Daily Archives: Mar 15, 2020

    FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) after the opening bell of the trading session in New York, U.S., March 13, 2020. REUTERS/Lucas Jackson

    LONDON/SYDNEY (Reuters) – Stock markets were routed and the dollar stumbled on Monday after the Federal Reserve slashed U.S. interest rates in an emergency move and its major peers offered cheap U.S. dollars in a bid to prevent global lending markets seizing up

    The drastic maneuvers were aimed at cushioning the economic impact as the breakneck spread of the coronavirus all but shut down more countries, but they had limited success in calming panicky investors.

    Europe, which has become the epicenter of the outbreak, saw its main stock markets plunge nearly 8% in brutal opening trade. Earlier, Wall Street futures for the S&P 500 index had hit their down-limit in the first 15 minutes of Asian trading as investors rushed for safety.

    “The central banks threw the kitchen sink at it yesterday evening yet here we are (with deep falls in stock markets),” said Societe Generale strategist Kit Juckes.

    “There is a great sense that central banks are going to get to grips with the issues of getting money flowing … But the human problem, the macro problem, there is nothing they can do about that.”

    The Fed’s emergency 100 basis point rate cut on Sunday was followed on Monday by further policy easing from the Bank of Japan in the form of a pledge to ramp up purchases of exchange-traded funds and other risky assets.

    New Zealand’s central bank also shocked by cutting rates 75 basis points to 0.25%, while the Reserve Bank of Australia (RBA) pumped more money into its financial system. South Korea cut rates and Russia rushed together a $4 billion anti-crisis fund.

    Japanese Prime Minister Shinzo Abe said G7 leaders would hold a teleconference at 1400 GMT to discuss the crisis.

    MSCI’s index of Asia-Pacific shares outside Japan tumbled 4% to lows not seen since early 2017, while the Nikkei fell 2% as the BoJ’s easing steps failed to reassure markets.

    Chinese data underscored just how much economic damage the disease has already done to the world’s second-largest economy, with official numbers showing the worst drops in activity on record. Industrial output plunged 13.5% and retail sales 20.5%.

    In Asia, Shanghai blue chips fell 3% overnight even as China’s central bank surprised with a fresh round of liquidity injections into the financial system. Hong Kong’s Hang Seng index tumbled 3.4%.

    Australia’s S&P/ASX 200 plunged, finishing down 9.7% — its steepest fall since the 1987 crash.

    “By any historical standard, the scale and scope of these actions was extraordinary,” said Nathan Sheets, chief economist at PGIM Fixed Income, who helps manage $1.3 trillion in assets. “This is dramatic action and truly does represent a bazooka.

    “Even so, markets were expecting extraordinary action, so it remains to be seen whether the announcement will meaningfully shift market sentiment.”

    Sheets emphasized investors wanted to see a lot more U.S. fiscal stimulus and evidence the Trump administration was responding vigorously and effectively to the public health challenges posed by the crisis.

    “The performance of the economy and the markets will be mainly determined by the severity and duration of the virus outbreak,” he said.

    UNDER STRAIN

    Markets have been severely strained as bankers, companies and individual investors stampede into cash and safe-haven assets while selling profitable positions to raise money to cover losses in savaged equities.

    To ease the dislocation, the Fed cut interest rates by a full percentage point on Sunday to a target range of 0% to 0.25%, its second cut this month, and promised to expand its balance sheet by at least $700 billion in coming weeks.

    Five of its peers also joined up to offer cheap U.S. dollar funding for financial institutions facing stress in credit markets.

    U.S. President Donald Trump, who has been haranguing the Fed to ease policy, called the move “terrific” and “very good news”.

    “It may be a shot in the arm for risk assets and help to address liquidity concerns … however, it also raises the question of whether the Fed has anything left in the tank should the spread of the virus not be contained,” said Kerry Craig, global market strategist at J.P. Morgan Asset Management.

    “We really need to see the fiscal side … to prevent a longer than needed economic slowdown.”

    The Fed’s rate cut combined with the promise of more bond-buying pushed U.S. 10-year Treasury yields down sharply, to 0.68% from 0.95% late on Friday.

    It was a different story in Europe, where Southern European bond yields jumped to multi-month highs as investors continued to worry about the rapid spread of the virus there.

    Spanish and Portuguese 10-year bond yields rose to 9-1/2 month highs at 0.74% and 0.93% respectively, up as much as 13 basis points on the day.

    French 10-year yields also soared as much as 14 basis points to 3-1/2 month highs at 0.14%, while Italian 10-year yields were up 17 basis points at 1.98%.

