The S&P 500 could end up recouping about $1 trillion today.

Huge gains are being logged in US stocks, with each of the Dow, S&P 500 and Nasdaq up more than 5%.

Investors seem to be optimistic that the rate of infection and deaths is stabilising in New York, which has been hardest hit in the US.

• S&P 500 is up+138.31 points or 5.56% 2,626.96
• Nasdaq is up +403.59 points or 5.47% at 7,776.67
• Dow is up +1,162.03 points or 5.52% 22,214.56

Grim forecasts from WH Smith, which expects April’s revenues to be down 90% year on year.

The newsagent, which depends heavily on stores in travel hubs like airports and train stations for income, issued the trading update alongside documents released for its proposed share placing.

The company said:

Total group revenue in March 2020 was down 25% year on year. However, as a result of the high number of store closures, in the latest week of trading to 4 April 2020, revenues across the group were down around 85% year on year.

On this basis, in the month of April as a whole, we expect group revenue to be down by approximately £114m (down 90% year on year), with a reduction in operating profit of approximately £39m compared to last year.

The UK economy could shrink 6.5% in 2020 in what could be the “biggest recession in a century.”

That’s according to Deutsche Bank analysts who believe UK GDP could contract by 13% in the second quarter.

Reuters is reporting on the comments, which add that there are “considerable downside risks” to the UK economic growth forecast. Namely, if Covid-19 cases do not peak by mid-April, there’s a risk that the hit to the economy could be more acute.

Perhaps it’s no big surprise given the massive market moves in recent weeks, but the London Stock Exchange saw a record number of trades in March.

It logged 44.8m trades for its UK order book alone last month, worth £187.7bn.

That’s more than double the 18.4m trades that were logged a year earlier.

Oil prices are tumbling again.

Brent crude, which was down just 1.8% an hour ago, is now down more than 5.3% at $32.28.

Consumer groups are urging any Debenhams shoppers to spend any leftover gift cards and use their credit card for any purchases over £100. It means there’s a better chance of getting the money back if the company stops trading and fails to deliver final orders.

Adam French, consumer rights expert at Which?, explains:

While stores remain closed, the retailer is still trading online so your consumer rights in respect of online shopping should be unaffected, however we’d advise anyone with a Debenhams gift card to consider spending it as soon as possible.

It’s generally sensible to use a credit card if you are planning to buy anything worth more than £100, so you can make a claim against your credit card company under Section 75 of the Consumer Credit Act if necessary.

All 30 stocks on the Dow are trading higher, and Boeing is among the biggest risers:

• American Express is up 10.6%
• Boeing is up 9.4%
• Raytheon Technologies is up 8.83%
• Visa is up 7.3%

Today, investors are reacting to news that Boeing extended the shutdown of its Seattle operations indefinitely due to health concerns, rather than reopening it on Wednesday as originally planned.

Big market swings over the past month have meant it’s not entirely rare to see airlines and aerospace manufacturers trading higher (due to general market sentiment or investors buying the dip), but it does turn heads.

Futures for Brent crude oil are down by 1.8% today to $33.49 per barrel, while futures for West Texas Intermediate, the north American benchmark, are down by 3.6% at $27.31.

For consumers of oil lower prices are a boon, but producers are desperate to shore up revenues, which are collapsing owing to reduced demand across the world’s largest economies.

But producers argue that lower prices will mean that future production doesn’t happen, leading to more volatility in later years. (Of course, this also ignores the pressing need to reduce the use of fossil fuels dramatically in order to tackle the climate crisis.)

Here’s the West Texas Intermediate future contract since the start of the year as the crisis has worsened:

Oil ministers from the G20 will meet on Friday as they scramble to prop up oil prices.

Opec+, the oil producers’ cartel plus other non-members such as Russia, is due to meet on Thursday. A G20 meeting would also involve the US and Canada in talks - although it is unclear how the US would mandate production cuts if Opec+ asked them to participate.

Cuts of 15m of barrels per day that Donald Trump said could emerge between Russia and Saudi Arabia may not be enough to push prices up.

From the Financial Times (£) report:

An emergency meeting of G20 oil ministers will be held this week after a push from Saudi Arabia and the International Energy Agency, as they scramble to find a solution to the collapse in demand caused by the coronavirus pandemic.

Fatih Birol, head of the International Energy Agency, told the Financial Times the meeting aimed to find a way to protect energy markets during the crisis, as millions of jobs and the stability of the global economy is at risk.

