PS: European stock markets are currently being called HIGHER on Monday, thanks to the late recovery on Wall Street.

But there’s a long way to go yet, depending what happens this weekend on the coronavirus pandemic.

There’s no sign of a late rally on Wall Street.

With 20 minutes to go, the Dow Jones industrial average is down 907 points or 3.5% -- ending the week on a real low point.

Money is continuing to pour into US government bonds tonight, driving the yield (or interest rate) to fresh record lows.

10-year Treasury bills are now yielding just 1.12% - a remarkably low interest rate that flashes danger signs. If investors are buying bond at that level, they’re desperate to preserve capital and worried about a recession.

The US stock market is now over 13% below its record highs, set just last week(!).

That’s officially a correction. And if the markets keep falling at their current rate, it’ll be a full-blown bear market - defined as a 20% decline.

Michael Every, senior strategist at Rabobank, thinks its a logical risk.

“We are now past a mere 10% technical correction and seem to be heading for a bear market, which is only logical when one considers the global backdrop.

We really can’t blame Jerome Powell for trying to reassure the markets with his statement tonight.

But the reality is that central banks are somewhat powerless in the face of a virulent pandemic.

Indeed, earlier today another senior US central banker dampened hopes that interest rates might be slashed in response to the Covid-19 crisis.

St. Louis Federal Reserve president James Bullard told the Arkansas chamber of commerce that a rate cut is possible if the situation deteriorate, but not as nailed on as markets think.

He said:

“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 also expressed optimism that Covid-19 will be brought under control, helping markets to recover.

Here’s confirmation that Britain’s stock market just suffered its third-worst week since 1984, from Sky’s Ed Conway.

The coronavirus will have a massive impact on the world economy, affecting techology, transport, retail and telecoms as well as the market.

Here’s our round-up of what’s happening, and what could happen next:

With two hours to go until the closing bell, Wall Street is still deep in the red.

Unless there’s a dramatic and frankly implausible turnaround, the New York market will post its worst week since October 2008. And the Dow could yet post another 1,000-point slump.

Here’s the damage right now:

• Dow: down 924 points or 3.5% at 24,842
• S&P 500: down 78 points or 2.62% at 2,900
• Nasdaq: down 168 points or 2% at 8,397

Vanguard, the asset management giant, appears to have had some technical issues today:

Presumably a lot of Vanguard’s 30 million investors have been checking how much this week’s turmoil has cost them.

Some will have been trying to cash out, while some brave souls will have been buying. We’ll soon know which was the right strategy....

German airline group Lufthansa has just announced it is cutting flight capacity, due to the Covid-19 crisis.

It plans to cut short- and medium-haul flights by up to 25%, and will also drop some long-haul flights too.

Lufthansa also warned that it cannot assess the impact of coronavirus on its profits - echoing similar comments from British Airway’s parent company IAG this morning.

Stock brokers AJ Bell have very helpfully worked out the biggest fallers on the London stock market this week.

And it’s no surprise that holiday firms TUI tops the list, with several airlines close behind, due to concerns that tough travel restrictions will be imposed (and that consumers will shun foreign holidays anyway).

Here are the stocks you really didn’t want to own this week, across the blue-chip FTSE 100 and smaller

FTSE 350 BIGGEST LOSERS ON THE WEEK

• TUI -30%
• Playtech -28%
• EasyJet -27%
• SIG -27%
• Premier Oil -24%
• International Consolidated Airlines -24%
• SSP -24%
• Jupiter Fund Management -23%
• William Hill -23%
• Wizz Air -23%

The FTSE 250 index of medium-sized UK companies also had a thoroughly dire week.

It fell by 2.29% today, meaning it has lost 11% of its value since Monday morning (just like its big sibling, the Footsie).

Reuters has calculated that the coronavirus panic has now wiped almost $6 trillion off global markets this week, thanks to the latest losses in Wall Street and Europe.

That’s based on the MSCI All-Country World Index, a broad measure of global equities.

Here’s their take:

The rout showed no signs of slowing as Europe’s main markets slumped 3-5% and the ongoing dive for safety sent yields on U.S. government bonds, widely seen as the world’s most secure asset, to fresh record lows.

Hopes that the epidemic which started in China would be over in months and that economic activity would quickly return to normal have been shattered this week as the number of international cases spiralled.

