Will they close the NYSE tomorrow?

The Kuwaiti stock exchange 

dropped by 10.98% today

Hal Turner

1 March, 2020

The working week in the Arab world runs differently to the West. Their day of worship is Friday. The last day of the working week FOR THEM is typically Thursday.

The Kuwaiti stock market dropped by 10.98 percent in the first 30 minutes of trading on Sunday morning (TODAY) as investors responded to the spread of the coronavirus across the Arabian Gulf.

Thus, on Monday here in the USA and elsewhere in the world, we are looking in the face of a financial Bloodbath. There may be brief dead cat bounces but people are starting to realize that stocks should for the foreseeable be close to single digit P/E ratios due to the coming locking of supply chains and 50-75% bankruptcies in the near term. Most stocks are triple digit P/Es.

Investors betting big against catastrophic diseases are watching the World Health Organization closely as insurance bonds tied to whether the organization labels COVID-19 a pandemic are set to mature in June.

$425M in World Bank catastrophe bonds set to default if coronavirus declared a pandemic by June

Washington Examiner

1 March, 2020

In 2017, the World Bank designed a new way to raise money: Pandemic Emergency Financing bonds. Over $425 million worth of such bonds, which bet against a global outbreak of infectious diseases and will default if WHO declares the coronavirus a pandemic, were sold by the World Bank in its first-ever issuance of catastrophe bonds. In the event of no pandemic, investors would be paid a healthy annualized return. Meanwhile, the World Bank could use the bonds to insure itself against the risk of a global outbreak.

“As an investor, we do not want to lose money,” said Chin Liu, a portfolio manager at Amundi Pioneer, a Boston-based firm that purchased the bonds as a way to diversify the company's $1 billion catastrophe fund. “But then, we also understand if it’s unfortunately triggered, it benefits every single person, including ourselves, to keep the virus controlled.”

For large-scale investors looking for above-average returns in a bloated market, the bonds were the next logical place to hedge against disaster. At the time of issuance, then-World Bank President Jim Yong-Kim heralded the bonds as an opportunity to leverage "capital market expertise to serve the world’s poorest people."

The bonds were administered in two tranches, with Class A bond investors receiving a return of 6.9% annually. Class B bond investors received 11.5% annually. The World Bank raised $225 million in Class A bonds and $95 million in Class B bonds.

The investors, mainly endowments and pension funds, have long bet against natural disasters such as hurricanes, but the 2017 issuance of the bonds marked a shift in the market. Before, investors were betting on the wind speed of hurricanes, but now, they were betting on the likelihood of an infectious disease that could tear through nations across the globe.

"This marks the first time that World Bank bonds are being used to finance efforts against infectious diseases, and the first time that pandemic risk in low-income countries is being transferred to the financial markets," read a statement from the World Bank at the time of issuance.

The conditions under which the payout on bonds will default are staggered based on how rapidly the disease spreads, the number of deaths associated with the illness, and whether the virus crosses international borders.

As of Wednesday, the coronavirus has claimed the lives of more than 2,500 people and infected more than 80,000, with most cases contained to mainland China. This week, the illness has begun to spread outside of China — with more than 100 cases reported in Iran and a run on stores in Italy after the number of infected patients increased 45% on Tuesday alone.

https://www.washingtonexaminer.com/news/425m-in-world-bank-catastrophe-bonds-set-to-default-if-coronavirus-declared-a-pandemic-by-june

New York Stock Exchang 

Bracing for Trading Floor 

Closure Due to Coronavirus 

Outbreak – Report

Sputnik,

1 March, 2020

Late last month, the World Health Organization said that the coronavirus outbreak is not yet a global pandemic, but called on countries outside China to brace themselves for the possible start of one.

Fox Business has reported that the possible escalation of the novel coronavirus crisis may prod the New York Stock Exchange (NYSE) to close down its trading floor in Lower Manhattan.

Appearing on the Claman Countdown programme Friday, Fox Business’ Charles Gasparino cited unnamed sources as claiming that the NYSE is “beginning to prepare for the possibility that the floor might not be able to open”.

“It's a mixture of both humans and an automated trading system, computerised trading system. So they're planning for a possibility that the […] floor traders, the brokers, the designated market makers can't make it in because they have to stay home”, he added, arguing that the NYSE will have "some sort of a test run" in the next few days.

Separately, Gasparino asserted that major Wall Street companies are telling employees to brace for the deterioration of the situation due to the coronavirus, instructing them to “be prepared to work from home”.

“Test your systems out, make sure your computer works, make sure you can get into the company system to trade”, the firms reportedly pointed out.

Stocks Nosedive Further Amid Coronavirus Fears

The remarks followed stocks sinking again on Friday amid coronavirus-related concerns, leaving the Wall Street with its worst week since October 2008.

The Dow Jones Industrial Average lost 357 points, or 1.4%, to 25,409, while the S&P 500 shrank by 24 points, or 0.8%, to 2,954. Earlier, the Nasdaq Composite fell by 414.30 points.

The developments came as World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus told reporters earlier this week that for the moment, the WHO is “not witnessing the uncontained global spread of this virus, and we’re not witnessing large-scale severe disease or deaths”.

“Does this virus have pandemic potential? Absolutely it has. Are we there yet? From our assessment, not yet”, he added.

On a global scale to date, the coronavirus disease has infected over 85,000 people, of whom 2,900 have died and nearly 40,000 have recovered. The deadly epidemic has spread from the Chinese city of Wuhan to over 55 countries so far, including the US, where the first coronavirus death was confirmed in Washington state on Saturday.