U.S. Exports, Imports Fell Sharply In April Amid Coronavirus Disruptions

Trade deficit widened as the pandemic sapped global commerce, affected supply chains.

U. S. exports and imports both posted their largest monthly decreases on record amid coronavirus-related shutdowns around the world.

Imports fell 13.7% in April from March, and exports dropped 20.5%, the largest declines since record-keeping began in 1992, the Commerce Department reported Thursday. The trade deficit expanded 16.7% to a seasonally adjusted $49.41 billion.

“Beyond the fact that we’re seeing a significant widening of the trade deficit, what really strikes me is the pace at which trade flows are declining,” with imports and exports down about a quarter since the coronavirus outbreak, said Gregory Daco, chief U.S. economist at Oxford Economics.

Exports of aircraft and cars have dropped as manufacturers such as Boeing Co. were hit by the world-wide disruption of travel and auto makers including Ford Motor Co. closed factories to prevent the spread of the virus.



“We’re reopening fast enough that import demand will pick up faster than export demand,” said Joel Naroff, president of Naroff Economic Advisors. “We’ll have more total activity as we go forward but the trade deficit is likely to widen.”

Global trade flows may start to pick up again as some factories reopen and the easing of social-distancing measures revives consumer demand.

“Much of the disruption may have already occurred,” Angeliki Frangou, chief executive of container ship operator Navios Maritime Containers LP, said on an earnings call last month. “As countries emerge from quarantine and return to work, we expect volumes to pick up, particularly in the second half of 2020.”

Exports of goods in April were the lowest since late 2009, when the nation was recovering from a deep recession, Thursday’s report showed Imports of goods were the lowest since late 2010.

A similar trend was seen in Canada, where the goods trade deficit widened in April as exports plunged to their lowest level in over a decade. Statistics Canada attributed the dramatic drops in exports and imports to factory shutdowns, weaker energy prices and widespread economic restrictions as authorities moved to contain the spread of the new coronavirus.



While the U.S. usually runs a deficit in goods, it runs a surplus in services. That surplus, in services such as medical care, travel, higher education and royalties, decreased by $1.3 billion in April to $22.4 billion, its lowest since December 2016.

In the first quarter, a narrowing trade deficit helped limit a sharp contraction in the U.S. economy. As a whole, the economy still shrank at a 5% annual rate, the steepest drop since the last recession. Trade is expected to subtract from gross domestic product this quarter should the deficit continue to widen.

The U.S. deficit in goods with China widened to $25.96 billion from $16.99 billion the prior month. Year to date, the deficit with China amounts to $87.60 billion, compared with $123.68 billion in the same period of 2019.

Chinese state-controlled companies have canceled some shipments from U.S. farm exporters, according to maritime officials, as tensions between Washington and Beijing rise over China’s handling of pro-democracy protests in Hong Kong and the coronavirus pandemic. The cancellations involve orders made following the phase-one trade pact between the two countries signed in January, in which China committed to increasing farm imports from the U.S.


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Lockdowns associated with the pandemic, which originated in China late last year, have sapped global commerce and growth, disrupted supply chains and closed factories and stores.

The International Monetary Fund said in April that it expected the U.S. economy would shrink 5.9% this year. It predicted the global economy would contract 3% in 2020. China’s growth would slow to 1.2% this year, the IMF projected, from 6.1% last year.

Global trade, already experiencing its weakest activity since the 2008-09 financial crisis because of the two-year U.S.-China trade conflict, is likely to contract by 11% in 2020, the IMF said, a collapse that would make it difficult for countries to revive their economies by increasing exports.




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U.S. Economy Faces Projected 10-Year Recovery From Coronavirus Effects

The U.S. economy could take the better part of a decade to fully recover from the coronavirus pandemic and related shutdowns, a U.S. budget agency said, as a series of surveys pointed to continuing weakness in global manufacturing.

The Congressional Budget Office, a nonpartisan legislative agency, said the sharp contraction triggered by the coronavirus caused it to mark down its 2020-30 forecast for U.S. economic output by a cumulative $7.9 trillion, or 3% of gross domestic product, relative to its January projections. GDP isn’t expected to catch up to the previously forecast level until the fourth quarter of 2029, the CBO added.



The roughly $3.3 trillion in stimulus programs enacted by Congress since March will only “partially mitigate the deterioration in economic conditions,” the CBO said.

