Global impact of covid-19
Initial unemployment claims totaled 3.0 million last week. Over the last eight weeks, a total of 36.5 million Americans have lost their jobs.
The decline in global economic activity reduced electricity demand in the first quarter. With more than half of the world’s electricity produced by burning fossil fuels (coal, natural gas, liquids), this is likely a contributor to reduced pollution levels.
united states Unemployment Claims
Electricity production falls as economic activity slows
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 (-486%).
COVID-19 and the Mortgage Market
The coronavirus pandemic has created a lot of uncertainty in the mortgage market. While federal assistance will provide temporary relief for mortgage borrowers, a slow economic recovery may lead to higher default rates later.
Impact on global equity markets
According to FactSet’s Market Indices, U.S. equities are down 12.2% year-to-date, while European equities are down 24.2% and Chinese companies are now up 0.9%.
Sharp Q1 GDP Declines for Europe’s Largest Economies
The UK saw a 2.0% q/q contraction in real GDP in Q1, while Germany’s economy shrank by 2.2%. Previously, France announced a decline of 5.8% and Italy a 4.7% drop.
Gold trades above $1700/oz
Viewed as a haven by investors in uncertain times, gold has been trading above $1700 per ounce in recent weeks. This is the first time the metal has crossed this threshold since late 2012.
Gold prices surge as investors look for safety
U.s. unemployed claims
weekly update | 5.18.2020
COPYRIGHT ©2020 FactSet
Q2 S&P 500 EPS estimates
The Q2 bottom-up estimate for the S&P has decreased by 34.5% since March 31.