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FTSE 100 hits four-month low as stock market sell-off continues – business live FTSE 100 hits four-month low as stock market sell-off continues – business live
(32 minutes later)
European markets are in the red again after Dow plunged by 1,000 points last nightEuropean markets are in the red again after Dow plunged by 1,000 points last night
Wall Street’s rally is running out of gas - just like Europe’s short-lived ‘recovery’ this morning.
The S&P 500 and the Dow are now flat, quickly losing their early 0.5% bounce from 45 minutes ago.
That’s hit sentiment in Europe, where stocks are falling further.
In London, the FTSE 100 is now down 85 points, or 1.2%, at 7,071 points - a new four-month low.
Luxury goods firms are expecting to lose tens of billions of pounds of sales because of the crisis.
A survey of top chief executives and finance officers estimated the industry could lose €30 billion to €40 billion in sales this year, for an estimated total sales of €309 billion in 2020.
Some of this is products that would have been shipped to China (where many stores are still closed). But it also covers potential sales lost because tourists from China, and beyond, will be staying home this year.
That would mean a 15% drop in earnings for the industry, or around €10bn.
Quartz has more details:
Just in: US consumer confidence has risen, but isn’t actually as strong as expected.Just in: US consumer confidence has risen, but isn’t actually as strong as expected.
The Conference Board’s index of consumer morale has come in at 130.7, rather weaker than the 132 which economists expected.The Conference Board’s index of consumer morale has come in at 130.7, rather weaker than the 132 which economists expected.
That’s still a rise, though, because January’s report has been revised down to 130.4 from 131.6.That’s still a rise, though, because January’s report has been revised down to 130.4 from 131.6.
Consumers reported that their current economic situation had worsened, but they’re optimistic about future prospects. Or at least they were! This survey took place before the virus escalated in recent days.
In other data news: US house price inflation picked up in December, with prices rising by 3.8% over the last year.In other data news: US house price inflation picked up in December, with prices rising by 3.8% over the last year.
The coronavirus could trigger recessions across the global economy unless it is contained soon, fears Dr. Kerstin Braun, president of Stenn Group (which provides trade finance).The coronavirus could trigger recessions across the global economy unless it is contained soon, fears Dr. Kerstin Braun, president of Stenn Group (which provides trade finance).
She warns that outbreak also threatens to harm global trade, and badly jolt the auto industry.She warns that outbreak also threatens to harm global trade, and badly jolt the auto industry.
Breaking away from coronavirus.... more than 1,800 jobs are at risk at supermarket chain Tesco, as it shakes up its bakeries operations.Breaking away from coronavirus.... more than 1,800 jobs are at risk at supermarket chain Tesco, as it shakes up its bakeries operations.
The Press Association has the details:The Press Association has the details:
Shares in US biotech firm Moderna have surged by 20% in early trading in New York.Shares in US biotech firm Moderna have surged by 20% in early trading in New York.
Last night, the Boston-based firm became the first company to release a potential coronavirus vaccine, which it has sent to the US National Institutes of Health to be tested in humans.Last night, the Boston-based firm became the first company to release a potential coronavirus vaccine, which it has sent to the US National Institutes of Health to be tested in humans.
That doesn’t mean the vaccine is ready to be released, of course -- but it’s an important step forward.That doesn’t mean the vaccine is ready to be released, of course -- but it’s an important step forward.
Cambridge biotech.Cambridge biotech.
DING DING! The opening bell is ringing on Wall Street, as traders return to their desks after Monday’s whopping selloff.DING DING! The opening bell is ringing on Wall Street, as traders return to their desks after Monday’s whopping selloff.
And the early moves are up.And the early moves are up.
Shares are staging a small recovery after the Dow’s 1,000 point plunge yesterday, with technology stocks among the risers.Shares are staging a small recovery after the Dow’s 1,000 point plunge yesterday, with technology stocks among the risers.
Dow Jones industrial average: up 155 points or 0.5% at 28,116Dow Jones industrial average: up 155 points or 0.5% at 28,116
S&P 500: up 18 points or 0.5% at 3,244S&P 500: up 18 points or 0.5% at 3,244
Nasdaq: up 84.9 points or 0.9% at 9,306Nasdaq: up 84.9 points or 0.9% at 9,306
So, a small recovery... can it last?So, a small recovery... can it last?
Upscale American department store chain Macy’s is starting to feel the impact of coronavirus.Upscale American department store chain Macy’s is starting to feel the impact of coronavirus.
After reporting results today, the company said it expects a “small impact” on sales in the current quarter, due to lower tourism levels.After reporting results today, the company said it expects a “small impact” on sales in the current quarter, due to lower tourism levels.