“After you get the initial bounce of economic activity simply from removing the lockdowns, I think what we’ll see is an economy that is running at a level of activity notably below where we were prior to Covid,” said Michelle Meyer, chief U.S. economist at BofA Merrill Lynch. “It’s going to take a long time to heal. There will be scars as a result of such a painful shock of the economy.”

The CBO analysis came as new surveys showed that factories in the U.S. and abroad continued to reduce output and shed jobs in May, though the pace of deterioration moderated as governments moved to ease coronavirus-related restrictions on their economies.

Surveys of purchasing managers at manufacturers in the U.S., Asia and Europe offered signs that the decline in global factory activity is starting to bottom out after the record fall seen in April. But sentiment remained negative, suggesting any recovery in the months ahead could be tentative.

The U.S. Institute for Supply Management’s manufacturing index for May rose to 43.1 from an 11-year low of 41.5 in April. The index’s core components all remained well below the 50 level that marks the threshold between contraction and expansion. A majority of survey respondents said both production and new orders worsened in May from April, and two-fifths reported lower employment levels.

The factory indexes add to other signs the U.S. and other countries may have reached an economic bottom, though recoveries could be slow. Unemployment is up sharply across the globe. Services industries, hit particularly hard by the virus, are just starting to recover. And consumer spending, an important catalyst for the U.S. and other economies, remains weak.

“We’re probably past the worst in terms of rates of decline, but things are still quite bad,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. He said forward-looking aspects of the ISM survey are still “extremely weak,”

The CBO now expects U.S. GDP to be 5.6% smaller in the fourth quarter of 2020 than a year earlier, a sizable markdown from its 2020 projection of 2.2% growth made at the end of 2019 before the pandemic.

While the economy is expected to resume growing after this year, the pace of growth likely won’t be fast enough to quickly make up for the ground lost during the coronavirus pandemic. The difference between the CBO’s latest projection for GDP and its January forecast “roughly disappears by 2030,” adjusted for inflation.

The outlook for weak manufacturing is one factor weighing on the ability of global economies to turn around.

Tim Fiore, who manages the ISM’s factory survey, said he expects further improvement in June as state governments allow more nonessential economic activities to resume. But until a vaccine or an effective treatment for Covid-19 becomes available, social-distancing efforts will limit the number of workers allowed on factory floors, likely restraining production.

Only in China, the first major economy to begin reopening after the novel coronavirus outbreak, did factories report an increase in activity. But the surveys suggested that its nascent economic recovery is already beginning to stall, with export orders falling sharply amid continued global efforts to contain the pandemic.

The surveys indicate the worst might be over for manufacturers, and activity could start to increase in coming months. But the road back to the levels of output and employment seen at the end of last year is set to be long and bumpy.

“Whether growth can achieve any serious momentum remains highly uncertain, however, as demand looks set to remain subdued by social-distancing measures, high unemployment and falling corporate profits for some time to come,” said Chris Williamson, chief business economist at IHS Markit, the data firm that compiles most of the surveys outside the U.S.

In many countries, factory managers reported that restrictions on movement continue to make it difficult for them to operate at normal levels of output. But they also reported that weak demand is holding them back, with new orders continuing to fall.

In a sign that factories don’t expect conditions to improve rapidly, many reported further job cuts. In India and South Korea, those reductions in payrolls were the largest on record.



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One problem highlighted by the surveys is that even where local restrictions have been removed, or were never very severe to begin with, the return to normality is being impeded by weak export demand.

China—the first country exposed to the virus—entered lockdown earlier than other countries. It also exited its lockdown earlier, but May surveys of purchasing managers pointed to a large decline in export orders.

That was also true of South Korea, which chose not to impose mandatory lockdowns and focused instead on widespread testing and tracing of those infected by the virus, and the people with whom they had come into contact.

Separate figures released on Monday showed South Korea’s May exports were down 23.7% from a year earlier to $34.86 billion following the prior month’s revised 25.1% contraction.

China’s Caixin general manufacturing purchasing managers index rose to 50.7 from 49.4, a sign that manufacturing activity increased after having fallen in April. A reading above 50.0 indicates an increase in activity, while a reading below that level indicates a decrease.

However, other manufacturing powerhouses continued to experience deep declines. Germany’s PMI rose only slightly, to 36.6 from 34.5, while Japan’s PMI fell to 38.4 from 41.9.

