FTSE 100 stabilises, but Wall Street rebound fizzles out – as it happened

Graeme Wearden

from on 2020-02-26 19:00 (#4ZWJ0)

Rolling coverage of the latest economic and financial news, as Britain's FTSE 100 recovers after hitting its lowest level in a year

Latest: Wall Street closed in the red, again
FTSE 100 closes 24 points higher
Trump: Media to blame for selloff
US crude hits one-year low
Chevron sends Canary Wharf staff home
Roubini: Worst is yet to come

9.32pm GMT

A late newsflash: Microsoft has warned that its More Personal Computing division won't hit its targets for the current quarter, due to the coronavirus.

"As a result, for the third quarter of fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated."

9.27pm GMT

Closing report: Wall Street couldn't hold onto its earlier gains, and has posted another loss.

"The last couple of days have seen like an emotional reaction, as opposed to a fact-based reaction.

The reality is that the data is coming in so quickly and changing so quickly," he said about the spread of the illness beyond Asia. "It's really difficult to see that changing over then next three or four weeks."

7.32pm GMT

Reminder: our main, comprehensive, coronavirus liveblog is still running:

7.08pm GMT

A handy recap:

Roller coaster day for the US stocks indexes ! Dow just bounced its day low ( about -190), Nasdaq was
( about -36), S&P ( about - 20). Oil downtown $48.63 at lod. Gold fell as low as 1,627, last around 1,646. Ten yr yield down to 1.315%. Bitcoin and digital coins all slammed.

7.00pm GMT

Oh dear, the Wall Street rally has indeed stumbled.

The Dow is now in the red, down 97 points or 0.36%, at 26,983.

6.03pm GMT

Hmmmm. Wall Street may be struggling to hold onto its gains.

The Dow nearly dropped into negative territory a few minutes ago, and is currently only up 0.5% today.

I was afraid of this: the Dow has given up its 400 point plus gain of earlier in the day, now dipping into negative territory. The last 3.5 hours of today's trading session are likely to be not just volatile, but also information-rich re technical positioning. #markets #investing https://t.co/7hTUpvAet0

5.08pm GMT

The sentiment in the markets has improved a little, says David Madden of CMC Markets, even if the Covid-19 crisis hasn't.

He says:

The health crisis is getting worse, but markets don't move in straight lines, so at some point there was going to be a switch in sentiment, and that's what we are seeing today....

The mood on Wall Street has turned optimistic and traders are buying back into equities in the wake of major losses earlier this week. The solid US new homes sales was a pleasant reminder there are positive aspects to the US economy, as the reading came in at 764,00, which smashed the 710,000 forecast.

5.06pm GMT

Despite this afternoon's late recovery, it's been a rough few days for the Footsie.

Britain's blue-chip index is still 5% down this week - bad news for pension-holders and other savers.

5.00pm GMT

The healthcare, utility, basic materials anfd financial sectors all led the recovery in London today.

But consumer-focused firms, such as housebuilders and retailers, fell.

4.54pm GMT

Just in! London's stock market has clawed its way back from this morning's one-year low.

The FTSE 100 index of leading UK-listed shares has close 24 points higher at 7042, up 0.35%. Quite a recovery, given it was down 106 points at one stage this morning.

#Cierre #Europa: #IBEX35 +0.71%#EuroStoxx50 +0.12%#FTSEMIB +1.44%#DAX -0.12%#CAC40 +0.09%#FTSE100 +0.35%

The FTSE 100 has closed higher, ending five days of downward movement.

It closed at 7,042.47, a rise of 24.59 points or 0.35%.

There's only one way it can go now!

The Dow Jones rode in like something of a white knight on Wednesday afternoon, rescuing Europe from its intraday lows.

The Dow added 350 points after the bell, a rebound likely born of nothing more than bargain-hunting investors sweeping in at near-4 month lows. That pushed the index above 27400 - for reference, around 1,100 points shy of its mid-February all-time highs.

