Coronavirus

Tariff-infected medical supply chains get sicker

3 Mar 2020

U.S. stocks of face masks, gloves and gowns were already under tariff pressure, which cut into just-in-time inventories. Shortages worsen as fears of a virus outbreak grow. Trump wants to inoculate against globalization. When it comes to medical equipment, he may have a case.

Fed easing shocks more than it awes

3 Mar 2020

U.S. central bank boss Jay Powell cut rates by half a percentage point because of economic risks from the coronavirus. Easing from the provider of global financial liquidity sets the scene for others to follow. The impact would have been bigger had G7 peers acted simultaneously.

OPEC readies knife for oil demand-slump gunfight

3 Mar 2020

The cartel and its Russian allies are set to curb crude supply again, to counter a virus-induced price fall. But even a 1 mln barrels per day cut may not do the job. To hike prices, OPEC needs Russia to prove helpful, Libya to stay troubled, and the coronavirus to not get worse.

Covid-19 monetary placebos start Down Under

3 Mar 2020

Australia’s central bank cut rates to a record low 0.5%, becoming the first in the developed world to trim post-outbreak. Others are expected to follow in some coordinated fashion. Any effects will be marginal or misplaced. Governments are better placed to deliver support.

Japan can handle Olympic defeat

3 Mar 2020

The flame is set to be lit as planned in Tokyo in late July, but the coronavirus casts fresh doubt each day. An economic uplift worth some $280 bln was anticipated. The bulk of it is already booked, though. And the country has plenty of tourism momentum on which to build.

Guest view: Virus may give Chinese banks M&A bug

3 Mar 2020

The outbreak is infecting the financial system. Lenders must provide new loans, roll over existing ones and cut rates. More small institutions might founder. The crisis, argues author Fraser Howie, creates an opening for consolidation, so long as bailouts have strings attached.

Oil’s plunge ratchets up “peak crude” anxiety

2 Mar 2020

The spread of coronavirus has contributed to a one-quarter plunge in oil prices, and even torpedoed the industry’s global pow-wow in Houston. Demand could decline for the first time in a decade. This new demand shock will steal valuable time from companies preparing for peak oil.

Investment banks have fickle friend in coronavirus

2 Mar 2020

Market volatility has surged alongside the disease’s global spread. Such moves help lenders with big trading desks, whose clients are more likely to need their services. Yet lower IPO and M&A fees may cancel out the gains, and force banks into another painful round of cost cuts.

Gilead’s $4.9 bln deal shows regular death goes on

2 Mar 2020

The $88 bln biotech company has the best antiviral bet against coronavirus; it’s also now buying cancer startup Forty Seven. Investors are focused on the former today, but the purchase at a hefty premium is a reminder that the fight against the grim reaper is a long-term affair.

Virus fight depends on practical economic measures

2 Mar 2020

Italy will spend 4.5 bln euros to fight Europe’s worst coronavirus outbreak. Keeping companies alive through tax breaks and other relief measures while the disease spreads could produce a rebound if the emergency proves short-lived. Monetary policy alone won’t kill the disease.

Virus could give dealmakers a new big MAC attack

2 Mar 2020

Morgan Stanley’s acquisition of E*Trade carves out Covid-19 from any “material adverse” change. Other buyers and sellers were too late, making the clauses ripe for review. They’re hard to trigger, but Chinese targets are vulnerable. More than $80 bln of M&A hangs in the balance.

Markets confront world economy’s viral unknowns

28 Feb 2020

The spreading coronavirus has knocked over 10% off U.S. and European bourses so far this week. The immediate question is the depth and length of any demand slump. The longer-term one is whether the crisis permanently alters global supply chains, dragging down corporate earnings.

Zoom’s work-from-home bump will lose appeal

27 Feb 2020

The $28 bln video-communications firm’s stock has shot up more than 60% in a month, as coronavirus prompts a surge in telecommuting. That suggests a deluge of new users, but also requires them to stick around. It’s somewhat defensible, until working from home loses its charm.

Virus will finally force politicians to spend

27 Feb 2020

Central bankers don’t have the tools to combat the economic damage. Rather than relying on them again, governments will have to raid their coffers to safeguard public health and prop up growth. That will do short-term good, but could further distract from long-standing problems.

Breakdown: Coronavirus goes global

27 Feb 2020

China’s draconian efforts have slowed the new disease, but it’s now spreading worldwide. Competent and open government is the best defense against hospitals and society being overwhelmed. Nations may have to deal with recurring outbreaks. Breakingviews explains what to expect.

StanChart leaves investors secure in their gloom

27 Feb 2020

Boss Bill Winters scrapped a year-old target of lifting return on tangible equity to 10% by 2021, citing low rates and the coronavirus. A $500 mln buyback helps, but there is little sense of when profitability might reach the cost of capital. That cements a cut-price valuation.

Viewsroom: Hong Kong in the time of Covid-19

27 Feb 2020

Small businesses are hurting, while bankers sit idle and families struggle with school closures and other containment efforts. Despite having only some 80 coronavirus cases, life – as well as retail, tourism and real estate – feels noticeably different in the Asian financial hub.

Companies will be first line of U.S. virus defense

26 Feb 2020

The White House is downplaying the spread of the coronavirus, perhaps to calm markets. If there’s an outbreak, it may be up to CEOs to make calls that would hurt the economy, like closing factories. It would follow the trend of firms stepping up where government has left a void.

Pandemic bonds are the sick man of finance

26 Feb 2020

They’re supposed to harness market power to help in a health crisis. Yet pandemic bonds are ill-suited to the task. Complex restrictions and the need to lure buyers mean creditors tend to get the upper hand – and recipients of the funds may benefit little even if they win.

Consumer giants take rosy view of epidemic damage

26 Feb 2020

Spirits maker Diageo reckons the coronavirus outbreak could cost it 325 million pounds in sales this year, while Danone is forecasting a 100 million euro hit. But neither is factoring in the effect of the disease spreading much beyond Asia. Investors are already more bearish.