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(Bloomberg) --

Good morning. Markets melted down spectacularly, central banks have disappointed and now eyes turn to what governments can do on both sides of the Atlantic. Here’s what’s moving markets.

Meltdown

If markets are going to have one historic day of falls in a week, why not have a second? Thursday was even more brutal than Monday, with Europe’s main stock gauge falling the most on record, European markets more broadly going into meltdown and U.S. equities crushed, too. The European Central Bank’s response disappointed investors and so did the Federal Reserve’s bond-buying move. It all puts the focus squarely back on what fiscal measures governments intend to take to deal with the economic fallout of the virus, because it would appear central bank influence is waning. So all eyes are back on governments and the Fed.

Delay and Closure

Europe’s response is ramping up after it was blindsided by the U.S. travel ban. The U.K.’s government is now focused on delaying the worst of the outbreak and conceding that many more will be infected, though whether the economy is strong enough to withstand the hit is in question and talk of the three-day-week of the 1970s is echoing. Normal day-to-day life in Italy has effectively ended for the time being, France is closing schools, Spain’s deputy premier has been quarantined and the country is banning short-selling on some stocks on Friday. Plus, eastern European countries are restricting entry and closing sites.

Trump

Equally important for European, indeed global, markets will be what the U.S. government does to shore itself against the virus hit, with New York having now declared a state of emergency. President Donald Trump said he won't back the bill put forward by the Democrats and the Senate has canceled the recess planned for next week. There are said to have been fierce battles in the Oval Office over Trump’s address on the virus earlier this week. And the president said he doesn't need to be tested for coronavirus, despite having met an aide to Brazil’s president who later tested positive.

The Rout

The market carnage was near-universal. Equities first. Traders described a “total capitulation” and black swans abound, bear markets signal an 80% chance of recession, trillion-dollar valuations are under threat and Canadian stocks flirt with the worst drop since the 1940s. Big corporates are maxing out credit lines, Brazilian assets got slammed and there are fears global new investment will grind to a halt. Plus palladium got crushed and entered a bear market, investors are even selling gold to meet their liquidity needs and, not to be left out, Bitcoin nosedived.

Coming Up…

Stocks in Asia plunged after yesterday's havoc but European and U.S. stock futures declined have eased, though anyone who has been covering markets in recent days would advise against relaxing. Oil prices are also having a slightly better start to the day, though remain on track for the worst weekly decline since 2008. Earnings are very thin on the ground and the data slate is relatively bare, with German, French and Spanish inflation coming.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours. 

• The world’s richest people have lost nearly $1 trillion.
• Everything is coming to a head for investors.
• Risk-parity trades are ringing alarm bells.
• The extreme stress of airline stocks, in charts.
• Disney is shutting down resorts, suspending cruises.
• Italian Fortnite players are straining broadband networks.
• Soccer authorities will meet to discuss their virus plans.
• Influencers gloss over the coronavirus.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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