Stock markets in Asia and Europe steadied on Monday following last week’s heavy sell-off, while US Treasury yields hovered around record lows, as investors pinned their hopes on central banks setting out measures aimed at cushioning the economic hit from the coronavirus outbreak.
An early rally in European equities fizzled in mid-morning trade, with the continent-wide Stoxx 600 flatlining. London’s FTSE 100 rose 0.9 per cent and Frankfurt’s Dax dropped 0.5 per cent.
That followed a broadly positive session in Asia, where China’s CSI 300 of Shanghai and Shenzhen-listed stocks closed up 3.3 per cent, chalking up its best one-day performance since May. Futures trade suggested no movement on the S&P 500 when Wall Street opens.
The mixed picture came as investors weighed the prospect of central bank easing against an increasingly bleak economic picture emerging from China and beyond.
The Bank of Japan followed the US Federal Reserve with a vow to fight the coronavirus. BoJ governor Haruhiko Kuroda on Monday promised to inject liquidity into markets and hinted at raising asset purchases.
But optimism around the prospect of co-ordinated international action to fight the disease was tempered as the OECD warned global growth could halve this year from its previous forecast and by Chinese manufacturing data that showed factory activity in February plunging to an all-time low.
“On the back of pledges of central bank support, equity markets have recovered this morning,” said Neil MacKinnon at VTB Capital. “The big question is whether the recovery is a ‘dead cat bounce’, to use the market jargon, or whether there is scope for fresh equity market declines.”
Brent crude was initially buoyed, with the international oil marker adding almost 3 per cent, before dropping back to trade up 1.3 per cent at $50.33 a barrel.
The yield on 10-year US Treasuries was down about 6 basis points — having fallen as much as 11 points to a record 1.0347 per cent in earlier trade. Yields fall as bond prices rise.
After the S&P 500 last week dropped 11 per cent, marking the Wall Street benchmark’s worst week since the global financial crisis, investors are betting that central banks will step in to try and mitigate the crisis that is threatening global economic growth.
Based on trading of Fed funds futures, investors think it is almost certain that the Federal Reserve will cut interest rates when it meets this month. Chairman Jay Powell has said the US central bank is “closely monitoring” developments.
Governments are taking action to support their economies during the virus outbreak. Italy said it would inject €3.6bn into its economy to mitigate the impact.
Analysts at Rabobank said that, regardless of the extent of the policy response, debt would remain an attractive investment option for investors, saying it was “a discernible near-term possibility” that the yield on the US 10-year could drop below 1 per cent.
“While the path for risky assets will be determined by the degree of activism on the part of global policymakers and an associated financially repressive impulse, the outlook for safe havens is unequivocally positive as either aggressive rate cuts provide support or a perceived insufficient policy response underpins a flight-to-quality bid,” they said.
Ken Cheung, chief Asia currency strategist at Mizuho, said traders were betting that a wave of fiscal stimulus by Beijing could soften the blow to the world’s second-biggest economy from the coronavirus.
“Optimism over a China growth recovery in March is being fuelled by the slowing pace of virus contagion and expectation for China’s strong stimulus,” he said.
Stock markets in Asia and Europe steadied on Monday following last week’s heavy sell-off, while US Treasury yields hovered around record lows, as investors pinned their hopes on central banks unleashing measures aimed at cushioning the economic hit from the coronavirus outbreak.
In Asian trade, China’s CSI 300 of Shanghai and Shenzhen-listed stocks closed up 3.3 per cent, chalking up its best one-day performance since May. Japan’s Topix climbed 1 per cent.
An early rally in European equities fizzled in mid-morning trade, with the continent-wide Stoxx 600 adding 0.2 per cent. In London, the FTSE 100 was 1 per cent higher, while Frankfurt’s Dax dropped 0.4 per cent.
The gains came after the Bank of Japan signalled it would inject liquidity into the financial system and hinted at increased asset purchases. The central bank “will closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases”, Haruhiko Kuroda, BoJ governor, said in a statement.
The brighter mood buoyed crude oil, with the price of Brent, the international marker, climbing 2.6 per cent to $50.95 a barrel.
Equities had initially sold off across Asia after China’s official manufacturing purchasing managers’ index at the weekend showed factory activity in February plunging to an all-time low.
The yield on 10-year US Treasuries was down about 3 basis points — having fallen as much as 11 points to a record 1.0347 per cent in earlier trade. Yields fall as bond prices rise.