Across the eurozone, Italy moved closest to a manufacturing recovery, as its PMI rose to 45.4 from 31.1.

According to the CPB Netherlands Bureau for Economic Policy Analysis, global industrial production was 4.2% lower in the first three months of the year than in the final quarter of 2019. The surveys of purchasing managers suggest the decline in the three months through June might be even larger.




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UK To Launch Big Stimulus Package Before Summer

Britain’s government is planning to launch a big stimulus package before the summer with a focus on creating jobs and infrastructure projects to help drag the economy out of the coronavirus crisis, the Financial Times reported.


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Finance minister Rishi Sunak declined on Friday to say whether he would bring forward his next budget statement, due in the autumn, to spell out how he will tackle Britain’s surging debt.

But Prime Minister Boris Johnson’s government was elected in December after promising to upgrade the country’s creaking infrastructure and the FT said this would form a central part of its recovery programme, along with the retraining of workers.

“We are trying to identify shovel-ready projects — we want to get a move on with this,” it quoted one minister as saying.

Sunak said on Friday that employers hammered by the coronavirus shutdown would have to gradually start contributing to the government’s hugely expensive wage subsidy scheme, but only from August.



The government has been paying since March 80% of the wages of workers who are temporarily laid off, and who now total 8.4 million, to limit a surge in unemployment.

While that has been warmly welcomed by unions and business groups there are still fears that many jobs will go in sectors which will struggle to reopen, such as hospitality, retail and aviation.



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Economic Indicators – Japan Exports Fall Most Since 2009 As Pandemic Wipes Out Global Demand

Japan’s exports fell the most since the 2009 global financial crisis in April as the coronavirus pandemic slammed world demand for cars, industrial materials and other goods, likely pushing the world’s third-largest economy deeper into recession.

The ugly trade numbers come as policymakers seek to balance virus containment measures against the need to revive battered parts of the economy, with the risk of a second wave of infections only complicating this challenge.



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The central bank will hold an emergency meeting on Friday to work out a scheme that would encourage financial institutions to lend to smaller, struggling firms. Policymakers are also considering cash injections for companies of all sizes.

Ministry of Finance (MOF) data on Thursday showed Japan’s exports fell 21.9% in April year-on-year as U.S.-bound shipments slumped 37.8%, the fastest decline since 2009, with car exports there plunging 65.8%.

The fall was the biggest since October 2009 during the global financial crisis, but slightly less than a 22.7% decrease seen by economists in a Reuters poll. Exports fell 11.7% in March.

“Reopening of trade with China led China-bound exports of electronics parts and imports of masks and PC, but trade with Europe, America and Southeast Asia remain shrunk,” said Takeshi Minami, chief economist at Norinchukin Research Institute.


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“It’s still far from fully-fledged resumption of economic activity. As exports and imports remain stagnant for a prolonged period of time, global trade will remain contractionary for the time being.”

Exports to China, Japan’s largest trading partner, fell 4.1% in the year to April, due to slumping demand for chemical materials, car parts and medicines.

Shipments to Asia, which account for more than half of Japanese exports, declined 11.4%, and exports to the European Union fell 28.0%.

Other trade-reliant economies in Asia have also been hit with data on Thursday showing South Korea’s exports slumping by a fifth in the first 20 days of May, year-on-year.

Industry data released last week showed Japan’s machine tool orders in April fell to their lowest level in more than a decade, a sign of deteriorating business spending.

Japan’s economy slipped into recession for the first time in 4-1/2 years, putting the nation on course for its deepest postwar slump as the pandemic ravages businesses and consumers.





Monday’s first-quarter GDP data underlined the broadening impact of the outbreak, with first quarter exports plunging the most since the devastating March 2011 earthquake and tsunami.

A private sector manufacturing survey showed on Thursday the decline in Japan’s factory activity accelerated in May as output and orders slumped.

Analysts warn of an even bleaker picture for the current quarter as consumption crumbled after the government in April requested citizens to stay home and businesses to close.



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Behind Bond Market’s Stall, Investors See Hard Times Ahead

For much of the past month and a half, the yield on the benchmark 10-year U.S. Treasury note has hovered around two-thirds of a percentage point—a shade above its all-time low of around 0.5% set in March.



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Taken together, the low level of the 10-year yield and its stability suggest that bond investors not only hold a dreary economic outlook but also are unusually confident in that perspective, a contrast with the optimism that has carried stocks to their highest levels since early March.

