Daily Archives: Feb 26, 2020

    New York – Stocks tumbled once again on Friday, adding to the market’s worst week since the financial crisis, as worries over the coronavirus and its impact on the economy continue to rattle investor sentiment

    The Dow was down more than 500 points after plunging 1,000 points earlier. The S&P 500 fell 1.5%, while the Nasdaq fell 0.7% after sinking more than 3% earlier.

    The major averages were under pressure Friday in part because investors kept adding to their bond market exposure. The benchmark U.S. 10-year Treasury yield touched a fresh record low. It was last at 1.18%. Yields move inversely to prices.

    New Zealand and Nigeria reported overnight their first coronavirus cases. South Korea, meanwhile, confirmed more than 500 new cases. China reported 327 additional cases.

    Caterpillar, a bellwether stock for global growth, was the worst performer among Dow stocks, sliding more than 3%. Apple shares slid 2.9%, while Chevron and Cisco Systems dipped more than 2% each.

    The Dow plummeted nearly 1,200 points on Thursday — its biggest one-day point drop ever — as worries over the coronavirus possibly spreading sent stocks spiraling lower. The 30-stock average closed in correction territory along with the S&P 500 and Nasdaq Composite.

    “The reason it happened so quickly is because the momentum going up was so great,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “The hedge funds, the algorithmic trading, the quants: They play on momentum.”

    The Dow had closed at a record high on Feb. 12. It only took the S&P 500 six days to fall from an all-time high into correction levels, marking the broad index’s fastest drop of that magnitude outside of a one-day crash.

    “People have been so preconditioned to buy the dip and to always expect the market to recover that people can get smacked around with moves like this,” said Patrick Hennessy, head trader at IPS Strategic Capital. “No one knows how this thing ends.”

    Thursday’s declines also put the Dow and S&P 500 down more than 10.5% each for the week, on pace for their worst weekly performance since 2008. Norwegian Cruise Line and American Airlines are among the worst-performing S&P 500 stocks this week, dropping more than 20% in that time. Las Vegas Sands has lost more than 10% week to date.

    “The timing of this was just the worst with respect to investor sentiment being elevated,” said Doug Ramsey, chief investment officer at The Leuthold Group, referring to the coronavirus outbreak. “I’m not sure that the market has really priced in the potential economic impact of this.”

    Concerns over the coronavirus have also led several companies to issue earnings and revenue warnings. Microsoft said Wednesday one of its key divisions may not meet the company’s previous revenue guidance. PayPal also warned about its outlook on Thursday.

    Goldman Sachs’ David Kostin warned U.S. companies will see no earnings growth this year. “Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty,” said Kostin, the bank’s chief U.S. equity strategist.

     

    C.D.C. Officials Warn of Coronavirus Outbreaks in the U.S.

    Clusters of infection are likely in American communities, health officials said. Some lawmakers questioned whether the nation is prepared.

    BY ALEXANDER BOLTO

    Sen. Mitt Romney (Utah), a prominent Republican voice in Congress, told senior Trump administration officials Tuesday that they are not adequately prepared for the possibility the coronavirus may spread more widely in the United States.

    Romney confronted administration officials at a private briefing on Capitol Hill about the same time that President Trump downplayed concerns about spreading infections, telling reporters in New Delhi the situation is “under control” and is a “problem that’s going to go away.” 

    Romney, a member of the Senate Health, Education, Labor and Pensions Committee, said he does not think the administration has done enough to prepare for the infectious virus spreading widely among the domestic population.

    “I’m very disappointed in the degree to which we’ve prepared for a pandemic, both in terms of protective equipment and in terms of medical devices that would help people once they are infected,” he said.

    “At this stage, I think we are substantially underinvesting in what would be appropriate for a setting which could be serious,” he added.

    Romney said he hopes a dire scenario can be avoided but added “we don’t know what the future holds.”

    “I think we should be pulling out all the stops,” he said.

    Romney raised these concerns with administration officials Tuesday morning at an all-senators briefing.

    Dr. Bob Kadlec, the assistant secretary for preparedness and response at the Department of Health and Human Services; Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health; Dr. Anne Schuchat, the principle deputy director at the Center for Disease Control, were among the officials who briefed senators.

    Other Republicans have also raised concerns about how the Trump administration is handling the rapid spread of the virus, which originated in China, but has registered hundreds of cases in South Korea, Japan, Iran and Italy.

    So far 57 cases have been reported in the U.S., most of whom contracted the disease abroad and were then repatriated.

    Sen. John Kennedy (R-La.), a member of the Senate Appropriations homeland security and health and human services subcommittees, said the administration needs to do a better job communicating the level of the threat. 

    “Here’s what they need to do, and I would suggest that Secretary Azar be the one to do it,” he said, referring to Health and Human Services Secretary Alex Azar.

