Tag Archives: Economy

Trump blasts media as anxious Americans come to grips with coronavirus pandemic

WASHINGTON (Reuters) – U.S. President Donald Trump on Friday capped a tumultuous week as Americans faced sweeping life changes and massive Wall Street losses amid the fast-spreading coronavirus outbreak by turning to a familiar playbook: attacking the media.

In a contentious press briefing, the Republican president lashed out at an NBC reporter who noted Trump’s tendency to put an optimistic spin on the situation and asked what his message was to the American people who may be scared.

“I say that you’re a terrible reporter. I think that is a nasty question,” Trump said.

Two of the nation’s most populous states – California and New York – have enacted their toughest restrictions yet affecting some 60 million people, while federal authorities this week moved to close the borders with Canada and Mexico. More than 200 people have died in the United States and over 14,000 cases of the highly contagious respiratory illness had been confirmed by Friday.

Trump and top administration officials for weeks downplayed the outbreak, which began in China in December, before shifting their tone about the severity of the health crisis more recently.

The president, who is running for re-election on Nov. 3, has long sparred with the media, blasting coverage of him as “fake news” and “hoaxes,” and slamming news outlets and journalists on his Twitter feed. His re-election campaign also recently filed lawsuits against several outlets, including the New York Times and the Washington Post.

Yet the crises has propelled Trump recently to give briefings with news outlets nearly every day in the White House briefing room, a place he eschewed during his first three years in office.

On Friday, in a particularly unusual twist, Trump’s first White House press secretary, Sean Spicer, attended the briefing and asked a question in his role working for Newsmax. Spicer repeatedly sparred with reporters during his time as a spokesman early in Trump’s term.

During his recent engagements with the press, Trump has sought to display unabashed optimism despite more sober comments from public health officials, medical experts, state governors and others who have sounded the coronavirus alarm.

One reporter on Thursday asked about the impact on the economy as many businesses have had to dramatically shift operations or shut down entirely during drastic measures to slow the spread of the virus.

“Thanks for telling us. We appreciate it,” Trump said. “What’s the rest of your question? We know that. Everybody in the room knows that.”

Asked last week about his role regarding the disbanding of a National Security Council pandemic preparedness team on his watch, Trump told a PBS reporter: “That’s a nasty question… When you say me, I didn’t do it.”

(Reporting by Steve Holland, Alexandra Alper, and Jeff Mason; writing by Susan Heavey; editing by Bill Berkrot)

UK puts military on standby as coronavirus shuts down swathes of London

Reuters
By Guy Faulconbridge and Kylie MacLellan

LONDON (Reuters) – The United Kingdom put 20,000 military personnel on standby, closed dozens of underground train stations across London and Queen Elizabeth left the city for Windsor Castle as the coronavirus crisis shut down whole swathes of the economy.

As the coronavirus outbreak sweeps across the world, governments, companies and investors are grappling with the biggest public health crisis since the 1918 influenza pandemic, panicked populations and imploding financial markets.

Against a background of panic buying in supermarkets and the biggest fall in sterling for decades, the British government moved to quash rumors that travel in and out of London would be restricted.

“There is zero prospect of any restriction being placed on traveling in or out of London,” Prime Minister Boris Johnson’s spokesman told reporters.

He said police were responsible for maintaining law and order and there were no plans to use the military for this purpose, though the government put military reservists on formal notification.

But dozens of underground train stations across the capital were due to be closed and an industry source said supermarkets were expecting police support amid the fears that London was facing a virtual shutdown.

After ordering the closure of schools across a country that casts itself as a pillar of Western stability, Johnson on Wednesday said the government was ruling nothing out when asked whether he would bring in measures to lock down London.

Johnson has asked the government to come up with plans for a so-called lockdown which would see businesses closed, transport services reduced, gatherings limited and more stringent controls imposed on the city.

Queen Elizabeth on Thursday left the capital for her ancient castle at Windsor. The monarch has also agreed to postpone the planned state visit by Japanese Emperor Naruhito in June.