Mr Birol said he expected large oil producers within the group — which includes the US, Canada, Saudi Arabia, Russia and Brazil — would discuss whether they could reduce production together, to tackle a supply glut that is at least 25m b/d in size.

But before we get too carried away it’s perhaps worth noting that Germany’s Dax is still far, far below levels hit before the start of the year.

Here’s the chart showing the massive fall in market value endured by German blue-chip companies over the course of a miserable 2020.

Has the bull market returned already?

The stateside buying optimism appears to have caused a feedback loop across the Atlantic. The Dax, the export-sensitive German benchmark, is now up by 5%. That means it is 20% above the bottom hit in the middle of March.

The usual definition of a bull market is a rise of 20% from a recent low point.

Given the worsening situation in many countries it would be a brave person to call it a bull market already. But then again there has been an unprecedented fiscal and monetary response to the crisis, and some investors have already said it’s time to pile back into more stable stocks.

Countries around the world seem to be competing to offer the biggest stimulus packages.

Hungary is looking to match Japan’s aim to point a stimulus equivalent to 20% of GDP at the coronavirus recessions. The country, ruled by Viktor Orban (who has been criticised for an allegedly draconian response to the crisis), is offering subsidised loans to Hungarian companies and funds to preserve jobs.

Although there have been concerns about the relative weakness of the US stimulus, its effects will be massive:

Stock markets around the world are gaining - perhaps because investors are taking heart from things happening in their own neighbourhoods.

US stocks on the S&P 500 and the Dow Jones industrial average are both set to rise by 3.75% if futures are any indication shortly before the market open.

Reuters quoted Thomas Hayes, managing member at Great Hill Capital in New York, who said:

Seeing signs of stabilization in New York City is probably the most important thing given the amount of capital that’s controlled through managers that live in the area.

It’s a tremendous relief for the market (but it’s) not to say that we’re through the woods yet, because we’re going to have a tough week or two ahead.

JP Morgan could consider suspending its dividend for the first time ever if the US suffers a severe recession.

In his letter to shareholders, chief executive Jamie Dimon, said the bank expected “a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008”. He added:

Our bank cannot be immune to the effects of this kind of stress.

British banks have already suspended their dividends at the behest of the Bank of England, although they are thought to be in a far stronger position than during the financial crisis more than a decade ago. However, American counterparts - even those which were bailed out in 2008 - have been more reluctant to suspend dividend payments.

The bank would be profitable in every quarter under the Federal Reserve’s stress tests, Dimon wrote, but “extreme prudence” might necessitate dividend suspension:

the board would likely consider suspending the dividend even though it is a rather small claim on our equity capital base. If the board suspended the dividend, it would be out of extreme prudence and based upon continued uncertainty over what the next few years will bring.

EasyJet has borrowed £600m under one of the government’s coronavirus lending schemes, as the budget airline seeks to boost its access to ready cash.

The Luton-headquartered budget carrier said it had issued £600m of commercial paper through the Covid Corporate Financing Facility (CCFF). The scheme allows big companies with a credit rating to access funds at the same rate as before the crisis.

EasyJet has also asked its banks to let it fully draw down on its $500m revolving credit facility, secured against aircraft assets. By the end of the week easyJet expects to have access to cash reserves of about £2.3bn - but it said it may need more if the grounding of its fleet is extended. (It may have no other option if lockdown continues.)

And it has also agreed a deal with Balpa, the pilots’ union, to furlough the workers during the grounding.

Johan Lundgren, easyJet chief executive, said:

We remain absolutely focused on ensuring the long-term future of the airline, reducing our costs and preserving jobs, to make sure easyJet is in the best position to resume flying once the pandemic is over.

Our current priority is to safeguard short term liquidity, so we have borrowed from the CCFF and drawn down on our Revolving Credit Facility in order to increase our liquidity in the event of a prolonged grounding of the fleet.

Looking ahead to the US open at 14:30 BST, US stock markets are set to rise strongly, following the lead set by their European counterparts.

S&P 500 futures are up by 3.6%, while Dow Jones industrial average futures have gained 3.5%.

In London the FTSE 100 has gained 1.9%, but Germany is holding on to its stronger gains of 4.3%. In France shares are up by 3.4%.

Reuters has reported that Germany plans to end its lockdown on 19 April, with an obligation for citizens to wear masks in public, limits on public gatherings and the rapid tracing of infection chains.

