Global markets fall as recovery challenges mount.
Global markets fell on Wednesday as economies struggled to recover from the coronavirus outbreak, extending Wall Street’s losses from the day before.
European markets were trading 1 to 2 percent lower after a mixed day in Asia. Prices for most U.S. Treasury bonds were higher, signaling investor unease. Futures markets were predicting Wall Street would open slightly lower as well.
Markets fell on Tuesday in the United States after officials warned that fully reopening the country’s economy could be a long and protracted process. Investors continue to watch warily as sporadic infections break out in places that had seemed to have the coronavirus under control.
The gloomy news continued on Wednesday, as the British government reported its economy fell 2 percent in the first quarter, and 5.8 percent in March alone. Commerzbank, Germany’s second-largest lender, said it was anticipating a large number of customers would be unable to repay loans.
Oil prices fell after gains over the last several days, indicating concerns that the world has too much oil and not enough demand for burning it.
In Japan, the Nikkei 225 Index fell 0.5 percent. Hong Kong’s Hang Seng Index was flat. China’s Shanghai Composite Index gained 0.2 percent. In Australia, the S&P/ASX 200 Index rose 0.4 percent. South Korea’s Kospi rose 1 percent.
In London, the FTSE 100 index was down 0.9 percent in early trading. Germany’s DAX was down 1.7 percent. In France, the CAC 40 index was down 1.5 percent.
The U.K. economy shrank nearly 6 percent in March.
Britain’s economy contracted by 2 percent in the first three months of 2020, the government reported on Wednesday, the steepest quarterly drop since the financial crisis in 2008. In the March alone, the economy shrank by 5.8 percent, the largest drop since the Office of National Statistics began keeping monthly tallies in 1997.
The January-March period did not reflect the full effects of the coronavirus pandemic that has led to government-ordered lockdowns in Britain and elsewhere. Britain’s lockdown only began in the last week in March. Since then, schools and many shops have been closed, and many employees have either been furloughed from their jobs — a government scheme pays up to 80 percent of furloughed employees’ wages — or are working at home.
The agency said that in March nearly every part of the economy was hit, with education, car sales and restaurants all falling substantially. Among the few industries that recorded growth were IT support and pharmaceuticals and cleaning products as the country stocked up to prepare for the pandemic.
Last week, the Bank of England published a scenario forecasting that the gross domestic product could fall by 14 percent in 2020, which would be the steepest annual drop in economic activity since 1706.
Some automakers may emerge stronger, others too weak to survive on their own. Factories will shut down. The pressure to go electric could become more intense.
The outbreak will realign the business of making cars in ways that could have a profound effect on the eight million people worldwide who work for vehicle manufacturers. As Volkswagen, Daimler, Fiat Chrysler and other companies slowly restart their assembly lines, people who work in the car business are beginning to ponder what the repercussions of this crisis will be.
People may travel less now that they have discovered how much they can get done from home. Or they may commute more by car to avoid jostling with others on crowded buses and trains. Companies like Chinese automakers could swoop in on competitors elsewhere with battered share prices. Labor strife could become more common as factories close. All the chaos may leave room for start-ups that could inject new life in the industry.
“We shouldn’t be too optimistic and expect that in 2021 everything is going to go back to normal as if nothing happened,” Ola Källenius, the chief executive of Daimler, told reporters during a recent conference call. The pandemic, he said, “will probably have a huge effect on the economy and we have to prepare.”
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EMAIL AND TEXT MESSAGES Phishing is one of the oldest internet scams, but it still happens because it works. Check the sender. Fraudulent email addresses will look like legitimate ones but often be off by a character or two. And check — but don’t click on — hyperlinks.
THE HOME OFFICE Hackers trying to steal information from a business might look to attack our personal email accounts or home networks. Check your network security and update your Wi-Fi router. And keep work and business tech separate, because your equipment and apps were probably not set up to protect your company’s network security.
