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Stock Markets Tumble as New Outbreaks Loom: Live Updates Stock Markets Slide as New Outbreaks Loom: Live Updates
(about 2 hours later)
Global markets tumbled on Monday on renewed fears of more coronavirus outbreaks, setting the stage for sharp losses when Wall Street opens later in the day. Global markets fell on Monday on renewed fears of more coronavirus outbreaks, setting the stage for sharp losses when Wall Street opens later in the day.
Stocks in London, Frankfurt and Paris were about 2 percent lower in morning trading. That followed some sharper losses in the Asia-Pacific region earlier in the day, led by a 4.8 percent drop in South Korea and a 3.5 percent fall in Tokyo. Stocks in London, Frankfurt and Paris were 1 to 2 percent lower. That followed some sharper losses in the Asia-Pacific region, including a 4.8 percent drop in South Korea and a 3.5 percent fall in Tokyo.
Futures markets were predicting the pain would spread to Wall Street. Futures that track the S&P 500 were predicting the index would open nearly 3 percent lower. Futures markets were predicting that the pain would spread to Wall Street. Futures that track the S&P 500 forecast that the index would open about 2 percent lower.
The sell-off was spread broadly across markets. Oil and gold fell in early futures trading. Prices for U.S. Treasury bonds, which generally rise when market sentiment is weak, gained sharply, sending yields lower. The pessimism was spread broadly across markets. Oil and gold fell in futures trading. Prices for U.S. Treasury bonds, which generally rise when market sentiment is weak, gained sharply, sending yields lower.
Investors were reacting in part to bad news out of China, where some monthly economic indicators were weaker than expected, and where officials are battling a new spate of cases in Beijing. In the United States, Arizona, Texas and Florida reported higher numbers. Gov. Andrew M. Cuomo of New York warned that officials there might have to reinstate lockdown conditions. Investors were reacting in part to bad news out of China, where some monthly economic indicators were weaker than expected, and where officials are battling a new spate of coronavirus cases in Beijing. In the United States, Arizona, Texas and Florida have also reported higher infection numbers, and Gov. Andrew M. Cuomo of New York said that the state might have to reinstate lockdown conditions.
BP warned shareholders on Monday that the company expected to write off $13 billion to $17.5 billion of the value of its oil and gas holdings when it reports second-quarter earnings on Aug. 4. The write downs — a reflection that oil and gas fields are not worth as much as they used to be — come as Bernard Looney, who became chief executive in February, is pursuing a rapid makeover of the London-based oil giant. In Europe, governments continued to loosen economic restrictions on Monday, with nonessential retailers in Britain now allowed to open their doors and travel restrictions easing among several European Union countries.
Mr. Looney is leading a reorganization of the company that is already expected to result in a reduction of 10,000 jobs, or nearly 15 percent of the work force. Mr. Looney also wants to change the way the company does business in order to meet a commitment to become carbon neutral by 2050. But BP offered a reminder of the cost of the pandemic, warning shareholders that the value of its oil and gas holdings could shrink as much as $17.5 billion.
The company said that the write downs of up to 12 percent of the previous book value are partly because it was sharply reducing its long-term forecasts of the price of oil by about 30 percent, to $55 a barrel. It is also similarly downgrading its long-term natural gas price. The company said that it now assumed that the coronavirus pandemic would have “an enduring impact” on the global economy and accelerate a shift to lower-carbon energy consumption as countries sought to rebuild their economies based on fuel sources that produce lower emissions. BP told shareholders on Monday that the company expected to write off $13 billion to $17.5 billion of the value of its oil and gas holdings when it reports second-quarter earnings on Aug. 4.
The write downs will come from both existing oil and gas fields and those in places like the Gulf of Mexico and Canada where the company has undeveloped holdings that it may decide not to exploit in the current circumstances. The write downs — a reflection that oil and gas fields have fallen in value — come as Bernard Looney, who became chief executive in February, pursues a rapid makeover of the London-based oil giant.
Mr. Looney said in a statement that he was “confident that these difficult decisions” will better enable the company to compete as the energy industry changes. A reorganization led by Mr. Looney is expected to result in a reduction of 10,000 jobs, or nearly 15 percent of the company’s work force. He also wants to change the way BP does business in order to meet a commitment to become carbon neutral by 2050.
The company said that the write downs of up to 12 percent of the previous book value were partly a result of a reduction in its long-term forecasts of the price of oil by about 30 percent, to $55 a barrel. It is also similarly downgrading its long-term price for natural gas.
The company said it assumed that the pandemic would have “an enduring impact” on the global economy and accelerate a shift to lower-carbon energy consumption as countries seek to rebuild their economies.
The write downs will come both from existing oil and gas fields and from those in places like the Gulf of Mexico and Canada where the company has undeveloped holdings that it may decide not to exploit in the current circumstances.
Mr. Looney said in a statement that he was “confident that these difficult decisions” would help the company to compete as the energy industry changes.
BP’s share price was down about 4 percent in morning trading.BP’s share price was down about 4 percent in morning trading.