Bets are now that the Federal Reserve will cut U.S. interest rates as soon as next month and other major central banks will follow to try and nurse economies through the troubles and stave off a global recession.

“The volatility isn’t as surprising as the fact that it took so long to rear its head. However, the recent swings indicate the complacency that appears to have settled over markets during the earlier stages of the outbreak has been dislodged,” said Paras Anand, CIO, Asia Pacific at Fidelity International.

Here’s a chart showing how the FTSE 100 slumped by 11% this week, its worst run since autumn 2008 when the financial sector was on the brink.

As you can see, it fell sharply on Monday - losing 3.5%, after Italy reported a shock jump in coronavirus cases. It followed this with a 1.9% drop on Tuesday, as more cases were reported globally.

Wednesday provided some stabilisation. But fears of a global pandemic, triggering a world recession, triggered yesterday’s 3.5% tumble -- dragging the Footsie into a correction.

With Wall Street plunging again last night, today only saw more pain, taking total losses on the blue-chip index to over 800 points, or more than £200bn.

This chart of the FTSE 100 over the last five years gives some sense of the scale of this week’s rout:

European stock markets have provisionally closed with a 3.8% slump.

We’re just waiting for the final numbers on the FTSE 100 now (it’s gone into a closing auction, which could take a little while).

Precious metals, such as gold, are falling sharply.

Gold is meant to provide protection in times of crisis -- but it appears that some investors are selling their bullion to cover losses on other financial positions.

The pound is also falling, down over a cent against the US dollar at $1.276.

That’s its lowest level since last October, when Boris Johnson was renegotiating Britain’s withdrawal agreement from the EU.

Reuters is reporting that traders are ditching sterling in favour of safer currencies such as the Japanese yen, the Swiss franc, and the US dollar.

Jonas Goltermann of Capital Economics predicts that the US central bank could be forced to slash interest rates, if the coronavirus epidemic worsens:

The S&P 500’s 14% plunge this week is the fastest such correction on record; the VIX index is now at its highest level since the euro-zone crisis in 2012; and the 10-year US Treasury yield has fallen to a record low.

These moves may force policymakers to respond whether they want to or not.

The London stock market is staggering towards the sanctuary of the weekend, after another torrid session.

Indeed, it’s been a thoroughly awful week in the City, wiping more than 10% off blue-chip stocks.

Here’s David Madden of CMC Markets on the “brutal” selloff:

Equity markets in Europe have gone from bad to worse to awful as the selling pressure has gained momentum all week. What started out as a tumble on Monday has turned has turned into panic selling as traders are terrified about the possibility of Europe undergoing an economic slowdown or a possible recession because of the coronavirus. The fear of the unknown is causing traders to lose their nerve and just cut and run as far as stocks are concerned.

The airline sector has endured a brutal sell-off this week as dealers took the view that travel would be greatly diminished on account of the coronavirus taking hold in Europe. It has been non-stop for the aviation industry as short-sellers stepped up their activity. Dealers’ fears were confirmed today when, BA’s owner International Consolidated Airlines Group, warned that demand will be negatively impacted, and that it will be hard to make a profit projection. Finn Air warned on profits on account of the health emergency, while easyJet said that flights will be cancelled.

Bloomberg’s Joe Wiesenthal has spotted something interesting....

Larry Kudlow, Trump’s national economic council director, was doing his best to calm the markets, arguing the fall has gone too far.

But he has a big problem here: Donald Trump.

Usually presidents avoid taking credit for rises in the markets because they realize they know events beyond their control can wipe out those gains. Trump, however, has boasted time and again about how he has driven recent rallies in the markets. As criticism mounts about his handling of the outbreak, he runs the risk of owning the fall as well.

Despite Larry Kudlow’s best efforts, the Dow Jones industrial average is still DEEP in the red - currently down over 900 points (3.5%).

This tweet from Bloomberg’s Michael McDonough shows how the US stock market turned south in recent days:

Sky News’s Ed Conway points out how historic this week’s slump is:

The S&P 500, which give a broader picture of the US stock market, is having a torrid day - down another 3.5% right now.

That takes the index deeper into correction territory, inflicting further heavy losses on investors.

At 2,869 points, the S&P 500 is on track for its lowest close since last August.

Nearly every stock on the Dow is down, many heavily so.

Major consumer-focused companies are among the top fallers, including Coca Cola (-5%), Procter & Gamble (-5%) and Johnson & Johnson (-4.8%).

