Asian stocks bounce after huge losses on news of possible U.S. tax cut

Asian stock markets took a breather from recent steep declines on Tuesday, with several regional benchmarks gaining more than 1% after New York futures reversed on news that President Donald Trump plans to ask Congress for a tax cut and other quick measures to ease the pain of the virus outbreak.
Tuesday’s rebounds followed Wall Street’s biggest one-day drop since the 2008 global crisis. Oil prices also bounced back from a record-setting fall.

Hong Kong’s benchmark jumped 1.8%, Sydney’s added 1.2% and Shanghai’s climbed 0.6%. Shares edged slightly lower in Tokyo and Seoul after bouncing in and out of negative territory.
Brent crude, the basis for international oil prices, gained 6.7% but still was down by nearly half from its January peak.
Selloffs Monday reflected alarm over mounting economic damage from the coronavirus that emerged in China in December. Anti-disease controls that shut down Chinese factories are spreading as the United States and European countries close schools, cancel public events and impose travel controls.
Anxiety has mounted as Italy, the hardest-hit place in Europe, said travel controls imposed earlier on its north would be extended nationwide. Ireland canceled St. Patrick’s Day parades and Israel ordered visitors quarantined ahead of Passover and Easter, one of the busiest travel periods of the year.

The mounting losses and a flight by investors into the safe haven of bonds have fueled warnings the global economy, which already was showing signs of cooling, might be headed into a recession.
The drop in U.S. stock prices on Monday was so sharp that it triggered Wall Street’s first trading halt in more than two decades. But Trump’s comment that he will seek relief for workers as ripple effects of the outbreak spread gave some investors an excuse to resume buying.
“This is not like the financial crisis where we don’t know the end is in sight,” said Treasury Secretary Steven Mnuchin. “This is about providing proper tools and liquidity to get through the next few months.”
On Tuesday, the Nikkei 225 NIK, +0.85% in Tokyo swung between modest gains and losses, losing 0.2% to 19,666.71. The Shanghai Composite Index SHCOMP, 1.844% advanced to 2,961.54. The Kospi 180721, +0.41% in Seoul edged 0.1% lower to 1,952.46.
Hong Kong’s Hang Seng HSI, 2.023% surged to 25,504.33 and the S&P-ASX 200 XJO, +3.10% in Sydney rose to 5,835.70. Singapore and Jakarta advanced by more than 1%, while New Zealand and Malaysia declined.
Benchmark U.S. crude CL.1, 6.489% gained 6.7%, or $2.09, to $33.22 per barrel in electronic trading on the New York Mercantile Exchange. It lost 25% on Monday to $31.13 per barrel. Brent crude BRNK20, 6.461% gained $2.53, or 7.4%, to $36.89 per barrel in London.
Oil prices plunged 25% after Russia refused to roll back production in response to virus-depressed demand. Saudi Arabia signaled it will ramp up its own output.
Stock markets usually welcome lower energy costs for consumers and businesses. But the decline cuts into revenue for producers, including the United States. And the abrupt drop, coming amid virus fears, rattled investors.
On Wall Street, the S&P 500 index SPX, -7.59% fell 7.6% to 2,746.56 for its biggest one-day drop since Dec. 1, 2008. The Dow Jones Industrial Average DJIA, -7.78% lost 7.8% to 23,851.02. The Nasdaq composite COMP, -7.28% gave up 7.3% to 7,950.68.
The S&P dropped 7.4% in the first few minutes of trading, triggering an automatic 15-minute market-wide trading halt. That has happened only once before, in 1997.
The S&P 500 has fallen 18.9% from its Feb. 19 record and has lost $5.3 trillion in value. U.S. stocks are close to entering a bear market, defined as a drop of 20% from their peak.
“Right now, it’s all-out panic,” said Phil Flynn of Price futures Group. “I think the situation is going to improve when cooler heads prevail, but it’s going to be a rocky road for the next couple of weeks.”
European stock indexes already are in a bear market after recording their biggest declines since the 2008 crisis.
Central banks in the United States, China and other countries have cut interest rates to try to shore up economic activity. But economists warn that while rate cuts might help to buoy consumer demand, they cannot reopen factories that are closed due to quarantines or lack of workers and raw materials.
“Even coordinated policy responses are not a tried and tested panacea and by no means guarantee the ability to durably pull markets back from the brink of bear territory,” Vishnu Varathan of Mizuho Bank said in a report.
The yield on U.S. Treasury bonds edged up to 0.66% after falling as low as 0.5% as investors shifted money into safe haven assets. It had never been below 1% until last week.
The yield, or the difference between the market price and what investors will receive if they hold the bond to maturity, is seen as a measure of economic confidence. Investors shift money into bonds if they expect economic growth and stock prices to weaken. That pushes up the bond’s market price and narrows the yield.
In the United States, a cruise ship with a cluster of coronavirus cases that forced it to idle off the California coast for days docked at Oakland as officials prepared to start bringing passengers to military bases for quarantine or return them to their home countries.
The Grand Princess had more than 3,500 people aboard, 21 of them infected. Japan’s handling of a similar situation involving a cruise ship that docked in Yokohama is seen as a major factor behind the spread of the virus in that country.
For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia. The vast majority of people recover from the virus, as has already happened with about three-quarters of those infected in China.
While the crisis is easing in China, where the virus was first detected, fast-growing clusters have turned up in South Korea, Japan, Iran and Italy, and the caseload is growing in the United States.
https://www.marketwatch.com/story/asian-stocks-bounce-after-huge-losses-on-news-of-possible-us-tax-cut-2020-03-10

