Five Things You Need to Know to Start Your Day
Want to receive this post in your inbox every morning? Sign up here
Stocks plunge again, Trump’s speech spooks investors, and it’s ECB decision day. Here are some of the things people in markets are talking about today.
Yesterday’s 5.9% slump in the Dow Jones Industrial Average pushed theblue-chip index into a bear market, and that trend isspreading across the world today. In Asia, Hong Kong’s Hang Seng Indexclosed within 1% of a 20% drop from its most recent peak while Japan’s Topix Index finished the session 4% lower. Europe’s Stoxx 600 Indexplunged 6.1% by 5:45 a.m. Eastern Time, with the travel sector falling more than 10% in the opening hours of trading. S&P 500 futureswere down 5%, the 10-year Treasury yield was at 0.717% and gold was slightly higher.
While the ongoing coronavirus pandemic is the reason for market weakness at the moment, today’s sharp selloff isdriven by investor reaction to President Donald Trump’s speech yesterday in which he announcedunprecedented travel restrictions from Europe. The 30-day halt on visitors from the EU does not include theUnited Kingdom or Ireland as both countries are not members of the European free travel area. Elsewhere, boththe U.K. andAustralia launched large fiscal stimulus packages to help reduce the economic effects of the outbreak.
Light at the end of the tunnel
China, the country where the virus first started, said that the outbreak in the country is “generally over” after it only reported 15 new cases of the infection. Italy is taking a leaf from the China virus playbook, with the country’s prime minister further tightening restrictions on movement in the country, announcing the closure of allpubs, restaurants and all non-essential businesses. Scandinavian countries are also upping their response, with Denmarkclosing all schools and telling workers to stay at home, while Norway shut some borders.
While much of the official response has been to increase travel restrictions and offer fiscal aid, monetary authorities have beenstepping up to the plate to offerwhatever support to the economy they can. The European Central Bank has been notably absent from the rush to stimulus so far, but that is expected to change when it announces the latest monetary policy decision at 8:45 a.m., followed by a press conference with President Christine Lagarde at 9:30 a.m. While a small reduction in rates is forecast, market expectations for more measures such as increased asset purchases, targeted loan operations and supervisory relief for banks are high in the wake ofLagarde’s comments to European leaders earlier in the week.
At 8:30 a.m. weekly initial jobless claims data is expected to show a small increase, while February PPI, also released at that time, is forecast to drop to -0.1%. In Washington, Congress will get a briefing on the coronavirus outbreak, while President Trump welcomes Irish Prime Minister Leo Varadkar to the White House. Oracle Corp., Adobe Inc., and Broadcom Inc. are among the companies reporting earnings today.
What we’ve been reading
This is what’s caught our eye over the last 24 hours.
- Goldman manager saysvirus hit may be worse than markets bet.
- Dash for cash is on as corporate titansdraw down credit lines.
- China’sindustrial reboot runs into the global coronavirus shock.
- NBA ownersreact to suspended season with shock but support.
- Rita Wilson and Tom Hanks test positive for coronavirus.
- Bitcoinfalls past $7,500 as cryptos slide in global selloff.
- The exotic inferno planet where itrains iron.
Source: Read Full Article