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Stocks Plunge and Bond Yields Sink: Live Updates Stocks Plunge and Bond Yields Sink: Live Updates
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Stocks plunged on Friday, and investors rushed to the safety of government bonds, as Wall Street was gripped by another wave of panic over the spreading coronavirus. Stocks plunged on Friday, investors rushed to the safety of government bonds, and oil prices nose-dived as Wall Street was gripped by another wave of panic over the spreading coronavirus.
The most dramatic move in financial markets Friday was a sharp drop in yields on government bonds. The yield on the 10-year U.S. Treasury note sank to 0.7 percent for the first time. Yields move inversely to bond prices and their slide has come as investors have fled risky investments and put their money into low-interest but safe Treasury bonds.The most dramatic move in financial markets Friday was a sharp drop in yields on government bonds. The yield on the 10-year U.S. Treasury note sank to 0.7 percent for the first time. Yields move inversely to bond prices and their slide has come as investors have fled risky investments and put their money into low-interest but safe Treasury bonds.
A strong report on the American job market on Friday didn’t change the direction of the markets. The U.S. government said employers added 273,000 jobs in February. But the data was a snapshot of a point in time 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 didn’t change the direction of the markets. The U.S. government said employers added 273,000 jobs in February. But the data was a snapshot of a point in time 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. Most of the funds will go to agencies dealing with the virus.Nor did it help that President Trump signed a $8.3 billion emergency spending bill aimed at funding efforts to contain the spread. Most of the funds will go to agencies dealing with the virus.
Despite the bill, which had been in the works for some time, markets seemed to be reacting to a lack of news from government officials in the United States that would indicate they had the situation in hand, said Gennadiy Goldberg, senior U.S. rates strategist at TDSecurities in New York.
“There really isn’t a response from the administration or the authorities telling people to calm down and there’s a plan,” said Mr. Goldberg. “It certainly feels like there isn’t a plan and I feel like that’s what the markets reacting to.”
For many the question now is how much damage can the virus do to the global economy and its growth prospects for the year.For many the question now is how much damage can the virus do to the global economy and its growth prospects for the year.
“The epidemic has already dented anemic global economic growth this year and it can be expected to slow further, then contract, as the fear of the virus takes hold,” said Nigel Green, chief executive of deVere Group, an investment firm.“The epidemic has already dented anemic global economic growth this year and it can be expected to slow further, then contract, as the fear of the virus takes hold,” said Nigel Green, chief executive of deVere Group, an investment firm.
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.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,” Mr. Green said.“Against this backdrop, we should prepare for a short-term but severe global recession,” Mr. Green said.
Shares in Europe were also sharply lower: In London, the FTSE 100 index was down more than 3 percent on Friday. Germany’s DAX index was 3.4 percent lower, and France’s CAC 40 index fell 3.6 percent.
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Shares in Europe were also sharply lower: In London, the FTSE 100 index was down more than 3 percent on Friday. Germany’s DAX index was 3.4 percent lower, and France’s CAC 40 index fell 3.6 percent.
In Tokyo, Hong Kong and Seoul, markets closed more than 2 percent lower. In the mainland Chinese cities of Shanghai and Shenzhen, markets fell about 1 percent. An index of China’s biggest companies listed in Hong Kong dropped by nearly 2 percent.In Tokyo, Hong Kong and Seoul, markets closed more than 2 percent lower. In the mainland Chinese cities of Shanghai and Shenzhen, markets fell about 1 percent. An index of China’s biggest companies listed in Hong Kong dropped by nearly 2 percent.
For the second month in a row, the United States economy churned out a blockbuster number of jobs, the government reported Friday, an impressive showing in an era of slow-and-steady employment growth.For the second month in a row, the United States economy churned out a blockbuster number of jobs, the government reported Friday, an impressive showing in an era of slow-and-steady employment growth.
Employers added 273,000 jobs in February. Analysts had expected a gain of about 165,000, according to MarketWatch.Employers added 273,000 jobs in February. Analysts had expected a gain of about 165,000, according to MarketWatch.
But with the coronavirus outbreak shaking economic confidence, the solid showing may not be a harbinger of continued strength.But with the coronavirus outbreak shaking economic confidence, the solid showing may not be a harbinger of continued strength.
Every jobs report looks backward, but February’s report captures a particularly unusual moment before the market was gripped with anxiety about the global impact of a widening epidemic.Every jobs report looks backward, but February’s report captures a particularly unusual moment before the market was gripped with anxiety about the global impact of a widening epidemic.
