Fed launches unlimited QE, but markets keep falling - as it happened

Graeme Wearden

from on 2020-03-23 20:12 (#513MC)

US central bank has produced its biggest bazooka yet, promising massive new support for the American economy

8.12pm GMT

Time for a recap

World stock markets have suffered fresh losses, despite a fresh attempt by America's central bank to protect the US economy from the coronavirus pandemic.

8.04pm GMT

It's over! Until tomorrow.

Wall Street has closed for the night, with the Dow Jones industrial average and the S&P 500 both down around 3%.

JUST IN: Dow Jones closes down nearly 600 points as markets continue to reel from fears of coronavirus' impact on the global economy. https://t.co/ziUp2C7nT1 pic.twitter.com/DAG9BgOE8c https://t.co/WS2CAjyI1E

Dow closes a hair shy of 600 points down. pic.twitter.com/QF5eawCsTm

7.30pm GMT

Dow Jones down over 800 points half an hour into the close. Yet another Black Monday!

7.28pm GMT

With 40 minutes to go until the Wall Street closing bell, shares are sinking towards their earlier lows.

The Dow is down over 4% again, shedding 852 to just 18,321 points.

7.20pm GMT

The race is on to build thousands more ventilators to help Britain's National Health Service handle the imminent spike in Covid-19 patients.

My colleague Rob Davies has the details:

The government has asked manufacturers including Airbus, Rolls-Royce, Nissan and JCB to help produce up to 30,000 ventilators in as little as two weeks, amid concern that the 8,175 the NHS has available will not be enough to treat a surge in Covid-19 patients.

As manufacturers race to heed that call, in an effort some have likened to British industry's effort to help produce Spitfires during the second world war, every effort is being made to support them, both by government and the broader business community.

6.56pm GMT

Risk Haven Assets update:#Oil - US Crude 2371 -0.39%#Gold 1549 +3.36%#USDJPY 111.54 +0.66%#VIX (Undated) 53.81 -11.57%#Bitcoin 6291.42 +5.94%#DOW 18562 -3.18%

6.46pm GMT

It's approaching 7pm GMT, which means it's long past hometime for many in the UK.

But in this new era of remote working, many workers are already at home....and possibly chained to their laptop still, as Bloomberg's Lucy Meakin points out:

It's after 6pm in the U.K. but how many of you at home are still working? I'll just leave this here for you when you're done https://t.co/WMuabzz9Ep pic.twitter.com/ix4xgLrulN

6.32pm GMT

Our economics editor Larry Elliott fears the US Federal Reserve is running out of ammunition to fight the looming coronavirus recession, following today's emergency measures.

He writes:

These are troubling times for the US Federal Reserve. The US central bank is trying everything it knows to pull the financial markets out of their tailspin but nothing seems to work.

Before Wall Street opened the Fed announced that its new plan was to provide infinite amounts of money through its quantitative easing programme. The response of traders was to shrug and carry on selling.

6.30pm GMT

Worryingly, hopes of a coordinated international response to Covid-19 are being undermined by tensions between Washington and Beijing.

Our diplomatic editor Patrick Wintour explains:

G20 finance ministers have held telephone talks but were not expected to issue a joint declaration, as divisions persist primarily between the US and China over responsibility for the coronavirus pandemic.

The G7 group of mainly western leaders did manage a joint communique after a similar teleconference last week, but it was remarkable for making no reference to China, the world's second largest economy. A full G20 world leaders teleconference is due later this week, but whether a consensus can be reached on a global fiscal stimulus is not clear.

6.23pm GMT

The UK City watchdog, the FCA, has issued a statement tonight saying it has no plans to close the markets or ban short-selling....

The FCA says its keeping markets open (despite some calls for closure) and has no problem with current short selling trends, despite bans in other countries

"There is no evidence that short selling has been the driver of recent market falls" pic.twitter.com/Y5pJssXudq

6.08pm GMT

Donald Trump's top economic adviser, Larry Kudlow, is making another attempt to prop up the markets:

"I would bet on America," NEC Director Larry Kudlow tells long-term investors as the coronavirus pandemic roils markets. "I would stay in the market and I might want to buy." https://t.co/Hd59FVyyyj pic.twitter.com/SoeiA3svfK

Last month, NEC Director Larry Kudlow said the U.S. had "contained" the coronavirus.

"Now we're way beyond that," he tells @KellyCNBC today. "Nobody could have predicted or expected this." https://t.co/DPNQtOwOMR pic.twitter.com/BssMTwDZVv

Trump advisor Larry Kudlow admits he was wrong about coronavirus being 'contained' https://t.co/DPNQtOwOMR

6.04pm GMT

The IMF's warning of a deep recession this year hasn't helped the mood in the market.

