There are pensive faces on Wall Street tonight, as the market turmoil shows no sign of ending:

The S&P 500 index narrowly avoided falling into a Bear Market tonight.

It still had a rough day, sliding by 4.9% to a one-year low of 2,741 points -- that’s 19% off its peak.

Some analysts believe the index will suffer further losses, as CNBC reports:

Goldman Sachs chief equity analyst David Kostin said Wednesday he expects the S&P 500 to hit a low of 2,450, more than 10% below its current closing level of 2,741. Kostin based his new view on a reduced expectation for S&P 500 earnings.

“I’m thinking maybe something like 2,400,” said Sam Stovall, chief investment strategist at CFRA. “If we end up with no earnings growth in 2020, we end up with a 15 multiple...that brings us to 2,460.”

Meanwhile in Europe......

Investors must feel like they’ve been chewed by a bear, given the scale of the sell-off in the last few weeks.

Here’s some reaction to the Dow Jones’s lurch into a bear market tonight:

Michael Corbat, the boss of Citi, has claimed that we’re not facing a financial crisis.

Speaking at a meeting of bank bosses with Donald Trump at the White House, he insisted:

“This is not a financial crisis. The banks and the financial system are in strong shape and we are here to help.”

Boeing had a shocking day, and was a key reason the Dow slumped into a bear market tonight.

The aircraft maker’s shares fell 18%, the worst performance on the index by some distance, after it announced it would fully tap a $13.8bn credit line, after suffering a jump in cancelled orders.

Chemicals maker Dow Inc slumped 10%, as fears of a global downturn refuse to abate.

Tech firms United Utilities (-9.9%) and Cisco (-7.5%) were also top fallers, along with American Express (-7.6%) and Procter & Gamble (-7.5%) - who will suffer if more Americans self-quarantine or simply shun the shops.

The Dow has fallen to its lowest point since January 2019.

That means more than a year of gains has been wiped out in under a month.

Newsflash: There are reports that president Trump will give a statement tonight on the coronavirus crisis, addressing the measures Americans should take:

America’s tech-focused Nasdaq index is also on the verge of a bear market tonight:

Earlier today, Swiss bank UBS warned that global stock markets could fall another 20%, if Covid-19 becomes a full-blown pandemic.

They estimate that shares only have another 5% to fall in an ‘intermediate’ scenario, while they could rally if the virus is contained.

Analyst Arend Kapteyn says:

In our new baseline, we expect global growth in 2020 to fall to 2.3% (was 2.9%) and eight countries to enter recession. However, we also consider two further escalation steps: an intermediate scenario where infections increase by a factor 1000 and a full pandemic scenario.

In the former, global growth falls to 1.6%YoY (16 out of 28countries in recession) and in the pandemic scenario to 0.8% (18/28 in recession).

So for equities, that means -5% and -20% losses in intermediate and pandemic scenarios, respectively.

If the virus can be contained, global equities should make new stimulus-powered highs by end-2020. North Asia and the US will likely lead gains, while Europe and the rest of EM lag.

In the intermediate scenario, we still see a recovery in H2, but not enough to keep returns positive for the year. The pandemic scenario sees a major step lower in returns as growth slips with little additional stimulus at policymakers’ disposal.

More bad news for investors: the S&P 500 index is also heading into a bear market tonight.

Over in São Paulo, Brazil’s Bovespa Index has slumped by more than 10% today.

This triggered a circuit breaker, forcing trading to suspended for 30 minutes.

The energy, consumer cyclical and mining sectors are leading the sell-off:

With an hour’s trading to go, the Dow is sliding even further... down 6%, or 1504 points, at 23,513.

That would certainly put the index into a bear market, if it closes there at 4pm New York time, or 8pm UK time.

Democratic politicians are working on their own stimulus package, according to US political news site The Hill.

The House will vote Thursday on sweeping legislation to address the economic fallout of the coronavirus, House Majority Leader Steny Hoyer (D-Md.) said Wednesday.

Democrats are still ironing out the details of the stimulus package, including its size, but Hoyer put the price tag “in the billions.” Party leaders are expected to brief members of the caucus on the specifics on Wednesday at 4 p.m.

“It’s being written now, so we’ll see how expansive it is,” he said. “We’re looking at a range of issues that are the economic consequences, as opposed to the direct health consequences” of the epidemic.

