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Malaysia’s economy suffers first contraction since global financial crisis

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KUALA LUMPUR (Reuters) – Malaysia‘s economy plunged into its first contraction since the 2009 global financial crisis in the second quarter as the coronavirus pandemic ravaged business activity, prompting the central bank to cut its GDP forecast for this year.

The central bank said on Friday gross domestic product shrank by 17.1% in April-June from the same period a year earlier – its worse slump in over 20 years and a much deeper contraction than the 10% decline forecast in a Reuters poll.

The downturn comes as the government imposed strict curbs on movement and businesses for most of the second quarter to contain the spread of the coronavirus which has infected more than 9,000 people in the Southeast Asian country.

It was Malaysia’s worst economic slump since the Asian financial crisis in 1998 and marked a sharp decline from the 0.7% year-on-year growth seen in the first quarter.

The central bank cut its GDP forecast for this year, expecting the economy to shrink by between 3.5% and 5.5% in 2020. It previously said the economy could contract as much as 2% this year in the worst case scenario.

It expects a sharp rebound of 5.5%-8% in 2021 as the government has gradually eased lockdown restrictions.

“We are likely to see a trough in the second quarter. The economy is poised for a recovery in the second half and rebound further in 2021,” Bank Negara Malaysia Governor Nor Shamsiah Mohd Yunus said at a virtual press conference.

(Reporting by Joseph Sipalan; Editing by Ana Nicolaci da Costa)

Source: – TheChronicleHerald.ca

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Global shares mixed amid worries on coronavirus, economy – CTV News

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NEW YORK —
Stocks are drifting in mixed trading on Wall Street Friday, as another zig-zag week for markets closes out following their abrupt loss of momentum this month.

The S&P 500 was down 0.1% in morning trading after giving up a small gain in the first few minutes of trading. It’s still on pace for a gain of 0.4% this week after a two-day slump followed up on a two-day gain.

The Dow Jones Industrial Average was virtually flat at 27,901, as of 10:23 a.m. Eastern time, and the Nasdaq composite was up 0.1%. Both were flitting between small gains and losses. Smaller stocks were stronger, with the Russell 2000 index of small caps up 0.8%.

Analysts warned that the day’s trading could be even bumpier than usual. Futures and options on stocks and indexes are set to expire in an event known as “quadruple witching,” which can drive swings in prices.

Stocks have already swirled this week despite the Federal Reserve’s saying it expects to keep short-term interest rates at record lows through 2023. Low rates typically turbocharge the market by encouraging investors to pay higher prices for stocks, but some investors may have been looking for the Fed to be even more aggressive.

Growth in some areas of the economy has also slowed after unemployment benefits and other aid from the federal government expired, and partisan disagreements in Congress are holding up a possible renewal of support. Investors say it’s essential that such aid arrives.

Rising tensions between the world’s two largest economies are also continuing to keep markets on edge. The United States said on Friday that it will ban the downloads of the Chinese apps TikTok and WeChat on Sunday. It cited national security and data privacy concerns.

President Donald Trump’s targeting of the Chinese tech industry has caused intermittent worries in the market about a possible retaliation against the U.S. industry.

Big Tech stocks already stumbled sharply this month on worries that their prices have grown too expensive following their virtuosic performance through the pandemic. Surging shares of Apple, Microsoft, Amazon and others helped carry Wall Street back to record heights, even as the pandemic walloped much of the economy, as the coronavirus accelerated work-from-home and other trends that benefit them.

But they suddenly lost momentum two weeks ago, causing the market to swing with them. Because these companies have grown so massive, their stock movements have huge sway over broad market indexes, such as the S&P 500.

On Friday, several Big Tech stocks were swinging from gains to losses. Apple was down 0.9%, and Microsoft was down 0.5%, but Facebook was up 0.4%.

Also on the long list of concerns for markets is how the pandemic progresses, whether a vaccine for COVID-19 could indeed be available in early 2021 as many investors expect and what November’s U.S. presidential election will do to the economy.

Treasury yields remain very low, showing the powerful strength of the Federal Reserve and continued expectations by bond investors for only modest economic growth and inflation. The yield on the 10-year Treasury dipped to 0.68% from 0.69% late Thursday.

