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
Official Chinese data lag behind activity — and can sometimes be viewed as open to manipulation — so we have constructed our own metric. The FT China Economic Activity Index, a measure of the country’s slowdown and nascent recovery, features indicators from real estate sales and box office numbers to container freight. Full details are on our maps and data page. Also, read today’s analysis on why China’s economic stimulus looks set to be a lot tamer than its response to the financial crisis in 2009.
Zara, the world’s largest clothes retailer, writes off almost €300m in inventory as sales plunge
Turkey announces $15bn support package for businesses and vulnerable people
Dash for cash
Another day of severe turbulence in global markets saw shares fall despite more government interventions. Bond prices also declined, a sign that even assets normally regarded as safe havens are buckling under the pressure.
The US Federal Reserve overnight had unveiled its latest support measures while the White House had begun talks with Congress on a $1tn fiscal stimulus package.
To add to the problems in the US, big banks were leading a wave of companies putting share buybacks on hold. Some analysts fear this will remove a pillar that the stock market has come to depend on. Repurchases helped to power the recent record run in share prices before the market turned bearish.
Bond yields — which move in the opposite direction to prices — were at their highest levels in weeks in the US and Europe, as fund managers under pressure to return cash to investors were forced to dump their most liquid holdings.
“This is fire-selling of liquid assets by those who need to meet redemptions,” said one portfolio manager. “A lot of people need cash and they’re liquidating the only thing that they can.”
Markets
Janet Yellen and Ben Bernanke, former Federal Reserve chairs, contribute to our new series on economic cures for the coronavirus emergency. Reviving crisis-era programmes is a first step but the US central bank may need to buy corporate bonds, they argue.
Oil prices today fell to a 17-year low. To make matters worse, the world could run out of storage capacity within months. Demand has been crushed by the pandemic while the Saudi-Russia price war has boosted supplies.
Private investors: fill your bathroom with toilet rolls if you must, but think twice about emptying your portfolios. That’s the advice from one fund manager writing for the FT.
Business
The car industry suffered more blows as Ford, GM and Fiat Chrysler said they would idle US plants. In the UK, BMW and Toyota said they would suspend production, following announcements from Nissan and Vauxhall, which are shuttering as sales fall and supply chains seize up.
UK supermarkets are fighting a battle against panic buyers. Wm Morrison, one of the big four groups, said the government should suspend rules intended to stop retailers colluding.
The coronavirus crisis could be the acid test for “stakeholder capitalism” says the FT’s Moral Money. Companies may evangelise about “purpose ahead of profit” when times are good, but who is just talking the talk and who is walking the walk?
Global economy
From Singapore to Rotterdam, the world’s ports are struggling as traffic slows from China, the world’s biggest exporter of goods. Even before the coronavirus crisis, world trade had contracted 0.5 per cent last year, the first annual decline since 2009, as the US trade war with China and its threats of tariffs on EU exports created uncertainty.
Eurozone member countries are grappling with how to use the bloc’s economic rescue fund — the European Stability Mechanism — against the fallout from coronavirus. The ESM was set up during the sovereign debt crisis to provide a permanent backstop for countries that could no longer tap financial markets to raise funding.
The new Bank of England governor said he was ready to pump unlimited quantities of money into the economy through its new commercial paper facility — and would go further if requested to by the government.
The essentials
The global total of coronavirus cases today passed the 200,000 mark, as a second wave of cases hit Asia, dispelling hopes that the region had contained the disease. A sharp jump in deaths in Indonesia means it now outranks Italy in mortality rates.
African nations, despite having recorded few cases, are taking early and severe action to try to stamp out the disease before it hits where health services are weak.
In Europe, the new epicentre of the virus, Parisians are struggling to adjust to life under lockdown, while Vo in Italy has stopped all new infections thanks to an aggressive testing regime.
Final thought
We’re all homeworkers now. Read tips from a seasoned FT pro on how to cope when you’re working in the twilight zone between sofa and stairs. Start with a dedicated space: “If you do not have a separate room, under no circumstances try to make a ‘home office’ out of a hopeless space that cannot be turned to any other use — a half-landing, a cubbyhole beneath the stairs, a bit of leftover corridor. It will feel temporary and uncomfortable, a domestic exile.”
Get in touch
How is your workplace dealing with the coronavirus? Please tell us what your company is doing by emailing [email protected]. We may publish your contribution in an upcoming newsletter. Thanks.
