Stock Markets Showing Optimism: Live Updates - The New York Times

Here’s what you need to know:

• Investors express optimism after policy pledges.
• Wall Street ends turbulent Thursday with a small gain.
• China lifts quarantines, aiming for a return to work.
• Hong Kong-based airlines join others in slashing service.
• Softbank value plummets as investors question big bets on tech.

The normally crowded neighborhood of Shibuya, a major commercial and business center in Tokyo, had few pedestrians on Thursday.Credit...Noriko Hayashi for The New York Times

Investors express optimism after policy pledges.

Global financial markets looked set to finish a tumultuous week on a more positive note, as investors digested news of fresh measures by policymakers to shore up economies that have been devastated by the coronavirus.

Investors piled money into Europe’s biggest financial markets, sending stocks in Paris and Frankfurt rallying by about 5 percent. In London, investors pushed the FTSE 100 up 2.6 percent.

They took their cue from the Asia-Pacific region, where stocks were buoyed on Friday by riskier appetites. Wall Street appeared ready to follow, with futures trading indicating a gain of nearly 2 percent when trading begins later on Friday.

Stocks across the Asia-Pacific region rose. The Hang Seng in Hong Kong jumped 5 percent, while Seoul’s Kospi gained more than 7 percent. Australia’s ASX 200 finished the day up nearly 1 percent. In Taiwan, stocks closed up 6.4 percent.

In China, markets were more muted. Shenzhen rose 1.3 percent while Shanghai gained 1.6 percent.

Some of the optimism was in reaction to the news that the European Central Bank would begin a massive bond-buying program to cauterize the economic bleeding across Europe caused by nationwide shutdowns to contain the coronavirus. In the United States, the Federal Reserve announced a plan to support money market funds.

“The pledged policy response has been swift — and we expect total fiscal stimulus to be similar in size to that of the financial crisis but in a shorter time frame,” wrote analysts at BlackRock Investment Institute, a research arm of the world’s biggest money manager.

But, they warned, the market could still see some turbulence.

“We believe market volatility is distracting from the sheer amount of promised stimulus — with more to come.”

Wall Street ends turbulent Thursday with a small gain.

Wall Street ended slightly higher on Thursday after a volatile session as investors weighed fresh evidence of a sharp economic decline against efforts in the United States and Europe to offset the damage.

By the end of the day, which had started with a sharp drop on Wall Street, the S&P 500 rose by less than 1 percent, and shares in Europe also scratched out small gains. Oil prices, which had collapsed by more than 20 percent on Wednesday, sharply rebounded.

The uneven trading came as the steady drumbeat of bad news continued about the spread of the coronavirus, and its impact on the economy.

In the United States, the number of workers filing first-time claims for unemployment insurance surged, government data released on Thursday showed. Those figures do not reflect the sharp cuts made in the past few days as companies quickly scale down operations. And a survey of manufacturers by the Federal Reserve Bank of Philadelphia showed a sudden drop off in activity.

China lifts quarantines, aiming for a return to work.

China is removing barriers to the movement of people and goods in much of the country after announcing that new cases of local coronavirus transmissions had fallen to zero.

The government will take measures to speed up the return to work for millions of people, including getting rid of mandatory quarantines for workers in parts of the country now considered “low-risk,” Li Keqiang, China’s No. 2 official, said in a statement.

China is eager to get the economic engines of the world’s second-largest economy up and running again after damaging government data pointed to the possibility that it will face its first economic contraction since 1976.

Earlier this week, the government said it reached a record number of imported cases of the virus, just as local cases in China dropped to zero. Chinese authorities are now focusing on travelers who are arriving from abroad who could potentially start a second wave of cases.

Inbound and outbound tourism will continue to be suspended. On Thursday, China’s aviation regulator said that airlines were asked to reduce capacity on international flights arriving in China.

China’s push to return to work comes as governments around the world have begun to announce new policies this week to close businesses and restaurants and keep citizens indoors as they face a steep rise in coronavirus cases.

Hong Kong-based airlines join others in slashing service.

More airlines in Asia cut back their services on Friday, as the travel industry finds itself helpless in the face of cratering demand.

Cathay Pacific, based in Hong Kong, said on Friday it would cut its passenger capacity by 96 percent in April and May, operating three flights per week to 12 cities. Cathay Dragon, a regional airline, will be reduced to three flights per week to three cities.

Hong Kong Express, a low-cost airline owned by Cathay, said it would shut down through April 30.

“We need to take difficult but decisive measures as the scale of the challenge facing the global aviation industry is unprecedented,” Ronald Lam, Cathay Pacific’s chief customer and commercial officer, said in a statement.

Softbank value plummets as investors question big bets on tech.

The value of Japan’s Softbank corporation has cratered over the last month in an expression of investor concern whether the company’s big bets on precarious tech firms make it especially vulnerable to the coronavirus’s economic effects.

On Friday afternoon in Tokyo, shares of the company — which has used its $100 billion Vision Fund to become a kingmaker in Silicon Valley — were trading at just under half of their value a month ago.

The company ran into trouble last year after a big bet on WeWork fizzled, forcing Masayoshi Son, Softbank’s founder and chief, to stage a multibillion-dollar rescue attempt. Big bets on companies like Uber had also disappointed, and in February, the company announced a $2 billion loss during the last quarter of 2019.

Earlier this week, Softbank threatened to withdraw $3 billion it had said it would use to buy WeWork shares as part of its rescue package. Last Friday, Softbank said it would spend up to 500 billion yen ($4.5 billion) on a buyback of its own stock.

On Tuesday, S&P Global Ratings cut the company’s rating to “negative,” citing the repurchase plan.

Tesla will suspend operations at its car factory in Fremont, Calif.

Tesla, the luxury electric carmaker, said on Thursday that it would temporarily shut down production at its factory in the San Francisco Bay Area starting Monday.

The company was under increasing pressure from local government officials and workers in recent days to stop making cars. Much of the Bay Area, including Tesla’s factory in Fremont, are under orders to shelter in place.

Earlier on Thursday, Kimberly Petersen, the chief of the Fremont Police Department, and other city officials had planned to meet with Tesla management to discuss compliance with an order by Alameda County limiting the operations of nonessential businesses, the department said on Twitter.

Airbnb looks to raise new funding as its business plummets.

Airbnb, the home rental start-up, has been holding talks with investors about new funding as the spread of the coronavirus ravages its business ahead of its planned initial public offering.

The company, which is based in San Francisco, is valued at $31 billion by private investors. It began fielding unsolicited offers last week from venture capital firms, private equity firms and sovereign wealth funds, according to a person familiar with the situation. Offers have ranged from $100 million to $1 billion, the person said. Valuations have not yet been discussed.

The deal talks were first reported by CNBC.

Airbnb has not decided whether it will raise more funding, which could be used to snap up smaller competitors that are struggling amid the industry downturn, the person said. The company has $3 billion in cash on its balance sheet and access to another $1 billion line of credit.

Reporting and research were contributed by Alexandra Stevenson, Ben Dooley, Ben Casselman, Niraj Chokshi and Daniel Victor.

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https://www.nytimes.com/2020/03/20/business/stock-market-today-coronavirus.html

2020-03-20 10:07:00Z
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