The German chambers of industry and commerce, DIHK, shares their latest outlook of the economy

• V-shaped recovery is likely “off the table”
• Half of German companies sees return to normalcy in 2021 at the earliest
• A third of German companies sees return to normalcy in 2020
• More than 40% of German companies are reporting liquidity shortages

Japan Industrial Production, f;ash reading for May 2020

• expected -5.9% m/m, prior -9.8%

and -25.9% y/y

• expected -23.1% y/y, prior -15.0%

• June at +5.7% m/m
• July +9.2%

• China’s PMIs will be especially closely watched given its earlier relaxation of virus-related restrictions. 
• So far the data have shown encouraging strength, with business activity across manufacturing and services growing in May at the fastest rate since the start of 2011. 
• The data for China may therefore help gauge the extent to which early rebounds in activity from lockdowns might fade. 

Trump is adamant that the coronavirus situation in the US is under control

Coronavirus deaths are way down. Mortality rate is one of the lowest in the World. Our Economy is roaring back and will NOT be shut down. “Embers” or flare ups will be put out, as necessary!

Well, it starts with a rise in cases followed by an overburden of medical capacity and then you’ll start to see the mortality rate spike again. I mean, there’s already a precedent as we saw many countries went through this back in March and April. Geez.

But I guess the takeaway for the stock market here is that there will be no major economic shutdown, then again the fear of the virus is something that matters a great deal too.

The US Q1 2020 GDP data

Details:

• Final sales -3.5% vs -3.7% prelim
• Consumer spending -6.8% vs -6.8% prelim
• GDP deflator +1.6% vs +1.6% prelim
• Core PCE +1.7% vs +1.6% exp
• Business investment -6.4% vs -7.9% prelim
• Corporate profits after tax -12.4% vs -14.2% prelim

The International Monetary Fund (IMF) steeply slashed India’s growth outlook for the current fiscal year to a minus 4.5 per cent from 1.9 expansion estimated in April owing to an extended Covid-19 lockdown and slower economic revival. This will be the lowest in several decades.

In fact, India faced the sharpest cut in the outlook, a 6.4 percentage point revision due a more severe fallout of the pandemic than earlier anticipated. In comparison, emerging markets and developing countries group saw a 2 percentage reduction in outlook while the world outlook was only cut by 1.9 percentage points.

“India’s economy is projected to contract by 4.5 per cent following a longer period of lockdown and slower recovery than anticipated in April,” the IMF said in its latest World Economic Outlook, titled ‘A Crises like No Other, An Uncertain Outlook’. India’s growth is expected to revive to 6 per cent in 2021-22, as per IMF.

With downturn deeper than previously projected, the global output will shrink by 4.9 per cent and emerging markets by 3 per cent this year.

“For the first time, all regions are projected to experience negative growth in 2020,” said the IMF.

Incidentally, China is estimated to post a 1 per cent growth in 2020, and revive to 8.2 per cent in 2021. (more…)

India’s real gross domestic product in Financial Year 2020-21 could contract 5.3 per cent, said India Ratings and Research on Wednesday as it flagged the “disorder” caused to the economy by Covid-19 and the nationwide lockdown to contain the disease.

“This will be the lowest GDP growth in Indian history and the sixth instance of economic contraction, others being in FY58, FY66, FY67, FY73 and FY80,” said the ratings agency in a press release. It expects nominal GDP to contract 3.4 per cent for the year and gross value added to contract by 5.5 per cent.

“The disorder caused by the Covid-19 pandemic unfolded with such a speed and scale that the disruption in production, breakdown of supply chains/trade channels and total wash out of activities in aviation, tourism, hotels and hospitality sectors will not allow the economic activity to return to normalcy throughout FY21,” the agency said.

“As a result, besides contracting for the whole year, GDP will contract in each quarter in FY21. However, the agency believes the GDP growth would bounce back in the range of 5 per cent-6 per cent in FY22, aided by the base effect and return of gradual normalcy in the domestic as well as global economy.” (more…)

The latest forecasts from the International Monetary Fund

WTO provides their latest take on the global trade outlook

• Trade would only need to grow 2.5% per quarter to reach optimistic scenario
• Rapid government aid helped to avoid worst-case downturn in trade
• Sees trade growth in 2021 more in the range of 5% to 20%