Good evening, let’s start with today’s top stories:
WHO raises impact risk alert to ‘very high’ as coronavirus wipes $5-trillion off markets
What a difference a couple of weeks makes. Late last week, the coronavirus had just begun to extend its reach. Not long before, most patients worldwide had some direct connection with Wuhan, China, where the virus began. Then the virus gained ground on the Diamond Princess cruise ship, and in South Korea, Iran and Northern Italy. It was no longer a virus among residents of, and travellers to and from, Wuhan.
Today, the World Health Organization raised its risk alert from “high” to “very high” as countries as far-flung as Mexico, Estonia, Denmark, the Netherlands and Lithuania reported their first coronavirus cases.
Nigeria too, where an Italian businessman arrived from Milan four days ago, and is now in quarantine in Lagos. African countries could be particularly vulnerable to the disease because of fragile health-care systems, porous borders and close links to China. Hopes that the epidemic that started in China late last year would be over in months, and that economic activity would quickly return to normal, have been shattered.
World markets reacted by selling off. Most trading days this week saw a plunge of several hundred points in both Toronto and New York. The Dow Jones Industrial Average and the S&P 500 index each shed more than 11 per cent over the past week. In Canada, the S&P/TSX Composite Index is down nearly 9 per cent on the week. Worldwide, stocks cratered, wiping US$5-trillion off markets as supply chains were disrupted, travel plans postponed and major events cancelled. Investors fled to bonds, spiking prices and pushing yields to record lows.
And a man who recently travelled to Iran has been confirmed as Ontario’s seventh coronavirus case. The man, in his 50s, arrived in Toronto from Iran on Tuesday and went to the emergency department of Sunnybrook Health Sciences Centre the next day, where he was isolated and tested for COVID-19, Ontario’s chief medical officer of health said in a statement. The man was sent home the same day to recover and has been in self-isolation since then.
- Eric Reguly: “The virus’s rapid spread and potential to shut down factories and entire cities has exposed the vulnerabilities of our modern economic system.”
- Rob Carrick: “Seeing those gains recede is hard, but all part of investing’s rich pageant. Remember to compare your portfolio’s current value with where you started, not to the recent high water marks.”
- David Rosenberg: “This virus at some point will stop making the front pages, there will be a few more multiple points of price-earnings contraction – and I will be turning bullish as the shills turn bearish.” David Rosenberg is founder of independent research firm Rosenberg Research and Associates Inc.
- The COVID-19 coronavirus: What we know so far about the new disease
- Is the coronavirus a pandemic? The WHO hasn’t declared it one, but here’s what you need to know if it does
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As we head into Saturday’s Democratic primary in South Carolina, embattled Joe Biden is expected to hold front-runner Bernie Sanders at bay, while over in Virginia, Biden has been endorsed by Senator Tim Kaine, Hillary Clinton’s running mate in 2016. Virginians join an assortment of other states holding their primaries on Super Tuesday March 3.
Meanwhile, Secretary of State Mike Pompeo defended the Trump administration’s response to the spreading coronavirus but also faced contentious questions from Democrats about the basis for an air strike that killed Iran’s most powerful general and whether the attack had put American security at risk. Democrats on the House Foreign Affairs Committee repeatedly expressed frustration that the panel was afforded only two hours to question Pompeo, who until Friday had gone months without testifying publicly on Capitol Hill. He balked last fall at complying with a subpoena tied to the House impeachment inquiry into the administration’s interactions with Ukraine.
And the House Judiciary Committee is launching a wide-ranging probe of Attorney-General William Barr and the Justice Department, demanding briefings, documents and interviews with 15 officials as it tries to determine whether there has been improper political interference in federal law enforcement.
- Lawrence Martin: “Just a fortnight ago, everything looked rosy for the President. His mood was buoyant as he looked to the fall election with a glowing economy in hand, one posting some of the best numbers in half a century. Alas, shift happens. Deus ex machina; the fates can intrude. The coronavirus scare has pummeled markets in ways not seen since the financial meltdown of a dozen years ago.”
Talks resume between Wet’suwet’en hereditary chiefs, B.C. and Ottawa in bid to end impasse
Talks, which began Thursday and continued Friday, aim to resolve a pipeline dispute that has triggered blockades and protests across the country and called into question how the British Columbia and federal governments oversee resource development in regions subject to unresolved land claims, including most of B.C. The meetings were closed to media and to the public.
Also on Friday, the Mohawk Council of Kahnawake near Montreal proposed that its Peacekeepers head up a temporary Indigenous police force to patrol Wet’suwet’en territory in British Columbia. Grand Chief Joseph Norton said the measure would allow the RCMP to withdraw from the area as hereditary chiefs and government representatives work to negotiate an end to the pipeline dispute.