A preliminary report on Friday said that consumer sentiment is improving at a faster pace than economists expected, which is key for an economy where spending by consumers is the main driver. But it follows other reports this week that showed growth in retail sales slowed last month and the number of layoffs across the country remains stubbornly high.

Other stock markets around the world made mostly modest moves.

In Europe, the German DAX lost 0.1%, and the French CAC 40 sank 0.8%. The FTSE 100 in London fell 0.4%.

Asian markets rose. Japan’s Nikkei 225 added 0.2%, South Korea’s Kospi gained 0.3% and Hong Kong’s Hang Seng climbed 0.5%. Stocks in Shanghai rose 2.1%.

Benchmark U.S. crude oil rose 0.7% to $41.26 to per barrel. Brent crude, the international standard, gained 0.3% to $43.41 per barrel.

——

AP Business Writer Yuri Kageyama contributed

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The price of the pandemic on Montreal's economy – Montreal Gazette

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Article content continued

Discussions over the financing began about one year ago, and the closing of the deal took place via videoconference, the CEO said.

“It’s one of the new realities of running a business during the pandemic,” Arsenault said. “The investors were located a few blocks from us, but we did everything via Microsoft Teams.”

Since Effenco counts customers in 10 countries, including France and the U.S., “not being able to travel is a bigger deal for us than teleworking,” Arsenault said. “With the pandemic we’ve had to rely on our foreign offices to bring in business. Teleworking itself has been no problem. The productivity is good. Many of our employees are happy to stay home when it rains.”

Teleworking “has helped to fuel the jobs recovery in greater Montreal,” says Montréal International’s Bernard. “Jobs have recovered much faster in the suburbs, and that’s due in large part to teleworking. Industries that rely on a physical proximity with the customer — lodging, restaurants, culture — aren’t bouncing back as fast in Montreal because the employees are not there.”

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Global shares mixed amid worries on coronavirus, economy – TheRecord.com

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TOKYO – Global shares were mixed on Friday as investors weighed the uncertainties around global economic outlook and a new rise in coronavirus cases in many countries.

Wall Street appeared set for a subdued start to trading, with Dow futures sinking nearly 0.1% and S&P 500 futures up nearly 0.2%.

France’s CAC 40 fell 0.2% to 5,031, while Germany’s DAX gained 0.3% to 13,246. Britain’s FTSE 100 lost 0.2% to 6,040 after the government imposed new limits on public gatherings to counter an increase in virus cases.

Traders are assessing whether recent gains in the stock market are overdone considering a glum economic outlook. Economists say that the speed of the recovery from the global recession will depend on containing the spread of the coronavirus, which is picking up again in many countries.

Central banks including the Federal Reserve, Bank of England and Bank of Japan this week refrained from providing more stimulus but are committed to keeping rates low until growth picks up sustainably.

U.S. jobs figures on Thursday highlighted how the economy is struggling to rebound. Official records showed that the number of Americans applying for unemployment benefits fell only slightly last week to 860,000, a historically high number that illustrates the broad economic damage still taking place nine months after the first case of COVID-19 was detected in the U.S.

Some investors appeared disappointed by a lack of new action by the Fed, whose easy monetary policy has helped drive stock markets.

“Hesitations as to whether the U.S. economy can sustain the current pace of recovery amid the lack of additional fiscal policy support and the Fed standing put on stimulus had the market reeling once again,” said Jingy Pan, senior market analyst at IG.

Japan’s benchmark Nikkei 225 gained 0.2% to finish at 23,360.30. South Korea’s Kospi added 0.3% to 2,412.40. Australia’s S&P/ASX 200 lost 0.3% to 5,864.50. Hong Kong’s Hang Seng rose 0.5% to 24,455.41, while the Shanghai Composite edged up 2.1% to 3,338.09.

In energy trading, benchmark U.S. crude gained 14 cents to $41.11 a barrel. Brent crude, the international standard, added 15 cents to $43.45 a barrel.

The dollar cost 104.57 Japanese yen, down from 104.63 yen Thursday. The euro stood at $1.1850, up from $1.1804.

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