With two hours to go on Wall Street, the Dow is down 3% or over 600 points:

5.53pm GMT

UK engineering firm Dyson says it is trying to help address the chronic shortage of ventilators, needed for Covid-19 patients.

The firm (known for its vacuum cleaners, hair dryers and hand dryers) explains:

"Dyson has responded to the Government's request for support with its Covid19 response, by focusing resources into the design and manufacture of a ventilator for the NHS.

This is a highly complex project being undertaken in an extremely challenging timeframe. We have deployed expertise in air movement, motors, power systems, manufacturing and supply chain and are working with medical technology and development company, TTP - The Technology Partnership, based in Cambridge.

5.48pm GMT

IMF chief Kristalina Georgieva has now tweeted her message to the G20:

In today's meeting of #G20 finance ministers and central bank governors, I reiterated that all countries need to work together to protect people and limit the economic damage. Here are the three key points I emphasized. (1/4) https://t.co/Ek1DT1ZpSQ #COVID19 #coronavirus pic.twitter.com/YrIQSajtS5

First, the global economic outlook for 2020 is expected to be negative. We will face recession at least as bad as during the global financial crisis or worse, but we expect recovery in 2021. Countries should undertake more bold fiscal actions. (2/4) https://t.co/Ek1DT1ZpSQ

Second, emerging markets and low-income countries face significant challenges, particularly low-income countries in debt distress, an issue on which we are working closely with the @WorldBank. (3/4) https://t.co/Ek1DT1ZpSQ

Third, many countries are turning to the IMF for financial assistance. To date, we have received close to 80 requests and we stand ready to deploy all our US$1 trillion lending capacity. (4/4) https://t.co/Ek1DT1ZpSQ #COVID19 #coronavirus pic.twitter.com/0bPD9V7iyC

5.21pm GMT

Newsflash: The head of the International Monetary Fund has warned that the coronavirus could cause a deeper downturn than the last financial crisis.

The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be.

They are badly affected by outward capital flows, and domestic activity will be severely impacted as countries respond to the epidemic. Investors have already removed $83bn from emerging markets since the beginning of the crisis, the largest capital outflow ever recorded. We are particularly concerned about low-income countries in debt distress-an issue on which we are working closely with the World Bank.

We will massively step up emergency finance-nearly 80 countries are requesting our help-and we are working closely with the other international financial institutions to provide a strong coordinated response.

5.18pm GMT

European finance ministers have taken the unprecedented decision to suspend limits on government borrowing, in response to the economic shock of coronavirus.

Meeting via telephone conference, the EU's 27 finance ministers rubber-stamped a proposal from the EU executive to trigger the "general escape clause" that means a suspension of borrowing limits because of a severe economic downturn.
In a statement, the group said:

Ministers of finance of the member states of the EU agree with the assessment of the commission, as set out in its communication of 20 March 2020, that the conditions for the use of the general escape clause of the EU fiscal framework - a severe economic downturn in the euro area or the union as a whole - are fulfilled.

Dutch finance minister says effective suspension of EU budget rules is enough for governments to spend to counter the coronavirus. Dutch will be among the resisters at tomorrow's Eurogroup to coronabonds https://t.co/ngLzaKwm1z

5.09pm GMT

Meanwhile in the US, Boeing is shutting down production at its factories in the Seattle area for two weeks.

CNBC explains:

The company's move to suspend its production at its facilities in the Puget Sound area comes as Washington State, where most of Boeing's production is centered, is in a state of emergency.

BREAKING: Boeing says it plans 2-week shutdown of factories in Puget Sound area of Washington state https://t.co/jJSwPxCmzn

4.54pm GMT

Newsflash: Britain's blue-chip stock index has hit its lowest closing level since 2011.

The FTSE 100 has ended the day down 196 points, or 3.79%, at 4993.89 points.

The coronavirus continues to hang over equity markets. A medial report said the number of infections has increased to 350,000 worldwide, and the fear factor is setting in for traders, which is why they are dumping equities. As far as the west is concerned, the situation is getting worse by the day, in addition to that, there is a perception things will get even worse within the next few weeks.

The Fed's announcement about a quantitative easing programme that could run on for the foreseeable future jolted European equity benchmarks higher, but the optimism was short lived, and the markets moved south again. The absence of a fiscal stimulus package from the US government is playing a role in the sell-off too.

4.36pm GMT

Banking news....

Meanwhile...the Bank of England just issued a joint statement alongside the chairmen of the UK's largest banks to assure they are in a "strong position" & are "rapidly getting systems in place" to support borrowers.