“There is a red line in the calendar,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “The value of it is that this report gives us kind of a benchmark of where we were before things began to go wrong.”“There is a red line in the calendar,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “The value of it is that this report gives us kind of a benchmark of where we were before things began to go wrong.”
Oil prices sank on Friday as major producers gathered for a critical meeting to try to agree on production cuts to try to manage the falling demand for crude as concerns about coronavirus spread across the globe.Oil prices sank on Friday as major producers gathered for a critical meeting to try to agree on production cuts to try to manage the falling demand for crude as concerns about coronavirus spread across the globe.
Brent crude fell about 4 percent, as low as $47.02 a barrel, a two-and-a-half-year low. West Texas Intermediate crude, the U.S. benchmark, was as low as $43.28 a barrel. Brent crude fell about 6 percent, to less than $47 a barrel, a two-and-a-half-year low. West Texas Intermediate crude, the U.S. benchmark, briefly fell below $43 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, are meeting in Vienna to try to steady the prices by reducing output beyond cuts that were already approved.The Organization of the Petroleum Exporting Countries and other producers, including Russia, are meeting in Vienna to try to steady the prices by reducing output beyond cuts that were already approved.
The Federal Reserve Bank of New York president, John C. Williams, made clear on Thursday evening that officials viewed the emergency rate cut they approved earlier this week as part of an international push to cushion the economy as the coronavirus threatens global growth.
Mr. Williams, one of the Fed’s three key leaders, spoke in New York two days after the Fed slashed borrowing costs by half a point in its first emergency move since the depths of the 2008 financial crisis. The move came shortly after a call between finance ministers and central bankers from the Group of 7, which also includes Britain, Canada, France, Germany, Italy and Japan.
Mr. Williams’s statement is significant, in part because global policymakers were criticized for failing to satisfy market expectations for a coordinated rate cut among major economies. Stocks briefly rallied after the Fed’s announcement, but quickly sank again.
Microsoft said late Thursday that two employees in the Seattle area have been diagnosed with coronavirus, the first known cases at the company, which is one of the region’s largest employers.Microsoft said late Thursday that two employees in the Seattle area have been diagnosed with coronavirus, the first known cases at the company, which is one of the region’s largest employers.
“The affected employees remain in quarantine, and we are supporting them as the recover,” Microsoft executive Kurt DelBene said in an email to employees obtained by The Times.“The affected employees remain in quarantine, and we are supporting them as the recover,” Microsoft executive Kurt DelBene said in an email to employees obtained by The Times.
The email said one of the employees worked at a building in Microsoft’s headquarters campus at the time the employee developed symptoms. The other, who worked at LinkedIn, had no known contact. The email said one of the employees worked at a building in Microsoft’s headquarters campus at the time the employee developed symptoms. The other, who worked at LinkedIn, had no known contact with other employees.
The Seattle area is the first region in the United States where the authorities have issued sweeping recommendations that people stay home to slow the spread of coronavirus. The Seattle area is the first region in the United States where the authorities have issued sweeping recommendations that people stay home to slow the spread of coronavirus. In Washington State, 13 people have died of coronavirus. More than 60 other people have been treated for the virus in the state, leading state officials to declare an emergency.
In Washington State, 13 people have died of coronavirus. More than 60 other people have been treated for the virus in the state, leading state officials to declare an emergency.
And in pockets all around Seattle, people were heeding the advice of officials and staying in. Microsoft, Amazon and many other top employers told their employees to work from home.
Ziehl-Abegg, a German maker of high-performance electric fans, has effectively forbidden its employees from going on vacation in the region of Italy known as South Tyrol, a popular destination for skiers, because of coronavirus danger.Ziehl-Abegg, a German maker of high-performance electric fans, has effectively forbidden its employees from going on vacation in the region of Italy known as South Tyrol, a popular destination for skiers, because of coronavirus danger.
On Thursday, Starbucks warned that its quarterly same-store sales in China, where it has a huge presence, would fall 50 percent compared to last year, resulting in a $400 million to $430 million hit to its revenue forecast.On Thursday, Starbucks warned that its quarterly same-store sales in China, where it has a huge presence, would fall 50 percent compared to last year, resulting in a $400 million to $430 million hit to its revenue forecast.
Reporting was contributed by Alexandra Stevenson, Stanley Reed, Karen Weise, Kirk Johnson and Jack Ewing. Reporting was contributed by Matt Phillips, Jeanna Smialek, Alexandra Stevenson, Stanley Reed, Patricia Cohen, Karen Weise, Kirk Johnson and Jack Ewing.