Concerns about the human and economic cost of Covid-19 continue to weigh on the markets today.
Jerome Powell, President of the United States Federal Reserve Yesterday shook investors warning that the United States risked a “prolonged recession” and an “extended period” of weak economic growth.
Powell’s prognosis is a blow to all lingering hope for a V-shaped recovery – the road to return from this pandemic will be rather bumpy.
The Fed chairman also warned that governments may have to spend even more to protect their economies – in addition to the huge stimulus packages already planned.
Mark haefele, CIO at UBS Global Wealth Management, fears that this call will not be heard.
Powell called for further fiscal stimulus to help offset the economic fallout from the pandemic, but ruled out pushing US interest rates into negative territory. Given persistent partisan tensions in Washington, the additional fiscal stimulus measures requested by Powell seem unlikely to materialize immediately. “
His warning came hours after learning that Britain had recorded its largest monthly GDP decline ever recorded, as British GDP fell by almost 6% in March.
Health experts also express caution against the assumption that life may return to normal soon.
Overnight, the World Health Organization warned that the coronavirus “could never go away.” Their emergency chief, Michael Ryan, said:
“It is important to put this on the table: this virus may just become another endemic virus in our communities, and this virus may never go away.
I think there is no promise on this and there are no dates. This disease can settle in for a long time, or it may not be. “
Asia-Pacific stocks fell, Japan Nikkei 225 and from Australia S & P / ASX 200 both down 1.7% after Wall Street fell more than 2%.
The European market also opened lower, the FTSE 100 losing another 82 points to 5821.
Global liquidation of risks is accelerating over fears that the post-coronavirus economic recovery will be bumpy due to new waves of contagion, says Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank:
The UN has warned that the coronavirus crisis could stunt four years of growth and plunge 130 million people into extreme poverty. If plans to reopen companies worldwide fail, these numbers could explode and paint an uglier economic picture for the decade to come.
The latest US weekly report on the unemployed will put a new spoonful of paint on the canvas – economists predict that another 2.5 million people filed new unemployment claims last week.
This would bring the total since the start of the crisis to around 35 million people. Unimaginable a few months ago.
- 9h BST: the European Central Bank publishes its Economic Bulletin
- 1:30 p.m. BST: American weekly jobless figures