After the S&P 500 last week dropped 11 per cent, marking the Wall Street benchmark’s worst week since the global financial crisis, investors are betting that central banks will step in to try and mitigate the crisis that is threatening global economic growth.
Based on trading of Fed funds futures, investors think it is almost certain that the Federal Reserve will cut interest rates when it meets this month. Chairman Jay Powell has said the US central bank is “closely monitoring” developments.
Governments are taking action to support their economies during the virus outbreak. Italy said it would inject €3.6bn into its economy to mitigate the impact.
Goldman analysts wrote on Sunday that they were forecasting rate cuts of varying magnitudes by central banks from the UK, Canada and Australia to India and South Korea. They now project the Fed will cut rates by 0.5 percentage points in March and another 0.5 percentage points in the second quarter.
Analysts at Rabobank said that regardless of the extent of the policy response, debt would remain an attractive investment option for investors, saying it was “a discernible near-term possibility” that the yield on the US 10-year could drop below 1 per cent.
“While the path for risky assets will be determined by the degree of activism on the part of global policymakers and an associated financially repressive impulse, the outlook for safe havens is unequivocally positive as either aggressive rate cuts provide support or a perceived insufficient policy response underpins a flight-to-quality bid,” they said.
China’s onshore-traded renminbi strengthened to 6.9566 per US dollar after the central bank set the midpoint of the currency’s trading band to below seven for the first time in more than a week.
Ken Cheung, chief Asia currency strategist at Mizuho, said traders were betting that a wave of fiscal stimulus by Beijing could soften the blow to the world’s second-biggest economy from the coronavirus.
“Optimism over a China growth recovery in March is being fuelled by the slowing pace of virus contagion and expectation for China’s strong stimulus,” he said.
‘Fear Factor’ Is Running High as Currency Markets Resume Trading Bloomberg
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Stocks plunged last week and entered a correction amid escalating fears of the coronavirus‘ spread and the damage it could inflict on the global economy. When all was said and done, the S&P 500 had suffered its worst week since the financial crisis – October 2008 to be exact.
The drubbing erased more than $6 trillion in market value in just five days, according to S&P Dow Jones Indices senior analyst Howard Silverblatt.
The sell-off was fueled by concerns that efforts to contain the virus could stymie economic growth and cut corporate profits. The coronavirus has spread to over 55 countries beyond its point of origin in China, infecting over 83,000 people around the world.
On Thursday, the S&P 500 posted its fastest correction – defined as a 10% drop from its recent peak – since the Great Depression.
But it won’t immediately impact their day-to-day existences.
„For most Americans, it’s a side show in their economic lives,“ Jacob Hacker, director of the Institute for Social and Policy Studies at Yale University, told USA Today about the stock market. „What really matters to them is the security of their jobs and health care, and the amount they have to pay for big-ticket items like housing and education.“
Here are three charts illustrating why the stock market bears little short-term impact on most people.
Most Americans simply don’t invest in stocks.
Foto: Source: Business Insider/Andy Kiersz, data from Federal Reserve
The chart above shows the share of Americans in each part of the wealth distribution who directly own stocks.
Data from the Federal Reserve shows that only 8% in the bottom half of household net worth own stock shares. That’s compared to 89% in the upper half of the distribution.
Just over half – 51% – are in the wealthiest 10% of US households.
That trend locks out a substantial share of Americans from reaping the benefits of a booming market – or the effects of one that plummets.
The amount and value of stock holdings skews heavily towards the richest Americans.
Foto: Source: Business Insider/Andy Kiersz, data from Federal Reserve
The average family among the top 10% of US households who own stock tend to have portfolios worth $200,000 and above, according to the Federal Reserve – at least 60x more than the bottom half of the wealth distribution.
As a result, stock losses would hit those with much higher incomes initially.
Less than half of Americans in the bottom half of the wealth distribution had money invested into retirement accounts.
Foto: Source: Business Insider/Andy Kiersz, data from Federal Reserve
Under half of Americans in the bottom half of the wealth distribution had money invested into retirement accounts, which includes IRAs, 401(k)s or similar.
In 2017, the US Census Bureau reported only a third of workers contributed to a 401(k) plan.
Of course, the recent stock market losses puts a dent in their savings.
Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: Copyright 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc.2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC 2018 and/or its affiliates.
