Travel restrictions to contain the coronavirus are multiplying rapidly, with governments around the world adding selective arrival bans on visitors from afflicted nations and companies banning trips by their employees. Airlines could lose up to $113B in revenue for passenger traffic globally in 2020, depending on how the coronavirus spreads, according to the International Air Transport Association. As recently as Feb. 20, IATA estimated the outbreak would cost carriers $29.3B in revenue. (SA)
The monetary response, while perhaps not as globally coordinated as advertised, saw the Bank of Canada yesterday follow the Federal Reserve with its own 50 basis-point rate cut. Perhaps more important is the arrival of a fiscal response. Governments in Asia have already pledged or are considering $38 billion in new spending to counteract the effects of the outbreak. Yesterday in Washington the House passed a $7.8 billion emergency spending bill to deal with the crisis. In Europe, there has been little beyond the promise of major fiscal measures, despite calls from the French Finance Minister for stimulus. (Bloomberg)
S&P 500 is down 76, and the NASDAQ is down 224. The MSCI International Index is down .07%
Oil ministers gathering in Vienna may be close to bridging the gap between Saudi Arabia and Russia as major oil producing nations seek to deal with the recent huge drop in demand. OPEC ministers have agreed on the 1.5 million barrels a day cut in production, which may still be contingent on Russian agreement at the wider OPEC and its allies meeting tomorrow. In the market, the price of a barrel of crude quickly reversed earlier losses as investors reacted to the news. (FT)
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.