Global markets surge on signs of overcoming the pandemic.
Investors on Friday found reason to cheer despite a disastrous economic report from China, sending shares higher and signaling the start of a strong trading day.
European markets opened about 3 percent higher after a strong trading day in Asia. Futures markets were predicting a similarly cheery opening on Wall Street.
Though the world economy remains under siege, investors were looking to signs of progress. Some looked to a media report that a drug from Gilead Sciences showed early — and, thus far, unproven — promise in fighting the coronavirus. Boeing said it was resuming commercial plane production. China reported for the first time in decades that its economy shrank, but the number was still better than some had forecast.
Prices for U.S. Treasury bonds fell in early Friday trading, suggesting investors were willing to take more risks.
Japan’s Nikkei 225 index rose 3.2 percent. Hong Kong’s Hang Seng Index was up 1.5 percent. In mainland China, the Shanghai Composite index rose 0.7 percent. In South Korea, the Kospi finished 3.1 percent.
In London, the FTSE 100 was up 3 percent in early trading. Both the DAX index in Germany and the CAC 40 in France were up 3.2 percent.
China’s official G.D.P. shrinks for the first time since 1976.
The coronavirus outbreak has brought China’s extraordinary, nearly half-century-long run of growth to an end — a stark reminder of the enormous task ahead for world leaders trying to restart the global economy.
China’s National Bureau of Statistics said on Friday morning that the country’s economic output shrank 6.8 percent from January through March compared to the same period last year. It’s the first economic shrinkage acknowledged in official statistics since 1976, when the country was in the final days of the Cultural Revolution, a national spasm of urban violence and torture.
The stark numbers reflect China’s dramatic efforts to stamp out the coronavirus, which included shutting down most factories and offices in January and February as the outbreak sickened tens of thousands of people.
They also illustrate how hard it will be to get the global economy back on its feet.
China is trying to restart its vast, $14 trillion economy, an effort that could give the rest of the world a much-needed shot in the arm. But the spread of the virus to Europe and the United States has sharply cut the world’s appetite for China’s goods. That could lead to factory shutdowns and worker furloughs.
China’s National Bureau of Statistics confirmed last month that domestic industrial production, retail sales and investment all suffered record, double-digit drops in the first two months of this year compared with the same period of 2019.
“This year is difficult — some have lost their jobs, some cannot find work to do,” said Liu Xia, a fruit vendor from a village on the northern outskirts of Beijing. “Those who do go to work and those who are still in business are greatly affected.”
Beijing’s options for dealing with the crisis are limited. Its economy has become too big and complex to easily restart like it did in 2008, when it unveiled a plan to spend more than half a trillion dollars. And years of easy lending have left local governments and state-run companies mired in debt.
In a 2015 speech, Bill Gates warned that the greatest risk to humanity was not nuclear war but an infectious virus that could threaten the lives of millions of people.
That speech has resurfaced in recent weeks with 25 million new views on YouTube — but not in the way that Mr. Gates probably intended.
Anti-vaccinators, members of the conspiracy group QAnon and right-wing pundits have instead seized on the video as evidence that one of the world’s richest men planned to use a pandemic to wrest control of the global health system. Mr. Gates, 64, the Microsoft co-founder turned philanthropist, has now become the star of an explosion of conspiracy theories about the coronavirus outbreak. In posts on YouTube, Facebook and Twitter, he is being falsely portrayed as the creator of the virus, as a profiteer from a vaccine, and as part of a dastardly plot to use the illness to cull or surveil the global population.
The wild claims have gained traction with conservative pundits like Laura Ingraham and anti-vaccinators such as Robert F. Kennedy Jr. as Mr. Gates has emerged as a vocal counterweight to President Trump on the coronavirus. For weeks, Mr. Gates has appeared on TV, on op-ed pages and in Reddit forums calling for stay-at-home policies, expanded testing and vaccine development. And without naming Mr. Trump, he has criticized the president’s policies, including this week’s move to cut funding to the World Health Organization.
