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Stocks and Bond Yields Sink, Capping a Week of Wild Trading Stocks and Bond Yields Sink, Capping a Week of Wild Trading
(10 days later)
Wall Street was gripped by another wave of worry over the spreading coronavirus on Friday. Stocks tumbled, investors rushed into the safety of government bonds, and oil prices nose-dived.Wall Street was gripped by another wave of worry over the spreading coronavirus on Friday. Stocks tumbled, investors rushed into the safety of government bonds, and oil prices nose-dived.
Financial markets have traded wildly for more than two weeks, as investors have tried to come to grips with the sudden rise in the number of virus cases, and the threat to the economy posed by measures to contain them.Financial markets have traded wildly for more than two weeks, as investors have tried to come to grips with the sudden rise in the number of virus cases, and the threat to the economy posed by measures to contain them.
Friday was no exception. The S&P 500 fell about 4 percent at its lowest point before recovering somewhat and ending down less than 2 percent.Friday was no exception. The S&P 500 fell about 4 percent at its lowest point before recovering somewhat and ending down less than 2 percent.
Perhaps the most notable move in financial markets was a slide in yields on government bonds to levels that would have been considered unthinkable just two weeks ago. The yield on the 10-year Treasury note fell to as low as 0.68 percent in early trading Friday. Such a steep drop reflects near panic, analysts said, given that there was little news overnight.Perhaps the most notable move in financial markets was a slide in yields on government bonds to levels that would have been considered unthinkable just two weeks ago. The yield on the 10-year Treasury note fell to as low as 0.68 percent in early trading Friday. Such a steep drop reflects near panic, analysts said, given that there was little news overnight.
Oil prices slid 10 percent as the world’s major producers failed to reach an agreement to reduce production as demand falls.Oil prices slid 10 percent as the world’s major producers failed to reach an agreement to reduce production as demand falls.
A strong report on the American job market on Friday did little to assuage investors’ concerns. Employers added 273,000 jobs in February, but the data is a snapshot of a point when the prevailing sentiment was that the United States would remain relatively unaffected by the coronavirus.A strong report on the American job market on Friday did little to assuage investors’ concerns. Employers added 273,000 jobs in February, but the data is a snapshot of a point when the prevailing sentiment was that the United States would remain relatively unaffected by the coronavirus.
Nor did it help that President Trump signed a $8.3 billion emergency spending bill aimed at funding efforts to contain the spread.Nor did it help that President Trump signed a $8.3 billion emergency spending bill aimed at funding efforts to contain the spread.
The downdraft already reflects a growing recognition that the Federal Reserve on its own will not be able to offset drags on the economy from the spreading coronavirus. The central bank already cut rates by a half point this week, and investors expect the Fed to do so again at its meeting later in March.The downdraft already reflects a growing recognition that the Federal Reserve on its own will not be able to offset drags on the economy from the spreading coronavirus. The central bank already cut rates by a half point this week, and investors expect the Fed to do so again at its meeting later in March.
“The most essential policy response is the public health one — testing, treatment, quarantine, contact tracing, social distancing, lockdown,” John Normand, a cross asset strategist at JPMorgan Chase, wrote in a note Friday.“The most essential policy response is the public health one — testing, treatment, quarantine, contact tracing, social distancing, lockdown,” John Normand, a cross asset strategist at JPMorgan Chase, wrote in a note Friday.
Economists on Wall Street have slashed growth forecasts for this year, and warned the economy could at least briefly slip into recession, over rising fear of the effects of the virus on supply chains, tourism and other economic activity. Analysts said on Friday that the Fed would be unlikely to offset that damage on its own.Economists on Wall Street have slashed growth forecasts for this year, and warned the economy could at least briefly slip into recession, over rising fear of the effects of the virus on supply chains, tourism and other economic activity. Analysts said on Friday that the Fed would be unlikely to offset that damage on its own.
For many, the question now is how much damage the virus can do to the global economy and growth prospects for the year. The uncertainty over that impact has produced big swings in the market. Although it ended Friday with a loss, big gains on Monday and Wednesday meant that the S&P 500 was actually slightly higher for the week.For many, the question now is how much damage the virus can do to the global economy and growth prospects for the year. The uncertainty over that impact has produced big swings in the market. Although it ended Friday with a loss, big gains on Monday and Wednesday meant that the S&P 500 was actually slightly higher for the week.
Still, investors have plenty to worry about. Factories in China are still struggling to get back up and running. Thousands of flights around the world have been grounded. Supply chains have been snarled, shaking some of the world’s biggest companies and forcing an untold number of workers to stay home.Still, investors have plenty to worry about. Factories in China are still struggling to get back up and running. Thousands of flights around the world have been grounded. Supply chains have been snarled, shaking some of the world’s biggest companies and forcing an untold number of workers to stay home.
“Against this backdrop, we should prepare for a short-term but severe global recession,” said Nigel Green, chief executive of deVere Group, an investment firm.“Against this backdrop, we should prepare for a short-term but severe global recession,” said Nigel Green, chief executive of deVere Group, an investment firm.
