This week, the attention of traders will be drawn to the following events:
- The impact of the pandemic on the US labor market
The US Non-Farm Payrolls report for March is due this week and is likely to have preceded the worst period of labor market impact. Economists still expect Friday figures to show a loss of 100 thousand jobs.
A meaningful excess of that figure and a unique $2 trillion stimulus package approved by Congress may abruptly seem inadequate. The government's stimulus package involves a $500 billion fund to help severely affected industries and an equal amount to finance direct payments to families of up to $3,000.
Another massive wave of new applications for unemployment benefits is expected to be released on Thursday for the week ending March 28, after they increased to a record high of 3.28 million the previous week.
- Trump's comments on resuming operations
Investors will keep a close eye on the White House after President Trump seems to have retreated from last week's announcement that the economy will begin to recover by Easter Sunday.
On Saturday Trump said he was not sure if the business would open in the country by April 12 after the suspension of major cities across the country.
Some investors believe that an earlier return to work will spur the U.S. economy, but health experts say that a systemless set of restrictions in different states could aggravate the impact of the coronavirus. On Saturday, the number of cases of infection in the U.S. exceeded 115 thousand, which is the highest rate in the world.
Trump, who is concerned about the economic impact of prolonged business closures, blamed Democrats for wanting to preserve the paralysis of the economy to increase the chances of his expulsion in the November 3 elections.
- Chinese business index data
Profits of Chinese factories for January-February have reached their lowest level in the last ten years, and the March Business Activity Index (PMI) survey conducted on Tuesday is likely to be disappointing. And as everywhere else, job losses are increasing, no matter how many cheap loans are proposed to businesses.
Although China seems to have held back the coronavirus, work permits and travel to compensate for the major economic damage may still be ahead. With the exponential growth of infection in the US, Europe, and other markets to which China exports its goods, as well as supply chain disruptions, China suffers from a supply and demand shock.
- Data from the Eurozone
There will be a lot of economic data from the Eurozone this week, and on Monday the economic sentiment data will give an idea of how companies and consumers assess the situation, even though new prohibitive measures have been introduced after the survey.
Lower oil prices mean that March inflation will fall, while retail and unemployment reports date back to February, so they will still not be able to show the full extent of the economic impact of the measures taken to curb the coronavirus epidemic.
- The end of the first quarter
Few will regret the end of the first quarter of the year. Worries of war between the U.S. and Iran have given way to a coronavirus pandemic, which, according to JPMorgan analysts, will push the world economy to a 12% reduction. This quarter was the worst global collapse of stock markets since the Great Depression, worsened by a 60% fall in oil prices.
The beginning of the second quarter may not bring much relief, as the coronavirus is still spreading rapidly and keeps much of the world economy under quarantine. Banks have also rushed down their forecasts for the second quarter, so one should await more disorder in financial markets.
But the markets have recovered and may end the first quarter at a high after governments announced $5 trillion in stimulus measures, while major central banks have cut rates and resumed asset purchases. Investors will be watching the peak of infection, but there is still no certainty when the coronavirus will be under control.