An important benchmark for interest rates across the economy, the ultralow 10-year Treasury yield has facilitated an explosion of corporate-bond issuance from the likes of Costco Wholesale Corp., Apple Inc. and Clorox Co. Monday’s news that an experimental coronavirus vaccine from the drugmaker Moderna Inc. had shown promise in an early trial helped push the 10-year yield to the top of its recent range. But the yield, which falls when bond prices rise, edged lower again Tuesday and remained at roughly half of its low from before this year.

Two factors typically determine longer-term Treasury yields. One is investors’ estimates of the average federal-funds rate set by the Federal Reserve over the life of a bond. The other is what is sometimes referred to as a risk premium, or an extra amount of yield investors demand to be compensated for the chance that short-term interest rates could rise higher than anticipated as a result of scenarios such as accelerating economic growth and inflation.

Tuesday’s closing 10-year yield of 0.711% suggests many investors believe that the Fed could basically repeat its postcrisis playbook: leaving the federal-fund rate near zero for about seven years before raising it to around 2%. Yields are lower than they were a decade ago in large part because investors feel more assured about that outcome, having seen the central bank implement such policies before without spurring a significant pickup in inflation.



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The risk premiums embedded in Treasurys “are basically zero or nonexistent,” said Thanos Bardas, global co-head of investment grade at Neuberger Berman. Expecting yields to remain rangebound over the next few quarters, Mr. Bardas said he likes Treasurys in the seven to 10-year range and has high hopes for the new 20-year bonds that are set to be reintroduced by the Treasury Department on Wednesday.

The stability of Treasury yields is particularly notable because it comes even as an unprecedented deluge of new debt floods the market. Not only has the Treasury Department ramped up the size of bond auctions to fund trillions of dollars in economic-relief measures but higher-rated companies also have been bombarding investors with new bond sales as they try to replace revenue that is being lost as a result of the coronavirus pandemic.

he Fed, meanwhile—after saying in March it would buy an unlimited amount of Treasurys—has slowed the pace of its purchases to $6 billion a day from $75 billion a day. Still, yields have barely budged, indicating that “globally, there’s tremendous demand for that high-quality debt,” said Colin Robertson, head of fixed income at Northern Trust Asset Management.

Treasury yields that are reliably this low have wide-ranging implications for markets and the economy. For investors, paltry yields might signal a gloomy future. But they can also propel them into riskier assets in search of returns, a likely factor in the surprisingly strong rebound in stocks since their sharp decline earlier in the year.

Low yields have also encouraged borrowing. For a brief period in March, corporate borrowing costs shot upward as fear gripped markets and investors sold bonds from even the safest companies. Since then, though, the average extra yield investors demand to hold investment-grade corporate bonds over Treasurys has shrunk, enabling businesses to benefit from the low benchmark rates.

Last month, Costco sold 10-year notes with a 1.619% yield, the lowest on record for that maturity, according to LCD, a unit of S&P Global Market Intelligence. Other companies that have recently issued 10-year bonds with sub-2% yields include Apple, Clorox and International Business Machines Corp. Overall, through Monday, nonfinancial companies had issued $148 billion of investment-grade bonds this month after selling a record $231 billion in April, according to Dealogic.

Treasury yields could turn even less volatile if the Fed adopts a policy known as yield-curve control, several analysts said. A cousin of quantitative easing, yield-curve control entails purchasing an unlimited amount of bonds at a particular maturity to peg rates at a target.







Yield-curve control has been used for years by the Bank of Japan to keep the yield on 10-year Japanese government bonds at around 0%. In March, the Reserve Bank of Australia said it would set a target of 0.25% for the country’s three-year government bond.

In the U.S., Fed Chairman Jerome Powell said last fall that “short-term yield-curve control is something that is worth looking at” as a tool to fight the next recession. It is far from certain that the Fed will enact such a policy. Still, the mere discussion has likely contributed to the bond market’s calm, analysts said.

Something similar happened to corporate bonds after the Fed said in March it would start buying the securities, said Thomas Simons, senior vice president and money-market economist in the Fixed Income Group at Jefferies LLC. Though it was nearly two months before the Fed started implementing the program, the announcement alone sparked a rush into the asset class as investors anticipated the Fed’s backing.

“Just knowing that the Fed could do something is almost the same as the Fed actually doing it,” Mr. Simons said.