Comes as banks like HSBC report 1hr+ wait times... pic.twitter.com/wG90UXwhV5

4.36pm GMT

High street chain Next are also joining the shutdown:

Next stores to close from 6pm tonight. Inevitable really. Online open for business

4.28pm GMT

Even Greggs, the much-loved supplier of steak bakes and vegan sausage rolls to the British public, cannot resist the grip of the coronavirus.

Greggs is a great business that employs over 25,000 people, and prides itself on the way that it deals with the many stakeholders we rely on in order to make good freshly prepared food available across the UK.

However, given the current and likely impacts of coronavirus we are now planning for the closure of our shop estate by close of business on Tuesday 24 March in order to protect our people and customers.

Greggs closing 2050 outlets across the country from close of business tomorrow.

End times. Think that might be the signal for the sub captains to launch the nukes.https://t.co/6MsmZBZjx6

4.08pm GMT

Reuters is reporting that G20 finance ministers and central bank chiefs will hold a conference call tomorrow, to discuss their coronavirus response efforts and the economic impact from the pandemic.

They say:

The call, to be led by U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, will likely result in a statement from the G7 finance officials, who remain in close touch and are coordinating their efforts, a source told Reuters on Monday.

The scheduling of the call comes as countries are rolling out unprecedented economic stimulus and financial backstop efforts to try to keep businesses from collapsing amid a halt to economic activity to slow the spread of the virus.

4.05pm GMT

Donald Trump will not like this, not one little bit.

Wall Street has now sunk back to its levels when the president dramatically beat Hillary Clinton in the race to the White House in November 2016.

Dow wipes out all the gains since Trump's election https://t.co/iYTkx5iW3t

S&P 500: pic.twitter.com/a0aHcsEjAP

3.48pm GMT

UK bankers will start restricting the number of customers in branches to try safeguard staff as they deal with a surge in demand for emergency loans during the Covid-19 outbreak.

It's part of efforts to abide by social distancing rules and could result in lengthy queues outside branches reminiscent of the 2008 crash.

3.33pm GMT

Oh dear. Wall Street is extending its losses, as the Fed's latest emergency move fails to calm the mood.

The Dow Jones industrial average is now down 3.7%, or 713 points, at 18,460 (remember, it was close to 30,000 points before the coronavirus pandemic struck).

3.28pm GMT

Not unsurprisingly, morale among Europeans has plummeted this month.

The EC's monthly gauge of consumer confidence across the eurozone has slumped to -11.6 this month, down from -6.6 in February.

#Eurozone #consumer confidence nosedived in March as #coronavirus took hold according to preliminary European Commission reading. Down to -11.6 in March (lowest since Nov 2014) from -6.6 in February. 5 point monthly drop in March sharpest on record https://t.co/7YE2RHfhYX

Consumer confidence in the eurozone has dropped like a stone to its lowest in 5 years this month. True extent like to be much worse as data was collected early. Just 15% of respondents replied after confinement measures were imposed in many member states pic.twitter.com/UTLhQHdbMw

3.04pm GMT

Treasury Secretary Steven Mnuchin is trying to cheer the markets.

Mnuchin insists that Democrats and Republicans are "very close" to agreeing on a major congressional stimulus package to fight the economic impact of the coronavirus, despite the Senate's failure to approve legislation last night.

"I think we're very close. We need to get this deal done today."

3.00pm GMT

A letter signed by 32 alcohol businesses has been sent to the UK chancellor, Rishi Sunak, backing a call from the Wine and Spirits Trade Association for a six-month suspension of excise duty to help the hard-pressed drinks business.

If government agrees, its actions will save UK wine and spirit businesses an estimated 5.8bn, the WSTA says.

WSTA chief executive Miles Beale said:

"On Wednesday many of these companies will have to shell out millions of pounds to the Government at a time when they have no income and many of them are unable to pay their staff wages.

"The Government has pledged 'to do whatever it takes' to help businesses, so now is the time to honour this promise.

2.57pm GMT

Nordea Markets have analysed the Federal Reserve's move, and concluded that America's central bank has just fired its "biggest bazooka" yet:

They write:

The Fed is basically now the direct lender of last resort to not only the financial system, but also the real economy. In other words, this as an attempt to assure that businesses can continue to exist while this (hopefully only) temporary collapse in the economy takes place. We, however, still expect US GDP growth to decline by a double digit number in Q2 (q/q annualised) - much worse than what we saw during the Global Financial Crisis.

