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Good morning. David Meyer here in Berlin, filling in for Alan.
For a moment this morning, it looked like Europe’s markets might be bouncing back from yesterday’s coronavirus-sparked tumble. But no. At the time of writing, any early gains have been wiped out: Europe’s Stoxx 600 is down 0.8%, the U.K.’s FTSE 100 is down 0.8%, Germany’s DAX is down 0.8%, and Italy’s Borsa Italiana is down 1.1%.
At least it’s not as bad as in Japan, where the Nikkei 225 fell 3.3% in the wake of yesterday’s 3.4% drop in the S&P 500—though the Japanese market was closed for a holiday yesterday, so it’s just playing catch-up. The Shanghai Composite was also down 0.6% today, but the Hang Seng was up almost 0.3% and South Korea’s Kospi made a 1.2% recovery. As things stand, futures indicate a flat open in the U.S.
So what’s happening in Italy, where an enormous spike in infections over the weekend caused yesterday’s rout? The death toll is up to seven now, but the number of confirmed cases has tapered off—though at 229, it’s still the third-largest tally in the world, after China (77,658 cases, 2,663 deaths) and South Korea (977 cases, 10 deaths).
The British government has advised people who have visited northern Italy—the hub of that outbreak—to isolate themselves if they experience flu-like symptoms. The European Parliament is taking things a step further, telling all staff who have visited the region to self-isolate for a couple weeks, and to only return to the office following a doctor’s approval. Goldman Sachs is taking a similar approach, and Crédit Agricole has reportedly imposed a travel ban within Italy.
Compared with the restrictions imposed by authorities in China, the self-isolation advice appears to be a modest—perhaps even weak—response. Beijing’s approach has been so heavy-handed that it has triggered pushback from Chinese business leaders and economists, who argue Beijing has gone too far and will hurt livelihoods while failing to stem the Covid-19 outbreak. Then again, the outbreak is far worse in China than it is in Europe.
There is much to be said for avoiding panic in the Italian context, but there is also a strong need for leadership in the response to Covid-19, even if policymakers are flying blind here—as Coins2Day‘s Eamon Barrett writes today, the World Health Organization is not providing clear answers to the question of whether we’re facing a pandemic yet, even though a worldwide spread remains very possible.
Ultimately, only hindsight will allow us to evaluate whether the Chinese or European approach was the more effective. In the meantime, stay alert.
More news below.
David Meyer
@superglaze
[email protected]
TOP NEWS
Trump in India
President Trump has secured a $3 billion sale of military equipment to India, in an apparent effort to counter China's weight in the region. Trump also said the U.S. And India were making "tremendous progress" on a trade deal, and indicated that he is pressuring Indian Prime Minister Narendra Modi to follow the U.S. In banning Huawei from its 5G networks. Reuters
Weinstein guilty
Harvey Weinstein has been convicted of rape and sexual assault, though he avoided conviction on charges that could have led to a life sentence—the film mogul is instead looking at somewhere between five and 29 years behind bars. As the New York Times explains, the Weinstein case could lead to changes in how prosecutors bring about complex sex-crimes cases. NYT
Facebook primaries
Facebook says it has asked Michael Bloomberg's campaigners to disclose that Bloomberg-promoting messages on their personal accounts are in fact sponsored by the billionaire. Bloomberg's team has tasked campaigners to rustle up support from friends and families on the social network, and the campaign claims the initiative was "not intended to mislead anyone". Meanwhile, Facebook also investigated "suspicious content" that supports Bernie Sanders' campaign, though it did not find anything to substantiate the claims that sparked the probe. Coins2Day
German investment
Business investment in Germany fell for the third quarter running at the end of last year, with spending on machinery down more than at any time in the last three and a half years. That was before the coronavirus crisis; the Bundesbank is now warning that growth momentum won't pick up in Q1 of this year. Wall Street Journal
AROUND THE WATER COOLER
"Uber of tractors"
John Deere has struck a deal with Hello Tractor, a Nigerian startup that allow farmers to hail tractors with an app. Deere is testing Hello Tractor's technology on its vehicles in Ghana and Kenya, and is targeting a rollout across Africa in the second half of the year. The idea is to connect small-scale farmers, who cannot afford the outlay for a tractor, with the vehicles' owners. Reuters
Austerity effects
Gains in life expectancy for people in the U.K. Have for the first time in 120 years stalled for a sustained period, according to a report from Michael Marmot at the Institute of Health Equity at University College London. The reason? The government's austerity policies, which have seen child poverty increase, education funding decrease, and rising numbers of people forced to use food banks. Financial Times
Revolut valuation
Revolut, the British app-based challenger bank, is now tied with Swedish payments firm Klarna for the position of Europe's most valuable fintech startup. Revolut's $5.5 billion valuation comes from a $500 million funding round led by Silicon Valley-based venture capital outfit TCV, which was an early investor in Facebook and Netflix. CNBC
Workplace racism
Black History Month provides a great opportunity for companies to begin discussions that can improve their diversity performance, Trudy Bourgeois and Julia Taylor Kennedy write for Coins2Day: "As people become more comfortable understanding each others' experiences, they’ll be more likely to produce the innovative ideas that help businesses succeed." Coins2Day
This edition of CEO Daily was edited by David Meyer.