- Kuroda's statement comes after Federal Reserve Chairman Jerome Powell issued a similar statement.
- China's industry is declining at an unprecedented rate due to the coronavirus epidemic.
- Clorox, which sells hand sanitizers and other antibacterial cleaners, has seen its stock price climb to a record high.
Bank of Japan Governor Haruhiko Kuroda said in major speech on Monday that the Bank of Japan will take the necessary measures to support markets shaken by the coronavirus outbreak. This has led to speculation about coordinated global policy action against the epidemic.
The BOJ “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,” Kuroda said. Kuroda’s statement comes after Federal Reserve Chairman Jerome Powell issued a similar statement. Powell made comments on Friday with regard to US monetary policy. Former Federal Reserve banker Bill Nelson expected central banks to cut interest rates globally on Wednesday.
Chinese Industry is Falling at an Unprecedented Rate
China’s industry is declining at an unprecedented rate due to the coronavirus epidemic. As the Bureau of Statistics announced on Saturday, the official purchasing managers’ index for February fell to 35.7 from 50.0 in January. This means that the barometer is well below the 50-meter mark, which can indicate an upward trend in business. Analysts interviewed by reporters had only expected that it would fall to 46 points in February. That would be the lowest level since January 2009.
Coronavirus means that goods cannot be transported or even produced because workers have to stay at home because of the danger of infection. Due to quarantine regulations and travel restrictions, the situation in the service industry is also poor. The barometer in the region dropped from 54.1 in January to 29.6 in February.
United Airlines Postpones Investor Day
As a result of the new coronavirus, United Airlines, a major US airline, has postponed an investor day originally scheduled for Thursday. The company said on Friday that the incident was originally scheduled to be held in September. After the market was closed on Friday, the company said that with the increase in the spread of the virus and the deterioration of market response, investors are currently only focusing on short-term impact. Therefore, it is not expected that a fruitful discussion on a long-term strategy will be held next week.
In view of the increased uncertainty caused by the coronavirus, the airline has withdrawn its 2020 guidance last week. United has justified this move by temporarily suspending a large number of flights across the Pacific. The company initially suspended links with mainland China and Hong Kong until April 24.
Fear of Virus Spread Drives Clorox Stock Price to Record High
Concerns over the spread of the new coronavirus globally have caused global stock trading to plummet, but there is still some stock demand. Clorox, which sells hand sanitizers and other antibacterial cleaners, has been in demand for days, setting a new record in US trade on Thursday. Despite a general sell-off, the stock rose slightly and temporarily climbed above $170.
William Susman, an expert at investment consultant Threadstone Advisors, said Clorox’s inventory could rise further in the short term due to the need for disinfectants. Clorox boss Benno Dorer himself said in an interview with CNBC that the company has not recorded any increase in demand to date. It is difficult to assess how the situation will develop. Clorox’s shares have been traded as potential beneficiaries of coronavirus transmission.
The investment company MKM Partners has put a “stay at home” index with some stocks, which will be especially popular if fear of the virus increases and many stay at home. In addition to Clorox, these companies include streaming giant Netflix, weapon maker Sturm Ruger, canned food provider Campbell, game developer Activision Blizzard, video conferencing expert Zoom, office chat app Slack or home fitness equipment maker Peloton.