The above measures are an unprecedented attempt to ease financial condition. The open-ended QE will now consist of, for instance, purchases of bond ETF's as well as primary and secondary market corporate bonds. Credit risk is therefore being transferred from the private sector to the Fed, which may lead to moral hazard issues in the future, but at the moment the Fed likely feels like it has no other choice (and admittedly the $300 bn in new financing are not that significant in the bigger picture).

Our quick take on the #FederalReserve's announcement of open-ended and unlimited QE:

--> https://t.co/9mhZrPCcN3 pic.twitter.com/ECumeWXN80

2.53pm GMT

BlackRock, the world's largest investor, has pledged to donate $50m (43m) to help people struggling with financial difficulties due to the global spread of the coronavirus.

The US fund manager says it has already made the first $18m (15.6m) tranche of funding available to community organisations such as food banks in the United States and Europe, so that it can immediately provide support to the most vulnerable in society. It has provided $2m (1.7m) to the UK's National Emergencies Trust, and $1.25m (1.1m) to provide medical supplies for healthcare workers across Europe. BlackRock says it has given financial support in Asia since January, as the virus first took hold in China, through the Give2Asia non-profitable organisation. Larry Fink, BlackRock's chief executive, says the firm believes it has a "responsibility to support those least able to cope and bounce back, and who will feel its impact hardest."

"We're committing $50 million to the immediate relief of those who are most affected right now, and to help address the financial hardship and social dislocation that this pandemic brings in its wake, as families grapple with job disruptions, school closures, and unexpected childcare and medical costs,".

2.45pm GMT

HSBC said it will give extra relief to any company making or supplying ventilators during the outbreak.

The London-headquartered bank said it will fast track loan applications, offer cheaper interest rates and extended repayment terms to support the "unprecedented demand on UK hospitals."

Amanda Murphy, head of commercial banking at HSBC UK said:

"We are committed to supporting UK businesses through these challenging times, and will continue to launch new measures to alleviate some of the pressures that our customers are facing."

2.43pm GMT

Shares in video conferencing service Zoom have, well, zoomed higher this morning - jumping almost 20%.

Stock market live updates: Zoom Video rose more than 19% this morning, hitting a new intraday all-time high and on pace for its 6th straight positive day and its best day since June 7th. https://t.co/qU3N5dHDJl pic.twitter.com/uAvZFqapsc

2.40pm GMT

Back in the UK, Sainsbury's is handing its supermarkets and Argos hourly paid staff a one-off 10% bonus payment.

Those working in stores, logistics and contact centres across both Sainsbury's and Argos between 9th March and 5th April will all receive the 10% increase in hourly pay.

2.27pm GMT

I'm afraid we won't have any photos of anxious Wall Street traders today.

On behalf of The New York Stock Exchange, Tom Greene, VP of Building Operations, rings The Opening Bell https://t.co/BsAkI40a9U

All NYSE-listed securities opened for trading electronically this morning

2.18pm GMT

The last month has been pretty horrendous for the markets, but could there be rather worse ahead?

The Financial Times is reporting that one investor is warning of a "full-on" crisis, as the coronavirus deals a massive shock to company revenues, one that's far worse than previously contemplated....

Investors underestimate how an "unprecedented revenue destruction" caused by coronavirus will damage even the biggest, highly rated companies, culminating in a "full-on credit and liquidity crisis", according to the head of an US investment group.

Alan Waxman, the head of Sixth Street Partners, the $34bn-in-assets credit arm of private equity giant TPG, sent a bleak letter late last week to investors arguing that despite the recent turmoil, markets were still complacent over the effects of the viral outbreak.

Credit markets may already have puked fairly violently, but TPG Sixth Street Partners' Alan Waxman reckons investors are still under-appreciating the risk of a full financial crisis. https://t.co/aahBa7t2LJ pic.twitter.com/YK7jLkDqtq

1.56pm GMT

Here's our US business editor Dominic Rushe on the US central bank's latest bazooka:

The US Federal Reserve has launched an aggressive plan to buy as much government-backed debt as it needs to keep financial markets functioning as plans for a $1.8tn plus bailout of business and consumers stalled in Congress.

The central bank announced a series of programs on Monday aimed at supporting large and small businesses already reeling from the economic blow of coronavirus.

Federal Reserve launches aggressive plan to buy government-backed debt https://t.co/6IYXF008Lt

1.53pm GMT

Wall Street's reluctance to rally is rather worrying....

It's now become scarily repetitive. Fed or the U.S. government or another govt. announces a big bazooka stimulus. Stocks go up for a bit and then fall with a vengeance. Same story today. S&P 500 -3% after Fed announced unlimited QE.
This beast has a mind of its own. #marketcrash

And the market open may have just sent a loud message to Congress:
"Yeah, we saw what the Fed did. NOT ENOUGH!
Or...
....the number of (mostly retail) no-limit sell orders at the open was overwhelming.
Bond market reacting accordingly, for now.