LOS ANGELES — Joe Coulombe envisioned a new generation of young grocery shoppers emerging in the 1960s, one that wanted healthy, tasty, high-quality food they couldn’t find in most supermarkets and couldn’t afford to buy in the few high-end gourmet outlets.
So he found a new way to bring everything to market, from a then-exotic snack food called granola to California-produced wines that rivaled anything from France. He made shopping for them almost as much fun as sailing the high seas when he created Trader Joe’s, a quirky grocery store filled with nautical themes and staffed not by managers and clerks but by “captains and mates.”
From the time he opened his first store in Pasadena in 1967 until his death Friday at age 89, Coulombe watched his namesake business rise from a cult favorite of educated but underpaid young people — and a few hippies — to a retail giant with more than 500 outlets in over 40 states.
A giant yes, but one that across more than half a century has never lost its reputation for friendly service from employees in goofy Hawaiian shirts, a newsletter that looks like it was published in the 1890s, and rows and rows of high-quality, moderately priced healthy food and great wine, even if you sometimes can’t ever again find exactly the same thing.
“He wanted to make sure whatever was sold in our store was of good value,” said Coulombe’s son, also named Joe, who added that his father died following a long illness. “He always did lots of taste tests. My sisters and I remember him bringing home all kinds of things for us to try. At his offices he had practically daily tastings of new products. Always the aim was to provide good food and good value to people.”
He achieved that by buying directly from wholesalers and cutting out the middleman, in many cases slapping the name Trader Joe’s on a bag of nuts, trail mix, organic dried mango, honey-oat cereal or Angus beef chili. He named several products after his daughters Charlotte and Madeleine and gave quirky names to others. Among them were Trader Darwin vitamins and a non-alcoholic sparkling juice called Eve’s Apple Sparkled by Adam.
He prided himself on checking out every vintage of wine from California’s Napa Valley, including Trader Joe’s standby, Charles Shaw, known as Two-Buck Chuck because it sold for $1.99. (It still does in the California stores, although shipping costs have increased the price in other states.)
After selling Trader Joe’s to German grocery retailer Aldi in 1979, Coulombe remained as its CEO until 1988, when he left to launch a second career as what he called a “temp,” coming in as interim CEO or consultant for several large companies in transition. He retired in 2013.
Joseph Hardin Coulombe, an only child, was born on June 3, 1930, in San Diego and lived on an avocado ranch in nearby Del Mar. After serving in the Air Force, he attended Stanford University, where he earned a bachelor’s degree in economics and a master’s in business administration. There he met his future wife, Alice.
China has been battling an outbreak of a new SARS-like coronavirus (COVID-19), which originated in Wuhan. The virus has claimed over 2,700 lives and infected nearly 80,000 people around the world.
(Pictured) People wearing protective face masks following an outbreak of the coronavirus make their way in a shopping district on Feb. 29 in Tokyo, Japan.
A theme park worker wearing a protective face mask cleans a giant swing at the theme park on Feb. 29 in Tokyo, Japan, following an outbreak of the coronavirus.
Muslim pilgrims wear masks at the Grand Mosque in Saudi Arabia's holy city of Mecca on Feb. 28. Saudi Arabia suspended visas for visits to Islam's holiest sites for the "umrah" pilgrimage, an unprecedented move triggered by coronavirus fears that raises questions over the annual hajj.
A woman wears a protective mask as a precaution against the spread of the new coronavirus at the airport on Feb. 28 in Mexico City. Mexico assistant health secretary announced that the country now has confirmed cases of the COVID-19 virus.
Kristen Curley, owner of Nitro-Pak, puts a backpack on a shelf to be sold as one of the personal protection and survival equipment kits ordered by customers preparing against novel coronavirus on Feb. 27, in Utah, U.S..
Migrants rescued in the Mediterranean sea disembark from the Sea Watch NGO's ship on Feb. 27 in the port of Messina, Sicily.
Life inside a red zone: A protective mask has been put on the face of a statue of Italy's patron saint, St. Francis, in San Fiorano, one of the towns on lockdown, in this picture taken by schoolteacher Marzio Toniolo in San Fiorano, Italy, on Feb. 27.
Traders work on the floor of the New York Stock Exchange, Feb. 28. Stocks around the world are broadly lower as investors react to news that the novel coronavirus outbreak is continuing to spread to more and more countries, raising fears of a global economic slowdown.
