Dow Jones has best day since 1933, with Asian and European markets also up, after US move
Global stock markets staged a strong rally on Tuesday as investors were buoyed by the Federal Reserve’s efforts to boost the US economy and the prospect of Congress backing a fiscal stimulus package.
The Dow Jones recorded its best day since 1933 as it gained 11.4%, or 2,113 points, while the FTSE 100 posted its highest ever gain, of 452 points, as it rose 9% to 5,446.
Continue reading...Covid-19 crisis is raising borrowing costs for poorer nations just as commodity exports, tourism and remittances sent home fall
Rapid action is needed to head off the risk of a new debt crisis in the world’s poorest countries amid evidence that the Covid-19 pandemic is raising borrowing costs and hitting commodity exports, according to a leading campaign group.
A Jubilee Debt Campaign report said some of the world’s most vulnerable nations were being hit by a double whammy of increasing debt interest bills and the tumbling price of oil and other raw materials.
Continue reading...Quantitative easing stimulus is equivalent to almost 2% off interest rates
The Bank of England has gone all in. By cutting interest rates to 0.1% and announcing a fresh £200bn of money creation via its quantitative easing programme it has fired all the conventional weapons in its arsenal.
There will be some who say this is all reminiscent of the Beyond the Fringe sketch where Peter Cook demands “a futile gesture” to raise the whole tone of the war. Others will saythe Bank’s new governor Andrew Bailey had no choice given the state of the markets and the imminent lockdown in London. Bailey has had a good first week in the job.
Continue reading...Bank now realises Europe will sustain grievous economic damage from Covid-19
Weak. Clumsy. Behind the curve. The European Central Bank took stick for its initial response to the Covid-19 pandemic – and rightly so.
Those accusations can no longer be levied after the ECB used an emergency meeting to launch a gigantic new package of quantitative easing (QE) – the electronic money creation device that has become a key tool for central banks since the financial crisis of 2008.
Continue reading...The Covid-19 outbreak is forcing politicians and central bankers to set aside ideology and orthodoxy to prevent a global collapse
It is as if the lights have been switched off. The global economy has been plunged into darkness as countries hunker down in response to the Covid-19 pandemic.
Most recessions develop gradually over time. When the last one started in 2008 it took the Bank of England six months to spot it. This time it is different. Then it was a financial virus, this time it is the real thing. Commentators often say the economy is hitting the wall or is falling off a cliff on the weakest of evidence. Today the cliches are horrifyingly true.
Continue reading...Sharp losses recorded after US interest rate cut, as Bank of England hints at further support to combat turmoil
The FTSE 100 fell below 5,000 points on Monday and trading on Wall Street was suspended for the third time in a week as markets were gripped by mounting concerns over the threat of a global recession, despite a coordinated effort by central banks to protect growth and jobs.
In an escalation of the worst turmoil since the 2008 financial crisis, stock markets suffered further sharp losses on Monday despite dramatic action taken by the US central bank late on Sunday in an attempt to limit the economic impact of the coronavirus pandemic.
Continue reading...Pledges of help from EU, China and Germany plus declaration of US emergency produce mild rally after torrid week
The world’s most powerful central bank, the US Federal Reserve, is preparing a fresh attempt to shore up investor confidence despite a late rally on Wall Street on Friday that ended a torrid week for stock markets on a more positive note.
Fresh pledges of help from China, Germany and the European commission combined with Donald Trump’s declaration of a national emergency over coronavirus to reassure investors after an ordeal for equities on both sides of the Atlantic that echoed the depths of the banking crisis.
Continue reading...Thinktank praises Covid-19 response but says ‘splurge’ relies on already announced plans
Rishi Sunak’s first budget is not as generous as it seems and will leave many Whitehall departments worse off than they were before the spending squeeze began in 2010, according to Britain’s foremost economics thinktank.
The Institute for Fiscal Studies said the chancellor made the budget sound more substantial than it was, while relying on previously announced spending plans.
Continue reading...US stock markets have been on an unprecedented streak since 2009, a bull market of gains
Wall Street’s record-breaking 11-year “bull market” came to an end on Wednesday as fears about the spreading Covid-19 pandemic hit stock markets again.
US stock markets have been on an unprecedented streak since 2009, a bull market of gains. On Wednesday investors sold off shares across all sectors after the World Health Organization declared the outbreak a pandemic for the first time and criticized “alarming levels of inaction” by governments in corralling the virus.
Continue reading...UK and US had worst days trading since 2008 GFC; Global cases near 110,000; Grand Princess passengers disembark. Follow the latest news.
As the whole of Italy goes into lockdown, there are some reassuring signs that measures are starting to work. Across the 11 towns that went into quarantine over two weeks ago, the number of cases is beginning to fall.
Virgin Atlantic has called on the European Commission and UK flight slots co-ordinator to relax rules amid the coronavirus outbreak, PA reports.
Chief executive Shai Weiss said: “Last month Virgin Atlantic and industry partners committed to achieving net zero carbon by 2050.
Continue reading...With cases spiking sharply across Europe and emergency measures in place from California to Saudi Arabia, investors have sent shares tumbling
US authorities are planning a flight tomorrow to repatriate Britons on the coronavirus-hit Grand Princess cruise ship.
The UK Foreign Office issued the following statement:
We continue to work closely with the US authorities to repatriate British nationals on board the Grand Princess. The US are currently planning for a flight to leave tomorrow evening, returning to the UK on Wednesday afternoon. We remain in contact with all British nationals on board and will continue to offer support.
Chinese authorities reportedly scrambled to move people out of quarantine hotels which need full safety inspections after the deaths of at least 10 people in a collapsed hotel.