Not all investors are unconcerned about a pickup in inflation that could push longer-term yields higher. A welcome surprise—such as an early vaccine available for emergency use this fall—could provide a major boost to the economy. Some also see risk in the tremendous amounts of money that the federal government is spending to help the economy, coupled with the promise of unlimited bond-buying from the Fed, which essentially helps finance that spending.

“The Fed wants to push inflation higher, and is willing to keep monetary policy accommodative even as the economy recovers from the Covid-19 shutdown to get inflation expectations up,” said Donald Ellenberger, senior portfolio manager at Federated Investors. Mr. Ellenberger said he therefore sees value in Treasury-inflation-protected securities, or TIPS.

Still, he said, his team’s strategy is to “trade the range”—betting on higher yields when the 10-year falls below 0.6% and lower yields if it approaches 1% in large part because of the Fed’s continued bond-buying and desire to support the economy.



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The Treasury Department Ready to Increase Investments In Fed Lending Programs

Treasury Secretary Steven Mnuchin said Tuesday he was prepared to provide more money and take more risks to facilitate lending programs being established by the Federal Reserve.



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Congress made $500 billion available to the Treasury Department through the $2 trillion economic-relief package that President Trump signed into law in March. The legislation provided the Treasury with $46 billion to provide direct assistance to airlines and other distressed industries, plus another $454 billion to cover losses in Fed lending programs.

The Fed has launched nine lending programs with Mr. Mnuchin’s approval to support financial markets, businesses, cities and states, and the Treasury Department has provided $195 billion from the economic-relief bill to cover losses in some of those programs.

“I am prepared to allocate the rest of that,” Mr. Mnuchin told lawmakers during a hearing conducted by the Senate Banking Committee via a videoconference Tuesday. “The only reason I have not allocated it fully is we are just starting to get these facilities up and running.”

Lawmakers have pressed Mr. Mnuchin on how much risk the government is willing to take on its investment in the Fed’s lending facilities, and whether he is prepared to lose the money Congress provided to ensure credit is widely available to companies that need it most.

“The answer is absolutely yes,” Mr. Mnuchin said. “We are fully prepared to take losses in certain scenarios on that capital.”

Mr. Mnuchin appeared at the hearing alongside Federal Reserve Chairman Jerome Powell. Lawmakers pressed both men on the need for additional spending to limit the economic damage from the current downturn. Democrats in the House of Representatives narrowly approved a $3 trillion relief package last week with only one Republican voting in favor.







Mr. Mnuchin has said the administration expects economic growth to pick up in the second half of the year, and administration officials are taking a wait-and-see stance regarding additional relief. Mr. Powell in recent weeks has urged Congress and the White House to spend more money to ensure the government’s response to the economic downturn isn’t squandered, and he has said the recovery faces a longer and more uncertain path.

“This is really a question for Congress to weigh,” Mr. Powell said Tuesday.

“There is a growing sense that the recovery may come more slowly than we would like…and that may mean that it’s necessary for us to do more,” Mr. Powell said last week during a moderated discussion online.

Mr. Powell faced questions on when the central bank’s lending programs will be up and running. The Fed has launched several operations to calm short-term funding markets, recycling programs it had used in the 2008 crisis to stabilize financial markets.

But it has unveiled other programs to backstop corporate and municipal bond markets and to lend directly to small and midsize businesses that are taking more time to put into operation.

The Fed began purchasing exchange-traded funds of corporate debt last week through one of these new programs, and it rolled out application materials Monday for state and local-government borrowers that plan to issue debt of up to three years through the central bank’s Municipal Liquidity Facility.

By simply announcing its intention to backstop corporate-debt markets, the Fed has made it possible for companies to borrow more money from private investors without the Fed’s buying a single security.

Still, the Fed’s ability to follow through on those programs will be closely watched by markets and lawmakers alike.



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In one particularly novel operation, called the Main Street Lending Program, the central bank will lend directly to middle-market firms that are too large for aid from the Small Business Administration and too small to borrow in Wall Street debt markets.

The Fed has already adjusted the terms of its loan programs several times, and Mr. Powell said the central bank would continue to adjust the terms for those operations “as we learn more.”

Mr. Powell said he expected that program would be ready to start lending by the end of the month or in the first week of June.

While some lawmakers have pushed the Fed to ease terms on certain lending operations, others have warned against the central bank’s expanding eligibility criteria to benefit sectors of the economy they think shouldn’t be helped by the Fed, such as oil-and-gas exploration and drilling.

