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ON THE RADAR: SCRAPPED DIVIDENDS, PRODUCTION CUTS...(0752 GMT)
Can “whatever it takes” not be enough?
If even talks of helicopter money doesn’t make it, then what?
That question seems to be eating European markets this morning with futures deep into the red despite Wall Street’s 6% jump overnight.
For all the hundreds of billions pledged to cushion the blow of the outbreak in the coming weeks or months, the damage the virus is inflicting on the economy is massive and immediate as this morning’s headline show.
French catering and services group Sodexo said the coronavirus crisis could impact its annual sales by 2 billion euros.
Like in 2008/9, the auto industry is on the frontline while passenger car sales already falling sharply in Europe's major markets in February, as data showed this morning.
Volkswagen is the latest group to announce drastic measures, halting the production of commercial vehicles at its plants in Poznan, Swarzedz and Września in Poland.
Retail is facing devastating sales with H&M temporarily closing all its 460 stores in Germany, its number one market for sales, and all 590 in its second largest market the United States.
Hard to see as well how say UK retail investors would go back into the markets with real estate funds managed by Kames Capital and Janus Henderson temporarily suspended or supermarket group Morrison warning it faced "unprecedented challenges and uncertainty".
Counting on companies to pay dividends for 2019, let alone 2020 also seems a foolish gamble: British IT company Micro Focus International says it not pay a final dividend.
Even the cash rich Zara-owner Inditex said it may channel the cash destined for the payment of the 2019 dividend into reserves.
In Germany Wintershall said it would cut investments and suspend its dividend until further notice despite posting strong results for 2019.
While airlines have already sustained an equity wipe out, there’s no sense of a bottom with the International Air Transport Association saying the total government support needed worldwide could reach $200 billion.
With the French government saying nationalisations are an option, such as for Air France, investors might not want to come back before a possible state-only rights issue.
Decisions such France to ban shorting for a month are not seen helping that much either.
EUROPEAN STOCKS SET FOR A 4% FALL (0730 GMT)
Futures point to a lower open for European bourses with all main indices down around 4% as investors weigh how the stimuli package from the U.S. and Europe will help to cope with falling demand and prolonged supply chain disruptions.
"With supply chains disrupted since February, countries hit one after the other and businesses closed in many leading economies, it is not a question of if, but a matter of how bad and how long the coronavirus-induced recession will be," writes Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
MORNING CALL: WHAT A DIFFERENCE A NIGHT MAKES (0626 GMT)
A European investors could have been excused last night to feel somewhat reassured by Wall Street's 6% jump.
After all, it was reasonable to assume that the pledge by the Fed and by governments across the world to pump up hundreds of billions of dollars to cushion the effect of the coronavirus outbreak would calm markets down.
Not anymore. Whatever positive sentiment was around last night faded away and European futures are deep into the red. Like over 5% into the red.
Which makes sense because Asian bourses fell and U.S. futures hit their daily limit outside U.S. trade.
(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)