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U.S. Schools May Shut: Virus Update

EconomyFeb 28, 2020 10:03AM ET
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Bullard Says Cuts Possible; U.S. Schools May Shut: Virus Update

(Bloomberg) -- James Bullard, president of the Federal Reserve Bank of St. Louis, said rate cuts may be necessary if the coronavirus becomes a pandemic. Acting White House Chief of Staff Mick Mulvaney said school closings are likely.

Germany quarantined about 1,000 people and Switzerland banned large events, leading to the Geneva car show being canceled. Iran and South Korea revealed more coronavirus cases and Nigeria, Africa’s most populous country, confirmed the first infection south of the Sahara desert.

Mexico confirmed its first case, while Australia, New Zealand, the Netherlands and Britain all reported new infections. U.K. Prime Minister Boris Johnson is expected to chair an emergency meeting next week.

Fear over the economic fallout from the spreading coronavirus tightened its grip on global markets, sending U.S. equities to a seventh straight loss and sparking demand for safe assets from Treasuries to the yen. Brent crude dipped below $50 a barrel for the first time since December 2018.

Key Developments

  • Confirmed cases worldwide pass 83,000; deaths top 2,800
  • Iran reports 143 more infections; South Korea adds 571
  • Traders speculate on Fed’s first emergency cut since 2008
  • Limited virus testing in Japan masks true scale of infection
  • China is making progress in the battle to get back to work
Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts. For analysis of the impact from Bloomberg Economics, click here.

Fed’s Bullard Says Rates Cuts Possible (9:22 a.m. NY)

Federal Reserve Bank of St. Louis President James Bullard said he would back interest-rate reductions if the coronavirus develops into a worldwide pandemic, but last year’s cuts are already supporting the economy.

“Further policy rate cuts are a possibility if a global pandemic actually develops with health effects approaching the scale of ordinary influenza, but this is not the baseline case at this time,” Bullard, who doesn’t vote on monetary policy this year, said Friday in prepared remarks to be delivered in Fort Smith, Arkansas.

Virus Could Disrupt U.S. Schools, Transportation: Mulvaney (9:08 a.m. NY)

Acting White House Chief of Staff Mick Mulvaney acknowledged that the coronavirus is likely to cause disruptions to everyday life, such as school closures and changes to public transportation.

“Are you going to see some schools shut down? Probably. Maybe see impacts on public transportation? Sure, but we do this. We know how to handle this,” Mulvaney said at the Conservative Political Action Conference outside Washington on Friday.

Iran’s Parliament Suspends Sessions Indefinitely (8:16 a.m. NY)

Iranian state TV reported that the country’s parliament has suspended sessions indefinitely. Earlier, Iran reported that cases had soared to 388 and there were eight more deaths, taking the total toll to 34. The country’s health minister said he expects “an upward trajectory” in confirmed coronavirus cases in the next few days.

Iran has shut universities and public spaces for another week. Travelers (NYSE:TRV) suspected of having the coronavirus will be stopped at city entrances and sent into quarantine for 14 days, according to state TV.

The Iranian health-care system is “not robust,” U.S. Secretary of State Mike Pompeo said in response to questions about the Islamic Republic’s ability to fight the virus. Iran isn’t sharing sufficient information on the virus, he said during a House Foreign Affairs Committee hearing.

U.K. Man Dies From Coronavirus Caught on Cruise (8:29 a.m. NY)

A U.K. man has died after contracting the coronavirus while on board the Diamond Princess cruise ship that was quarantined in Japan, Kyodo reported on Friday, citing Japan’s Health Ministry.

He’s the sixth person to die after contracting the virus on the cruise ship, and the first foreigner, according to the Japanese news agency.

Mexico Confirms First Coronavirus Case: (8:20 a.m. NY)

Mexico’s Deputy Health Minister Hugo Lopez-Gatell confirmed the country’s first case at a press conference. The patient is in good health and has mild symptoms. His family members have also been isolated at the hospital for tests.

Earlier, El Universal reported that the patient is a 35-year-old man who recently traveled to northern Italy.