Oil bounces 8% on stimulus hopes, virus slowdown in China

Oil prices bounced 8% on Tuesday from the biggest one-day rout in nearly 30 years, as investors eyed the possibility of economic stimulus amid a price war between Russia and Saudi Arabia and as new virus cases slowed in China.

President Donald Trump on Monday said he will be taking “major” steps to gird the U.S. economy against the impact of the spreading coronavirus outbreak and will discuss a payroll tax cut with congressional Republicans on Tuesday.
Brent crude futures rose by $2.85, or 8.3%, to $37.21 a barrel by 0605 GMT, while U.S. West Texas Intermediate (WTI) crude gained $2.46, or 7.9%, to $33.59 a barrel.
Both benchmarks plunged 25% on Monday, dropping to their lowest since February 2016 and recording their biggest one-day percentage declines since Jan. 17, 1991, when oil prices fell at the outset of the U.S. Gulf War.
Trading volumes in the front-month for both contracts hit record highs in the previous session after a three-year pact between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on Friday.
“In times of turmoil, nothing is more important in restoring confidence than the government appearing calm and in control of the situation, how tenuous that control may be,” said Jeffrey Halley, senior market analyst at broker OANDA in a note.
Asian shares bounced and bond yields rose from historic lows as speculation of coordinated stimulus from global central banks and governments calmed panic selling.
Sentiment was also lifted after Chinese President Xi Jinping visited Wuhan, the epicenter of the coronavirus outbreak, for the first time since the epidemic began, and as the spread of the virus in mainland China sharply slows.
China, the world’s second largest oil consumer, is trying to get people in hard-hit Hubei province back to work by using a mobile phone-based monitoring system that will allow people to travel within the province.
Crude was also supported by hopes for a settlement to the price war and potential U.S. output cuts, although analysts warned gains may be temporary as oil demand continues to be hit by the economic impact of the coronavirus outbreak which has spread beyond China and caused Italy to be under lockdown.
U.S. shale producers rushed to deepen spending cuts and could reduce production after OPEC’s decision to pump full bore into a global market hit by shrinking demand due to the coronavirus outbreak.
“When you look at the leverage the industry is in, at prices of around $30, it’s not profitable,” said Jonathan Barratt, chief investment officer Probis Group.

“Saudis and other Middle Eastern producers have their budgetary constraints, Russia is starved for cash and the breakeven for .. shale has to be around $50 a barrel. So the dynamics of all those put together will mean they will come to an agreement somewhere.”
On the demand side, the International Energy Agency said oil demand was set to contract in 2020 for the first time since 2009.
https://www.reuters.com/article/us-global-oil/oil-bounces-8-on-stimulus-hopes-virus-slowdown-in-china-idUSKBN20X02D

Trump has not been tested for coronavirus – White House

U.S. President Donald Trump has not been tested for the coronavirus, the White House said on Monday, though at least two lawmakers with whom he has recently come into contact have announced they were self-quarantining after attending a conference with a person who had tested positive for the virus.
“The President has not received COVID-19 testing because he has neither had prolonged close contact with any known confirmed COVID-19 patients, nor does he have any symptoms. President Trump remains in excellent health, and his physician will continue to closely monitor him,” White House spokeswoman Stephanie Grisham said in a statement, referring to the acronym describing the virus.
https://www.reuters.com/article/us-health-coronavirus-trump-testing/trump-has-not-been-tested-for-coronavirus-white-house-idUSKBN20X06F

Biden, Sanders eye changing campaign plans amid coronavirus outbreak

Democratic presidential candidates Joe Biden and Bernie Sanders said on Monday they were consulting with public health experts about coronavirus risks in planning their next campaign moves, as election officials in upcoming primary states urged people to consider voting early.