4.31pm GMT

US equity markets are "facing this coronavirus like buffalo, with their heads into the storm and marching onwards", says Neil Wilson of Markets.com.

4.24pm GMT

Eek. More UK jobs cuts, this time at Virgin Money.

#Breaking Virgin Money has said it expects 500 jobs to be lost across its branches and head office as part of a restructuring

4.19pm GMT

Today's recovery may be driven by hopes that Donald Trump calms the crisis, when he speaks this evening (6pm New York time).

feels like all the short covering is done now in spoos... Trump better not disappoint at 6pm

4.09pm GMT

Tech stocks are sizzling on Wall Street, with Netflix up by 5%, NVIDIA up 4.6%, Oracle up 3.75% and Micron Technology at 3.7%.

4.02pm GMT

Carl Tannenbaum, chief economist for Northern Trust, fears economic growth will be hit by measures to contain Covid-19, as it spreads beyond China.

The growth in #coronavirus cases in China is slowing...the growth outside of China is increasing. This will extend public health restrictions, which will further impair commerce. https://t.co/OUNcMzvSdH

4.01pm GMT

Nobel prize-winning economist Paul Krugman is scathing about the US government's response to Covid-19:

How Trump and friends have responded to virus:

Wilbur Ross says it's good for American business bc it hurts China

Limbaugh says it's Dem propaganda, no worse than common cold

Kudlow says it's contained

Trump admin wants to pay for response by cutting low-income heating aid 1/

Bad people don't always make bad policy, but right now the fact that we're ruled by terrible human beings is looking likely to kill a number of Americans 2/

3.52pm GMT

It's been a bad day for the UK labour market.

Lloyds Banking Group, insurance group Direct Line and fashion chain Ted Baker have all announced job cut plans, a day after Tesco said 1,800 jobs were at risk at its supermarket bakeries.

3.50pm GMT

Wall Street is pushing higher....

Stock rally picks up steam with Dow soaring 400 points https://t.co/r0fYnD1I3E pic.twitter.com/aI28oQyb44

3.49pm GMT

The oil price is now recovering from today's one-year low, after US energy stocks rose by less than expected.

The Energy Information Administration has reported that crude oil inventories rose by 452,000 barrels in the last week, below analyst forecasts of a 2 million-barrel rise.

#Crudeoil YTD EIA Inventory Changes: pic.twitter.com/PR3RyCVLzL

3.32pm GMT

Some encouraging news -- US home sales have hit their highest level since the financial crisis, some 12 years ago.

Sales of new American single-family homes jumped 7.9% to a seasonally adjusted annual rate of 764,000 units last month, the Commerce Department says. That's the highest level since July 2007, just before the credit crunch.

3.11pm GMT

Virtually every sector of the New York stock market has risen in early trading, as Wall Street tries to end this week's slide.

But Disney is dragging the consumer sector back. Its shares are down 1.25% after CEO Bob Iger surprisingly announced he was stepping down last night.

3.03pm GMT

Wall Street's recovery has dragged the London's stock market away from this morning's one-year low.

The FTSE 100 just briefly turned positive, nudging back over the 7,000 point mark.

2.54pm GMT

Nearly every company on the Dow is up this morning -- which makes a change!

Healthcare firms are leading the risers, with UnitedHealth up 2.2% and Walgreen Boots up 1.6%.

2.51pm GMT

Here's the state of play regarding coronavirus infections:

2.42pm GMT

Newsflash: Wall Street has opened higher, as US traders try to hold their nerve after two days of wild declines.

The Dow Jones industrial average has jumped by 200 points, or 0.75%, at the start of trading. That lifts the index to 27,287, up from last night's four-month low.

STOCKS AT THE OPEN:
-Dow up 131.07 points
-Nasdaq up 55.43
-S&P up 16.14 pic.twitter.com/zEPrJA8j6n

2.21pm GMT

Not every investors is hammering the sell button today.