LONDON CLOSING?

London’s transport authority said it would close up to 40 underground train stations until further notice and reduce other services including buses and trains. The line between Waterloo station and the City of London financial district would be closed.

“People should not be traveling, by any means, unless they really, really have to,” London Mayor Sadiq Khan said.

Britain has so far reported 104 deaths from coronavirus and 2,626 confirmed cases, but UK scientific advisers say more than 50,000 people might have already been infected.

Britain faces a “massive shortage” of ventilators that will be needed to treat critically ill patients suffering from coronavirus, after it failed to invest enough in intensive care equipment, a leading ventilator manufacturer said.

With the world’s fifth largest economy coming to a standstill, the pound on Wednesday plunged to its lowest since March 1985, barring a freak “flash crash” in October 2016. On Thursday the pound was down 0.5% at $1.1570.

British shoppers were queuing around the block early on Thursday morning to buy basic supplies such as bottled water and tinned goods ahead of an expected toughening of measures to contain the coronavirus outbreak.

Supermarkets have been forced to limit purchases after frantic shoppers stripped shelves. Outside one Sainsbury’s supermarket in central London on Thursday, a huge queue had formed ahead of opening, with people standing calmly in the rain.

(Writing by Guy Faulconbridge; Additional reporting by Dylan Martinez, Kate Holton and Kylie MacLellan; Editing by Michael Holden and Giles Elgood)

Trump urges U.S. to halt most social activity in virus fight, warns of recession

By Jeff Mason and Steve Holland

WASHINGTON (Reuters) – President Donald Trump urged Americans on Monday to halt most social activities for 15 days and not congregate in groups larger than 10 people in a newly aggressive effort to reduce the spread of the coronavirus in the United States.

Announcing new guidelines from his coronavirus task force, the president said people should avoid discretionary travel and not go to bars, restaurants, food courts or gyms.

As stocks tumbled, Trump warned that a recession was possible, a development that could affect his chances of re-election in November. The Republican president said he was focused on addressing the health crisis and that the economy would get better once that was in line.

The task force implored young people to follow the new guidelines even though they were at lesser risk of suffering if they contract the virus. Older people, especially those with underlying health problems, are at the greatest risk if they develop the respiratory disease.

“We’ve made the decision to further toughen the guidelines and blunt the infection now,” Trump told reporters at the White House. “We’d much rather be ahead of the curve than behind it.”

Reporters staggered their seating, sitting in every other seat in the White House briefing room, to follow social distancing measures.

Trump said the worst of the virus could be over by July, August or later. He called it an invisible enemy.

“With several weeks of focused action, we can turn the corner and turn it quickly,” he said.

The president has taken criticism for playing down the seriousness of the virus in the early days of its U.S. spread. On Monday, when asked, he gave himself a good grade for his response.

Trump said a nationwide curfew was not under consideration at this point.

Normally a cheerleader for the U.S. economy, he acknowledged the possibility of a recession while brushing off another dramatic decline on stock markets as investors worried about the virus.

“The market will take care of itself,” Trump said, adding it would be very strong once the virus was handled. The president has long considered soaring stock markets to be a sign of his administration’s success.

Trump said the administration had talked regularly about domestic travel restrictions but hoped not to have to put such measures in place.

He said he thought it would still be possible for G7 leaders to meet at the Camp David retreat in Maryland in June. Trump upset European countries, which make up a large part of the G7, by instituting travel restrictions from European countries without consulting with them first.

(Reporting by Jeff Mason and Steve Holland; Additional reporting by Timothy Ahmann, Lisa Lambert and Makini Brice; Editing by Peter Cooney)

Coronavirus causes historic market drop, global scramble to contain ‘invisible enemy’

By Doina Chiacu and Guy Faulconbridge

(Reuters) – Coronavirus fears led to a historic drop in U.S. stocks, shut borders and disrupted daily life around the world, as governments took increasingly drastic measures to try to reduce the severity of the global outbreak.

