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BlackRock’s CEO is predicting the economy will eventually recover, but will be forever changed. China’s consumption levels are faltering as the country struggles to get its shoppers out and about. And Italy is being warned to heed the early mistakes of Wuhan by shifting to mass quarantining of coronavirus patients with mild symptoms. Here are some of the things people in markets are talking about today.
Italy needs to shift to mass quarantining of coronavirus patients with mild symptoms instead of letting them isolate at home, according to a group of Chinese experts who traveled to the European nation to advise officials there. Doctors in Wuhan made the same error early on in the outbreak, said Liang Zong’An, head of the respiratory department at the West China Hospital at Sichuan University. Researchers now know that those with mild symptoms who are told to stay at home usually risked passing the virus to family members, as well as to others outside their homes as some still moved around freely. Elsewhere in Europe, governments moved to tighten restrictions to contain the coronavirus outbreak amid an unrelenting rise in infections and deaths, and now Russia is even moving toward a lockdown. In New York, new infections seem to be finally slowing, but over in India, doctors are saying it’s only a matter of time before the virus sweeps the world’s second-most populated country. On a hopeful note though, a century-old vaccine is being investigated as a potential weapon against the virus. Here’s how Bloomberg is tracking everything coronavirus-related.
Asian stocks looked set to rise after a rally in their U.S. counterparts, as investors saw glimmers of optimism in efforts to deliver rapid testing for the new coronavirus. The dollar climbed. Futures pointed higher in Japan, Australia and Hong Kong on the last trading day of the quarter. S&P 500 futures were little changed after the index climbed for the fourth time in five days with health-care shares among the biggest gainers. Crude clawed back some losses after falling more than 5%. The 10-year Treasury yield rose, while gold dipped. Global equities are on track to round out their worst quarter since the last three months of 2008 as investors grapple with the economic impact of the coronavirus spread.
BlackRock Chief Executive Officer Larry Fink predicted the economy will eventually recover from the coronavirus outbreak, though he said the crisis will reshape investor psychology, business practices and consumer habits. The pandemic that swept through nations across the globe this year is causing people to re-evaluate “just-in-time” supply chains and dependence on air travel, Fink wrote in his annual letter to shareholders dated Sunday. “In my 44 years in finance, I have never experienced anything like this,” Fink wrote, adding that “as dramatic as this has been, I do believe that the economy will recover steadily, in part because this situation lacks some of the obstacles to recovery of a typical financial crisis.” The world’s largest asset manager is overseeing three separate debt-buying programs on behalf of the Federal Reserve.
The resilience that defined Chinese markets during unprecedented global volatility surprised almost everyone this quarter. But while a national preference for domestic assets helped fuel the feat, there’s evidence that’s fading. A measure of volatility on the Shanghai Composite Index has climbed to the highest in nearly four years, even though it remains one of the few major global stock benchmarks that’s avoided falling into a bear market. The yuan, which hit the highest versus a basket of 24 currencies since mid-2018, has lost 1.8% versus those peers in the past five days. And while government bonds are in line for their best quarterly showing in more than a decade, the 10-year yield has climbed about 10 basis points since hitting its lowest since 2002 earlier in March. Other signs of waning confidence include a slowdown in stock-trading activity, with turnover sliding from a February peak.
Relax, eat out and shop. That’s the latest message from the Chinese government to its people, after months of warning them to stay indoors because of the coronavirus. In a bid to jump start consumption, authorities in some places are distributing vouchers, asking companies to give people paid time off and offering subsidies on larger purchases like cars. Domestic media are playing up stories of officials venturing out to enjoy local delights like bubble tea, hot pot and pork buns. But many Chinese are still hesitant to return to their old lives. They’re worried about whether it’s safe to go outside and financial pressures as unemployment spikes.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Australia fires a “warning shot” on foreign suitors to firms.
- The number of people filing for U.S. unemployment benefits is forecast to set a record for the second straight week.
- Oil traders are scrambling to try and divert a flood of American crude to Asia.
- A combative day trader dumped Japan stocks amid a $75 million loss.
- A date has been set for the rescheduling of the Tokyo Olympics.
- Home cooks are grabbing discount wagyu, uni and caviar.
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