    “The momentum we’ve seen in the periphery is largely to do with the sentiment toward debt metrics in countries which after many, many years of quantitative easing and existing central bank support within the euro zone, are going into another fairly significant if not larger crisis than the one before,” said Rabobank strategist Matt Cairns.

    The fall in U.S. Treasury yields had pressured the dollar early on Monday, though it regained some ground later on. It was last down 1.6% on the Japanese yen at 106.37. The euro was up almost 1% at $1.1212.

    The commodity-exposed Australian dollar fell as much as 0.3% to $0.6166 while the New Zealand dollar slipped 0.2% to $0.6044.

    Oil, already reeling from a price war, fell further on concerns about the impact of coronavirus on global demand. Brent crude was last off $2.21, or 6.5% at $31.64 per barrel while U.S. crude slipped $1.64 to $30.94 a barrel.

    Gold rallied 0.8% to $1,541.34.

    Additional reporting by Wayne Cole in Sydney; Editing by Catherine Evans

     

    City and Erie County officials held a press conference Sunday to update the public following the announcement of the first confirmed cases of COVID-19 in Erie County Saturday.

    “We are entering uncharted waters,” Buffalo Mayor Byron Brown said Sunday. He also urged people to take this seriously.

    36 samples were tested Saturday, Brown said 33 were negative and three were positive.

    The three confirmed cases in Erie County are:

    • A woman in her 30s from Buffalo who recently traveled out of state, she is in quarantine at a private residence.
    • A man in his 30s from Clarence who recently traveled to Westchester County, he is in quarantine at a private residence.
    • A woman in 20s from Grand Island who recently traveled to Italy, she is in quarantine at private residence.

    In regards to the positive case in Clarence, County Executive Mark Poloncarz tweeted out additional information on Sunday afternoon. According to Mr. Poloncarz, a child who attends Clarence Central Elementary lives in the same residence. The child is NOT symptomatic, though a test is being done on him/her. Clarence Central Schools are now on the growing list of districts that are closed indefinitely

    None of the three confirmed cases are in a hospital.

    The county says the cases are not believed to be related.

    Officials have taken actions to identify anyone who may have been in contact with the three people who have tested positive as well as any establishments these individuals may have entered.

    “We are sure to find additional cases as more Buffalo and Erie County residents are tested,” said Erie County Health Commissioner Dr. Gale Burstein. “Our goal right now is to identify new cases rapidly, and prevent or limit secondary transmission.”

    Mayor Brown and County Executive Poloncarz declared a state of emergency for the county Sunday and ordered all Erie County schools closed to students Monday with further guidance to come within the next 36 hours.

    Below you can find multiple resources should you have any questions or concerns regarding COVID-19.

    • Erie County Department of Health, COVID-19 Information Line: (716) 858-2929 (M-F, 9 a.m. – 9 p.m.)
    • New York State Department of Health Coronavirus Hotline: 1-888-364-3065
    • World Health Organization, Coronavirus: https://www.who.int/health-topics/coronavirusErie County Executive Mark C. Poloncarz on Sunday beseeched the public to do its part to not spread germs as he declared a state of emergency to help the county prevent the spread of COVID-19.Poloncarz announced the action to use expanded emergency powers as a total of seven county residents tested positive for the novel coronavirus by Sunday night.

      “We don’t want to become like Italy,” Poloncarz said. “We don’t want to have to shut down the community.”

      Poloncarz said he would move cautiously, pushing for a $5 million transfer from the county’s 2019 year-end surplus to combat the spread of the virus. That includes money to expand the number of epidemiologists and other staff needed at the county Health Department to help track all potential exposures to COVID-19.

      Poloncarz also said he would use his expanded powers to shut down schools in the county on Monday. By Sunday night, school superintendents took that a big step farther: agreeing to close schools through April 20, according to Buffalo Public Schools Superintendent Kriner Cash.

      Cash said there was no way to safeguard students and staff when a single lunch period alone might involve more than 500 students.

      “We are entering uncharted waters,” Poloncarz said. “What we will be seeing in the next few weeks is something we would not have even foreseen to ask of the public a couple weeks ago. The coronavirus does not discriminate based on age, sex, race, net worth, or for that matter, political affiliation. Folks, we are all in this together. I ask for everyone to take what we are going through at this point very seriously.”

      County leaders had been bracing for news of a confirmed case but were still scrambling Sunday to make decisions with far-reaching consequences. Conference calls among major leaders, school superintendents and the heads of major departments were going on for much of the day.

