FTSE 100 in ‘bull market’ territory as Covid-19 treatment hopes lift shares – business live

Bloomberg’s John Authers has an interesting theory about the market rally.

He suspects that investors are piling back into riskier assets because they’re less worried that they’ll catch Covid-19 themselves, rather than really thinking about the wider economic damage being caused.

He writes:

The rest of the week will have plenty of earnings announcements and central bank meetings to give rational reasons to buy or sell the market. Beyond that, the reduction in personal fear of the virus, and the unquestionable successes in holding it back, may have led to an irrational reduction in estimates of the economic damage.

Scientists in China suggest that Covid-19 could become a recurring seasonal disease; Singapore has been hit by a second wave of infections after apparently fighting off a first successfully; Germany has started to reopen its economy and already faces concerns that it has done so too soon. Production might be able to return to normal reasonably swiftly over the next few months — but surely consumption cannot be anywhere close to normal again until there is a vaccine. Or maybe I am just saying that because I live in a community where the problem is still severe.

I fear that the market rally has been driven by people for whom the virus seems less immediate and close, and who have moved from excessive fear to over-optimistic forecasts that the disease will now disappear.

Here’s the full piece– well worth a read.

‘I fear that the market rally has been driven by people for whom the virus seems less immediate and close, and who have moved from excessive fear to over-optimistic forecasts that the disease will now disappear.’ https://www.bloomberg.com/opinion/articles/2020-04-29/stocks-rally-has-roots-in-waning-fear-of-coronavirus … by @johnauthers https://www.bloomberg.com/opinion/articles/2020-04-29/stocks-rally-has-roots-in-waning-fear-of-coronavirus …

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UK pub chain Wetherspoons has told the City tonight that it expects to keep its pubs closed until late June.

It made the prediction as it announced a new equity placing to raise £140m, to tide it through the lockdown.

Wetherspoons argued that it is relatively well-placed to handle social distancing rules, once restrictions are eased.

The company is likely to make some changes to its operating model, assuming increased social distancing, and anticipates a gradual recovery in customer numbers.

Wetherspoon pubs are substantially larger than average, and most have outside facilities. The company believes these factors are likely to assist if social distancing measures apply.

However… the government hasn’t yet said when it will start to lift the current lockdown, and many analysts suspect pubs will not be the first places to reopen either.

While the govt refuse to discuss when and how a lockdown might happen, businesses are making their own plans

Wetherspoon's are planning to reopen their pubs and hotels 'in or around June'

— Joel Taylor (@JoelTaylorhack) April 29, 2020

Jennifer Rankin

Empty Air France and Delta Airlines check-in desks at Paris-Charles-de-Gaulle airport last month. Photograph: Bertrand Guay/AFP via Getty Images

A dozen European Union member states have called for a relaxation of air-passenger rights rules to help airlines deal with the economic fallout from coronavirus.

France, Poland, the Netherlands and Ireland are among the 12 countries who have proposed amending EU rules, so airlines can reimburse cancelled tickets with vouchers, rather than cash.

Air-France/KLM and Lufthansa are currently negotiating government bailouts, while British Airways has announced plans to make 12,000 employees redundant, as the virus has brought international travel to a near standstill, leaving planes grounded.

The 12 member states argue the requirement of a 2004 EU regulation to reimburse cancelled flights in cash is adding to airlines’ cash-flow problems.

The joint statement calls on the European commission, which oversees EU law, to urgently amend the law, declaring:

The goal shared by the European Union and its member states must now be to preserve the structure of the European air traffic market beyond the current crisis, while considering the interests and necessary protection of passengers.

The EU’s 27 transport ministers are holding a conference call to discuss an exit from current restrictions. So far the commission has declined to say publicly whether it backs the voucher plan.

European commission vice president Vĕra Jourová told reporters earlier today.

“The debate is ongoing so I am not now giving you the final word,”

But her colleague in charge of transport, Adina Vălean, has previously said airlines can only offer vouchers if passengers can accept them.

Ministers are also looking at what green strings should be attached to airline bailouts. France’s transport minister Élisabeth Borne has said government aid for Air France would be linked to cutting pollution, including a 50% reduction in CO2 emissions by 2024 for domestic flights and fleet renewal to cut total emissions.