Trevor Greetham, head of multi asset at Royal London Asset Management, says he's "buying the dip" - betting that stocks will soon recover from this week's tumble.

"We are buying the dip in our multi asset funds, moving to a high conviction overweight position in stocks. While it is impossible to know how much economic damage measures to contain the virus will cause over the next few months, markets have a strong tendency to overreact to bad news in the short term and our contrarian investor sentiment indicator is once again registering a buy signal."

"As longer term investors we find it usually pays off to look on the bright side when others are panicking. Virus disruption is very unlikely to force the world economy into recession. We expect to see a large but temporary hit to economic activity followed by a bounce back later in the year that additional stimulus could make stronger than it otherwise would be.

"We are not complacent about the risks. We expect markets to remain choppy for weeks or perhaps months as investors weigh up good and bad news on the outbreak and its impact. We will look to trim equity exposure on rallies and buy on dips during this period.

With inflation low, the longer term prospects for the world economy and stock markets remain positive, especially if additional stimulus is in the offing.".

1.50pm GMT

The performance of a selection of US, European and Asian stock markets this week#CoronavirusOutbreak pic.twitter.com/P31LtxmbLB

1.47pm GMT

European stock markets appear to be recovering their earlier losses!

The Italian FTSE MIB is now up 1.5% today, clawing back some of this week's losses, while the Stoxx 600 index is now flat.

1.17pm GMT

Greece's stock market has fallen sharply, since its first coronavirus case was reported today.

The Athens stock index has slumped by over 3%, with Piraeus Bank and Aegean Airlines both down over 6%.

1.08pm GMT

Donald Trump will be pleased to hear that Wall Street is expected to open calmly in 90 minutes time.

The Dow Jones industrial average is on track to rise 0.25%, or 75 points, when trading begins.

Low Ratings Fake News MSDNC (Comcast) & @CNN are doing everything possible to make the Caronavirus look as bad as possible, including panicking markets, if possible. Likewise their incompetent Do Nothing Democrat comrades are all talk, no action. USA in great shape! @CDCgov.....

I will be having a News Conference at the White House, on this subject, today at 6:00 P.M. CDC representatives, and others, will be there. Thank you!

12.54pm GMT

Chinese microblogging site Weibo has warned that the coronavirus outbreak could wipe 20% off its revenues.

It warned shareholders that its business has been "significantly impacted" by the coronavirus outbreak, adding:

Due to the high uncertainty of the evolving situation, we have limited visibility on the full quarter revenue impact brought upon by the epidemic. Based on our current best estimate, Weibo anticipates its first quarter of 2020 net revenues to decrease by 15% to 20% year-over-year on a constant currency basis.

This forecast reflects Weibo's current and preliminary view, which is subject to change.

China's Twitter-like #Weibo Wed. reported Q4 2019 earnings: revenues fell 3% to $468.1 mln; average DAU were 222 mln in Dec. 2019, marking an increase of about 22 mln y-o-y. It predicts Q1 2020 revenues to decline by 15-20%, citing the coronavirus as a major factor. $WB pic.twitter.com/v5WxcR4abh

12.01pm GMT

After a rough morning, European stock markets are struggling back off the mat as lunchtime approaches.

Most of the indices are still down, but they've bounced off their lowest points. Italy's market has actually turned positive, after several days of heavy selling.

FTSE100 back to within touching distance of 7,000 after round tripping from lows today at 6,871 pic.twitter.com/brK2T5a8JR

11.43am GMT

The UK stock market is on the brink of falling into a full-blown correction, due to coronavirus fears.

A correction is defined as a 10% fall from a recent peak.

FTSE-100 now a whisker off "correction" territory (ie 10% off most recent peak). Key number is 6900. Stocks like easyJet look absurdly cheap.

11.29am GMT

Just in: Credit rating agency Moody's has slashed its forecast for car sales in 2020, due to the economic damage caused by Covid-19.

"Global vehicle sales will decline 2.5% in 2020, narrowing from a 4.6% drop in 2019, but worsening from the 0.9% decline that we had previously projected for this year.

