On Christmas eve, amid the turmoil of tier 4, Boris Johnson has secured a trade deal with the EU giving it tariff free access to European markets. After 9 months of talks both sides were able to find a compromise on the final stalling point of fishing rights and thus complete the deal. Many believe the deal is the least bad option but at least it’s a trade agreement designed to benefit both the UK its EU partners in allowing the freedom of goods and services to continue. With many in the market being off for the holiday volume was light but the UK market saw a bounce in mid cap domestic stocks and the pound. Alas, much of the positivity around a deal had forced the pound higher in the last few weeks so on the day of the actual agreement the moves were not as big as some would have hoped for.
Rishi Sunak, in his first speech on financial services since taking over as chancellor in February, announced plans to launch the country`s first green gilts, as part of the UK`s plan to hit the net zero-carbon target by 2050. Green gilts, or green sovereign bonds, are a form of government borrowing where the proceeds are earmarked to fund low-carbon infrastructure projects. This is a huge step for the UK, which is following in the footsteps of the European Union, who have already introduced major green initiatives, with many countries including Germany and Sweden, already issuing green gilts. A further significant announcement made by the chancellor was that the UK would become the first country in the world to make large listed and private companies disclose the threats to their business from climate change by 2025, including banks, insurance companies and pension schemes.
A COVID vaccine developed by Pfizer has today been announced as proving effective against COVID-19 in 90% of test cases in its long term trial. With the trial still not finalised it will be a few more weeks before the vaccine is officially approved. Markets reacted very positively on the news with most developed markets up over 3% with many segments of the market affected by COVID rallying the most. There still remains large logistical hurdles to a global roll out of the vaccine but this initial news will come as a welcome update on the fight against COVID.
Nearly a week after the election began, Joe Biden, now President elect Biden secured victory on Saturday evening to take his place as th46th President of the United States. Biden secured the Presidency when he edged ahead of Trump in Pennsylvania which has 20 electoral seats and represents a state which Trump needed to win to stand a chance of retaining the Presidency. Markets have reacted positively on the news with the MSCI world reaching a new record high.
British Chancellor Rishi Sunak has today announced that the UK furlough scheme to pay 80% of workers’ wages will be extended until March. The announcement has come on the back of the UK moving into a full lockdown for November and ready’s itself for a winter of surging COVID cases. The Chancellor has reserved the right to review the schemes effectiveness in January of 2021 to see if employers can begin to take on a larger share of the payments to employees. Market reaction on the news was muted as US election results and volatility have kept front and centre.
Trump and Biden met in person again for a final presidential debate, 12 days head of the election. The debate was seen as a more civil affair than the first debate, largely because opponents microphones were muted when not responding. The debate had more of a focus on policy responses and the state of the nation under the virus. Both talked at length on topics like race, immigration, and the future of the oil industry. The outcome of the debate seems to have favoured Biden purely because Trump failed to land enough punches to change the stakes in any meaningful way. Biden remains ahead in the polls by 8.4%.
UK Prime minister Johnson has, a few moments ago, told the UK to prepare for a no deal Brexit as the EU remains staunch in its objections to the UK having a Canada style arrangement of free market access. Johnson instead told the UK to prepare for an Australia style deal which is to say the UK would be trading with the EU on WTO rules which is what Australia has. Johnson did leave a back door to further negotiations by saying he was not going to completely walk away from negotiations in the hope that the EU would soften their requirements.
UK unemployment rose at a record rate in the three months to August, UK unemployment now sits at double the level seen in March of this year. Much of the summer job losses were from redundancies in sectors most affected by COVID. This comes against the backdrop of data showing more furloughed employees actually returning to work over the same time period. A lot of focus will be on the final quarter of 2020 to see if the chancellors diluted assistance schemes will help stem the unemployment rises.
Donald Trump has confirmed he will not be partaking in the next presidential debate which has been taken viral as the physical debate was cancelled. Tump decried the move as an attempt from the political elite to further crush his ratings. Markets moved on the news as Trumps approvals ratings were affected from the move. The VP debate held last night also caused a spike in markets as investors saw a Biden victory as a thawing in relations with China and thus a more productive trade agreement.
Employment numbers in the US rose by 661,000 for September which was a miss from the consensus number. Positively the unemployment rate declined from 8.4% to 79% which is the lowest its been since the 4.4% number in February. Main areas of gains were hospitality, leisure healthcare and social assistance. The number has been somewhat muted in terms of a market reaction as Trumps positive COVID test continues to occupy the headlines.