Financial markets had their worst day in 30 years despite emergency action by global central banks to try to prevent a recession, with U.S. stock markets falling 12% to 13%, wiping out trillions of dollars in market value.

Just a month ago, financial markets were hitting record highs on the assumption the outbreak would largely be contained in China and not cause disruptions beyond what was seen with earlier viral outbreaks of Ebola, SARS and MERS. There have now been more cases and more deaths outside mainland China than inside, with 180,000 cases worldwide and over 7,000 deaths.

Canada, Chile and other countries closed their borders to visitors. Peru deployed masked military personnel to block major roads, while Ireland launched a campaign to recruit more healthcare workers. Airlines slashed flights, shed jobs and asked governments for billions of dollars in loans and grants.

In contrast to much of the world, Mexico and Brazil still held large political rallies and the United Kingdom kept its schools open.

GRAPHIC: Track the spread of coronavirus – https://graphics.reuters.com/CHINA-HEALTH-MAP/0100B59S39E/index.html

‘INVISIBLE ENEMY’

U.S. states pleaded with the Trump administration on Monday to coordinate a national response to the outbreak, saying patchwork measures enacted by state and local authorities were insufficient to confront the coast-to-coast emergency that has killed at least 74 Americans.

A few hours later, President Donald Trump urged Americans to halt most social activities for 15 days and not congregate in groups larger than 10 people in a newly aggressive effort to reduce the spread of the coronavirus.

Calling the highly contagious virus an “invisible enemy,” Trump said the worst of the outbreak could be over by July, August or later and warned a recession was possible.

However, the United States was not yet closing its borders or mandating curfews or business closures on a national scale.

Many states and cities had already taken those steps or were preparing to. San Francisco area residents will be urged to shelter in place for three weeks starting on Tuesday, the San Francisco Chronicle reported.

A White House adviser said the United States could pump $800 billion or more into the economy to minimize economic damage.

EU finance ministers were planning a coordinated economic response to the virus, which the European Commission says could push the European Union into recession.

‘TEST, TEST, TEST’

The World Health Organization (WHO) called on all countries on Monday to ramp up testing programs as the best way to slow the advance of the pandemic.

“We have a simple message to all countries – test, test, test,” WHO Director General Tedros Adhanom Ghebreyesus told a news conference in Geneva. “All countries should be able to test all suspected cases. They cannot fight this pandemic blindfolded.”

In Italy, another 349 people died on Monday, taking the total to 2,158, with nearly 28,000 cases, after 368 deaths were reported on Sunday, a daily toll more dire than even China was reporting at the peak of the outbreak.

“Many children think it is scary,” Norwegian Prime Minister Erna Solberg told a news conference dedicated to answering children’s questions about the pandemic.

“It is OK to be scared when so many things happen at the same time,” Solberg said.

Several countries banned mass gatherings such as sports, cultural and religious events to combat the fast-spreading respiratory disease that has infected nearly 179,000 people globally and killed more than 7,000.

Spain and France, where cases and fatalities have begun surging at a pace just days behind that of Italy, imposed severe lockdowns over the weekend.

The Middle East business and travel hub of Dubai said it was closing all bars and lounges until the end of March. Thailand plans to close schools, bars, movie theaters and popular cockfighting arenas.

Public health experts in the United States and elsewhere are hoping the measures will help spread out the number of new cases over time so as not to overwhelm hospitals and healthcare systems as has happened in Italy.

Italy’s Prime Minister Giuseppe Conte told daily Corriere della Sera that the outbreak was still getting worse, though the governor of Lombardy, the northern region that has suffered the worst, said he saw the first signs of a slowdown.

The International Olympic Committee will hold talks with heads of international sports organizations on Tuesday, a source close to a federation briefed on the issue said, amid doubts the Tokyo 2020 Olympics set to start on July 24 can proceed.

