European stocks slide as U.S. coronavirus cases surpass China and global spread intensifies


European stocks and U.S. equity futures fell on Friday, as U.S. coronavirus cases surpassed China and the global spread intensified.

The pan-European Stoxx 600

SXXP, -2.24%

 index declined 2.5% in early trading, while the FTSE 100

UKX, -3.65%

 slipped 3.8% lower. The German DAX

DAX, -1.89%

 dropped 2.1% and the French CAC

PX1, -2.69%

fell 3%. Stocks slipped back at the end of a good week as investors digested the increasing spread of the virus and the uncertainty ahead. Dow Jones Industrial Average futures

YM00, -1.87%

 were down 2%, Nasdaq futures

NQ00, -1.84%

 fell 1.9% and S&P 500 futures

ES00, -1.90%

 were 2.1% lower ahead of the open.

What’s moving the market?

The U.S. has now surpassed China as the country with the most coronavirus cases, rising above 85,500. The U.S. death toll climbed to just below 1,300 but sits far below Italy — 8,215 — and Spain — 4,365. Global infections grew by 13.6% in the past 24 hours — the seventh double-digit rise in 8 days. Cases have now tripled in Europe in a week, with Germany and France also among the worst affected.

The Dow entered a new bull-market phase on Thursday, driven by a $2 trillion stimulus package, bringing the 11-day-old bear market to an end, but was set to fall back on Friday. Asian markets followed Wall Street higher overnight but European stocks headed lower as the continent’s own equity rally came to an abrupt end.

OANDA analyst Craig Erlam said it made sense that investors were taking profit ahead of the weekend, given the fast-changing nature of the pandemic.

“We may have had a good run this week but the weekend can feel like a long time at moments like this and the numbers we’re getting from the U.S., which now has more cases than China or Italy, are getting uglier by the day. I fear a few more shocks lie ahead as we get closer to peak coronavirus in countries like the U.S., U.K. and more,” he said.

China’s industrial profits slumped 38% in January and February. As the first country impacted and locked down, global investors are closely following China’s economic fallout and recovery.

Stocks to watch

Cruise operator Carnival plunged 11% in early trading as the hard-hit industry was left out of the $2 trillion U.S. stimulus package.

As the U.K.’s national lockdown took hold and the economic impact began being felt across the country, shares in house builder Persimmon

PSN, -7.82%

 tumbled 9% and retail property company Hammerson

HMSO, -11.12%

 dropped 12%.



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Pelosi predicts House will pass $2 trillion coronavirus bill with ‘strong bipartisan vote’


Mark Wilson/Getty Images

House Speaker Nancy Pelosi

U.S. House Speaker Nancy Pelosi on Thursday predicted speedy passage for a $2 trillion economic package aimed at cushioning the effects of the coronavirus on Americans, as she planned a vote for Friday.

“I feel certain that we will have a strong bipartisan vote,” the California Democrat said at a news conference.

The Friday vote in the House would come in the wake of the late-Wednesday passage by the Senate of the massive coronavirus-aid bill, which contains direct payments to many Americans, aid for battered industries and expanded unemployment benefits, among many other provisions.

Read: What the $2 trillion stimulus means for you — and how the ‘recovery rebates’ will be calculated.

The House is currently out of session.

The speaker said she expected the measure to pass on a voice vote, which involves members who are present yelling “aye” or “no.” Not all members must be in the House chamber for such a vote.

Pelosi backed off an earlier plan for a so-called “unanimous consent” vote that also would not have required members to be in the Capitol. Under that option, just one lawmaker’s objection would prevent a bill from passing. “I don’t think we will get unanimous consent,” she said.

But Thursday night, lawmakers were reportedly flying back to Washington in case a voice vote does not pass. NBC News reporter Kasie Hunt tweeted that while the ultimate outcome of the vote is not in doubt, it may be delayed until 216 House members can assemble in person.

