Time for a recap, after another wild day in the markets.

World stock markets have been hit by fresh turbulence, a day after their worst rout since the financial crisis.

Fears over the coronavirus outbreak and the launch of an oil price war continue to rattle traders, leading to very volatile trading.

The day began, and ended, with optimism that the White House was planning payroll tax cuts and support for businesses hurt by the current turmoil. But in between, fears of a global downturn weighed on stocks too.

European markets closed in the red for the second day running, suffering fresh losses after their worst day since 2008. The Stoxx 600 lost almost 1% more, with Italy leading the selloff as economists predicted a deep recession this year.

Britain’s FTSE 100 also began the day strongly, rising by over 3%, but that rally fizzled out. It closed flat at 5960. a four-year low, after slumping by almost 500 points yesterday.

However, Wall Street jumped by almost 5% tonight, after president Donald Trump said his administration were helping travel and holiday companies. Last night, Trump promised a big response to the Covid-19 threat (while still playing down the scale of the crisis).

According to Bloomberg, the risk of a US recession is now over 50%.

With this in mind, Trump’s White House appears to be aiming to persuade Congress to back a stimulus package to shield the economy from the fallout from the coronavirus outbreak.

According to one report, that could include assistance for the shale oil and gas production industry.

Trump also lashed out at the US central bank, calling it “pathetic” for not cutting interest rates faster.

Energy companies were in the firing line again today, with Saudi Aramco announcing plans to pump millions more barrels of oil each day - as part of a plan to drive down the oil price and put rivals out of business.

In the UK, banks promised help for small firms and mortgage holidays for consumers affected by the coronavirus outbreak, as the number of cases continues to rise.

On Wednesday, Britain’s new chancellor Rishi Sunak is expected to pledge billions of extra pounds to help the NHS, and boost infrastructure spending.

Meanwhile in Europe, officials are preparing to suspend the EU’s use-it-or-lose it rules on airport landing slots, ending the spectre of airlines running “ghost flights” with few or no passengers at all.

Thanks for reading and commenting. Goodnight! GW

Tonight’s stock market rally came despite predictions that the US economy could start shrinking this year, due to the coronavirus.

Bloomberg News’s Recession Tracker has calculated that the probability of a US downturn has jumped over 50%, based on various financial indicators, economic data and other factors.

They explain:

The surge in the recession probability reflects a sharp deterioration in financial conditions that began in mid-to-late February. As the number of cases -- and deaths -- from the rapidly spreading coronavirus increased, stocks plummeted and credit spreads widened.

The market suffered yet another blow after a collapse of OPEC+ talks led to a price war between Russia and Saudi Arabia, sinking oil prices.

Boom! That’s last-minute scramble into stocks had helped Wall Street recover around half Monday’s crash.

The Dow has jumped by 4.89% to finish at 25,018.16 , a gain of 1,167 points.

Ashoka Mody, formally a deputy director of the International Monetary Fund’s European Department, fears that the coronavirus will trigger a deep recession in Italy this year.

He argues that policymakers should devise a precautionary bailout of €500bn to €700bn, to reassure markets that it can meet its debt obligations.

Writing on Marketwatch, he says:

The coronavirus will almost certainly cause the Italian economy to contract by about 3% in the first half of 2020, although the damage could be much larger than that.

As the Chinese economy slows down further — and very likely itself contracts— in the coming few months, the lack of Chinese supplies of critical parts and ingredients will cause continuing damage to world production and trade. That damage is spreading to Germany, which even as it struggles remains Europe’s strongest economy and an important market for Italian manufacturers.

In Italy, the virus has forced not just the lockdown of the country’s most vibrant regions — Lombardy and its fashion and finance hub in Milan, as well as large parts of Veneto and Emilia-Romagna regions — but now the entire country as of Tuesday. As people stay home and demand for services falls, the economically vulnerable — especially young Italians on precarious temporary jobs — will lose incomes, and demand will shrink further. And with one of the oldest populations in the world (about 23% of the people are above the age of 65), the coronavirus-induced illness and mortality — and the associated economic and financial stress — could persist longer than elsewhere.