Virus May Crimp Growth in France, Germany (7:18 a.m. NY)

French Finance Minister Bruno Le Maire said the coronavirus outbreak could have a bigger impact on economic growth than previously expected. Le Maire had said last week he expected the virus to shave 0.1 percentage points off France’s 2020 GDP growth. “Now the epidemic has spread beyond China, this figure could obviously be higher depending on how the health situation changes,” he said.

Earlier on Friday, Bundesbank President Jens Weidmann warned growth in Germany might well be lower than the institution predicted for 2020. The outbreak is already having an impact on the U.K, according to Bank of England Governor Mark Carney.

Hong Kong’s Lam to Donate Salary to City (7:01 a.m. NY)

Hong Kong Chief Executive Carrie Lam and other high-ranking officials will donate a month’s salary to the city’s community chest, HK01 reported, citing people it didn’t identify. Lam earns HK$416,500 a month, the report said.

Separately, all political office holders in Singapore will take a one-month salary cut.

British PM to Lead Emergency Meeting (6:20 a.m. NY)

The U.K. premier will chair a meeting of the country’s emergency council on Monday. Earlier, two further patients tested positive for the virus, taking the total number of cases in England to 17. Following confirmed cases in Northern Ireland and Wales, the total number of U.K. cases stands at 19.

Separately, Netherlands reported its second confirmed infection. Five new cases were earlier confirmed in Sweden, bringing the total confirmed cases in the country to seven.

Geneva Car Show Canceled (6:34 p.m. HK)

One of the auto industry’s marquee events, the Geneva International Motor Show, was canceled. The trade fair, due to start Monday, will return next year, Palexpo SA, which runs the Geneva convention center, said Friday. Swiss authorities earlier in the day banned big events on health concerns. The virus reached Switzerland this week and neighboring Italy reported hundreds of cases.

Europe Debt Risk Gauge Spikes Most Since Oct. 2014 (6:24 p.m. HK)

The Markit iTraxx Europe Crossover index of credit-default swaps on high-yield companies rose for a fifth straight day on Friday. The index, a key measure of risk of debt for Europe’s most fragile companies, rose as much as 80.3 basis points to 300 this week, the biggest weekly jump since Oct. 2014.

Singapore to Ban Activities of South Korea Religious Sect (6:23 p.m. HK)

Singapore intends to ban the local activities of the religious sect that’s been at the center of rapidly rising coronavirus cases in South Korea. Five South Korean nationals and two Singaporeans are helping with ongoing investigations into the unregistered local chapter of the sect in Singapore.

Nine Guests Leave Virus-Hit Hotel in Tenerife (5:45 p.m. HK)

The first nine guests of about 700 isolated since Tuesday at a Tenerife hotel have been allowed to leave, La Provincia newspaper reported, citing people in the Canary Islands government it didn’t identify by name.

Switzerland Cancels Large Events (5:16 p.m. HK)

Public and private gatherings with more than 1,000 people won’t be allowed until March 15, the Swiss government said. The next big event in the country is the Geneva Motor Show, which was set to open to the public on March 5.

The move comes alongside a German quarantine of 1,000 people. Authorities in Heinsberg, near the Dutch border, asked people who came into contact with a married couple with the disease to stay at home. Cases in Italy soared to 650 on Thursday from 400 a day earlier, bringing the European total to more than 700.

French President Emmanuel Macron and Italian Prime Minister Giuseppe Conte on Thursday called for European cooperation and rejected calls for suspending the Schengen Treaty that allows for border-free travel within the European Union.

South Korea’s Moon, Party Leaders Urge ‘Bold’ Steps (5:11 p.m. HK)

President Moon Jae-in and political party leaders agreed on the need for “bold and swift extraordinary measures,” including a bigger budget, to combat the outbreak and revitalize economy, Yonhap News reported, citing a joint statement from parties.

Japan’s Hokkaido Declares State of Emergency (4:47 p.m. HK)

Japan’s northern island of Hokkaido has declared a state of emergency due to the outbreak of coronavirus there, national broadcaster NHK said. Residents have been asked to stay indoors over the weekend.

South Korea Confirms More Cases (4:34 p.m. HK)

South Korea’s Centers for Disease Control said an additional 315 cases of the novel coronavirus have been confirmed as of 4pm local time, in addition to the 256 additional cases as of 9am earlier in the day. The death toll rose to 16.

