Europe’s Stock Markets Are Slammed by Trump Travel Ban: Live Updates - The New York Times

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The Bank of England in the City of London on Wednesday. — Credit...Daniel Leal-Olivas/Agence France-Presse — Getty Images

Europe plunges, worsening a global slump.

European stocks plunged in early Thursday trading as investors digested the consequences of President Trump’s 30-day travel ban on European visitors to the United States.

London led the drop, as stocks there fell about 6 percent. The opening following a broad fall in Asian shares.

Futures markets signaled dire openings for Wall Street and European stocks as well.

The falls were driven in part by a sharp drop on Wall Street on Wednesday, but they worsened considerably during Asian trading following a spate of late news from the United States. President Trump on late Wednesday said the United States would stop most Europeans outside Britain from traveling to the country for 30 days in an effort to slow the spread. The State Department advised Americans to reconsider all international travel. An aide in the United States Senate tested positive. The National Basketball Association suspended its season after a player tested positive.

With global growth on the line, investors have been looking for world leaders to step in to keep the economic gears turning. Mr. Trump on Wednesday said he would extend financial relief for sick workers and would ask Congress for more. Britain has said it would spend more than $30 billion. Central banks are cutting interest rates.

So far, for investors, it hasn’t been enough.

Prices for 10-year U.S. Treasury bonds, a traditional safe haven for investors, jumped in Asian trading on Thursday, helping to keep yields near historic lows.

Oil prices were down more than 5 percent, shaken by a clash between Saudi Arabia and Russia over excessive production and by fears that the world simply does not need as much fuel as it once did.

In Europe, London’s FTSE 100 index was about 5.6 percent lower. In Frankfurt, Germany’s DAX index was down 5.9 percent. France’s CAC 40 index was down 5.8 percent.

Among Asian stock markets, in Tokyo, the Nikkei 225 index finished 4.4 percent lower. Australia’s S&P/ASX 200 index tumbled 7.4 percent, despite a pledge by the government to help the economy.

South Korea’s Kospi index fell 3.9 percent. Regulators briefly suspended trading in Seoul on Wednesday, after the index fell by more than 5 percent. The intervention, which lasted five minutes, came one day after regulators put in place new limitations on short selling.

In Hong Kong, the Hang Seng Index fell 3.7 percent. In mainland China, the Shanghai Composite Index fell 1.5 percent.

All eyes are on the European Central Bank, with little hope.

As another wealth-destroying wave of selling swept through European markets early Thursday — with the London, Paris and Frankfurt exchanges all plunging more than 5 percent, and futures indicating a similar drop for Wall Street — eyes turned to the European Central Bank, and an anticipated midday announcement of emergency measures.

The bank was widely expected to deliver a cut to short-term interest rates while perhaps expanding its purchases of bonds, now running at about 20 billion euros ($23 billion) each month.

Investors and economists were expressing confidence that the central bank would deliver some sort of action, in large part because markets are gripped by fear and in need of confidence. Some central banks have already employed their tools: The U.S. Federal Reserve cut rates last week, and the Bank of England followed suit on Wednesday.

But any likely E.C.B. action is also expected to yield little meaningful change. The cuts from the Fed and the Bank of England were both followed by frantic selling, as investors appeared to construe activity as indications of dire conditions.

And the E.C.B. is particularly limited in its actions. Its rates are already below zero. Pushing them further into negative territory is unlikely to spur spending and investment. The central bank has already bought so many bonds that supply is scarce.

Ultimately, the E.C.B. appeared largely powerless to aid markets for the simple reason that the danger at hand is different from the usual economic crisis: It is a public health emergency that may simply be beyond the usual economic policy tool kit. Low borrowing costs will not encourage people to return to offices, factories and shopping malls so long as going to such places carries real risk of contracting a dangerous virus.

Global economy was already weakening toward recession.

Even before the global pandemic, many of the world’s largest economies were slowing markedly, sliding toward trouble.

This is the chief finding from a report released by the Organization for Economic Cooperation and Development on Thursday morning — a potential indication that the deadly coronavirus risks turning what was already flagging growth into a global recession.

Members of the so-called Group of 20 countries — a bloc that collectively accounts for roughly 90 percent of the world’s economic output — saw their growth slow to 0.6 percent during the last three months of 2019, down from 0.8 percent during the previous quarter, according to the report. Japan, Italy, France and Mexico all contracted.

The trend was especially pronounced in Britain, where growth slowed from 0.5 percent between July and September to zero during the last three months of the year. This was during a period when Britain was wracked by uncertainty over Brexit, prompting many companies to delay investments.

Growth remained unchanged in the United States, remaining at a pace of 0.5 percent expansion.

The data enhance fears that the pandemic is hitting a world economy that was already weakened by a host of factors — the trade war between the United States and China, weakening growth in Europe, and the diminishing effect of tax cuts delivered by the Trump administration in the United States.

This week, Oxford Economics slashed its forecast for global growth to 2 percent for this year, down from an anticipated 2.5 percent in January.

“A global recession may not yet be an inevitable consequence of the coronavirus outbreak, but even a modest surge in bad news could make it our baseline view,” warned Oxford’s director of global macro research, Ben May.

Trump’s travel ban sends airfreight rates surging.

President Trump sent global stocks tumbling when he said he would suspend most travel from Europe to the United States. One market saw a surge: the price of airfreight.

Mr. Trump quickly clarified that the suspension applied only to passengers. But airfreight costs surged all the same, for shipments across the Atlantic and around the world.

More than half of the cargo crossing the Atlantic Ocean travels in the bellies of passenger jets. With a large number of passenger flights now likely to be canceled, freighter jets have become essential to moving goods quickly over the Atlantic.

