. The move comes after Amazon abandoned its efforts to build a second headquarters in New York’s Long Island City neighborhood.

The company is also building out operations in northern Virginia, where it’s building its second headquarters, dubbed HQ2. So far, Amazon has hired 400 employees to work out of leased offices in Crystal City, Virginia. It also plans to bring 5,000 jobs to Nashville, Tennessee, where it expects to build two towers.







◊ How To Make Money Online◊


Internet offers many opportunities to make a lot of money. Whether you’re looking to make some fast cash, or you’re after long-term, more sustainable income-producing results, there are certainly ways you can make money online today. The truth is that making money online isn’t as difficsult as most make it out to seem.

 

However, if you’re looking for realistic ways to make money now, then it really truly does boil down to 11 paths you can take towards profit. Some will provide you with immediate results, helping you to address your basic monthly necessities, while others have the potential to transform your life by revolutionizing your finances in the long term…



1. Make Money as a Life Coach

LIFE

Money Invested: $45 | Time Invested: 110 Hours | Money Earned (30 days): $979

How To Make Money as Life Coach: Life coaching is the process of helping people identify and achieve personal goals through developing skills and attitudes that lead to self-empowerment. Life coaching general deals with issues such as work-life balance and career changes, and often occurs outside the workplace setting. Learn More …



2.  Make Money With Affiliate Programs

Affiliate

Money Invested: $1,300 | Time Invested: 72 Hours | Money Earned (30 days): $7,742

How To Make Money In Affiliate Marketing: Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make. Learn More …



3. Make Extra Money Online Simply By Sharing Your Opinions

opinion

Money Invested: $1 | Time Invested: 46 Hours | Money Earned (30 days): $429

How To Make Money by Sharing Your Opinion: A Review ( Opinion ) is an evaluation of a publication, service, or company such as a movie, video game, musical composition, book; a piece of hardware like a car, home appliance, or computer; or an event or performance, such as a live music concert, play, musical theater show, dance show, or art exhibition. Learn More …



4. Make Money With an Online Drop Shipping Business

drop

Money Invested: $75 | Time Invested: 144 Hours | Money Earned (30 days): $2,915

How To Make Money With an Online Drop Shipping Business: Drop shipping is a business model where you send your customers’ orders to a manufacturer or wholesaler, and they send the products directly to your customer. Learn More …





Funding Opportunities Available for All United States Citizens


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German Industry Output Suffers Biggest Slump Since 2009

Stock Market NewsGerman industrial output registered its biggest drop in more than a decade in December, highlighting the weakness of the manufacturing sector that is dragging on overall growth in Europe‘s largest economy.

Industrial production tumbled by 3.5% on the month, undershooting expectations for a 0.2% fall, figures released by the Statistics Office showed. The drop was the biggest since January 2009, a Statistics Office official said.

The November output reading was revised to an increase of 1.2% after a previously reported 1.1% rise.

Separate trade figures showed seasonally adjusted exports edged up by 0.1% on the month while imports fell by 0.7% in December.







⇑⇓ Best Trading Platform Europe ⇓⇑


StockMarketNews.Today — what is the best stock trading platform in Europe for 2020? ….  How To Choose The Best Online Broker in Europe { 2020 } …


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


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.


A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today


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.


trade-job


◊ Best Stock Trading Platform In Europe {2020} : 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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Commodity-Trading-today





Best Stock Market Sectors For 2020

♦ Stock Market Predictions For 2020 ♦ StockMarketNews.Today — After another big year for the stock market and the U.S. economy in 2019, investors are looking ahead to 2020 to determine which sectors will lead the next phase of the… Read More ›





  • Best Books For Making Money { 2020 }

    Best Books For Making Money ◊ #1 – The Book on Making Money After skipping college, Steve Oliverez worked a series of low-paying jobs before setting a remarkable goal for himself – to double his income every year. In… Read More ›

  • The Best Movies Related To Stock Market {2020}

    Top Movies Related To Stock Market {2020} #1 – The Big Short The Big Short is a 2015 American biographical comedy-drama film directed by Adam McKay. Written by McKay and Charles Randolph, it is based on the 2010 book The… Read More ›

  • Best Stock Market Books For Beginners {2020}

    Best Stock Market Books For Beginners {2020} Amazon #1 – The Intelligent Investor. (Revised Edition) 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… Read More ›

  • How To Make Money Online by Investing Little Money

    How To Make Money Online by Investing Little Money – StockMarketNews.Today ◊ Internet offers many opportunities to make a lot of money. Whether you’re looking to make some fast cash, or you’re after long-term, more sustainable income-producing results, there… Read More ›

  • How To Make Money During Stock Market Correction?

    How to Deal With a Stock Market Correction ◊ Stock market corrections are scary but normal. In fact, they’re a sign of a healthy market in most… Read More ›

  • How To Make Money In Online Stock Trading?

    Investing in the stock market can be a great way to have your money make money…  Stock trading is not a risk-free activity, and some losses are inevitable. However, with substantial research and investments in the right… Read More ›





Today’s Stock Market News { Wednesday – 5th February 2020 }



Stock Market News — { Wednesday – 5th February 2020 }

Here’s what you need to know in financial markets on Wednesday, 5th February.



1. Coronavirus toll nears 500; markets grasp at news of drug progress

The death toll from the coronavirus reached 493, another rise of over 16% on the previous day, but more than twice as many people infected by the disease have now recovered. Fatal cases remain highly concentrated in the Hubei region around Wuhan, where the outbreak originated.

Markets in Europe picked up on reports of progress by lab researchers with drugs aimed at treating the disease, while an institute in Wuhan applied for a patent on an antiviral drug developed by Gilead Sciences (NASDAQ:GILD), threatening to revive U.S.-China tensions over intellectual property.

Apple (NASDAQ:AAPL) supplier Hon Hai revised down its sales outlook for the year citing the virus, while Disney said it expects the closure of its theme parks in Shanghai and Hong Kong to hit operating profits by a combined $175 million.

2. Stocks, oil set for higher opening on virus optimism

U.S. stock markets are set for another strong opening, helped by more solid gains in Asia and Europe overnight, which in turn reflected the Chinese central bank’s liquidity measures this week and the – still somewhat speculative – reports of progress in finding drugs to treat the coronavirus.

By 6:30 AM ET (1130 GMT), Dow 30 futures were up 264 points or 0.9%, while S&P 500 futures were up 0.9% and Nasdaq 100 futures were up 1.0%.

In China, the Shanghai Composite had ended up 1.3% while in Europe, the Stoxx 600 was up 1.1%.

Crude oil futures had rebounded overnight after dipping below $50 for the first time in a year. U.S. crude futures were up 2.9% at $51.06 a barrel, while gold futures were flat at $1,556.15 and the U.S. 10-Year benchmark Treasury yielded 1.64%, up three basis points from late Tuesday.

The bounce in crude is set to be tested by the release of government inventory data at 10:30 AM ET (1530 GMT).

3. GM earnings in focus after Ford slumps; ICE-eBay tie-up also eyed

Earnings seasons grinds on, with the focus Wednesday falling on General Motors after Ford Motor slumped 10% in after-hours trading on the back of a gloomy outlook for 2020. Ford’s figures made for an interesting counterpoint to the wild, but volatile, surge in Tesla (NASDAQ:TSLA) stock on Tuesday amid signs that the company’s valuation had lost all relation to any realistic development in sales and profit in the near term.

Also reporting in the course of the day are pharma giant Merck, Humana, Boston Scientific , Spotify and Metlife. Qualcomm completes day’s action after the bell.

Another stock likely to be in focus Wednesday is Intercontinental Exchange Group. ICE (NYSE:ICE), which owns the New York Stock Exchange, confirmed late on Tuesday it had offered to buy struggllng online marketplace eBay (NASDAQ:EBAY), in a radical departure for a group which has so far concentrated only on wholesale financial markets. ICE stock, which fell 7.5% on Tuesday on initial reports of talks, recovered 0.8% in after-hours trading as it emerged that no talks were currently in progress.

4. ADP’s report to trail Friday payrolls ballyhoo

ADP (NASDAQ:ADP) will update the market on the U.S. private-sector labor market, amid expectations of a slowdown in hiring at the start of the year after the December numbers surged to a seven-month high.

Analysts polled by Investing.com expect a gain of 156,000 in what is widely seen as the dress rehearsal for the broader government report on payrolls on Friday. The report is due at 8:15 AM ET.

Economic data around the world were mixed: China’s service-sector purchasing managers index fell short of expectations, while the same index in the euro zone outperformed, pushing the composite PMI to a five-month high of 51.3. The ISM’s survey of non-manufacturing activity will be released at 10 AM ET.

5. Buttigeig wins in Iowa as Washington theatricals intensify

Pete Buttigeig emerged as the winner of the Democratic Party’s Iowa caucuses, with Vermont Senator Bernie Sanders a close second and Massachusetts Senator Elizabeth Warren a respectable third. Former Vice-President Joe Biden trailed badly in fourth place after a lackluster campaign.

Buttigeig capitalized on the inability of Sanders and Warren to campaign more actively in the state during the impeachment trial of President Donald Trump, which is expected to end today with his acquittal by a Republican-controlled Senate.

Trump’s State of the Union address on Tuesday passed without any major policy initiatives being announced, leaving the public to focus on a theatrical exchange of insults between the President and House Speaker Nancy Pelosi.


bond-bomb




Easy Ways To Make Money From Home


Internet offers many opportunities to make money from home. Whether you’re looking to make some fast cash, or you’re after long-term, more sustainable income-producing results, there are certainly ways you can make money online today. The truth is that making money online isn’t as difficsult as most make it out to seem. However, if you’re looking for realistic ways to make money now, then it really truly does boil down to 11 paths you can take towards profit. Some will provide you with immediate results, helping you to address your basic monthly necessities, while others have the potential to transform your life by revolutionizing your finances in the long term…




1. Make Money as a Life Coach (Using An Internationally-Recognized Certification Program… )

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Today’s Stock Market News { 1 February, 2020 }

Today’s Stock Market News — U.S. equity markets wiped out their gains for the year on Friday, following European and Asian shares lower as concern escalated about the impact of the coronavirus on global growth.

The death toll from the epidemic had risen to 213, Beijing said, with another 9,811 confirmed cases worldwide and a further 15,000 suspected. The US announced restrictions on entry to the country for foreigners who have recently travelled to China, and airlines cancelled flights to China.

The US equity benchmark, the S&P 500 index, closed down 1.8 per cent and the Dow Jones Industrial Average fell more than 2 per cent. Both registered their biggest weekly percentage declines since August.

Weighing on European stocks alongside coronavirus fears was economic data that showed the eurozone’s fourth-quarter growth in 2019 was only 0.1 per cent, below expectations of 0.2 per cent.