Neither Sanders, a senator from Vermont, nor Biden, the former vice president, has called off a major rally because of the outbreak that has sickened more than 110,000 people and killed almost 4,000 globally, although public health officials have urged people at risk for contracting the disease to avoid large gatherings.
There have been 605 confirmed cases in the United States, with 22 deaths.
The winner of the Democratic nomination will take on Republican President Donald Trump in the Nov. 3 general election. Trump has said he would not stop holding campaign rallies.
“Every organization in America is taking a hard look at what the coronavirus means for their operations, and yes, that’s true of our campaign, as well,” Sanders told a coronavirus roundtable in Michigan, one of six states that vote on Tuesday in the next round of the state-by-state nominating competition.
“We do not hold a rally without first conferring with local public health officials.”
Biden told NBC on Monday he would consider calling off rallies if health authorities warned they were too risky
“I’m looking to the CDC for advice on that,” Biden said, referring to the U.S. Centers for Disease Control and Prevention. “We’re going to follow the recommendations of the experts … and if they conclude that there shouldn’t be big indoor rallies, then we’ll stop big indoor rallies.”
At a rally in Detroit on Monday, Biden’s campaign provided hand sanitizer to attendees and press.
A “Women for Trump” bus tour set to be led by the president’s daughter-in-law, Lara Trump, was canceled on Monday, because of scheduling issues, his campaign said. The New York Times reported that sources close to the campaign said the cancellation was spurred by concerns over the coronavirus.
Several of the states holding nominating contests in coming days have adopted measures aimed at protecting voters from contracting or spreading the virus.
Florida’s government urged voters to consider voting early for its March 17 Democratic presidential nominating contest, and Arizona braced for the possibility of poll workers staying home that day.
In Michigan, which votes on Tuesday, officials told poll workers to step up plans to sanitize voting booths and other equipment. Washington state – the hardest-hit state in the country – caught a break because its Tuesday contest is vote-by-mail.

CANCELLATIONS

Fears of the spread of the virus have led officials to cancel events and conferences across the country, including a planned Saturday event by Democrats in Washington state.
Arizona officials are bracing for the possibility that poll workers will not show up on March 17 because of illness or fear. They are combing through a statewide volunteer database to identify potential replacements if needed, according to the Arizona Department of State.
In Cook County, Illinois, which includes Chicago, officials are seeking the power to extend voting hours on March 17, reassign early voting locations and even change voting days, said Frank Herrera, a spokesman for the county clerk’s office.
Florida, the nation’s third most-populous state and home to a large population of elderly people, has 19 confirmed cases of the virus and has declared a state of emergency.

State voters who have symptoms can designate someone to pick up their absentee ballots up until Election Day, Laurel Lee, Florida’s secretary of state, wrote on Twitter on Monday.
Florida authorities have emailed local election officials recommendations from the CDC on how to prepare polling places amid the spread of the virus. The recommendations include advising poll workers to stay home if they feel ill and steady cleaning of voting locations throughout the day.
In Orlando, Florida, a forum for the presidential candidates that had been scheduled for Thursday was canceled because of coronavirus concerns, said Carolyn Bobb, a spokeswoman for the AFL-CIO.
https://www.reuters.com/article/us-health-coronavirus-usa-election/biden-sanders-consider-changing-campaign-plans-amid-coronavirus-outbreak-idUSKBN20W2PN

Mnuchin promises to use ‘all of our tools’ amid coronavirus outbreak

The Trump administration scrambled on Monday to assure Americans it was responding to a growing coronavirus outbreak as stock markets plunged and top health officials urged some people to avoid cruise ships, air travel and big public gatherings.

As worries over the virus deepened, the Dow fell a record 2,000 points when trading opened and the S&P 500 posted its largest single-day percentage drop since December 2008, the depths of the financial crisis. A plunge in oil prices contributed to fears of a looming recession.

https://www.marketscreener.com/S-AMP-P-500-4985/news/Mnuchin-promises-to-use-all-of-our-tools-amid-coronavirus-outbreak-30133999/

Trump vows ‘major’ steps to aid U.S. economy amid coronavirus rise

U.S. President Donald Trump on Monday said he will be taking “major” steps to gird the economy against the impact of a spreading coronavirus outbreak and will discuss a payroll tax cut with congressional Republicans on Tuesday.