China had nearly eradicated the Covid-19 virus within its borders last month, but that was not enough to get the country’s consumers spending again — and with a new outbreak in Beijing over the past several days, a full economic recovery could be even farther away. China appeared to have nearly eradicated the coronavirus within its borders last month, but that was not enough to get people in the country spending again — and with a new outbreak in Beijing over the past several days, a full economic recovery could be even further away.
Restaurants, bars and shopping malls were open across China last month except for a small area near the border with North Korea and Russia, which had a coronavirus outbreak in May. But retail sales nonetheless fell 2.8 percent nationwide in May compared to a year ago. Restaurants, bars and shopping malls were open across China last month except for in a small area near the border with North Korea and Russia, which had a coronavirus outbreak in May. But retail sales nonetheless fell 2.8 percent nationwide in May compared with a year ago.
The weak result, which was worse than most economists expected, is likely to trigger renewed discussion over a politically difficult question: whether to reopen the country’s cinemas, which are practically the only large category of retail spending that remains completely closed. That result, which was worse than most economists expected, is likely to prompt renewed discussion over a politically difficult question: whether to reopen the country’s cinemas, which are practically the only large category of retail spending that remains completely closed.
The closure of cinemas has been a big blow to shopping malls, at a time when a lot of purchasing is already moving online. Malls in China and around the world rely heavily on cinemas to draw people out of their homes, with the hope that they will stay after the movies to dine or shop. Unlike the malls, car dealerships had a fairly good month in May, with sales up 1.9 percent from an already strong month last year. The closure of cinemas has been a big blow to shopping malls at a time when buying is increasingly moving online.
But Xi Jinping, the country’s leader, said at the end of March that cinemas were not needed, and no one has dared to challenge his decision publicly since then. Malls in China and around the world rely heavily on cinemas to draw people out of their homes, with the hope that they will stay after the movies to dine or shop. Unlike the malls, car dealerships had a fairly good month in May, with sales up 1.9 percent from an already strong month last year.
“If anyone wants to watch a movie, just watch it online,” Mr. Xi said during a visit on March 31 to Hangzhou in east-central China’s Zhejiang province. But Xi Jinping, the country’s leader, said at the end of March that cinemas were not needed, and no one has dared to challenge his decision publicly since then. “If anyone wants to watch a movie, just watch it online,” Mr. Xi said during a visit on March 31 to Zhejiang Province.
Exports were also weak in May. Beijing announced last week that they had fallen 3.3 percent. Exports were also weak in May. Beijing said last week that they had fallen 3.3 percent.
Industrial production was up 4.4 percent last month compared to a year ago, also slightly below expectations. Factory output has consistently run well ahead of retail sales this spring, raising worries that unsold inventories may pile up and trigger another round of production cutbacks. Industrial production was up 4.4 percent last month compared with a year ago, also slightly below expectations. Factory output has consistently run well ahead of retail sales this spring, raising worries that unsold inventories may pile up and set off another round of production cutbacks.
Warner Bros. on Friday pushed back the release of “Tenet,” a $200 million-plus movie from Christopher Nolan that was supposed to arrive in theaters on July 17 and jump-start the pandemic-stricken movie business. Instead, “Tenet” will be released on July 31.Warner Bros. on Friday pushed back the release of “Tenet,” a $200 million-plus movie from Christopher Nolan that was supposed to arrive in theaters on July 17 and jump-start the pandemic-stricken movie business. Instead, “Tenet” will be released on July 31.
The move means theaters will largely sit fallow for an extra week. Disney’s extravagant “Mulan,” directed by Niki Caro, will now signal the return of megawatt Hollywood movies when it comes out on July 24 — unless Disney also decides that market conditions are too harsh. A Disney spokesman had no immediate comment. The move means that theaters will largely sit fallow for an extra week. Disney’s extravagant “Mulan,” directed by Niki Caro, will now signal the return of megawatt Hollywood movies when it comes out on July 24 — unless Disney also decides that market conditions are too harsh. A Disney spokesman had no immediate comment.
After being closed for months by the pandemic, movie theaters around the world are reopening, albeit with limited attendance and heightened safety requirements.After being closed for months by the pandemic, movie theaters around the world are reopening, albeit with limited attendance and heightened safety requirements.
AMC Theaters, the world’s largest cineplex operator, announced on Tuesday that “almost all” of its locations in the United States and Britain would reopen next month. Over all, theaters in 90 percent of overseas markets will be running again by mid-July, according to the National Association of Theater Owners, a trade organization for movie exhibitors in 98 countries. AMC Theaters, the world’s largest cineplex operator, said on Tuesday that “almost all” of its locations in the United States and Britain would reopen next month. Over all, theaters in 90 percent of overseas markets are due to be running again by mid-July, according to the National Association of Theater Owners, a trade organization for movie exhibitors in 98 countries.