Here’s a clip of Donald Trump speaking at the White House earlier, promising (vague) help for cruise operators and airlines.

Newsflash: European stock markets have closed in the red, as it fails to recover from Monday’s huge losses.

The Stoxx 600 index has provisionally ended the day down almost 1%, having been over 3% higher in early trading.

In London, the FTSE 100 subsided.... ending the day 5 points lower -- on top of the 496-point plunge yesterday. It was propped up by the pound, which has weakened by 2 cents against the US dollar (boosting exporters and multinationals).

Italy’s FTSE MIB ended the day down 3%, as economists feared its economy will shrink sharply this year, while Germany’s DAX lost 1%.

That shows that the panic which triggered yesterday’s crash has not abated. Instead, stocks have been highly volatile today -- as hopes of government stimulus packages have crashed against fears of a global downturn.

Newsflash: president Donald Trump is holding a meeting with healthcare bosses in the White House now.

Vice-president Pence is telling Trump that all the insurance companies at their meeting today have agreed they will not charge customers for Coronavirus testing, by waiving the ‘copays’ which would normally be levied.

Some states had already been insisting on free testing for Covid-19, but this announcement appears to make it a national policy.

The bosses have also agreed to extend medical coverage to include coronavirus, Pence says, and to cover telemedicine for patients, such as the elderly, who get health care at home.

These measures could encourage US citizens to be tested for the coronavirus, and protect them from medicals bills.

Trump also weighed in, saying that the US authorities will help airline companies and cruise operators.

They’re two great industries and we’ll be helping them through this patch, and so far I think it’s been going very well”

The rally is fizzling out, as global stock markets continue to remain highly volatile.

The Dow Jones industrial average has now turned negative on Wall Street, having been up 1,000 points when it opened two hours ago.

The S&P 500 index, which was up 3.7% earlier, has now dropped back to last night’s closing levels.

Investors may be losing faith in Donald Trump’s stimulus plan, with insiders telling CNBC that it’s not written yet.

Democratic politicians are also insisting that any coronavirus stimulus programme provides proper sick pay for workers, to help people to actually self-isolate. They’re not happy about simply pushing through tax cuts which would help the rich,

House Democratic Caucus Vice Chair Katherine Clark told reporters at a news conference that potential aid should include paid sick leave, enhanced unemployment insurance, food security and affordable testing and treatment.

So with Wall Street losing its mojo, European markets have that sinking feeling again...

With 90 minutes to go, the European stock market rally is fizzling out.

Italy’s share index has sunk by 2%, as traders digest the implications of the nationwide lockdown announced yesterday.

British Airways and Ryanair have both cancelled all international flights to and from Italy today, which will hurt tourism revenues (although clearly the right thing).

London stocks are also fading, being dragged down by cruise operator Carnival (-4%).

Newsflash: President Trump has launched a new assault on the US central bank, labelling it “pathetic” for not cutting interest rates more deeply.

In another example of Trump’s distain for central bank independence, he is pushing the Federal Reserve to get US interest rates down towards 0%.

Last week, the Fed announced an emergency rate cut which lowered its Funds rate to 1%-1.25% (and promptly triggered a market sell-off).

In contrast, the UK’s interest rates are 0.75%, and the eurozone is 0% (or Minus 0.5% for bank deposits at the ECB).

The Fed’s policymakers meet next week - and are likely to cut again. Indeed, the markets are now pricing in US interest rates close to zero soon.

Wall Street won’t let the bull market die! Especially not on its 11th birthday.

Every stock on the Dow Jones industrial average is rallying this morning, as stocks bounce back.

Energy companies, banks and travel firms, who led yesterday’s slump, are among the top risers this morning.