Caterpillar, the world’s biggest construction and mining equipment maker, cast a further shadow, after it reported lower sales for the past quarter and forecast worse than expected earnings for this year. Strong earnings from Amazon limited the decline of the tech-weighted Nasdaq Composite index to 1.69 per cent.

The coronavirus outbreak will reduce US economic growth by 0.4 percentage points in the first quarter in the face of declining numbers of tourists from China and exports to Asia, according to Goldman Sachs economists.

“The market reaction may deepen further if the virus spreads further,” said Kristina Hooper, chief global market strategist for Invesco. “The most recent revelation of new infections in China and elsewhere suggests that the market will be faced with further downside risks.”

With Friday’s drop, the S&P 500 wiped out its gains for 2020, having been up 3.1 per cent at its highest close earlier this month. The benchmark index is now down 0.2 per cent year-to-date, while the Dow is down 1 per cent and the Nasdaq Composite’s 2020 gain has been trimmed to 2 per cent.

Bourses in Paris and Frankfurt earlier closed down more than 1 per cent, while the Stoxx Europe 600 was 1.1 per cent lower, leaving the continent-wide benchmark down 3 per cent for the week.

Eurostat data revealed the eurozone ended last year with a whimper, as the French and Italian economies both shrank unexpectedly, denting hopes that the region was poised to rebound from its recent sluggish performance.

Government bonds in the eurozone extended their gains this week following the disappointing growth data, pushing yields to fresh lows for the year. The yields on the 10-year German Bunds and UK gilts were down 2 basis point to minus 0.42 per cent and 0.53 per cent, respectively.

US Treasury yields also sank. The yield on the benchmark 10-year Treasury note fell to 1.50 per cent, the lowest since October. The 30-year Treasury bond yield fell below 2 per cent, the lowest since September.

Bonds had already rallied significantly in recent days as fear over the spread of coronavirus fuelled demand for haven assets.

Traders were pricing in at least one rate cut by the Federal Reserve in July, with indications of another rate cut increasing for later this year.

“The market impact of the coronavirus outbreak in China . . . increasingly resembles last year’s trade-war-driven turmoil in May and August,” said Jonas Goltermann at Capital Economics. “But unless the fallout from the epidemic escalates significantly, it is hard to see the sharp falls in bond yields persisting.”

Worries surrounding the coronavirus have consequently hit Asian markets. Hong Kong’s Hang Seng closed down 0.5 per cent on Friday while South Korea’s Kospi ended its session 1.3 per cent lower.




Traders Pay Up For Protection Against Sharp Falls In US Stocks

Stock Market News Today— Traders have been scrambling to protect themselves from a collapse in US stocks, spooked by the coronavirus outbreak, the looming presidential race and the sheer strength of last year’s rally.

The US equity market climbed 29 per cent in 2019 and started this year strongly, but the spreading nervousness has sent the S&P 500 index down by about 2.5 per cent since the middle of the month.

The Cboe Volatility index — known as the market’s “fear gauge” — suggests that traders are now bracing for sharper moves. The 10-day moving average volume of Vix call options — derivatives that allow traders to benefit from a spike in turbulence — has increased from 200,000 traded at the start of January to about 400,000.

The Vix itself has climbed from a low of about 12 points in mid-January to over 18 on Thursday, when the S&P 500 index was off by 0.7 per cent by midday in New York.

There are many negative factors “that are screaming for a big stock sell-off”, said Stephen Aniston, president of vixcontango.com, a volatility trading analytics provider.

Activity in put options linked to the US stock market, which offer investors protection against equities slumping, has also been rising in recent weeks as the spreading coronavirus and the approaching US presidential election has investors on edge.

Trading in S&P 500 put options has climbed to levels not seen since September. The 10-day moving average for put volume on the S&P 500 has gone from 720,000 at the start of January to 920,000, again the highest since October.

Traders said the flurry of hedging activity is similar to October 2018, when Federal Reserve chair Jay Powell’s remarks on interest rate increases and “quantitative tightening” rattled the market, and also in February 2018, when Vix-linked funds hit trouble.

A slide in government bond yields and a rise in gold prices are further signs of investors’ sharpened appetite for safe assets, traders noted. The benchmark 10-year US Treasury yield sank to a four-month low below 1.55 per cent on Thursday, while gold has nudged above $1,580 a troy ounce.

The upcoming US presidential election has also prompted some investors to buy insurance against market declines. Senator Bernie Sanders recently surpassed former US vice-president Joe Biden in a poll on the popular political betting site PredictIt for the first time, just days ahead of the first caucus for the 2020 Democratic presidential nomination.

A Deutsche Bank poll indicated that 90 per cent of clients thought that a victory for Mr Sanders would be negative for the US stock market. The left-leaning US senator from Vermont is in the lead with a 39 per cent chance of winning the Democratic nomination, according to bets on PredictIt. Data gathered by Real Clear Politics has him ahead in Iowa, which casts the first votes of the 2020 campaign next week.

“The market is going to start to price in some serious probability of a leftwing Democratic win, which will hit stocks quite a bit,” Mr Aniston said.

Investors are also worried that underwhelming corporate profits will unsettle the stock market, given how far and fast it rallied over the past year. “We now see the market fully valued, particularly within US equities. This is not going to persist indefinitely,” warned Erin Browne, a managing director at Pimco.




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Best Stock Trading Platform In Europe {2020}



StockMarketNews.Today — what is the best stock trading platform in Europe for 2020? ….  How To Choose The Best Online Broker in Europe { 2020 } …


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


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.


A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today


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.


 

Stock Market: Microsoft Earnings Preview


♦Microsoft Earnings Preview♦


Stock Market —- Microsoft Stock Forecast 2020

* Reports Q2, 2020 results on Wednesday Jan. 29, after the market close

* Revenue Expectation: $35.67 billion

* EPS Expectation: $1.32

When Microsoft Corporation (NASDAQ:MSFT) releases its latest quarterly earnings today, it will provide investors with confidence that one of the bull market’s dominant bets remains intact.

Following a massive transformation under its Chief Executive Satya Nadella, Microsoft has become one of the most powerful players in the fast-growing cloud-computing market, commanding the segment’s second largest market share, with only Amazon.com (NASDAQ:AMZN) ahead.

More than five years ago, Nadella began to diversify Microsoft’s revenue away from its traditional growth engines — Windows and Office — by investing heavily in data centers and other infrastructure to help corporate customers run applications and store their data.

The growth in this market continues unabated for Microsoft, powering its operating income. For the quarter that ended on Dec. 31, analysts’ consensus forecast expects that Microsoft will produce about 10% growth in sales, while profit should surge by 20% to $1.32 a share.

Revenue from the company’s Azure cloud services rose 59% in the previous period, while sales of the subscription-based Office 365 for corporate customers, Microsoft’s other major cloud business, jumped 25%. Microsoft’s Intelligent Cloud segment now comprises more than 30% of the company’s overall revenue base.

We believe this strength will once again be on display as the company continues to win both large and small clients. In October, the Pentagon awarded Microsoft the Joint Enterprise Defense Infrastructure, or JEDI, contract that could be worth up to $10 billion over the next decade.

Large Cloud Deals Keep Coming
Microsoft’s win for this large government work shows that how quickly the Redmond, Washington-based company is capturing market share, posing a serious threat to Amazon’s dominance.

The latest deal comes after many large brands signed agreements to use Microsoft’s Azure cloud software, including grocer Kroger Company (NYSE:KR), AT&T Inc (NYSE:T), Walgreens Boots Alliance (NASDAQ:WBA) and oil giant Exxon Mobil (NYSE:XOM).

These contracts provided most of the fuel for the powerful rally in Microsoft shares in the past year, setting it apart from other large-cap legacy tech companies, such as International Business Machines (NYSE:IBM).

Microsoft shares—which closed yesterday at $165.46—are up more than 50% in the past year. This leap has pushed the company’s market value to $1.26 trillion, making it one of the world’s most valuable corporations.

The big question for investors now is how far can this rally go? At almost 31 times forward earnings, Microsoft’s shares are selling at a premium when compared to many top tech stocks. They also carry the highest multiple the stock has commanded in more than 15 years.

In our view, the factors that supported Microsoft shares over the past 12 months are still very much in play. The cloud computing market is expected to grow from $285 billion in 2017 to $411 billion by 2020. That segment alone is big enough to drive the company’s revenue growth for the next three to four years, according to Microsoft executives.

Coupled with cloud momentum, the tech giant is also benefiting from strong PC sales. Fourth-quarter sales of personal computers were the best the industry has seen in years, according to data released last week by market research firms IDC and Gartner.

Bottom Line

As investors fret about the global economic outlook and the longevity of this bull cycle, Microsoft’s fundamentals make it a safe bet in the tech space. We believe Microsoft’s earnings momentum will continue as it expands its market share in the cloud computing segment while maintaining its leading position in legacy software products such as Windows and Office.

This durable advantage will help the company achieve sustained, double-digit growth in revenue, earnings per share and free cash flow, making it a reliable tech stock to own over the long term.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Microsoft Stock Forecast 2020


Stock Market: Economic Calendar – Top 5 Things to Watch This Week



Stock Market — Here’s what you need to know to start your week.


Coronavirus outbreak
Market participants are keeping a wary eye on developments surrounding the coronavirus outbreak which has infected more than 2,000 people, the vast majority in China where 56 people have died. The virus has also spread to the U.S., Thailand, South Korea, Japan, Australia, France and Canada.

With stocks close to all-time highs investors are fearful that the newly identified virus could develop into something worse, like the 2003 SARS epidemic.

“Markets hate uncertainty and the virus has been enough to inject uncertainty in the markets,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

The World Health Organization has stopped short of calling the outbreak a global health emergency, but some health experts question whether China can continue to contain the epidemic.

More FAANG results
While last week’s Q4 earnings from Netflix (NASDAQ:NFLX) underwhelmed Wall Street, analyst hopes are still high for the other FAANGs – Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Google parent Alphabet (NASDAQ:GOOGL) – ahead of their financial results for the quarter.

The FAANG group of U.S. tech stocks have been the biggest drivers of the bull market, with recent gains among most of the group far outstripping the broader market.

Facebook is expected to post earnings growth of 6.2% when it reports on Wednesday, while Apple earnings, due a day earlier, are forecast to have grown 8.7%. Amazon has warned that increased investment in its package delivery business in the last quarter will weigh on earnings, but it sees quarterly revenues up 18.7% when it reports on Thursday.

In comparison, the S&P 500’s fourth-quarter earnings are expected to decline 0.8% and revenue is seen rising 4.4%, according the latest estimates compiled by Refinitiv.

Fed meeting
The Fed will almost certainly keep monetary policy on hold on Wednesday as policymakers continue to assess how the three rate cuts from 2019 are percolating through the economy.

“With no new forecasts being released at this meeting it will be the tone of Jerome Powell’s press conference and the actual vote that is likely to be of most interest for markets,” said James Knightley, chief international economist at ING.

