President Donald Trump has also suggested he’d be amenable to blocking companies that receive federal assistance during the coronavirus pandemic from conducting stock buybacks.
He told today’s press conference:

“It takes many many people in this case to tango, but as far as I’m concerned conditions like that would be okay with me.”

This is a hot topic -- yesterday, The Guardian calculated that America’s five largest airlines have paid more than $45bn to shareholders and executives over the last five years. Now they want a $50bn+ bailout....

Leading Democrat Elizabeth Warren reckons firms can be kept in check:

Over in Washington, Treasury Secretary Steven Mnuchin has been outlining the White House’s stimulus plans.

It would apparently include sending $1,000 checks to most adults and $500 for each child, to help families handle the economic slowdown as the U.S. seeks to contain the coronavirus epidemic.
In an interview with Fox Business, Mnuchin urged Congress to pass a massive financial aid package that includes direct payments to families as quickly as possible.

Our US politics blog has all the latest:

More on Norway’s plans to help its airlines....

With Italy falling deeper into the covonavirus crisis each day, the country’s prime minister is urging the EU use “the full firepower” of its €500bn rescue fund to support its members.

Giuseppe Conte told the Financial Times it was time for the European Stability Mechanism to offer emergency credit lines to countries reeling from the pandemic.

He also warned that monetary policy alone cannot counter a “global shock that has no precedents”.

“Monetary policy alone cannot solve all problems; we need to do the same on the fiscal front and, as I already mentioned, time is of the essence,

“The route to follow is to open ESM credit lines to all member states to help them fight the consequences of the Covid-19 epidemic.”

There are some crazy moves in the oil market tonight.

US crude has closed 25% higher tonight, up $5 per barrel at $25.41, as prices surged back from Wednesday’s slump to a 17-year low.

Stocks are rallying harder in New York, with the Nasdaq now 5% higher.

Traders are weighing up the latest central bank interventions from the BoE, the ECB and the Fed - and perhaps wondering if the worst of the market mayhem is over.

Mind you, a 5% jump doesn’t even recover all of Wednesday’s rout. And with massive swings up and down virtually a daily event, there’s surely more volatility ahead....

RBC Capital Markets reckon the Bank of England was forced to expand its QE (bond-buying) programme because UK government bond prices started falling (pushing interest rates/yields up).

For the market, we think this package should go a long way in compressing Gilt yields. In line with other ‘risk free’ markets around the globe, Gilt yields rose over the last weeks, sending both nominal and, probably more important, real yields up.

This clearly is not acceptable to a central bank that tries to help cushion the blow of an unprecedented economic crisis.

Hence, today’s announcement, together with the ECB’s substantial package and the forthcoming purchases from other central banks in their respective markets....

Capital Economics reckon the Bank of England may have to take even more dramatic measures at its scheduled meeting next week.

They point out that today’s shock interest rate cut, alongside a massive dose of QE, hasn’t had much impact on the bond market yet.

The big package of measures announced by the Bank of England today in its second emergency meeting in just over a week is designed to ease the stress in the financial markets and to support the recovery once the full economic hit from the coronavirus has been felt.

So far it has only reduced gilt yields by 10-15 basis points, so the Bank may have to do even more at its next meeting on Thursday 26th March.

That could potentially include tweaking the QE programme, to buy enough government bonds to keep 10-year gilt yields close to 0%, for example.

Frankly it’ll be a change to get a BoE decision at the appointed hour, after two emergency moves in just over a week!

Over in Westminster, Boris Johnson has said companies should “think very carefully” before they lay off their staff.

He also told the daily Covid-19 briefing that government will support business, and businesses should support their workers.

He says he thinks the government will have a “great package” on this. Rishi Sunak will say more tomorrow, he says.

Our main coronavirus blog has all the details:

IKEA have got in touch with more details of their store closure plan (see earlier post):

Those able to perform their roles from home are doing so. Our online fulfillment operations and customer contact centre are still in operation.

Those store workers who are fit and healthy are being asked to come in to into work when stores are shut to the public and we’ll work together to define how we best support our customers and communities. Those self-isolating in line with government guidelines are being paid.