Goldman Sachs are up 5.4%, followed by oil producers Chevron (+5.2%) and Exxon (+4.3%).

Last night’s selloff left the S&P 500 index down 19% from its recent peak - close to entering a Bear Market...but not quite.

The current bull market started right back on 10 March 2009, when the sell-off triggered by the financial crisis finally ended. But it would only take one more selloff to end it.

NEWSFLASH: Shares are surging on Wall Street, as investors return to duty after the worst one-day slump since the dark, troubling days of 2008.

Stocks are jumping, pushing the main US indices up by around 3%. The Dow has risen by over 800 points.

That would normally be a very big move, but it doesn’t even recover half of Monday’s rout.

But still, president Trump’s promise of a stimulus programme is helping traders to regain their poise, and calming some of the fears of a global recession (even though White House insiders say the plan isn’t written yet....)

Royal Bank of Scotland is offering to defer mortgage and loan repayments for three months, for customers affected by the Covid-19 outbreak.

The bank is also making it easier for customers to access cash without penalty, to help prevent cash flow problems (as is reportedly happening in Italy too).

An RBS spokesperson explains:

“We are monitoring the potential impact of Coronavirus across all our customers to ensure we can support them appropriately through any period of disruption.

We have a strong track record in working with our customers who are affected by disruption outside of their control.

RBS says it is supporting personal customers in five ways:

• Mortgage and loan repayment deferral for up to three months
• Customers can close fixed savings accounts to access cash with no early closure charge
• Refunds on credit card cash advance fees
• Customers can apply for increased temporary credit card limit
• Customers can request an increased cash withdrawal limit of up to £500

RBS has also “proactively” contacted 5,000 business customers to offer support, it adds.

UK banks are taking steps to support British businesses through the economic shock of coronavirus.

Lloyds Banking Group has pledged to offer £2bn of new funding for small firms, which won’t come with any arrangement fee, to help their cashflows cope with Covid-19.

This will mean:

• No arrangement fees for new overdrafts or overdraft limit increases, for small companies
• No arrangement fees for new or increased invoice discounting and finance facilities
• In certain circumstances, repayment holidays to be provided, to those businesses impacted the most

These measure should help fundamentally healthy firms cope with a short-term hit, if the UK imposes significant quarantine measures in the weeks and months ahead.

David Oldfield, group director for commercial banking at Lloyds Banking Group said:

“We fully understand how worrying these times are for business owners, concerned not only about their and their own family’s health and wellbeing, but also of their employees. They are also worried what the outbreak might mean for their business and with no knowledge of how or when they might be affected.

As our customers face into such uncertainty, we want to provide reassurance to them that, if needed, we are here to help with additional working capital to get them through temporary interruptions to their business and to their cashflow.”

Standard Life, one of the UK’s biggest investment companies, has suspended all international travel as it tries to deal with the coronavirus outbreak.

The Edinburgh-based fund manager has also split its investment and functions staff into red and blue teams in Asia Pacific, with some working from home and others working in the office – and they have their temperature checked twice a day.

The firm is rolling this out in the UK and the US in the coming weeks.

Standard Life boss Keith Skeoch revealed this as he warned of more market turbulence this year. He said yesterday’s heavy sell-off was driven by “pure panic”. He noted that markets have priced in a global recession, but said how western countries deal with the virus outbreak will be crucial.

If they are “as good as China” in containing the epidemic, we could get a short, sharp downturn followed by an economic recovery in six months’ time.

Wall Street is set to rebound today, partly thanks to Donald Trump’s promise of tax cuts to support the US economy through the coronavirus crisis.

The Dow and S&P 500 are UP 4% in pre-market trading, after both sliding almost 8% yesterday.

This is driving European markets higher now, with France’s CAC, Germany’s DAX and Italy’s FTSE MIB now up 3%.