“We would also expect to hear Jerome Powell retaining his cautiously upbeat language, particularly given the positive conclusion to U.S.-China trade talks. He is likely to reiterate that we will need to see a “material change” for the Fed to consider a policy shift.”

Bank of England meeting
The BoE is to deliver its final monetary policy decision before Britain exits the EU on Jan 31 on Thursday and the meeting will be Mark Carney’s last as central bank governor.

The question is whether the BoE will join central bank peers in cutting interest rates. Economic growth and inflation took a hit from three-and-a-half years of Brexit uncertainty so a recent string of dismal data and comments by BoE officials, including Carney, that more economic stimulus might be needed saw rate cut expectations surge.

But economic data last week pointed to a post-election boost, leading markets to pare back expectations for a cut.

The future path of the British pound, currently trading at around $1.31, in the middle of its trading range so far in 2020 – hangs on the BoE’s decision and forecasts for whether the economy will find more momentum after Brexit.

GDP figures
The U.S. is to release advance fourth quarter GDP figures on Thursday, with analysts forecasting growth of 2.1%. U.S. President Donald Trump might repeat his argument that if it were not for Fed policy tightening, growth would be closer to 4%.

The Euro Zone is to release GDP data on Friday, which is forecast to show the economy expanded 0.2% from the previous three months, backing up the European Central Bank’s view of “ongoing, but moderate growth.”




⇑⇓ Today’s Stock Market Quotes ⇓⇑




Stock Market: This May Be The Most Important Week So Far In 2020



Stock Market — The week ahead is arguably the most important here at the start of 2020. The Federal Reserve and the Bank of England meet. The U.S. and the eurozone report initial estimates of Q4 19 GDP. The eurozone also reports its preliminary estimate of January CPI. China returns from the extended Lunar New Year celebration and reports its official PMI. Japan will report December retail sales and industrial production. These data points will provide insight into the state of the recovery from the October sales tax and typhoon.

Fears of the spread of a new virus from China and the potential economic impact weighed on risk-taking appetites last week. It is still early days, but the contagion rate appears to be tracking something close to SARS, which ended up slashing Chinese growth by two percentage points. China and Hong Kong equity markets were hit the hardest (3%+), the S&P 500’s decline of a little more than 1%, was only the fourth weekly loss but the largest since the end of Q3 ’19.

China reports the newest PMI readings on January 30. The impact of the coronavirus may not be picked up entirely in the data, which will not offer a clean read on the economy due to the Lunar New Year. To the extent that the virus impact is detected, it will likely hit services harder that manufactured goods in the first instance. That said, January manufacturing and non-manufacturing PMI are expected to have softened a little (50.2 and 53.5, respectively in December). The risk is that the economic disruption will offset the stimulus recently provided. The magnitude of the commitment to buy U.S. goods was already a stretch, according to some estimates, and weaker Chinese growth could provide another hurdle.

It has been widely reported that China committed to buying $200 bln more U.S. goods than the $128 bln purchased in 2017, the last year before the tariffs. However, last year, the U.S. exports to China were about $98 bln. So, compared with 2019, China has committed to buying $230 bln more U.S. goods. China will likely import a bit more than $2 trillion of goods and services this year. The political agreement appears to secure for the U.S. a little more than 15% of that market.

With a press conference after every FOMC meeting, and given Powell’s perceived communication challenges, it is difficult to say that the January 29 meeting is a non-event. Still, for all practical purposes, it is. There is scope for a small technical adjustment. The Fed pays 1.55% interest on both required and excess reserves. It could raise this by five basis points to ensure the fed funds rate remains within the 1.50%-1.75% target range. Many who think the Fed’s bill buying and repo operations represent an easing of monetary policy (as in QE), may argue that the Fed is tightening. However, most will likely conclude that it would be a technical adjustment and not a change in monetary policy proper.

The forecasts will not be updated until March, and the economy has not materially deviated from Fed expectations. Last year, some media reports played up the two persistent dissents against the series of rate cuts and argued Powell was losing control. However, this does not seem to be the case, and indeed a clear consensus has emerged. At the December meeting, 14 of the 17 officials thought no rate change would be needed this year.

Near-term downside risks have lessened. The U.S.-China trade deal may not deserve the embellished official descriptions, but an escalation in the coming months seems less likely than even a couple of months ago. The UK will leave the EU at the end of January for an 11-month standstill arrangement where nothing changes while a new trade deal is negotiated. The risk of a disruptive no-deal exit at the end of the year remains, but it is not yet pressing. Nevertheless, the implied yield of the December 2020 fed funds futures contract is near 1.30% compared with the current average of 1.55%, suggesting a 25 bp Fed cut has been discounted.

The Bank of England is a different story. Two members of the Monetary Policy Committee have dissented at the past couple of meetings in favor of an immediate rate cut. Two other members have indicated if the data did not improve, they too could support a rate reduction. BOE Governor Carney also sounded more dovish in recent comments. The January 30 BOE meeting will be the last Carney chairs. Andrew Baily will take the reins before the next meeting on March 26.

The official comments and the disappointing economic data has spurred a shift in market expectations. On January 10, the derivatives market implied a little less than a one-in-four chance of a rate cut on January 30. By January 17, the odds jumped to almost three-in-four. But sentiment swung back last week, and the odds narrowed to a little less than 50/50. It is a close call, and on balance, the resilience of the labor market, the recovery in business confidence, and the uptick in the PMI may keep the BOE on hold a bit longer. If this is indeed the case, sterling may pop higher, though ideas that lower rates can still be delivered later in H1 may limit the upside.

Quarterly GDP numbers often grab the headline, but for many investors, the report is a culmination of other high-frequency data with some variance. Moreover, GDP data is backward-looking. It is then more a favorite of economists than market participants. That said, the mixed signals of the U.S. economy make this GDP call particularly tricky, and the first estimate is subject to statistically significant revisions, often stemming from trade and inventories. The NY Fed’s GDP tracker (as of January 17) pointed to a sub-par 1.2% annualized pace. The Atlanta Fed’s model pointed to a 1.8% pace. The Bloomberg survey has a median forecast of 2.1%.

The composition of U.S. growth may have also changed. Consumption may have slowed from the 3.2% annualized pace in Q3. Residential investment appears to have risen, and trade also may have made a net positive contribution. The headline and core deflator are likely to be mostly steady. The Federal Reserve will look through just about any weakness in Q4 GDP and will make allowances for the production cuts at Boeing Co (NYSE:BA) in Q1 20. The case of a rate cut is based on ideas that record-long U.S. expansion is fragile and will have increasing difficulty coping with shocks. The lack of pick-up in early Q2 will leave the Fed with the same choice as last year. With price pressures subdued, another insurance policy can be taken out to boost the chances that the expansion can be extended.

Eurozone Q4 GDP seems easier to forecast. Growth has been relatively steady, with quarterly growth averaging about 0.3% for the past four quarters and 0.2% for the previous two. The year-over-year pace has been about 1.2% over the same period. It may not be very inspiring, but it is steady, and growth potential is probably only a little higher at around 1.5% or so. Market participants appear to be more confident that the ECB is on hold for the duration that it is of the Fed. The market sees only about a one-in-five chance of a rate cut by the ECB this year.

Perhaps the most challenging data point for investors to make sense of will be the initial estimate of the eurozone’s January consumer inflation. Prices fall in January. Last January, prices fell by 1%. That means that if prices fell by 0.9% this month, as economists forecast, the year-over-year rate will tick up. Indeed, the year-over-year rate is expected to rise to 1.4%. It would be the highest since last April. This is one reason why claims of Japanification of Europe are too simplistic: European inflation is nearly twice that of Japan’s. However, while we anticipate a base-effect rise in European CPI, the comparisons are not as friendly, and the true signal, as likely to be reflected in the core rate that may ease to 1.2% after being stuck at 1.3% in November and December.

Lastly, we turn to Japan. The issue at hand is how quickly it can rebound from the controversial sales tax increase and the typhoons. The most direct report will be retail sales. Recall the sequence of events. Anticipating the tax increase in October, consumers brought forward purchases, and August retail sales rose by 4.6% and then 7.2%, before plummeting 14.2% in October. They snapped back 4.5% in November and probably a little more than 1% in December.

Industrial output fell by 4.5% in October and another 1% in November. A small rise of around 0.7% is expected in December. Yet, in terms of the yen, these macro considerations seem to be of secondary importance. The heightened anxiety over the new coronavirus expressed through the sale of risk-off assets, and the unwinding of carry-trades and those speculators knowingly or unknowingly riding this wave is the primary driver now as the dollar’s advance was stalling around JPY110.25.

The coronavirus is an economic and financial shock. The extent of that shock still needs to be assessed but it could provide the spark for an arguably long-overdue adjustment in the capital markets. Investors may be risk-averse until there is greater transparency about the contagion rate and health risks. It is humbling to appreciate that despite the advances in science and medicine, some 80k Americans died in 2017-2018 from influenza, the highest toll in 40 years. The World Health Organization estimates that the annual flu epidemic kills between around 250k-500k people globally each year.



STOCK MARKET ›
NEWS ›
TODAY ›
BUSINESS ›
ECONOMIC INDICATORS ›
COMMODITIES ›
INSIGHTS ›



◊ Plus500 Review 2020 ◊


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Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo Account.


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, commoditiescryptocurrencies, 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 platformPlus500 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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


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.


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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.Spreads at Plus500 were some of the lowest in the market.

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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


 

Stock Market: Economic Calendar – Top 5 Things to Watch This Week

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Stock Market — Here’s what you need to know to start your week.


Coronavirus outbreak
Market participants are keeping a wary eye on developments surrounding the coronavirus outbreak which has infected more than 2,000 people, the vast majority in China where 56 people have died. The virus has also spread to the U.S., Thailand, South Korea, Japan, Australia, France and Canada.

With stocks close to all-time highs investors are fearful that the newly identified virus could develop into something worse, like the 2003 SARS epidemic.

“Markets hate uncertainty and the virus has been enough to inject uncertainty in the markets,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

The World Health Organization has stopped short of calling the outbreak a global health emergency, but some health experts question whether China can continue to contain the epidemic.

More FAANG results
While last week’s Q4 earnings from Netflix (NASDAQ:NFLX) underwhelmed Wall Street, analyst hopes are still high for the other FAANGs – Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Google parent Alphabet (NASDAQ:GOOGL) – ahead of their financial results for the quarter.

The FAANG group of U.S. tech stocks have been the biggest drivers of the bull market, with recent gains among most of the group far outstripping the broader market.

Facebook is expected to post earnings growth of 6.2% when it reports on Wednesday, while Apple earnings, due a day earlier, are forecast to have grown 8.7%. Amazon has warned that increased investment in its package delivery business in the last quarter will weigh on earnings, but it sees quarterly revenues up 18.7% when it reports on Thursday.