Commerzbank, Germany’s second-largest lender after Deutsche Bank, fell into the red during the first three months of 2020 as it faced an increase in problem loans caused by the pandemic.
The bank reported a loss of 295 million euros, or $320 million in the quarter, compared to a profit of 122 million euros a year earlier. While revenue from interest and commissions rose because of higher demand for loans, Commerzbank quadrupled the amount it set aside to cover losses from delinquent borrowers.
Tesla’s California car factory was shipping out new cars on Tuesday despite a county order prohibiting it from restarting production and even as local officials continued to try to negotiate with the company.
It was not clear how many cars Tesla is making. But on Tuesday, trucks were leaving the factory, which is the Bay Area city of Fremont, with new sedans and sport-utility vehicles. New cars were also parked in rows outside the factory. The parking lot for employees was also filled.
Tesla’s head of human resources for North America, Valerie Workman, sent an email to employees on Monday saying that their furloughs had ended on Sunday. She told employees they would be contacted within 24 hours about when to return to work.
Tesla did not respond to a request for comment.
The county’s director for health care services, Colleen Chawla, sent a letter to Tesla late Monday saying that the company was violating its order. “We hope that Tesla — like other businesses who have been notified of noncompliance — comes into compliance with the order without the need for additional enforcement measures,” Ms. Chawla said.
On Tuesday, the county said that it had received Tesla’s plan for reopening the plant and was reviewing it. The plant is Tesla’s main source of revenue and has been closed for more than a month. County officials have said they were working with Tesla on an agreement to reopen the plant on May 18. But Tesla sued the county on Saturday in United States District Court in San Francisco, arguing that the county’s order was unconstitutional and contradicted an order by Gov. Gavin Newsom that permits manufacturing statewide.
The state has authorized a resumption of manufacturing, Mr. Newsom said Monday, but he added that “we recognize localism” and “if a county doesn’t want to go as far,” local orders would prevail.
In her email, Ms. Workman said employees who were uncomfortable returning to work could stay home on unpaid leave.
TUI, the world’s largest travel company, said it would cut its work force by more than 10 percent after the pandemic brought its operations almost to a standstill.
The company, based in Hanover, Germany, said it would begin reopening some of its 400 hotels and resorts in coming days, but that it would still need to cut 8,000 jobs out of a total of 70,000 worldwide.
TUI also owns a fleet of 150 aircraft and 18 cruise ships.
As the death toll in nursing homes climbs, calls to redesign them grow.
Shortages of safety gear and staff. Workers who may inadvertently be carriers. A disease that preys on older people with underlying health conditions. There are many reasons the coronavirus has hit nursing homes so hard.
Add the design of the buildings to the list.
With shared resident rooms off long corridors and vast dining rooms where everyone mingles, nursing homes may have been laid out to be efficient and cost effective. But these very features have also allowed the virus to spread from person to person in what Gov. Andrew M. Cuomo of New York called “a feeding frenzy.”
New York State has become a pandemic hot spot. “Why are we seeing such a high rate in nursing homes?” asked Richard J. Mollot, executive director of the Long Term Care Community Coalition, an advocacy group for residents. “Maybe it’s because some nursing homes are so big.”
Before the pandemic, a movement under the banner of “culture change” was challenging the institutional model, calling for dividing up large nursing home populations into small, self-sufficient units with kitchens, private rooms and a dedicated staff. Now, anecdotal reports suggest that private rooms may be having more success at keeping the coronavirus at bay.
Catch up: Here’s what else is happening.
Walmart said on Tuesday that it would give another round of bonuses to its workers in the United States: $300 for full-time workers and $150 for part-time and temporary workers, for a total of more than $390 million. The retailer said it had committed more than $935 million in bonuses for its workers so far this year.
Reporting was contributed by Stanley Reed, Jack Ewing, Carlos Tejada, Mohammed Hadi, Vikas Bajaj, Niraj Chokshi, Neal Boudette, Jane Margolies and Gregory Schmidt.