    “There’s some real basic questions that the American people need answers [to.] How many cases do we have? Based on their modeling, how many do they think we will have? How’s the virus transmitted?” he said.

    “What is the mortality rate? What’s the mortality rate compared to influenza? How many facemasks are we going to need and are we working on getting more? How many respirators are we going to need and are we working on getting more?” he said.

    Kennedy said he wants to know “what steps in a concrete way” the administration is taking to stop the virus from spreading throughout the United States.

    He said the Department of Homeland Security and health officials at other departments have given conflicting answers on how long it’s likely to take to develop a coronavirus vaccine.

    “God made these things called telephones and they could get on the phone and talk to each other,” he said.

    Kennedy had earlier in the day grilled acting Department of Homeland Security Secretary Chad Wolf during a subcommittee budget hearing, appearing increasingly frustrated as Wolf was unable to answer questions about coronavirus preparedness measures.

    A senior administration health official warned Tuesday that the spread of the coronavirus to the United States now appears to be inevitable and could cause “severe” disruptions to daily activities and the economy.

    Nancy Messonnier, the director of the Centers for Disease Control and Prevention National Center for Immunization and Respiratory Diseases, told reporters Tuesday that containing the virus will become increasingly difficult as more and more countries are affected.

    “It’s not a question of if this will happen but when this will happen and how many people in this country will have severe illnesses,” she said, warning: “Disruption to everyday life might be severe.”

    Nathaniel Weixel contributed. 

     

      The campaign and the Kremlin had an overarching deal: help beat Hillary Clinton for a new pro-Russian foreign policy

      By

      Mr. Frankel was the executive editor of The Times from 1986 to 1994.

      Collusion — or a lack of it — turns out to have been the rhetorical trap that ensnared President Trump’s pursuers. There was no need for detailed electoral collusion between the Trump campaign and Vladimir Putin’s oligarchy because they had an overarching deal: the quid of help in the campaign against Hillary Clinton for the quo of a new pro-Russian foreign policy, starting with relief from the Obama administration’s burdensome economic sanctions. The Trumpites knew about the quid and held out the prospect of the quo.

      Run down the known facts about the communications between Russians and the Trump campaign and their deal reveals itself. Perhaps, somewhere along the line, Russians also reminded the Trump family of their helpful cooperation with his past financial ventures. Perhaps, also, they articulated their resentment of Mrs. Clinton for her challenge as secretary of state to the legitimacy of Mr. Putin’s own election. But no such speculation is needed to perceive the obvious bargain reached during the campaign of 2016.

      Early on, emissaries of the Russian oligarchs sent word of their readiness to help embarrass and undermine the Clinton candidacy. And in June 2016, the Russians lured the Trumpites to a meeting in Trump Tower with a promise of “dirt” against Mrs. Clinton only to use the meeting to harp on their hunger for sanctions relief. As the Trump family openly acknowledged, the Russians spoke at that meeting of a desire to again allow Americans to adopt Russian children. Since the adoptions were halted to retaliate against the American sanctions, it required no dictionary to interpret the oligarchs’ meaning: “dirt” for sanctions relief.

      That relief and a warm new relationship with Russia were then freely discussed in public and in private. There was even an effort to concoct a grand diplomatic bargain by which the Russians would be allowed to legalize their seizure of the Ukrainian Crimea. Michael Cohen and other Trump advisers promoted the idea of letting the Russians “lease” the seized territory for up to 100 years so as to sanitize the reciprocal lifting of the sanctions that Mr. Obama had imposed to punish the land grab.

      Sanction relief seems to have been discussed in some of the other secret contacts between Trump operatives and Russians. We know that Michael Flynn lied to the F.B.I. when he denied discussing sanction relief with the Russian ambassador.

      As Robert Mueller surely discovered in tracking down these dealings, the promise of policy changes was not in itself illegal. Candidates routinely promise policy changes, often with foreign governments. (Move the embassy in Israel, anyone?)

      So why all the secrecy and lying? Candidate Trump made no secret of his intention to forge a warm relationship with the Kremlin. But pledges of sanctions relief and other specific moves while not yet in office were unseemly at best and clearly offensive to the American convention that we have only one president at a time. Mr. Flynn especially had to lie because though already in transition to power he was directly undermining Mr. Obama’s still active and punitive diplomacy against Mr. Putin.

      Mr. Flynn, remember, was deemed so helpful to the Mueller investigation that the special counsel pleaded to have him spared any time in jail. He was “colluding” all right, but with legal policy promises, not apparently with election sabotage. And true to the campaign minuet, despite great resistance in Congress, President Trump has watered down the sanctions and otherwise appeased Russian interests, even at the expense of America’s allies. Call it the art of the deal.

      Max Frankel was the executive editor of The Times from 1986 to 1994.

      The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.

       

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