Another awful day on the stock markets as Coronavirus deaths and infections continue to climb.

• US stock markets have now erased all the gains they have made since Donald Trump’s inauguration
• Trump didn’t help - markets slumped again after his latest speech
• The Dow fell over 1,300 points - 6.29%
• The S&P 500 lost over 5%
• The Nasdaq lost 4.7%
• The oil price fell to an 18 year low
• US carmakers will close factories tomorrow
• In the UK the pound fell to a 35-year low against US dollar as the Bank of England warned of a potential crisis
• Deutsche Bank is warning we could be heading for the worst slowdown since World War 2

Over in Washington bailout discussions are underway. You can follow all the latest here:

We will be back on the business beat tomorrow. Thanks for reading, stay safe and wash your hands!

The US’s largest mall landlord, Simon Property Group, will close all of its retail properties starting 7pm local time today.

This decision comes after “extensive discussions with federal, state and local officials and in recognition of the need to address the spread of COVID-19,” the Indianapolis-based company said.

Simon Property owns more than 200 malls and outlet centers in the US and joins a growing list of retailers to shut up shop including Apple and Macy’s.

“The health and safety of our shoppers, retailers and employees is of paramount importance,” said David Simon, chief executive officer of Simon Property in a statement.

• The Dow is down over 2,000 points
• Oil has hit an 18-year low
• European stocks tumbled - again

If you want to watch a billionaire melting down, this CNBC interview with Bill Ackman, which I mentioned earlier, is now available. It’s quite something: “Hell is coming!” Let’s hope he’s wrong.

Negotiations are now underway to bail out the airlines. Delta announced today that it is going to cut 70% of its flights.

They have asked for $50bn which, according to our calculation, is just $5bn more than $45bn they have spent on share buybacks and executive pay over the last five years.

Bet they - and US taxpayers - wish they had sat on some of that cash.

Sara Nelson, president of the Association of Flight Attendants, has demanded that any US government bailout package come with “significant conditions” that would not allow companies to “enrich shareholders or pad executive bonuses”.

Nelson has outlined her plan on Twitter.

We won’t let this to look like the bank bailout of 2008, nor can you compare the two. The airline industry didn’t cause the pandemic and money should come with significant conditions to help workers and keep planes flying, not enrich shareholders or pad executive bonuses.

General Motors and Ford are closing all North America manufacturing plants until March 30. A similar announcement from Fiat Chrysler is expected soon.

We have been taking extraordinary precautions around the world to keep our plant environments safe and recent developments in North America make it clear this is the right thing to do now,” GM boss Mary Barra

Remember this?

Presidents usually avoid boasting about the stock market, aware that today’s gains can be wiped out by tomorrow’s events.

It’s a lesson Trump is learning the hard way. Covid-19 has now erased all the stock market gains of the Trump presidency.

After his last speech, markets fell so hard they were temporarily stopped. Now they are open again and still falling. The Dow is now down 9%.

America’s biggest companies are weighing in - calling on Congress to “act boldly” to limit the economic fallout from the pandemic.

The Business Roundtable, which speaks for dozens of major US companies including Apple, General Motors, JP Morgan Chase and WalMart, wants a suspension of global tariffs, a temporary halt to payrolls taxes and measures to support the supply chain.

The government actions necessary to address this crisis will have enormous costs,” the letter, signed by Walmart boss Doug McMillon, said. “However, failure to act boldly now will impose far greater costs to our country and our future.”

More gloom! Deutsche Bank has forecast a severe global recession will occur in the first half of 2020.

In a new report, it says aggregate demand has plunged in China in the current quarter, and will plunge in Europe and the US in April-June.

They warn:

The quarterly declines in GDP growth we anticipate substantially exceed anything previously recorded going back to at least World War II.

But... they also predict that governments will fight back:

The fiscal response could turn out to be huge, with serious discussion in the US of stimulus packages amounting to 6% of GDP on top of already significant automatic stabilizers. In Europe, the fiscal rules have been effectively suspended and leaders pledge to spend “whatever it takes”.

So, their new forecasts show a precipitous slump in growth, but then a recovery:

Here’s a chilling forecast -- 25 million jobs could be lost worldwide due to the Covid-19 crisis.

That’s according to the International Labour Organization (ILO), who fear the impact will be even worse than the 2008 financial crisis. But the impact could be lower-- if policymakers take decisive steps.

In its “low” scenario, the ILO estimates global unemployment would rise by 5.3m. But the “high” scenario shows it jumping by 24.7m worldwide, from 188m last year.

By comparison, the 2008-9 global financial crisis increased global unemployment by 22 million.

That ‘low’ scenario is based on governments protecting workers in the workplace, stimulating the economy and employment, and supporting jobs and incomes.

