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| Wall Street surges back after Thursday slump amid coronavirus stimulus hopes – business live | Wall Street surges back after Thursday slump amid coronavirus stimulus hopes – business live |
| (32 minutes later) | |
| Rolling coverage of the latest economic and financial news | Rolling coverage of the latest economic and financial news |
| The head of the European commission Ursula von der Leyen has described the coronavirus as “a major shock” to Europe’s economies, as she promised a multi-billion euro fund to handle the fallout. | |
| At a press conference in Brussels, von der Leyen said the coronavirus pandemic was an “unprecedented challenge for our healthcare systems”, but the EU could withstand the economic shock as long as member states “lived up to [their] responsibilities”. She announced Brussels was increasing a coronavirus “investment initiative” to €37bn (£33bn), up from €25bn proposed on Tuesday. The starting point is €8bn of unspent money from the EU budget for infrastructure spending - “sleeping money” as von der Leyen put it - that is intended to trigger a further €29bn of public and private funds. But EU member states and the European parliament - currently meeting in restricted sessions because of the virus - will have to approve the idea. The commission also provided more details on measures announced earlier this week, such as loosening rules on state aid, and making use of flexibility in EU budget rules. Measures include: | |
| Relaxing airport slot rules. Airlines will not lose their prized landing and take-off slots, if they fail to use them as a result of travel bans and falling demand. A waiver on the usual “use it or lose it” rule that requires carriers to use 80% of their slots, will run until 30 June 2020 and can be extended if necessary. | |
| Loosening rules on state aid, so governments can help companies by suspending tax payments or compensate those suffering losses. The commission said it had already signed off a Danish scheme in less than 24 hours, promising to do the same for other countries. | |
| Releasing €1bn from the EU budget, which is expected to cover €8bn in loan guarantees, with the aim of providing liquidity to 100,000 small and medium-sized companies. | |
| Governments will be able to use flexibilities in the EU stability and growth pact rules that restrict the deficit. In normal years a state’s deficit cannot exceed 3% of gross domestic product. This rule will be relaxed under an “unusual events” clause, so governments can, for example, pay self-employed people or help companies that have put workers on half time, without facing fines from Brussels | |
| She also said France and Germany were “willing to adapt” export bans on medical goods, such as masks and ventilators. Such restrictions flout EU rules on the free movement of goods and have angered countries that do not produce such products. | |
| Von der Leyen said the commission would do more if needed, delivering the message in the EU’s three working languages of English, French and German. | |
| “This is an important economic package but we have to acknowledge the situation is evolving fast. We stand ready to do more as the situation evolves,” she said. | |
| She also insisted EU authorities were fully behind Italy, following complaints from Italian politicians that Europe has gone missing in action when it comes to helping the country worst-affected by the coronavirus epidemic. | |
| Tech stocks and financial companies are leading the recovery in New York. | |
| Bank of America and Citigroup are up 7%, as Wall Street tries to put its worse day since 1987 behind it. | |
| Every stock on the Dow has risen, with chipmaker Intel (+10.3%), aircraft maker Boeing (+10.1%) and Walt Disney (+8.9%) hogging the top of a crowded list of rising stocks. | |
| BOOM! Stocks on Wall Street have rocketed higher at the start of trading. | BOOM! Stocks on Wall Street have rocketed higher at the start of trading. |
| The S&P 500, Dow Jones industrial average, and the Nasdaq all surged by 6% as the opening bell rang out in New York. | The S&P 500, Dow Jones industrial average, and the Nasdaq all surged by 6% as the opening bell rang out in New York. |
| After their worst losses in a generation, US stocks are firmly rebounding -- as hopes of a US economic relief package. | After their worst losses in a generation, US stocks are firmly rebounding -- as hopes of a US economic relief package. |
| The promise of more government spending in Europe, and the liquidity injections promised by the US Federal Reserve and the Bank of Japan in the last 24 hours are also helping. | The promise of more government spending in Europe, and the liquidity injections promised by the US Federal Reserve and the Bank of Japan in the last 24 hours are also helping. |
| But volatility is absolutely soaring right now - as a truly historically wild week enters its last act. | But volatility is absolutely soaring right now - as a truly historically wild week enters its last act. |
| And don’t forget, Wall Street slumped by 10% yesterday, so we’re still down over two days. | And don’t forget, Wall Street slumped by 10% yesterday, so we’re still down over two days. |
| Tension is building on Wall Street, with shares expected to surge at the open following Thursday’s shocking losses. | Tension is building on Wall Street, with shares expected to surge at the open following Thursday’s shocking losses. |