So the Fed throws the kitchen sink at help for struggling companies and financial markets. US market opens lower. We are not in a good space

1.42pm GMT

So much for the rally!

1.32pm GMT

Another closure! This time it's books and toys chain The Works, which will close all stores on Monday night.

The company said sales rose 2.9% between 16 January, its last update, and 15 March across both stores and online.

....customers demanded products to support with their child's ongoing education, mindfulness material to support mental health or products to "beat the boredom" during this period of social distancing.

1.26pm GMT

There are also reports today that the UK government could force all non-essential shops to close.....in an escalation of measures to try to slow the spread of the coronavirus.

1.20pm GMT

Back in the UK, another takeaway chain is closing due to the coronavirus:

Subway has authorised all franchisees to temporarily close all their stores in the UK and Ireland, from 5pm GMT today.

1.18pm GMT

Once again, central banks are stepping in to fill the void left by politicians, says Seema Shah, chief strategist, Principal Global Investors.

Here's her take on the Fed's latest announcement of emergency help for the US economy:

"The Fed's announcement that it will purchase an unlimited amount of bonds is undoubtedly significant, over-taking the GFC quantitative easing measures in one fell swoop. In addition, its programs to directly provide aid to employers and households, as well as plans targeted at supporting small and medium sized businesses, will help fill in the sinkhole left by Congress' failure to pass a much-needed fiscal stimulus bill. This seems to follow the recent pattern of many banks proactively acting to mute the negative impact of the shock, while fiscal authorities drag their feet.

Given some businesses' understandable reluctance to take on more debt during this tough economic time, the US economy still requires the US government to provide economic support in a way that doesn't involve additional borrowing.

"Furthermore, while central bank and fiscal action is absolutely crucial, the key requirement to stop the market rout is investors believing the virus is behind us. Until that happens, central bank and fiscal action will quickly become out-dated, requiring policymakers to repeatedly re-visit and multiply their stimulus plans."

1.04pm GMT

The Fed's bazooka has inspired a big turnaround at the New York stock exchange.

Having been 'limit down' (down 5%) overnight, Wall Street is on track to rally when trading begins (up over 2% right now)

Dow futures sharply jump more than 600 points after Fed unveils massive open-ended asset purchase program https://t.co/G8PjSsP1YO pic.twitter.com/vziP5Eexkw

US futures are bouncing back strongly after the Fed went all in on Monday, announcing unlimited, open-ended QE among numerous other measures to support the economy and markets.

We've gone from limit-down into the green and could soon be limit-up, all before the opening bell on Wall Street. Safe to say, the chaos of the last few weeks is going nowhere and the way this week has started, it could feasibly be the most remarkable week of the lot.

12.57pm GMT

"Absolutely massive". "Shock and awe". "A whatever it takes moment."

That's how the Fed's promise of unlimited QE, and fresh support for the corporate bonds and consumer credit, is being interpreted.

Make no mistake, central bank watchers aren't overplaying this. The latest decisions by the Fed and the ECB are absolutely massive and will change the macro-financial landscape for ever. #InfinityAndBeyond

SHOCK & AWE from #FederalReserve saying NO limit to it's monetary support & money pumping in!
US #stockmarket futures SPIKE UP

This is Jay Powell's "whatever it takes" moment: https://t.co/HYnt4x8du8

12.51pm GMT

The Federal Reserve has stunned the markets by pledging to inject as much money into the economy as needed, and to prop up the credit market too.

It's a massive moment, says AXA's chief economist Gilles Moec.

It's done: Fed commits to unlimited purchases and will start intervening on the corporate bond market. They are plugging all the holes. At first glance it is very generous 1/

Fed is seemingly opening to direct lending to big corporations. This is absolutely massive 2/

Federal Reserve gives all its got to prevent bad from getting worse. https://t.co/kkATSGgM6a

US Federal Reserve wields the bazooka. Quantitative easing (money creation) without a limit.
BIG move. Bigger than anything the @bankofengland and @ecb did last week.
Shares rallying across Europe (and US futures up sharply) https://t.co/2WfJx0hPbQ

In its new facility the Fed will buy IG corp bonds including the $1 trillion of "fallen angels" IG bonds that are 1 step from being downgraded to junk bonds (HY). Most of such fallen angels are bound 2 junk downgrade. So the Fed takes a reckless credit & mkt risk: HY spread >1000

Fed buying credit all the way down to BBB-, picking up everything that is investment grade. And US-listed bond ETFs.