(Reporting by Doina Choicu in Washington and Guy Faulconbridge in London; Additional reporting by Leela de Krester and Maria Caspani in New York; Jeff Mason, Lindsay Dunsmuir, Nandita Bose, Howard Schneider and Ann Saphir in Washington; Kate Holton in London; Jan Strupczewski and Francesco Guarascio in Brussels; Francesca Landini and Elvira Pollina in Milan; John Revill in Zurich; Emma Farge in Lausanne; Kevin Yao in Beijing; Jaime Freed in Sydney; Gwladys Fouche in Oslo; Kay Johnson in Bangkok and Tracy; Rucinski in Chicago; Writing by Raju Gopalakrishnan, Nick Macfie and Lisa Shumaker; Editing by Peter Graff and Bill Berkrot)

‘It’s okay to feel scared’: Coronavirus brings countries close to standstill

By Doina Chiacu and Guy Faulconbridge

NEW YORK/LONDON (Reuters) – Bars, restaurants, cinemas and schools were shutting down from New York and Los Angeles to Paris and Dubai in a worldwide effort to combat the coronavirus pandemic, as financial markets tumbled despite emergency action by global central banks.

The U.S. Federal Reserve cut interest rates for the second time in less than two weeks, but Wall Street opened with a dizzying plunge that set off circuit breakers.

EU finance ministers were planning a coordinated economic response to the virus, which the European Commission says could push the European Union into recession.

Leaders of the G7 countries were due to hold a video conference on Monday to discuss a joint response.

European stocks fell on Monday to their lowest level since 2012, with investors still worried about the threat to the global economy. Wall Street’s S&P 500 index fell more than 9% as trading resumed after an initial automatic 15-minute cutout.

In Italy, hardest-hit country in Europe, there were 368 new deaths from the COVID-19 outbreak on Sunday, a daily toll more dire than even China was recording at the peak of the outbreak that first hit its central city Wuhan.

“Many children think it is scary,” Norwegian Prime Minister Erna Solberg told a news conference, at her office, dedicated to answering children’s questions about the pandemic.

“It is okay to be scared when so many things happen at the same time.”

Several countries banned mass gatherings such as sports, cultural and religious events to combat the disease that has infected over 169,000 people globally and killed more than 6,500.

Just a month ago, financial markets were hitting record highs on the assumption that the outbreak would largely be contained in China. But there have now been more cases and more deaths outside mainland China than inside.

New York Mayor Bill de Blasio said on Sunday he was ordering restaurants, bars and cafes to sell food only on a take-out or delivery basis. He also said he would order nightclubs, movie theatres, small theater houses and concert venues to close.

“These places are part of the heart and soul of our city,” he said. “But our city is facing an unprecedented threat, and we must respond with a wartime mentality.”

Los Angeles Mayor Eric Garcetti issued similar orders.

Spain and France, where cases and fatalities have begun surging at a pace just days behind that of Italy, imposed severe lockdowns over the weekend.

The Middle East business and travel hub of Dubai said it was closing all bars and lounges until the end of March. Thailand plans to close down schools, bars, movie theatres and popular cockfighting arenas.

“The worst is yet ahead for us,” said Dr Anthony Fauci, the top infectious diseases expert in the United States.

GETTING WORSE IN ITALY

U.S. Surgeon General Dr Jerome Adams said it was important to react aggressively.

“Do we want to go the direction of South Korea and really be aggressive and lower our mortality rates or do we want to go the direction of Italy?” he told Fox News.

Italy’s Prime Minister Giuseppe Conte told daily Corriere della Sera that the outbreak was still getting worse, though the governor of Lombardy, the northern region that has suffered the worst, said he saw the first signs of a slowdown.

Britain has asked manufacturers including Ford <F.N>, Honda <7267.T> and Rolls Royce <RR.L> to help make health equipment including ventilators to cope with the outbreak and will look at using hotels as hospitals.

The worldwide financial policy actions were reminiscent of the sweeping steps taken just over a decade ago to fight a meltdown of the global financial system, but the target now is forcing entire societies to effectively shut down.

“The issue for investors that still remains is that the virus’s economic impact is still not known, if this is a one-month event or if this is a one-year event, and how deep the cutback in consumer spending is going to be,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

Airlines said they would make more drastic cuts to their flying schedules, shed jobs and seek government aid because of sweeping global travel restrictions.