| With the futures contracts suspended, after jumping 5% overnight, who knows how the Dow and the S&P 500 will perform in a few minutes? | With the futures contracts suspended, after jumping 5% overnight, who knows how the Dow and the S&P 500 will perform in a few minutes? |
| Treasury secretary Steve Mnuchin is trying to cheer traders, it seems: | Treasury secretary Steve Mnuchin is trying to cheer traders, it seems: |
| Germany has pledged to boost government spending to support its economy through the Covid-19 pandemic, breaking its long adherence to fiscal restraint and balanced budgets. | Germany has pledged to boost government spending to support its economy through the Covid-19 pandemic, breaking its long adherence to fiscal restraint and balanced budgets. |
| Finance Minister Olaf Scholz told a press conference in Berlin: | Finance Minister Olaf Scholz told a press conference in Berlin: |
| Although the stock market is surging, the City is eerily quiet. | Although the stock market is surging, the City is eerily quiet. |
| Walking down Moorgate towards Bank of England there is a marked absence of pedestrians and cars. It feels like a Sunday, my colleague Larry Elliott reports. | Walking down Moorgate towards Bank of England there is a marked absence of pedestrians and cars. It feels like a Sunday, my colleague Larry Elliott reports. |
| Lloyd’s of London has closed its underwriting today, as part of a stress-test of its resilience for a coronavirus shutdown. Anecdotally, many City workers have said they’ve been testing home-working in recent days. | Lloyd’s of London has closed its underwriting today, as part of a stress-test of its resilience for a coronavirus shutdown. Anecdotally, many City workers have said they’ve been testing home-working in recent days. |
| Talks about a potential US stimulus package are continuing in Washington.... | Talks about a potential US stimulus package are continuing in Washington.... |
| US House Speaker Nancy Pelosi and U.S. Treasury Secretary Steven Mnuchin have spoken on the phone about an economic relief package to help protect the US people from the coronavirus economic shock. | US House Speaker Nancy Pelosi and U.S. Treasury Secretary Steven Mnuchin have spoken on the phone about an economic relief package to help protect the US people from the coronavirus economic shock. |
| This is from Pelosi’s chief of staff: | This is from Pelosi’s chief of staff: |
| The two sides had been split about how to respond to the crisis, on predictable lines. | The two sides had been split about how to respond to the crisis, on predictable lines. |
| The Democrats are pushing for a package including paid leave for ill workers, higher jobless benefits and food aid, and free testing for coronavirus. | The Democrats are pushing for a package including paid leave for ill workers, higher jobless benefits and food aid, and free testing for coronavirus. |
| President Trump, though, is insisting on tax cuts - a message he’s just repeated on Twitter | President Trump, though, is insisting on tax cuts - a message he’s just repeated on Twitter |
| The bounceback is gathering pace in the City, with the FTSE 100 now up over 8% today - a gain of 430 points. | The bounceback is gathering pace in the City, with the FTSE 100 now up over 8% today - a gain of 430 points. |
| Mining giants are leading the way, with BHP, Anglo and Glencore up around 15% each. | Mining giants are leading the way, with BHP, Anglo and Glencore up around 15% each. |
| British Airways owner, IAG,is also recovering strongly - up 13%. | British Airways owner, IAG,is also recovering strongly - up 13%. |
| That would be match some of the wild swings we saw during the 2008 crisis.... the last time global markets were quite this spooked. | That would be match some of the wild swings we saw during the 2008 crisis.... the last time global markets were quite this spooked. |
| Another dramatic Wall Street session looms..... | Another dramatic Wall Street session looms..... |
| Newsflash: The Bank of England has released the minutes of its emergency meeting this week, when it voted to cut UK interest rates from 0.75% to 0.25% | Newsflash: The Bank of England has released the minutes of its emergency meeting this week, when it voted to cut UK interest rates from 0.75% to 0.25% |
| They show that the Monetary Policy Committee believes UK economic activity will “weaken materially” over the coming months. It expects to learn more about the economic shock of Covid-19 in the weeks and months ahead. | They show that the Monetary Policy Committee believes UK economic activity will “weaken materially” over the coming months. It expects to learn more about the economic shock of Covid-19 in the weeks and months ahead. |
| And if necessary, the MPC believes it has further tools to fight - including cutting bank rate again. It could also expand its offer of cheap loans for banks to pass onto businesses, also announced on Wednesday morning. | And if necessary, the MPC believes it has further tools to fight - including cutting bank rate again. It could also expand its offer of cheap loans for banks to pass onto businesses, also announced on Wednesday morning. |
| A reminder that the markets have been here before (and will doubtless be here again): | A reminder that the markets have been here before (and will doubtless be here again): |
| The FTSE 100 index is surging higher, up 7.3% today on hopes of international co-operation and a US stimulus package. | The FTSE 100 index is surging higher, up 7.3% today on hopes of international co-operation and a US stimulus package. |