Stocks are still higher on the New York stock exchange - but there aren’t so many people there to see it.

The NYSE looks a little quieter than usual, after two traders tested positive for Covid-19. Yesterday, the exchange said it will close its physical trading floor on Monday, March 23, and move to a fully electronic trading system.

“They’re finally shutting it down,” one NYSE insider told The New York Post. “It’s a relief, to be honest.”

Right now, the Dow is up 294 points or 1.4% at 20,192 points, with around two hours trading to go.

Lufthansa Group has announced it will allow its staff to volunteer as medics to combat the coronavirus crisis.

The move comes after Lufthansa confirmed the grounding of most of its fleets earlier today, and said that the future of the aviation industry could not be guaranteed without state aid.

The airline said its medically trained staff would still be paid by Lufthansa. The airline also extended its rebooking period for passengers with grounded flights until the end of the summer, with a €50 on subsequent bookings, in an effort to retain revenues during at least two months of virtual standstill.

The coronavirus has had a devastating impact on demand for cruises.... so Carnival has an idea -- use its ships as temporary hospitals.

Marketwatch has the details:

The cruise ship operator said it would only ask interested parties to cover the essential costs of the ship’s operations while in port.

“With the continued spread of COVID-19 expected to exert added pressure on land-based healthcare facilities, including a possible shortage of hospital beds, Carnival Corporation and its brands are calling on governments and health authorities to consider using cruise ships as temporary healthcare facilities to treat non-COVID-19 patients, freeing up additional space and expanding capacity in land-based hospitals to treat cases of COVID-19,” Carnival said in a statement.

The stock, which rose 7.5% in afternoon trading, has plunged 77% over the past month, while the S&P 500 SPX, 0.804% has lost 28.4%.

Two of Carnival’s Princess ships have already been in the frontline of the battle against Covid-19, after passengers tested positive for the virus. Last week it suspended all sailings, so its ships are currently idle..... and authorities do need plenty of beds for patients....

As we’ve become used to recently, there were some wild swings on the FTSE 100 today.

Investment manager M&G jumped by 34%, which largely reverses three days of heavy losses.

Cruise operator Carnival and holiday firm TUI made a rare appearance in the top FTSE risers too, both gaining almost 19%. But British Airways owner, IAG, lost another 9%.

Sector-wise, telecoms, energy, consumer goods makers and healthcare firms generally rose, while miners and utilities dipped.

The smaller FTSE 250 index had another rough day, though, finishing 1.4% lower at 12,829 points. That’s its lowest level since early 2013, as the Covid-19 crisis has driven down the value of many smaller UK firms, quite dramatically:

Here is our full story on the Bank of England’s latest emergency interest rate cut:

Ikea will close all its stores in the UK and Ireland from 6pm tomorrow, Ashley Armstrong from The Times reports:

The Bank’s decision to cut rates and pump more stimulus into the economy is a clear indication that UK policymakers are ready to make coordinated efforts to support the economy.

That’s according to Ivan Petrella, associate professor of economics at Warwick Business School. He adds:

The fact that the Bank of England is ready to step up its efforts to stimulate the economy gives the UK a clear advantage over countries in the EU.

It is now clear that the prolonged impact of a shut-down to the economy, coupled with the large fall in demand and related uncertainty, will most likely lead to a severe downturn unless we see more drastic and decisive policy actions. That will most likely lead to a massive credit crunch for large sectors of the economy.

So far, the government has put forward a fiscal package of a similar size to other European countries to support businesses, but it falls short of direct support to jobs. This is most likely the area where the government will have to intervene in the coming weeks if it aims at prevent a wave of lay-offs.

The emergency rate cut is the Bank of England’s second in a little more than a week, and is the latest move as policymakers at both Threadneedle Street and the Treasury attempt to limit the economic damage of the coronavirus pandemic.

After the Bank announced the latest cut, the chancellor Rishi Sunak reiterated his pledge that he is prepared to take “whatever action is necessary” during the crisis.

Sunak is under mounting pressure to do more to support workers facing layoffs following the coronavirus outbreak.