Mr. Mnuchin faced questions on the Treasury Department’s role in administering the Paycheck Protection Program, which has provided $530 billion in emergency small-business loans. The program got off to a bumpy start and has faced criticism over loans that went to large public companies, and rules limiting how small firms may spend the money to qualify for loan forgiveness.



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Japan’s Economy Fell Into Recession In First Quarter Of 2020

The world’s third-largest economy after the U.S. and China shrank an annualized 3.4% in the January-March period, pushed down by the initial effects of the coronavirus pandemic. That followed a revised 7.3% contraction in the previous quarter that was triggered by an increase in the national sales tax. Two straight quarters of contraction is one definition of a recession.




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“The situation has become even more severe in April and May after a state of emergency was issued,” Economy Minister Yasutoshi Nishimura said Monday. “The economy is expected to shrink substantially for the time being.”

Prime Minister Shinzo Abe declared a national state of emergency in April to contain the spread of the coronavirus. Last week, he lifted it in 39 of 47 prefectures. It still applies in Tokyo and Osaka, but is expected to end nationwide in the next week or two.

Many stores and restaurants have closed during the pandemic, while tourism has virtually halted because most foreign visitors are barred from entering the country and Japanese people have been encouraged to avoid travel.

Economists are forecasting a contraction at an annualized pace of 20% or more in the current quarter.

Exports fell at an annual rate of 21.8% in the first quarter, reflecting supply-chain disruptions and lockdowns in China, one of Japan’s biggest markets. Private consumption and capital spending by companies also fell, but not as much.





Daiwa Securities economist Mari Iwashita said exports were likely to fall further with lockdowns continuing in some countries. She said imports might improve as China’s economy moves closer to normal operations and provides Japan with personal computers for people working at home and masks.

Société Générale economist Takuji Aida said that even after Japan’s state of emergency lifts, the pace of economic recovery may be slow because many people may see their income reduced or lose their jobs. “Households and companies are reaching their limits of their strength,” he said.

Mr. Nishimura, the economy minister, said the government planned to put together an additional spending package by about May 27, including further support for corporate financing and aid for students. In April, Parliament passed a measure with some $240 billion in spending, including cash payments of about $935 to every person in Japan.



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COVID-19 to Cause 17% Unemployment in June

U.S. unemployment is expected to hit 17% in June as the economy contracts due to efforts to contain the coronavirus pandemic, economists predicted, and the economy is expected to start rebounding in the second half of the year.

A monthly Wall Street Journal survey found economists expect gross domestic product to shrink 6.6% this year, measured from the fourth quarter of 2019, a downgrade from the 4.9% contraction economists predicted in last month’s survey. While economists expect a deeper contraction in the second quarter, a majority—85%—continue to expect the recovery will start in the second half of the year. They predict an annualized growth rate of 9% in the third quarter, up from 6.2% in the prior survey. Growth is expected to clock in at 6.9% in the fourth quarter, up slightly from last month.


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“The trough will occur in May or June, with activity starting to pick up,” said Chad Moutray, chief economist for the National Association of Manufacturers. “With that said, growth will remain well below pre-recessionary levels likely until at least 2022.”

Business and academic economists in this month’s survey expect, on average, that gross domestic product will contract at an annual rate of 32% in the second quarter. That represents a worsening from the April survey of economists, when they expected GDP to shrink 25% from April to June. The annualized rate, however, overstates the severity of any drop in output because it assumes that one quarter’s pace continues for a year.

In the May survey, 68.3% of economists said they expect the recovery to be shaped like a “swoosh.” Named after the Nike logo, it predicts a large drop followed by a gradual recovery. The survey results echo recent comments by corporate executives.

As states start to loosen stay-at-home orders, economists were split on whether this is the right moment to do so. Some 29.8% said the reopening measures are happening at the right time. 14% said such measures were overdue, while 31.6% described it as too soon. Just under a quarter, 24.6%, were unsure whether the timing is right.

“In the absence of a vaccine or some therapeutic drug, opening the economy now would certainly trigger a spike in new infections and will be followed by economic shutdown 2.0,” said Bernard Baumohl, chief global economist at The Economic Outlook Group, who currently views the reopening as premature.

Federal Reserve Chairman Jerome Powell received good grades for his performance as Fed chair during the coronavirus pandemic, with 71.9% of economists assigning him an A grade, while 24.6% gave him a B. Just 1.8% gave him a C and F respectively.