| The blue-chip index has now gained 383 points, taking it back to 5620 and away from last night’s seven-year low. | The blue-chip index has now gained 383 points, taking it back to 5620 and away from last night’s seven-year low. |
| The news that Wall Street will surge in 90 minutes time is pushing up stocks across Europe. The EU-wide Stoxx 600 is also up 7%. | The news that Wall Street will surge in 90 minutes time is pushing up stocks across Europe. The EU-wide Stoxx 600 is also up 7%. |
| That doesn’t recover all of Thursday’s huge losses (when the FTSE 100 lost 639 points. or 10%). But it’s something of a boost to the City, where traders must be dizzy after the last few weeks. | That doesn’t recover all of Thursday’s huge losses (when the FTSE 100 lost 639 points. or 10%). But it’s something of a boost to the City, where traders must be dizzy after the last few weeks. |
| British Prime Minister Boris Johnson will have conversations with other world leaders on Friday regarding the global response to the coronavirus outbreak, his spokesman said. | British Prime Minister Boris Johnson will have conversations with other world leaders on Friday regarding the global response to the coronavirus outbreak, his spokesman said. |
| He added that planning staff from the Ministry of Defence would help local authorities work out how to support public services so they can deal with the outbreak (via Reuters). | He added that planning staff from the Ministry of Defence would help local authorities work out how to support public services so they can deal with the outbreak (via Reuters). |
| That might reassure City investors that politicians could work together to limit the economic harm we face. | That might reassure City investors that politicians could work together to limit the economic harm we face. |
| The US stock market is expected to rally strongly when trading begins in a couple of hours. | The US stock market is expected to rally strongly when trading begins in a couple of hours. |
| Trading in Dow and S&P 500 futures has been frozen ‘limit-up’ at +5% -- meaning the market is likely to jump by more than 5% when the opening bell rings. | Trading in Dow and S&P 500 futures has been frozen ‘limit-up’ at +5% -- meaning the market is likely to jump by more than 5% when the opening bell rings. |
| Perhaps the latest interventions from central banks, including the Federal Reserve’s $1.5trn liquidity push last night, is helping calm markets. | Perhaps the latest interventions from central banks, including the Federal Reserve’s $1.5trn liquidity push last night, is helping calm markets. |
| Investors are also pinning hopes on a co-ordinated push by governments to calm the panic. | Investors are also pinning hopes on a co-ordinated push by governments to calm the panic. |
| Yesterday, the US Congress cancelled its planned recess next week so policymakers could work on a economic stimulus package to protect the US economy from a severe downturn. | Yesterday, the US Congress cancelled its planned recess next week so policymakers could work on a economic stimulus package to protect the US economy from a severe downturn. |
| From the Footsie to the footie.... | From the Footsie to the footie.... |
| The Italian short-selling ban will include shares in two storied football clubs - Juventus and Lazio. Their revenues will be hit now Serie A games are being played behind closed doors. | The Italian short-selling ban will include shares in two storied football clubs - Juventus and Lazio. Their revenues will be hit now Serie A games are being played behind closed doors. |
| English games, meanwhile, are being suspended altogether for a month - an unprecedented move, that will also hurt club revenues, and have a knock-on impact on the hospitality trade. | English games, meanwhile, are being suspended altogether for a month - an unprecedented move, that will also hurt club revenues, and have a knock-on impact on the hospitality trade. |
| But as the Premier League says, “the health and welfare of players, staff and supporters are our priority”. | But as the Premier League says, “the health and welfare of players, staff and supporters are our priority”. |
| Three hours in, and the European rally is holding firm. | Three hours in, and the European rally is holding firm. |
| FTSE 100: up 255 points or 4.8% at 5492 | FTSE 100: up 255 points or 4.8% at 5492 |
| German DAX: up 337 points or 3.7% at 9,498 | German DAX: up 337 points or 3.7% at 9,498 |
| French CAC: up 182 points or 4.5% at 4226 | French CAC: up 182 points or 4.5% at 4226 |
| Italian FTSE MIB: up 1,479 points or 9.9% at 16,373 | Italian FTSE MIB: up 1,479 points or 9.9% at 16,373 |
| Up to 50 million people in the travel and holiday sector could lose their jobs due to the coronavirus, an industry body warned today. | Up to 50 million people in the travel and holiday sector could lose their jobs due to the coronavirus, an industry body warned today. |
| The World Travel and Tourism Council fears that demand for international travel could slump by 25% this year -- causing 12-14% of workers in the sector to be laid off. | The World Travel and Tourism Council fears that demand for international travel could slump by 25% this year -- causing 12-14% of workers in the sector to be laid off. |
| The WTTC wants governments to cut travel taxes, simplify the visa process, and support companies affected. | The WTTC wants governments to cut travel taxes, simplify the visa process, and support companies affected. |