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Get up to date with what’s moving global markets this morning.
(Bloomberg) --
The biggest global equity rout since the financial crisis shows no signs of letting up. The World Health Organization says the threat of a pandemic is “very real.” And Asia has a new richest man, sort of. Here are some of the things people in markets are talking about today.
If markets were just nervous last week, this week it’s real. The global equity rout that sent U.S. stocks to the biggest plunge since the financial crisis showed no signs of letting up in Asia Tuesday, with investors on edge over the spreading coronavirus and a full-blown oil price war. Futures in Japan were down about 3% and Australian contracts fell almost 5%. The S&P 500 Index sank 7.6%, the most since December 2008, as investors fled risk assets with virus cases surging and the Trump administration so far unwilling to step in to soften the expected economic blow. Treasury yields plummeted, though were above lows seen in Asian trading Monday. Crude sank over 25% and credit markets buckled. The breakneck speed of the sell-off is putting the longest bull market in jeopardy. Here’s a rundown of the dramatic market moves across assets globally. But, it’s not all doom and gloom for some: Ray Dalio and Lloyd Blankfein tweeted words of encouragement amid the slide, telling their followers to “look for the opportunities.”
Less than 48 hours after Prime Minister Giuseppe Conte announced far-reaching measures to control the spread of the coronavirus in the region around Milan, Italy will now attempt to extend a lockdown throughout the country. The new restrictions come after the number of cases in Italy soared by 25% to 9,172 on Monday. The story isn’t much improved elsewhere either. Cases in Spain almost doubled, French President Emmanuel Macron called for urgent European cooperation and the World Health Organization is now saying the threat of a pandemic is “very real.” The Trump administration is also drafting economic measures to blunt the fallout from the outbreak, which has seen 600 confirmed infections in the U.S. alone. Germany reported its first two deaths, and Canada announced its first, a patient in British Columbia. Cases surpassed 113,000 worldwide, and deaths exceeded 3,900. Here’s how Bloomberg is visually mapping the outbreak across the world. Meanwhile, JetBlue Airways became the latest major airline to withdraw its earnings forecast, and Cathay Pacific is about to show how badly the industry is suffering.
And in more bad news: Just as China’s factories get back on their feet after being laid low by the coronavirus, a drop in demand from their biggest trading partners around the world is coming back to give them another hit. Manufacturing firms across China told Bloomberg News that they are close to being able to resume full production as domestic infections slow to a trickle, but are now facing canceled orders and fewer opportunities to gain new customers as the virus grips elsewhere. The weaker demand from developed markets is now posing a fresh risk to China’s restart, with the world’s second-largest economy already facing its first quarterly contraction in decades and the weakest year since the early 1990s. That could feed a global vicious cycle, which in a worst-case scenario, adds to recessions in the U.S., the euro area and Japan to chop some $2.7 trillion off global output, according to Bloomberg Economics. “We are actually more worried about the development of the epidemic in Europe and the U.S., which will affect their domestic consumption,” said Mark Ma, owner of Shenzhen-based Seabay International Freight Forwarding, a company that relies on those regions for 80% of its business.
Indian energy tycoon Mukesh Ambani is no longer Asia’s richest man, relinquishing the title to Jack Ma after oil prices collapsed along with global stocks. The rout, exacerbated by mounting fears that the spread of the novel coronavirus will thrust the world into a recession, erased $5.8 billion from Ambani’s net worth on Monday and dropped him to No. 2 on the list of Asia’s richest people, according to the Bloomberg Billionaires Index. Ma, the Alibaba founder who relinquished the No. 1 ranking in mid-2018, is back on top with a $44.5 billion fortune, about $2.6 billion more than Ambani. While the coronavirus has curtailed some of Alibaba’s businesses, the damage has been mitigated by increased demand for its cloud computing services and mobile apps. Shares in Reliance Industries, by comparison, plunged 12% on Monday, the most since 2009.
Tesla shares opened lower on Monday as the concerns about the Saudi-Russia price war in oil spurred the crash in crude and the coronavirus outbreak weighs heavily on car sales in China. Shares of the electric-vehicle maker fell as much as 14% to $605 in New York before a wider sell-off prompted a market-wide trading halt. The shares last traded at these levels in late January, but the stock had risen to about $917 in mid-February, just before a broader meltdown hit the markets amid the intensifying virus risks. Dwindling oil prices, triggered by the breakup of the OPEC+ alliance, spells trouble for Tesla: With both Russia and Saudi Arabia flooding the market with cheap oil, the company’s expensive battery-driven vehicles will become a tougher sell. Meanwhile, the slowdown in China is another major challenge, given a big part of the company’s growth trajectory is dependent on that country.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Trump will seek “very substantial” economic relief measures to counteract the impact of coronavirus.
- People with high blood pressure are a major risk group for death from the virus.
- iPhone shipments to China plunged more than 60% last month.
- Malaysia’s prime minister picked the head of one the country’s main banks as his new finance minister.
- Facebook named two new directors, making their board 40% female.
- Mask or no mask? Here’s what the experts have to say.
- All rise! The soufflé is the chefs’ comfort food of choice this year.
To contact the editor responsible for this story: Alyssa McDonald at amcdonald61@bloomberg.net
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