House Minority Leader Kevin McCarthy, a California Republican, poured cold water on the unanimous-consent option on Wednesday, saying it was the wrong vehicle for a $2 trillion bill.

“We expect to have a voice vote on it, but if we don’t, we’ll be prepared for whatever it is,” Pelosi said.

A request by any House lawmaker for a recorded, roll-call vote would force the chamber back into session, as Politico explains. Leadership would then likely move to change the rules to allow for “proxy voting,” in which a small group of lawmakers votes on behalf of a much larger group on the floor, Politico wrote.

U.S. stocks

DJIA, +6.38%

  rose sharply Thursday, despite a Labor Department report that showed unemployment claims soared to a record 3.28 million last week, as the coronavirus pandemic shut down businesses across the nation.

See: Market Snapshot.





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Schumer says coronavirus stimulus package won’t provide aid to Trump family’s businesses


‘Senate Democratic Leader Chuck Schumer has secured a provision in the agreement that will prohibit businesses controlled by the President, Vice President, Members of Congress, and heads of Executive Departments from receiving loans or investments from Treasury programs. The children, spouses and in-laws of the aforementioned principals are also included in this prohibition.’


Senate Minority Leader Chuck Schumer’s office

The point above was one thing that Senate Minority Leader Chuck Schumer’s office emphasized on Wednesday after Democratic and Republican lawmakers and the Trump administration reached a deal on a $2 trillion coronavirus relief package.

The largest economic rescue measure in U.S. history includes $500 billion for Treasury Department loans to hard-hit companies, but it looks like the Trump Organization’s enterprises won’t benefit from that pool of money.

The New York Democratic senator’s provision that bans Treasury aid to businesses controlled by President Donald Trump or other top Washington officials comes after Trump on Sunday said he had “no idea” whether his business would refrain from accepting bailout money.

“Everything’s changing, just so you understand. It’s all changing,” the president said on Sunday, according to a Washington Post report. “But I have no idea.” On Saturday, Trump had said his own hotels are among those suffering due to the crisis triggered by the coronavirus causing the disease COVID-19.

Also banned from getting Treasury aid are any enterprises controlled by Vice President Mike Pence, members of Congress or bosses of executive departments such as the Department of Defense and Department of Energy.

“That makes sense,” Schumer said on CNN on Wednesday, regarding his provision. “Those of us who write the law shouldn’t benefit from the law.”

However, a different provision in the package appears to make its small-business benefits available to big hotels such as the Trump Organization’s properties, and a tax-code change in the package could benefit hotels such as Trump’s, according to a New York Times report. Schumer’s provision also might not stop Treasury assistance from going to companies owned by the family of Jared Kushner, Trump’s son-in-law and adviser, because Kushner rarely has a majority stake in those companies, the report added.

Related: Lobbyists have asked U.S. government for at least $2.3 trillion in aid

U.S. stocks

DJIA, +4.07%

SPX, +4.39%

have been hammered this month by coronavirus-related worries, but Tuesday and Wednesday brought gains and the Dow industrials also were trading higher on Thursday afternoon., with analysts pinning this week’s rally on stimulus hopes.

This is an updated version of a report first published on March 25, 2020.



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Glimmer of hope in New York as Gov. Cuomo says rate of hospitalizations has slowed, but he adds ‘we’re still on the way up the mountain’


Gov. Andrew Cuomo said early signs show social distancing is paying off, as the exponential rate of new hospitalizations has slowed.

“The evidence suggests that the density control measures may be working,” Cuomo said at a news conference on Wednesday. The number of hospitalizations, which on Sunday were doubling every two days, are now doubling nearly every five days. However, the governor showed some hesitation to believe things could slow that much.

“We’re still on the way up the mountain,” he said.

He pointed out that Westchester County, which had the first cases of the virus in New York, has seen a significant slowdown in the number of new infections.

“In Westchester we have dramatically slowed what was an exponential increase,” he said

Meanwhile, on Tuesday, the White House advised anyone traveling through or from New York City, the epicenter of the coronavirus outbreak in the U.S., to put themselves into self-quarantine for 14 days—a blanket order some public health experts said is a step too far.

