By Lorcan Roche Kelly
Getting back to work
Chinese authorities are calling on the biggest companies to meet production targets as executives begin to restart factories that have been left idle for weeks. President Xi Jinping reportedly has warned officials that measures to contain the coronavirus, which has killed more than 1,000 people in the country, have gone too far and are now threatening the nation’s economy. Bloomberg Economics estimates that if the outbreak is successfully contained the impact on growth will be severe but short-lived, with GDP expanding 4.5% in the first quarter before rebounding and stabilizing in the second half of the year.
Federal Reserve Chairman Jerome Powell will begin two days of testimony to Congress at 10:00 a.m. Eastern Time this morning. The bank’s semi-annual report to lawmakers said that the coronavirus outbreak presented a “new risk to the outlook” so Powell is almost certain to face question on the Federal Reserve’s response to any economic effects in the U.S. One thing Powell is unlikely to do is announce any major policy changes, despite continuing pressure from President Donald Trump.
Today’s Democratic primary in New Hampshire will probably produce a victory for Senator Bernie Sanders while not giving any signs of the party coalescing around a single candidate. There are 24 delegate votes at stake today, a small prize compared with the Super Tuesday vote on March 3. The latest national poll shows Sanders leading, overtaking Joe Biden with former New York Mayor Michael Bloomberg rising to third place. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)
The rally yesterday which saw U.S. indexes close at record highs shows little sign of abating today. The MSCI Asia Pacific excluding Japan Index climbed 0.9% overnight. Markets in Tokyo were closed for a national holiday. In Europe the Stoxx 600 Index had gained 0.7% by 5:50 a.m. with all 19 sub-indexes of the gauge posting gains. S&P 500 futures pointed to a higher open, the 10-year Treasury yield was 1.592% and oil rose.