Your level-headed briefing on how the coronavirus epidemic is affecting the markets, global business, our workplaces and daily lives, with expert input from our reporters and specialists across the globe.
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Latest news
President Trump is expected to declare a state of emergency later today
Johnson & Johnson said it was rationing supplies of consumer products including Tylenol, the popular branded paracetamol, after soaring demand during the coronavirus outbreak
Spain announced a state of alert from Saturday, giving the government powers to requisition factories and restrict people’s movements.
FTSE 100 in London closes up 2.46% at 5366
Whiplash week for markets
Markets began to bounce back on Friday after investors digested the latest interventions from global regulators and policymakers. Record falls yesterday included a 10 per cent drop on Wall Street, ending the longest US bull run in history.
Thursday’s intervention by the Federal Reserve had failed to calm nerves in the US, while investors in Japan were spooked by fears the Olympic Games could be cancelled. The UK FTSE 100 index suffered its worse fall since the Black Monday crash of 1987.
China began today’s round of measures, launching a $79bn stimulus to make it easier for banks to lend to companies hit by the virus. The country’s economic activity ground to a halt in late January and some analysts say first-quarter growth could even turn negative.
In Europe, Ursula von der Leyen, the European Commission president, announced €37bn in liquidity support in a package that she said was only the beginning of the EU’s response. Brussels officials warned it was “very likely” that EU growth rates would turn negative this year. Germany pledged a “bazooka” of unlimited cash for virus-hit businesses. Italy and Spain also made interventions.
Markets
Yesterday’s historic equity market crash in the US could be an indicator that “monetary morphine” — trillions of dollars of central bank support — is no longer effective, says columnist Gillian Tett. Could the corona-induced turmoil start a dash for cash?
Collapsing global demand for oil because of the virus outbreak and a squabble between Russia and Saudi Arabia have led to the “nuclear version of a price war”. Read our analysis: Eight days that shook the oil market — and the world.
Robert Armstrong delves into the numbers and puts Thursday’s US sell-off into context.
Business
British Airways warned airlines were facing a “crisis of global proportions like no other” and said it would have to cut jobs and suspend routes. An internal message to staff, seen by the FT, said that, while BA was financially resilient and had a robust balance sheet, it was “under immense pressure”.
The International Chamber of Commerce has written a letter to the G20 to express concern about how countries are imposing export controls on medical equipment, sanitiser, and protective clothing as the coronavirus spreads.
This week saw the 20th anniversary of the dotcom bubble. Since the subsequent crash, tech start-ups have had little experience of severe downturns. They could be in for a shock, writes Richard Waters.
Global economy
Mário Centeno, the president of the group of eurozone countries, laid out plans to unleash the “full flexibility” of its budget rules so member countries could boost spending.
Italy, which passed the 1,000 deaths mark yesterday, stands alone among eurozone members as the country that never fully recovered from the crises that swept the block after currency union in 2010, says columnist Tony Barber. Its draconian actions carry risks for its many small, family-run businesses.
Two prominent economists write for the FT on why borders should not be closed against the coronavirus, stressing the need for free trade and co-ordinated action to ensure medical supplies get to where they are needed.
The essentials
The US defence department’s research arm is developing three new coronavirus tests that aim to diagnose the disease at an earlier stage and with greater accuracy than has so far been possible. The move comes after criticism of the US response to the coronavirus threat.
Britain’s chief scientific adviser stoked controversy on Friday when he said that around 40m people in the UK could need to catch the coronavirus to build up “herd immunity” and prevent the disease coming back in the future.
Edward Luce in Washington and Rana Foroohar in Brooklyn — “the homeworking capital of the world” — swap notes on working life and the etiquette of epidemics. “I’m feeling good about my move to cash several months ago,” says Rana. “I just wish I’d thought to buy stock in Purell.” Janan Ganesh says millions find meaning in office work. He is not one of them.
Final thought
In a world turned upside down by the coronavirus, there is pleasure in delayed satisfaction, says Tim Harford, a confirmed precrastinator in a world of procrastinators.
Source: Economy - ft.com