Debenhams has said that legal action from suppliers could result in its 142 stores going into liquidation, which is why it intends to appoint an administrator.

The retailer’s creditors will be prevented from pursuing legal action for 10 working days while the company tries to secure a rescue deal.

Jasvir Jootla, partner at Gowling WLG, said:

It’s not surprising that Debenhams’s has to consider a deeper restructuring of its overall cost base.

An administration may provide them with the opportunity to radically rebase themselves and their offering. However, for them and other consumer reliant businesses the future is uncertain.

Demand will return in a post Covid-19 world, but it may not be clear for some time yet how quickly that will happen.

The easyJet founder and main shareholder, Sir Stelios Haji-Ioannou, has relaunched his attack on the airline’s management and its order for 107 more “useless” planes from Airbus.

Haji-Ioannou, who with his family owns just over a third of easyJet shares, demanded an emergency general meeting and called for the sacking of two directors. He said his “main objective is to terminate the £4.5bn Airbus contract”, saying that otherwise the airline would run out of cash before August, with the airline’s fleet grounded due to coronavirus. When international travel eventually restarts, he said, the airline would “feel more like a start-up trying to find a few profitable routes for a few aircraft”.

EasyJet is understood to be already in talks with Airbus to review the contract and reduce its ongoing spend. It has said it may need more government help to survive, but the Treasury has been unwilling to assist airlines until rich shareholders dig deep.

Haji-Ioannou, who received around £60m in dividends last month, said:

For the avoidance of doubt, I will not inject any fresh equity in easyJet whilst the Airbus liability is in place.

EasyJet said an emergency meeting would be “an unhelpful distraction”, adding: “We remain absolutely focused on short term liquidity, removing expenditure from the business alongside safeguarding jobs and ensuring the long-term future of the airline.”

Note: this post has been corrected to show that Sir Stelios received around £60m in dividends, not £171m.

Volkswagen has been found by the UK’s high court to have used “defeat devices” on cars sold in Britain, according to a law firm bringing action on behalf of 91,000 consumers.

The carmaker has paid out fines and compensation worth tens of billions of euros across the world in relation to the “Dieselgate” scandal, in which it was found to have cheated emissions tests. The vehicles affected were sold under Volkswagen, Audi, Seat and Skoda brands and were fitted with an EA 189 diesel engine.

The law firm, Leigh Day, said the next stage in the case is for the court to determine the losses payable to the claimants, which may include some of them recovering a percentage of the purchase price they paid for their vehicles.

Leigh Day and another firm, Slater and Gordon, want VW to enter into settlement negotiations (avoiding lengthy litigation and making the consumers and their lawyers a quicker return).

Bozena Michalowska-Howells, a solicitor at Leigh Day, said:

Today’s ruling is hugely significant for our clients who have been battling for four years to hold Volkswagen to account. In reaching his decision the judge rejected virtually all of Volkswagen’s arguments and found that the vehicles were fitted with illegal defeat devices.

Our clients bought their vehicles in good faith and are fully entitled to expect them to comply with the law. Many of our clients have been horrified to find out that they had been driving vehicles which were much more harmful to the environment than they were led to believe.

It feels like a while (apart from the aftermath of the Brexit vote) since inflation worries were at the top of the agenda for central bankers.

Nevertheless, Bank of England governor Andrew Bailey, who has not had the easiest time since starting his new job, is apparently keen to signal that it is still important to him. Writing in the Financial Times (£), Bailey rejected notions that the bank would print money to finance government deficits.

Using monetary financing would damage credibility on controlling inflation by eroding operational independence. It would also ultimately result in an unsustainable central bank balance sheet and is incompatible with the pursuit of an inflation target by an independent central bank.

The Bank has already committed to buying £200bn in government bonds, which many economists is essentially paying for the big expansion in government spending to cushion the economy through the coronavirus pandemic.

Bailey begs to differ - although the issue is perhaps more one of messaging rather than any practical difference. He says the money printing is temporary rather than permanent to help monetary and financial stability.

Another administration for Debenhams would put the jobs of 22,000 workers at risk, only a year after it was rescued by its lenders.

The department store’s suppliers are reportedly one of the main reasons it intends to appoint administrators: while the process is being carried out they will have some breathing space to try to work out a bailout package.