In comparison, the S&P 500’s fourth-quarter earnings are expected to decline 0.8% and revenue is seen rising 4.4%, according the latest estimates compiled by Refinitiv.

Fed meeting
The Fed will almost certainly keep monetary policy on hold on Wednesday as policymakers continue to assess how the three rate cuts from 2019 are percolating through the economy.

“With no new forecasts being released at this meeting it will be the tone of Jerome Powell’s press conference and the actual vote that is likely to be of most interest for markets,” said James Knightley, chief international economist at ING.

“We would also expect to hear Jerome Powell retaining his cautiously upbeat language, particularly given the positive conclusion to U.S.-China trade talks. He is likely to reiterate that we will need to see a “material change” for the Fed to consider a policy shift.”

Bank of England meeting
The BoE is to deliver its final monetary policy decision before Britain exits the EU on Jan 31 on Thursday and the meeting will be Mark Carney’s last as central bank governor.

The question is whether the BoE will join central bank peers in cutting interest rates. Economic growth and inflation took a hit from three-and-a-half years of Brexit uncertainty so a recent string of dismal data and comments by BoE officials, including Carney, that more economic stimulus might be needed saw rate cut expectations surge.

But economic data last week pointed to a post-election boost, leading markets to pare back expectations for a cut.

The future path of the British pound, currently trading at around $1.31, in the middle of its trading range so far in 2020 – hangs on the BoE’s decision and forecasts for whether the economy will find more momentum after Brexit.

GDP figures
The U.S. is to release advance fourth quarter GDP figures on Thursday, with analysts forecasting growth of 2.1%. U.S. President Donald Trump might repeat his argument that if it were not for Fed policy tightening, growth would be closer to 4%.

The Euro Zone is to release GDP data on Friday, which is forecast to show the economy expanded 0.2% from the previous three months, backing up the European Central Bank’s view of “ongoing, but moderate growth.”




⇑⇓ Today’s Stock Market Quotes ⇓⇑




Stock Market: This May Be The Most Important Week So Far In 2020



Stock Market — The week ahead is arguably the most important here at the start of 2020. The Federal Reserve and the Bank of England meet. The U.S. and the eurozone report initial estimates of Q4 19 GDP. The eurozone also reports its preliminary estimate of January CPI. China returns from the extended Lunar New Year celebration and reports its official PMI. Japan will report December retail sales and industrial production. These data points will provide insight into the state of the recovery from the October sales tax and typhoon.

Fears of the spread of a new virus from China and the potential economic impact weighed on risk-taking appetites last week. It is still early days, but the contagion rate appears to be tracking something close to SARS, which ended up slashing Chinese growth by two percentage points. China and Hong Kong equity markets were hit the hardest (3%+), the S&P 500’s decline of a little more than 1%, was only the fourth weekly loss but the largest since the end of Q3 ’19.

China reports the newest PMI readings on January 30. The impact of the coronavirus may not be picked up entirely in the data, which will not offer a clean read on the economy due to the Lunar New Year. To the extent that the virus impact is detected, it will likely hit services harder that manufactured goods in the first instance. That said, January manufacturing and non-manufacturing PMI are expected to have softened a little (50.2 and 53.5, respectively in December). The risk is that the economic disruption will offset the stimulus recently provided. The magnitude of the commitment to buy U.S. goods was already a stretch, according to some estimates, and weaker Chinese growth could provide another hurdle.

It has been widely reported that China committed to buying $200 bln more U.S. goods than the $128 bln purchased in 2017, the last year before the tariffs. However, last year, the U.S. exports to China were about $98 bln. So, compared with 2019, China has committed to buying $230 bln more U.S. goods. China will likely import a bit more than $2 trillion of goods and services this year. The political agreement appears to secure for the U.S. a little more than 15% of that market.

With a press conference after every FOMC meeting, and given Powell’s perceived communication challenges, it is difficult to say that the January 29 meeting is a non-event. Still, for all practical purposes, it is. There is scope for a small technical adjustment. The Fed pays 1.55% interest on both required and excess reserves. It could raise this by five basis points to ensure the fed funds rate remains within the 1.50%-1.75% target range. Many who think the Fed’s bill buying and repo operations represent an easing of monetary policy (as in QE), may argue that the Fed is tightening. However, most will likely conclude that it would be a technical adjustment and not a change in monetary policy proper.

The forecasts will not be updated until March, and the economy has not materially deviated from Fed expectations. Last year, some media reports played up the two persistent dissents against the series of rate cuts and argued Powell was losing control. However, this does not seem to be the case, and indeed a clear consensus has emerged. At the December meeting, 14 of the 17 officials thought no rate change would be needed this year.

Near-term downside risks have lessened. The U.S.-China trade deal may not deserve the embellished official descriptions, but an escalation in the coming months seems less likely than even a couple of months ago. The UK will leave the EU at the end of January for an 11-month standstill arrangement where nothing changes while a new trade deal is negotiated. The risk of a disruptive no-deal exit at the end of the year remains, but it is not yet pressing. Nevertheless, the implied yield of the December 2020 fed funds futures contract is near 1.30% compared with the current average of 1.55%, suggesting a 25 bp Fed cut has been discounted.

The Bank of England is a different story. Two members of the Monetary Policy Committee have dissented at the past couple of meetings in favor of an immediate rate cut. Two other members have indicated if the data did not improve, they too could support a rate reduction. BOE Governor Carney also sounded more dovish in recent comments. The January 30 BOE meeting will be the last Carney chairs. Andrew Baily will take the reins before the next meeting on March 26.

The official comments and the disappointing economic data has spurred a shift in market expectations. On January 10, the derivatives market implied a little less than a one-in-four chance of a rate cut on January 30. By January 17, the odds jumped to almost three-in-four. But sentiment swung back last week, and the odds narrowed to a little less than 50/50. It is a close call, and on balance, the resilience of the labor market, the recovery in business confidence, and the uptick in the PMI may keep the BOE on hold a bit longer. If this is indeed the case, sterling may pop higher, though ideas that lower rates can still be delivered later in H1 may limit the upside.

Quarterly GDP numbers often grab the headline, but for many investors, the report is a culmination of other high-frequency data with some variance. Moreover, GDP data is backward-looking. It is then more a favorite of economists than market participants. That said, the mixed signals of the U.S. economy make this GDP call particularly tricky, and the first estimate is subject to statistically significant revisions, often stemming from trade and inventories. The NY Fed’s GDP tracker (as of January 17) pointed to a sub-par 1.2% annualized pace. The Atlanta Fed’s model pointed to a 1.8% pace. The Bloomberg survey has a median forecast of 2.1%.

The composition of U.S. growth may have also changed. Consumption may have slowed from the 3.2% annualized pace in Q3. Residential investment appears to have risen, and trade also may have made a net positive contribution. The headline and core deflator are likely to be mostly steady. The Federal Reserve will look through just about any weakness in Q4 GDP and will make allowances for the production cuts at Boeing Co (NYSE:BA) in Q1 20. The case of a rate cut is based on ideas that record-long U.S. expansion is fragile and will have increasing difficulty coping with shocks. The lack of pick-up in early Q2 will leave the Fed with the same choice as last year. With price pressures subdued, another insurance policy can be taken out to boost the chances that the expansion can be extended.

Eurozone Q4 GDP seems easier to forecast. Growth has been relatively steady, with quarterly growth averaging about 0.3% for the past four quarters and 0.2% for the previous two. The year-over-year pace has been about 1.2% over the same period. It may not be very inspiring, but it is steady, and growth potential is probably only a little higher at around 1.5% or so. Market participants appear to be more confident that the ECB is on hold for the duration that it is of the Fed. The market sees only about a one-in-five chance of a rate cut by the ECB this year.

Perhaps the most challenging data point for investors to make sense of will be the initial estimate of the eurozone’s January consumer inflation. Prices fall in January. Last January, prices fell by 1%. That means that if prices fell by 0.9% this month, as economists forecast, the year-over-year rate will tick up. Indeed, the year-over-year rate is expected to rise to 1.4%. It would be the highest since last April. This is one reason why claims of Japanification of Europe are too simplistic: European inflation is nearly twice that of Japan’s. However, while we anticipate a base-effect rise in European CPI, the comparisons are not as friendly, and the true signal, as likely to be reflected in the core rate that may ease to 1.2% after being stuck at 1.3% in November and December.

Lastly, we turn to Japan. The issue at hand is how quickly it can rebound from the controversial sales tax increase and the typhoons. The most direct report will be retail sales. Recall the sequence of events. Anticipating the tax increase in October, consumers brought forward purchases, and August retail sales rose by 4.6% and then 7.2%, before plummeting 14.2% in October. They snapped back 4.5% in November and probably a little more than 1% in December.

Industrial output fell by 4.5% in October and another 1% in November. A small rise of around 0.7% is expected in December. Yet, in terms of the yen, these macro considerations seem to be of secondary importance. The heightened anxiety over the new coronavirus expressed through the sale of risk-off assets, and the unwinding of carry-trades and those speculators knowingly or unknowingly riding this wave is the primary driver now as the dollar’s advance was stalling around JPY110.25.

The coronavirus is an economic and financial shock. The extent of that shock still needs to be assessed but it could provide the spark for an arguably long-overdue adjustment in the capital markets. Investors may be risk-averse until there is greater transparency about the contagion rate and health risks. It is humbling to appreciate that despite the advances in science and medicine, some 80k Americans died in 2017-2018 from influenza, the highest toll in 40 years. The World Health Organization estimates that the annual flu epidemic kills between around 250k-500k people globally each year.



STOCK MARKET ›
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TODAY ›
BUSINESS ›
ECONOMIC INDICATORS ›
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◊ Plus500 Review 2020 ◊


plus-500-banner-01


Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo Account.


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, commoditiescryptocurrencies, 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 platformPlus500 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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


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.Spreads at Plus500 were some of the lowest in the market.

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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Trading News: 3 Things Under the Radar This Week


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Trading News — There’s an ominous technical indicator hovering over the U.S. dollar, which could mean a move away from the greenback. But don’t go looking for value in bitcoin, according to one fund manager speaking at the World Economic Forum in Davos, Switzerland this week. Meanwhile, as lower interest rates have been a boon to equities, the run of ever-cheaper money may finally be coming to an end, according to one investment bank.



Here are three things that flew under the radar this week.

1. Dollar Hits the Death Cross

While markets were captivated this week on fundamentals, with some calling the Wuhan coronavirus a possible Black Swan, technicals weren’t overlooked.

The U.S. dollar could be in the crosshairs of the infamous death cross. The death cross happens when a 50-day moving average goes below the 200-day moving average, which happened on the last day of 2019, according to Bank of America Merrill Lynch.

When that’s been triggered in the past, the dollar has gone down seven out of eight times since 1980, Merrill said.