“I would not follow that,” Dr. Howard Zucker, New York state’s health commissioner, said at the Wednesday briefing with Cuomo. He advised, instead, following the Center for Disease Control (CDC) guidelines, which recommend avoiding proximity to others, washing hands and disinfecting surfaces often, and for people who feel sick to stay home.

“I would follow the guidelines in general that you should social distance,” Zucker said. “These cases are all over the country, it’s not just New York. We’re at the forefront, as the governor has said, but it’s elsewhere.”

On Tuesday, Dr. Deborah Birx, the White House’s coronavirus response coordinator and a public health expert, expressed concern that infected New Yorkers, many of whom have fled the city, might exacerbate the disease in less hard-hit areas.

“Everybody who was in New York should be self-quarantining for the next 14 days to ensure that the virus doesn’t spread to others, no matter where they have gone, whether it’s Florida, North Carolina, or out to the far, far reaches of Long Island,” Birx said.

Her comments followed a more forceful order from Florida Gov. Ron DeSantis mandating that anyone who travels from the tri-state area of New York, New Jersey or Connecticut go into self isolation for two weeks.

As of Wednesday, 17,856 people in New York City had tested positive for Covid-19, the new coronavirus, and 199 had died.

But the disease has been present and spreading across communities in every state, not only New York, said Dr. Bill Hanage, associate professor of epidemiology at Harvard’s T.H. Chan School of Public Health.

“If it were only in New York, it would make sense. The issue is it isn’t only in New York,” he said. Therefore, the opportunity to shut the disease out entirely with such measures is already gone.

He also questioned the reason for telling travelers from New York City to self isolate for two weeks and not people coming from other local hot spots in Washington state and California.

“I don’t understand the singling out of New York, a place that is doing the best testing,” Hanage added.

President Trump and Cuomo have sparred for weeks over the White House’s handling of the virus, even while the two work together to supply New York with the medical equipment and infrastructure support it needs to handle the deluge of hospitalization expected to hit New York City in the next two or three weeks. It raised the question of whether the White House’s advice to New Yorkers was another political jab or a true medical recommendation.

Remote, especially seasonal, communities, such as Cape Cod in Massachusetts or the Hamptons in New York, however, are likely feeling uneasy as they witness an influx of people looking for refuge from dense urban areas, said Dr. Cheryl Healton, dean of New York University’s School of Public Health. Many of these communities have limited emergency medical capacity and only a few intensive care beds.

“They are only scaled for full-time residents,” Healton said. That would be a problem in the event of an outbreak, which would quickly overwhelm the local health system.

If traveling to those remote places, it might make sense for anyone coming from a hard-hit area, including New York, to exercise increased caution, which may include a period of self-isolation.

“I don’t think it’s a bad idea for anyone coming from a hot spot, if they’re entering a community with a lower baseline,” Healton said. “I don’t think that’s unreasonable.”

New Yorkers who decide to quarantine — and who have to in Florida — should stay at home for 14 days from the date of exposure, or the last day they were in New York City. During quarantine, the CDC recommends monitoring your health and practicing social distancing, and not going to work, school or out of the house for any reason.



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How do you choose between economic ‘deaths of despair’ and coronavirus victims? Economists, lawmakers grapple with a moral conundrum


How do you strike a balance between the country’s economic life and actual human life?

Is putting America back to work sooner rather than later a Sisyphean task, the equivalent of rolling a rock perpetually uphill while up to 2 million people die of COVID-19? Or does the Sisyphean task involve waiting, while millions more people lose their businesses and livelihoods, only to find themselves among the long-term unemployed or underemployed, eventually succumbing to substance abuse and chronic depression, and even perhaps, as the president forecasts, suicide?