Anything passed by the House (America’s lower chamber) would then go up to the Senate, which is controlled by the Republicans.

However, there’s a problem.... both chambers are scheduled to hold a recess next week. So any economic relief legislation might not even reached Donald Trump’s desk until later in March.

U.S. Treasury Secretary Steven Mnuchin dampened hopes of a rapid, major stimulus package earlier today -- another reason shares are under pressure.

Mnuchin told lawmakers on Capitol Hill that a major economic stimulus package wouldn’t get through Congress quickly. So, it makes sense to start with a smaller measure designed to help small businesses and workers grappling with the coronavirus outbreak.

Mnuchin told House Appropriations subcommittee hearing.

“The president very much wants to consider a stimulus bill, whether it is through a payroll tax or otherwise.

We realize that may not get done this week, so we want to get done what we can do this week and we will come back.”

Today’s slump has more than wiped out Tuesday’s gains, which followed Monday’s crash (the worst since 2008)

Today’s rout on Wall Street is being driven by a handful of coronavirus fears.

1) WHO’s decision to declare Covid-19 a pandemic is fuelling fears of a global recession

2) Doubts are building about whether the White House will deliver a stimulus package. Donald Trump’s pledge of a major package, including payroll tax cuts, seems illusive.

AFP explains:

Senate Finance Committee Chairman Chuck Grassley -- a Republican like Trump -- said there is no bipartisan support for cutting the taxes automatically taken out of Americans’ paychecks.

“We’re in the process of analyzing the economic impact of the virus so right now I wouldn’t say it’s necessary,” he told Bloomberg.

Grassley’s spokesman later said on Twitter that the comment was “widely misinterpreted” and that a payroll tax cut remains an option.

The S&P 500 index is also being kicked around again, down over 4%.

Investors are clearly anxious about the White House’s resolve to tackle the coronavirus.....

Most UK stocks fell today, some heavily, despite the Bank of England’s emergency rate cut, and the government’s coronavirus stimulus programme.

Just 18 members of the FTSE 100 rose, while 80 fell. Some of the usual suspects drove the rout, including airlines IAG and easyJet, and cruise operator Carnival.

Stockbroking firm AJ Bell has warned that it doesn’t know how much damage the coronavirus outbreak will have on its business.

It has also pointed out that today’s UK interest rate cut will dent its revenues and profits (it will make less money from customer cash reserves).

AJ Bell told shareholders:

At present, given the extent of current market uncertainty, it is difficult to predict the exact impact of these events on trading performance.

This will largely depend upon the length of time for which COVID-19 continues, stock markets remain at or below current levels, base rate remains at 0.25% and the other related measures remain in place.

European stock markets are sinking into the red in late trading, as investors watch stocks slide on Wall Street.

The FTSE 100 is now down another 75 points, or 1.25%, to 5885 points -- just below Monday’s four-year low. Once again, the Footsie couldn’t hold onto its early morning rally.

Big fallers include budget airline easyJet (-7.8%) and conference group Informa (-5%), as fears of a global recession ripple through trading floors again.

A Barclays banker in London has tested positive for coronavirus.

The employee was based at the 5 North Colonnade offices in Canary Wharf, which houses Barclays’ investment bank and is about a 5 minute walk from its headquarters.

The worker has been in self-quarantine since 9 March after learning they had been exposed to the virus.

Barclays is doing a deep-clean of their desk and surrounding areas, while colleagues and clients who were in close contact with the employee were told to self-isolate.

However, the Guardian understands that the office has not been evacuated.

Barclays issued a statement, saying:

We can confirm that a member of our staff based in our London office, 5 North Colonnade, has tested as positive for COVID-19 today. The health and safety of our staff, customers and clients is our top priority and we are providing every support to the member of staff and their family.

We are working closely with Public Health England (PHE) and other local authorities, and are following their advice. The colleague has been in self-quarantine since 9 March, following notification of their potential exposure to the virus.

We are undertaking the recommended deep clean and disinfection of their workspace and the surrounding area where the colleague is based, in accordance with PHE guidelines, and are undertaking additional, ongoing deep-cleaning as a precautionary measure.

We have also identified colleagues and clients who had close contact with our affected colleague, and are advising those colleagues to self-quarantine in line with PHE guidance.