The coronavirus pandemic has truly moved UK economic policy into uncharted territory with that emergency rate cut.

The rate cut takes the Bank of England the lowest it can feasibly go, said Jeremy Thomson-Cook, chief economist at payments company Equals Group. New governor Andrew Bailey may have to hand over to chancellor Rishi Sunak now, he added.

Another day, another rate cut by the Bank of England. The base rate is now at the lowest level we think the Bank of England is prepared to go to and with that will come a not so unsubtle hand-off of the stimulus baton to the Treasury. Lower rates and additional quantitative easing can keep markets satisfied and borrowing costs for both businesses and the government down but unless money is forced into the hands of small businesses soon, then it will be for nothing; they are the ones laying off staff due to a liquidity shock.

Sterling is higher on the day following the announcement having endured its fifth worst day of the century against the USD yesterday.

Sterling is now flying against the euro.

It’s up by 1.8% for the day, hitting highs above €1.0839 - althought that still remains short of levels hit just yesterday when the pound slumped.

The Bank of England’s move has boosted demand for UK government bonds. Yields, which move inversely to prices, have fallen.

From Reuters:

Yields on British government bonds, known as gilts, fell sharply after the BoE move. Two-year gilt yields were last down 15 basis points [0.15 percentage points] on the day at around 0.19%, while 10-year gilt yields were almost 4 bps lower at 0.76% reversing earlier rises.

The FTSE 100 is now gaining: it’s up by 0.6% for the day.

Sterling is up by 0.4% against the US dollar.

The quantitative easing purchaes will focus on UK government bonds, the Bank said:

The majority of additional asset purchases will comprise UK government bonds. The purchases announced today will be completed as soon as is operationally possible, consistent with improved market functioning. The Bank will issue further guidance to the market in due course.

The rate cut takes the Bank of England’s base rate to its lowest in history, at 0.1%.

The Bank also announced another £200bn in bond buying under the quantitative easing programme, and the extension of the term funding scheme, which encourages banks to pass on the benefits of interest rate cuts to companies and households.

The unscheduled meeting of the monetary policy committee was only held today.

The Bank says the cut has come in response to tightening financial conditions.

Over recent days, and in common with a number of other advanced economy bond markets, conditions in the UK gilt market have deteriorated as investors have sought shorter-dated instruments that are closer substitutes for highly liquid central bank reserves. As a consequence, UK and global financial conditions have tightened.

Here is the link to the Bank of England’s full statement.

Newsflash: US stock market indices have staged a reversal, and all three major indices are now positive for the day.

The S&P 500 is now up by 0.6% for the day.

The FTSE 100 is still down by 0.6%, at about 5,046 points. That move represents a recovery from earlier’s move down, however.

France’s Cac 40 is about flat, while Germany’s Dax is up by 0.8%.

US carmaker Ford has drawn down $15.4bn (£13bn) of cash from two credit lines as it looks for to build buffers for coronavirus disruption.

The company has also suspended its dividend and offered payment holidays to new customers.

Ford said it will use the extra cash to address “temporary working capital impacts of the coronavirus-related production shut downs and to preserve Ford’s financial flexibility”.

Ford chief executive Jim Hackett said:

While we obviously didn’t foresee the coronavirus pandemic, we have maintained a strong balance sheet and ample liquidity so that we could weather economic uncertainty and continue to invest in our future.

Our Ford people are extremely resilient and motivated, and I’m confident in the actions we are taking to navigate the current uncertainty while continuing to build toward the future.

Another retail update from the Guardian’s Joanna Partridge, this time on pharmacy chain Superdrug.

CK Hutchison, the Hong Kong-based conglomerate which owns the high-street chain Superdrug, expects Superdrug and other health and beauty stores in western Europe to remain open during the coronavirus outbreak because they have a pharmacy format.

The group said shops in its western Europe retail division, which includes the UK, discount health and beauty retailer Savers, and brands in the Netherlands, Poland and Germany, have experienced “double-digit sales growth”. The group’s co-managing director, Canning Fok Kin-ning, wrote in the company’s 2019 financial results:

We are in “mass essential” business selling high demand products, such as hand sanitisers, personal wash, vitamins and other health lines and also household cleaning.