      A state of emergency does not mean the county is on lockdown, Poloncarz said. But the county executive implored residents to do what they can to reduce contact with others and to help stop the spread of the disease.

      He urged parents with school-age children to keep them close to home.

      Buffalo Mayor Byron Brown also declared a state of emergency Sunday and began a crackdown on downtown bars and restaurants that were celebrating St. Patrick’s Day by openly flouting the governor’s directive to only run at half capacity to prevent a potential virus spread. Many other counties and municipalities also made similar declarations.

      “We want people to do the right thing,” Brown said.

      Seven cases in Erie County

      The states of emergency were prompted by the news late Saturday that three Erie County residents had tested positive for COVID-19. By Sunday night, that total had grown to seven. Allegany County reported Sunday evening that two people tested positive for COVID-19.

      All seven of the Erie County residents were people in their 20s, 30s or 40s who had traveled outside the area.

      As of Sunday evening, 67 Erie County residents were in quarantine. Another 222 people had completed quarantine and were released.

      “We expect that number to change today,” said Poloncarz. He said epidemiologists were working to identify people who may have been in contact with those who tested positive.

      [RELATED: Erie County coronavirus patient total stands at 7; Allegany has 2 cases]

      Poloncarz said he would send a request to the Erie County Legislature this week to grant him the authority to spend $5 million as needed under the state of emergency, without the usual requirement that every unplanned expenditure of more than $10,000 be approved by lawmakers and subject to a formal bidding process.

      Legislature Chairwoman April Baskin said she expects the Legislatures to take up the emergency measure at its Thursday meeting.

      County officials said the current epidemiology team – which is responsible for the identification, tracking and control of diseases – has been working to determine COVID-19 exposure stemming from the residents who have been identified. They warned, however, the team is understaffed. Nurses from county clinics, and even graduate students, have been brought in to assist the three full-time staff epidemiologists, said Erie County Health Department spokeswoman Kara Kane.

      Officials expect some of the $5 million would go toward hiring more epidemiologists and other Health Department personnel to help the work of tracking cases. Kane said that work can be as detailed as gathering restaurant credit card information to find other people who may have been exposed to an infected individual.

      Erie county is also looking into worst-case scenarios if the number of severe COVID-19 cases exceeds hospital capacity.

      Poloncarz said he and the county’s public works commissioner visited the vacant Erie County Home in Alden, a former hospital and nursing home that closed nearly a decade ago. He said they were exploring the idea that it could be retrofitted to reopen as a wing for coronavirus patients, if they could not be accommodated in existing hospitals.

      “We’re looking at everything,” he said.

      Erie County has set up a phone number for people who have questions or are looking for information about COVID-19: 716-858-2929. Anyone who believes they may have been exposed to COVID-19 or feel sick are asked to call their physician directly, or call an urgent care center if they have no regular doctor.

      Public cooperation urged

      With coronavirus testing capacity expected to increase over the next week, Erie County Health Commissioner Dr. Gale Burstein said the county will expand the criteria for who will be allowed to be tested to include anyone with symptoms who may have traveled outside the area.

      Roughly 80% of people who are confirmed to have COVID-19 show only mild symptoms, and only about 12% of cases in New York State require hospitalization. However, the virus has a disproportionately negative impact on those who are elderly or have chronic health conditions or immune system deficiencies, and they may require hospitalization and intensive care.

      Gov. Andrew M. Cuomo on Saturday was the first to announce the confirmed cases in Erie County, prompting some residents to question a more than 15-hour delay before Erie County release more details about those cases.

      Poloncarz and Burstein said the county automatically reports its lab results to the state and was in the process gathering more information when the governor held his scheduled press conference Saturday evening. Going forward, as more details become known of the confirmed cases and who else may have been exposed, he said, they will be released to the public promptly.

      “We want people to understand that this is going to be an evolving matter,” Poloncarz said, “and once we have information that needs to be shared with the public, we will share it, because our goal, once again, is to protect the public.”

      ………….

      For information about the novel coronavirus, visit:

      Erie County: www.erie.gov/covid19

      New York State Department of Health: https://www.health.ny.gov/diseases/
      communicable/coronavirus/

      Federal Centers for Disease Control and Prevention: http://www.coronavirus.gov

      For general questions about COVID-19, call the Erie County phone line: 858-2929.

      Anyone who believes they may have been exposed to COVID-19 and who exhibits symptoms of the disease should call their primary care physician, or an urgent care center if they have no physician.

     

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