During this week, the U.S. Commerce Department said that retail sales fell 8.7% last month, more than expected, & another indication that the coronavirus is taking a huge toll on the U.S. economy as consumers resigned in spending on goods ranging from cars & clothing to meals at restaurants. It’s the biggest monthly decline since the Commerce Department started keeping records in 1992 & comes after reports that nearly 17M Americans have filed for 1st-time unemployment claims in recent weeks.
Global markets moved higher Tuesday after trade data shows that China’s economy is performing better than expected as the country recovers from the coronavirus pandemic. March data showed that Chinese exports dropped 6.6% last month in US dollar terms. Imports dropped just 0.9%. In January & February combined, exports fell 17.2%, while imports dropped 4%. U.K.’s economy may shrink by 35% in Q2, & the unemployment rate could more than double to 10% due to the government’s coronavirus shutdown. The Office for Budget Responsibility says the budget deficit could hit 273B pounds ($342.23 B) in the 2020/21 tax year, 5 times its previous estimate & equivalent to 14% of GDP, its biggest since WW II.
Russian officials claim the global oil production cut of 9.7 million barrels per day reached by OPEC+ over the weekend, will help to establish a price floor & help to save millions of jobs in the United States. U.S. President Trump tweeted on Monday, that an output cut of 20M bpd may still be possible.
India considers restarting some of its manufacturing this week even if the world’s biggest lock down is extended to the end of the month. The lock down is to end Tuesday, & Prime Minister Modi has directed that some crucial industries open as soon as Wednesday. Separately, the industries ministry has recommended restarting manufacturing in autos, textiles, defense, electronics & some other sectors.
U.S. banks are bracing themselves for a wave of loan defaults. JPMorgan Chase America’s largest bank tells investors that it has set aside $6.8 billion to protect against an expected upsurge of loan delinquencies. Wells Fargo is also bracing for trouble, earmarking $3.1B to protect against bad loans.
The IMF estimates a shrink of -3% in the global economy; Philippine banana exports may drop nearly 40%; Walmart & Netflix reached new all-time highs; The number of new houses being built in the U.S. declined; Oktoberfest will not be held this year; Analysts estimate that only 1 in 5 restaurants will survive the US quarantine.
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