China said industrial output contracted at the sharpest pace in 30 years in the first two months of 2020.

The International Olympic Committee will hold talks with heads of international sports organisations on Tuesday, a source close to a federation briefed on the issue said, amid doubts the Tokyo 2020 Olympics starting on July 24 can proceed.

The Jewish faithful should avoid kissing the stones of the Western Wall, the chief rabbi of the Jerusalem site said.

And Starbucks <SBUX.O> has moved to a “to go” model in all its company-owned stores in the United States and Canada, the coffee chain said, temporarily abandoning reusable cups.

(Reporting by Doina Choicu, Leela de Krester in New York; Lindsay Dunsmuir, Nandita Bose, Howard Schneider and Ann Saphir in Washington; Guy Faulconbridge and Kate Holton in London; Jan Strupczewski and Francesco Guarascio in Brussels; Francesca Landini and Elvira Pollina in Milan; Kevin Yao in Beijing; Jaime Freed in Sydney; Gwladys Fouche in Oslo; Kay Johnson in Bangkok and Tracy Rucinski in Chicag; Writing by Raju Gopalakrishnan and Nick Macfie; Editing by Stephen Coates, Timothy Heritage and Peter Graff)

Explainer: Fed may go into its crisis tool kit soon. What’s in it?

Reuters
By Jonnelle Marte and Howard Schneider

(Reuters) – Analysts and economists increasingly expect the Federal Reserve to roll out measures beyond interest rate cuts and bond purchases to ensure financial markets keep operating smoothly and banks have ample liquidity during the coronavirus outbreak.

The unexpected move by aircraft maker Boeing Co  to draw on nearly $14 billion in credit lines from its banks, as travel restrictions aimed at containing the pandemic hurt its customers, illustrates the stress that some corporate credit markets are already starting to feel.

The Fed, which delivered an emergency rate cut last week and is expected to lower them more when it meets next week, has already taken steps to ensure liquidity in the banking system by substantially increasing the support it provides to overnight lending markets.

But the central bank has an array of other emergency lending facilities and other tools it used during the 2007-2009 financial crisis that it could turn to if needed to keep credit markets from freezing up during times of stress.

“The playbook story in these events is that the Fed would always be a provider of liquidity as needed,” said Nellie Liang, a senior fellow in economic studies at the Brookings Institution and former director of the Division of Financial Stability at the Federal Reserve Board.

Some steps the Fed can take on its own under existing authority, while others might require partnering with the Treasury Department or expanded authority from Congress.

But here is a look at some of the tools that could be adjusted or revived to support markets if credit conditions worsen significantly:

** Discount window

The Fed’s lending tool of last resort is rarely used because banks are worried that borrowing from the window could make them appear weak. But policymakers could start by reminding banks that “the discount window is open, please use it,” said Liang. Fed officials could also make the credit more attractive by lowering the rate they charge or extending the length of the loans offered from one day to 30 days or 90 days.

** Term Auction Facility (TAF)

The Fed rolled out the TAF in 2007 as a way to offer loans to banks that were too hesitant to turn to the discount window. The TAF lacked some of the stigma associated with the discount window because of the way the loans were issued. Financial firms had to bid for the funding, which meant that the rate they paid would be viewed as being determined by the market, and not as a penalty rate.

The money also was not disbursed until three days later, suggesting that the banks who borrowed in that way were not in immediate need of cash.

“It is a signal that you are not desperate,” said Liang. The Fed closed the facility in March 2010.

** Commercial paper funding facility (CPFF)

In the financial crisis, establishing the CPFF was the closest the Fed came to making direct loans to non-financial businesses.

The commercial paper market is a key source of short-term funding for a range of businesses. When it froze up in 2008, the Fed created the CPFF to help reopen that market by purchasing high-rated, asset-backed commercial paper at three-month maturities. The facility was closed in 2010.