President Trump and first lady have tested positive for COVID-19. Both have committed to immediate quarantine with Trump cancelling all of his public appearances. Markets moved lower on the news with the dollar strengthening as the possibility of a Biden win in next month’s elections moved to 60%. Whilst many commentators believe the selloff is just a reactionary move from algorithms it does underscore the volatility which is imbedded into the presidential contest.
The first US presidential debate was held last night and reports indicate the debate descended into anarchy with Trump and Biden swapping personal insults more than economic policies. Many believe Trump came off worse than Biden in the aftermath. This seemed to centre around two points - the Presidents reluctance to commit to a peaceful transfer of power should he loose and his refusal to condemn white supremacists. Some commentators who have been watching live debates for decades believed it to be the worst debate in US history.
Following the yesterday's decision by the US Federal Reserve (The FED) to keep interest rates at historic lows, the Bank of England (BoE) has also decided to hold rates, currently at 0.1 per cent in the UK. In contrast to the FED, the BoE indicated it was beginning to consider taking rates negative to help deal with the evolving economic fallout from COVID 19 and was consulting regulators. There was no change announced to the asset purchase program (QE) though mention was made that no tightening would be considered if the 2% inflation target is not met. Sterling weakened initially following the decision as the idea of negative interest rates prompted a move out of the currency, though declines were largely clawed back. For equities and bonds, reaction to the news was muted, with global market sentiment driving price moves on the day.
The US Federal Reserve (The FED) has confirmed it will keep interest rates on hold at historic lows, through into 2023, whilst stopping short of offering fresh stimulus to the US economy. This decision by 13 of 17 members was on the basis that rates could be taken higher longer term when the US labour market returns to a position of strength, near full employment, and if the illusive 2% inflation target is reached. Following the decision, global equities receded from recent highs, while the US dollar saw a renewed bout of strength against a broad range of currencies as safety was sought in the world reserve currency. Other safe havens were mixed, with sovereign bonds experiencing muted volatility, whilst gold suffered from the strength of the US dollar in which it is priced.
US payrolls advanced in August ahead of analyst’s expectations with 1.4m new roles added against an expected number in the region of 700,000. The number has been taken as both a positive on the strength of the recovery and a negative as law makers in Washington see less impetus for further economic stimulus given the strength of people going back to work. The second point to note from August was the unemployment rate in the US dropped to 8.4% which is now well below the 10% unemployment rate seen in the aftermath of the financial crisis. Again, further evidence of the US’s jobs recovery leading to less motivation for more economic stimulus.
The Jackson Hole meeting of the US FED saw the central bank state that they will now move to an average inflation targeting policy rather than a hard target of 2%. What this allows the FED to do is allow inflation to move ahead of 2% without having to raise interest rates. The sub text of this decision is the FED want to keep interest rates low regardless of short term inflation. US treasuries sold off on the news.
Joe Biden, former US vice president and now Democratic front runner has announced Kamala Harris as his running mate. Kamala's pick as Biden's VP will see the first black female in the role and tips her to be the Democratic successor as Biden steps down after one term. Democratic fund raising in the first 24 hours after the announcement broke previous fundraising records with $26 million coming to the Biden campaign. This level of support only serves to strengthen Biden's chances of taking the presidency in November.
The UK economy in Q2 entered into the largest recession on record with a dip of 20.4%. This drop was double that of the US and far more than other EU counterparts with the exception of Spain. This drop was largely driven by the length of the UK shutdown and attributable to the services sector which was adversely hit during the economic shutdown and represents 80% of UK GDP.
The UK has, since the outset of the COVID pandemic, shed almost three quarters of a million jobs with many earning less and working less than five days a week. The level of people claiming out of work benefits from the government has also risen to 2.7 million people and represents nearly double the level of claims pre pandemic. Investors are continuing to pare back expectations towards UK assets as the furlough scheme ends in a few months with many expecting jobless claims to rise further as the UK continues to remain in a demand glut.
US non-farm payrolls for July came in at 1.8m jobs created representing an unemployment rate of 10.2% down from 11.1% in June. The number was better than expected but still below the 4.8 million created in June. The bulk of the new roles created came from the hospitality sector as many in the country began to travel once again. Investors speculate that the slowdown in new jobs created since June centres around the re enforced lockdown in the southern states. Eyes remain on the trajectory of the report for the remainder of the year.
