- Title: Trump's coronavirus travel ban "bad for business" - market analyst
- Date: 12th March 2020
- Summary: (SOUNDBITE) (English) ANALYST AT CMC MARKETS, DAVID MADDEN, SAYING: "It sends out a dire message. It sends out a message that this is actually going to be a huge global crisis. Adding to that, it's actually just bad for business. A huge chunk of the clientele that take transatlantic flights from the Schengen zone in mainland Europe to to the U.S. are not U.S. citizens, they are in fact European citizens. So all of a sudden there's going to be a huge drop off in passengers travelling between mainland Europe and the U.S.. That's going to have a severe negative impact on the European airline sector: the likes of Lufthansa, Intercontinental Consolidated Airlines Group (International Consolidated Airlines Group) - the owner of British Airways - Lufthansa, Norwegian Air Shuttle. They're all down heavily today, and their outlook is terrible because we could see further pressure on the airline sector should other countries follow suit." SCREEN SHOWING MARKET DATA (SOUNDBITE) (English) ANALYST AT CMC MARKETS, DAVID MADDEN, SAYING: "It's getting worse by the minute, to be properly honest. And it's really taken hold that there's a belief now in the City that we are going to be in for the treatment that China had a month ago or six weeks ago. There's a belief that the crisis is spreading. Governments don't appear to be fully in control of it. With that, we're seeing panic selling. Anytime governments intervene, sometimes we do see a short-term bounce, because let's face it, traders like to to jump on the back of a stimulus, but that's a double-edged sword. When governments intervene, it's also a sign of weakness. It's also it's also a sign that governments have a terrible outlook for the situation, therefore they need to bring in these drastic measures." SCREEN SHOWING MARKET DATA (SOUNDBITE) (English) ANALYST AT CMC MARKETS, DAVID MADDEN, SAYING: "The size of the moves we're seeing are similar to what we saw in 2008. We've seen moves from where the Dow Jones regularly moves a thousand points in either direction in a single day. So in terms of the scale of the moves and the rate of change, it will be on par with the moves seen in 2008-2009 at the height of the banking crisis." SCREEN SHOWING MARKET DATA (SOUNDBITE) (English) ANALYST AT CMC MARKETS, DAVID MADDEN, SAYING: "This is going to be a short term blip, but when when will the bottom of the blip be reached? That's anyone's guess. From the point of view of the West, of Europe and North America, we don't seem to be at the peak pinnacle of the crisis so far. Things are getting worse and with that, we're seeing entrenched and increased fears and therefore, panic selling." VARIOUS OF DEALERS WORKING (SOUNDBITE) (English) ANALYST AT CMC MARKETS, DAVID MADDEN, SAYING: "There's a fear that the situation in Europe and North America will become as dire as what it is in China. So with that, we could see economic activity really grind to a halt; we could see many countries around the world undergo major economic cooling. A country like Italy is highly likely to be tipped into recession. They already had one... they already had negative growth in the final quarter of 2019. It's looking quite likely they're also going to have even more negative growth in early 2020, which would be the signal ahead of a recession." VARIOUS OF DEALERS WORKING AT THEIR DESKS
- Keywords: CMC Markets China Coronavirus Europe Schengen Trump U.S. markets travel ban
- Reuters ID: LVA003C4QZ8LJ
- Location: LONDON, ENGLAND, UNITED KINGDOM
- City: LONDON, ENGLAND, UNITED KINGDOM
- Country: United Kingdom
- Duration: 00:03:42
- Aspect Ratio: 16:9
- Topics: Economic Events
- Story Text: A London market analyst told Reuters on Thursday (March 12) that President Donald Trump's decision to ban travel between the U.S. and the 26-nation European Schengen zone would be "bad for business."
David Madden of UK-based financial derivatives dealer CMC Markets said the move sent out "a dire message" that the international coronavirus outbreak would result in a "huge global crisis."
The World Health Organization declared the novel COVID-19 outbreak a pandemic on Wednesday (March 11).
"It's getting worse by the minute," Madden told Reuters, saying financial markets were preparing for a strict social restrictions to be put in place similar to those imposed in China, where the virus was first identified as surfacing.
Madden said the effect on markets looked similar to the 2008 financial crash, with frequent unpredictable swings up and down leading to general instability.
Madden said this would only be a short-term "blip" compared to 2008, but market fears are based on uncertainty as to how long the crisis will last and when it will peak.
"There's a fear that the situation in Europe and North America will become as dire as what it is in China," Madden said.
"We could see economic activity really grind to a halt; we could see many countries around the world undergo major economic cooling."
(Production: Gerry Mey, Ben Dangerfield)
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