ILO Director-General Guy Ryder says:

This is no longer only a global health crisis, it is also a major labour market and economic crisis that is having a huge impact on people.

In 2008, the world presented a united front to address the consequences of the global financial crisis, and the worst was averted. We need that kind of leadership and resolve now.

Not even the prospect of a $1.2 trillion stimulus package could prevent the New York stock market from sliding.

Wall Street slumped roughly 5% as soon as the opening bell rang, wiping out most of yesterday’s rally.

• Dow: down 1,267 points or 6% at 19,970 points
• S&P 500: down 132 points or 5.24% at 2,396 points
• Nasdaq: down 304 points of 4% at 7,030.21 points

BoE governor Andrew Bailey has also fired two warning shots at the City -- don’t pay large bonuses and dividends if you take official help, and don’t you dare short UK assets during this crisis.

He’s told the BBC that firms should also hold off from laying off staff, before checking if the government can help.

Short-selling is a crucial part of some hedge-fund strategies. It’s not always malicious - a fund could short one retailer, for example, and buy shares in another whose prospects look brighter.

NEWSFLASH: The UK’s new top central banker has warned that Britain faces a national emergency (just three days into his new job).

Our economics editor Larry Elliott explains:

Andrew Bailey, the new governor of the Bank of England, has warned that Britain faces an economic emergency and that further measures will be needed to prevent widespread disruption turning into destruction.

Speaking in a conference call from a virtually deserted Threadneedle Street, Bailey said events had moved on rapidly in the week since the Bank cut interest rates and eased capital requirements on banks as part of a co-ordinated stimulus with Rishi Sunak’s budget.

“Those were big steps we and the government took a week ago. They were the right steps”, Bailey said.

“It is unquestionable, though, that things have moved on a lot in the ensuing period”

Bailey, who took over from Mark Carney at the start of the week, said one big and worrying development was the impact of the coronavirus crisis on large companies as well as the small and medium-sized businesses that were the focus of the joint Bank-Treasury action a week ago.

More here:

Sterling is continuing to slump - it’s now down almost 1.5 cents today at $1.191.

That’s the lowest since the post-Brexit vote flash crash in late 2016 - but really, we’re looking at the lowest point against the dollar in decades.

As the Financial Times puts it:

The UK currency has not consistently traded under $1.20 since the 1980s.....

“Everyone thought that Brexit was the big deal for sterling this year but …the currency has been completely overwhelmed by the coronavirus,” said Richard Benson, co-chief investment officer at Millennium Global Investments in London.

The pound has sunk below $1.20 against the US dollar, for the first time since last September.

Its currently down three-quarters of a cent today, at $1.1975.

Sterling has slumped since the coronavirus crisis began - it was trading over $1.30 in February, but is now heading towards levels last seen in the 2016 flash crash.

If you ignore that flash crash, the pound is approaching levels seen in the 1980s, against the dollar.

But its partly because investors are piling into the dollar. Against the euro, the pound is at its lowest since last August.

Government bond prices are weakening today, as investors sell up.

This is pushing the yield on UK, US, German and other European government debt up from their recent record lows - a sign that prices are dropping from their peaks.

Italy is not alone, although its moves are more dramatic (see earlier post).

One reason is that the huge stimulus packages being drawn up to fight the Covid-19 crisis will need paying for, with an avalanche of debt.

But it also suggests that investors are selling their safe-haven assets, perhaps to cover other losses or to satisfy redemption requests.

The FT has a good take:

Bond yields in the US and Europe rose to their highest levels in weeks as fund managers under pressure to return cash to investors were forced to dump their most liquid holdings, according to traders. Yields move in the opposite direction to prices.

“This is fire-selling of liquid assets by those who need to meet redemptions,” said Mike Riddell, a portfolio manager at Allianz Global Investors. “A lot of people need cash and they’re liquidating the only thing that they can.

UBS has slashed its forecast for China’s economic growth - warning that it could contract at an annual rate of 30% this quarter.

That’s because the mobility restrictions imposed to contain the virus have had a chilling impact on the economy, while also curbing infections.

UBS write:

Only 0.005% of China’s population is confirmed to be infected but, because of the near complete halt in activity for 4-6 weeks, we now expect Q1 growth to fall -31% QoQ annualized, and full year growth to come in as low as 1%YoY.

That revision moves our 2020 global growth forecast from 2.4% to 1.5%YoY, halfway towards our worst-case scenario. And many countries are now following China’s example.

So with “broad-based service sector shutdowns in many countries”, the impact on global growth will be worse then feared, they add.

Gosh! The European Central Bank has slapped down one of its own governing council members, Austria’s top central banker, after he suggested monetary policy was running low on gas.

In an interview with Austria’s Der Standard, Robert Holzmann suggested the ECB was at its limits and markets were expecting too much from policymakers.

