Fitch sees US GDP down 3% in 2020, affirms US rating with stable outlook

Fitch obviously not wanting tweet rants directed their way.

  • Affirms US rating
  • outlook stable
  • says if the virus is contained in the second half of the year GDP in the US will recover
Then they go an spoil it all calling a -3% GDP forecast for the year.

Japan says that economic conditions are ‘severe’, worst view in nearly 7 years

Japan downgrades its economic assessment for the month of March

  • Sees economy in a ‘severe situation, extremely depressed by the coronavirus’
  • First time removing the word ‘recovering’ since July 2013
  • Conditions likely to remain severe due to the influence of the disease
  • Economy is worsening at a pace comparable to when the 2011 earthquake struck
  • And towards levels last seen during the collapse of Lehman Brothers in 2008
  • The damage is as bad as those two events put together
The prior assessment can be found here. This doesn’t come as a surprise as we are seeing an unprecedented decline in economic sentiment and real conditions across the globe.
Expect this view to stay the course so long as the virus outbreak continues to keep the world in lockdown mode, with Japan also on the verge of starting their own.

Singapore Q1 GDP -10.6% q/q (annualised). Worse than expected.

First quarter economic growth data for Singapore

Q1 GDP -10.6% q/q (annualised)
  • missing on the -8.2% expected
-2.2% y/y
The forecast range for 2020 has been downgraded to -4 to -1%
  • from -0.5 to +1.5% previous
  • downgrade cites the unprecedented nature of the virus outbreak
more to come

German parliament backs EU750B crisis spending package

That’s a big number

Germany’s parliament approved aid for smaller firms and the self-employed. It includes a 156B euro supplementary budget.
That’s a huge number. Germany’s GDP is one-fifth of the US which just unveiled an enormous $2 trillion package. In relative terms, this is much bigger. That said, the details matter. Parts of both programs are loan guarantees and those don’t necessarily cost anything because they will be paid back.

Goldman Sachs expects global real GDP to contract by about 1% this year

The firm continues with the doom and gloom scenario

  • Expects real GDP in advanced economies to contract very sharply in Q2
  • That includes a 24% drop in the US
  • Based on partial count of state releases, estimates that 2.25 million Americans filed an initial jobless claim last week
We’ve heard these predictions previously here and here during the course of the week. But make no doubt, the jobless claims report this week is going to be a real shocker.
The peak during the 2008-09 crisis was 665K and the release this time around should comfortably exceed that with expectations to double at the very least.