US gross domestic product or GDP dropped 33% in Q2 of 2020. This numbers is represents one of the worst drops in US history and fell much further than both the financial crisis and the end of the second world war which only posted a GDP contraction of less than 2% Vs Q2 2020 of 33%. This came at the same time as unemployment benefit claims rose in the US to 1.43 million as more sunbelt states forced a second round of shutdowns to fight the infection
After several days of debate, which began in Brussels on Friday, European Union leaders have agreed on a support package worth 750 billion euros to help struggling countries recover from the COVID-19 pandemic. The recovery fund, drafted by German Chancellor Angela Merkel and French President Emmanuel Macron back in May, will deliver grants of 390 billion euros to economically weakened member states in southern Europe and a further 360 billion euros in low interest loans. Furthermore, around a third of funds have been earmarked for fighting climate change, with all expenditure having to align with the Paris Agreement`s goal of cutting greenhouse gases. European stocks as well as government debt from the riskier, periphery countries, rallied following the news and the euro strengthened.
The European Central Bank under Christine Lagarde has voted in favour of keeping rates unchanged at its policy meeting today. Alongside this the central bank reasserted its commitment to continue its bond purchases for as long as necessary to offset the impact from the forced economic shut down in the Eurozone. All eyes now look to the meeting of EU leaders tomorrow on the state of the 750bn Euro bailout fund for countries most affected by the crisis.
Rishi Sunak, Chancellor of the Exchequer has announced new stimulus measures for the UK to help combat the profound economic challenges ahead for the UK. The mini budget contained a cut to VAT for the hospitality sector, 50% off restaurant meals in August and a cut to stamp duty for homes under £500k.The last initiative called the Job retention bonus will see the UK government pay companies £1,000 per employee they hire back after the furlough programme ends. If the take up on this was 100% and all employees were hired back this would cost the UK government £9bn .
US employment for June came in ahead of expectations with job growth of 4.8m with an unemployment rate of 11.1% down from 13% in May. However with 7.5m now back at work there remains a lot more employment needed to erase the 22m who lost their jobs. The risk in these June numbers is they were collected in the third week of June which was largely ahead of the second wave of infections in the US sunbelt states which could disrupt the US’s return to full employment.
The Bank of England has voted to pump another £100 Billion into the UK economy via its quantitative easing programme. At the same time the Bank of England voted unanimously to keep interest rates on hold. The vote to increase the QE programme reflected the increasing level of uncertainty about the UK’s recovery trajectory into 2021. However, the market reacted negatively on the news as the £100 billion increase was seen as a overly hawkish raise and at the lower end of the projected increase which the market was hoping for.
US retail sales for May surged past expectation which were for 8% growth to notch up a gain of 17.7% from last month which posted a contraction of 16%. This represents the largest jump in the sales data since 1992. Whilst the data was a big surprise, the level of spending was still down some one billion dollars from May 2019. Markets have reacted very positive with US market opening up over 2% and European markets following them higher. Economists still advocate caution to extrapolating this data too far forward to rationalise going overweight equities.
The UK economy shrunk at the fastest monthly rate on record in April, contracting by 20.4%, and following on from the decline of 5.8% in March. The coronavirus lockdown was the driver of this significant fall in UK GDP, with services, particularly accommodation, food services, travel, retail and entertainment, being worst hit. Given that the services sector accounts for 80% of UK GDP, this was the main reason for the decline. Other affected areas were trade, the industrial sector and the construction sector. UK equity markets were unfazed by the news, and in fact rose in early trading, recovering from the losses over the previous days.
The US federal reserve voted yesterday to keep rates in the 0 – 0.25% range with Chairman Powell stating there was no intention to raise US rates until 2022. This message sparked a rally in US government debt whilst equity markets sold off on this being seen as a more pessimistic outlook than anticipated. Markets also took a leg lower this morning as infection rates in some US states have begun to spike again as lockdown measured are eased sparking fears of a second wave of infections.
The US jobs report for May was released on Friday and will perhaps go down in history as one of the biggest upsets to consensus on the monthly number. Consensus put job losses in the US at over 7 million for May, the actual figure was 2.5 million growth in jobs which was unprecedented. Markets rallied sharply on the news as investors saw a V shaped recovery being more likely given this anecdotal evidence on US jobs growth rather than contraction. Many believe the jump in employment was attributed to the US furlough scheme coming into effect which saw employees re hired back onto company rosters with salaries being paid by the government.