Asked about the slump in shares and Italian bonds following last week’s ECB meeting, Holzmann said:

We cannot solve the problem on our own, it is now primarily a matter of fiscal policy. It is the state’s responsibility to provide liability and social support.

Monetary policy cannot cover up the problem.

Holzmann also suggested the crisis could have a ‘cleansing’ impact, clearing out failing companies and making the economy (eventually) stronger:

This has prompted a rare public rebuttal from the ECB, which says:

With regards to comments made by Governor Holzmann, the ECB states:

The Governing Council was unanimous in its analysis that in addition to the measures it decided on 12 March 2020, the ECB will continue to monitor closely the consequences for the economy of the spreading coronavirus and that the ECB stands ready to adjust all of its measures, as appropriate, should this be needed to safeguard liquidity conditions in the banking system and to ensure the smooth transmission of its monetary policy in all jurisdictions.

After 90 minutes trading, European stocks are sagging.

The FTSE 100 index is now down 4.5%, as the latest stimulus packages announced by world leaders fail to reassure the markets.

Michael Strobaek, chief investment officer at Credit Suisse, suggests investors should keep to the sidelines, saying (via the FT):

“The jury is still out on whether these measures will help stabilise financial markets.”

Investors are also aware that this isn’t a repeat of 2008. It’s actually the reverse - the real economy is hurting the financial sector, not the other way round.

As Kit Juckes of Société Générale wisely explains:

2008 was a crisis born in shadow banking that exposed how over-leveraged the financial sector had become and for many banks, including large ones, over-dependence on short-term funding was a major weakness which, in turn, caused liquidity to dry up. The banks were in the front line of the crisis.

This time (economic) front line in the crisis, is the damage the pandemic is wreaking on companies in exposed sectors and on the economy more widely as the crisis spreads. So while market participants scramble de-leverage, the banks need money to lend to companies whose cashflow situation has changed almost overnight.

That need for funds to flow into the economy isn’t going away any time soon. The result is that while direct financial effects of this crisis might be less acute than in 08, they will continue being felt for a long time.

As markets shrug at yesterday’s £350bn economic rescue plan, the UK government has suggested it could take further action - which could include more help for employees

Speaking on the Today programme, business secretary Alok Sharma said the proposals put forward by the chancellor had been well-received by groups including the CBI, but confirmed that more action would be needed.

“I completely understand that people want us to go further, particularly on this issue of support for employees, for employment... The chancellor was very clear that this is a conversation he and I are having with employers and trade unions, and we’ll come forward in the coming days with further measures.”

While not ruling out direct payments to workers, Sharma said that the government was “looking at using the current system and how we can get that support very quickly into businesses.”

He said:

“The principle is that yes we will get support to businesses for employees measures specifically”.

Asked if businesses could be relied on to pass money from grants and loans onto employees, rather than prioritising creditors or other payments he said:

“The vast amount of businesses want to operate, they will behave sensibly, but I completely get this point about measures specifically for employees and employment and we will come forward with those.”

Sharma ducked a question about whether he would be able to live on the £94.22 a week available as statutory sick pay to those who are unable to work, saying instead that 30% of employers paid more, and workers might also be entitled to other benefits.

Fears of a deep global recession are driving the oil price down again today.

US crude has dropped nearly 4% to $25.83 per barrel, which looks to be the lowest since 2003.

Oil prices have collapsed this year (from over $60 in January), as traders anticipate a global downturn. Saudi Arabia is pressing on with its price war too, by boosting crude output even though demand is falling.

Brent crude has dropped to $28.25 per barrel (last seen in 2016, I think).

Britain’s stock market has opened in the red, as the government’s £330bn Covid-19 rescue plan fails to calm nerves in the City.

The FTSE 100 has dropped by 180 points, or 3.3%, to 5123 - wiping out Monday’s rally.

Jet engine maker Rolls-Royce is leading the slump, tumbling by 18% to 312p. JP Morgan slashes its target on the stock this morning, from 350p to 250p.

With airlines grounding planes, and many expected to fail, demand for new engines - and lucrative servicing contracts on existing ones - is going to be hit.

International equipment rental company Ashtead is down 13%

But supermarket chains are surging, after Morrisons (+12%) posted its 5% jump in sales this morning. J Sainsbury are up 11%, with online grocer Ocado 5% up.

Restaurant Group, which runs the Wagamama, Frankie & Benny’s and Chiquito chains, has told the City its trading has tumbled in the last fortnight.

It says:

Group like-for-like sales for the first eight weeks of the financial year were up 4.5%, in a period unaffected by Covid-19.

In the last two weeks we have seen an increasing and material impact of Covid-19 across our businesses with Group like-for-like sales being down 12.5%. In particular, our Concessions business has been significantly impacted with like-for-like sales down 21.7% and getting worse by the day given International travel bans.