Adding to concerns is the fundamental backdrop of a global economy that may not need the safety of the greenback as much as it used to.

“The global economy looks like it’s healing,” TD Securities Mark McCormick said. “The reduction of uncertainty will likely allow investors to take risks … they didn’t want to take before.”

Momtchil Pojarliev, head of currencies at BNP Asset Management, is betting the dollar will fall against the euro, Japanese yen and Australian dollar as growth in those countries accelerates and their central banks raise interest rates while the Federal Reserve keeps them steady. That should narrow the gap in yields that has buoyed the U.S. currency.

2. Ray Dalio Debunks Bitcoin’s Diversification Powers

Bitcoin has been hailed in some corners as the holy grail of uncorrelated diversification assets, but famed fund manager Raymond Dalio warned earlier this week that bitcoin has no place in the real of world of investing.

With interest rates looking lower for longer and rendering cash almost useless, Dalio pushed back at the World Economic Forum in Davos, Switzerland against claims that bitcoin has a place in a diversified portfolio, pointing to the popular cryptocurrency’s lack of intrinsic value and wild swings.

“There’re two purposes of money: a medium of exchange and a store hold of wealth,” he said. “And Bitcoin is not effective in either of those cases now … It’s too volatile. Because of the volatility, you can’t go next to it.”

While there would be many who share Dalio’s view that bitcoin currently lacks the credentials to be taken seriously as a form payment, some of the most important central bankers have conceded that bitcoin has a role to play in a diversified portfolio.

“Really almost no one uses bitcoin for payments, they use it as an alternative to gold. It’s a store of value, a speculative store of value, like gold,” Federal Reserve Chairman Jerome Powell said in the summer of last year.

“Bitcoin’s consistent statistically uncorrelated nature provides an excellent source of diversification within a portfolio,” Blockhead Capital said, citing its study that measured the correlation of bitcoin’s price performance to several other assets or indices.

3. Easing Is Ending?

The main case for central banks cutting rates is receding, making the case for more accommodative monetary policy from current levels harder to justify, according to J.P. Morgan. The argument for an economic mid-year rebound has strengthened, J.P. Morgan said in a note to clients this week.

“The easing cycle is … close to an end and central bankers can take comfort that their limited and unconventional toolbox proved effective in cushioning a substantial shock,” analyst Bruce Kasman and team said.

But the biggest challenge that major central banks will face is dealing with inflation.

“With the Fed having lost confidence in translating current growth and labor market outcomes to future inflation, core inflation will likely need to move above 2% before it considers reversing last year’s ease,” J.P. Morgan said. “In refraining from reversing last year’s mid-cycle adjustment until inflation rises, the Fed will break from its past pattern of removing insurance once it became convinced that the growth scare had passed.”

Unlike the Fed, which looks happy to overshoot on inflation, the Bank of Japan will likely be content to undershoot.

Meanwhile, the “(p)ersistently low inflation remains a prime concern” for the ECB, but “creeping financial stability concerns set the bar high for additional action.”





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Stock Market News: U.S. Stocks Fall After Second Coronavirus Case Emerges

Stock Market News — The S&P 500 erased early gains and fell 0.6 per cent around lunchtime in New York. The Nasdaq Composite, which had registered an intraday record high in morning trade, was down 0.5 per cent even as upbeat earnings from Intel — which surged to its highest level since September 2000 — lifted chipmakers. The Dow also lost 0.5 per cent.

The declines followed a rise in European stocks as investors appeared to brush off concerns over the market impact of coronavirus, while there were fresh signs of life in the German economy.

The Stoxx Europe 600 rose 0.9 per cent, down from session highs but snapping four days of losses as major bourses from London to Frankfurt climbed higher. The euro dipped, falling 0.2 per cent against the dollar, after survey data showed business activity in the eurozone remained unexpectedly weak in January.

Still, activity in Germany, the eurozone’s largest economy, beat expectations. That pushed the Dax 1.4 per cent higher for its best day in more than three months.

Investors had few cues from the Asian session, where Chinese markets were closed for the lunar new year holiday. Hong Kong’s Hang Seng rose 0.2 per cent in its half-day of trading, but has still lost nearly 4 per cent this week as concerns over the outbreak of virus have weighed on investor sentiment.

The World Health Organization on Thursday held back from declaring a global emergency over the outbreak, but said its panel was split “almost 50:50”.

Paul Donovan, a strategist at UBS, said structural changes to the nature of the global economy make it hard to draw a clear analysis from events so far.

“There may be a further shift to online retail sales, limiting the damage to the consumer,” he said. But, he added “the rise of fake news on social media may spread fear faster and wider.”

The outbreak has prompted S&P Global Ratings, the credit rating agency, to warn that if the situation worsened considerably the disease could knock 1.2 percentage points off China’s economic growth this year.

Sterling fell 0.4 per cent after upbeat UK PMI data failed to convince investors that the Bank of England will hold off cutting interest rates next week. The meeting is now on a knife-edge, with traders pricing in a 48 per cent chance of a rate cut to 0.5 per cent, prices in swaps markets show.

In the US, a majority of investors are betting the Federal Reserve will maintain its pause on interest rates after three cuts last year.




Stock Market: World Economy Going Through Longest Period of Falling Trade Since 2009

Stock Market — The downturn in global trade dragged on at the end of last year, marking the longest period of contraction since the end of the financial crisis.The volume of goods trade dropped 0.6 per cent in November compared to the previous month, and was down 1.1 per cent compared to the same month in 2018, according to a closely watched world trade monitor from the Netherlands Bureau for Economic Policy Analysis (CPB).

November marked the sixth consecutive month of year-on-year contraction, the longest period of falling trade since 2009 and a sharp reversal from the 3.4 per cent expansion in November 2018.

The rate of contraction slowed in November, however, down from a 2 per cent pace in October, which was the steepest fall in a decade.

The annual contraction in trade- which is the value of exports and imports adjusted for price changes — was geographically broad-based with the eurozone, emerging Asia, the US and Latin America all reporting falling trade volumes.

However, trade was up over the previous month in emerging Asia, while the downturn became more severe in the eurozone where trade volumes dropped 1.7 per cent compared to October.

The data confirm surveys released earlier this month that showed a deterioration in global trade running until the end of the year. The exports order component of the JPMorgan Global purchasing manager index remained in negative territory in November and December, although up from September’s reading.

“International trade remains the main drag on efforts to lift growth further, so any moves that reduce tensions and barriers on this front will be especially beneficial.” Olya Borichevska, from Global Economic Research at JPMorgan.

Economists expect trade data to improve in early 2020, reflecting the signing of the US-China phase one trade deal earlier this month, as well as improving conditions in emerging economies such as Turkey. But a strong recovery is not on the cards yet.

“We think a recovery in world trade will be very modest, despite the pause in US-China hostilities” said Adam Slater, chief economist at Oxford Economics.

“World trade growth at this pace is less than half its long-term average.”







Plus500 CFD Review { 2020 }


Plus500 Rewiew 2020 — Plus500 is an international financial firm providing online trading services in contracts for difference (CFDs), across more than 2,000 securities and multiple asset classes. The company is headquartered in Israel and has subsidiaries in UK, Cyprus, Australia, Singapore and Bulgaria.

Plus500 is authorised and regulated by the Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the Australian Securities and Investments Commission (ASIC), the Monetary Authority of Singapore (MAS), and the Israel Securities Authority (ISA). It is listed on the London Stock Exchange with the ticker “PLUS” and is a constituent of the FTSE 250 Index.


plus-500-banner-01


• Business & Financial News – Stock Market News Today •


Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo Account.


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, commoditiescryptocurrencies, 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 platformPlus500 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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


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.


best-broker-stock-market


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.


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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.Spreads at Plus500 were some of the lowest in the market.

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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Plus500 Deposits and Withdrawals

Plus500 Deposits and Withdrawals… This Answers the Following Questions: What is the minimum deposit for Plus500? What payment methods are accepted by Plus500? Does Plus500 accept PayPal? How to withdraw money from Plus500? How much can you withdraw from Plus500?… Read More ›

Best Stock Trading Platform In Europe {2020}

⇑⇓ Best Trading Platform Europe ⇓⇑ StockMarketNews.Today — what is the best stock trading platform in Europe for 2020? ….  How To Choose The Best Online Broker in Europe { 2020 } … Best Online Trading Platform. Start Trading Now or Try… Read More

> START TRADING NOW OR TRY A FREE DEMO ACCOUNT <

Stock Market Today: Markets rebound, Investors Reassured by Beijing’s Response to the Coronavirus

Stock Market News Today — US stocks hit records, with the S&P 500, Nasdaq Composite and Dow Jones Industrial Average each hitting all-time intraday highs soon after the open.

Asian markets rebounded from the previous session’s sell-off. Hong Kong’s Hang Seng index rose 1.3 per cent, recovering some of Tuesday’s losses, while shares in mainland China rebounded off year-lows to close higher. European markets nudged higher.

“The spread of a new coronavirus across Asia and into the US is clearly a major public health concern, but we suspect that its economic effects will be modest,” said Jennifer McKeown, head of global economics at Capital Economics.

The coronavirus has killed nine people and infected at least 440 in China, and has since spread to other Asian countries and North America. Controlling the outbreak has now reached a critical stage as more than 100m Chinese prepare to board trains and aeroplanes to return home for the Lunar New Year.

The outbreak has evoked memories of China’s Sars crisis in 2003, but markets have been reassured by a higher degree of urgency and transparency in controlling the disease.

“The speed with which this virus has been identified is testament to changes in public health in China since Sars and strong global co-ordination through the World Health Organisation,” Jeremy Farrar, director of health research foundation Wellcome, said.

In 2003, the Sars outbreak sent Hong Kong into recession and the Hang Seng index fell nearly 7.5 per cent in the first quarter, but the market quickly recovered throughout the rest of the year.

Economists at Deutsche Bank said the effects from an escalation of the coronavirus would be felt in the local retail, travel and hotel and catering industries, but that these would likely recover quickly and most service, trade and manufacturing activities would not be seriously affected.

Investors are moderating their concerns over the virus,” the bank’s strategist Jim Reid said.

Government bonds were stable while the China’s offshore renminbi was flat after its weakest day in five months on Tuesday.




Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo Account.




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Plus500 Review 2020

StockMarketNews.Today — Plus500 Trading Review ◊ Plus500 Review 2020 ◊ • Business & Financial News – Stock Market News Today • Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo… Read More ›


How To Start Investing In 2020

StockMarketNews.Today — Over half of Americans (55%) say they are not participating in the stock market, according to a 2019 poll of over 8,000 U.S. adults conducted by MetLife…. Read More ›


Best Stock Trading Platform In Europe {2020}

⇑⇓ Best Trading Platform Europe ⇓⇑ StockMarketNews.Today — what is the best stock trading platform in Europe for 2020? ….  How To Choose The Best Online Broker in Europe { 2020 } … Best Online Trading Platform. Start Trading Now or Try… Read More ›


Best Stock Market Sectors For 2020

♦ Stock Market Predictions For 2020 ♦ StockMarketNews.Today — After another big year for the stock market and the U.S. economy in 2019, investors are looking ahead to 2020 to determine which sectors will lead the next phase of the… Read More ›




federal





◊ Plus500 Review 2020 ◊


plus-500-banner-01


• Business & Financial News – Stock Market News Today •


Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo Account.


