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Honored Social Butterfly

Forecast for 2nd Quarter - Disasterous

JPMorgan officially forecasts a coronavirus-driven recession will rock the US and Europe by July

 

  • A new economic-growth estimate from JPMorgan projects that a recession will hit the US and European economies by July.
  • The bank said its views of the coronavirus outbreak "have evolved dramatically in recent weeks." JPMorgan economists now expect US GDP to shrink by 2% in the first quarter and 3% in the second.
  • Eurozone GDP could contract by 1.8% and 3.3% over the same periods, the economists added.
  • The "sudden stop" to economic activity through quarantines, event cancellations, and social distancing contributed to the downward revision, alongside recent weeks of financial-market chaos.
  • "As we resign ourselves to the inevitability of a large and broad-based shock," nations' economic policy responses are key to preventing an even longer downturn, the economists added.

The US's biggest bank expects the coronavirus pandemic to sink the US and European economies into a deep recession as soon as this summer.

 

JPMorgan's views of the virus "have evolved dramatically in recent weeks" as the outbreak has spread further around the world and fueled the worst stock-market sell-offs in decades, the bank's economists wrote in a Thursday note.

 

The US economy could shrink by 2% in the first quarter and 3% in the second, JPMorgan projected, while the eurozone economy could contract by 1.8% and 3.3% in the same periods.

 

A technical recession is defined as two consecutive quarters of negative gross-domestic-product growth. The bank's emerging-markets economists haven't updated their growth estimates, but "evolving news on the virus and the material tightening" in those markets' financial conditions make it "reasonable to expect further downward revisions" in global first-half GDP, the economists wrote.

 

The outbreak was initially deemed a short-lived but disruptive shock to world economies, but two key developments led the bank to brace for a "much sharper" contraction in the first half of the year and a "novel-global recession."

 

The economists first cited the "sudden stop" to economic activity created by quarantines and social-distancing measures around the world. Italy, where the number of cases has surpassed 15,000, is in lockdown, and numerous countries, including the US, have banned some travel to curb contagion. The cancellations of major sporting, cultural, and business events will further cut into consumer spending, and the uncertainty surrounding the virus will make a coordinated economic restart even more difficult, the economists said.

 

Financial markets' wild price swings and tumbling asset prices will also contribute to economic contraction over the next two quarters, according to JPMorgan. Financial conditions around the globe are "tightening sharply as perceptions of credit quality" across several assets deteriorate, the economists said. The risk of sovereign and corporate debt crises adds to the firm's already dire economic outlook.

 

The key to avoiding an even worse hit to global growth lies in countries' policy responses, the bank's economists said: Authorities need to target ailing sectors with stimulus measures, limit financial-market stress, and prop up consumer demand through monetary policy. Any shortfall risks a recession lasting throughout 2020, the firm added.

 

"As we resign ourselves to the inevitability of a large and broad-based shock to global growth, the key issue is whether we can avoid a traditional and longer-lasting recession event," JPMorgan wrote.

 

JPMorgan officially forecasts a coronavirus-driven recession will rock the US and Europe by July 


"FAKE 45 #illegitimate" read a sign at the Woman's March in DC, 1/27/2017
Honored Social Butterfly

Some guy on TV said it would be a miracle if 75% of restaurants survived this.  We are largely a service industry.  And when we stop paying for services, what happens?   It's quite concerning.

Honored Social Butterfly

I think we will see something very similar to 2008 when many businesses filed for bankruptcy. For example, how long do you think cruise lines, restaurants, and airlines can go without any revenue? Those are just a few examples. 

 

GDP and job growth for the 2nd quarter should be horrible. 

Honored Social Butterfly


@CriticalThinking wrote:

I think we will see something very similar to 2008 when many businesses filed for bankruptcy. For example, how long do you think cruise lines, restaurants, and airlines can go without any revenue? Those are just a few examples. 

 

GDP and job growth for the 2nd quarter should be horrible. 


As well as the 1st quarter GDP and the March job numbers......


"FAKE 45 #illegitimate" read a sign at the Woman's March in DC, 1/27/2017
Honored Social Butterfly

 

 

 

 

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Honored Social Butterfly


@jimc91 wrote:

 


Yep, Bill Maher nailed it!  It was a recession or an impending one that finally got the rights attention.  I see trump was still in denial and blaming others.  What a poor leader....


"FAKE 45 #illegitimate" read a sign at the Woman's March in DC, 1/27/2017
Honored Social Butterfly

Yes, after watching this morning's bobble head press conference trump is still trying to coverup for his incompetence and lack of preparation by giving away money, and telling Governors to fend for themselves, and patting himself on the back for the great job he is doing. 
He continues to blame others, and make this political. One of the heads bobbled the answer about WHO test kits which were offered, claiming they were not accurate enough for the US...turns out it was the CDC tests which were faulty!

Situation normal, trump is not a leader. 

Honored Social Butterfly


@williamb39198 wrote:

 

"bobble head press conference"

 

LMAO!  Isn't THAT the truth....


"FAKE 45 #illegitimate" read a sign at the Woman's March in DC, 1/27/2017
Honored Social Butterfly

The media reports the news, and if Trump is failing as a leader, well it's their job to report what he's doing. They aren't part of Team Trump bending and polishing the news to make him look good (they leave that to Fox).

Honored Social Butterfly

I really don't know how we avoid a recession. I went out Friday to get my car washed and it was slow. The cashier told me they didn't get their first customer until two hours after they opened.

 

I went skiing yesterday and it was dead.  Of course, it's March and warm and it's a local resort. But there was almost no one.  

Got pho last night. One family in the restaurant. It's usually standing room only. My cleaning service has suspended cleanings for two weeks. Both of those are small businesses. What's going to happen to them?

 
Apple is closed. Nike is closed. Patagonia.  They are paying their employees, which is awesome, but what happens with lost sales/revenues? 

It's a great time to be a grocery store. But what else?

Honored Social Butterfly

Things are constantly changing nothing stays static.  . This moment, every moment whether good or terrible won't  stay stagnant and will pass into oblivion.    So one must live it whatever it is and see it through.

Eventually a new day will come again,   with it another chance of something better.  

( I read this today in a novel  and believe it is fitting for the time we are in )  

Honored Social Butterfly

It looks like trump has browbeat the Fed into dropping the rate again...is this just another "sugar high" boost for trump to influence the stock market?

Not good future news for trump's economy...it's all trump's now, not Obama's!

WTYS

Where are the test kits !

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