Global impact of covid-19
Initial unemployment claims totaled 3.2 million last week. 33.5 million Americans have lost their jobs in the last seven weeks. The jobless rate plummeted to 14.7% in April, the lowest level since the Great Depression.
According to FactSet Estimates, the U.S. economy will shrink by 4.3% in 2020 while the Eurozone contracts by 5.3%. China’s growth is expected to slow to just 1.8% compared to 6.1% in 2019.
united states Unemployment Claims
Continued Downward Revisions to 2020 GDP Estimates
Energy Sector Hit the Most
10 of 11 S&P sectors have witnessed a double-digit decline in Q2 EPS since March 31, led by Energy (-491%).
Staggering April job losses led by services
Of the 20.5 million jobs lost in April, 17.2M were private service-producing, 2.4M were goods-producing, and 1M were government jobs. March and April job losses erased the previous nine years of job growth.
Impact on global equity markets
According to FactSet’s Market Indices, U.S. equities are down 10.0% year-to-date, while European equities are down 21.1% and Chinese companies are now up 1.3%.
What can we learn from past bear markets?
Bear markets over the last 20 years all had different causes and characteristics. However, there are some consistent signals that we can glean from these periods to guide us in today’s market.
Futures price remains sub-$1 per gallon
RBOB gasoline futures rose 24% to $0.95 per gallon for the week ended May 8
as oil prices and fuel demand increased.
Gasoline prices rebound with increased demand
U.s. unemployed claims
weekly update | 5.11.2020
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Q2 S&P 500 EPS estimates
The Q2 bottom-up estimate for the S&P has decreased by 32.8% since March 31.