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, commoditiescryptocurrencies, 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 platformPlus500 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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


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.Spreads at Plus500 were some of the lowest in the market.

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.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Plus500 Deposits and Withdrawals

Plus500 Deposits and Withdrawals… This Answers the Following Questions: What is the minimum deposit for Plus500? What payment methods are accepted by Plus500? Does Plus500 accept PayPal? How to withdraw money from Plus500? How much can you withdraw from Plus500?… Read More ›

Plus500

⇑⇓ Plus500 ⇓⇑ StockMarketNews.Today — Plus500 is an international financial firm providing online trading services in contracts for difference (CFDs), across more than 2,000 securities and multiple asset classes. The company is headquartered in Israel and has subsidiaries in UK,… Read More ›


Natural Gas News Today




Best Stock Market Books For Beginners {2020}


#1 – The Intelligent Investor. (Revised Edition)

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.

Over the years, market developments have proven the wisdom of Graham’s strategies. While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.

Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.



#2 – Stock Investing For Dummies (Business & Personal Finance)

Grow your stock investments in today’s changing environment. Updated with new and revised material to reflect the current market, this new edition of Stock Investing For Dummies gives you proven strategies for selecting and managing profitable investments. no matter what the conditions. You’ll find out how to navigate the new economic landscape and choose the right stock for different situations—with real-world examples that show you how to maximize your portfolio.

The economic and global events affecting stock investors have been dramatic and present new challenges and opportunities for investors and money managers at every level. With the help of this guide, you’ll quickly and easily navigate an ever-changing stock market with plain-English tips and information on ETFs, new rules, exchanges, and investment vehicles, as well as the latest information on the European debt crisis.

Incorporate stocks into your investment portfolio
> Understand and capitalize on current market conditions
> Balance risk and reward
> Explore new investment opportunities
Stock Investing For Dummies is essential reading for anyone looking for trusted, comprehensive guidance to ensure their investments grow.



#3 – Encyclopedia of Chart Patterns

In this revised and expanded second edition of the bestselling Encyclopedia of Chart Patterns, Thomas Bulkowski updates the classic with new performance statistics for both bull and bear markets and 23 new patterns, including a second section devoted to ten event patterns. Bulkowski tells you how to trade the significant events — such as quarterly earnings announcements, retail sales, stock upgrades and downgrades — that shape today?s trading and uses statistics to back up his approach. This comprehensive new edition is a must-have reference if you’re a technical investor or trader. Place your order today.
“The most complete reference to chart patterns available. It goes where no one has gone before. Bulkowski gives hard data on how good and bad the patterns are. A must-read for anyone that’s ever looked at a chart and wondered what was happening.”
— Larry Williams, trader and author of Long-Term Secrets to Short-Term Trading.



#4 – How to Make Money in Stocks

Anyone can learn to invest wisely with this bestselling investment system!… Through every type of market, William J. O’Neil’s national bestseller, How to Make Money in Stocks, has shown over 2 million investors the secrets to building wealth. O’Neil’s powerful CAN SLIM® Investing System―a proven 7-step process for minimizing risk and maximizing gains―has influenced generations of investors.

Based on a major study of market winners from 1880 to 2009, this expanded edition gives you:

>Proven techniques for finding winning stocks before they make big price gains
>Tips on picking the best stocks, mutual funds, and ETFs to maximize your gains
>100 new charts to help you spot today’s most profitable trends
>PLUS strategies to help you avoid the 21 most common investor mistakes!

“I dedicated the 2004 Stock Trader’s Almanac to Bill O’Neil: ‘His foresight, innovation, and disciplined approach to stock market investing will influence investors and traders for generations to come.’”
―Yale Hirsch, publisher and editor, Stock Trader’s Almanac and author of Let’s Change the World Inc.

“Investor’s Business Daily has provided a quarter-century of great financial journalism and investing strategies.”
―David Callaway, editor-in-chief, MarketWatch

“How to Make Money in Stocks is a classic. Any investor serious about making money in the market ought to read it.”
―Larry Kudlow, host, CNBC’s “The Kudlow Report”.



#5 – How to Day Trade for a Living

Very few careers can offer you the freedom, flexibility and income that day trading does. As a day trader, you can live and work anywhere in the world. You can decide when to work and when not to work. You only answer to yourself. That is the life of the successful day trader. Many people aspire to it, but very few succeed. Day trading is not gambling or an online poker game. To be successful at day trading you need the right tools and you need to be motivated, to work hard, and to persevere… This book is definitely NOT a difficult, technical, hard to understand, complicated and complex guide to the stock market. It’s concise. It’s practical. It’s written for everyone. You can learn how to beat Wall Street at its own game.




 

Visa To Buy Fintech Plaid in $5.3bn Deal


♦ Visa To Buy Fintech Plaid ♦


Visa agreed to acquire Plaid, a group that connects fintech companies with their customers’ bank accounts, for $5.3bn in the latest large tech-focused deal by the payments company.

The acquisition of the Silicon Valley company, which is backed by high profile tech investors including Mary Meeker and Andreessen Horowitz as well as Goldman Sachs, comes less than two years after it was valued at $2.65bn.

For Visa the transaction indicates its latest effort to make a further push into the fast growing fintech sector. In 2017 it acquired a minority stake in Sweden’s payments provider Klarna, which became Europe’s most valuable fintech company in the summer.

Plaid provides so-called “aggregator” software that allows fintechs and other financial services companies to access client’s bank account information. Its clients include the financial planning apps Mint and Acorns and the money transfer app Venmo.

“This acquisition is the natural evolution of Visa’s 60-year journey from safely and securely connecting buyers and sellers to connecting consumers with digital financial services,” said Al Kelly, chief executive and chairman of Visa.

“The combination of Visa and Plaid will put us at the epicentre of the fintech world, expanding our total addressable market and accelerating our long-term revenue growth trajectory.”

A year ago, Plaid bought rival aggregator Quovo for around $200m. Other aggregators include California’s Yodlee, which was bought by Envestnet for $660m in 2015, and Utah-based Finicity.

The aggregators have long had uneven relationships with banks, which have expressed reservations about the aggregators’ ability to protect customers’ personal information. Of particular concern is “screen scraping,” where consumers provide their bank login details to third-party fintechs, rather than using secure APIs (application programming interfaces) that can transmit data from the bank without the release of passwords.

JPMorgan Chase recently said it would ban fintechs from using its customers’ passwords to access their accounts. API connections require banks to come to explicit agreements with aggregators and fintechs, which screen-scraping does not.

Visa’s move to take over Plaid could help strengthen relations with larger banks. In the press release announcing the deal on Monday, JPMorgan’s head of consumer banking endorsed the deal as “an important development in giving consumers more security and control over how their financial data is used.”

“Protecting customer data and helping them share that information safely has long been a top priority for Chase. We look forward to partnering with Visa to continue building a great experience for our shared customers,” said Gordon Smith, co-president, JPMorgan Chase and chief executive of consumer and community banking. Goldman Sachs served as the sole adviser to Plaid.




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How To Make Money Online?


Internet offers many opportunities to make a lot of money. Whether you’re looking to make some fast cash, or you’re after long-term, more sustainable income-producing results, there are certainly ways you can make money online today. The truth is that making money online isn’t as difficsult as most make it out to seem.

However, if you’re looking for realistic ways to make money now, then it really truly does boil down to 11 paths you can take towards profit. Some will provide you with immediate results, helping you to address your basic monthly necessities, while others have the potential to transform your life by revolutionizing your finances in the long term…



1. Make Money as a Life Coach

LIFE

Money Invested: $45 | Time Invested: 110 Hours | Money Earned (30 days): $879

How To Make Money as Life Coach: Life coaching is the process of helping people identify and achieve personal goals through developing skills and attitudes that lead to self-empowerment. Life coaching general deals with issues such as work-life balance and career changes, and often occurs outside the workplace setting. Learn More …



2.  Make Money With Affiliate Programs

Affiliate

Money Invested: $1,300 | Time Invested: 72 Hours | Money Earned (30 days): $7,742

How To Make Money In Affiliate Marketing: Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make. Learn More …



3. Make Extra Money Online Simply By Sharing Your Opinions

opinion

Money Invested: $1 | Time Invested: 46 Hours | Money Earned (30 days): $329

How To Make Money by Sharing Your Opinion: A Review ( Opinion ) is an evaluation of a publication, service, or company such as a movie, video game, musical composition, book; a piece of hardware like a car, home appliance, or computer; or an event or performance, such as a live music concert, play, musical theater show, dance show, or art exhibition. Learn More …



4. Make Money With an Online Drop Shipping Business

drop

Money Invested: $75 | Time Invested: 144 Hours | Money Earned (30 days): $1,915

How To Make Money With an Online Drop Shipping Business: Drop shipping is a business model where you send your customers’ orders to a manufacturer or wholesaler, and they send the products directly to your customer. Learn More …



5. Write an Ebook and sell it on Amazon

write-publish-ebook-today

Money Invested: $55 | Time Invested: 108 Hours | Money Earned (30 days): $973

How to Make Money Selling Ebooks Online: Do you want to learn how to make an ebook from beginning to end?… Writing ebooks is one of the easiest way to earn money. You work on your own time, and when you finish the book – you will make money from it over and over again…for a very long time!. Learn More …



6. Make Money on Twitter

Twitt22

Money Invested: $25 | Time Invested: 52 Hours | Money Earned (30 days): $494

How to Make Money on Twitter: Twitter is an American online microblogging and social networking service on which users post and interact with messages known as “tweets”. Selling advertising, sponsored links, and affiliate marketing. Here are a few programs that can help you make money on Twitter. Learn More …



7. Make Money Buying And Selling Domain Names

become-domain-reseller

Money Invested: $55 | Time Invested: 110 Hours | Money Earned (30 days): $1,514

How To Make Money Selling Domain Names: Domain name is like a land on the Web. You can use domains in a variety of ways to make money. Domains increase value over time, especially if they have some commercial value. You can buy a domain name at low price and then sell it high priceLearn More …



8. Make Money In The Stock Market – ( Day Trading )

best-broker-stock-market

Money Invested: $300 | Time Invested: 72 Hours | Money Earned (30 days): $3,177

How To Make Money in Stock Trading: Investing in the stock market can be a great way to have your money make money… Stock trading is not a risk-free activity, and some losses are inevitable. However, with substantial research and investments in the right companies, stock trading can potentially be very profitable. Learn More …


9. Make Money With Your Photos

makemoneyphotos

Money Invested: $1 | Time Invested: 74 Hours | Money Earned (30 days): $374

How To Earn Money Selling Photos Online: Who wouldn’t want to earn money by selling their photos online? … Did you know thousands of photographers are making hundreds even thousands of dollars every day just by selling their photos online?… In fact every month millions of photos are bought online which is used for websites, magazines, blogs, print ads, marketing materials and many more. Learn More …



10. Earn Money With YouTube

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Money Invested: $1 | Time Invested: 60 Hours | Money Earned (30 days): $245

How To Make Money on Youtube: You’ve probably heard stories about regular people earning money on YouTube and thought, “Hey, I can do this too!”. Earning with YouTube is easy, but making big money with the platform can be a challenge. Learn More …









Funding Opportunities Available for All United States Citizens




U.S. Will Slap New Sanctions On Iran Following Strikes On U.S. Targets


⇑⇓ STOCK MARKET NEWS TODAY — BUSINESS & FINANCIAL NEWS ⇓⇑

Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin announced Friday that the U.S. would impose new sanctions on Iran’s metal exports and a handful of the country’s senior officials.