CK Hutchison, which also has ports, infrastructure and telecommunications divisions, warned of a “very challenging” trading environment during 2020, and said it could not currently estimate the financial impact of Covid-19 on its business.

Clarks has closed all its own stores in the UK and Republic of Ireland.

The company said all store employees would continue to receive pay and benefits during the temporary closure.

In a statement Clarks said:

We will continue to monitor the situation and will be reviewing the decision of when to re-open our stores when the health and wellbeing of our employees and customers can be protected.

Waitrose is closing all its cafes and rotisseries and temporarily suspending making coffees as it joins other supermarkets in tightening restrictions on purchases, writes retail correspondent Sarah Butler.

From today, shoppers are limited to three items of any specific grocery and a maximum of two packets of toilet roll per customer in shops.

At the same time, Waitrose has set up a £1m community support fund which staff in local stores can use to develop services such as local deliveries for the self-isolating, the vulnerable, the elderly or boxes of staples to local care homes and community groups.

Waitrose is also joining other supermarkets in allocating the first hour after opening as dedicated to the elderly, the vulnerable and those who look after them.

Next is leading the FTSE 100 risers during a bumpy day - it’s still up by 12%.

Investment group 3i has also gained 12%. It warned that its brands Action, BoConcept and Hans Anders in the retail sector, and Audley Travel and ICE in the travel space could be affected by the outbreak, but said the disruption would be modest.

The biggest riser on the FTSE 350 today is Elementis, a chemicals business, whose market value appears to have doubled after it said it had secured a relaxation of its banking convenants.

Easyjet is the biggest FTSE 100 faller, down by 14.5%. Melrose, the takeover specialist, has lost 13.8%.

Germany is to be plunged into recession due to the global health crisis, German economists have said this morning, writes the Guardian’s Berlin correspondent, Kate Connolly.

Economists from the German Institute for Economic Research, the DIW, and the Munich-based Ifo Institut, which measures business climate, have both said a recession is “unavoidable”. “The German economy is certain to plunge into a recession,” DIW’s head of forecasting and economic policy, Claus Michelsen said.

He said it was impossible to predict exactly how the recession would develop. Two scenarios are possible.

Either a ‘V’, that is to say a quick recovery effect for production and consumption after a rapid collapse, just as was the case with other epidemics, such as Sars, the swine and bird flus.

That would lead GDP to shrink by around 0.1%. But it was more likely to be an ‘L’ shaped recession, in which after a collapse there was little recovery and consumption and production remained low, he added. “In which case, a recession would be much harsher.” He said he could not be more specific than that.

Ifo’s business climate index sank to 87.7 points, compared to 96 points last month. Clemens Fuerst, Ifo’s president, said: “The expectations of companies in the coming months are darkening like never before.”

The German government has announced its next tranche of economic help, this time for the self-employed and other small companies, confirming that €50bn would be set aside to help them. It is not yet clear how those monetary injections will be administered.

As we approach midday in London, here’s a recap of market moves in the wake of the European Central Bank’s “no limits” stimulus package.

• The FTSE 100 gave up early gains to fall by 2.2%.
• Germany’s Dax fell by 1.4%; France’s Cac 40 also turned negative, with a loss of 1.5% despite what appeared to be strong gains in morning trading.
• Italy’s FTSE MIB was still up for the day, gaining 1.3%.
• The pound lost 0.5% against the US dollar, hovering near lows last seen in 1985.
• However, the pound gained 1% against the euro.
• The US dollar index, measuring the strength of the currency against a trade-weighted basket, rose to highs of 102.329 - the strongest since January 2017.
• Brent crude oil futures prices rose by 4.7%, but remained near historically weak levels just above $26 per barrel. Futures for West Texas Intermediate, the North American benchmark, rose 10% to $22 per barrel.
• Government bond yields have risen, in sign that investors are looking for cash.
  