Some measures of potential stress have appeared in this market. The spread on borrowing rates between the highest-rated non-financial borrowers and the next tier below them has widened notably this month. It is now the widest in nearly two years.

It is too early to say if the current stress will grow to an extent that allows the Fed to reopen such a facility under the “unusual and exigent circumstances” section of the Federal Reserve Act, which allows it to lend to businesses and individuals.

** Central bank liquidity swaps

The Fed has standing agreements with five other major foreign central banks – the Bank of Canada, European Central Bank, Bank of England, Bank of Japan and Swiss National Bank – that allows them to provide dollars to their financial institutions during times of stress. These were converted from temporary to standing arrangements in 2011.

The Fed could roll out more agreements with other central banks not currently party to the standing agreements to increase access to dollars if needed.

** What else?

The central bank could create new tools more tailored to today’s market, said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “Many of these were created for the specific issues that were plaguing the financial system back then,” said Bostjancic.

“What it shows is the Fed can be innovative.”

(Reporting by Jonnelle Marte and Howard Schneider; Editing by Dan Burns and Andrea Ricci)

Fed slashes rates in emergency move to combat coronavirus risks

WASHINGTON (Reuters) – The U.S. Federal Reserve cut interest rates on Tuesday in an emergency move designed to shield the world’s largest economy from the impact of the coronavirus.

It was the Fed’s first emergency rate cut since 2008 at the height of the financial crisis, underscoring how grave the central bank views the fast-evolving situation.

In a statement, the central bank said it was cutting rates by a half percentage point to a target range of 1.00% to 1.25%.

“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate,” the Fed said a statement.

The decision was unanimous among policymakers.

In a news conference, Federal Reserve Chair Jerome Powell said the coronavirus would weigh on the U.S. economy for some time. He said he believed the central bank’s action would provide “a meaningful boost to the economy.”

“We saw a risk to the outlook for the economy and chose to act,” Powell said. “I do know that the U.S. economy is strong.. I fully expect that we will return to solid growth and a solid labor market as well.”

The Fed’s decision to cut interest rates before its next scheduled policy meeting on March 17-18 reflects the urgency with which the Fed feels it needs to act in order to prevent the possibility of a global recession.

U.S. stocks initially surged on the move, which had increasingly been expected as it became evident the coronavirus would not be contained to its epicenter in China. With 90,000 cases worldwide in 77 countries and territories, the virus has upended global supply chains, triggered cancellations of sports events, business meetings and other large gatherings, and torpedoed global stock prices on fears it could cause a recession.

Equities reversed many of their initial gains within minutes of the unscheduled announcement by the Federal Open Market Committee, the central bank’s policy arm. U.S. Treasury debt prices surged, sending bond yields lower. Interest-rate futures traders immediately began pricing in even more rate cuts in coming months.

“Normally, markets would welcome a rate cut, and they were hoping for it,” said Peter Kenny, Founder of Kenny’s Commentary LLC. “Now that we’ve got it, the question is what’s next.”

Powell had earlier on Tuesday taken part in a conference call with the top finance authorities from the world’s seven largest economies, which concluded with a statement that they would take all appropriate measures to support the economy. At his news conference, Powell said the Fed was in active discussions with other central banks.

“I’m a little surprised. I didn’t expect that at 10 o’clock today, I thought you’d see something coordinated among central banks,” said Justin Lederer, interest rate strategist at Cantor Fitzgerald in New York.

U.S. Treasury Secretary Steven Mnuchin applauded the Fed’s decision, saying it would help the U.S. economy. In a tweet after the Fed move, President Donald Trump called on the central bank to cut even more. “More easing and more cutting,” he said.

(Reporting by Lindsay Dunsmuir and Ann Saphir; Editing by Dan Burns and Andrea Ricci)

Coronavirus spreading fast but stigma is more dangerous: WHO

By Stephanie Kelly and Se Young Lee

GENEVA/BEIJING (Reuters) – Coronavirus now appears to be spreading much more rapidly outside China than within but can still be contained, and stigma is more dangerous than the disease itself, the World Health Organization said on Monday.

