Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
We’re entering the fifth week of the markets panic over the Covid-19 crisis, and there’s no let-up.
Stocks have slumped in Asia overnight, and we’re heading for another rocky start in Europe.
This latest sell-off is triggered by the news, overnight, that the US Senate failed to approve a massive funding package to combat the impact of coronavirus.
A key Senate procedural vote Sunday evening was split 47-47, with Democratic senators refusing to support a package which (they argue) fails to provide enough support for workers who will suffer from the looming recession, while bailing out companies.
Leading Democrat Chuck Schumer described the plan as merely a:
…large corporate bailout with no protections for workers and virtually no oversight.
This ‘shell bill’ (effectively a place-holder into which the actual legislation would be dropped into later) needed 60 votes to advance. The 47-47 split has dashed hopes of a quick stimulus deal, with congressional leaders and the White House failing to agree a plan.
This stalemate had a predictably chilling impact on the markets – sending Wall Street future crashing 5% (the maximum allowed).
Stephen Innes, global chief markets strategist at AxiCorp, says the US political deadlock is scaring the markets:
While other governments around the world pour money into fiscal spending, the US can’t get over its political squabbling. Democrats claim the money will just go to corporates, and hence they can’t support it.
One senator, Rand Paul, has now tested positive for coronavirus – raising concerns that Capitol Hill could struggle to pass legislation if more lawmakers are incapacitated.
Donald Trump has also weighed in, tweeting that “we can’t let the cure be worse than the problem” — seemingly attacking the medical advice that self-isolation is the only way to fight Covid-19.
Donald J. Trump
(@realDonaldTrump)WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!
Asian markets have suffered heavy losses (again), with South Korea’s Kospi and Australia’s S&P/ASX losing over 5%, and China down 3%.
India’s stock market has plunged over 10%, as it starts to implement a lockdown to slow the virus’s spread.
David Ingles
(@DavidInglesTV)Recently has been quite bad already but even in this new normal, Monday’s been quite brutal and ugly in Asia.
Indian stocks -10%
European futures -5%https://t.co/CF8ueoGfle pic.twitter.com/AOf7rJhDpv
European markets are going to take a bath too, with the UK FTSE 100 expected to drop by 4%.
Holger Zschaepitz
(@Schuldensuehner)Dax Future plunge >4%, signal another “nasty” opening as coronavirus shock narrative prevails BUT has pared some earlier losses. pic.twitter.com/kyzOribwWW
Tn the UK, chancellor Rishi Sunak is under pressure to provide more help for self-employed workers — after he took the historic step of guaranteeing the wages of workers if their employers agree not to lay them off:
The economic calendar is quite quiet, apart from the latest survey of eurozone consumer confidence – which is expected to have slumped sharply this month.
The agenda
- 3pm GMT: Eurozone consumer confidence for March: expected to fall to -13, from-6.6
