Global markets follow Wall Street’s plunge but show signs of bottoming.
Asian markets fell on Friday but did not match the scale of Wall Street’s plunge the day before. Other indicators suggested the market’s swoon may be bottoming.
Stocks in South Korea led the region’s fall, dropping about 2.5 percent at midday. But markets in Japan and Hong Kong saw moderating losses after steeper drops earlier in the day.
In fact, investors looking for signs of optimism had several to choose from. Futures markets were predicting that European markets would open only moderately lower and that Wall Street would open slightly higher. Prices for U.S. Treasury bonds, often seen as a safe haven by investors, were lower in Asian trading.
Stocks in the United States took a sharp tumble on Thursday, with the S&P 500 index falling nearly 6 percent. The drop was a sudden reversal of weeks of bullish investor sentiment despite the major disruptions to the global economy caused by the coronavirus, as well as other worries like protests in American cities and worsening relations between the United States and China.
Investors instead had looked at signs of recovery in some of the hardest-hit places and the huge amounts of money governments had freed up to help recovery efforts. By Monday, the S&P 500 had climbed about 45 percent from its lows in late March and recouped all of its losses for the year.
But on Thursday, investors grew alarmed at a slew of negative economic forecasts and signs that the coronavirus remains a threat to parts of the United States, even as New York and other places hit earlier begin to recover.
While world markets showed signs of stabilizing of Friday, some indicators still reflected deep investor worries. Oil prices, which cratered on Thursday, continued to fall on Friday.
Twitter removes fake accounts that discussed China’s response to the virus.
Twitter said it had discovered and removed 23,750 accounts that were “highly engaged” in a coordinated effort to spread misinformation, and 150,000 others that were dedicated to amplifying China’s messages through likes and retweets. Those findings are consistent with a recent New York Times analysis that detected hundreds of similar accounts.
The Trump administration has sparred with Beijing over the pandemic, saying that China mishandled the outbreak, which is believed to have started in the city of Wuhan. Chinese officials on Twitter have fought back, suggesting without evidence that the virus originated in the United States.
Twitter announced its finding on the same day that Zoom, a video-chat app that rose to fame during the outbreak, acknowledged that it had briefly blocked the account of a U.S.-based Chinese human-rights leader at the Chinese government’s request. The activist, Zhou Fengsuo, had used the platform to organize a commemoration of the 1989 Tiananmen Square crackdown between activists in the United States and China.
Zoom restored Mr. Zhou’s account on Wednesday, but the suspension highlights the California company’s delicate balancing act between free-speech principles and the power of China’s huge censorship machine.
Treasury Secretary Steven Mnuchin said on Thursday that he was “very seriously considering” backing another round of economic stimulus payments to Americans as part of another relief package.
The Trump administration is considering a range of measures to inject more money into the economy, which is facing its deepest downturn since the Great Depression as a result of the coronavirus pandemic. The House of Representatives passed a $3 trillion pandemic relief bill last month, but Senate Republicans and the White House have dismissed that as dead on arrival.
Negotiations between the White House and lawmakers are expected to get underway next month. Mr. Mnuchin has said he would prefer additional stimulus to focus on specific industries that have been hit hardest by the pandemic, but direct payments to individuals would have the benefit of raising consumer spending more broadly.
“It’s a very efficient way for us to deliver money into the economy,” Mr. Mnuchin said in a briefing with reporters on Thursday, noting that for people who still have jobs, the money is akin to a tax cut.
Mr. Mnuchin said he remained optimistic that the economy would rebound during the second half of the year and he played down gloomy projections from the Federal Reserve this week that predicted that the unemployment rate could be close to 10 percent at the end of the year. The Treasury secretary said that traditional economic models are poorly equipped to predict the impact of a pandemic.
The Treasury secretary said he believed that it was unlikely that the economy would be shut down again if there was a second wave of the virus, but he acknowledged that there was more work to be done to get businesses back on track. He pointed to the need for additional incentives such as tax credits to get firms to hire workers and tax deductions that would entice workers to eat out at restaurants.
“High unemployment is unacceptable,” Mr. Mnuchin said. “We have more work to do.”
Catch up: Here’s what else is happening.
Lululemon, the premium athleisure brand, said on Thursday that its sales in the first quarter fell 17 percent to $652 million, showing that not even makers of comfortable, stretchy clothing have been spared during the pandemic. The company said that as of June 10, 295 of its 489 stores had reopened, and that e-commerce sales made up more than half of its first quarter revenue, compared with 27 percent in the same period last year. Still, unlike most other retailers, it managed to post a profit of $28.6 million.
Boeing has asked a major supplier of parts for its troubled 737 Max jet to stop work on four Max fuselages and not to start work on 16 more, which were planned for delivery this year, according to the supplier, Spirit AeroSystems. Based on that request and further correspondence with Boeing, Spirit said it expected to cut back work it had planned on 125 of the jets and would furlough some employees on the project for three weeks starting Monday.
Reporting was contributed by Mohammed Hadi, Alan Rappeport, Sapna Maheshwari, Kate Congier, Paul Mozur, Carlos Tejada, Michael Ives and Niraj Chokshi.