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Get up to date with what’s moving global markets this morning.
(Bloomberg) --
The U.S. Centers for Disease Control and Prevention warned Americans to prepare for a coronavirus outbreak at home. Asian markets brace for another rocky trading day as virus fears dig deeper. And global trade suffered its first full-year drop since the financial crisis. Here are some of the things people in markets are talking about today.
Top U.S. health officials have begun to describe a range of measures the government could take if the outbreak of coronavirus eventually spreads widely in the U.S. They outlined emergency plans that could result in significant disruptions to daily life for some, including school closings, cancellations of sporting events, concerts and business meetings. Similar measures have been taken by other countries facing outbreaks as the virus has begun to pop up in meaningful numbers outside China. While the U.S. has seen a small number of cases and hopes to limit the spread, health officials are preparing as if there will be a pandemic, Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases, said. “It is not a matter of if, but a question of when, this will exactly happen.” The comments undercut President Donald Trump’s upbeat comments on Tuesday that the virus poses little threat to the U.S. Here are the latest numbers on the virus.
Asian traders prepared for more severe market moves on Wednesday after heightened concern about the spreading coronavirus triggered a slide in U.S. stocks and Treasury yields. The 10-year U.S. Treasury yield fell to a record low of 1.3055% as investors sought shelter from the virus’s impact on the outlook for growth. The S&P 500 Index dropped 3%, bringing its losses to 7.6% over the past four days. Equity futures fell in Japan, Hong Kong and Australia. Elsewhere, volatility gauges spiked, sending the Cboe’s measure of equity gyrations surging past 30 for the first time since 2018. Crude oil slumped again after Monday’s slide of nearly 4%.
The Hong Kong stock exchange is turning from a tough year to a trading boom. After a rough 2019, virus-fueled volatility is now boosting trading volumes to start the new year. The exchange is estimated on Wednesday to report a 2% increase in net income for 2019, helped by a rise in initial public offerings as the bourse maintained its place as the world’s biggest IPO market. That allowed it to weather a 19% drop in trading — typically its main source of revenue -- as the city was rocked by anti-government protests. In early 2020, the tables have turned. Trading has boomed with investors rushing to adjust their portfolios to guard against the impact of the spreading coronavirus, while IPOs have all but come to a halt.
Global trade suffered its first full-year drop since the financial crisis in 2019 as weaker world growth and a manufacturing recession took their toll. Updated figures from the CPB World Trade Monitor show trade volumes fell 0.4% last year. Though the decline isn’t huge, it’s the first since 2009 and follows growth of more than 3% in 2018. It reflects President Trump’s protectionist stance and the U.S. trade war with China, as well as Germany’s industrial slump. There was hope for a better 2020, and surveys of business activity and manufacturing had started to slowly improve. But the outbreak of the virus, which has shut huge areas of China, closed factories, and now spread internationally, has put a damper on that.
President Trump touted “ tremendous progress” on a trade deal with India as he sought to strengthen ties with a country that’s proving key to American efforts to blunt China’s influence in Asia. Officials have tried to hammer out a modest trade deal opening up India to U.S. agricultural products and medical devices in return for the restoration of preferential export status that Trump stripped from India last year. There was an expectation that a mini-deal would be unveiled before the U.S. president’s visit, but Trump has since said he’s in no hurry to finalize it.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Disney named Bob Chapek as its new chief executive officer.
- Virus panic is devastating Chinatowns from New York to Sydney.
- Millions in India could end up in Modi’s new detention camps.
- Calpers top money man is swept up in Chinese espionage fears.
- Air New Zealand is putting bunk beds in economy class.
- India's best-performing bank stock is sputtering on succession worries.
- Singapore has a $100 billion plan to survive in a far hotter world than experts predicted.
- Parents want refunds for costly education fees as Hong Kong extends school closures.
To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net
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