WHO chief Tedros Adhanom Ghebreyesus said almost nine times as many cases had been reported outside China as inside in the previous 24 hours, adding that the risk of coronavirus spreading was now very high at a “global level”.

He said outbreaks in South Korea, Italy, Iran and Japan were the greatest concern, but that there was evidence that close surveillance was working in South Korea, the worst affected country outside China, and the epidemic could be contained there.

“Stigma, to be honest, is more dangerous than the virus itself. Let’s really underline that. Stigma is the most dangerous enemy,” he told a news briefing in Geneva.

He said the fight against the coronavirus should become a bridge for peace, commending the United States for supporting sending medical aid to Iran despite the tensions between them.

“I think we have a common enemy now,” he said.

The global death toll exceeded 3,000, with the number of dead in Italy jumping by 18 to 52 and Latvia, Saudi Arabia and Senegal reporting cases for the first time.

Yet equity markets surged after their worst plunge since the financial 2008 crisis last week, encouraged by the prospect of government action to stem the economic impact.

Finance ministers of the G7 group of leading industrialized democracies were expected to discuss measures in a conference call on Tuesday, sources told Reuters.

Oil prices jumped 4% amid hopes of a deeper output cut by the Organization of the Petroleum Exporting Countries.

( Graphic: Tracking the coronavirus https://graphics.reuters.com/CHINA-HEALTH-MAP/0100B59S39E/index.html )

MORE THAN PREDICTED

A senior U.S. official said he was concerned about a likely jump in the number of cases in the United States, which has had more than 90, with six deaths.

“When you have a number of cases that you’ve identified and they’ve been in the community for a while, you’re going to wind up seeing a lot more cases than you would have predicted,” Dr Anthony Fauci, head of the infectious diseases unit at the U.S. National Institutes of Health, told CNN.

South Korea has had 26 deaths and reported another 599 infections on Monday, taking its tally to 4,335.

Of the new cases in South Korea, 377 were from the city of Daegu, home to a branch of the Shincheonji Church of Jesus, to which most of South Korea’s cases have been traced after some members visited the Chinese city of Wuhan, where the disease emerged.

Vietnamese students of Hanoi National University of Education, wearing protective masks, attend the first day of classes after returning to the university, which was closed for over a month due to the novel coronavirus outbreak, Hanoi, Vietnam March 2, 2020. REUTERS/Kham

The Seoul government asked prosecutors to launch a murder investigation into leaders of the church. Seoul Mayor Park Won-soon said that if founder Lee Man-hee and other heads of the church had cooperated, fatalities could have been prevented.

Lee knelt and apologized to the country, saying that one church member had infected many others and calling the epidemic a “great calamity”. “We did our best but were not able to stop the spread of the virus,” Lee told reporters.

It was not immediately known how many of South Korea’s dead were members of the church.

‘OUTBREAKS ARE CURBED’

But Wuhan itself, at the center of the epidemic, shut the first of 16 specially built hospitals that were hurriedly put up to treat coronavirus cases, the Chinese state broadcaster CCTV said.

There was also a steep fall in new cases in Hubei, the province around Wuhan, but China remained on alert for people returning home with the virus from other countries.

The virus broke out in Wuhan late last year and has since infected more than 86,500 people, mostly in China.

Only eight cases were reported in China beyond Hubei on Sunday, the WHO said.

Outside China, meanwhile, more than 60 countries now have cases, with more than 8,700 infected and more than 100 deaths.

One of the worst-hit nations, Iran, reported infections rising to 1,501, with 66 deaths, including a senior official. With stocks of gloves and other medical supplies running low in pharmacies, authorities uncovered a hoard of supplies including millions of gloves.

In Britain, which has 40 confirmed cases, Prime Minister Boris Johnson urged people to be prepared for a further spread.

ECONOMIC DAMAGE

Factories worldwide took a beating in February from the outbreak, with activity in China shrinking at a record pace, surveys showed, raising the prospect of a coordinated policy response by central banks.