Market turmoil has boosted trading in recent weeks, which is ultimately good news for some investment banks like Credit Suisse, writes the Guardian’s banking correspondent, Kalyeena Makortoff.

In an unscheduled market update on Thursday, the Swiss lender said higher trading volumes were boosting its private banking revenues, helping offset a drop in its capital markets division. (Capital markets bankers help companies issue new shares to raise cash - but the current market sell-off has forced firms to look elsewhere for new funds)

Credit Suisse said it was also in a strong position due to its lower exposure to the oil and gas sector as well as leveraged debt, referring to loans offered to firms which are highly indebted or have poor credit history.

The bank said:

This has substantially increased our resilience and preparedness for the impact of the spread of COVID-19 and the consequent market and economic volatility.

However, Credit Suisse warned that it was difficult to know how the pandemic would impact its results going forward:

We continue to monitor our credit exposures prudently in light of these conditions. However, we are very satisfied with how the teams have so far navigated the increased volatility, including in areas such as share-backed lending.

Germany’s Dax is now in the red as well as the FTSE 100. It appears that the rush provided by the European Central Bank may be fading.

However, a decline of 0.8% on the Dax today still represents stability compared to the moves of recent weeks. The question is whether investors hold their nerve, considering the eye-watering recession forecasts for every major economy.

Central banks are queuing up to stimulate their economies.

Here’s the latest from Reuters on Taiwan:

Taiwan’s central bank cut interest rates for the first time in more than four years on Thursday to a new low and reduced its growth forecast for the export-oriented economy amid growing fears that the coronavirus could trigger a global recession.

The central bank lowered its benchmark rate by 25 basis points to 1.125%, it said in a statement after a policy meeting.

Here’s more on the deal between the government and energy suppliers, from the Guardian’s energy correspondent, Jillian Ambrose.

The government has agreed new emergency measures with energy suppliers to help households which are in financial distress or unable to leave home to top-up pre-pay energy meters.

The government has ordered energy companies to offer struggling customers help meeting their energy bills by reducing or pausing bills, and offering debt repayments plans.

Suppliers must also completely suspend disconnections for the 4m homes which use pre-pay meters. Instead, suppliers may add credit to the meter remotely or send hard-hit households pre-loaded top-up cards so that energy supply is not interrupted.

Alok Sharma, the business secretary, said those most in need “can rest assured that a secure supply of energy will continue to flow into their homes during this difficult time”.

An interesting story from the Guardian’s Brussels correspondent, Jennifer Rankin. There have been widespread anecdotal reports of the internet struggling under the weight of people working from home, and now the EU has confirmed it.

The European Union’s industry chief has called on Netflix and other streaming services to take action to reduce congestion on the internet, amid surging demand as millions of people confined to their homes go online.

Thierry Breton, the European commissioner for industry, told Netflix chief executive Reed Hastings that he and other operators should take responsibility for preventing internet congestion by switching to standard definition rather than high definition.

In a statement Breton said:

Streaming platforms, telecom operators and users, we all have a joint responsibility to take steps to ensure the smooth functioning of the internet during the battle against the virus propagation.

The commission would also like internet users to reduce their data consumption, by using Wi-FI or choosing lower resolution for content.

The coronavirus has led to a spike in internet usage, as parents working at home make video conference calls, while children log on for online lessons or digital games.

You can follow more updates on the coronavirus impact around the world on the main live blog:

And a previous post has been corrected. Refresh your page to see the correction.

Despite Next and British Gas owner Centrica (up 12% after the government agreed a deal to secure households’ energy supplies) the FTSE 100 has now actually slipped to a loss of 0.9%.

Some of the momentum on European exchanges has been lost as well. The Dax in Germany is up by only 0.5% according to our latest data, although the main European benchmarks outside of London are still green for today.

Next, the clothing and homewear retailer, is the top riser on the FTSE 100 after it put out a fairly confident statement this morning. Shares are up by 14%.

Chief executive Simon Wolfson, said retailers are “facing a crisis that is unprecedented in living memory, but we believe that our balance sheet and margins mean that we can weather the storm”.

