Global stocks stabilize after Wall Street’s wild ride.
Global markets stabilized on Wednesday one day after Wall Street ended sharply lower, signaling a wait-and-see stance by investors over how world leaders would react to the worldwide coronavirus outbreak.
European markets opened modestly lower after a mixed day in Asia. Futures markets suggested Wall Street would open in a similar way.
Oil prices rose slightly, suggesting investors who had panicked on Tuesday were starting to see confidence return.
From Tokyo to New York, investors are grappling with the potential damage the coronavirus could inflict on the global economy as fractured supply chains, travel bans imposed by companies and governments, and the disruption of daily life in general, take their toll.
As the virus has spread around the world, investors have become intensely focused on its impact. But there is little clarity about how long it will take governments and health officials to contain the virus, leading to a gloomy prognosis for global economic growth.
On Tuesday, the Federal Reserve validated these concerns by announcing an emergency cut in interest rates, only a few hours after leaders of the world’s largest economy said they would refrain from concrete action.
And Wall Street’s reaction to the Fed’s move — stocks and bond yields both fell sharply — showed that investors had settled on the conclusion that the cut would not address the biggest economic challenges posed by the virus.
While they can bolster confidence and help to keep borrowing cheap, central banks cannot prevent disease from spreading or mend broken supply chains amid factory delays.
The Fed’s move “can provide a short-term floor under sentiment, which is what they’ve done today,” Neil Dutta, head of economic research at Renaissance Macro Research, wrote in a note following the announcement. “But the Fed’s tools are imperfect and not adequate to deal with a public health crisis.”
As of early Wednesday in global financial markets, investors seemed to signal that they were willing to wait for what happens next.
In Tokyo, the Nikkei 225 index ended 0.1 percent lower. Hong Kong’s Hang Seng Index was trading 0.2 percent lower near the end of its day.
In China, the Shanghai Composite Index rose 0.6 percent.
The biggest loser in the Asia-Pacific region on Wednesday was the Australian stock market, where the S&P/ASX 200 index fell 1.7 percent. The biggest gainer among major index was South Korea’s Kospi, which rose 2.2 percent.
In European, London’s FTSE 200 index opened flat.
Germany’s Dax opened 0.3 percent lower, while the CAC 40 index in France was down half a percentage point.
Ford is halting domestic travel as well as international.
As the coronavirus outbreak has spread to Europe and the United States, companies that rely on world travelers are struggling to predict exactly how it will ultimately affect them as corporations impose restrictions on nonessential business travel and the public stays put.
Most of the restrictions by American companies are on cross-border travel, but Ford Motor Company told its employees on Tuesday to stop all domestic air travel in the United States as well, and to use videoconferences as much as possible for critical meetings.
Rare exceptions will be made for travel that is critical to Ford operations, requires employees to be on site and does not put anyone at risk, the company said.
The company had previously restricted travel to and from China, where it has two joint ventures.
Analysts say most companies in the lodging, gambling or leisure industries, including cruise ship lines and amusement parks, know they will take a near-term hit to revenues, but have little idea of what will happen in the summer or beyond.
Nervous investors are bracing for the worst. The stocks of hotel chains like Hyatt, Marriott and InterContinental Hotels have tumbled more than 16 percent this year, compared with declines of 5 percent in the broader market.
Here’s what else is happening:
Google said on Tuesday that it was canceling its annual developers conference because of concerns related to coronavirus. The Google I/O event was scheduled to take place May 12-14 in Mountain View, Calif.
Amazon learned that an employee in one of its office buildings in the South Lake Union neighborhood of Seattle tested positive for the virus, the company said in an email to its staff late Tuesday. “We are supporting the affected employee, who remains in quarantine,” said Drew Herdener, an Amazon spokesman.
Reporting was contributed by Neal E. Boudette, Julie Creswell, Karen Weise and Daisuke Wakabayashi.