Shares in Europe and Asia were also sharply lower, with benchmarks in Britain, Germany and France down more than 3 percent. In Tokyo, Hong Kong and Seoul, markets closed more than 2 percent lower.Shares in Europe and Asia were also sharply lower, with benchmarks in Britain, Germany and France down more than 3 percent. In Tokyo, Hong Kong and Seoul, markets closed more than 2 percent lower.
The Trump administration continues to weigh options for stimulating the economy, but no decisions have been made and nothing is imminent, a situation that is stoking concern among investors, lawmakers, economists.The Trump administration continues to weigh options for stimulating the economy, but no decisions have been made and nothing is imminent, a situation that is stoking concern among investors, lawmakers, economists.
Administration officials and President Trump have sent conflicting messages in recent days about what, if any, steps they might be willing to take to support growth. They have not opened active negotiations with leaders in the House and Senate over any sort of a large-scale stimulus bill.Administration officials and President Trump have sent conflicting messages in recent days about what, if any, steps they might be willing to take to support growth. They have not opened active negotiations with leaders in the House and Senate over any sort of a large-scale stimulus bill.
On Friday, congressional aides said administration officials were weighing tax relief for airlines and cruise ships, along with potential efforts to calm markets and reduce volatility in trading. That could include a possible bank holiday, in which financial institutions are closed.On Friday, congressional aides said administration officials were weighing tax relief for airlines and cruise ships, along with potential efforts to calm markets and reduce volatility in trading. That could include a possible bank holiday, in which financial institutions are closed.
It could also include reinstating the “uptick rule” — a regulation created in the wake of the Great Depression to prevent short-sellers — who bet that a given stock will fall — from short-selling a stock whose price is falling. The rule, which was eliminated in 2007, allowed investors to short a stock only after the last trade was equal to or higher than the prior trade.It could also include reinstating the “uptick rule” — a regulation created in the wake of the Great Depression to prevent short-sellers — who bet that a given stock will fall — from short-selling a stock whose price is falling. The rule, which was eliminated in 2007, allowed investors to short a stock only after the last trade was equal to or higher than the prior trade.
On Friday, the director of the National Economic Council, Larry Kudlow, said on CNBC that he, Treasury Secretary Steven Mnuchin and others in the administration have been discussing “a targeted approach, a more micro approach” to help the economy and not a “gigantic macroeconomic fix.” He suggested that could include aid to sectors that have suffered from virus-related setbacks, like tourism.On Friday, the director of the National Economic Council, Larry Kudlow, said on CNBC that he, Treasury Secretary Steven Mnuchin and others in the administration have been discussing “a targeted approach, a more micro approach” to help the economy and not a “gigantic macroeconomic fix.” He suggested that could include aid to sectors that have suffered from virus-related setbacks, like tourism.
Updated July 7, 2020
The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
Mr. Mnuchin has been discussing a range of measures that Treasury could use to buttress the economy, including allowing some industries to defer tax payments, and he has been talking to financial regulators about ways to allow banks increase lending to specific industries.Mr. Mnuchin has been discussing a range of measures that Treasury could use to buttress the economy, including allowing some industries to defer tax payments, and he has been talking to financial regulators about ways to allow banks increase lending to specific industries.
Mr. Trump has suggested that he would be happy to see Democrats in Congress move to cut payroll taxes for a year. But asked repeatedly by reporters on Friday if the economy needed fiscal stimulus, Mr. Trump would only promote the strength of the latest jobs report — while calling on the Fed to continue cutting interest rates.Mr. Trump has suggested that he would be happy to see Democrats in Congress move to cut payroll taxes for a year. But asked repeatedly by reporters on Friday if the economy needed fiscal stimulus, Mr. Trump would only promote the strength of the latest jobs report — while calling on the Fed to continue cutting interest rates.
The president also suggested there was an economic upside to the virus, saying the U.S. economy was benefiting from Americans canceling travel plans abroad. “People are staying here and spending their money here, as opposed to going to Europe and other places,” he said.The president also suggested there was an economic upside to the virus, saying the U.S. economy was benefiting from Americans canceling travel plans abroad. “People are staying here and spending their money here, as opposed to going to Europe and other places,” he said.
A growing chorus of economists — in Washington, academia and on Wall Street — have called for the administration and Congress to pass stimulus measures to complement the interest rate cut that the Federal Reserve has already undertaken.A growing chorus of economists — in Washington, academia and on Wall Street — have called for the administration and Congress to pass stimulus measures to complement the interest rate cut that the Federal Reserve has already undertaken.
“There’s not very much that monetary policy can do in this situation,” Alan Blinder, a former Fed vice chairman, said in a call with reporters organized on Friday by the Brookings Institution.“There’s not very much that monetary policy can do in this situation,” Alan Blinder, a former Fed vice chairman, said in a call with reporters organized on Friday by the Brookings Institution.
Oil prices plummeted Friday after major producers meeting in Vienna failed to reach an agreement to reduce production, as concerns about the coronavirus’s impact on the economy spread across the globe.Oil prices plummeted Friday after major producers meeting in Vienna failed to reach an agreement to reduce production, as concerns about the coronavirus’s impact on the economy spread across the globe.