Restaurant Group’s business plan is now based on group sales almost halving in the first six months of 2020, and by another 5% in H2. It is planning to cut capital expenditure this year by at least £45m from the previous guidance of £75m, and is seeking ‘covenant’ holidays from its banks (the relaxation of the terms on its loans).

But it insists it can ride out the crisis, saying:

The Restaurant Group is fundamentally a resilient business with a strong asset base, substantial cash liquidity and strong cash flow

A flurry of UK companies are warning that the coronavirus crisis is damaging their businesses.

Let’s do the pubs first.

Mitchells & Butlers, which runs the All Bar One and O’Neills chains, says it is still open for business - but suffering a slump in sales. So it can’t forecast its financial performance for 2020.

For the first 24 weeks of the year, up to 14 March, like-for-like sales were 0.9%.

Within this recent trading has been severely impacted by COVID-19 and the containment measures taken by the Government, including the recommendation to avoid pubs and restaurants which is now expected to lead to a further significant downturn in sales.

Marstons has also warned its sales will be “significantly lower”, following official advice to avoid going on. It’s slashing capital expenditure, and says it will suspend rent for its tenants “on a case by case basis”.

Recent statements from the UK Government suggest that the current state of much reduced social activity is likely to continue for several months at least. If that is the case, it is unlikely that an interim dividend will be recommended in May, retaining c.£20 million in the business.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The fiscal fightback against the coronavirus has begun, but will it be enough?

Yesterday, politicians on both sides of the Atlantic promised massive spending programmes to ward off the huge recession that is heading our way, as countries go into lockdown.

UK chancellor Rishi Sunak pledged to do “whatever it takes”, as he unveiled a £350bn package of loans and grants. The government is offering

• state loan guarantees worth £330bn
• a one-year break from business rates
• grants of up to £25,000 for struggling retailers and pubs
• a mortgage holiday of up to three months for customers hurt by the crisis

Eurozone governments are also also fighting back. France is pledging €45bn in direct tax breaks and support for companies, as part of a €300bn package. Spain announced €100bn of loans and guarantees.

In the US, Donald Trump is now pushing for a $1.2trn bailout package - bigger than expected - that would see $1,000 checks sent to each American. This would need Congressional approval, of course.

The White House is also offering tax deferrals, to help families through the crisis.

Yesterday, New Zealand unveiled a NZ$12.1bn stimulus package - worth 4% of GDP - that includes wage subsidies, business tax relief and healthcare funding.

But financial markets aren’t terribly convinced. Wall Street did jump by 6% last night, but it’s now down 5% (limit-down) in the futures market.

European markets are heading for another tumble - handing back yesterday’s rally. The FTSE 100 index is on track for a 4% slide, having gained 2.8% on Tuesday.

Asia-Pacific markets have already taken a tumble:

• Japan’s Nikkei: down 284 points or 1.68% at 16,726 points
• China’s CSI 300: down 73 points or 2% at 3,636 points
• Australia’s S&P ASX 200: down 340 points or 6.4% at 4,953 points

Investors fear that these new packages may still not be enough to protect economies though the crisis.

Jeffrey Halley, senior market analyst for Asia Pacific at OANDA:

That call appears to be finally being heeded by governments around the world. Globally, from New Zealand to Spain, impressively large fiscal packages are being rolled out to mitigate the effects of the coronavirus recession.

Most pleasingly, the United States seems to be finally getting its act together, with the White House seeking approval for a $1.2 trillion package that includes direct payments to households. The White House is proposing two tranches, of $1,000 and $2,000 to qualifying Americans within two weeks. Other proposals were $300 billion in small business loans and income tax payment deferrals. Off course this all needs to be approved by Congress, and one could argue, it probably isn’t enough.

UK supermarkets are starting to impose restrictions on shoppers. From today, Sainsbury’s will also be restricting shoppers to buying a maximum of three items of any grocery product and two packets of popular items such as toilet paper, soap and UHT milk.

Two UK property funds froze yesterday, reflecting the slump in values of offices and warehouses - and more may follow.

Ryan Hughes, head of active portfolios at AJ Bell, explains:

“The suspension of the Kames Property Income fund has been swiftly followed by the Janus Henderson UK Property fund also suspending on the basis of material uncertainty over the valuation of UK commercial property.

With independent valuers finding it impossible to accurately value property given the major economic uncertainty, there is little choice but to suspend dealing.

The markets are likely to remain in turmoil until there are signs that the covonavirus crisis is easing. And we’re nowhere close .The global death toll from coronavirus is nearing 8,000, with 198,006 recorded cases worldwide.

The agenda

• 2.30pm GMT: US weekly oil inventories figures