Sales will rebound only modestly in 2021, with growth of 1.5%,"

With the #coronavirus outbreak hitting demand and disrupting automotive supply chains, Moody's lowers its sales forecast for global auto manufacturers in 2020: https://t.co/T87Jg0sFJR pic.twitter.com/FlYqS6f790

11.26am GMT

The Chinese government has attempted to calm fears over its economy.

State TV are reporting that the Communist Party's Politburo has held a meeting, where they agreed that China's economic recovery is accelerating.

Reuters: CHINA POLITBURO MEETING SAYS CHINA'S ECONOMIC RECOVERY IS ACCELERATING -STATE TV

Reuters: CHINA POLITBURO MEETING SAYS CORONAVIRUS OUTBREAK SITUATION IN HUBEI PROVINCE, WUHAN ARE STILL DIRE-STATE TV

Reuters: CHINA POLITBURO MEETING SAYS CANNOT IGNORE THE RISKS OF CORONAVIRUS EPIDEMIC RESURGENCE IN RELEVANT REGIONS-STATE TV

11.20am GMT

Greek government bonds are weakening, after Athens reports its first coronavirus case.

Greece's heath ministry says a 38-year-old Greek woman who had travelled
from an area of northern Italy has caught the virus.

11.12am GMT

Harvard professor Jeffrey Frankel fears that central bankers lack the firepower to fight the coronavirus crisis (as Nouriel Roubini also warned).

He writes:

While global recessions are exceedingly difficult to forecast, the odds of one - particularly one characterised by less than 2.5% growth, a threshold set by the IMF - now seem to have risen dramatically. (Unlike advanced-economy growth, global growth rarely falls below zero because developing countries have higher average trend growth.)

So far, US investors seem unconcerned about these risks. But they may be taking too much comfort from the US Federal Reserve's three interest-rate cuts last year. Should the US economy falter, there is nowhere near enough room for the Fed to cut interest rates by 500 basis points, as it has in past recessions....

11.03am GMT

The coronavirus scare reached London's financial district yesterday, when US oil company Chevron sent home about 300 workers from its Canary Wharf offices.

Chevron asked traders and other staff to work from home as a precaution after an employee reported flu-like symptoms, having recently visited a country where coronavirus has been detected.

"Chevron continues to monitor the situation very closely, utilizing the guidance of international and local health authorities.

"Our primary concern is the health and safety of our employees and we are taking precautionary measures to reduce their risk of exposure."

US oil company Chevron sent home about 300 workers from its office in London's Canary Wharf business district on Tuesday after an employee who had recently returned from a country infected with the coronavirus reported flu-like symptoms https://t.co/M6nGAUjKw6

Chevron asked traders and other staff in London to work from home as a precaution after an employee was tested for the coronavirus https://t.co/yBnOwQE3uC

11.03am GMT

The coronavirus outbreak has forced a major trade show in Milan to be postoned.

Salone del Mobile.Milano was due to start on 21 April, but instead it's been pushed back by two months.

We won't stop. We can't stop. Salone del Mobile.Milano will be held from 16th to 21st June at Rho Fiera Milano, hear @BeppeSala, Mayor of #Milano, to know more#SaloneDelMobile #SaloneDelMobile2020 #iSaloni #Eurocucina #SaloneDelBagno pic.twitter.com/Qanh1W1w4Z

10.36am GMT

Here's our news story on this morning's coronavirus warnings from Lufthansa, Diageo, and Danone....

10.23am GMT

Despite the heavy losses this week, global investors are too complacent about the coronavirus.

So says economics professor Nouriel Roubini, in an article in the Financial Times. Dr Doom", as he's known, reckons "the worst is yet to come", as the chances of a global recession rise.

The view that the economic impact will peak before the end of the first quarter now looks very shaky. The damage to China is severe, and global supply chains are being seriously disrupted, at a time when China accounts for about 20 per cent of global gross domestic product, not the tiny 4 per cent it had at the time of Sars in 2003.