Brent crude fell by about 10 percent, while West Texas Intermediate crude, the U.S. benchmark, was down 10 percent to $41.21 a barrel.Brent crude fell by about 10 percent, while West Texas Intermediate crude, the U.S. benchmark, was down 10 percent to $41.21 a barrel.
Oil prices have fallen more than 20 percent since early January when China, a major importer of oil, started confronting the emerging coronavirus outbreak.Oil prices have fallen more than 20 percent since early January when China, a major importer of oil, started confronting the emerging coronavirus outbreak.
The Organization of the Petroleum Exporting Countries and other producers, including Russia, were meeting to try to steady the prices by reducing output beyond cuts that were already approved. But the producers struggled to reach an agreement during the meetings, which were in their third day on Friday.The Organization of the Petroleum Exporting Countries and other producers, including Russia, were meeting to try to steady the prices by reducing output beyond cuts that were already approved. But the producers struggled to reach an agreement during the meetings, which were in their third day on Friday.
Banks in New York and London are beginning to hive off small parts of their trading desks so that if there is an outbreak of coronavirus at their headquarters, there will at least be a small contingent of traders located elsewhere who can keep business running.Banks in New York and London are beginning to hive off small parts of their trading desks so that if there is an outbreak of coronavirus at their headquarters, there will at least be a small contingent of traders located elsewhere who can keep business running.
Bank of America assigned about 100 people to an office outside of Stamford, Conn., on Friday, a person familiar with the matter said.Bank of America assigned about 100 people to an office outside of Stamford, Conn., on Friday, a person familiar with the matter said.
JPMorgan’s backup crews are going from New York to New Jersey, according to a memo seen by The New York Times. In London, the bank is splitting its traders and sales representatives between its offices in Canary Wharf and two other disaster-recovery offices.JPMorgan’s backup crews are going from New York to New Jersey, according to a memo seen by The New York Times. In London, the bank is splitting its traders and sales representatives between its offices in Canary Wharf and two other disaster-recovery offices.
Morgan Stanley is testing plans that would have some employees in sales and trading, as well as in capital markets, work out of a disaster-recovery facility near Heathrow Airport in West London, a person briefed on the matter said on Friday. In New York, Morgan Stanley is also sending some employees to backup locations in Westchester, another person said.Morgan Stanley is testing plans that would have some employees in sales and trading, as well as in capital markets, work out of a disaster-recovery facility near Heathrow Airport in West London, a person briefed on the matter said on Friday. In New York, Morgan Stanley is also sending some employees to backup locations in Westchester, another person said.
Citigroup is experimenting with various options for dividing groups of employees among different locations, but a spokeswoman declined to share details.Citigroup is experimenting with various options for dividing groups of employees among different locations, but a spokeswoman declined to share details.
Lufthansa Group, one of the world’s largest airline companies, said on Friday that it planned to cut flights by up to 50 percent in the coming weeks because of a rapid decline in demand.Lufthansa Group, one of the world’s largest airline companies, said on Friday that it planned to cut flights by up to 50 percent in the coming weeks because of a rapid decline in demand.
Singapore Airlines said on Friday that a cabin crew member, whose last flight was between Paris and Singapore on Feb. 24, had tested positive for coronavirus. He has not been to work since the onset of symptoms, the airline said.Singapore Airlines said on Friday that a cabin crew member, whose last flight was between Paris and Singapore on Feb. 24, had tested positive for coronavirus. He has not been to work since the onset of symptoms, the airline said.
British Airways said Friday that two employees — both baggage handlers who work at Heathrow Airport — had tested positive for the coronavirus. “The colleagues have been isolated are recovering at home,” a spokeswoman said in a brief statement.British Airways said Friday that two employees — both baggage handlers who work at Heathrow Airport — had tested positive for the coronavirus. “The colleagues have been isolated are recovering at home,” a spokeswoman said in a brief statement.
Apple sent a memo to its Silicon Valley employees on Friday saying its offices would remain open, but it was encouraging them to work from home to minimize health risks. Facebook said on Friday that it had closed its London offices until Monday because of coronavirus concerns.Apple sent a memo to its Silicon Valley employees on Friday saying its offices would remain open, but it was encouraging them to work from home to minimize health risks. Facebook said on Friday that it had closed its London offices until Monday because of coronavirus concerns.
Reporting was contributed by Matt Phillips, Emily Flitter, Michael de la Merced, Jeanna Smialek, Alexandra Stevenson, Stanley Reed, Patricia Cohen, Karen Weise, Geneva Abdul, Kirk Johnson, Mike Isaac, Alan Rappeport, Jim Tankersley and Jack Ewing.Reporting was contributed by Matt Phillips, Emily Flitter, Michael de la Merced, Jeanna Smialek, Alexandra Stevenson, Stanley Reed, Patricia Cohen, Karen Weise, Geneva Abdul, Kirk Johnson, Mike Isaac, Alan Rappeport, Jim Tankersley and Jack Ewing.