12.43pm GMT

European stock markets are rallying too - with the German DAX up 1.5% and France's CAC gaining 1%.

Traders are relieved to see the US Federal Reserve throwing the kitchen sink at the coronavirus crisis, with its major new pledge to buy unlimited bonds and to backstop hundreds of billions of credit to support the economy:

Another week, another kitchen sink thrown by the Fed, this time broadening beyond core funding markets to include corporates and munis https://t.co/jDVBCHkoln

12.37pm GMT

The Federal Reserve's latest emergency action has cheered the markets.

The FTSE 100 index has recovered almost two-thirds of its losses - now down only 80 points, or 1.5%, to 5110 points. Financial stocks are getting a boost, with Prudential up 7.6% and Royal Bank of Scotland up 2.2%

12.32pm GMT

The Fed says its new Primary Market Corporate Credit Facility (PMCCF) will allow companies access to credit so that they are "better able to maintain business operations and capacity" during the coronavirus pandemic.

This facility is open to investment grade companies and will provide bridge financing of four years.

12.27pm GMT

In another remarkable move, the Federal Reserve says it will soon announce "a Main Street Business Lending Program".

This scheme will support lending to eligible small-and-medium sized businesses -- another attempt to prevent the economy freezing up.

12.16pm GMT

NEWSFLASH: The US Federal Reserve is announcing a new wave of monetary policy measures to support the US economy.

In a statement, the Fed says:

The coronavirus pandemic is causing tremendous hardship across the United States and around the world. Our nation's first priority is to care for those afflicted and to limit the further spread of the virus. While great uncertainty remains, it has become clear that our economy will face severe disruptions.

Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate.

The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy

JUST IN: Fed calls third emergency meeting, announces unprecedented moves to calm corporate debt https://t.co/F5yXUY16eE by @bcheungz pic.twitter.com/sFs8o9u1m7

12.03pm GMT

France's finance minister, Bruno Le Maire, has just tweeted that G20 finance ministers have agreed to prepare a common strategy to overcome the coronavirus crisis, on a conference call today.

Le Maire (who has been pushing hard for such action), added that the coronavirus pandemic is now causing a "violent economic impact" on world growth.

Confi(C)rence ti(C)li(C)phonique #G20 : confirmation de l'impact i(C)conomique violent de la crise sanitaire sur la croissance mondiale, soutien financier aux pays en di(C)veloppement, pri(C)paration d'une strati(C)gie commune de sortie de crise. #cooperationinternationale pic.twitter.com/5Byio7hRMD

11.46am GMT

Global oil markets tumbled again on Monday morning as travel and industrial activity continued to contract in a bid to slow the spread of the coronavirus.

The oil markets were unable to hang on to the tentative price gains late last week when a string of government interventions designed to soften the economic blow of Covid-19 buoyed prices to just over $30 a barrel.

"We estimate that supply will surpass demand by more than 10 million barrels next quarter and storage infrastructure will be insufficient to support the current production level."

11.42am GMT

The latest UK retail footfall figures, just released, show precisely why so many retailers are closing their doors.

"The decline in footfall week on week was on par with the drop normally only ever seen in the week post-Christmas.

The annual change represented an unprecedented decline in retail footfall that was three times greater than the worst result we have ever previously recorded."

11.27am GMT

Diageo, the manufacturer of Johnnie Walker and Smirnoff, has pledged to provide alcohol to help make more than eight million bottles of hand sanitiser to help protect frontline healthcare workers across the world.

"This is the quickest and most effective way for us to meet the surging demand for hand sanitiser around the world."

11.16am GMT

In a worrying (but not surprising) development, the cost of insuring junk bonds issued by European companies has hit an eight-year high.

That means this debt is as risky as during the eurozone debt crisis in the summer of 2012, as firms struggle to cope with a slump in demand, or supply, (or both!) due to the coronavirus.

The cost of insuring against European junk bond defaults jumped over 50 bps to a new eight-year high on Monday, as a rising tide of national lockdowns threatened to overwhelm policymakers' frantic efforts to cushion what is likely to be a deep global recession.

Markit's iTraxx Crossover, an index of credit default swaps (CDS) for European junk-rated companies, rose to 725 basis points, its highest level since June 2012.

11.04am GMT

Another sad, but inevitable, blow:

Time Out magazine to cease printing for first time since 1968 and hopes to return after the pandemic. Until then it's going to rebrand as Time In.

11.01am GMT

Department chain Debenhams has bowed to the inevitable - shutting its network of UK and Ireland stores from tonight.

Debenhams closing temporarily all UK and Ireland stores tonight.. think that's about 140 stores..

