April 15, 2020, 4:22 PM
5 min read
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Wednesday related to the global economy, the work place and the spread of the virus.
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NUMBERS TELL A GRIM STORY: Data just emerging paints a devastating picture of the extent to which the outbreak has seized the economy, as well as the livelihood of Americans.
— Not since the U.S. demobilized after World War II has the country seen such a rapid winding down of its industrial might. The numbers were not unexpected, but still shocking. “We all knew this was coming, but it does not make the heartache any less real for the furloughed workers, the people in related industries or suppliers,” wrote Wells Fargo economists Tim Quinlan and Sarah House.
— The Federal Reserve Bank of New York’s index for state manufacturing plummeted 56.7 points in April, the largest monthly decline in its history dating back to 2001. At 78.2 this month, it is also the lowest it's ever fallen.
— Consumer confidence as measured in a monthly index put out by Refinitiv/Ipsos registered its largest monthly decline ever in April. According to the Refinitiv/Ipsos Primary Consumer Sentiment Index, consumer confidence tumbled 12.3 points to 47.8.
“The coronavirus outbreak continues to permeate through every aspect of our lives, and American consumer confidence is considerably shaken,” wrote Jharonne Martis of Refinitiv.
JOBS EVAPORATE: Jobs are vanishing at an astounding rate. More job cuts and furloughs arrive daily.
— Best Buy becomes the latest national chain to announce massive furloughs. The company will begin furloughing about 51,000 of its hourly employees, including nearly all of its part-time hourly employees and a small portion of its full-time hourly employees starting Sunday. Best Buy will begin voluntary, temporary reduced work weeks as well.
The company is also cutting pay for executives and its board.
— The number of companies that have registered to put employees on a government-backed short-time work program has risen to 725,000 — a 12% jump from last week, according to Germany’s federal labor agency.
The program, which allows firms to keep workers on the payroll, is expected to easily surpass the 1.4 million people who used it during the financial crisis a decade ago.
MOVEMENT: Nations are reacting differently to ebbs in infection levels. There has been a push to slowly ease restrictions on movement in a bid to limit damage to national economies.
— India will begin easing restrictions on Monday to revive manufacturing and farming activity in rural areas, and ease the suffering of millions of the poor. India’s Home Ministry issued guidelines on Wednesday that will also permit the construction of roads and buildings in those rural areas. The inter-state transport of goods, essential and non-essential, will be allowed.
— Italy is not easing its lockdown on industry — with all non-essential manufacturing on hold until the nationwide containment efforts are lifted, currently set for May 4. The government has put together a task force to study how to safely relaunch industry. At the same time, many people continue to work, creating a de facto easing.
AIR TRAVEL: A rescue package for U.S. airlines has been reached, though the large-scale shutdown is has hit millions of people working in industries that rely on robust travel.
— A day after the deal was reached with the U.S. Treasury, airlines were among the few to see stocks surge, but that optimism faded before noon. Shares of Delta and Southwest fell by 4% and 6% respectively. The NYSE index that tracks global airlines has plunged 50%.
— Thailand has extended a ban on international passenger flights until the end of the month. The ban went into place early this month after chaos broke out at Bangkok’s international airport, when more than 100 returning Thai citizens refused to go to quarantine centers as required.
EARNINGS: Twenty-three S&P 500 constituents are scheduled to report quarterly earnings this week. Everyone will be looking closely at companies with operations in China to see how those operations emerged from the outbreak.
— The largest banks and financial players began to roll out quarterly earnings Wednesday. Those institutions anticipate a flood of loan defaults as households and business customers take a big financial hit from the coronavirus pandemic.
MARKETS:
— Global stocks and oil prices tumbled Wednesday on grim economic data from the U.S. and after the International Monetary Fund said the global economy will log its worst year since the Great Depression.