“We’ll be discussing a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s a big number,” Trump told reporters.
He did not provide details but added that a press conference will be held on Tuesday.
Also, Vice President Mike Pence said the administration was consulting Congress on providing paid sick leave to workers, an idea that Democrats already have been trying to advance.
The stepped-up response to the coronavirus came as the number of confirmed cases in the United States hit 605, according to Johns Hopkins University. It said that worldwide, there are 113,584 cases, with 3,996 deaths.
The moves also came as stock markets plunged and top health officials urged some people to avoid cruise ships, air travel and big public gatherings.
Meanwhile, the administration was planning to huddle in coming days with executives of the banking, hospital and health insurance industries.
While an across-the-board payroll tax cut has been under discussion, top White House economic adviser Larry Kudlow and others have advocated specific tax credits, loans or direct subsidies to certain industries or hard-hit areas.
A payroll tax cut could encourage consumer spending and help households that might otherwise struggle to make rent and mortgage payments on time or pay medical bills if family members’ work hours are reduced during a coronavirus outbreak.
Florida health officials said everyone returning from China, Iran, South Korea and Italy must isolate for 14 days while travelers from other countries affected by the outbreak should monitor their health.
Thirty-four U.S. states and the District of Columbia have reported to the U.S. Centers for Disease Control and Prevention (CDC) infections of the respiratory illness COVID-19 that can lead to pneumonia. Louisiana had the state’s first presumed coronavirus case, Governor John Bel Edwards announced on Monday.
As worries over the virus deepened, the Dow fell a record 2,000 points when trading opened and the S&P 500 posted its largest single-day percentage drop since December 2008, the depths of the financial crisis. A plunge in oil prices contributed to fears of a looming recession.
Trump, who often points to the stock market as a gauge of his economic record, criticized news media organizations’ coverage of the outbreak in a tweet and accused Democrats of hyping the situation “far beyond what the facts would warrant.”
The CDC advised colleges and universities to consider asking students studying abroad to return home and cancel or postpone upcoming travel.
Several U.S. universities were either moving to virtual instruction or considering the step and limiting gatherings on their campuses.
Anthony Fauci, head of infectious diseases at the National Institutes of Health, and other health officials say older Americans, especially those with chronic medical concerns, should avoid big social gatherings, cruise ships and airline flights.
As leaders in the U.S. Congress reviewed potential plans for operating amid coronavirus, four Republican lawmakers — Senator Ted Cruz and Representatives Paul Gosar, Doug Collins and Matt Gaetz — announced that they would self-quarantine after coming in contact at a conservative political conference with an attendee who later tested positive for the virus.
Gaetz traveled with Trump aboard Air Force One on Monday.
Trump and Vice President Mike Pence, who is heading the administration’s overall response to the crisis, also attended the conference. The White House said there was no indication they came into contact with the infected attendee.
Pence told reporters that he has not been tested for the virus and did not know whether Trump had been.
CRUISE SHIP
The coronavirus outbreak, which originated in China late last year, has spread to at least 105 countries and territories. Italy, which has the second-highest death toll, said it was extending to the rest of the country restrictions on movement imposed on much of its wealthy industrial north in an effort to contain spread of the virus.
The hardest-hit place in the United States has been a nursing home in the Seattle suburb of Kirkland, and Washington state is considering mandatory measures such as banning large gatherings but not necessarily imposing massive quarantines.
The Life Care Center facility has accounted for most of the 18 confirmed coronavirus-related deaths in Washington state.
In California, officials planned to offload 2,400 passengers on Monday and Tuesday from the Grand Princess cruise ship, which was barred from returning to San Francisco last week due to a coronavirus outbreak on board.
Most of the passengers will go into quarantine at military bases in the United States, with those requiring immediate medical attention heading to hospitals. The crew of 1,100 will be quarantined and treated aboard the ship, unless they are in need of acute care off the vessel.
California has more than 100 confirmed cases, while on the East Coast, cases in New York state rose to 142, up from 105 a day earlier, Governor Andrew Cuomo said on Monday.
One of them was Rick Cotton, executive director of the Port Authority of New York and New Jersey that controls airports and other major travel hubs. He will be quarantined and work from home, Cuomo said.
New York City Mayor Bill de Blasio asked employers in the nation’s most populous city to consider staggering workers’ start times to ease crowding on public transport and to allow more telecommuting where possible. De Blasio said there were 20 confirmed cases there as of Monday afternoon.

https://www.marketscreener.com/S-AMP-P-500-4985/news/Trump-vows-major-steps-to-aid-U-S-economy-amid-coronavirus-rise-30132418/

Boeing says employee tests positive for coronavirus

Boeing Co said late on Monday an employee at its Everett facility in Washington state has tested positive for the coronavirus and has now been quarantined.

“As a precaution, we’ve asked all coworkers of the employee who were in close contact to remain home to self-quarantine and self-monitor,” the company said https://boeing.mediaroom.com/news-releases-statements?item=130635.

https://www.marketscreener.com/news/Boeing-says-employee-tests-positive-for-coronavirus–30134167/