Greetings,
United States: The biggest post-WW-II drop in consumer spending will drive the contraction in the GDP.
The decline in the second quarter is expected to be much worse (the consensus is a 26% contraction). Below is Goldman’s monthly current activity indicator (CAI).
The Fed’s balance sheet, as a percentage of the GDP, is in uncharted territory this year.
Eurozone: Demand for consumer and housing loans is near 2008 lows.
However, demand for corporate credit increased sharply, as companies seek fresh liquidity.
China: China’s regional banks’ funding costs have been declining with interbank rates. However, the PBoC has resisted cutting the deposit rate, holding large banks’ funding costs fixed.
Equities: The S&P 500 has decoupled from consumer confidence.
Global Developments: If policy actions are successful, the cumulative impact of the current crisis could be well below what was seen in 2008, according to BlackRock.
Food for Thought: Reasons why uninsured Americans don’t have health coverage:
Edited by Devon Lall
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