Stock Markets Tumble as New Outbreaks Loom: Live Updates

Global markets tumble, and Wall Street faces a tough opening.

Global markets tumbled on Monday on renewed fears of more coronavirus outbreaks, setting the stage for sharp losses when Wall Street opens later in the day.

Stocks in London, Frankfurt and Paris were about 2 percent lower in morning trading. That followed some sharper losses in the Asia-Pacific region earlier in the day, led by a 4.8 percent drop in South Korea and a 3.5 percent fall in Tokyo.

Futures markets were predicting the pain would spread to Wall Street. Futures that track the S&P 500 were predicting the index would open nearly 3 percent lower.

The sell-off was spread broadly across markets. Oil and gold fell in early futures trading. Prices for U.S. Treasury bonds, which generally rise when market sentiment is weak, gained sharply, sending yields lower.

BP warned shareholders on Monday that the company expected to write off $13 billion to $17.5 billion of the value of its oil and gas holdings when it reports second-quarter earnings on Aug. 4. The write downs — a reflection that oil and gas fields are not worth as much as they used to be — come as Bernard Looney, who became chief executive in February, is pursuing a rapid makeover of the London-based oil giant.

Mr. Looney is leading a reorganization of the company that is already expected to result in a reduction of 10,000 jobs, or nearly 15 percent of the work force. Mr. Looney also wants to change the way the company does business in order to meet a commitment to become carbon neutral by 2050.

The company said that the write downs of up to 12 percent of the previous book value are partly because it was sharply reducing its long-term forecasts of the price of oil by about 30 percent, to $55 a barrel. It is also similarly downgrading its long-term natural gas price. The company said that it now assumed that the coronavirus pandemic would have “an enduring impact” on the global economy and accelerate a shift to lower-carbon energy consumption as countries sought to rebuild their economies based on fuel sources that produce lower emissions.

The write downs will come from both existing oil and gas fields and those in places like the Gulf of Mexico and Canada where the company has undeveloped holdings that it may decide not to exploit in the current circumstances.

Mr. Looney said in a statement that he was “confident that these difficult decisions” will better enable the company to compete as the energy industry changes.

BP’s share price was down about 4 percent in morning trading.

China’s tries to rebound, but its movie theaters remain closed.

China had nearly eradicated the Covid-19 virus within its borders last month, but that was not enough to get the country’s consumers spending again — and with a new outbreak in Beijing over the past several days, a full economic recovery could be even farther away.

Restaurants, bars and shopping malls were open across China last month except for a small area near the border with North Korea and Russia, which had a coronavirus outbreak in May. But retail sales nonetheless fell 2.8 percent nationwide in May compared to a year ago.

The weak result, which was worse than most economists expected, is likely to trigger renewed discussion over a politically difficult question: whether to reopen the country’s cinemas, which are practically the only large category of retail spending that remains completely closed.

The closure of cinemas has been a big blow to shopping malls, at a time when a lot of purchasing is already moving online. Malls in China and around the world rely heavily on cinemas to draw people out of their homes, with the hope that they will stay after the movies to dine or shop. Unlike the malls, car dealerships had a fairly good month in May, with sales up 1.9 percent from an already strong month last year.

But Xi Jinping, the country’s leader, said at the end of March that cinemas were not needed, and no one has dared to challenge his decision publicly since then.

“If anyone wants to watch a movie, just watch it online,” Mr. Xi said during a visit on March 31 to Hangzhou in east-central China’s Zhejiang province.

Exports were also weak in May. Beijing announced last week that they had fallen 3.3 percent.

Industrial production was up 4.4 percent last month compared to a year ago, also slightly below expectations. Factory output has consistently run well ahead of retail sales this spring, raising worries that unsold inventories may pile up and trigger another round of production cutbacks.

“Tenet” is pushed back, delaying Hollywood’s return to the theaters.

Warner Bros. on Friday pushed back the release of “Tenet,” a $200 million-plus movie from Christopher Nolan that was supposed to arrive in theaters on July 17 and jump-start the pandemic-stricken movie business. Instead, “Tenet” will be released on July 31.

The move means theaters will largely sit fallow for an extra week. Disney’s extravagant “Mulan,” directed by Niki Caro, will now signal the return of megawatt Hollywood movies when it comes out on July 24 — unless Disney also decides that market conditions are too harsh. A Disney spokesman had no immediate comment.

After being closed for months by the pandemic, movie theaters around the world are reopening, albeit with limited attendance and heightened safety requirements.

Now, a divide is growing between advisory firms that took the money and those that declined because of ethical concerns. The issue is more than a tempest in a teapot. Some firms could lose millions in fees if their clients start pulling their wealth out.

“We didn’t think it was very credible that these firms actually needed the money,” said Gary Ribe, the chief investment officer of Accretive Wealth Partners, which manages $130 million and did not apply a loan from the Paycheck Protection Program. “Getting it out of an abundance of caution — that didn’t seem credible, either.”

Catch up: Here’s what else is happening.

  • A bankruptcy court judge on Friday allowed Hertz to sell up to $1 billion in new stock, granting the car rental agency’s request as investors improbably bought up shares in recent days. The company’s stock price ended the day Friday at $2.83 per share, up from a low of 40 cents after it filed for bankruptcy last month.

Reporting was contributed by Mohammed Hadi, Keith Bradsher, Stanley Reed, Carlos Tejada, Brooks Barnes, Nicole Sperling, Paul Sullivan and Niraj Chokshi

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