But if that fails it could spell the end of a chain whose history stretches all the way back to 1778, when William Clark established a drapers store at 44 Wigmore Street in London’s West End selling expensive fabrics, bonnets, gloves and parasols (according to the company’s handy history page):

The firm prospered from the Victorian fashion for family mourning by which widows and other female relatives adhered to a strict code of clothing and etiquette.

Recent years have been less kind, however. The chain, with its massive store footprint, did not adjust quickly enough to the shift to online spending to avoid significant financial peril.

Here’s more detail on the Debenhams developments, from Press Association:

Debenhams said it has the support of its lenders to enter administration and is engaging with employees and suppliers over the move.

The majority of its employees in the UK are currently being paid under the Government’s furlough scheme, after its stores closed following the shutdown of non-essential stores.

It added that it continues to trade online across the UK, Ireland and Denmark and customer orders, gift cards and returns are being accepted and processed normally.

BT has guaranteed staff that they will not lose their jobs or be furloughed - and has given 58,000 frontline workers such as engineers and key workers a 1.5% pay rise - while managers have had their salaries frozen.

Chief executive Philip Jansen, who was the first publicly confirmed FTSE 100 boss to be diagnosed with Covid-19, has said that he will donate his salary to the NHS Charities Together Covid-19 appeal and to affected small businesses in his local community for at least the next six months. Jansen’s base salary, before performance bonuses, is £1.1m annually.

The company said:

No employee will lose their job in the foreseeable future – at least the next three months – as a direct result of changing trading conditions brought about by coronavirus.

BT said that the 1.5% pay rise from 1 July applies to all “team workers” among its 85,000 UK staff, some 58,000, the vast majority of whom are frontline key workers. BT said that managers, some 26,000 members of staff, will have their pay frozen this financial year. The 1.5% pay rise for key workers does not extend to staff in BT’s global business, around 16,000 employees, who are not key workers.

The company also remains committed to giving its 100,000 staff the £500 in shares in June it promised staff under its new “yourshare” scheme, which costs it £50m annually.

High street challenger Metro Bank has put aside a £2m fund as a “thank you” to frontline workers who aren’t able to work from home during the pandemic.

It will result in a lump sum bonus of up to £1,000 each for around 2,000 staff in branches, call centres and some back/office support staff who have been handling a surge in requests for payment holidays and new loans under the government’s coronavirus business interruption loan scheme.

At £1,000, that’s the average bonus handed to frontline staff for the whole of 2019. The payout date of the new bonus is yet to be confirmed.

A spokeswoman for Metro says the £2m fund will not affect its cost savings plans, which were announced after it reported a full year loss worth £130m caused partly by a major accounting error revealed last year.

Even though construction workers are not banned from going to work there has been a steep impact on the sector, notes Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

It seems that staff protests and the furloughing scheme have persuaded many construction companies to pause projects. The housing index (46.6) was much higher than the commercial (35.7) and civil engineering indices (34.4), though firms commented that they expected housing work to slump ahead, primarily due to measures to counteract the spread of the virus.

Looking ahead, builders were the most pessimistic about the 12-month outlook for demand since October 2008, and in response, they cut headcounts at the fastest rate since September 2010.

It seems likely the numbers will deteriorate further in April.

BUT there is some reason for hope for the sector, adds Tombs.

If, as we expect, banks largely maintain the supply of credit to the economy and the government follows through on its plans for much higher levels of public sector investment, the construction sector should see a much swifter recovery than after the 2008/09 recession, when it took seven years for output to return to its prior peak.

The construction data - plus weak consumer confidence data overnight - add to the body of evidence that the UK is on course for a once-in-a-lifetime recession, according to Andrew Wishart, UK economist at Capital Economics.

The GfK consumer confidence data, published at 1am this morning, showed the biggest fall in more than 45 years. The index fell to -34 from -9 in its regular survey for March, the biggest on record. A one-off survey later in the month showed the weakest sentiment since February 2009.

Wishart said the data are consistent with a quarterly GDP contraction of between 2% and 2.5% - meaning the coronavirus outbreak has wiped out more than a year of activity in barely a month and a half.

He added:

And the PMI is pretty much guaranteed to deteriorate further in April as the full effect of the lockdown is captured. Even then, we doubt it will capture the true scale of the loss of economic activity. We are currently forecasting a -15% q/q fall in GDP in Q2 but if anything, it could be larger.

There is worse to come for Britain’s construction industry, experts say.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, which sponsors the PMI survey, said:

The brutality of this impact cannot be underestimated, and the sector has not hit rock bottom yet.