But tax cuts won’t fix a healthcare crisis, as analyst Ricardo Evangelista of ActivTrades points out:

The dollar bounced back against other major currencies following political statements from the White House that showed a willingness to act, through concerted economic policies, to mitigate the fallout from the coronavirus crisis.

The focus of the markets is very unlikely to divert from the virus’ impact on the public health and economic prospects of several countries, including of course Italy, but also, and crucially, the United States, where some suspect the numbers of infected may be much higher than the figures published so far indicate.

Some of yesterday’s anxiety was driven by the fear of seeing the US finding itself in a situation similar to that already witnessed in China and Italy. The next few days will determine if today’s rebound in the market is to continue, or if it is not more than the proverbial ‘dead cat bounce’.

Saudi Aramco, the Kingdom’s oil giant, has confirmed that it is flooding the markets with crude.

From April 1, Aramco will offer customers 12.3m barrels of oil per day, up from 10m bpd previously, it says.

This is confirmation that Saudi Arabia is launching a price war against rivals, after Russia refused to back Opec’s proposed output cuts last week. That move was a major cause of Monday’s rout.

That’s 300,000 barrels per day MORE than Aramco’s ‘maximum sustained capacity’ -- implying that Saudi authorities plan to reduce their own oil reserves, to fuel the price war (having already driven the price down 20% yesterday).

It’s a blow to the new wave of US shale oil producers. Their shares plunged yesterday, some by almost 50%, on fears that the industry won’t cope with oil below $40 per barrel.

Energy analyst Gregory Bree explains:

Reuters is reporting that mortgage payments are be suspended across Italy, as part of Rome’s measures to tackle the coronavirus outbreak.

That would help families cope with the economic cost of the quarantine measures being imposed, which will hurt some sectors such as retail and tourism.

Here’s the story:

Payments on mortgages will be suspended across the whole of Italy after the coronavirus outbreak, Italy’s deputy economy minister said on Tuesday.

“Yes, that will be the case, for individuals and households,” Laura Castelli said in an interview with Radio Anch’io, when asked about the possibility.

Italy’s banking lobby ABI said on Monday lenders representing 90% of total banking assets would offer debt moratoriums to small firms and households grappling with the economic fallout from Italy’s coronavirus outbreak.

Here’s some instant reaction:

The UK FTSE 100 is pushing higher, as the recovery in London gathers pace.

The Footsie is now up 121 points or 2% (which recovers roughly a quarter of yesterday’s losses).

It’s being led by miners and oil companies, following the recovery in the crude price this morning.

But European markets are lagging behind, with Italy’s FTSE MIB only 0.6% higher today. It crashed by 11% yesterday.

It’s not unusual to see the markets rise after a day of heavy falls -- and it doesn’t mean the crisis is over.

As Kit Juckes of Societe Generale puts it:

The expression ‘dead cat bounce’ was invented for mornings like this.

Neil Wilson of Markets.com agrees:

European stock markets looked to recover some ground early on Tuesday on hopes of a round of stimulus measures as the market tried to rally the troops after the rout of Black Monday.

Investors are licking wounds and there is a stabilisation of the rout, but this looks like a short-term bounce on oversold levels, not a meaningful turn.

It smells like a dead cat. The stimulus is coming, but the situation on the ground gets worse. It seems comments from Donald Trump, and overnight some emollient tones from the Japanese authorities, are helping.

Japan is expected to announce a second stimulus package to combat the coronavirus later today.

Informa, the world’s largest exhibition company, has postponed or cancelled almost 130 events worth £450m in revenue due to the coronavirus outbreak.

The company, which has already suffered a £1bn drop in its market value since the start of the year as a result of share price falls, said that its events arm accounts for about 65% of £2.9bn in total group revenues.

Stephen Carter, chief executive of the FTSE 100 company, says:

“We are facing a 2020 impact from COVID-19 in our events-related businesses and so we have used our strong customer and supplier relationships to swiftly deploy a material postponement programme shifting our events calendar to later dates in 2020,”

Newsflash: Stocks are rising in Europe at the start of trading, as investors try to put Monday’s rout behind them.