It is unclear whether people will feel safe from the coronavirus, the spread of which rose to a worldwide high on Sunday, as measured by new cases. As the United States has started to reopen its economy, new hot spots have emerged; Texas, Florida and California all recently reported their highest daily tallies of new virus cases. Mass protests against police brutality have raised the specter of a coronavirus surge in the coming weeks. It is unclear whether people will feel safe from the coronavirus, the spread of which rose to a worldwide high on Sunday, as measured by new cases.
As the United States has started to reopen public life, new virus hot spots have emerged. Texas, Florida and California all recently reported their highest daily tallies of new virus cases. And mass protests against police violence and racism have raised the specter of a coronavirus surge in the coming weeks.
People who might typically bet on sports are playing a sizable role in the market’s recent surge, some Wall Street analysts say — a shift that has helped largely erased its losses for the year.
Millions of small-time investors have opened trading accounts in recent months, a flood of new buyers unlike anything the market had experienced in years, just as lockdown orders halted entire sectors of the economy and sent unemployment soaring.
It is unclear exactly how many of the new arrivals are sports bettors, but many are behaving like aggressive gamblers. There has been a jump in small bets in the stock options market, where wagers on the direction of share prices can produce thrilling scores and gut-wrenching losses. And transactions that make little economic sense — like buying up the nearly valueless shares of bankrupt companies — are off the charts.
Even with modest investments, these newcomers can move the market, because stock prices are set by just a sliver of shareholders.
On most days, the overwhelming majority do nothing, while the buyers and sellers establish the prices. So even a small influx of hyperactive speculators can have a significant effect.
“Investors are increasingly asking us about the participation of individual investors in the shares and options market,” analysts from Goldman Sachs wrote in a note published late last month. “Our data suggests that individual investors are indeed a significant proportion of daily volume.”
The federal government’s multibillion-dollar aid program to help small businesses hurt by the pandemic prompted outrage after billions went to public companies while mom-and-pop businesses were sidelined.The federal government’s multibillion-dollar aid program to help small businesses hurt by the pandemic prompted outrage after billions went to public companies while mom-and-pop businesses were sidelined.
Now, another group of recipients is being scrutinized for taking the money: independent wealth management firms, some of which manage billions of dollars on behalf of affluent Americans. Their fees, which are typically 1 percent, can bring in tens of million annually regardless of market fluctuations.Now, another group of recipients is being scrutinized for taking the money: independent wealth management firms, some of which manage billions of dollars on behalf of affluent Americans. Their fees, which are typically 1 percent, can bring in tens of million annually regardless of market fluctuations.
The initial $349 billion allocated in April for the Paycheck Protection Program went quickly, prompting Congress to approve an additional $310 billion. But some business owners found the guidelines for accepting the money confusing or too restrictive.The initial $349 billion allocated in April for the Paycheck Protection Program went quickly, prompting Congress to approve an additional $310 billion. But some business owners found the guidelines for accepting the money confusing or too restrictive.
Now, a divide is growing between advisory firms that took the money and those that declined because of ethical concerns. The issue is more than a tempest in a teapot. Some firms could lose millions in fees if their clients start pulling their wealth out.Now, a divide is growing between advisory firms that took the money and those that declined because of ethical concerns. The issue is more than a tempest in a teapot. Some firms could lose millions in fees if their clients start pulling their wealth out.
“We didn’t think it was very credible that these firms actually needed the money,” said Gary Ribe, the chief investment officer of Accretive Wealth Partners, which manages $130 million and did not apply a loan from the Paycheck Protection Program. “Getting it out of an abundance of caution — that didn’t seem credible, either.”“We didn’t think it was very credible that these firms actually needed the money,” said Gary Ribe, the chief investment officer of Accretive Wealth Partners, which manages $130 million and did not apply a loan from the Paycheck Protection Program. “Getting it out of an abundance of caution — that didn’t seem credible, either.”
A bankruptcy court judge on Friday allowed Hertz to sell up to $1 billion in new stock, granting the car rental agency’s request as investors improbably bought up shares in recent days. The company’s stock price ended the day Friday at $2.83 per share, up from a low of 40 cents after it filed for bankruptcy last month. SAS, the Scandinavian airline, said on Monday that it would need an additional 12.5 billion Swedish krona, or $1.3 billion, to continue operating. The airline said that part of that sum was expected to come from the Swedish authorities, who will submit to Parliament a proposal to invest 5 billion krona. The Swedish and Danish governments last month agreed to back a loan facility valued at 3.3 billion krona for the ailing airline.
Reporting was contributed by Mohammed Hadi, Keith Bradsher, Stanley Reed, Carlos Tejada, Brooks Barnes, Nicole Sperling, Paul Sullivan and Niraj Chokshi A bankruptcy court judge on Friday allowed Hertz to sell up to $1 billion in new stock, granting the car rental agency’s request as investors improbably bought up shares in recent days. The company’s stock price ended the day at $2.83 per share, up from a low of 40 cents after it filed for bankruptcy protection last month.
Reporting was contributed by Matt Phillips, Mohammed Hadi, Keith Bradsher, Stanley Reed, Carlos Tejada, Brooks Barnes, Nicole Sperling, Paul Sullivan, Niraj Chokshi and Kevin Granville.