The meeting of the European central bank today hit expectations with an announcement of a further 600billion into its bond buying programme and further comment that it was prepared to step further into the market when it was needed. European sovereign debt rallied on the news as did the euro as investors saw this move to provide more stimulus as a positive. Equity markets did not react to the news as profit taking from a strong week of rallies continued to override any positivity.
The US government has taken the decision to remove the special trade status given to Hong Kong after the Chinese government enacted new security laws to draw Hong Kong further under its influence. This move from the Chinese is seen by the US as a termination of Hong Kong’s autonomy from mainland China and as such the special region should no longer receive special treatment internationally. Despite the revival of protests on the island markets, for now have remained unaffected.
The UK economy has shrunk at a record monthly pace of 5.8% in March, contributing to the -2% fall in gross domestic product for the first quarter of 2020, the largest fall since the 2008 financial crisis. The sharp fall in GDP came in the month when the UK government began to enforce strict lockdown measures in an attempt to contain the spread of the coronavirus, which caused a major downturn in economic activity and demand. Sectors which contributed the most to the fall include services, construction and hospitality. On a slightly more positive note, the first quarter contraction was less than expected by the Bank of England, who expected a 3% decline in output, and also less than the 3.8% decline in the eurozone economy.
The US unemployment figure in April reached 20.5 million unemployed. That level of unemployment represents 14.7% of the US population which is f the highest unemployment figure in the US since the second wold war. Economists believe that figure would be as high as 20% if those who are not registered as unemployed found their way onto the register. Despite this, the number came in slightly above expectations which bolstered the mood of markets in the US as well as the news that many developed market economies were gradually beginning to lift lock down measures.
The Bank of England today voted to keep interest rates and the existing QE package on hold. The central bank also predicted the UK would see the worse recession in 300 years but anticipated a V shaped recovery in the back half of 2020. Many think the UK BoE indeed to drag rates lower and push QE wider but are waiting for the economic recession to bite rather than releasing more stimulus measures right now when the economic numbers still remain uncertain.
Flash estimates of the Composite Purchasing Managers` Index (PMI) released today, revealed the UK has experienced the fastest contraction in manufacturing and services data on record, as a result of the lockdown measures imposed in an attempt to control the spread of the coronavirus. The composite index for the UK, which is an average of manufacturing and services activity, fell from 36 in March to 12.9 in April, highlighting how business activity has collapsed following business closures and social distancing measures. These flash estimates, released a week in advance of the final results, reinforce the expectation of a significant contraction in the UK economy, possibly in the region of 7% quarter-on-quarter or more.
Markets have witnesses yet another historic event over the last trading day. The price of a barrel of US oil plunged below $0 for the first time in history. The reason ? Oil producing nations around the world have continued to pump oil at a time when almost all cars, planes and oil consuming industries have ground to a halt. This means oil coming out of the ground today has run out of places to be stored which in effect means producers are paying buyers to take the oil off their hands, hence the negative price.
US weekly job losses to the end of April 11th came in at 5.25 million people filing for unemployment. The US market initially peaked as this number was a beat on expectations that the number would reach 5.5 million however many fear this number is set to be revised lower as more states submit their numbers. This employment number combined with previous weeks put the US unemployment rate at around 15% which continues to deteriorate.
Both German and French economies have entered into a historic recession after only being in the COVID-19 turmoil for a few months. In Q2 2020 the German economy is set to contract by 10% which is double that of the 2008 recession. At the same time France has announced its GDP will contract by 1.5% for every week the economy is in lock down and posted that GDP in Q1 2020 contracted by 6% which, given the relative COVID-19 free Jan and February, this 6% number is almost entirely from March. France has forecast the COVID-19 virus will hit economic output the most since the second world war.
US non farm payrolls have delivered their first negative print since March 2009. The level of job loss was predicted to come in at 100,000 losses, down from 270,000 jobs created in February. The actual number came in at a total loss of 701,000 which was seen as a massive miss Vs expectations. Markets did not move a huge amount on the news with many speculating that the rally in oil markets has helped to offset some of the negativity from this unemployment number. The realisation that this loss was incurred before the social distancing measures were enacted in the US has led to speculation that the worse is yet to come with some predicting the number will stretch into the millions.
