Britain will face an exponentially growing death rate from COVID-19 within weeks unless urgent action is taken to halt a rapidly spreading second wave of the outbreak, the country’s senior medics said on Monday.
Chris Whitty, the government’s chief medical officer, and Patrick Vallance, its chief scientific adviser, cautioned that if left unrestricted the epidemic would reach 50,000 new cases per day by mid-October in the United Kingdom.
The selloff also reflected news that global banks transferred more than $US2 trillion in suspect funds over nearly two decades.
Britain-based HSBC Holdings, Standard Chartered and Barclays, Germany’s Deutsche Bank and Commerzbank, and JPMorgan Chase and Bank of New York Mellon were among the lenders named in the report by the International Consortium of Investigative Journalists and based on leaked documents obtained by BuzzFeed News.
The report was based on 2100 leaked suspicious activity reports (SARs), covering transactions between 1999 and 2017, filed by banks and other financial firms with the US Department of Treasury’s Financial Crimes Enforcement Network (FinCen).
Today’s agenda
Local: Weekly payrolls
Overseas data: Euro zone consumer confidence September; UK public sector borrowing August; US existing home sales August and Richmond Fed index September
Market highlights
ASX futures down 90 points or 1.6% to 5721 near 4.45am AEST
- AUD -1.1% to 72.07 US cents
- On Wall St at 2.50pm: Dow -3.1% S&P 500 -2.5% Nasdaq -1.7%
- In New York: BHP -4.1% Rio -5.1% Atlassian +3.1%
- In Europe: Stoxx 50 -3.7% FTSE -3.4% CAC -3.7% DAX -4.4%
- Spot gold -2.1% to $US1909.34/oz at 2.51pm New York time
- Brent crude -4% to $US41.42 a barrel
- US oil -4.5% to $US39.26 a barrel
- Iron ore -4.1% to $US119.82 a tonne
- 2-year yield: US 0.14% Australia 0.16%
- 5-year yield: US 0.26% Australia 0.35%
- 10-year yield: US 0.66% Australia 0.85% Germany -0.53%
- US prices as of 2.46pm New York
From today’s Financial Review
Politics is keeping borders closed, say health experts: Health experts have backed NSW Premier Gladys Berejiklian’s claim there is no legitimate health reason for state borders to remain closed.
Cleanaway boss says he had to be tough to fix business: Vik Bansal says he ‘genuinely’ believes the culture at Cleanaway Waste Management is good, following revelations he was probed for bullying behaviour.
Barrenjoey angling to set capital markets alight: Barrenjoey boss and Bankers Trust alumnus Brian Benari says the newest investment bank on the block will succeed because of its throwback ownership model.
Chanticleer: Barrenjoey Capital’s $10b war chest: A full service investment bank needs enough capital to underwrite the risk appetite of its clients. This is why Barclays is so critical to Barrenjoey Capital Partners.
United States
Healthcare providers came under pressure on uncertainty over the Obamacare case, with shares of Universal Health Services falling more than 10%.
Ginsburg’s death can lead to a tie vote when the Supreme Court hears the challenge to the constitutionality of the Affordable Care Act (ACA) in November, brokerage Mizuho said.
Wall Street has tumbled in the past three weeks as investors dumped heavyweight technology-related stocks following a stunning rally that returned the S&P 500 and the Nasdaq to record highs.
Another round of business restrictions will threaten a nascent recovery in the wider economy and add further pressure on equity markets, analysts said. The first round of lockdowns in March had led the S&P 500 to suffer its worst monthly decline since the global financial crisis.
Nikola plunged after its founder Trevor Milton stepped down as executive chairman following a public squabble with a short-seller over allegations of nepotism and fraud.
Europe
European stocks posted their worst fall in three months on Monday as fears of a second wave of COVID-19 infections hit travel and leisure shares, while banks tumbled on a report about $US2 trillion worth of suspect transfers by leading lenders.
There could be up to 50,000 new coronavirus cases per day in Britain by the middle of October if the pandemic continues at its current pace, the country’s chief scientist adviser warned. On Sunday, Health Minister Matt Hancock said a second national lockdown was possible.
“We suspect equities would fall sharply and indiscriminately, similar to what happened in Feburary-March or in June … if the rise in new cases in Europe seriously undermined the global economic recovery,” said Simona Gambarini, markets economist at Capital Economics.
London’s FTSE 100 was the worst-hit blue chip index in Europe, falling about 3.4% in its worst day in more than three months. UK-focused midcaps in the FTSE 250 dropped 4.0%.
The pan-European STOXX 600 was down 3.2%, a fall not matched since early June.
Europe’s travel and leisure index fell 5.2%, its worst two-day drop since April, with airlines such as British Airway-owner IAG plummeting 12.1% and Lufthansa 9.5%.
European banks slumped 5.7% to hover near record lows after lenders including HSBC and Standard Chartered were named in a cache of leaked documents which said they had transferred large sums of suspect funds over the past two decades.
HSBC’s shares in Hong Kong and Standard Chartered’s in London fell on Monday to their lowest since at least 1998. Barclays and Deutsche Bank, which were also mentioned in the report, slipped 5.4% and 8.8%, respectively.
Asia
Huawei reveals $100m local cost of ‘cold war’: Huawei is cutting its investment in Australia by $100 million and will axe 1000 local jobs as experts warn all sides will be hurt in the China-US tech war.
Hong Kong shares fell on Monday, dragged by financials after reports said HSBC and Standard Chartered were among banks moving allegedly illicit funds over the past two decades and as Sino-US tensions hit index heavyweight Tencent.
At the close of trade, the Hang Seng index was down 504.72 points, or 2.1%, at 23,950.69, its biggest daily percentage drop since July 24. All but three index constituents fell on the day.
Hong Kong shares of HSBC touched 25-year lows and finished down 5.3%, and Standard Chartered lost 6.2%, following media reports that they and other banks moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money.
“The big banks … are quite a meaningful weight in the index, and that the banks are going to be under such scrutiny (after the reports) is going be a big distraction for investors in this part of the world,” said Jim McCafferty, head of equity research, Asia ex-Japan at Nomura in Hong Kong.
The Hang Seng China Enterprises index fell 1.7% to 9640.42.
Currencies
Commodities
Rio mine plans under threat as traditional owners hit back: The mining giant has bowed to pressure to revisit iron ore deals in which traditional owners signed their heritage protection rights away.
Aussie LNG squeezed by Qatar’s pricing tactics: The move by Qatar to crowd out rival LNG projects could spell longer delays for ventures planned by Woodside and Santos.
BHP accused of ageism, racism over COVID-19 policy: BHP has been hit with legal action over its nationwide policy that excluded indigenous and older workers due to their higher risk of serious illness from COVID-19.
Australian sharemarket
Australian shares ended the first session of the week at a near three-month low on Monday, pulled dragged lower by losses in the heavyweight mining and bank sectors, with the mood fragile as European COVID-19 cases rose anew.
The S&P/ASX 200 index fell 0.7 per cent, or 41.90 points, to 5822.60, for its lowest close since June 29.
Street Talk
Adamantem Capital mulls Servian exit, calls in bankers
