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Get up to date on what’s moving global markets this morning.
(Bloomberg) --
For the first time, there were more new coronavirus cases outside China than inside it. Hong Kong’s government unveiled a budget packed with handouts. And Microsoft cuts its sales forecasts for the current quarter.Here are some of the things people in markets are talking about today.
In the last 24 hour period, there were more coronavirus cases in other countries than in China, the World Health Organization said. It’s a significant development — this is the first time infections elsewhere have outstripped those in China since the initial patient was identified on Dec. 8. New infections were diagnosed in countries from Pakistan to Brazil, which reported the first case in Latin America, while Italy and Iran confirmed additional patients with the disease. Germany also said it was likely at the start of an epidemic, and 700 people remained confined in a hotel in Tenerife, one of the Canary Islands. So what does all that mean for the world? For the U.S., at least, one top American health official said the increase in outbreaks outside China will make it harder to keep the virus outside the U.S. President Donald Trump and federal health officials plan to brief the public Wednesday evening in the U.S. on efforts to prevent the spread of the pathogen. Thus far, 2,771 have died and 81,233 people have been infected globally. It’s leading some to question: Is this a pandemic? If so, here’s what that will mean. Meanwhile, the virus’s spread is putting a question mark over the Tokyo Olympics.
Stocks in Asia looked set for a cautious start on Thursday after a rocky session on Wall Street that saw Treasury yields hit new all-time lows and declines in U.S. shares. The S&P 500 Index slipped, bringing its five-day retreat to 8%, as concern mounts that the spread of coronavirus into the world’s largest economy could curb growth. Microsoft Corp. fell in after-hours trading after saying the virus continues to impact its supply chain in China. The Australian dollar tumbled to a fresh 11-year low. Elsewhere, traders will be watching the Bank of Korea’s policy decision Thursday. Meantime, industrial metals and minerals mostly dropped, including copper and iron ore. Crude oil slumped back below $49 a barrel in New York.
Australia has the world’s top-performing equity market over the past 120 years, thanks to its ability to largely evade the global financial crisis. That’s according to a new study published by Credit Suisse Group AG, which explained that Australian stocks have achieved an annualized real local-currency return of 6.8% per year since 1900. Converted to U.S. dollars, Australia’s return trumps that of 22 other equity markets around the world for which the researchers compiled data. The U.S. ranked second, followed by South Africa and New Zealand. The countries studied made up 98% of the global equity market in 1900 and still represent over 91% today. While Australia is often called the “lucky country” due to its abundant natural resources, its services-based economy combined with its strong banking and savings system helped make it mostly immune to the financial crisis, the report said. But things aren’t looking as rosy for the Australian economy. The coronavirus hit has exposed the extraordinary depth of Australia’s economic dependence on China and fueled questions over whether the nation is too reliant on the Asian behemoth.
Hong Kong’s government unveiled a budget packed with giveaways — including a one-time cash handout that economists said isn’t actually likely to spur growth. The main feature of the annual budget announced Wednesday is a payment of HK$10,000 ($1,284) to each permanent resident of the city 18 or older, aiding a population “overwhelmed by a heavy atmosphere,” Financial Secretary Paul Chan said. Chan estimated the deficit will reach a record HK$139.1 billion in the coming fiscal year. As the city struggles to stabilize an economy battered by political unrest and the coronavirus, Chief Executive Carrie Lam is seeking to stop the slide of the collapsing economy by rolling out the boldest budget in recent years amid blame for government inertia. Months of political unrest over China’s role in the city pushed Hong Kong last year into its first annual recession in a decade, with economists forecasting a second annual contraction in 2020 as disruptions from the coronavirus outbreak further depress output.
Microsoft is the latest company to join the scores of firms reducing sales forecasts for the current quarter, thanks to the coronavirus’ impact. In a statement on Wednesday, the company said it doesn’t expect to meet its guidance for fiscal third-quarter revenue in its Windows personal-computer software and Surface device business because the supply chain is returning to normal at a slower pace than expected. Last month, Microsoft had projected sales of $10.75 billion to $11.15 billion in that division. When the world’s largest software maker reported earnings in January, it offered a wider-than-usual revenue target for the More Personal Computing business to account for the uncertainty related to the spread of the disease. The company joins Apple and HP in saying that supply-chain disruptions related to the virus, known as Covid-19, will crimp results in the current quarter. Microsoft shares slipped about 2.1% in late trading following the announcement.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Here are the winners and losers from Hong Kong’s handout budget.
- Virologists in zombie movies are inspiring bond managers’ new playbooks.
- Thailand’s richest man is building Bangkok’s tallest skyscraper.
- Profits are peaking for the world's most lucrative mobile games.
- How just one patient turned Korea’s virus outbreak into an epidemic.
- The race to lead Malaysia comes down to two long-time rivals.
- Virus or not, religion dominates in the land of Islamic shrines.
To contact the editor responsible for this story: Alyssa McDonald at amcdonald61@bloomberg.net
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