Travel ban response to virus triggers another market shutdown
SWEEPING TRAVEL bans accelerated around the globe Thursday, walling off regions, keeping people inside their homes, and slowing the engines of commerce to curtail the unfolding coronavirus pandemic. Princess Cruises, which had one of its ships quarantined off the coast of Japan last month, is suspending global operations for two months. The cruise line, which is part of Carnival Corp, said Thursday that 18 cruise ships will cease voyages that were scheduled to depart between March 12 and May 10. The Miami cruise operator said those currently on cruises that will end in the next five days will continue to sail as expected so that travel arrangements aren’t disrupted. Sailings under way that extend past March 17 will end at the most convenient location for guests, factoring in operational requirements. In the United States, stocks dropped so fast that it triggered a 15-minute halt in trading for the second time in a week. The latest sell-off came after US President Donald Trump announced late Wednesday he would restrict travel to the United States from Europe. The S&P 500 dropped about seven per cent within the first few minutes of Thursday’s trading, steep enough to trigger an automatic halt to trading on the New York Stock Exchange. The index is set to join the Dow in entering a bear market after losing more than 20 per cent from its record set last month, and one of the greatest eras in Wall Street’s history is crumbling. Trump, who had downplayed the virus for weeks, delivered a sombre Oval Office address Wednesday night announcing strict rules on travel from much of Europe to begin this weekend. “The market j udgement on that announcement is that it’s too little too late,” said Michael McCarthy of CMC Markets. The US State Department followed with an extraordinary warning to Americans to “reconsider travel abroad” as well. The damage was worldwide and eye-popping. European stocks tumbled eight per cent, even after the European Central Bank pledged to buy more bonds and offer more help for the economy. In Thailand and the Philippines, stocks fell so fast that trading was temporarily halted. Japan’s Nikkei 225 sank to its lowest close in four years. And oil continued its brutal week, with benchmark US trading at less than US$31 per barrel. Airlines scrambled Thursday to adjust to the new restrictions, with many telling customers they were still assessing options and asking for patience from those trying to contact them. There are usually about 400 flights a day from Europe to the United States, according to flight tracker FlightAware. Airlines have already been slashing their flight schedules, especially on international routes, to cope with a sharp decline in travel demand among fearful customers. About 72.4 million passengers flew from the US to Europe in the year ended last June, making it the most popular international destination, according to Transportation Department figures. About one-third of those passengers fly on US airlines, the rest on foreign carriers. Trump didn’t mention restrictions on Americans travelling to Europe. Even before Trump’s announcement, the International Airline Travelers Association was forecasting a 24 per cent fall in Europe’s passenger traffic this year and US$37 billion in lost potential ticket sales. Italy, which is all but closed off as authorities try to control the spread of the virus there, has been particularly hard hit. Not only has the degree of the market’s drop in recent weeks been breathtaking, so has its speed. If the S&P 500 remains under 2,708.92, which looks very likely, it would be the fastest that the index has fallen from a record to a bear market since World War II, according to CFRA. It was just two days ago that the S&P 500 soared nearly five per cent amid hopes that big stimulus from the US government could arrive soon to help cushion the economic blow from the virus. The European Union quickly slammed Trump’s “unilateral” decision, declaring the virus a “global crisis, not limited to any continent, and it requires cooperation rather than unilateral action”. The virus detected three months ago in China has produced crippling outbreaks in Asia, Europe and the Middle East, ignited global financial panic, and in the last week has seen dizzying developments that are erupting by the hour. Those include an official designation of ‘pandemic’ from the World Health Organization, WHO, a dramatic halt to much travel between the United States and 26 European countries, and infections
being announced in rapid-fire pace by Hollywood celebrities, sports stars and political leaders, as well as ordinary folks on cruise ships. “It’s similar to what you might think of as an infectious disease equivalent of a major earthquake that’s going to shake us for weeks and weeks,” said Dr Jeff Duchin a top public health official for the Seattle area, which has one of the biggest US coronavirus outbreaks. More than 126,000 people in more than 110 countries have been infected with the virus. The vast majority are in just four countries: China and South Korea – where new cases are declining – and Iran and Italy, where they are not. More than 4,600 people have died worldwide. In Italy, the centre of Europe’s epidemic, new restrictions closed restaurants, cafés and retail shops Thursday after the prime minister imposed a nationwide lockdown on personal movement earlier in the week. Grocery stores, pharmacies and outdoor markets were allowed to operate, as were newspaper stands. Ireland, Norway and Lithuania joined the growing list of countries shutting down their school systems, and Europe’s most successful soccer team, Real Madrid, put all its players into quarantine after one tested positive. The UK and Ireland were exempted from the US travel ban, despite imposing far fewer restrictions in response to the virus than many EU countries, raising questions about t he coherence of the US policy. Trump accused Europe of not acting quickly enough to address the “foreign virus” and claimed that US clusters were “seeded” by European travellers. Across the US, where cases now number more than 1,300, college basketball’s NCAA tournament was to be played in empty arenas, while the NBA decided their pros won’t play at all for now. TV shows taped without audiences, and rush-hour crowds in New York subway cars disappeared. As the pandemic grips Europe and the US, it continues to ebb in China, where the first cases of COVID-19 emerged in December. China reported a record low of just 15 new cases Thursday. So far, more than three-fourths of its patients have recovered. Most people infected by the new virus have only mild or moderate symptoms, such as fever and cough, though symptoms can be severe, including pneumonia, especially in older adults and people with existing health problems. Recovery for mild cases takes about two weeks, while more severe illness may take three to six weeks, according to the WHO. Research published Wednesday found that the coronavirus can live in the air for several hours, and for as long as two to three days on some surfaces. On Wall Street at mid-morning, the Dow was down eight per cent or 1,800 points, while the S&P was off 6.2 per cent. “There’s a real feeling that we don’t know where this ends,” said Brad McMillan, chief investment officer for Commonwealth Financial Network.