This is “nothing to be concerned about yet”, Macy’s insisted, but it also cautioned that the situation is still “unfolding”.This is “nothing to be concerned about yet”, Macy’s insisted, but it also cautioned that the situation is still “unfolding”.
US shoe vendor Wolverine World Wide has warned that the coronavirus will hurt its profitability, by disrupting its supply chain and cutting sales.US shoe vendor Wolverine World Wide has warned that the coronavirus will hurt its profitability, by disrupting its supply chain and cutting sales.
Wolverine, whose brands include Hush Puppies, Merrell and Bates, predicts that Covid-19 will knock $30m off its revenues in the first half this year.Wolverine, whose brands include Hush Puppies, Merrell and Bates, predicts that Covid-19 will knock $30m off its revenues in the first half this year.
That will also reduce profits by around 4%, or 10 cents per share, to around $2.20 per share.That will also reduce profits by around 4%, or 10 cents per share, to around $2.20 per share.
It says:It says:
The coronavirus is having a painful impact on Italy, forcing several towns to lock down.The coronavirus is having a painful impact on Italy, forcing several towns to lock down.
The Italian economy was already on the brink of recession, and financial analyst Kathleen Brooks of Minerva fears it could be driven in to a deep crisis:The Italian economy was already on the brink of recession, and financial analyst Kathleen Brooks of Minerva fears it could be driven in to a deep crisis:
The coronavirus crisis is also causing ructions in the bond market.
The cost of insuring junk-rated company debt has hit its highest level since October, Bloomber’s Katie Linsell points out. That reflects concerns that a pandemic could leave some firms unable to repay their debts.
After another tough morning, 87 of the 100 companies on the FTSE 100 are in the red as lunchtime approaches.
Neil MacKinnon, Global Macro Strategist at VTB Capital, says investors are right to be very worried:
Newsflash! Britain’s FTSE 100 has hit a new four-month low, as markets slide again.
The blue-chip index is now down 55 points at 7100, an 0.8% drop. That’s its lowest level since 4th October, adding to the 247 points lost yesterday.
Engineering firm Meggitt and chemicals group Croda are the top fallers, down 4.4% and 3.2% respectively, after they warned that the coronavirus will hurt their businesses this year (as reported earlier).
The travel industry is also sliding again, with TUI down 3% and easyJet down 2%
Stocks are under pressure across Europe too, in the face of the latest cases in Iran, Italy and the Canaries. The Stoxx 600 index has lost another 1%, on top of its 3.3% fall on Monday.
David Madden of CMC Markets says investors are fretting about a global Covid-19 pandemic:
Hopes of a recovery on Wall Street have fizzled out too....
Hong Kong has posted some shockingly bad trade data today, which show that its economy is sinking deeper into recession.
Hong Kong’s exports plummeted the most in more than a decade in January, down 22.7% year-on year. Imports dropped by 16.4%, their 14th monthly decline in a row.
Hong Kong’s economy was already shrinking, following the long pro-democracy protests last year. The coronavirus crisis is dealing another blow to its tourism sector, forcing shops to close.
Stephen Innes of AxiCorp says:
Donald Trump then claimed that the stock markets would hit fresh heights if he were elected, but tumble if he loses in November.
The US stock market has gained over 40% since Trump’s shock win in 2016, and there probably is some nervousness on Wall Street about Elizabeth Warren or Bernie Sanders clamping down on the financial sector.
This week’s jitters, though, are definitely virus-related..
Just in: Donald Trump is discussing yesterday’s market tumble, on his trip to New Delhi.
The stock markets don’t appear to share Donald Trump’s view that the coronavirus is under control, says Pierre Veyret, technical analyst at ActivTrades.
He writes:
The White House is facing heavy criticism for not reacting faster to Covid-19, but has now requested $2.5bn in emergency funding.
Last night, Donald Trump tweeted that the stock market was looking ‘very good’ -- effectively encouraging Americans to buy shares following the Dow’s 1,000-point dive.
European stock markets are now all in the red again, as coronavirus fears rear up again.
In another worrying development, authorities in Tenerife are testing hundreds of tourists after a visitor fell ill at a Canary Islands hotel.
With Iran reporting two more deaths from Covid-19 a moment ago, and that latest case in Italy, traders are ditching equities again.
Here’s the damage:
FTSE 100: Down 36 points or 0.5% at 7129
German DAX: Dow 46 points or 0.33% at 12,988
French CAC: down 24 points or 0.4% at 5,767
Italian FTSE MIB: down 147 points or 0.6% at 23,277
Spanish IBEX: down 69 points or 0.7% at 9,414