European stock markets are falling further, as traders watch the slump on Wall Street with alarm.

In London, the FTSE 100 index has plunged by another 4.3%, or 290 points. That takes it down to 6506 points -- almost 900 points down this week.

This puts the Footsie on track for its lowest close since July 2016, with one hour’s trading to go.

Holiday operator TUI is the top faller, down 9%.

This is now the seventh day of big losses on Wall Street, and the sell-off is accelerating.

Heavy selling has pushing the Dow below the 25,000-point mark for the first time since last June.

The index is now down 922 points, or 3.5% -- as fears of a Covid-19 pandemic and a global recession hit stocks.

Apple is leading the Dow fallers, down 5.4%, followed by JP Morgan (-4%) and Procter & Gamble (-3.9%).

Today’s losses have pushed the Dow Jones industrial average to its lowest level since last June, as this chart shows:

Just in: UK travel retailer On The Beach has warned it won’t achieve market expectations this financial year, due to the coronavirus.

It blames a “small but noticeable” drop in demand for summer holidays, saying:

The Group experienced a small but noticeable reduction in demand for Summer 2020 travel following the early reports of COVID-19 cases in early February. The reduction in demand has accelerated significantly following the increase in COVID-19 cases in Europe, particularly the spread of the virus to Tenerife.

Whilst this reduction in demand has led to a natural reduction in marketing spend, the Board does not now expect the Group to achieve payback in the current financial year on its previously outlined strategic marketing investment.

With less than 10 minutes until Wall Street opens, the future market is predicting fresh heavy falls.

The Dow is currently priced to fall around 750 points, or another 3%.

We’ve also learned today that US personal incomes rose in January, but spending growth slowed.

Associated Press reports:

Americans pulled back on their spending in January, even as their incomes surged, a sign the economy was growing modestly before the threat of coronavirus arose.

The Commerce Department said Friday that consumer spending increased 0.2% last month, down from 0.4% in December and the smallest gain since October.

Incomes, however, rose 0.6%, the biggest rise in nearly a year, spurred by bigger paychecks and an increase in Social Security benefits stemming from a cost of living adjustment.

Canada’s economy barely grew in the last quarter of 2019, fresh data shows.

Canadian GDP increased by just 0.1% in October-December, which highlights that the world economy was already weak, before the coronavirus struck.

We already knew that the UK and Germany both stagnated during the quarter, while the French, Italian and Japanese economies shrank. The US grew by around 0.5%.

There’s no sign that this week’s rout is over.

The world’s stock markets are either trading sharply lower (Europe), closed deep in the red (Asia-Pacific), or waiting nervously to open (US)

Back in the City, the FTSE 100 is currently down 3% - or 204 points - at 6593 points.

That’s up from this morning’s lowest points, but still another very hefty loss.

It takes the index back to its December 2018 lows, and means it’s down over 10% this week.

But shares in jet engine maker Rolls-Royce are still up, around 6%, after it told reporters that its supply chain had not been disrupted by the coronavirus.

CEO Warren East says:

Building on the strength of our performance into the end of 2019, we are looking forward to 2020 with some degree of conviction and confidence.

Not many other companies can say that today.

US government bonds have hit fresh records today, as traders continue to sell shares and pile into less risky assets.

This has pushed the yield, or interest rate, on 10-year Treasury bills below 1.2% - a record low.

That would typically signal that investors are anticipating very weak growth, but also shows they’re desperate to put their money somewhere safe.

Wall Street is expected to fall again when trading begins in two hours.

The Dow Jones industrial average is currently down 286 points in the futures market, or slightly over 1%.

It has already lost nearly 2,200 points this week, taking the index down to 25,766 last night.

There’s so much uncertainty today, so we could see plenty of volatility. It’s already the worst week for US stocks since the financial crisis.

Palexpo have now confirmed that the Motor Show has been cancelled altogether (not merely postponed, as first thought).

They are citing the legal principle of ‘force majeure’ -- unforeseeable circumstances that prevent someone from fulfilling a contract.

Cancelling the motor show will cost the Geneva economy between €200m and €250m of lost spending, they say.

It also appears that exhibitors will not be compensated, with Palexpo citing Switzerland’s ban on large gatherings.

Workers at the Palexpo exhibition centre in Geneva had been working hard to get the motor show ready for next week’s opening - but have now downed tools.