The company has carried out a stress test showing that it could “comfortably sustain the loss of more than £1bn (25%) of annual full price sales, without exceeding our current bond and bank facilities”. This includes the chancellor’s business rates holiday, but doesn’t take into account the possibility of further government support.

Lord Wolfson, who is a Conservative peer, said:

When the pandemic first appeared in China, we assumed that the threat was to our supply chain. It is now very clear that the risk to demand is by far the greatest challenge we face and we need to prepare for a significant downturn in sales for the duration of the pandemic.

Total sales for the year ending in January 2020 rose by 3.5% on last year. Group profit before tax was up 0.8%, at £728.5m, even beating its previous guidance because of a stronger-than-expected Janaury.

Discount retailer B&M has revealed some of the items that are flying off its shelves, as the retail sector adjusts to much of the country working from home.

Increased sales of hand-washing products are perhaps understandable, but a sevenfold increase in Pot Noodle sales is somewhat alarming, notes Guardian retail reporter Sarah Butler.

Influential ratings agency Moody’s has published a verdict on the UK government and Bank of England coronavirus measures. They said the moves support the banking sector and offset some of the risks to the UK’s debt rating.

However, there is of course large uncertainty around the judgements - and the agency also quibbled with the idea of a large expansion in government debt potentially being problematic (at least from the point of view of their investor clients).

Sarah Carlson, the lead sovereign analyst for the UK at Moody’s, said:

While businesses small and large will welcome short-term relief from cash-flow constraints, the extent to which the new initiatives will mitigate the damage to the economy and the resulting cost to the banking system remains unknown because the magnitude and duration of the coronavirus-induced disruption itself is highly uncertain.

While their scale underlines the gravity of the situation, any measures that help to reduce the damage caused by the economic downturn will help limit a decline in banks’ asset quality, and therefore support their creditworthiness.

If this effort was successful in reducing the deterioration in banks’ asset quality, this would have mixed credit implications for the sovereign. It would clearly entail some fiscal cost, but it would also reduce any increase in the sovereign’s susceptibility to banking sector risk.

The opinions of the agency (and rivals such as Fitch and S&P Ratings) are important because a change in bond ratings for a company or government can determine whether pension funds are allowed to own the debt - although their reputation was severely hit during the last crisis.

German business morale has slumped to its lowest since 2009, during the financial crisis, in a clear sign that recession appears inevitable.

The Ifo institute said preliminary results from its March survey showed its business climate index slumped to 87.7 from 96.0 in February, Reuters reported.

The index is usually closely watched as a leading indicator of economic growth,but given the extraordinary measures taken to stop travel across Europe, perhaps its main use is to put the disruption into historical context.

Ifo president Clemens Fuest said:

This is the biggest drop since 1991 and the lowest value since August 2009. Germany is falling into recession.

Direct Line, the UK’s biggest car insurer, has dropped plans for a £150m share buyback as it looks to conserve cash during the coronavirus crisis.

The company, which also owns the Churchill and Green Flag brands, has previously said that it expects to be able to cope with coronavirus-related claims. Advice to Britons to self-isolate and practice social distancing could reduce the number of car accidents.

Travel claims related to the virus climbed to £5m on 15 March, up from around £1m on 3 March, it said on Thursday.

*This post has been corrected. A previous version incorrectly said Direct Line’s buyback was £250m. Apologies for the error.

Here’s what €750bn in stimulus (or more than €1tn if you count previously announced measures) gets you: a concerted rise in European equities.

France and Italy are leading the way.

The gains on the FTSE 100 have accelerated: the blue-chip index has now gained 0.8%. It is volatile though.

However, the mid-cap FTSE 250 has moved by 1.2% in the other direction.

In Italy the FTSE MIB has regained 3%. Italy has been the worst affected country in Europe during the outbreak.

France’s Cac 40 is up by 2.2%, while Germany’s Dax has gained 1.2%.

In London the FTSE 100 has gained 0.2% in early trading. The mid-cap FTSE 250 index is flat.

The Dax in Germany gained 0.8% and France’s Cac 40 gained 0.5%.

Across Europe the Stoxx 600 index was down by 0.6% in early exchanges.