Debenhams shutting all UK & Ireland stores at close of business tonight. Follows John Lewis, Fenwick ,Harvey Nicks,Selfridges, Harrods. Think we're still waiting on Mike Ashley's House of Fraser

10.47am GMT

Here's our news story on the historic suspension of Britain's railway franchise system, which takes the railways (or at least the cost of running them!) back into public hands for the first time since the 1990s:

10.43am GMT

Back in the markets, the FTSE 100 index just nudged its nose over the 5000-point mark.

And we have a few stocks in the risers list! Royal Dutch Shell are up 2%, after it announced a huge cost-cutting plan this morning.

10.28am GMT

NEWSFLASH: UK retailer Card Factory has announced it will "close temporarily all of our shops from the end of business today".

An understandable move, given the slump in high street trading and the pressure to self-isolate.

10.19am GMT

The pound is weakening this morning, as investors dash into the safety of the US dollar and the euro again.

Sterling has lost three-quarters of a cent to $1.156, back towards the 35-year low of $1.14 set last Friday. It was worth $1.30 a month ago (meaning UK investors who held cash rather than shares have also suffered from the coronavirus).

10.13am GMT

Just in: 70 Laura Ashley stores are closing permanently today, putting 721 jobs at risk, as the company appoints administrators.

"I remain unwavering in my belief that Laura Ashley can and should retain the place it deserves in the international retail landscape. Unfortunately, we will lose some brilliant people through no fault of their own.

However, I remain hopeful there is a buyer out there who shares my vision and can see the enormous potential of this iconic

10.08am GMT

A petition calling on the UK government to provide more support for self-employed workers has attracted 55,000 signatures already.

It warns that last Friday's package (which allows the self-employed to claim universal credit as sick pay) is inadequate - and much less generous than the pledge to pay 80% of furloughed employees wages (up to 2,500 per months).

Universal Credit takes five weeks and is nowhere near enough to support us. That's why we're asking for emergency legislation to:

1) Provide a minimum wage for freelancers and the self-employed.

9.54am GMT

The UK-focused FTSE 250 share index is having another grim morning, down 4.5% after nearly two hours of trading.

Financial services group Virgin Money are leading the rout, down 27% despite Richard Branson's 215m pledge of support for his empire.

I've just announced an Emergency Measures Agreement to keep the railway running for key workers, plus fee-free refunds for all advance tickets passengers. Find out more: https://t.co/OYAwZSwX2s

9.41am GMT

Here's our round-up of this morning's flurry of Covid-19 profit warnings and dividend cancellations:

9.34am GMT

Billionaire businessman Sir Richard Branson has warned that Covid-19 is "the most significant crisis the world has experienced in my lifetime", as he outlined plans to inject $250m (215m) into his Virgin empire.

Because many of our businesses are in industries like travel, leisure and wellness, they are in a massive battle to survive and save jobs.

Our airlines have had to ground almost all their planes; our cruise line has had to postpone its launch; our health clubs and hotels have had to close their doors and all bookings to our holiday company have stopped.

The chances of securing widespread economic recovery will depend critically upon governments around the world successfully mobilising various newly announced support programmes, which in these unique circumstances will be essential to protect people's livelihoods.

9.18am GMT

Fast food chain McDonalds is shutting all its UK and Republic of Ireland restaurants by 7pm tonight.

It has concluded that busy takeaway and Drive Thru restaurants aren't really compatible with social distancing measures:

9.10am GMT

Associated British Foods told the City this morning that all its UK Primark stores are now temporarily closed - following a similar move in Europe last week.

As at 16 March 2020, Primark stores representing 20 percent of selling space and 30 percent of sales were closed. Since then, and following the closure on Sunday of all stores in the UK which represented 41 percent of sales, all 376 stores in 12 countries are now closed until further notice. This represents a loss of some 650m of net sales per month.

A variety of work streams have been established to mitigate the effect of the contribution lost from these sales and all expenditure is being reviewed. In the first instance we have implemented a significant reduction in discretionary spend. We are making good progress in also reducing fixed costs following discussions with counterparties, in particular landlords, and welcome the recently announced government support in the countries in which our stores operate. As a result, we currently estimate being able to recover some 50 percent of total operating costs.

8.46am GMT

In what would normally be a HUGE story, Britain is suspending its rail franchise system.

The Department for Transport has announced that the franchise agreements to run trains across the UK will be suspended for six months, in response to the slump in demand due to the coronavirus.

Breaking - Rail franchise agreements are to be suspended to avoid train companies collapsing due to the coronavirus, the Department for Transport (DfT) has announced. - via PA.