Joanna Davison, an English teacher, and her partner were suddenly placed in enforced isolation in Shenzhen after a ferry trip about 10 days ago. On Thursday, she told the Guardian she endured a “terrifying” experience as five people in hazmat suits came to test them at her home before they were whisked to quarantine.
Move follows Russian refusal to join Opec-led production cut aimed at keeping prices high
The price of crude oil has plunged by more than 20% after Saudi Arabia, the world’s top oil exporter, said it would step up production from next month, flooding global markets and most likely depressing petrol and diesel prices.
Brent crude futures slid 30% to $31.02 a barrel in chaotic trade on Monday morning, before recovering slightly to $36.06, a drop of 20% on Friday night’s close. It was the worst one-day fall for brent since the start of the first Gulf war in 1991. US crude fell 27% to $30.
Continue reading...Washington DC-based bank grants funds to redraft south American state’s oil laws by lawyers linked to oil giant
The World Bank is to pay for Guyana’s oil laws to be rewritten by a legal firm that has regularly worked for ExxonMobil, just as the US producer prepares to extract as much as 8bn barrels of oil off the country’s coast.
The World Bank has pledged not to fund fossil fuel extraction directly, but it is giving Guyana millions of dollars to develop governance in its burgeoning oil sector, as the south American country prepares for an oil rush led by ExxonMobil and its partners.
Continue reading...Chancellor mulling measures including tax holidays and support when staff self-isolate
Rishi Sunak is poised to announce a package of emergency measures to support businesses hit by the knock-on effects of the coronavirus crisis in his first budget on Wednesday.
The chancellor is considering short-term tax holidays for affected businesses, and taxpayer support for small businesses whose employees self-isolate as the outbreak escalates, the Guardian understands.
Continue reading...World economy’s prospects look bleak owing to Covid-19 outbreak and Donald Trump’s trade policy
At the start of this year, things seemed to be looking up for the global economy. True, growth had slowed a bit in 2019: from 2.9% to 2.3% in the US and from 3.6% to 2.9% globally. Still, there had been no recession and as recently as January, the International Monetary Fund projected a global growth rebound in 2020. The new coronavirus, Covid-19, has changed all of that.
Early predictions about Covid-19’s economic impact were reassuring. Similar epidemics – such as the 2003 outbreak of severe acute respiratory syndrome (Sars), another China-born coronavirus – did little damage globally. At the country level, GDP growth took a hit but quickly bounced back, as consumers released pent-up demand and firms rushed to fill back orders and restock inventories.
Continue reading...Concerns mount that the spread of Covid-19 cannot be stopped as stock markets fall amid investor fears. Follow latest news
Italy may need to call on the European Union to offer leeway on its budget targets as it struggles with the impact of the coronavirus outbreak, a senior official said.
Deputy economy minister, Laura Castelli, made the comments a day after prime minister Giuseppe Conte warned that the fallout from the outbreak, which has concentrated in the economic powerhouses of northern Italy, would be “very strong”.
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Continue reading...Deaths in mainland China pass 2,000 and Foreign Office tells Britons to stay on the Diamond Princess cruise ship
Inspectors in protective suits have been going door to door in Wuhan in an effort to find every infected person, the Associated Press reports.
Wednesday marked the final day of a campaign to root out anyone with symptoms whom authorities may have missed so far.
Britons returning home from the Diamond Princess cruise ship that has had more than 600 cases of coronavirus will be quarantined at the same NHS facility that housed people flown back to the UK from Wuhan.
The Department of Health said: “We can confirm that an accommodation block on the Arrowe Park NHS site will be used to isolate those returning from the Diamond Princess cruise ship in Japan. They will be kept in this location for the 14-day quarantine period, with around-the-clock support from medical staff at all times.”
Related: Foreign Office tells Britons not to leave cruise ship struck by coronavirus
Continue reading...UK prepares evacuation flight for cruise ship passengers. Follow the latest news
The Italian luxury fashion house Prada has postponed a fashion show due to take place in Japan in May.
In a statement, the company said:
Due to the current uncertainty related to the spread of the novel coronavirus, the Prada Resort fashion show originally scheduled for May 21 in Japan will be postponed.
Repatriating passengers from the coronavirus-stricken cruise ship in Japan is not without risks, a medical expert has said.
Paul Hunter, professor in Medicine at the University of East Anglia, said:
Considerable care needs to be made to ensure that the passengers do not transmit infection between themselves or to cabin crew during the flight home and once back on home soil they do not act as a focus for the spread of the disease into their home countries – any returning passengers may be put in quarantine on their return.
It is well known that certain infections such as influenza and norovirus can spread rapidly on board cruise ships. Cruise ships take passengers and crew from all over the world, often passengers are relatively elderly, they spend most of their time on board indoors mixing with others.
The most likely [infection] route is direct person-to-person transmission when people are close to an infected person, but with currently publicly available information it is not possible to rule out other issues at this stage.
Continue reading...International trade slump and coronavirus outbreak combine to weaken consumer demand
Japan’s economy is heading for a recession this year after figures showed the world’s third largest economy slumped by an annual rate of 6.3% during the last quarter of 2019.
Germany, the world’s fourth largest economy, is also expected to stumble as the coronavirus epidemic and a slump in trade with China combine with weak consumer demand to drag growth lower.
Continue reading...Rolling coverage of the latest economic and financial news, including the latest eurozone growth figures
Andrew Kenningham of Capital Economics has told clients:
“We think the economy will continue to flirt with recession in the first half of this year.”
It’s hard to put too much gloss on a stagnating economy, but the German government has tried to strike an optimistic-ish tone this morning.
Berlin’s economy ministry says Germany’s economy is going through a weak phase, but it’s encouraged that business sentiment has improved.
Continue reading...