Financial mayhem needn’t become pandemic 12 Mar 2020 The Fed opened the taps on $1.5 trln of liquidity to smooth Treasury trading. Stocks tumbled again as companies like Boeing drew on debt. And policy gaffes from Washington and Frankfurt don’t help. But there’s no reason, yet, for the health crisis to create a financial one.
Viewsroom: Oil shock 12 Mar 2020 A major rift between Saudi Arabia and Russia has sent oil prices plummeting just as the Covid-19 outbreak saps demand. The fallout is pummeling U.S. shale producers and calling traditional energy-security concepts into question. Plus, market fallout in Japan, China and India.
Trump bumps smart infrastructure punters to coach 12 Mar 2020 The U.S. president’s Europe travel curbs crushed securities in the region’s top airports. Robust revenues attracted sharp, long-term investors to hubs like Paris-de Gaulle and London Heathrow. Plummeting footfall and high debt levels will challenge their status as safe havens.
ECB’s stealth easing enlists banks in virus fight 12 Mar 2020 President Christine Lagarde left interest rates unchanged but used other tricks to support the euro zone economy through Covid-19. Lenders can borrow at sub-zero rates and dip into capital and cash buffers. They have every incentive to help her limit the damage from the slowdown.
Virus-hit airlines can fly without state thrust 12 Mar 2020 A U.S. ban on European travellers hammered airline stocks on both sides of the Atlantic. Washington doled out $15 bln of aid after the post-9/11 shutdown. But airlines are bigger now and fitter, letting them ride out turbulence. Regulatory leeway may suffice.
Three things the EU can do to cushion virus blow 12 Mar 2020 The 27-nation bloc lacks central spending power to fight the economic shock caused by the health crisis. But it’s not powerless. Relaxing fiscal rules and restrictions on state aid would give states freedom for more emergency measures. Looser bank regulation is another quick win.
Virus ructions test Natixis’ racy model 12 Mar 2020 Shares in the $8 bln French bank tanked after a hedge fund it manages suffered big losses. It’s the latest glitch in CEO Francois Riahi’s plan to shift from humdrum lending to high-octane asset management. He must prove the formula works even when markets are volatile.
Donald Trump is rising risk factor in virus battle 11 Mar 2020 The U.S. president’s address to the nation sparked more market panic. A $50 bln pledge for small businesses hit by Covid-19 is good, but his speech lacked public-health remedies, was full of mixed messages and focused on a Europe travel ban. He’s missing both diagnosis and cure.
Pandemic builds a better template for share sales 12 Mar 2020 Oodles of time and money is spent sending executives and bankers around the world to sell stock. China’s InnoCare Pharma is doing things differently, by marketing its Hong Kong IPO virtually. With balance sheets and carbon footprints in focus, the model may last beyond Covid-19.
Virus adds edge to Democratic healthcare debate 11 Mar 2020 The party’s top two presidential candidates have very different ideas for overhauling the U.S medical system. Bernie Sanders’ national health service plan would cost some $12 trln more than Joe Biden’s goal to augment what’s already in place. Covid-19 puts the issue center stage.
U.S. virus bailouts require good instructions 11 Mar 2020 Donald Trump wants to help airlines weather the hit from Covid-19. Unlike cruise lines, also on his list, that makes sense. Some carriers, like Delta and United, may not need aid. But taxpayer rescues can work with the right structures. Breakingviews offers a bluffer’s guide.
No Dolce Vita: Life inside the Italian lockdown 11 Mar 2020 A national quarantine prompted by coronavirus threatens the social contacts essential to Italian life, while gut-punching the economy. Italy’s experience also highlights the struggle ageing societies face in fighting epidemics. Breakingviews offers glimpses from the red zone.
Mark Carney’s joined-up thinking does what it can 11 Mar 2020 The outgoing Bank of England boss unexpectedly eased policy with measures that used most of his armoury. It came just before finance minister Rishi Sunak unveils steps to help the economy deal with virus disruptions. Euro zone policymakers struggle to act with such unity.
Ailing U.S. consumers need cash, not tax cuts 10 Mar 2020 U.S. President Donald Trump wants to reduce payroll levies to ease virus-related economic pain. But workers often don’t spot such changes and it doesn’t help those who end up not getting paid at all. A direct payment would be more useful and help shore up consumer spending.
Occidental divi cut puts Buffett in driver’s seat 10 Mar 2020 The oil driller slashed its payout in response to crude prices plummeting. That is the last straw for CEO Vicki Hollub, who staked her credibility on a debt-fuelled purchase of Anadarko. Oxy now looks like an appealing M&A morsel, though all hangs on kingmaker Warren Buffett.
Virus pain may leave CoCos with lasting infection 10 Mar 2020 Monday’s selloff was the worst ever for bank contingent convertible bonds. More could lie ahead if losses caused by the coronavirus and oil collapse allow lenders to stop paying coupons. The more banks that trigger hybrids, the less they will worry about spooking bond markets.
Virus storm will challenge cruise liners’ buoyancy 10 Mar 2020 Shares in $15 bln Carnival have halved since Covid-19 broke out on two of its ships. Demand has recovered quickly after past disasters, including illnesses and the fatal sinking of the Costa Concordia. Persuading core older clients to reboard may be tougher this time.
White House can lend U.S. shale a helping M&A hand 9 Mar 2020 Black gold’s rapid price drop makes many Texas drillers and frackers uneconomic, threatening U.S. energy independence touted by President Trump. His administration could offer merger sweeteners, effectively forging state-backed oil giants to compete with OPEC and Russia.
OPEC shock pours fuel on credit-market cinders 9 Mar 2020 The collapse in oil prices and worsening epidemic are causing turmoil in corporate debt markets. Yet the price moves are hard to justify, even matching the damage from Lehman Brothers’ failure in 2008. That adds weight to fears that bank trading limits can exacerbate a crisis.
Boeing airworthiness takes new viral hits 9 Mar 2020 The aircraft maker’s shares have plunged 25% in under a month – double the damage to the S&P 500. On top of the 737 MAX grounding, a possible pandemic weakens Boeing’s airline customers while also disrupting its supply chain. New CEO David Calhoun needs more than an apology tour.