The new penalties came days after Iran fired a barrage of missiles at Iraqi bases that were housing U.S. targets — a move made in retaliation for an American airstrike in Baghdad that killed Iran’s top military leader, Qasem Soleimani.

On Wednesday, President Donald Trump said that the U.S. will “immediately impose additional punishing economic sanctions on the Iranian regime.”

Last month, State Department officials said the pressure on Iran “will intensify in 2020, as the U.S. seeks to rein in Tehran’s pursuit of nuclear infrastructure and regional aggression.”

“There will be more sanctions to come, and Iran’s economic problems and challenges are going to compound in 2020,” a senior State Department official said on a Dec. 30 call with reporters.

“They are already deep into a recession, and we are also seeing Iran come under greater diplomatic isolation.”

Another senior State Department official added that the Trump administration has sanctioned approximately 1,000 individuals and entities with links to Iran’s malign activities.

“What we are doing is denying the regime the revenue that it needs to run an expansionist foreign policy, and by that policy, Iran has less money to spend today than it did almost three years ago when we came into office,” said the official, who spoke on the condition of anonymity.

In December, Secretary of State Mike Pompeo announced another round of fresh sanctions, this time targeting Iran’s largest shipping company and biggest airline, saying the companies are aiding the regime’s alleged proliferation of weapons of mass destruction.

“As long as its malign behaviors continue, so will our campaign of maximum pressure,” Pompeo said during a Dec. 11 press conference at the State Department.




Today’s Stock Market News – Friday, 10 January, 2020


Stock Market Today — World stocks set new record highs on Friday and the prices of safe-haven assets such as gold pulled back as investors cheered an apparent de-escalation in U.S.-Iran tensions and looked instead to prospects of improved global growth.

Markets have swiftly reversed the sharp falls seen at the start of the week after the United States killed Iran’s most senior general, believing it would not lead to a full-scale military confrontation that would rock investor confidence.

The MSCI world equity index, which tracks shares in 49 countries, has quickly resumed its rally and added another 0.1% on Friday to hit a new record high. It is almost 1.5% above the lows seen on Monday.

European shares were mixed at the open, with pan-European Euro Stoxx 50 (STOXX50E) down 0.16%, the German DAX (GDAXI) up 0.06% and Britain’s FTSE (FTSE) 0.1% ahead.

That followed record levels in the three major share indexes on Wall Street on Thursday. Stock markets have got off to a strong start in 2019 despite U.S. President Donald Trump’s decision to kill military commander Qassem Soleimani, the second most powerful figure in Iran, in a missile strike in Baghdad.

FULL CIRCLE… “In the space of a few days we appear to have swung full circle; with investors seemingly convinced that the problems in the Middle East appear to have settled down, at least for the time being,” said Michael Hewson, chief markets analyst at CMC Markets.

“Investors now have the opportunity to focus on the signing of the new U.S.-China phase one trade deal next week, as well as the health of the U.S. economy today, and in particular the labor market which has continued to look resilient,” he added, referring to all-important U.S. non-farm payrolls data due at 1330 GMT.

While markets judge the United States and Iran to be making moves to defuse the tensions, investors also welcomed news that sales of Apple’s iPhones in China in December jumped more than 18% on the year.

Investors digested the report as a prelude to the upcoming visit by China’s Vice Premier Liu He, head of the country’s negotiation team in Sino-U.S. trade talks, to Washington next week to sign a trade deal with the United States.

There were other signs of investors’ bullish mood too. MSCI’s emerging market currency index, although little changed on Friday, hit 1-1/2-year highs on Thursday in what is likely to be its sixth straight week of gains as it has also benefited from three U.S. rate cuts last year.

Safe haven assets extended their downward move. Gold eased 0.1% to $1,550 per ounce from a seven-year high of $1,610.90 hit right after Iran’s missile attack on Wednesday. Against the Japanese yen, which investors often buy in times of uncertainty, the U.S. dollar strengthened to a two-week high of 109.61 yen .


MONEY-TODAY
OVERNIGHT MILLIONAIRE MIND-HACKS SECRETLY USED BY THE RICH & FAMOUS …

The dollar was little changed more broadly (DXY) and against the euro it stood at $1.1108 (EUR=). The euro fell to $1.1091 on Thursday, its lowest in about two weeks.

Oil prices, which spiked earlier this week on worries that tensions with Iran would disrupt global supplies, retreated further.

Brent crude fell 0.3% $65.20 a barrel, and was heading for its first decline in six weeks, down almost 5%.

U.S. crude oil dropped 0.4% to $59.33 a barrel and was also on track for its first weekly drop in six, falling 6% from last Friday’s close.

Government bond yields, which rose on Thursday as investors’ nerves about the situation in the Middle East eased, edged lower in early trading on Friday.

The benchmark 10-year German bond yield fell 1 basis point to -0.236% but for the week remains up almost 5 basis points, in a strong signal of investors’ willingness to pull back from safe-haven government debt for riskier assets.

The 10-year U.S. Treasury yield slipped 1 basis point to 1.849% but it too remains up 6 basis points on the week.

“Unless we have external shocks such as a resurgence of U.S.-China trade tensions or a war in the Middle East, it is hard to see the U.S. economy falling apart,” said Hiroshi Watanabe, senior economist at Sony Financial Holdings.

“There could be a great rotation to stocks from bonds. Emerging markets are likely to benefit from investors’ bullish mood too,” he added.




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U.S. Job Growth Slows – Unemployment Rate Steady At 3.5%

Stock Market News — U.S. job growth slowed more than expected in December, but the pace of hiring remains more than enough to keep the longest economic expansion in history on track despite a deepening downturn in a manufacturing sector stung by trade disputes.

The Labor Department’s closely watched monthly employment report on Friday also showed the jobless rate holding near a 50-year low of 3.5%. A broader measure of unemployment dropped to a record low 6.7% last month, though wage gains ebbed.

The report will probably not change the Federal Reserve‘s assessment that both the economy and monetary policy are in a “good place.”

Nonfarm payrolls increased by 145,000 jobs last month, with manufacturing shedding jobs after being boosted in November by the return to work of about 46,000 production workers at General Motors (N:GM) after a strike, the government’s survey of establishments showed. Milder-than-normal temperatures in December boosted hiring at construction sites.

Some of the slowdown in December is likely due to seasonal volatility associated with a later-than-normal Thanksgiving Day. Economists polled by Reuters had forecast payrolls rising by 164,000 jobs in December. Roughly 100,000 jobs a month are needed to keep up with growth in the working-age population.

Data for October and November was revised to show 14,000 fewer jobs added than previously reported. The economy created 2.1 million jobs in 2019, down from 2.7 million in 2018.

Worries that a downturn might be triggered by the Trump administration’s trade war with China spurred the Fed to cut interest rates three times in 2019. Indeed economic growth did slow last year, throttling back to 2.1% in the third quarter from 2018’s pace of nearly 3%.

Now, though, with a Phase 1 deal with China set to be signed next week, policymakers are more confident in the outlook and last month signaled borrowing costs could remain unchanged at least through this year. Economists are pegging growth at the end of last year around a 2.3% rate.

The labor market has continued to churn out jobs at a healthy clip, despite anecdotal evidence of worker shortages, which economists had feared would significantly restrain hiring.

There are, however, concerns the Labor Department’s Bureau of Labor Statistics (BLS), which compiles the employment data, may not be fully capturing the impact on payrolls of President Donald Trump’s 18-month-long trade war with China, which has pushed manufacturing into recession and led to company closures.

The government last August estimated that the economy created 501,000 fewer jobs in the 12 months through March 2019 than previously reported, the biggest downward revision in the level of employment in a decade. That suggests job growth over that period averaged around 170,000 per month instead of 210,000. The revised payrolls data will be published next month.

The projected massive revision has attracted the attention of some Fed officials. Minutes of the U.S. central bank’s Dec. 10-11 policy meeting published last week showed a “couple” of officials viewed the anticipated downgrade as an indication “that payroll employment gains would likely show less momentum coming into this year.”

Economists say downward revisions of that magnitude are often associated with early signs of a recession and suggest that the model the government uses to calculate the net number of jobs from new business and closings is faulty.

Some expect payrolls growth beyond last March could also be revised down. For now, the labor market is on solid footing, with the unemployment rate declining by five-tenths of a percentage point 2019. There was little impact on the jobless rate from annual revisions to the seasonally adjusted household survey data going back five years, which were incorporated in December’s employment report.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, fell to 6.7% in December, the lowest since the series started in 1994, from 6.9% the prior month.

The tight labor market, however, has not generated strong wage inflation. Average hourly earnings rose three cents, or 0.1%, after increasing 0.3% in November. In the 12 months through December, wages rose 2.9% after gaining 3.1% in November.

Manufacturing employment dropped by 12,000 jobs in December after jumping 58,000 in November as the GM strike ended. The industrial sector has been hurt by the U.S.-China trade war.

The Institute for Supply Management’s measure of national factory activity dropped in December to its lowest level since June 2009. The ISM’s gauge of manufacturing employment contracted for a fifth consecutive month.

Hiring at construction sites increased by 20,000 jobs in December. Government employment rose by 6,000 jobs. It is expected to accelerate in the coming months amid increased hiring for the 2020 Census.




Today’s Stock Market News – Friday, 10 January, 2020


Stock Market Today — World stocks set new record highs on Friday and the prices of safe-haven assets such as gold pulled back as investors cheered an apparent de-escalation in U.S.-Iran tensions and looked instead to prospects of improved global growth.

Markets have swiftly reversed the sharp falls seen at the start of the week after the United States killed Iran’s most senior general, believing it would not lead to a full-scale military confrontation that would rock investor confidence.