At this stage, we are operating business as usual; we continue to monitor the situation closely and will take further action as appropriate.

It comes just days after a trader at Barclays’ New York offices tested positive for the coronavirus in Manhattan. They have been in self-quarantine since 3 March.

The Dow Jones industrial average is now down by 1,000 points. The Nasdaq has lost 3% and the S&P 500 has lost 3.3%.

A quick look at the S&P 500’s biggest fallers suggests that it’s the US energy sector that is taking much of the pummelling, alongside consumer-facing companies.

The US oil sector was one of the main targets of Russia, which thinks a price fall could knock out American shale companies (giving Russia more market share). And consumer spending for many companies will clearly take a hit if consumers are locked at home.

Another notable mover: the mighty aircraft manufacturer Boeing is down by 9%, after saying it will draw down the full amount on a $13.8bn loan. It has already been under pressure because of the 737 Max crisis, so extra financial troubles could spell trouble.

A bit more detail on Steve Mnuchin’s comments today, in a briefing with reporters.

The main thing he has mentioned so far is that hundreds of billions of dollars can be put into the US economy through deferred tax payments.

The impact of the virus was initially underestimated across the the world, he said. The US Treasury is coordinating internationally.

Does that mean that the US will match the response of countries like the UK with a fiscal expansion?

Just in: US regulators are relaxing regulations that have forced some airlines to run almost empty flights.

The Federal Aviation Administration, part of the US Department of Transport, has announced it will waive use-it-or-lose-it rules that mean airlines must run flights to avoid losing slots at busy airports. It said:

Under normal circumstances, airlines can lose their slots at congested airports if they don’t use them at least 80 % of the time.

The FAA is waiving the 80%-use requirement through 31 May 2020 for US and foreign airlines that have affected flights. In doing so, the FAA expects that US carriers will be accommodated with reciprocal relief by foreign authorities at airports in their countries, and may determine not to grant a waiver to a foreign carrier whose home jurisdiction does not reciprocate.

The main airports affected are New York’s John F. Kennedy (JFK) and LaGuardia airports, as well as Washington’s Ronald Reagan airport Chicago O’Hare, Newark Liberty, Los Angeles International (LAX), and San Francisco International will also have rules relaxed.

Here’s some reaction to the economic aspects of the Rishi Sunak’s budget.

Sarah Carlson, a senior vice president at Moody’s, the influential ratings agency, said:

The fiscal stimulus announced by chancellor Rishi Sunak in today’s budget should help to support economic growth given the economic headwinds created by Covid-19, but the resulting deterioration in the UK’s fiscal position highlights the sovereign’s ongoing difficulty in meaningfully reducing the UK’s gross general government debt burden from its current high levels.

John Hawksworth, chief economist at PwC, said:

The inevitable implication of higher public spending without net tax increases is higher public borrowing: the average annual budget deficit over the four years to 2023/24 is now projected by the OBR to be around 2.5% of GDP, as compared to around 1.5% of GDP previously. The implied increase in annual borrowing of around 1% of GDP, or over £20bn a year, is significant.

Public borrowing looks set to jump to about 3% of GDP this year, according to Samuel Tombs, chief UK economist at Pantheon Macroeconomics. He said:

Chancellor Sunak’s “temporary, timely and targeted” fiscal response to the Covid-19 outbreak won’t prevent GDP from falling sharply over the next couple of months, but together with the BoE’s response earlier today, it greatly improves the chances that the UK economy rebounds in the second half of this year.

The number of confirmed cases of coronavirus in the UK has risen to 456, up from 373 a day ago, according to the Department of Health.

You can follow the spread of the infection here on our main coronavirus live blog:

US stock markets jumped last night with investors hoping for President Donald Trump to unleash a major fiscal response to the coronavirus outbreak. They now appear to be expressing their disappointment at the lack of action.

Even with central banks the world over bringing out their monetary bazookas, the hit to the economy means that it’s fiscal spending that is in focus.

There are some snaps coming through on the wires from US treasury secretary Steven Mnuchin: he says that Trump is focused on a broad strategy for a stimulus package.

Sunak has just finished his budget – after one hour and three minutes.

Sterling has ended up after the budget... almost exactly where it was before. It’s a gain of 0.25% for the day to $1.2940.

