Stock Markets Tumble on Dire U.S. Warning: Live Updates

Global stock markets fell broadly on Wednesday as investors digested a steady drip of worrying news about the economic ramifications of the global coronavirus outbreak.

London and Paris stocks opened nearly 4 percent lower, following similar drops in Asia. Futures markets predicted that Wall Street would open lower later on Wednesday.

While the panic of recent weeks appeared to have subsided, numerous signs pointed to glum prospects for a quick solution to the coronavirus outbreak. After Wall Street’s close on Tuesday, President Trump said at a news conference that the United States would face “a very painful, very, very painful two weeks.” U.S. government scientists projected that the outbreak could kill up to 240,000 Americans.

Prices rose for long-term U.S. Treasury bonds, a traditional investment safe haven, as did gold futures. Oil prices, a proxy for world economic growth prospects, fell, with Brent crude, the global benchmark, down more than 4 percent.

Tokyo’s Nikkei 225 index fell 4.5 percent on Wednesday, and the Kospi index in South Korea fell 3.9 percent. The Hang Seng index in Hong Kong dropped 2.2 percent. The Shanghai Composite index in mainland China fell 0.6 percent.

In London, the FTSE 100 index was down 3.9 percent after the open. The CAC 40 index in Paris was down 3.8 percent, and Germany’s DAX index was down 3.3 percent.

March was a month of head-snapping turns in financial markets: The S&P 500 suffered its worst one-day drop since 1987 before later recording its best three-day run since 1933, oil prices crashed, interest rates plunged and Wall Street’s more esoteric markets seized up.

The stakes are high, and so are the prices. Wholesale costs for N95 respirators, a crucial type of mask for protecting medical workers, have quintupled. Trans-Pacific airfreight charges have tripled.

The country’s economy was already on the brink of a technical recession — two consecutive quarters of contraction — following a 7.1 percent drop in economic output in the final three months of last year.

But a gauge of factory output, known as the purchasing manager’s index, fell to 44.8 in a monthly survey by Jibun Bank and IHS Markit. A reading less than 50 indicates economic contraction.

The reading was the lowest level since 2009, when the country was grappling with the impact of the global financial crisis.

Separately, Japanese manufacturers’ concerns about the course of the economy over the coming three months have sharpened dramatically, turning negative for the first time since 2011, in the aftermath of the Fukushima nuclear disaster, according to a central bank survey of business conditions, known as the Tankan, that was released on Wednesday.

So far, Japan has managed to limit the spread of the coronavirus without resorting to the kinds of strict measures that have caused widespread economic shutdowns in the United States, China and Europe.

But plummeting demand from those areas and disruptions to global supply chains have nevertheless driven Japanese manufacturers to cut back production.

The Japanese automaker Subaru announced on Wednesday it was temporarily suspending activity in some of its factories at home and in the United States. The announcement followed similar decisions by other automakers, including Toyota, which announced last month that it would pause work at some domestic facilities.

Friends of Ren Zhiqiang, a well-known former property mogul and Communist Party member in China, say he has disappeared after writing an essay critical of the Chinese government’s response to the coronavirus outbreak.

The essay, which was shared widely within private internet message groups, never named Xi Jinping, China’s top leader, but it faulted the actions of a power-hungry “clown” and the Communist Party’s strict limits on free speech. It declared that the party should “wake up from ignorance” and oust the leaders holding it back, just as it did with the leaders known as the “Gang of Four” in 1976, ending the turmoil of the Cultural Revolution.

The disappearance of Mr. Ren, a longtime critic of the Chinese government who amassed nearly 38 million Weibo followers before his account was deleted in 2016, adds to fears that China is sliding backward and abandoning the reforms that saved it from extreme poverty and international isolation. His fate suggests China’s leadership won’t tolerate criticism of its actions during the outbreak.

For 15 years, the U.S. government has been pressing airlines to prepare for a possible pandemic by collecting passengers’ contact information so that public health authorities could track down people exposed to a contagious virus.

The airlines have repeatedly refused, even this month as the coronavirus proliferated across the United States. Now the country is paying a price.

As the coronavirus spread into the United States earlier this year, the federal government was not able to get in touch with or monitor airline passengers who might have been exposed to the disease or were bringing it into new communities.

Airline executives and lobbyists have protested that it would be expensive and time-consuming for them to start collecting basic information like email addresses and phone numbers for all passengers.

Reporting was contributed by Ben Dooley, Li Yuan, Keith Bradsher, Carlos Tejada and Daniel Victor.

Source Article