The MSCI world equity index, which tracks shares in 49 countries, has quickly resumed its rally and added another 0.1% on Friday to hit a new record high. It is almost 1.5% above the lows seen on Monday.

European shares were mixed at the open, with pan-European Euro Stoxx 50 (STOXX50E) down 0.16%, the German DAX (GDAXI) up 0.06% and Britain’s FTSE (FTSE) 0.1% ahead.

That followed record levels in the three major share indexes on Wall Street on Thursday. Stock markets have got off to a strong start in 2019 despite U.S. President Donald Trump’s decision to kill military commander Qassem Soleimani, the second most powerful figure in Iran, in a missile strike in Baghdad.

FULL CIRCLE… “In the space of a few days we appear to have swung full circle; with investors seemingly convinced that the problems in the Middle East appear to have settled down, at least for the time being,” said Michael Hewson, chief markets analyst at CMC Markets.

“Investors now have the opportunity to focus on the signing of the new U.S.-China phase one trade deal next week, as well as the health of the U.S. economy today, and in particular the labor market which has continued to look resilient,” he added, referring to all-important U.S. non-farm payrolls data due at 1330 GMT.

While markets judge the United States and Iran to be making moves to defuse the tensions, investors also welcomed news that sales of Apple’s iPhones in China in December jumped more than 18% on the year.

Investors digested the report as a prelude to the upcoming visit by China’s Vice Premier Liu He, head of the country’s negotiation team in Sino-U.S. trade talks, to Washington next week to sign a trade deal with the United States.

There were other signs of investors’ bullish mood too. MSCI’s emerging market currency index, although little changed on Friday, hit 1-1/2-year highs on Thursday in what is likely to be its sixth straight week of gains as it has also benefited from three U.S. rate cuts last year.

Safe haven assets extended their downward move. Gold eased 0.1% to $1,550 per ounce from a seven-year high of $1,610.90 hit right after Iran’s missile attack on Wednesday. Against the Japanese yen, which investors often buy in times of uncertainty, the U.S. dollar strengthened to a two-week high of 109.61 yen .


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The dollar was little changed more broadly (DXY) and against the euro it stood at $1.1108 (EUR=). The euro fell to $1.1091 on Thursday, its lowest in about two weeks.

Oil prices, which spiked earlier this week on worries that tensions with Iran would disrupt global supplies, retreated further.

Brent crude fell 0.3% $65.20 a barrel, and was heading for its first decline in six weeks, down almost 5%.

U.S. crude oil dropped 0.4% to $59.33 a barrel and was also on track for its first weekly drop in six, falling 6% from last Friday’s close.

Government bond yields, which rose on Thursday as investors’ nerves about the situation in the Middle East eased, edged lower in early trading on Friday.

The benchmark 10-year German bond yield fell 1 basis point to -0.236% but for the week remains up almost 5 basis points, in a strong signal of investors’ willingness to pull back from safe-haven government debt for riskier assets.

The 10-year U.S. Treasury yield slipped 1 basis point to 1.849% but it too remains up 6 basis points on the week.

“Unless we have external shocks such as a resurgence of U.S.-China trade tensions or a war in the Middle East, it is hard to see the U.S. economy falling apart,” said Hiroshi Watanabe, senior economist at Sony Financial Holdings.

“There could be a great rotation to stocks from bonds. Emerging markets are likely to benefit from investors’ bullish mood too,” he added.




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Aramco Achieved The $2 Trillion Valuation, Shares Rose Sharply On Their Second Day Of Trading


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The Saudi Crown Prince has made the Aramco initial public listing (IPO) the centerpiece of his plan to diversify the Kingdom’s economy away from its dependence on oil production by using the $25.6 billion raised to develop other sectors.

But that was well below the Crown Prince’s plan announced in 2016 which called for raising as much as $100 billion via international and domestic listings of a 5% stake in Aramco.

Bernstein analysts initiated Aramco with an “underperform” rating, estimating its value at around $1.36 trillion. This compares with U.S. energy giant Exxon Mobil’s valuation of less than $300 billion.



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Saudi Aramco is the largest, most profitable oil company in the world – but size is not everything,” they wrote, flagging the risk of slow net income growth if oil prices stay flat.

Bernstein’s note said Saudi Arabian Oil Co (Aramco) should trade at a discount rather than premium to international oil majors, with corporate governance “the key risk for investors” as Saudi Arabia will own more than 98% of the company.

“A valuation discount to western oil majors seems warranted,” Bernstein said of Aramco, whose shares gained the maximum 10% allowed by the Riyadh exchange on their Wednesday debut. They hit 38.7 riyals ($10.32) on Thursday, before easing to 37.5 riyals, putting its market value at $2 trillion.

Aramco has become the world’s biggest IPO, topping the $25 billion 2014 listing of China’s Alibaba, despite limited interest from foreign investors leading it to cancel roadshows in New York and London.

It opted instead to sell just a 1.5% stake in Riyadh and rely mainly on domestic and regional buyers. Some analysts said there could be a lag before the Aramco price settles and some investors take profits from the IPO.

“After Aramco hits $2 trillion, investors will debate: why should it go higher … while its owners value it at $2 trillion?” a Gulf analyst who asked not to be identified said.

The analyst added that when National Commercial Bank (NCB) was listed in 2014 its shares rose by the maximum limit for 10 days before investors started selling. Saudi Aramco tops $2 trillion, defying valuation sceptics



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Uber Loses License to Operate in London


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Uber can continue to operate in the city through an appeals process that could take months. Still, the public reproach over a loophole in Uber’s software threatens to further shake trust in the platform here and elsewhere.

Uber has long found itself in the crosshairs of authorities around the world over what critics say was a corporate culture, built under its co-founder and former Chief Executive Travis Kalanick, that tested the regulatory and legal envelope of countries where it operated. Chief Executive Dara Khosrowshahi has said he is trying to repair some of the reputational damage that strategy wrought.

In particular, he has courted London authorities after years of strained relations with city officials, regulators and competitors, including the city’s ubiquitous black cabs. London officials lauded Uber generally for what it said was progress improving the company’s internal issues.

Monday’s ruling, however, shows how the company—in a similar vein to other big tech companies—is now facing questions about its ability to police the behavior of others on its platform. It couldn’t be determined if the issue was a significant problem elsewhere, and Uber declined to comment about other markets. The company said, however, its technical and operational fix was being rolled out globally.

Transport for London, or TfL, the city’s main transportation regulator, said it had found 14,000 instances in late 2018 and early 2019 in which unauthorized drivers swapped their own photos with those of authorized drivers on Uber’s platform, allowing them to pick up riders themselves. A TfL spokesman said in some cases it believed drivers were using the loophole to allow people they knew to use their own accounts to pick up riders.

TfL said all 14,000 rides identified were uninsured and that two of the 43 drivers involved were unlicensed drivers—meaning they hadn’t been vetted by the regulator with a criminal-background check or for their driving ability. At least one ride involved a driver whose license had been revoked by the regulator, TfL said.

The regulator said it couldn’t disclose how many overall rides those 14,000 violations came from—citing commercial sensitivity for Uber. It said, though, the number of customers affected was significant.

TfL said Uber told the regulator about the unauthorized accounts this summer, but TfL found the problem to be widespread after further investigation. TfL said Uber fixed the loophole in October, but that it still didn’t have the confidence to grant it a license because drivers might find other ways to get around restrictions in the app.

“If not that loophole, a different loophole might be exploited,” a TfL spokesman said.

The regulator said Uber’s drivers in London had also been using vehicles without correct insurance in place, and that overall it was concerned that Uber’s app could be manipulated. It added that it wasn’t confident that Uber could keep its passengers safe “while managing changes to its app.”

Uber said it would appeal the regulator’s decision, which it called “extraordinary and wrong.” The company said it had been strengthening its driver identification processes over the past two months and that it would soon introduce “facial matching” to prevent what it called photo fraud. In September, Uber said it was working on a security enhancement that would require drivers to look at their smartphone camera and blink, smile and turn their head to verify their identity.

“We have fundamentally changed our business over the last two years and are setting the standard on safety,” said Jamie Heywood, Uber’s regional manager for Europe.

Paul Loberman isn’t so sure. An Uber user who lives in a suburb of London, he said he would now have second thoughts about the service, out of concern that its drivers’ identities could be false. The 48-year-old financial-services worker described the matter as a public-safety issue.

“What happens if there’s an accident or worse?” he said. Mr. Loberman also said he won’t use Uber anymore, “certainly not in London.”

David Papineau, a philosophy professor at King’s College London, doesn’t want Uber to have to stop operating in the city. “It does a good service. It employs a lot of young men who are mostly immigrants,” he said. Mr. Papineau, 72 years old, believes Uber is being treated unfairly by the TfL. “The ban is working to the interests of the traditional black cabs,” he said, adding that Uber is more convenient and more affordable by comparison.

Uber shares fell 1.5% in New York on Monday. That fall exacerbated a monthslong decline since their May debut. Shares are down by more than a quarter since Uber’s initial public offering. Last August, the company reported a quarterly loss of $5.2 billion, its biggest ever, due to costs related to its IPO and heavy competition in its international markets.

London is one of Uber’s most important markets globally. When it pushed into the city, it met stiff resistance from black-cab drivers worried about the competition and regulators who said they wanted to make sure Uber followed the rules and provided a safe environment for users.

It survived a series of legal challenges to become a part of everyday life for many Londoners. Many have embraced it as a middle ground between the city’s extensive and cheap—but creaky and jammed-to-capacity—public transportation, and the relative luxury of hailing a black cab. Yanking its drivers off the road would put extra strain on the city’s transportation networks.

Today, though, it faces a bevy of new rivals like Bolt Technology OU, an Estonian ride-hailing app that launched in London approximately four months ago. Bolt has amassed 30,000 drivers in London, according to its founder and CEO, Markus Villig.

In 2018, Uber derived 24% of the gross bookings for its rides business—or about $9.96 billion—from five metropolitan areas, which include Los Angeles, San Francisco and New York, as well as London, and São Paulo in Brazil, according to securities filings. Gross bookings are the total dollar value of rides, including taxes, and don’t account for discounts or driver earnings, Uber says. The company says it has 3.5 million riders and 45,000 licensed drivers in London.

This isn’t the first time Uber has lost its license in London.

In 2017, TfL rejected Uber’s application for a long-term license because of issues including safety and its corporate culture and governance. It pointed to Uber’s internal use of an app called Greyball, which allowed it to evade surveillance by local authorities, as well as problems with the company reporting crime to the police. Uber appealed that decision and won a 15-month license, which expired in September 2019. The regulator then gave Uber a two-month license, which expired Monday.

A spokesman for TfL said the decision was similar to its action in 2017. Uber has 21 days to launch its appeal, and can continue to operate over an eight-month period until that process is exhausted.


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