ALSO ON OUR RADAR
Supreme Court rules mining company Nevsun can be sued in Canada for alleged abuses abroad
Previously, Canadian companies operating abroad could only be sued in the jurisdiction in which alleged infractions occurred. For the mining industry, the ruling potentially adds an extra layer of risk to its business model. And it gives individuals added options when considering launching a civil lawsuit, allowing them to pick the jurisdiction with the sturdiest legal system.
Rate cuts ‘a possibility’ if coronavirus outbreak intensifies into a global pandemic, Fed’s Bullard says
It was the most explicit assessment yet from a U.S. central banker of how the epidemic is influencing thinking. St. Louis Federal Reserve president James Bullard acknowledged that while the expectation was for at most a small hit to U.S. growth and containment of the virus, there was “serious” downside risks if the virus remains uncontained and death rates began approaching those of yearly flu outbreaks. But he pushed back against speculation the Fed might make emergency rate cuts before its March 17-18 meeting or that global central banks might co-ordinate a joint response. The dramatic market selloff, he suggested, had gotten ahead of the likelihood the virus will be contained.
Nine candidates expected to make it through first hurdle of Conservative leadership race
The two well-known candidates are ex-cabinet ministers Peter MacKay and Erin O’Toole, who is also an MP. The lesser-known candidates include four social conservatives: former political staffer Richard Décarie, MP Derek Sloan, lawyer Leslyn Lewis and political activist Jim Karahalios. Other contenders are MP Marilyn Gladu, former political staffer Rudy Husny and businessman Rick Peterson.
David Ayres’s wild, wonderful and wacky week
In a short few days, David Ayres has gone from an ordinary Joe who coaches a Bantam hockey team in Whitby, Ont., to a celebrity chauffeured around Manhattan in a limousine. For three years, Ayres attended Maple Leafs home games as an emergency goaltender. Three times he was asked to dress, but never played. That all changed last Saturday.
Canada’s main stock index flirted with correction territory as an increase in global coronavirus cases unsettled investors worried about its economic impact. The Toronto Stock Exchange’s S&P/TSX Composite Index was down 454.39 points, or 2.72 per cent, at 16,263.05.
Canada’s energy sector dropped 0.7 per cent as oil prices plummeted amid fears of slowing economic growth. The financials sector slipped 2.6 per cent. The industrials sector fell 2.2 per cent.
The S&P 500 fell for the seventh straight day on Friday and the benchmark index suffered its biggest weekly drop since the 2008 global financial crisis, although stocks cut losses at the end of the day’s session.
The Dow Jones Industrial Average fell 356.88 points, or 1.39 per cent, to 25,409.76, the S&P 500 lost 24.7 points, or 0.83 per cent, to 2,954.06 and the Nasdaq Composite added 0.89 points, or 0.01 per cent, to 8,567.37.
Nationwide disruptions – such as the co-opted Wet’suwet’en protests – cannot be consequence-free
Gary Mason: “[The Wet’suwet’en dispute] was co-opted by others who saw in the hereditary chiefs a perfect cover. As long as they had them as a shield, they could run around shutting down traffic or blocking rail lines, taking their anger out on colonial oppressors and capitalist autocrats in any number of ways with little repercussion.”
The Conservative leadership race limps off to an unpromising start
Andrew Coyne: “Stephen Harper was in power for nearly a decade, yet failed either to recruit much in the way of new talent or promote from within. You could count on one hand the ministers in his cabinet who had any real reason to be there other than slavish personal loyalty to the leader, the one principle to which his government was committed.”
New in theatres this weekend
Head to the cinemas for a brief respite from the midwinter blahs. Read our film critics’ take on the latest incarnation of Emma and the twisty Niagara-set thriller Disappearance at Clifton Hill. They also weigh in on the devastating Russian drama Beanpole and on a revisionist take on The Invisible Man.
Plan your screen time with The Globe’s new weekly What to Watch newsletter, launching next week with film, TV and streaming reviews and more. Sign up today.
LONG READ FOR A LONG COMMUTE
Meet four startups impressing customers – and venture capitalists – by turning lofty visions into executed plans
Largely ignored by tech startups until recently, the construction sector was pegged as a slow-moving industry by investors and developers. But after doing more than 500 interviews with general contractors, subcontractors, engineers and developers, Mallorie Brodie and Lauren Lake realized construction’s supposed curmudgeonly resistance to tech solutions was a fiction. Instead, they found a gap in the market.
From bringing tech solutions to the construction industry to creating compostable phone cases, these businesses are selling fresh ideas.
This edition of Evening Update was written and compiled by Andrew Saikali. If you’d like to receive this newsletter by e-mail every weekday evening, go here to sign up. If you have any feedback, send us a note.