In London, the FTSE 100 has gained 73 points, or 1.2% -- a small improvement on Monday’s 7.7% slump.

Mining companies such as Rio Tinto (+4.5%) and Anglo American (+3%) are among the risers,.

Oil giants BP (+3.5%) and Shell (+4%) are also gaining, after losing almost 20% each yesterday. They’re benefitting from a recovery in the oil price today - up 5% (after tumbling over 20% yesterday).

The EU-wide Stoxx 600 index is up 1%, with Germany gaining 0.9% and France up 1.3%.

Asia-Pacific stocks have clawed back some of Monday’s huge losses, amid hopes that China’s coronavirus crisis may be easing

• Australia’s S&P 500 has jumped by over 3% today, having slumped by 7% yesterday.
• Japan’s Nikkei, which fell 5% yesterday, has gained 0.85%.
• China’s Shanghai Composite index recovered more than half of Monday’s 3% slide, with a 1.8% bounce

Traders were cheered to see China’s president Xi Jinping visiting Wuhan today, meeting frontline medical workers, military, community staff, local party officials and residents. That could be a sign that Beijing thinks it’s winning the battle.

Faced with Wall Street’s worst day in a decade, Donald Tump tried to assure Americans last night that he would tackle the economic impact of coronavirus.

He told reporters that:

• His administration would ask Congress to pass payroll tax relief and other quick measures.
• He would seek help for hourly-wage workers to ensure they’re “not going to miss a paycheck” and “don’t get penalized for something that’s not their fault”.

Trump continued to argue that Covid-19 had caught everyone on the hop (even though the first US case was reported back on 25 January).

This blindsided the world, and I think we’ve handled it very, very well, they’ve done a great job.

But Trump refused to respond to questions about whether he’d been tested himself.

That’s not an idle question. Several members of his political circle are currently self-quarantining after they came into contact with a man later diagnosed with the disease, CNN reports. It’s not escaped anyone’s notice that Trump, along with Democratic rivals Joe Biden and Bernie Sanders, are all in the 70+ age bracket susceptible to the virus.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

After their worst day since the financial crisis, European and US stock markets are expected to rebound from Crash Monday today.

Investors are catching their breath, counting their losses, and hoping that governments will step up and protect their economies from the coronavirus threat.

Last night, president Trump signalled that he’s considering providing tax relief to companies who are struggling with the impact of Covid-19.

Trump, who’s under fire for downplaying the virus, said he was planning “a timely and effective response to the coronavirus.”

He told reporters:

“We are to be meeting with House Republicans, [Senate majority leader] Mitch McConnell, and discussing a possible payroll tax cut or relief, substantial relief, very substantial relief.”

Any sign that Trump is taking Covid-19 more seriously is welcome, given criticism that US authorities were slow to test citizens and quarantine them.

But a tax cut will not protect people from the virus, or stop it spreading. And it will not encourage consumer spending if people are too scared to visit the shops -- or are quarantined anyway.

Other governments are devising stimulus measures too. Yesterday, Ireland announced a €3bn package that will include more health spending and early sick pay for all workers.

But after Monday’s losses, investors are deeply concerned that coronavirus will become a pandemic - inflicting significant economic harm (as well as many more deaths and illnesses around the globe).

Yesterday’s rout ended with the FTSE 100 at a four-year low, down almost 7.7% at 5965 -- wiping out £125bn off leading stocks.

Wall Street had a shocker too, with the Dow ending down 2,000 points or over 7%. We’ve not seen such wipeouts since the aftermath of Lehman Brothers collapse.

The markets are also still coming to terms with the oil price war triggered by Saudi Arabia over the weekend, which wiped nearly a fifth of BP and Royal Dutch Shell last night.

We’ll be tracking all the action through the day....

The agenda

10am GMT: Eurozone fourth-quarter GDP