UK government bond yields have actually fallen – not the response that you would usually expect after a relatively big fiscal expansion. The 10-year gilt is at 0.26%, having hovered around 0.3% as Sunak started speaking. (Bond yields fall as prices rise when investors buy more debt.)

There is still a lot more to come on the political response which you can follow here:

Lufthansa has just announced thousands of flight cancellations in response to the coronavirus, covering the period from 29 March to 24 April.

For all passenger airlines in the Group, a total of 23,000 flights must be cancelled. Further cancellations are expected in the coming weeks. Flight schedule adjustments for the period after 25 April will be made at a later date.

The German flag-carrier had already said it would cancel as many as half its flights.

Sterling is now flat for the day against the dollar – possibly a reaction to a budget that looks pretty expansionary on the fiscal front.

A pound now buys $1.292 against the US dollar, a gain of 0.07%.

Sunak says he will limit entrepreneurs’ relief, the heavily criticised tax break given to people who sell their businesses.

The relief was “expensive [...] ineffective and [...] unfair”, Sunak says.

The lifetime limit on how much relief sellers can claim will fall from £10m to £1m.

The £6bn raised over the next five years from the change will be spent on tax reliefs on research and development, buying buildings, and increasing employment allowance.

While Sunak has been speaking the market selloff has accelerated.

The FTSE 100 is now down by 0.3%. S&P 500 futures indicate Wall Street could fall by 3.3% in 25 mins when markets open. Dow Jones industrial average futures are down by 3.1%.

CBI lead economist Alpesh Paleja notes that the Office for Budget Responsibility’s forecasts need to be taken with a large dose of salt.

The government will boost spending by £175bn over the next five years, increasing productivity, Sunak says.

Growth will be 0.5 percentage points higher than it would have been without the spending, he says, citing the Office for Budget Responsibility’s forecasts.

Pre-coronavirus the OBR had forecast GDP growth of 1.1% in 2020, 1.8% in 2021, 1.5% in 2022, 1.3% in 2023, and 1.4% in 2024.

Sunak says that the coronavirus response has been “clearly and closely coordinated with the Bank of England”.

He pledges to use fiscal action with a three-point plan:

1. Whatever extra resources the NHS needs, it will get.
2. If people fall ill statutory sick pay will be available for anyone asked to self-isolate – even if they haven’t tested positive. He will also create a £500m hardship fund for local authorities.
3. Businesses with fewer than 250 employees will be refunded the costs of providing statutory sick pay.
   

Sterling is up by 0.2% for the day as Sunak says there will be supply-side and demand-side effects from coronavirus.

But he adds that it will be temporary.

Renowned emerging markets investor Mark Mobius has noted that not all of the global selloff has been warranted.

Speaking on Bloomberg television, he said that there are “incredible opportunities and bargains” in emerging markets and gold, the traditional safe-haven asset. The chaos on oil markets will hurt oil companies and exporters, but it could also cushion the blow for consumers. He said:

This oil price decline is good for India, it’s good for China, it’s good for all these oil-importing countries.

There are “terrific bargains in Turkey”, while Indonesia will also benefit from lower oil prices, he added. But there are still big risks out there (not least given potential disruption to financial markets). It is “time to buy like the way porcupines make love”, Mobius said. His interviewer helpfully chimed in with the answer: “Carefully”.

Hello, Jasper Jolly here. I’ll be focusing on global markets as the coronavirus turmoil continues, so head to the budget live blog for a UK focus (although I’m sure a bit of budget reaction will sneak in here as well).

That Goldman Sachs note from a few minutes ago does not appear to have helped global markets: US stock market futures have extended their declines – in spite of the Bank of England’s intervention today.

Futures for the S&P 500 are down by 2.8%, and Dow Jones industrial average futures are down by 2.6%.

Right, I’m off to give Andy Sparrow a hand covering the UK budget.

It should include a raft of measures to protect the UK economy from the coronavirus threat, plus a big increase in infrastructure spending - and new growth and borrowing forecasts.

Here’s the Budget liveblog:

Jasper Jolly has the controls....

The early rally in Europe’s stock markets is fizzling out, again, as traders brace for another bumpy session on Wall Street.