Bill Gates, the co-founder of Microsoft

MSFT, -0.96%

and now a megaphilanthropist whose foundation focuses in large part on fostering global health, issued some strong words for the Donald Trump this week. “There really is no middle ground, and it’s very tough to say to people, ‘Hey, keep going to restaurants, go buy new houses, [and] ignore that pile of bodies over in the corner,’ ” Gates said in a TED interview, as described by the Vox Media site Recode. “We want you to keep spending because there’s maybe a politician who thinks GDP growth is all that counts.”

In a worst-case scenario, the CDC has forecast that 2.4 million to 21 million people in the U.S. could require hospitalization, potentially crippling the country’s health-care system.

On the other side of the argument stands Trump, who has warned that efforts to stem the rapid spread of COVID-19, the disease caused by severe acute respiratory syndrome coronavirus 2, or SARS-CoV-2, are spiraling the U.S. economy into another Great Recession; the impact has already sent the Dow Jones Industrial Index

DJIA, +2.39%

plunging toward potentially its worst-ever month. He said he would like to put people back to work by Easter. “You’re going to have suicides by the thousands,” Trump said this week.

The debate over the ramifications of a months-long shutdown of the American economy in an effort to force people to “socially distance” and, thus, prevent coronavirus from spreading unchecked also highlights the chasm between left and right on the American political spectrum. The left generally believes that strong social structures beget a stronger economy for all. The right traditionally follows the idea that a strong social-support system begets strong social structures for all.

“People get tremendous anxiety and depression, and you have suicides over things like this when you have terrible economies,” Trump said. “You have death. Probably and — I mean, definitely — would be in far greater numbers than the numbers that we’re talking about with regard to the virus.” (“It is not a foregone conclusion that we will see increased suicide rates,” Christine Moutier of the American Foundation for Suicide Prevention told the Associated Press.)

However, the Centers for Disease Control has warned that in a worst-case scenario 2.4 million to 21 million people could require hospitalization, potentially, should they take ill within a condensed time frame, crippling the country’s health-care system. U.S. hospitals have just over 924,000 staffed hospital beds, according to the American Hospital Association. Up to 2 million people could die from the novel coronavirus if the disease caused by it is allowed to spread, the CDC added.

‘Unprecedented levels of deaths of despair’

The spread of the disease has not yet peaked. Coronavirus had infected at least 69,171 people in the U.S. by early hours of Thursday morning and killed at least 1,050 people, according to data aggregated by Johns Hopkins University’s Center for Systems Science and Engineering. New York City accounts for just over 30% of the national total, and 4% of global cases. Worldwide, there were 471,783 confirmed cases of the virus and 21,306 reported deaths; 114,858 people have recovered.

George Loewenstein, professor of economics and psychology at Carnegie Mellon University, said it’s not as simple as making a choice between the human lives of Americans and the long-term health of the American economy. “I think it might be a false dichotomy because we don’t have a very good understanding of what the impact of a severe [economic] depression would be on human life,” he said. “It will dramatically decrease the quality of human life, and it will certainly kill people as well.”

“We’ve already have unprecedented levels of deaths of despair, and, if we lose a generation as a result of the coronavirus pandemic, that’s going to have mortality consequences,” Loewenstein added. “They’re just going to be more difficult to discern from the statistical victims. If you ignore the impact on quality of life — which is potentially an immense thing that should be taken into account — we don’t really understand what the impact of the economy on mortality.”

‘We’ve already have unprecedented levels of deaths of despair, and if we have a lost generation as a result of the coronavirus pandemic that’s going to have mortality consequences.’


George Loewenstein, professor of economics and psychology at Carnegie Mellon University in Pittsburgh

Anne Case and Angus Deaton, economists at Princeton University, first chronicled these “deaths of despair” among middle-aged non-Hispanic Caucasians since 1999. They include deaths by suicide, alcohol poisoning, overdoses of opioids and other drugs, and cirrhosis of the liver. The CDC estimates that such deaths of despair have almost doubled since 1999, reaching 150,000 in 2017, with one-third of that figure accounted for by suicide. The Trump campaign of 2016 may have had the victims and potential victims of such outcomes in mind when it spoke of “the forgotten people.”