In another sign of how the pandemic is ravaging the aviation sector, Hong Kong’s flag carrier said on Friday that it would lay off its U.S.-based flight attendants.
“As a result of the Covid-19 pandemic which has virtually halted global travel, Cathay Pacific has made the difficult decision to close its U.S. cabin crew bases,” the airline said in a statement, adding that it had 286 U.S.-based flight attendants working out of New York, San Francisco and Los Angeles.
The airline said on Friday that it had 13,000 flight attendants overall. It said in an annual report last year that about 78 percent of the permanent staff worldwide at Cathay Pacific and Cathay Dragon, a sister airline, were based in Hong Kong.
Last month, Cathay Pacific closed its base for cabin crew members in Vancouver, cutting 147 jobs. It said on Thursday that it had carried 90 percent fewer passengers in March compared with the same period last year.
Cathay Pacific has now grounded most of its planes, with plans to operate only three percent of its normal capacity through the end of the month. And from April to December, the airline said, its chairman and chief executive will take a 30 percent pay cut to their base salaries, while executive directors would take a 25 percent cut.
Last December, Cathay said in its annual report that its previous chief executive, Rupert Hogg, had earned the equivalent of about $300,000 in base salary for 2019 — up until August, the month he resigned. He earned about four times as much in other benefits.
Boeing plans to bring about 27,000 employees back to work in Washington State to resume aircraft production, the company said on Thursday. Most will come back to work by the end of next week.
The announcement is the first attempt at large-scale resumption of business activity by a U.S. corporation since the coronavirus outbreak forced companies and government officials to shut down most nonessential work. President Trump is encouraging businesses and states to reopen the economy by May 1 or earlier.
“Following thorough reviews of local conditions, we’ve started restoring operations at some sites where work has been suspended,” Boeing’s chief executive, Dave Calhoun, said in a letter to employees ahead of the announcement. This week, the company brought about 2,500 employees in the state back to work, most of them focused on defense production operations.
Of Boeing’s approximately 160,000 employees worldwide, there are at least 66 current confirmed coronavirus infections. At least 124 others have recovered after being infected.
Boeing employees who return to work in the coming week will find new health and safety precautions in place, such as staggered start times and spread-out work areas, the company said. But a company spokesman, Charles Bickers, said Boeing would not test employees for the virus.
Catch up: Here’s what else is happening.
The movie theater chain AMC Entertainment said in a statement that it intended to raise $500 million in a private offering — squelching speculation, for now, that it will need to file for bankruptcy sooner than later.
The National Multifamily Housing Council, a trade group for big apartment owners and developers, said in a report that 16 percent of tenants failed to make a full or partial monthly rent payment by April 12, up from 9 percent in a similar period last month.
USAA, which serves military members and their families, will temporarily change its policies on overdrawn accounts to let customers collect stimulus money. The New York Times had reported that the financial services company was not allowing those customers to access the funds.
Robinhood, a stock trading app popular with young people, is in talks to raise a new round of funding led by Sequoia Capital that would value it around $8 billion, according to a person familiar with the situation.
The biotechnology company Moderna said that it had been awarded up to $483 million from the federal government to develop its coronavirus vaccine and to scale up manufacturing.
Uber, which will report first-quarter financial results on May 7, said that the pandemic had made it impossible to forecast how much money it would make this year. It also warned investors that its stakes in several international ride-hailing businesses would lose value.
The Labor Department said that more than 5.2 million workers had been added to the tally of the unemployed, bringing the four-week total to about 22 million. That’s roughly the net number of jobs created in a nine-and-a-half-year stretch that began after the last recession and ended with the pandemic’s arrival.
Reporting was contributed by Daisuke Wakabayashi, Davey Alba, Marc Tracy, Elaine Yu, Kevin McKenna, Nelson D. Schwartz, Kate Conger, Katie Thomas, Erin Griffith, Emily Flitter, Alan Rappeport, Brooks Barnes, Keith Bradsher, Niraj Chokshi, Vindu Goel, Carlos Tejada and Mike Ives. Yiwei Wang and Coral Yang contributed research.