South Korea President Moon Jae-in’s disapproval rating rose to 51%, the highest level since October, a Gallup Korea poll showed. The Financial Times said the U.S. military had placed its South Korea garrisons, which includes its largest army base outside America, in lockdown.

Separately, Malaysia will temporarily bar visitors who have been in South Korea’s Daegu city and Cheongdo area in the 14 days before arriving in the country.

China, Japan Agree Xi Visit to Go Ahead as Planned (4:22 p.m. HK)

Japanese Foreign Minister Toshimitsu Motegi and top Chinese diplomat Yang Jiechi agreed at a meeting Friday that President Xi Jinping’s visit to Tokyo would go ahead as planned, the Ministry of Foreign Affairs said.

Airlines Warn on Outlook (4 p.m. HK)

British Airways parent IAG (LON:ICAG) SA slumped after saying it couldn’t provide an earnings forecast this year, as weak demand in Asia rippled across to Europe and companies cut back on business travel. EasyJet Plc said that it had seen a softening in demand and made plans to cancel flights.

Finnair dropped after it revised outlook, citing the coronavirus and its wider than originally estimated impact. Alitalia plans to extend temporary layoffs for about 4,000 workers following the outbreak in Italy, Ansa reported. Amadeus IT Group SA, which operates software for flight bookings, fell 5% after saying that airline travel sales are slowing globally.

Singapore Airlines Ltd said it would reduce management pay, with the CEO taking a 15% cut effective March. 1 and Philippine Air cut 300 jobs.

New Zealand, Lithuania Report First Cases (12:38 p.m. HK)

New Zealand confirmed its first case after a person who recently returned from Iran was diagnosed with the illness, the Ministry of Health said Friday. Lithuania also reported its first case, a person who was infected in the Italian city of Verona.

Abe Adviser Says Japan Needs $45 Billion Extra Spending (11:45 a.m. HK)

An adviser to Prime Minister Shinzo Abe said Japan should compile another economic package with fresh spending of at least 5 trillion yen ($45 billion) to respond to a severe hit from the coronavirus outbreak.

FDA Confirms First Drug Shortage Relating to Virus (11:40 a.m. HK)

The Food and Drug Administration confirmed the first drug shortage relating to the coronavirus, Commissioner Stephen Hahn said in a statement. The announcement didn’t name the manufacturer but said “there are other alternatives that can be used by patients.” The shortage is due to an active ingredient used to make the drug, the FDA said.

JPMorgan Restricts All Non-Essential Travel Globally (11:29 a.m. HK)

JPMorgan Chase (NYSE:JPM) & Co. issued global restrictions on non-essential travel to protect its employees and its business against the spreading coronavirus. Because of the continuing spread of the virus, it’s now “restricting all international travel to essential travel only,” the New York-based bank said in a memo distributed to staff. The memo was confirmed by spokespeople at the bank.

Nigeria Confirms First Infection (9:10 a.m. HK)

Nigeria confirmed its first case of the coronavirus in Lagos, the West African country’s biggest city and commercial capital, the Health Ministry said. It’s also the first reported in sub-Saharan Africa. Algeria has also reported a case. Health experts have voiced concerns over the possible spread of the virus in places like Africa that may be ill-equipped to handle such a crisis.

Hong Kong Dog Found to Have ‘Low Level’ of Virus (8:49 a.m. HK)

The pet dog of a coronavirus patient in Hong Kong has been found to have a “low level” of the virus, the Hong Kong government said. The dog tested “weak positive,” the city’s agricultural and fisheries department said in a statement, without giving further details. Officials will carry out further tests to confirm whether the dog has really been infected, or if it was a result of environmental contamination of its mouth and nose.

China Death Toll Rises to 2,788, Up 44 (7:53 a.m. HK)

China’s death toll rose to 2,788 by the end of Thursday as it reported 44 new fatalities, according to a statement from the country’s National Health Commission. The number of cases climbed to 78,824 as 327 additional infections were reported. Discharged patients increased by 3,622 to 36,117. Hubei, the province at the center of the outbreak, had 318 additional cases and 41 new deaths.

U.S. Schools May Shut: Virus Update
 

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Comments (1)
Andrew carson
Andrew carson Feb 28, 2020 11:47AM ET
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Rate cuts were needed before this even started. Sorry we waked you. Go back to sleep.
 
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