US jobless claims rose to a new record of 6.65 million in the week ending March 28, according to the Department of Labour, as the US stepped up their efforts to fight the spread of the coronavirus with many more shops and restaurants forced to close. This bring the two-week total to nearly 10 million and sets the seen for Friday`s job`s report, which is likely to highlight the first signs of the damage to labour markets as a result of the coronavirus pandemic. US futures, which were looking at modest gains at the opening of the US stock market, fell on the news, while the US dollar and gold rose.
Data released from the US today shows the staggering scale of job losses in the first week since the government began urging citizens to stay home. 3.3m people filed a claim for unemployment benefits in the week ending Saturday, up from 282,000 the week before. This is the largest single-week rise in unemployment claims since records began being published over 50 years ago. Despite this news, US equities opened strongly, continuing the gains made over the last couple of trading sessions after the $2 trillion stimulus package was approved by the US Senate overnight.
The US Senate has finally agreed a US fiscal stimulus package totalling 2 trillion dollars. The level of support to the US economy marks the largest US bailout in history. The package will stimulate both businesses and consumers with business cash injections and means tested cash handouts for struggling US households. The bill, which has now passed through the Senate, needs to pass through Congress later today which will finalise the deal. The bailout package has caused global equity markets to rally more than 10% on the news with some speculating this could be a false bottom as the global economy continues to grapple with the virus.
Prime minister Johnson yesterday took the unprecedented measure of closing Britain to all but essential services and essential travel in a bit to halt the spread of the virus. The measures will remain in place for three weeks to begin with or until there is evidence of the strategy working to slow the rate of infection. Some have speculated that the UK has been late to announce these measures when compared to countries which are further along in the coronavirus pandemic.
The US Federal Reserve has stunned markets with a commitment to providing unlimited stimulus in the form of $600bn in asset purchases. What surprised markets was the commitment to buy BBB rated debt and even corporate debt ETF's and asset backed securities. This is an unprecedented level of monetary stimulus which has never before been seen in capital markets. The announcement prompted the S&P to rally into the green and force the dollar to give back some of its pre-market gains.
The US Federal Reserve, as part of a global coordinated effort, have lowered interest rates to 0% which is a level not seen since 2015. In conjunction with this the Fed announced they would be including $700Bn buys of US Treasuries to prop up this essential market. This move is part of a global coordinated effort from central banks to pump monetary stimulus into the economy to stabilise markets against the fear that the global economy is shortly going to enter a recession.
The European Central Bank (ECB) has launched a plan of further stimulus in an attempt to counter the negative impact of the coronavirus on the eurozone economy. ECB President, Christine Lagarde, announced today further loosening of monetary policy, with a planned 120 billion euros of bond purchases by the end of the year, although the main deposit rate will remain unchanged at its record low of minus 0.5 per cent. This is on top of their existing commitment to buy 20 billion euros of bonds a month. The central bank also said it would launch a new program of cheap loans for banks as a temporary measure until June. European stocks continued to decline after the announcement, while European debt broadly weakened.
The Dow Jones index officially ended the longest running bull market in US history yesterday by falling the required 20% to qualify as being in a bear market. The Dow Jones, the US’s industrial index, was pushed into bear market territory on the WHO announcement that the coronavirus was now officially a global pandemic. An underwhelming Presidential address to the nation also caused further concern about the US’s inability to react quick enough to the viral outbreak whilst banning travel to the US from mainland Europe.
The Bank of England has, this morning, voted to cut UK interest rates by 0.5% taking the rate to just 0.25%. The move has come as a double effort from the UK government to deliver monetary stimulus in the form of an interest rate cut this morning and further fiscal stimulus measures when the budget is announced later today. This is all to help insulate the UK economy from a downturn in economic growth from the virus. The BoE also announced its intention to increase lending to small and middle-sized businesses in the UK to the tune of 100bn pounds which should provide further support.
Equities plunged today on a dual headwind of Coronavirus concerns and OPEC’s decision not to prop up the oil market with supply cuts. The decision from OPEC surprised investors and prompted the price of oil to fall over 30% as a result. This had a knock-on effect into global equities which served to deepen the Corona induced selloff with some indexes falling to levels not seen since the 2008 financial crisis.
Payroll data released today showed the US economy added 273,000 jobs in February, far higher than the gain of 175,000 forecast by economists. Unemployment was slightly lower than expected at 3.5 per cent versus the 3.6 per cent predicted. Overall, the market reaction was fairly muted, with government debt remaining strong and US futures continuing to decline. The figure indicated that employment was holding up as coronavirus concerns grew, though this was before the outbreak intensified, therefore next month`s jobs number will likely be of more interest to market participants.