Add to that an economic shock to big economies like Japan, South Korea and Italy. When the disease spreads to other developed and emerging markets, this damage will increase.

The idea of a V-shaped recovery is nonsensical. Suppose that the best Goldilocks scenario does occur: the shock to China hits only the first quarter and the contagion is mostly contained to the country. If its output shrinks just 2 per cent in the first quarter, that is an annualised contraction of 8 per cent. A V-shaped rebound would therefore require the same annualised growth, which exceeds the 6 per cent that China managed before the virus.

Assuming that China will rebound at this rate in the final three quarters of the year - which would imply growth in 2020 of 4 per cent - is heroically optimistic. It is more likely that a V-shape shows growth returning to a pre-virus annualised level of 6 per cent from the second quarter onwards. In this case, China's calendar-year growth would be 2.5 per cent.

Fiscal policy will react very slowly, or not at all, given political and other constraints. Central banks are running out of bullets: how much more negative can the European Central Bank, Bank of Japan and others go on interest rates?

Markets remain complacent about coronavirus. Despite recent sell-off the worst is yet to come, Nouriel Roubini says. The idea of a V-shaped recovery is nonsensical. https://t.co/ttOOt1nXsc pic.twitter.com/wbgLMSReFH

10.22am GMT

Mining giant Rio Tinto has warned that the coronavirus outbreak could hurt its operations.

Although its iron ore order books are currently full, CEO Jean-Si(C)bastien Jacques sees challenges ahead:

"We are likely to see some short term impacts such as supply chains and possibly even provision of services from Chinese suppliers".

10.16am GMT

Helal Miah, Investment Research Analyst at The Share Centre, explains why travel companies are being pummelled:

"As Coronavirus takes hold in Europe, the fear is authorities may have to resort to drastic measures like in China to contain it while travellers hold back bookings. In regards to this, the market slide has been led by the travel and leisure groups.

EasyJet is down over 22% over the past week, most of the damage being done on Monday and yesterday after the weekend's news. TUI, IAG and Carnival are also off in a significant way and most sectors have been impacted to a certain degree.

10.02am GMT

Bloomberg's Dani Burger has spotted that trading volumes on Wall Street were huge yesterday -- as the Dow plunged by almost 900 points.

There was no messing around with yesterday's sell off. Last time total volume was this high, it was the Christmas sell off 2018 pic.twitter.com/InasexpVgS

9.44am GMT

The price of oil has hit a one-year low, as fears intensify about the health of the global economy.

Commodity prices took a hard hit amid concerns that the epidemic will curb global demand. Crude oil led declines with a weekly loss of about six per cent, while copper and rubber were both down as of Wednesday. A rush to safe-haven assets, on the other hand, pushed gold prices to a seven-year high this week, and the Japanese yen has rallied too.

9.29am GMT

European stock markets are now sliding deeper and deeper into the red.

Germany's DAX has tumbled by another 2.5%, while the UK's FTSE 100 is now 1.5%, or 106 points, at 6910 (still a one-year low).

DOW, DAX, CAC, IBEX tanked -10% in the last 4-5 days and erased all the gains from the previous 4 months.

market goes up the escalator and down the elevator.

European shares were also under significant pressure as several countries on the continent announce their first cases. Germany's DAX index drops 1.2%, overnight Japan's Nikkei 225 index was down 0.8%.

The correction for equities reflects the reality that the impact of this outbreak is likely to be far-reaching and lead to pressure on company's revenue and earnings. Alcoholic drinks maker Diageo becoming the latest high-profile company to flag an impact this morning.

9.09am GMT

Lufthansa has announced a hiring freeze and is offering employees unpaid leave as part of a range of cost savings measures to attempt to limit the financial impact of the spread of the coronavirus.

"In order to counteract the economic impact of the coronavirus at an early stage, Lufthansa is implementing several measures to lower costs.