“it doesn’t really matter what the cargo is,” said Peter Stallion, a freight derivatives broker at Freight Investor Services, a London trading firm. “It’s all going to be squeezed onto a very limited freighter network.”

There are a lot more passenger jets than freighter jets, and now the latter are in tight demand. Many have already been put to work on routes out of China, where most passenger air traffic was canceled weeks ago. Now that China is reopening for business, freight agents are struggling to find space on freighters.

“Within minutes of Trump’s announcement, people with freighters were inundated with requests to operate flights for the next 30 days,” said John Peyton Burnett, the managing director of TAC Index, an air cargo pricing data company in Hong Kong.

Making matters worse is that some air freighter pilots are reluctant to fly. They are nervous about government policies, particularly in China, that require freighter pilots to wait between flights in airport areas also used by international travelers, who may be infected with the coronavirus.

Investors shrug off stimulus in Australia, sending stocks tumbling again.

Australian stocks plunged more than 7 percent on Thursday, the worst drop since the 2008 financial crisis, as the government’s unveiling of a multibillion-dollar stimulus package did little to ease investors’ worries over the growing economic fallout from the coronavirus pandemic.

Shares fell by 7.4 percent in Sydney on Thursday, following a decline of 7.3 percent three days before. The market has now fallen by more than 25 percent since mid-February.

The sell-off came even as the Australian government announced that it was injecting more than $11 billion into the economy.

The stimulus package will include payouts of up to $16,000 for small- and medium-size businesses to help cover employee wages, as well as tax incentives for bigger businesses to invest in equipment and other assets. Additionally, millions of households already receiving government assistance will be eligible for a payment of almost $500.

Australia has not been hit as hard by the virus as other countries, reporting 128 cases so far. But the government has warned that the toll on the country’s health and economic activity could grow much worse, and it said it hoped the stimulus would deliver a quick burst of money into the economy, bolstering employment.

“It is a health crisis, but it is a health crisis with very significant economic impacts,” Prime Minister Scott Morrison said in announcing the stimulus, which is worth 17.6 billion Australian dollars, or about 1 percent of the country’s gross domestic product. “This is us doing the heavy lifting when it comes to the tough months ahead.”

Steep sell-off highlights fears that Washington’s response won’t be enough.

Stocks plunged on Wednesday, with the Dow Jones industrial average falling into a bear market, in a drop that reflected investors’ fear that Washington won’t be able to muster a response to the economic crisis triggered by the spreading coronavirus.

A bear market begins when stocks have fallen 20 percent from their high. Though it’s a somewhat arbitrary threshold, in financial markets the designation acknowledges what many investors are surely feeling — that fear-based trading in the stock market may not end soon.

The last time stocks in the United States were in a bear market was during the height of the financial crisis, more than a decade ago.

The S&P 500 fell nearly 5 percent on Wednesday, while the Dow dropped nearly 6 percent. From its February high, the S&P 500 is down 19 percent, while the Dow is down 20 percent.

Chinese hackers exploit virus fears.

Criminals and nation-state hackers are capitalizing on the coronavirus outbreak to commit fraud and steal sensitive data.

Over the past two weeks, two well-known Chinese state hacking groups have been baiting employees at large telecommunications companies and government agencies in Asia into downloading fake documents that purport to contain critical coronavirus information, three cybersecurity firms said.

Two California companies, CrowdStrike and FireEye, and the Israeli company Check Point confirmed this week that the Chinese groups were sending out coronavirus-themed documents loaded with malware. For now, the breaches have focused on targets in Vietnam, Mongolia and the Philippines.

FireEye reported that Russian hackers have been using legitimate coronavirus update documents to target entities in Ukraine, and North Korea hackers have used coronavirus information as bait to target a South Korean nongovernmental organization.

Security researchers worry the campaigns are an early warning for cyberattacks that could hit the United States. “We’re seeing cybercriminals and Chinese groups jump on coronavirus,” said Adam Meyers, the head of threat intelligence at CrowdStrike. “People need to be aware of what is coming.”

Criminals have also been using coronavirus maps to lure people into downloading hacking tools that can be used for everything from stealing usernames and passwords to downloading ransomware. They have been sending what appears to be a Johns Hopkins University interactive map of coronavirus infections to bait victims into clicking.

Mortgage refinancing applications surge as interest rates fall.

Consumers unnerved by the turmoil wrought by the coronavirus on Wall Street can focus on one bright spot, at least: falling mortgage rates.

The rate on a 30-year fixed-rate mortgage has dropped to about 3.74 percent, and the Mortgage Bankers Association said Wednesday that refinancing applications jumped 79 percent last week.

The index that tracks refinancing activity surged to its highest level since 2009, the worst of the financial crisis, and there has been an almost equally robust rise in applications for new mortgages.

If interest rates remain low, the association said it expected refinancing activity to exceed last year’s levels by 37 percent.

The best refinancing deals may not be the ones found on lender websites or so-called mortgage lead generation websites run by firms like Bankrate, Lendingtree and Zillow.

“Very seldom does a borrower get the rate advertised on an aggregator website,” said Rick Sharga, founder of mortgage and real estate consulting firm CJ Patrick. “What we are hearing is some firms are pricing themselves out of the market to slow down the flow of leads, especially to people who are just rate shopping.”

Here’s what else is happening.

The actor Tom Hanks said he and his wife, Rita Wilson, had tested positive for the coronavirus. The 63-year-old Academy Award-winning actor is in Australia, where he was set to film a movie about the life of Elvis Presley.

Reporting was contributed by Peter S. Goodman, Alexandra Stevenson, Isabella Kwai, Keith Bradsher, Nicole Perlroth, Matthew Goldstein, Geneva Abdul and Carlos Tejada.

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