Investors expect new forecasts from the IMF about the global economy, which is expected to change for the worse due to the impact of the worldwide quarantine aimed at containing the spread of the pandemic COVID-19. U.S. statistics on initial jobless claims for the week were a key report that will be the focus of investors' attention this week and beyond. The US Retail Sales figures for March should show a slowdown as expected by analysts. The speeches of Fed officials will also be a very important factor.
Here is the main news of this week:
Forecasts of the International Monetary Fund. On Tuesday, the IMF will publish the forecasts within the framework of the World Economic Outlook program, after the meetings with the World Bank, which will be held in the format of videoconference in connection with COVID-19. Kristalina Georgieva, Managing Director of the International Monetary Fund, reported last Thursday that the coronavirus pandemic could lead to "sharply negative" global economic growth in 2020, leading to the worst results since the Great Depression. This prospect, according to Georgieva, applies to both developed and developing countries. She also stressed the need for assistance and debt relief for the countries of the world to overcome the crisis and agreed to increase the IMF financial assistance.
Economic data. Investors will focus their attention again on Thursday on the statistics on weekly unemployment benefits, the number of which is expected to be millions. The number of American citizens, who applied for benefits during the last three weeks, exceeded 15 million people. This week, a report on March retail sales and industrial production is also expected, which will provide a more in-depth picture to assess the economic impact of quarantine measures concerning the spread of coronavirus. Analysts expect retail sales to fall the most in at least three decades as millions of people across the country have lost their jobs due to quarantine. A report on industrial production may show the biggest fall since the Second World War.
Speeches of federal speakers. This week, the heads of the Chicago Federal Reserve Charles Evans, St. Louis Bullard and Atlanta Raphael Bostick are scheduled to speak, while investors are waiting for politicians to comment on the extent of the recession. The Federal Reserve cut interest rates to zero, launched perpetual bond purchases and introduced a set of instruments for emergency lending due to economic shock caused by the coronavirus. The regulator's reports last week showed that Fed officials expect the measures taken earlier on the monetary policy to remain in force amid deep uncertainty, while the economy is expected to enter recession this year and not to recover until next year in the worst-case scenario. On Wednesday, Fed will release the "Beige Book".
Earnings Season. The first quarter income report season starts with the six largest U.S. banks, including JPMorgan Chase, Bank of America and Goldman Sachs, which report on their first-quarter results. Investors are watching for any signs of banks cutting lending, which may be a sign of a prolonged recession. Besides, the Fed said on Thursday that it will work directly with the banks to provide financial support to the business. Johnson & Johnson will publish the report on Tuesday and Abbott Laboratories on Thursday. Revenue reports will also give an idea of how much retailers like Bed Bath & Beyond, which should report on Wednesday, have suffered.