While COVID-19 fatalities are understandably the main focus now, Loewenstein said those who would ultimately lose their lives as the result of another Great Recession or, worse, a new Great Depression, are sometimes left out of the current economy–vs.–human life conversation. “The Identifiable Victim Effect is the idea that identified victims get much more attention and help than much more statistical victims that will predictably emerge in the future,” he said.

He cites the case of “Baby Jessica,” the 18-month-old girl who fell down a well in her aunt’s backyard in Midland, Texas, in 1987. “The world was fixated on this girl who fell in the well,” he said. Donations of up to $800,000 poured in. She was rescued after 2½ days. “It’s a sign of our humanity. If we ignored such events, we would have a hard time looking at ourselves in the mirror.” Loewenstein added. “At the same time, it creates an immense distortion in policy making.”

Loewenstein argues that Americans are caught between these two events now: start the economy too soon and an avoidable number of people will likely die; wait too long and it could also lead to untold long-term suffering. “I don’t think people have thought efficiently or carefully about smart strategies that would get the best of both, and make a better trade-off between the two. I say that as someone who is 64, and who might be — as part of a smart strategy — isolated,” he added.

Colin Camerer/Quentin Fottrell

The Value of Statistical Life.
‘We’re very comfortable with making these trade-offs’

“It’s appalling to attach a dollar number to a human life — for noneconomists,” said Colin Camerer, a behavioral financier and professor of behavioral finance and economics at the California Institute of Technology in Pasadena. “You can never make things perfectly safe with zero risk. We do have limited time, health-care staff, ventilators and money. What is the curve of transmission? How many people are going to die, if you open up the economy? No one is really too sure.”

“We’re very comfortable with making these trade-offs,” Camerer said. “Without even thinking about it, we do make these trade-offs. You may pay less attention crossing the street if your parking meter is about to run out. You are endangering your life in a tiny way to avoid getting a parking ticket. Such decisions that involve an implicit trade-off, but they’re almost invisible.” However, he said such decisions involving other human beings are obviously far more morally complicated.

‘We do make these trade-offs. You may pay less attention crossing the street if your parking ticket is about to run out. You are endangering your life in a tiny way to avoid getting a parking ticket.’


Colin Camerer, Caltech

Economists use the Value of Statistical Life. It measures the value placed on changes that increase likelihood of death, not the value on a human life to avoid death. “It’s used in court cases when assigning damages,” Camerer said. I could make a highway a little safer at a very high cost. This is one reason economics is called the dismal science. People are typically paid more money to do risky jobs in timber and fishing. We call that a compensating differential.”

VSL is used in court and by governments. Guidance on the amount varies by state agency and can run up to $10 million. “Imagine volunteering for a dangerous mission, and there’s a 10% chance you’ll get killed, and you’re going to be paid x,” Camerer said. “The implicit value of a life is x divided by 0.10. If the boss offers $1 million and the guy says no, he’s acting like his life is worth more than $10 million. If he says yes, he’s acting like it’s worth less.”

What if there are not enough ventilators and you, as a doctor, have to choose between a young child and an elderly patient? And what if you have two people who are exactly the same age and both have an equal chance of survival? Would the minutes between when the patients were admitted to the hospital be the deciding factor? Or would it be who required ventilation first? “You have to go outside of the labor-market framework into an ethical domain,” Camerer said.

Gov. Andrew Cuomo appealed for more ventilators, as the city braces for a surge of hospitalizations. He said the state requires 30,000 ventilators; 4,000 have been sent by the federal government and 7,000 have been procured. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, told CNN Wednesday evening that one thing will decide when people go back to work: “You can’t make an arbitrary decision until you see what you’re dealing with.”

“The virus will decide the timeline,” he said.

Want to read more? Follow Quentin Fottrell on Twitter and read his Moneyist columns here





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