See here: Goldman Sachs has significantly downgraded the outlook for the US economy between April and June. The Investment Bank now expects an annual contraction rate of 34% compared to the previous quarter. The last estimate was an already shocking 24%.
Goldman revised the forecast because it believes the US labor market collapse will be even worse than expected. Unemployment now looks up to 15% in mid-year, up from 9% before.
The bank has also updated its predictions of a financial setback between July and September, which it believes will be stronger than it had last refinished. But in the meantime, Wall Street is clearly stiffening for pain.
China's official industry procurement management index rose from 35.7 in February to 52 in March, surpassing analysts' estimates. Survey data also showed a rebound in other parts of the economy. A reading above 50 indicates growth compared to last month.
But that doesn't mean production has returned to levels seen before the coronavirus outbreak, according to Julian Evans-Pritchard, senior China economist at Capital Economics. It "simply suggests that economic activity improved modestly compared to February's gloomy shows," he said.
More good news: Kallum Pickering of Berenberg Bank observed in a note to clients that "the harsh containment measures that large parts of Europe began introducing about two weeks ago are apparently beginning to work," reducing the frequency of new infections.
But that's only a small relief as the United States, home to the world's largest economy, becomes the new epicenter of the virus.
In a new report, Deutsche Bank said it expects US and European GDP to take a trillion trillion dollars as a result of the pandemic. And it takes into account the outstanding political response.
Dealers have tens of thousands of workers
The store chain, which also owns Bloomingdales and Bluemercury, closed all its 775 stores in the United States earlier this month. Some states have forced the closure of non-essential businesses. Macy's said it had lost "the majority" of sales.
Gap, meanwhile, said it would affect most store workers in the United States and Canada. The company also reduces the number of employees at corporate offices.
– After taking extraordinary measures to temporarily close all our company-owned stores in North America and Europe two weeks ago, we are now in a position where we need to take deeper action, CEO Sonia Syngal said in a statement.
What it means: The record two trillion US rescue packages passed last week is not enough to stop layoffs in industries that have been hit hard by the virus and attempts to contain it.
And the cost savings have not changed the calculation for skeptical investors who have steered away from retail. Shares of Macy's dropped 2.9% Monday. They are down more than 68% so far this year.
The worst quarter since the global financial crisis
When March ends, so does the first quarter – and the routine of the past month has proved painful.
Global equities are set for the worst quarter since the global financial crisis. The MSCI All-Country World Index is set to fall more than 21% between January and March. It is the index's worst performance since the fourth quarter of 2008, when it fell almost 23%.
Some signs of stabilization have emerged in recent days. The MSCI All-Country World Index has risen four of the last five trading days. Since March 23, it has risen by 15.9%, helped by a meeting of US equities.
Morgan Stanley pointed out in a recent note to clients that stock markets tend to look ahead, reaching their low points four to five months before the economy troughs. "If the cycle falls around the summer of 2020, based on economists' growth forecasts, we should soon see the stock markets," said the investment bank's strategists.
But the road ahead still looks rocky. According to Morgan Stanley, the key risk is the path in US and European Covid-19 cases, which should become clearer by next week.