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You can find the current article at its original source at https://www.theguardian.com/business/live/2020/mar/12/stock-markets-tumble-trump-europe-travel-ban-ecb-christine-lagarde-business-live
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| FTSE 100 shares lose £160bn as European stocks suffer historic losses – business live | FTSE 100 shares lose £160bn as European stocks suffer historic losses – business live |
| (32 minutes later) | |
| Britain’s FTSE 100 index has endured its worst day since 1987 as world stock markets plunge again | Britain’s FTSE 100 index has endured its worst day since 1987 as world stock markets plunge again |
| Baseball’s only sport. Just like the markets are only money. | |
| But the postponement of America’s Major League Baseball season tonight brings home to Wall Street just how much of an impact Covid-19 is going to have, | |
| With just 10 minutes to go, Wall Street is still showing heavy losses again. | |
| The S&P 500 is down 8%, which means it will be in a bear market when the closing bell rings, while the Dow Jones industrial average is down 2,120 points or 9%. | |
| The International Air Transport Association, which represents most of the world’s airlines, has warned that President Donald Trump’s shock ban on visitors from most of Europe could drive some carriers out of business: | |
| IATA had already predicted that the crisis could wipe out over $100bn of revenue - but even that extreme scenario didn’t include such severe measures. | |
| Société Générale strategist Albert Edwards, who has long been predicting an economic downturn, has warned today that stock markets are still very vulnerable - and shouldn’t be regarded as at bargain levels. | |
| Edwards (known as a perma-bear in City circles) wrote: | |
| Here’s a number for you: Europe’s blue-chip stocks have lost €3tn (£2.7tn) in market value since hitting their highest level on record last month. | Here’s a number for you: Europe’s blue-chip stocks have lost €3tn (£2.7tn) in market value since hitting their highest level on record last month. |
| The last three weeks have wiped out almost seven years of gains for Europe’s largest companies (including many of those on the FTSE 100, Germany’s Dax and Italy’s FTSE MIB, amongst others). The index has been running since 1998. | The last three weeks have wiped out almost seven years of gains for Europe’s largest companies (including many of those on the FTSE 100, Germany’s Dax and Italy’s FTSE MIB, amongst others). The index has been running since 1998. |
| This is the calculation from the kind people at Stoxx’s owner, Deutsche Boerse: | This is the calculation from the kind people at Stoxx’s owner, Deutsche Boerse: |
| And this is what that looks like (the vertical lines on the right-hand side): | And this is what that looks like (the vertical lines on the right-hand side): |
| A worrying report from Reuters on the Treasury market, suggesting there are serious issues even after the Federal Reserve stepped in. | A worrying report from Reuters on the Treasury market, suggesting there are serious issues even after the Federal Reserve stepped in. |
| The promise of $1.5tn of liquidity is a sign that the Fed is taking the problems about as seriously as they come. The Treasury market (for US government bonds) is the benchmark for prices all over the economy, meaning any disruptions could be very serious across the financial system. | The promise of $1.5tn of liquidity is a sign that the Fed is taking the problems about as seriously as they come. The Treasury market (for US government bonds) is the benchmark for prices all over the economy, meaning any disruptions could be very serious across the financial system. |
| Here’s part of the Reuters report: | Here’s part of the Reuters report: |
| A recap: here’s the damage from across Europe on a day that will be remembered long into the future (for all the wrong reasons). | A recap: here’s the damage from across Europe on a day that will be remembered long into the future (for all the wrong reasons). |
| The FTSE 100 fell by 10.87%, its most since 1987 (the day after Black Monday). That was the second worst daily fall since the index started on 3 January 1984. | The FTSE 100 fell by 10.87%, its most since 1987 (the day after Black Monday). That was the second worst daily fall since the index started on 3 January 1984. |
| The Euro Stoxx 600, which tracks shares across Europe and the UK, fell by 11.48% – the worst day since that record began in 1998. | The Euro Stoxx 600, which tracks shares across Europe and the UK, fell by 11.48% – the worst day since that record began in 1998. |
| Italy’s FTSE MIB lost 16.92%, its worst loss ever. | Italy’s FTSE MIB lost 16.92%, its worst loss ever. |
| Germany’s Dax index fell by 12.24%; France’s Cac 40 lost 12.28%. | Germany’s Dax index fell by 12.24%; France’s Cac 40 lost 12.28%. |
| The car industry and the insurance sector were the worst performing sectors. | The car industry and the insurance sector were the worst performing sectors. |
| Market participants are shellshocked. Neil Wilson, chief market analyst at Markets.com, said: | Market participants are shellshocked. Neil Wilson, chief market analyst at Markets.com, said: |
| US stocks are almost back where they were before the NY Fed intervened. | US stocks are almost back where they were before the NY Fed intervened. |
| The S&P 500 is down by 7.9%. The Dow Jones industrial average has lost 8.3%, the Nasdaq has lost 7.7%. | The S&P 500 is down by 7.9%. The Dow Jones industrial average has lost 8.3%, the Nasdaq has lost 7.7%. |