Here’s the scene:

In other news, three former Barclays bankers accused of funnelling secret fees to Qatar in exchange for emergency funding at the height of the 2008 financial crisis have been found not guilty of fraud.

More here:

Reuters are reporting that the Geneva motor show will been cancelled, as we expected, following the ban on large gatherings in Switzerland.

Here’s the story:

The organisers of the Geneva car show, Palexpo, have informed carmakers that the international auto show has been called off due to coronavirus concerns, three people familiar with the matter told Reuters.

A spokeswoman for Palexpo declined to comment.

After two and a half hours of trading, European stock markets are still deep in the red.

Fears of a global recession remain elevated. The main indices are all down over 3%, meaning we’re still looking at the worst week since the financial crisis of 2008.

Britain’s FTSE 100 is still sharply lower too, although a little higher than its 3.5-year low struck this morning.

Neil MacKinnon, global macro strategist at VTB Capital, predicts that markets will remain volatile until there is some good news on Covid-19.

Equity markets have finally caught up with what the bond markets have been signalling which is the clear threat of global recession as the coronavirus spreads and results in further disruption of supply chains, reductions in demand out output.

Until there is a vaccine, the coronavirus will spread and market volatility we persist. US equities have made a 10% correction and it can easily end up being a 20%+ correction or “crash”. The US 10 year Treasury yield has now fallen to a record low and further declines are likely.

Helal Miah, Investment Research Analyst at The Share Centre, argues that investors should hunker down:

“With the markets already down by 11% over a week, those who haven’t already sold have obviously made losses and need to reconsider whether selling now is to risk missing out from a future recovery. A recovery will come but it may not necessarily be V shaped but more likely a U shape since the virus in the West is still spreading and we do not know the full economic fallout. However, the longer it takes to get over this crisis the more likely we are to see certain economies who are already weak, go into recession, I’m thinking Germany and Italy as most likely. Monetary and fiscal stimulus will help with financial and economic confidence but it may do little for people who are afraid to catch a virus and avoid going out and spending money.

“We take the view that from here, the best course of action may be for investors to sit tight and do nothing.”

Germany’s central bank governor has warned that Europe’s largest economy could miss its growth forecasts due to the coronavirus.

Bundesbank President Jens Weidmann said this morning:

“All in all, economic growth this year could come in slightly lower than our experts estimated in December.”

Those forecasts are already low - with the Bundesbank expecting just 0.6% growth in 2020.

Germany’s economy stagnated in the fourth quarter of 2019. A significant economic shock (as investors are fearing) would surely push Germany even closer to recession, or into one.

And here’s my colleague Jasper Jolly’s story:

It certainly looks like the Geneva Motor Show, which was due to run from 5-15 March, must be either postponed or cancelled:

The FTSE 100’s latest tumble comes as UK officials announced they have now detected 19 cases of Covid-19, including the first cases in Wales.

Our main coronavirus liveblog has all the details:

Newflash: Switzerland has just banned large events expected to draw more than 1,000 people - a move that surely means the Geneva Motor Show will be cancelled.

The Swiss cabinet says:

“In view of the current situation and the spread of the coronavirus, the Federal Council has categorised the situation in Switzerland as ‘special’ in terms of the Epidemics Act

“Large-scale events involving more than 1,000 people are to be banned. The ban comes into immediate effect and will apply at least until 15 March.”

Oil prices are also sliding again, on fears of a global recession.

This has sent Brent crude below $50 per barrel for the first time in over a year.

Virtually every company on the FTSE 100 is down this morning, with IAG now shedding almost 10%.

The tech sector (-4.4%), miners (-4.3%), utilities (-4.25%) and consumer firms (-4.2%) are leading the rout.

Only Rolls-Royce is defying the slump, after posting a 25% jump in underlying profits this morning.

Bloomberg has calculated that six trillion dollars has been wiped off global markets since January 20th.

That was the moment when the first human-to-human transmission of coronavirus was confirmed by Chinese authorities.

Finland’s national airline has added to the gloom, by warning that its profits will be hit hard by the coronavirus.

Finnair has also scrapped its capacity growth target for this year, and hopes to slash €50m off its costs -- which could include temporary layoffs.

Chief Executive Topi Manner said:

“As the coronavirus situation has entered a new phase with outbreaks in several new countries, we will take appropriate measures to adapt our costs, operations and resources to better match our revenues.”