4 May

Macroeconomic data is starting to reveal the devastating impact of the Covid-19 crisis, according to a Fitch Ratings‘ Report.

Outright GDP contractions in 1Q 2020, rising unemployment and collapsing consumer spending and confidence are among the themes highlighted.

According to the ratings agency: Quarter-on-quarter GDP declined in China, Korea, the US, eurozone, France, Italy, Spain and Mexico in 1Q20 due to the coronavirus outbreak and the measures necessary to contain its spread.

In response, central banks have launched a campaign of interest rate cuts and balance-sheet expansion, with the latter reflected in strong money supply growth (M2) in the US, eurozone, China, Japan, the UK, Australia, Canada, Brazil, Russia, India, Korea, Indonesia, Mexico, Poland, Turkey and South Africa.

In addition, equity markets moved sharply lower in 1Q20 across virtually all Fitch20 economies.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

An additional 3.8 million Americans filed for unemployment insurance last week, bringing total initial claims over the past six weeks to over 30 million.

Wells Fargo Securities update and commentary for last week said that with so many jobs lost and more at risk, consumers have cut back sharply on spending.

Consumers are shaken, as confidence in current conditions slid 90 points in April, the largest drop in data going back to 1967.

However, expectations remain lofty and supportive of an eventual rebound in spending, according to the bank.

An analysis by JP Morgan said that by Friday 1 May nearly half of S&P 500 companies have reported 1Q20 earnings, and that the bank’s current estimate is for a -20% decline relative to a year prior.

According to the bank’s analysis, this earnings season has been about the good, the bad and the ugly:

The good: the health care sector has seen solid demand for over-the-counter pharmaceuticals and branded drugs. In consumer staples, strength has been concentrated in food products and household items. Technology and communications are seeing strength in hardware, software and content that can be consumed at home.

The bad: financial service company earnings have been weak, as rising loan loss provisions have offset solid capital markets activity.

The ugly: industrials and energy are in bad shape. Lower oil prices are impacting energy revenues, and forcing companies to take impairment charges on oil field assets.