Francesco Seminario, a taxi driver, wears a protective mask while sanitizing his cab, as the business has faced losses in the country since the coronavirus outbreak, in Milan, Italy, on Feb. 28.
Visitors wearing protective face masks and Winnie the Pooh costumes are seen outside Tokyo Disneyland in Urayasu, Japan, on Feb. 28.
People wear protective face masks as they pray on a street during Friday prayers in local souq, in Manama, Bahrain, on Feb. 28.
A policeman on duty wears a mask as a precaution after two cases of coronavirus were reported in Pakistan late Wednesday, in Peshawar, Pakistan, on Feb. 28.
Ukrainian medical workers wearing protective gear escort a fake patient during a medical training exercise in case of detection of patients with the COVID-19 coronavirus symptoms, at the Oleksandrivska Clinical Hospital, in Kyiv, Ukraine, on Feb. 28.
A government officer sprays disinfectant as a precaution against the COVID-19 outside a department store in Seoul, South Korea, on Feb. 28.
Workers unload groceries at a Sinopec gas station where customers can buy supplies while they refuel as the country is hit by an outbreak of the novel coronavirus, in Beijing, on Feb. 28.
Employees work on the production line of an antimalarial drug that Chinese officials said has curative effect on the novel coronavirus disease, at a pharmaceutical company in Nantong, Jiangsu province, China, on Feb. 27.
U.S. Vice President Mike Pence speaks during a tour of the "secretary's operation center" following a coronavirus task force meeting at the Department of Health and Human Services (HHS) in Washington, on Feb. 27.
Doctors at West China Hospital of Sichuan University use 5G technology to diagnose COVID-19 patients on Feb. 27, in Chengdu, Sichuan Province of China.
Fans wearing protective masks react while enjoying a band's performance at Hidden Agenda: This Town Needs (TNN) Live House during the club's last concert as business plummets due to the fear of the coronavirus, in Hong Kong, China on Feb. 27.
Hugo Lopez-Gatell Ramirez, Mexico's Undersecretary of Health Prevention and Promotion, holds a news conference on information about the new coronavirus, in Mexico City, on Feb. 27.
A worker wearing a protective suit sprays disinfectant at a high school in the northern city of Thessaloniki, Greece, on Feb. 27. Greece's Health Minister Vassilis Kikilias said all carnival events in Greece would be suspended as a precautionary measure.
French President Emmanuel Macron, flanked by French Director General of Health Jerome Salomon, meets medical staff as he visits the Pitie-Salpetriere hospital in Paris on Feb. 27 where the first French victim of COVID-19 passed away the day before. France has so far registered 18 infections and two deaths, a 60 year-old French citizen and an 80-year-old Chinese tourist, as European governments scramble to contain a slew of new coronavirus cases popping up across the continent.
Passengers remain onboard the MSC Meraviglia cruise ship in Cozumel, Mexico, on Feb. 27. A cruise carrying 6,000 people which was turned away by Jamaica and the Cayman Islands after a crew member tested positive for flu, has docked in Mexico.
Employees of the China Streel Corp. eat lunch behind plexigass partition boards in a company canteen in Kaohsiung City, southern Taiwan, on Feb. 27. China Steel installed the plexiglass, which cover three sides of the diner, to prevents infection of Covid-19 coronavirus by saliva.
Workers with sanitizing equipment disinfect at the Shanghai railway station on Feb. 27 in Shanghai, China.
People wearing protective face masks, following an outbreak of the coronavirus, are seen in front of the Giant Olympic rings at the waterfront area at Odaiba Marine Park on Feb. 27 in Tokyo, Japan.
A resident of Jongno-Gu wearing a face mask sprays disinfectant as a precaution against the coronavirus at the Jogyesa Buddhist temple on Feb. 27 in Seoul, South Korea.
President Donald Trump, with members of the president's coronavirus task force, speaks during a news conference in the Brady Press Briefing Room of the White House on Feb. 26. in Washington. President Donald Trump announced appointment of Vice President Mike Pence in charge of response to the coronavirus in US.
Policemen guard the entrance of a school, after authorities put the school under isolation because of suspicions of a coronavirus case, after a teacher returned from a travel in Northern Italy, in Vienna, Austria on Feb. 26
Members of the Italian army wearing protective face masks check the permission of a driver to enter the red zone of Turano Lodigiano, closed off due to a coronavirus outbreak in northern Italy, on Feb. 26.