The FTSE 100 is now up just 12 points, or 0.2%, at 5970 -- close to a four-year low. Italy’s FTME MIB has dipped into the red, while the Stoxx 6o0 is only up 0.5%.

Stocks are expected to fall on New York - having rallied last night on hopes of a stimulus package.

Investors are disappointed that president Trump hasn’t delivered any details of the measures he mentioned yesterday to protect the economy, such as a payroll tax cut.

Goldman Sach’s warning that the bull market is on borrowed time isn’t helping the mood either.

The Dow is being called 800 points down, a loss of almost 3%, having jumped by 1,167 points (nearly 5%) yesterday.

Italy’s prime minister has tweeted that his cabinet have approved plans for a €25bn package of “extraordinary” measures.

Giuseppe Conte also pledged that “We are doing everything that is necessary, with every tool available. Together we’re going to make it”.

But is €25bn enough? Italy’s death toll is rising alarmingly each day (from 461 to 631 yesterday), and its streets are deserted as citizens are locked down. A deep recession and a tragic social cost seems inevitable.

Here’s a video clip of the key points from Mark Carney’s press conference:

UK bank HSBC has announced a package of support for customers as they tackle the financial impact of Covid-19.

For personal bank customers, it could let them defer mortgage payments, and/or switch to an interest-only mortgage. It is also waiving charges on its fixed-rate saving account, to let customers access cash if needed. HSBC is also offering to temporarily increase credit card and overdraft limits.

For business customers, the Bank has “allocated £5bn to help businesses that need support” (from its existing SME lending scheme), and could also give repayments holidays or review loans. That could free up cash, to help companies whose sales take a big hit this year.

Here’s a video clip of BoE governor Mark Carney pledging that the UK financial system is strong enough to help Britain cope with the coronavirus:

And here’s more reaction, first from Allianz’s chief economic advisor Mohamed El-Erian:

Here’s Sky’s Ed Conway:

Plus Julianna Tatelbaum of CNBC:

City economists are very concerned that the UK economy stagnated in the last quarter.

Howard Archer of EY Item Club says this morning’s data are “very disappointing” -- showing Britain’s economy was weak before the Covid-19 outbreak began.

Sam Tombs of Pantheon Economics says the UK economy is weak enough to justify an interest rate cut anyway!

Martin Lewis, founder of MoneySavingExpert.com, has described the Bank of England’s move as “extraordinary, unprecedented economic shock therapy”.

Such as dramatic rate cut shows there are “seismic coronavirus tremors running through the nation’s finances”, so the Bank is trying to encourage spending and keep money flowing through the system.

Lewis adds:

“The financial winners are those on variable and tracker rate mortgages. They will see cost cuts of – very roughly – £25 per month per £100,000 of mortgage. And while it’ll take a week or two to factor through, it’s likely we’ll see the rate of new mortgage fixes drop too – meaning it will then be a very cheap time to remortgage.

“Most loans, credit cards and other debts will likely be unaffected or only minimally affected because the Bank’s interest rate only plays a small part in their rates.

“The losers are savers. Many who’ve worked hard to build up a nest egg will be holding their head in their hands at this news. Savings rates have already been plummeting this year, and this will massively increase the height of the roller coaster fall.

Back at the Bank of England, Mark Carney is insisting that the coronavirus crisis needn’t create a new financial crisis.

Q: Do we need co-ordinated action by the world’s governments, asks my colleague Richard Partington?

Carney replies that he was involved in the joint interest rate cuts of 2008 (when he was Bank of Canada governor).

Those measures were needed to “get to the weekend”, so G7 leaders could decide what steps to take, Carney says.

Q: Won’t savers suffer from today’s rate cut, asks the Daily Mail...

Carney replies that Daily Mail readers will understand that people’s lives, jobs, businesses need to be protected during the coronavirus crisis.

Q: But what if the economic shock of coronavirus isn’t temporary, as you believe?

Carney insists there is no reason for the economic damage to be as bad as 2008.

His successor, Andrew Bailey, also warns commercial banks that the BoE expects this morning’s measures to be passed on. Customers deserve to be treated fairly, he says, and we’re watching....n

Today’s GDP report shows clearly that Britain’s manufacturers have been struggling for months:

Britain’s economy was dragged back by a decline in its car sector in the last quarter.