Government takes control of rail franchises for six months but will pay a management fee to private operators. Rail industry was slowly heading towards to something resembling this model pre-crisis... now there's all sorts of things that are happening in days rather than years. pic.twitter.com/NePjrZucZG

8.38am GMT

European stock markets are all deep in the red this morning, amid disappointment that the US Senate couldn't make progress on Covid-19 stimulus package overnight.

Europe's meagre rebound managed at the end of last week was quickly wiped out come Monday morning, as investors woke up to partisan deadlock over the proposed US stimulus plan.

Arguing, in the words of Chuck Schumer, that the $1.8 trillion package is a 'large corporate bailout with no protections for workers and virtually no oversight', the Democrats blocked the bill on Sunday night, with a 47-47 split leaving it short of the required 60 votes.
Even if the reasons behind the Democrats' intransigence are sound, America's inability to move things forwards stands in contrast to many of its now free-spending peers, and has sent the market into another tailspin.

8.18am GMT

Ouch! Britain's FTSE 100 has slumped by over 4.5% at the start of trading, wiping out its fragile recovery late last week.

The Footsie has tumbled by 245 points, back to 4944 -- with every share down.

8.14am GMT

UK transport companies are also reeling from the coronavirus.

Stagecoach, which operates bus, coach and tram services in the UK, has issued a profits warning and predicted it won't pay a dividend this year:

Having been on course to deliver our expected adjusted earnings per share for the year ending 2 May 2020, the quickly developing COVID-19 situation means we no longer expect to achieve our previous expectation.

Our Directors are sacrificing 50% of their salaries / fees for a period of time, will not receive any bonuses for 2019/20 and will not receive any pay increase for 2020/21;

Pay negotiations and decisions in respect of other staff will reflect the challenging environment we currently face.

In regional bus, significantly reduced services have been introduced in response to declines in passenger numbers, with reductions in the cost base being made where possible. Discussions with Government and local authority continue regarding financial and contractual support.

8.02am GMT

Publishing firm Pearson is suspending its share buyback programme too, to preserve cash.

Its exams testing operations have been badly hit by school closures across the world, including the US (which has already cost 15m), and the cancellations of exams in the UK this summer.

...A significant uplift in the use of our digital products and services, as we enable our existing courseware and assessment customers to migrate quickly to online learning and testing. This will strengthen and deepen these relationships, and should, in time, accelerate the shift to online learning.

Learning company Pearson halts share buyback (with 183m is 350m to go) and says closure of testing centres until mid-April will hit profits by 25m to 35m. Same again for each month after that if remain closed. Cancellation of US school tests has hit profits by 15m so far.

7.59am GMT

Broadcaster ITV has announced it, too, is slashing its payments to shareholders.

It will save 300 by not paying a final dividend for 2019, or paying one in 2020 -- as it reels from a slump in advertising.

"We are operating in unprecedented and uncertain times, requiring us to take difficult decisions, plan carefully and act with speed. Our absolute priority is to protect our people, while trying to ensure that we deliver the news and programmes our viewers value and love to watch, and to keep them informed.

We are actively taking measures to reduce costs and manage our cash flow so that we are best positioned to continue to deliver our strategy of building a digitally led media and entertainment company over the medium term."

ITV says advertising continues to deteriorate, scraps dividend and makes 300m in cuts and savings to shore up balance sheet as coronavirus spreads

7.52am GMT

Oil giant Royal Dutch Shell is slashing billions of dollars of spending this year, as it faces the twin threats of covid-19 and Saudi Arabia's oil price war.

"As well as protecting our staff and customers in this difficult time, we are also taking immediate steps to ensure the financial strength and resilience of our business.

The combination of steeply falling oil demand and rapidly increasing supply may be unique, but Shell has weathered market volatility many times in the past."

7.44am GMT

An absolute flurry of companies are updating the markets about the impact of Covid-19 on their businesses.

"By maintaining production, managing its resilient backlog, supporting its customers and securing financial flexibility for its operations, Airbus intends to secure business continuity for itself even in a protracted crisis,"

7.20am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

...large corporate bailout with no protections for workers and virtually no oversight.

While other governments around the world pour money into fiscal spending, the US can't get over its political squabbling. Democrats claim the money will just go to corporates, and hence they can't support it.

WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!

Recently has been quite bad already but even in this new normal, Monday's been quite brutal and ugly in Asia.

Indian stocks -10%
European futures -5%https://t.co/CF8ueoGfle pic.twitter.com/AOf7rJhDpv

Dax Future plunge >4%, signal another "nasty" opening as coronavirus shock narrative prevails BUT has pared some earlier losses. pic.twitter.com/kyzOribwWW

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