Guests, wearing protective face mask, look through a window at H10 Costa Adeje Palace, which is on lockdown after cases of coronavirus have been detected there in Adeje, on the Spanish island of Tenerife, on Feb. 26.
Hong Kong Financial Secretary Paul Chan is seen on a screen as he delivers the annual budget at the legislative council in Hong Kong on Feb. 26. Hong Kong's government said it will give a 10,000 HKD (1,280 USD) handout to seven million permanent residents in a bid to jump-start a recession-hit economy after the coronavirus outbreak.
People wear protective face masks as they walk in St. Mark's square holding a placard that reads "Corona Tour. You've got to have courage even to be afraid", after the last days of Venice Carnival were cancelled due to coronavirus, on Feb. 25 in Venice, Italy.
Figures depicting the coronavirus vs "carneval virus" are pictured during the "Rosenmontag" (Rose Monday) parade on Feb. 24 in Duesseldorf, Germany.
A man collects bags of his food order as a worker places it in a basket to prevent human contact following the coronavirus outbreak, in Beijing, on Feb. 23.
A view of Gurbulak border crossing after Turkey has decided to temporarily close its border with Iran over the coronavirus outbreak, in Agri, on Feb. 23.
Brazilian citizens who were repatriated from China's coronavirus-struck Wuhan enter a plane after their quarantine period ended in Air Force base of Anapolis, State of Goias, Brazil, on Feb. 23.
Ambulances transporting confirmed coronavirus patients arrive at a hospital in Daegu, South Korea, on Feb. 23.
Workers in protective suits are seen at a checkpoint for registration and body temperature measurement, at an entrance of a residential compound in Wuhan, the epicenter of the novel coronavirus outbreak, on Feb. 23.
British Diamond Princess evacuees depart from Boscombe Down airfield following a repatriation flight from Tokyo, on Feb. 22 in Amesbury, England.
People board a plane chartered for British passengers after they left the coronavirus-hit cruise ship Diamond Princess at Haneda Airport in Tokyo Japan, on Feb. 22.
Association of South East Asian Nations (ASEAN) foreign ministers pose during an emergency meeting with China's Foreign Minister Wang Yi on the coronavirus outbreak in Vientiane, Laos, on Feb. 20.
A man holds a Ukrainian state flag during a protest against the arrival of a plane carrying evacuees from China's Hubei province hit by an outbreak of the novel coronavirus in the village of Novi Sanzhary in Poltava region, Ukraine, on Feb. 20.
A Chinese tourist (front right), who was tested positive for the COVID-19 coronavirus and was isolated for treatment, receives a kiss from Sri Lankan Health Minister Pavithra Wanniarachchi and medical staff after she was discharged from the hospital near Colombo on Feb. 19. The 43-year-old woman, the first and only COVID-19 patient in Sri Lanka, was admitted to the hospital on January 25 and tested positive for COVID-19 two days later.
The building housing the biocontainment unit at Nebraska Medical Center is seen in this photo on Feb. 18 in Omaha, Nebraska. The center is treating patients potentially exposed to a viral outbreak of the COVID-19 virus.
Workers go about their duties at a section of the Leishenshan Hospital, the newly-built makeshift hospital for novel coronavirus patients, in Wuhan in China's central Hubei province on Feb. 18. The first group of patients infected with the COVID-19 coronavirus was discharged from Leishenshan Hospital on Feb. 18, according to local media.
Passengers react after they disembarked from the MS Westerdam, back, at the port of Sihanoukville, Cambodia, on Feb. 14. Hundreds of cruise ship passengers long stranded at sea by virus fears cheered as they finally disembarked Friday and were welcomed to Cambodia. China on Friday reported another sharp rise in the number of people infected with a Coronavirus (COVID-19), as the death toll neared 1,400.
This photo taken on Feb. 13 shows a train attendant gesturing to medical staff leaving for Wuhan in Nanchang, China's central Jiangxi province. The death toll from the Coronavirus (COVID-19) epidemic neared 1,400 on Feb. 14, as the United States complained of a "lack of transparency" from Beijing over its handling of a crisis that has fueled global panic.
Jay Butler, Deputy Director for Infectious Diseases addresses the media about response to the 2019 Novel Coronavirus (COVID-19 ) as Senior Adviser Ed Rouse looks on, at the Emergency Operations Center inside The Centers for Disease Control and Prevention (CDC), on Feb. 13 in Atlanta, United States.