The epidemic has forced the postponement of festivals, exhibitions, trade fairs and sports events and damaged tourism, retail sales and global supply chains, especially in China, the world’s second-largest economy.

Middle East airlines have lost an estimated $100 million so far due to the outbreak.

An official of the International Air Transport Association (IATA) said airlines stood to lose $1.5 billion this year due to the virus and urged governments to help them.

The Organization for Economic Cooperation and Development warned that the outbreak was pitching the world economy into its worst downturn since the global financial crisis, urging governments and central banks to fight back.

(This story corrects to say almost nine times as many cases reported outside China as inside, not vice versa, in the second paragraph)

(Reporting by Stephanie Nebehay in Geneva, Hyonhee Shin and Jack Kim in Seoul, Ju-min Park in Gapyeong, Ryan Woo, David Stanway, Se Young Lee, Emily Chow and Andrew Galbraith in Beijing, Leigh Thomas in Paris, Michelle Price in Washington, Leika Kihara in Tokyo, Jonathan Cable in London, Donny Kwok and Twinnie Siu in Hong Kong and Grant McCool in Washington; writing by Nick Macfie and Philippa Fletcher; editing by Mark Heinrich and Kevin Liffey)

U.S. construction spending increases to record high

WASHINGTON, (Reuters) – U.S. construction spending increased by the most in nearly two years in January, but the upbeat news is likely to be overshadowed by financial market fears that the fast-spreading coronavirus could tip the economy into recession.

The Commerce Department said on Monday that construction spending surged 1.8% to a record high of $1.369 trillion as investment in both private and public projects increased. Data for December was revised up to show construction outlays rising 0.2% instead of decreasing 0.2% as previously reported.

Economists polled by Reuters had forecast construction spending would increase 0.6% in January. Construction spending advanced 6.8% on a year-on-year basis in January.

The coronavirus epidemic, which has killed at least 3,000 people and infected more than 80,000, has left financial markets

fearing the end of the longest economic expansion on record, now in its 11th year.

U.S. stock indexes suffered their worst week since the 2008 global financial crisis last week as investors sold equities and bought U.S. Treasuries. The yield on the two-year Treasury note fell below 1% for the first time since 2016.

In January, spending on private construction projects jumped 1.5% to the highest level since February 2018, after gaining 0.1% in December. It was boosted by a 2.1% surge in spending on homebuilding after a 1.5% increase in December.

Residential construction is being supported by lower mortgage rates. Residential investment increased solidly in the second half of 2019, after contracting for six straight quarters, the longest such stretch since the last recession.

Spending on nonresidential structures, which includes manufacturing plant and mining exploration, shafts and wells, increased 0.8% in January. Spending on nonresidential structures fell 1.5% in December. The government in its fourth-quarter GDP report last week said spending on nonresidential structures contracted in 2019 by the most since 2016.

Outlays on private non-residential structures have been depressed by a manufacturing downturn due to trade tensions and cheaper energy products.

Investment in public construction projects increased 2.6% in January after gaining 0.6% in December.

Spending on state and local government construction projects surged 2.0% after rising 0.5% in December. Outlays on federal government construction projects soared 9.9% in January to the highest level since May 2012.

That followed a 1.5% increase in December.

((Reporting by Lucia Mutikani; Editing by Paul Simao))

Rate futures surge as coronavirus seen pushing Fed to ease

(Reuters) – U.S. interest rates futures surged to their highest levels since last fall as a global sell-off in stocks and panicked buying of government bonds fueled growing expectations that the Federal Reserve will soon be forced to respond with interest rate cuts.

The fed funds futures contract tied to the Fed’s July policy meeting reflected a probability of more than 80% that the central bank’s benchmark overnight lending rate would be at least a quarter percentage point lower after that meeting’s conclusion. It currently stands at 1.50%-1.75% after three rate cuts last year.

The moves come as Italy, South Korea and Iran all reported sharp increases in the number of coronavirus infections.

(Reporting By Dan Burns; Editing by Alex Richardson)