The Federal Reserve has engaged in an emergency interest rate cut of 0.5 per cent in response to the spreading of the coronavirus which has disrupted economic activity in many countries, with the risks to the US outlook having changed materially. The central bank reiterated its intentions to use its tools to support the economy where it can, however, the question is whether or not lower interest rates can stimulate consumer spending, revive the tourism and travel industries and support manufacturing companies who require materials from abroad. US equity markets rose sharply on the news, but later pulled back, while government debt also strengthened following the announcement, as represented by a fall in yields.
Losses on the FTSE 100 accelerated today with the US opening sharply lower as investors continue to pull billions out of the equity market. This week’s sell off is now approaching 12% and marks one of the worst weeks for global stocks since the 2008 financial crisis and, at this stage, shows no signs of slowing. In contrast to Monday’s rally in gold, the precious metals price is now reversing with speculation that profit taking is now occurring in the gold market. Investors are now looking to central banks around the globe to step in and stimulate the global economy to prevent a global recession.
The FTSE 100 has tumbled 3.5% on the first day of trading this week on fears the coronavirus is on the verge of tipping the global economy into a recession. The slump in the UK’s largest 100 companies came off the back of a steep sell off in the US markets on Friday with the S&P500 down 2.6%.Gold prices spiked to over 1,600 dollars an ounce on the news as investors flocked to safe havens to protect capital. Investors remain on alert for any further deterioration in sentiment before deciding where to go from here.
UK household spending rose more than expected in January showing the UK consumer has taken heart from the increased level of certainty provided from a stronger UK government and the UK’s final departure from the EU. The numbers indicated a rise of 0.9% over last year which was higher than the forecasted rise of 0.7%. This announcement comes off the back of a strong employment figure for the UK in January which backs up TAM’s assessment that the UK economy is showing a more robust economic recovery than many were forecasting. This increase in consumption bodes well for domestic facing businesses and funds invested into them.
Jupiter Asset Management has struck a deal to buy Merian Global Investors for £370m via a new share issuance in Jupiter stock. Whilst not the largest asset managers in the UK, the merger brings together two favourites of the industry with a combined £65bn in assets under management. With both fund houses suffering outflows in assets over 2019 the two entities hope this new merger will revitalise their opportunities and bring the groups asset inflows back into positive territory.
The Bank of England has voted 7-2 in favour of holding interest rates at their current level of 0.75 per cent. The Monetary Policy Committee’s decision was based on several factors including an improvement in business sentiment since the general election, a reduction in global trade tensions and better UK survey data of households and companies, which led them to believe that a cut was unnecessary at this time. Having said this, they also downgraded the UK growth forecast, with an estimate for average growth in the UK economy of 1.1 per cent per annum over the next three years. Carney expressed that some modest tightening may be needed over the next few years if the economy continues to perform well, which contrasts to earlier comments where he stated that he expected “limited and gradual” interest rate rises over the coming years. The UK government bond market weakened on the news, while the pound gained strength.
The spread of the Chinese originated Corona virus has now spread into India taking the total list of countries affected to 16 and prompting the WHO to consider announcing the spread of the virus as a global emergency. Markets have continued to swing from positive to negative on updates and setbacks in the global effort to contain the virus. Markets are down another 1% today on fears of a continuation in the spread of the virus.
It was announced today that the UK government has approved the use of China`s Huawei equipment in the country`s 5G networks, with the goal to provide access to more advanced, world-leading technology. There has been concerns around the risk of exposing Britain to spying by the Chinese sate, particularly coming from the Trump administration. The UK National Security Council has addressed these concerns by imposing a 35 per cent market share cap and excluding Huawei from the sensitive, core parts of the networks, with the aim to slowly reduce the role of Huawei as new entrants come to the market.
US stocks experienced their largest one-day drop since the beginning of October as the escalating coronavirus has been reported to have killed at least 81 people in China and infected over 2,500, with cases now reported in several other Asian countries as well at the US, Canada, France and Australia. The Chinese government has extended the public transport shutdown to cities and announced further curbs on travel between China and Hong Kong in an attempt to contain the virus. Markets have been reacting on fears about the derailment of global growth prospects. US and European stocks have fallen, whilst safe havens such as government debt and gold are back in demand.