Though there are signs that the outbreak has entered the platform period, but the macroeconomic data and dismal results has only just begun “ugly” look up, recession fears deepened, prompting the President of the United States trump eager hope to restart the economy as soon as possible, trump plans announced in 16, restart the guidance of social economy, to keep an eye on the market. This session, the market also needs to be alert to the possibility of another wave of shock from the U.S. data release. Comments from several federal reserve officials are also worth watching.
More than 640,000 people have been diagnosed in the United States
As of 09:21 Beijing time on April 16, there were more than 640,000 confirmed covid-19 cases, 643,508 cases and 28,506 deaths, according to real-time data update website worldometers.
US President Donald trump said at a White House press conference on Monday that the number of newly confirmed cases in the us had passed its peak and that he would announce a guideline on restarting the social economy on Saturday. “tomorrow is a big day”.
“Our aggressive strategy is clearly working,” Mr. Trump said at a news conference. “while this campaign will continue, the data show that new cases across the country have peaked.”
Mr Trump added that “these encouraging developments put us in a very strong position to complete the needle on restarting the economy”, which he would discuss at a press conference on the 16th to “announce guidelines”.
“My administration is using all available powers to accelerate the development, research and delivery of therapies,” he said. Clinical trials of at least 35 treatments are under way, he added.
He has said he thinks some states may be able to return to work on May 1. Anthony Fauci, director of the national institute of allergy and infectious diseases, said in an interview on May 14 that the May 1 target was too optimistic about trump’s plan to resume U.S. economic activity.
Robert Redfield, director of the centers for disease control and prevention, said the center will support 20 states that are likely to restart economic activity on May 1.
In an effort to prevent the outbreak from spreading, New York governor Andrew cuomo said at a news conference on Wednesday that he would sign an executive order requiring everyone to wear a mask or cover their face in public places where it is difficult to maintain a social distance, such as on public transportation.
The United States data crash, earnings boom! Today to welcome the first day
Economic data on Wednesday highlighted the “ugly” impact of the new crisis, with us retail sales and manufacturing reporting a “shock”.
The Commerce Department reported that retail sales fell 8.7 percent in March, more than the 8 percent drop economists had expected. On a breakdown basis, with the exception of grocery stores, which sell necessities, and some online stores, the rest of the retail sector slumped, with clothing stores down more than 50 percent.
“The U.S. economy is clearly in ruins,” said Chris Rupkey, chief financial economist at MUFG union bank in New York. No one is buying a car — sales are down 25.6 percent, no one is buying furniture — sales are down 26.8 percent, restaurants are down 26.5 percent.”
James Sweeney, a Swiss economist, thinks the worst is yet to come, saying: “march should only mark the beginning of a decline in consumption, which could accelerate further in April. Overall, we expect consumption to decline at an annualized rate of 17.5 percent in the second quarter, the worst quarter since world war ii.”
Meanwhile, the New York fed’s manufacturing index fell to its lowest level on record in April, more than double the average Wall Street estimate and worse than during the great depression. U.S. industrial output fell at its fastest pace since 1946 in March as a new outbreak shut down a wave of manufacturers.
In addition to the poor macroeconomic data, Goldman sachs, citigroup and bank of America reported a string of bearish results, dashing Wall Street’s hopes for a quick v-shaped recovery, the fear index VIX rose, led by energy and financial stocks, all three indexes closed lower.
Paul Nolte, portfolio manager at Kingsview Investment Management in New York, said the disappointing bank results added to concerns about the outlook for the rest of the earnings season.
In the coming weeks, he says, “it’s more important to focus on how companies are doing… From a debt perspective, “I’m not sure the recovery is going to be as strong as people make it out to be.”
“This is not surprising to us,” Mark McCormick, head of global currency strategy at Toronto Dominion Bank, said in a report.
The international monetary fund said on Tuesday it expects the global economy to contract by 3.0 per cent in 2020 as a coronavirus outbreak shuts down economic activity, the worst downturn since the great depression of the 1930s.
The combination of data and earnings sent investors fleeing riskier assets for safe-haven assets such as the dollar, which rose sharply against a basket of currencies on Wednesday, briefly approaching the 100 mark, before hovering around 99.85 on Thursday, waiting for U.S. jobless claims in the evening.
“The combination of a larger-than-expected downgrade of global growth in the IMF’s overnight report, a record plunge in U.S. retail sales and a sharp decline in U.S. industrial production has seen a flight to the safe-haven dollar,” analysts at Action Economics wrote.
As the dollar strengthened, gold’s gains were curbed, and as profit-taking took its toll, spot gold followed stocks lower, falling to around $1,705 at one point and more than $20 from the session’s highs, though fears of a global recession helped support a bottom.
In Asian session on Thursday, spot gold remained in a tight range, trading around $1,720.
Bart Melek, head of commodities strategy at TD Securities, said: “gold has been following the stock market recently, with the stock market selling off today and people adjusting their portfolios in response to the stronger dollar, which has led to volatility in the gold market.”
Despite Wednesday’s drop, commerzbank analyst Carsten Fritsch thinks gold could hit $1,800 an ounce by the end of the year.
In the current session, the market will pay particular attention to U.S. jobless claims, which are due at 20:30 (Beijing time) on Thursday.
New claims for state unemployment benefits rose to 6.66 million in the week ended April 4, above expectations of 5.25 million, from 6.648 million, labor department data showed on Thursday.
Economists estimate that about 5.5 million people applied for unemployment benefits last week, bringing the four-week total to more than 22 million, or about one-eighth of the labor force, wiping out virtually all the new jobs created since the last recession.
Diane Swonk, chief economist at Grant Thornton LLP, said people often do not file for unemployment benefits because there is an opportunity to find another job, but that is not the case. People who have never received unemployment benefits before will receive them in this environment because they have no choice.
Sahm, a former fed economist, said the 30 percent unemployment rate would shift from a “likely scenario” to a “most likely scenario” if initial claims did not start to stabilize. That would be three times the 10 percent unemployment rate after the global financial crisis and even more than the 25 percent unemployment rate during the great depression,
G7 leaders are also scheduled to hold a videoconference today, where they are scheduled to discuss coordinating anti-epidemic measures. The White House said the G7 was working on a range of issues including health, finance, humanitarian assistance and science and technology to tackle the crisis. According to the financial times, the next G7 videoconference will be held in May to lay the groundwork for the June meeting.