| Oil prices were briefly boosted by the Fed’s intervention in the markets, but the good cheer did not last. | Oil prices were briefly boosted by the Fed’s intervention in the markets, but the good cheer did not last. |
| A barrel of Brent crude, the North Sea benchmark, will set you back $32.71, according to futures prices. That represents a fall of 8.6% today. | A barrel of Brent crude, the North Sea benchmark, will set you back $32.71, according to futures prices. That represents a fall of 8.6% today. |
| Prices were briefly almost at $36 per barrel only this morning. | Prices were briefly almost at $36 per barrel only this morning. |
| Here’s the long haul: a chart showing oil prices since 2015. | Here’s the long haul: a chart showing oil prices since 2015. |
| On a normal day that would be the headline gracing newspaper front pages. Today it feels almost like a footnote. | On a normal day that would be the headline gracing newspaper front pages. Today it feels almost like a footnote. |
| It’s worth taking a look back at some of the moves among UK shares on the FTSE 100 and the FTSE 250 today. | It’s worth taking a look back at some of the moves among UK shares on the FTSE 100 and the FTSE 250 today. |
| Here’s the picture of the biggest fallers on the FTSE 100 (there aren’t any gainers): | Here’s the picture of the biggest fallers on the FTSE 100 (there aren’t any gainers): |
| The FTSE 250 fell by 9.35% – its third worst day. Among the mid-caps: | The FTSE 250 fell by 9.35% – its third worst day. Among the mid-caps: |
| Finablr, the owner of Travelex, lost 79.9% of its value today. It said it has launched an internal investigation into its financial situation and that it will take steps to address a liquidity squeeze. | Finablr, the owner of Travelex, lost 79.9% of its value today. It said it has launched an internal investigation into its financial situation and that it will take steps to address a liquidity squeeze. |
| Premier Oil lost 45% after a lender send it should abandon proposed acquistions to save cash. | Premier Oil lost 45% after a lender send it should abandon proposed acquistions to save cash. |
| Go Ahead, the operator of buses and rail services such as Southeastern, dropped 31.5% after it said it would be hit in the second half of the year. | Go Ahead, the operator of buses and rail services such as Southeastern, dropped 31.5% after it said it would be hit in the second half of the year. |
| In fact, the Fed’s actions in total represent more than $1.5tn in liquidity: $500bn for the three-month repo market today, followed tomorrow by $500bn in that market and $500bn in the one-month repo market. | In fact, the Fed’s actions in total represent more than $1.5tn in liquidity: $500bn for the three-month repo market today, followed tomorrow by $500bn in that market and $500bn in the one-month repo market. |
| Seema Shah, chief strategist, Principal Global Investors, said: | Seema Shah, chief strategist, Principal Global Investors, said: |
| The actions of the NY Fed (which is responsible for market operations on behalf of its parent, the US Federal Reserve) have sparked talk of a return of quantitative easing. | The actions of the NY Fed (which is responsible for market operations on behalf of its parent, the US Federal Reserve) have sparked talk of a return of quantitative easing. |
| It’s “QE4”, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. He pointed to a modification of the Fed’s $60bn purchases of bonds, which it carries out to manage the stock of assets built up under quantitative easing. The Fed will widen the purchases to a broader range of debt. | It’s “QE4”, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. He pointed to a modification of the Fed’s $60bn purchases of bonds, which it carries out to manage the stock of assets built up under quantitative easing. The Fed will widen the purchases to a broader range of debt. |
| Shepherdson said: | Shepherdson said: |
| Prime minister Boris Johnson has described the coronavirus outbreak as the “worst public health crisis for a generation”. | Prime minister Boris Johnson has described the coronavirus outbreak as the “worst public health crisis for a generation”. |
| The true number of cases is higher, “perhaps much higher”, than the latest figures suggest, he said. | The true number of cases is higher, “perhaps much higher”, than the latest figures suggest, he said. |
| You can follow those developments here: | You can follow those developments here: |
| The $500bn operation came too late for European markets, but it appears to have given limited succour to US investors. | The $500bn operation came too late for European markets, but it appears to have given limited succour to US investors. |
| The US repo markets are a crucial part of the financial system, allowing banks and other financial institutions to borrow money against US government Treasury bonds. The NY Fed’s statement said that there had been problems in transactions in this market. | The US repo markets are a crucial part of the financial system, allowing banks and other financial institutions to borrow money against US government Treasury bonds. The NY Fed’s statement said that there had been problems in transactions in this market. |
| However, the liquidity actions will not address the underlying economic weaknesses that are scaring investors. | However, the liquidity actions will not address the underlying economic weaknesses that are scaring investors. |
| Here’s the full statement from the New York Fed. | Here’s the full statement from the New York Fed. |
| Fireman Fed? | Fireman Fed? |