The ONS says:

The services sector showed no growth in the three months to January 2020. The main drivers behind the weakening seen in services were the wholesale, retail and motor trade sector and the information and communication sector, which fell by 0.7% and 1.0%, respectively.

This fall was largely offset by increases in administrative and support services activities, and education, growing by 1.1% and 0.8%, respectively.

Q: If interest rates can be lower -- why didn’t you cut them there today, rather than only cutting to 0.25%?

Mark Carney repeats that today’s measures are a “big package” -- again citing the cut to the Countercyclical Capital Buffer which releases £190 billion of bank lending to businesses.

And he again hints at the Budget will include significant measures -- you’ll have to wait until the end of the day, or at least midday, for the full package.

Q: Might the Bank act again at its scheduled meeting later this month, and could you expand your QE (bond-buying) programme?

Mark Carney replies that quantitative easing is very much part of the Bank’s toolkit. Asset purchases could provide useful firepower if needed.

But today’s moves are a ‘big package’, he insists.

Reducing Britain’s ‘counter-cyclical buffer’ (meaning banks are allowed to hold less capital) will release a “huge amount” of extra lending.

Onto questions

Q: Are UK interest rates now as low as they can go?

No, Mark Carney replies. There is room for interest rates to be cut further, to just above zero.

Q: What evidence is there that Covid-19 is creating an economic shock in the UK?

Carney says there are some early signs -- China’s growth swinging from 5.5% growth to a likely contraction.

He also cites very early signs in the global PMI reports (surveys of purchasing managers).

In the financial crisis more than a decade ago, the financial sector was the “core of the problem”, says Mark Carney.

Now it can be now it can be part of the solution

Carney says the banks have been transformed in the last decade -- to make them strong enough to survive an economic shock. This was prudence with a purpose, resilience with a reason.

The Bank of England is about to hold a press conference to discuss today’s shock rate cut. You can watch it live here:

Here’s our economics editor Larry Elliott’s rapid analysis on today’s rate cut:

Today’s shock rate cut is the first unscheduled Bank of England move since the financial crisis, and the biggest as well:

The British Chambers of Commerce has cheered the BoE’s move -- but cautioned that commercial banks need to pass these measures onto small firms.

BCC Director General Dr Adam Marshall says:

“Businesses will welcome the decisive action taken by the Bank of England to support the economy at this delicate moment.

“The Bank and UK financial institutions must now work together to ensure that these policy measures translate into real-world support for firms on the ground.

“We will want to see banks using new flexibilities to do everything they can to help businesses whose cash flow and prospects have been disrupted due to the impacts of Coronavirus.”

The pound initially plunged when the Bank’s rate cut was announced -- but has now clawed its way back to $1.29

Reaction to this morning’s emergency cut to UK interest rates to just 0.25% is pouring in.

Karen Ward, chief market strategist at J.P. Morgan Asset Management, says the Bank’s moves should help the economy -- but government spending would help more:

We believe targeted fiscal measures would prove more effective. Rent and wage subsidies and tax credits would give companies confidence in their ability to manage down their costs in line with their falling revenues. This will prevent a vicious cycle of demand weakness leading to job cuts and further demand weakness. In short, interest rate cuts will help, so long as they are playing the supporting act to pro-active government stimulus.

“For that reason all eyes are now on the Chancellor to see if he announces a big increase in spending in his Budget today. If he does this would be the first instance of a truly coordinated monetary and fiscal push. Investors may be comforted by the fact that policy makers are willing to deploy their full ammunition - moving a step closer to helicopter money.”

This chart shows how UK interest rates have been cut back to record lows this morning:

Here’s our news story on the Bank of England’s emergency move today:

UK interest rates are now at their lowest ever level again. They’ve only been 0.25% once before -- after the Brexit vote in 2016.

In an attempt to protect small UK companies, the Bank of England is creating a new “Term Funding Scheme”.

This will provide a “cost-effective source of funding” for small firms, says the BoE.

It effectively helps commercial banks to lower the interest rates on their loans, by borrowing cheaply from the Bank (‘at or very close to base rate’). It could pump up to £100bn of extra potential borrowing into the system.

The Bank says:

Experience from the Term Funding Scheme launched in 2016 suggests that the TFSME could provide in excess of £100 billion in term funding.