It is not yet possible to estimate the expected impact of current developments on earnings."

9.01am GMT

Shares in Diageo have slid by 2.5% this morning, after it warned Covid-19 could wipe out 200m of profits.

Neil Wilson of Markets.com says Diageo has highlighted an important issue -- sales lost during the coronavirus crisis can't always be clawed back:

The problem is for the likes of Diageo is that once the consumption picks up again in affected regions in China and beyond, you don't then go and buy two bottles of Scotch instead of your normal one (most people anyway).

8.54am GMT

The selloff in European markets is accelerating again.

In London, the FTSE 100 has now shed another 102 points, or 1.5%, in its third day of big losses in a row.

8.53am GMT

UK travel catering firm SSP Group has been hit hard by the coronavirus disruption.

SSP runs restaurants and bars at airports and railway stations around the world -- so the transport restrictions imposed in Asia to combat Covid-19 are hurting sales badly.

In terms of the impact at the airports in which we operate across the region, in China we have seen sharp declines in both domestic and international air passenger numbers, which are currently running c. 90% lower YOY( year-on-year). In Hong Kong passenger numbers are c. 70% lower YOY and across a number of our other Asia Pacific countries, including Singapore, Thailand, Taiwan and the Philippines, passenger numbers are between 25% and 30% lower YOY.

Elsewhere, we have also seen some impact at our airports in Australia, as well as at major travel hubs in the Middle East and India, although to date this has been less severe.

8.35am GMT

French food group Danone has also warned that the coronavirus crisis is hurting its business.

The maker of Evian and Volvic bottled water, and Activia, expects to lose around a100m in sales, mostly at its "Waters China" business.

We start this year under the uncertain clouds of the coronavirus. Our priority is on the health and safety of our employees, business partners, customers and the communities in which we operate, hand in hand with the work of authorities.

I would like in particular to commend and deeply thank our teams in China for their incredible commitment to their mission serving relentlessly families, parents, babies and elderlies despite the difficult conditions. Let me express my support and empathy for the difficulties and challenges they face and my confidence that life will return to normal in China and beyond.

8.19am GMT

FTSE 100 index has dropped below 7,000

It's not closed below that level for over a year.

8.19am GMT

The FTSE 100 has now lost more than 5% of its value this week -- as it plunged to a one-year low this morning.

8.06am GMT

Newsflash: The FTSE 100 share index has hit a new one-year low at the start of trading.

Covid-19 worries have pushed the blue-chip index down by another 39 points, or 0.5%, to 6978. That's its lowest level since February 2019.

7.53am GMT

Newsflash: the coronavirus outbreak will hit its sales and profits at drinks giant Diageo this year.

Covid-19 impact starting to wash up everywhere on big companies: drinks giant Diageo warning of a 140m to 200m hit to operating profit this year so far https://t.co/ZT3arS4GCP

Bars and restaurants have largely been closed and there has been a substantial reduction in banqueting. As the majority of consumption is in the on-trade, we have seen significant disruption since the end of January which we expect to last at least into March.

The outbreak in several other Asian countries, especially South Korea, Japan and Thailand, has led to events being postponed, a reduction in conferences and banquets, and a drop in tourism which have all impacted on-trade consumption.

7.41am GMT

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

"You have to be ready to manage this at a larger scale " and it has to be done fast."

We've now had two seismic daily declines on global stock markets. Short term traders may well choose to grit their teeth for a short-covering rally but we're getting the impression institutional investors are materially reassessing their outlook for stocks.

The Dow and S&P 500 have just notched up the worst 2-day decline since February 2018 with the Dow giving up over 1900 points in the process. The Nasdaq has closed in the red for the year. Alarmingly, it has been reported that Only 5 US states have the capacity to test for the coronavirus.

Source	RSS or Atom Feed
Feed Location	http://feeds.theguardian.com/theguardian/business/economics/rss
Feed Title
Feed Link	http://feeds.theguardian.com/