Shares ended lower in the US even after Congress approved a $US2 trillion rescue plan for the economy amid widespread disruption because of the coronavirus outbreak there.
As of Friday afternoon in the US, there were more than 97,000 confirmed cases and almost 1500 deaths in the country.
The news of surging cases and deaths in the US helped snap a three-day rally in New York. Losses were pared somewhat after the House of Representatives passed the rescue bill. President Donald Trump signed it into law shortly after the closing bell.
At at the close in New York, the Dow was down 915 points or 4.1%. The S&P 500 slid 3.4% and the Nasdaq shed 3.8%.
On Friday afternoon, President Trump invoked the Defence Production Act to force General Motors to make ventilators, and taking the opportunity in his statement to criticise GM for “wasting time” in negotiating contract terms.
In Europe, markets ended near their session lows. The Stoxx 50 shed 4.1%, London’s FTSE 100 fell 5.3% – rocked in part by news that Prime Minister Boris Johnson tested positive for COVID-19 and was in self-isolation.
France’s CAC 40 slid 4.2%, while Germany’s DAX ended down 3.7%.
The European Central Bank asked banks to halt dividend payments at least until October 1, and also to stop buying back their own shares.
The “capital” that is conserved from these two actions can “be used to support households, small businesses and corporate borrowers and/or to absorb losses on existing exposures to such borrowers”, it said.
ASX futures were up 6 points or 0.1% to 4834 as of 3.59pm New York time.
The Australian dollar advanced 1.7% to US61.68¢, defying at least for the moment forecasts that it was poised to tumble. It peaked at US62.00¢.
The yield on the US 10-year yield tumbled 16 basis point to 0.69% as of 4.29pm New York time.
Gold slid 0.6% to $US1621.81 an ounce, brent oil fell 6.4% to $US24.66 a barrel and US oil fell 4.6% to $US21.57 a barrel, according to Bloomberg data near 4.30pm New York time.
In Today’s AFR Weekend
Landlords, staff to share shutdown pain: Property landlords will need to waive rent, while worker pay and accumulated leave may be sacrificed to help shuttered businesses survive a six-month coronavirus “hibernation”, Scott Morrison has declared.
Chanticleer: This virus recession is complicated: Share markets turned bullish this week despite cascading news of increased measures to lock down the economy. The recovery could be complicated by Australia’s record household debt.
More carnage as Myer closes stores, stands down 10,000 staff: Myer will stand down about 10,000 store and support office staff from Monday, taking retail job losses due to COVID-19 to more than 40,000.
The AFR View: Fight the virus, don’t rebuild fortress Australia: Like previous global struggles, the fight against COVID-19 will shape the political and economic contours of the next 20 years.
In other overnight news:
The Bank of Canada slashed its key interest rate by 50 basis points to 0.25%.
“This unscheduled rate decision brings the policy rate to its effective lower bound,” governor Stephen Poloz said in a statement. “The intent of our decision today is two-fold: to immediately support the financial system so it keeps on providing credit, and, over the longer term, to lay the foundation for the economy’s return to normalcy.”
The bank also said it will begin acquiring Canadian government securities in the secondary market. “Purchases will begin with a minimum of $C5 billion per week, across the yield curve. The program will be adjusted as conditions warrant, but will continue until the economic recovery is well underway. The bank’s balance sheet will expand as a result of these purchases.”
Bill Ackman says it’s ‘absurd’ to link him to market sell-off: In a new letter to shareholders, Pershing Square boss Bill Ackman defended his comments on the pandemic and the firm’s portfolio moves.
LNG suppliers flood market with excess spot cargoes as demand shrinks: “Right now if we could cancel, depending on the contract, we would cancel everything we could,” a gas trader in Spain said.