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3h ago
09:33
European
markets fall as investors anticipate long-term damage
After 90
minutes trading, European stocks are sagging.
The FTSE
100 index is now down 4.5%, as the latest stimulus packages announced by world
leaders fail to reassure the markets.
Michael
Strobaek, chief investment officer at Credit Suisse, suggests investors should
keep to the sidelines, saying (via the FT):
“The jury
is still out on whether these measures will help stabilise financial markets.”
Investors
are also aware that this isn’t a repeat of 2008. It’s actually the reverse -
the real economy is hurting the financial sector, not the other way round.
As Kit
Juckes of Société Générale wisely explains:
2008 was a
crisis born in shadow banking that exposed how over-leveraged the financial
sector had become and for many banks, including large ones, over-dependence on
short-term funding was a major weakness which, in turn, caused liquidity to dry
up. The banks were in the front line of the crisis.
This time
(economic) front line in the crisis, is the damage the pandemic is wreaking on
companies in exposed sectors and on the economy more widely as the crisis
spreads. So while market participants scramble de-leverage, the banks need
money to lend to companies whose cashflow situation has changed almost
overnight.
That need
for funds to flow into the economy isn’t going away any time soon. The result
is that while direct financial effects of this crisis might be less acute than
in 08, they will continue being felt for a long time.
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3h ago
06:54
Here now is today’s latest coronavirus pandemic news,
at a glance:
The global death toll is nearing 8,000. The number of
deaths from coronavirus around the world has risen to 7,948, according to the
Johns Hopkins University tracker. Infections, meanwhile, are nearing 200,000:
there are 198,006 recorded cases worldwide.
Travellers are scrambling to reach home, after nations
began closing their borders, airlines cut flights and governments urged their
citizens to return. On Tuesday, Australia joined Canada, New Zealand, Indonesia
and the United Arab Emirates in calling back its citizens.
The WHO has called for aggressive action in south-east
Asia. Poonam Khetrapal Singh, WHO’s regional director, said the response in the
region needed to be “scaled up”. Hours later, Thailand recorded a jump in cases
of nearly 20% to 212.
The US death toll passed 100, as coronavirus reached
every state. California governor Gavin Newsom warned that most schools in the
state will likely remain closed for the rest of the school year – until the end
of August – because of coronavirus.
There is treatment hope in Japan. Shares in the
Japanese firm Fujifilm have shot up after medical authorities said a drug
developed to treat new strains of influenza appeared to be effective in
coronavirus patients.
There is more trouble ahead for financial markets,
which are set for another volatile day as the selling frenzy of the past two
weeks continued in Asia Pacific on Wednesday where Australia’s main index lost
6.4%. More significantly, US futures trading suggest renewed losses on Wall
Street when markets open in New York later.
Non residents are banned from Taiwan. Authorities have
said non-residents will be banned from entering the country from midnight. The
restrictions exclude diplomats and holders of alien resident certificates.
Two Canadian provinces have called a state of
emergency, including the country’s most populous province, Ontario.
Australia’s prime minister, Scott Morrison, stepped up
the country’s response to the coronavirus crisis by announcing sweeping new
measures to try to slow the spread of coronavirus, including a ban on indoor
gatherings of more than 100 people, a global do-not-travel order, and strict
new rules for visiting aged care homes.
Kylie Moore-Gilbert is not among the prisoners
released in Iran. British-Australian academic Kylie Moore-Gilbert has not been
reported among the 85,000 prisoners temporarily released from Iranian jails out
of fear coronavirus could sweep through the country’s overcrowded prisons.
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