With no upturn in sight, and with the fastest level of layoffs since September 2010, the sector is stuck in quicksand and sinking further. Though lower commodity prices will bring some relief for those that can source a limited number of materials amidst disrupted supply chains, this will be cold comfort without sites to work in and staff available as health concerns remain.

Tim Moore, economics director at IHS Markit, said:

The closure of construction sites and lockdown measures will clearly have an even more severe impact on business activity in the coming months. Survey respondents widely commented on doubts about the feasibility of continuing with existing projects as well as starting new work.

Construction supply chains instead are set to largely focus on the provision of essential activities such as infrastructure maintenance, safety-critical remedial work and support for public services in the weeks ahead.

The FTSE 100 has fallen back somewhat, shortly before construction data is released.

Gains for the day are at 1.7%, or 93 points.

The FTSE 250 is up by 3.5%, also paring earlier gains.

But an interesting (and potentially uplifting) side note: battery electric sales are continuing to soar.

Electric sales tripled year-on-year, and they have rapidly gained market share as well - a good sign as the UK seeks to drastically reduce transport carbon dioxide emissions.

Battery electric sales now make up 4.6% of the total car market, compared to only 0.9% at the same time last year.

The carrot - the introduction of new models - and the not insignificant stick - the prospect of big fines for carmakers - are doing their job in promoting higher electric car sales.

Car sales showed a steeper fall than during last financial crisis and it was the worst March since the late nineties.

The car industry is now expecting car sales to fall to 1.73m in 2020, 23% lower than its previous expectation.

And for global carmakers the UK is only one sign of the damage being done across the world.

The continued closure of car plants across Europe and North America will cost the auto industry more than $100bn (£82bn) in lost revenues if the shutdown lasts until the end of April, writes the Guardian’s Joanna Partridge.

All major European carmakers have suspended production because of disruption caused by the spread of the coronavirus and if this continues as expected until the end of April, this will account for $66bn (£54bn) in lost sales in Europe, or 2.6m cars. In North America this will account for 2m cars, and lost sales of about $52bn (£42bn).

The publisher of the Daily Mirror, Reach, is putting a fifth of its staff on furlough as it adjusts to the coronavirus crisis.

That means the government will cover 80% of their salaries. All employees are taking 10% pay cuts as well.

WH Smith is preparing to raise new equity to get it through the coronavirus crisis.

The newsagent is heavily dependent on travel locations such as train stations and airports. It “has seen a substantial downturn in economic activity resulting from the Covid-19 pandemic” in the second half of March, it said on Monday.

As well as new lending facilities worth £120m, it is planning an equity issue of up to 13.7% of its share capital. Its statement added:

These financing arrangements, coupled with a broad range of mitigating actions to manage the cost base and cash-flow, will provide sufficient liquidity to deal with this most challenging of trading environments.

Sterling has gained 0.2% against the US dollar and the FTSE 100 has received another leg up after a cabinet minister said he expects Boris Johnson to return from hospital shortly.

Robert Jenrick, the housing minister, told BBC radio that the prime minister should be back at work “shortly”.

He’ll stay in hospital as long as he needs to do that, but I’ve heard that he’s doing well and I very much look forward to him being back in Number 10 as soon as possible.

This isn’t an emergency admission and so I certainly expect that he’ll be back at Number 10 shortly.

The FTSE 100 has now gained 3%.

We will bring any market developments here, but for more details you can also follow the UK coronavirus live blog:

All but five of the FTSE 100 have gained so far, and there are some notable movements.

• Carnival has surged by 18% - although that’s in the context of heavy losses previously. The cruise ship operator has been one of the worst affected companies on the index - shares are still down by almost 80% for the year.
  
• Rolls-Royce has gained 13.9% - despite cutting its targets and suspending its dividend. It said it would cut costs (including a 10% cut in staff costs) and that it had secured another borrowing facility to tide it through the lockdowns.
  
• Legal & General has gained 13.2% in early trading after it said it will keep its dividend payout to shareholders - despite the Bank of England raising an eyebrow. The regulator had asked insurers to reconsider, but L&G on Friday stuck with the £750m payment.

The FTSE 100 has gained 2.7% in the first few minutes of trading, or 150 points to reach 5,566 points.

Germany’s Dax benchmark has gained 4%, while France’s Cac 40 has gained 2% and Spain’s Ibex rose by 3.3%.