The ultrastructural morphology exhibited by the 2019 Novel Coronavirus (2019-nCoV), which was identified as the cause of an outbreak of respiratory illness first detected in Wuhan, China, is seen in an illustration released by the Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, on Jan. 29.
50/50 SLIDES
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Major companies are beginning to cancel conferences and travel plans within the United States due to the coronavirus, which analysts warn will have cascading impacts on the country’s hotels, airlines and convention centers.
International travel — particularly to Asia — has so far been the hardest-hit part of the industry, though analysts say that could soon change as fears of the coronavirus spread to Europe and North America. Hotels around the country have begun reporting a rise in group cancellations. Some air carriers, including Alaska Airlines and JetBlue Airways, are doing away with cancellation fees as jittery travelers rethink their plans.
“The cancellations are starting to move toward North America,” said Scott Solombrino, executive director of the Global Business Travel Association, which estimates that the slowdown in global travel has already cost American businesses $7 billion this year. “Obviously the concern is that this will have a long-term impact on the U.S. economy.”
Analysts said wide-scale cancellations — which so far have been concentrated in large cities such as New York, Washington and Los Angeles — are starting to hit smaller U.S. cities, as companies change their internal travel policies.
Workday called off a sales conference in Orlando scheduled for next week, while Google and Facebook canceled multiple events in California and Nevada between March and May. Amazon this week told employees to put off “nonessential travel” in the United States, though it did not offer details on what types of trips would qualify. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
Mounting cancellations, analysts said, are likely to have ripple effects throughout the economy, particularly for upscale hotels that rely on group bookings for about one-third of their sales, according to Jan Freitag, senior vice president of lodging insights for STR, a hospitality research firm.
“The most noticeable impact so far has been in group travel, with large conferences around the world being canceled,” he said. “These large group conferences take years and years to plan. If they don’t happen now, there is a good chance they won’t happen at all.”
Executives at Marriott International, the world’s largest hotel chain, said this week that group bookings in the United States have started to take a hit. The Bethesda-based hospitality giant said much of the impact so far has been concentrated in Asia, where it has 800 hotels.
“To date, we have not yet seen a significant impact in the U.S., and our first quarter is off to a solid start, but the situation is fluid,” Leeny Oberg, Marriott’s chief financial officer, told CNBC on Wednesday. “We have seen a handful of citywide cancellations.”
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Booking Holdings, which owns Priceline, Booking.com and Kayak, said this week that it expects hotel room bookings to fall as much as 10 percent this quarter because of the coronavirus.
Shares of hotel companies and airlines plunged this week, as coronavirus-related fears led global markets to post their worst weekly losses since the Great Recession. Shares of Marriott and InterContinental Hotels Group fell about 9 percent apiece, while American Airlines and Jet Blue posted declines of more than 20 percent. Expedia Group, meanwhile, posted a 13 percent drop in share price.
“Every day we think we could be near a bottom, and every day we are not,” Helane Becker, an airline industry analyst for Cowen, wrote in a note to clients this week. “The virus has spread, and the question is how much do people change their travel plans.”
Hostelling International USA, which oversees nearly 50 properties around the country, said group cancellations are on the rise. Individual travelers, though, are “so far going strong,” spokeswoman Netanya Trimboli said.
The company is taking extra precautions by training employees on how to properly clean surfaces and encouraging them to stay home if they feel sick. New signs at its hostels remind guests to wash their hands and cough into their elbows.
Other hotels also report stalling demand, as Americans put off travel plans. But analysts say the largest impact on the hospitality market could come from a slowdown of Chinese visitors, who last year contributed $34 billion to the U.S. economy, according to Philadelphia-based Tourism Economics. Chinese visitors typically spend about $6,000 and spend an average of 15 nights in a hotel while in the United States, the firm said. It expects the number of Chinese travelers to the United States to drop by 25 percent this year.
“Right now there’s a lot of uncertainty,” said Adam Sacks, president of Tourism Economics. “It’s shaping up to be very similar to SARS, when we saw very severe impacts.”
This time, he said, could be worse: Visits from China to the United States have grown nearly 13-fold since 2002, making a possible coronavirus outbreak much more devastating to the U.S. economy than the SARS epidemic was in 2003.
“Reservations are at a standstill,” said Kim Lee, who handles sales at Arc The.Hotel, a boutique property in Washington’s Foggy Bottom neighborhood, where multiple groups have canceled reservations in recent weeks. “We’ve seen a real decline.