“Like a good engineer, [Mr. Powell] opened the floodgates to drain the reservoir in advance of an impending flood of demand for liquidity,” said Georgia State University economist Rajeev Dhawan.

The grades marked an improvement from December, when 63.8% of economists gave Mr. Powell a B. Seventeen percent assigned him an A grade and 14.9% gave him a C.

To fight the coronavirus pandemic, U.S. central-bank officials cut rates to near zero, purchased huge quantities of government debt and began lending to American businesses.

Those purchases of debt are expected to get bigger. Economists project the central bank’s portfolio of bonds, loans and new programs will swell to $7.74 trillion in June from less than $4 trillion last year. The portfolio stood at $6.72 trillion on May 4.

Economists see the Fed’s balance sheet swelling to $9.29 trillion by December, $9.63 trillion by December 2021 and $11.27 trillion by December 2022. In that range, the portfolio would be more than twice the size reached after the 2007-09 financial crisis.



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Federal Reserve Warns Of A Possible Sustained Recession From Pandemic

Federal Reserve Chair Jerome Powell is warning of the threat of a prolonged recession resulting from the viral outbreak and is urging Congress and the White House to act further to prevent long-lasting economic damage.

The Fed and Congress have taken far-reaching steps to try to counter what is likely to be a severe downturn resulting from the widespread shutdown of the U.S. economy. But Powell warns that there still could be widespread bankruptcies among small business and extended unemployment for many people.


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“Deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy,” the chairman says in prepared remarks before an online discussion with the Peterson Institute for International Economics. “Avoidable household and business insolvencies can weigh on growth for years to come.”

The U.S. government “ought to do what we can to avoid these outcomes, and that may require additional policy measures,” Powell says.



He says the Fed will “continue to use our tools to their fullest” until the viral outbreak subsides but gives no hint of what the Fed’s next steps might be.

Powell repeats his previous warnings that the Fed can lend money to solvent companies to help carry them through the crisis. But a longer downturn could threaten to bankrupt previously healthy companies without more help from the government.


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Greater support from government spending or tax policies “could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery,” he says.



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Economic Indicators – Coronavirus Lockdowns Trigger Big Drop in Consumer Prices


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The coronavirus pandemic pushed down April consumer prices by the most since the last recession as efforts to contain the virus disrupted demand for energy, travel, clothing and other goods and services.

The Labor Department said the consumer-price index fell by 0.8% last month, the second month in a row prices have eased since the pandemic reached the U.S. and the biggest drop since 2008. Business closures and stay-home orders aimed at containing the virus have created cheap oil, and falling prices for air travel, clothing, car insurance and other goods and services.

Excluding the volatile food and energy categories, so-called core prices decreased 0.4%, the largest monthly drop in records dating to 1957. While the month-to-month drops in inflation notched records, annual prices only reached the lows of the last expansion. Overall prices were up 0.3% from a year earlier, the lowest since 2015, and core prices were 1.4% higher from a year ago, the lowest since 2011.

Economists expect the decline in prices to be short-lived, with costs firming up as the U.S. reopens its economy and demand increases. Most don’t think the U.S. is likely to see price softness turn into a worst-case scenario as an extended period of deflation—when there are so many idle economic resources that businesses and workers are forced to lower prices and wages to generate demand for their goods and services.



“With economic activity beginning to open up, even if in a halting manner, while prices may slip further, they are unlikely to do so to nearly the extent seen in April,” said Richard Moody, chief economist at Regions Financial Corp.

A weak economy and softening inflation has had some investors betting the Federal Reserve will turn to negative interest rates to help boost growth. But some central bank research shows negative rates, adopted in other countries, have pushed inflation expectations lower, and Fed officials have concluded the tool’s costs outweigh uncertain benefits.

The Fed’s preferred inflation gauge is the personal-consumption expenditures price index, which has tended to run a little cooler than the CPI. The two generally move in the same direction, though measurement differences might produce a larger difference than usual now.

Lately, energy prices are the biggest drag on both. The Labor Department’s index for gasoline prices tumbled 20.6% in April from the prior month.

As recently as January, a barrel of U.S. oil cost more than $60. On April 20, U.S. crude futures for delivery the following month fell below $0 a barrel for the first time in oil market history. The coronavirus killed demand for fuel. A price war between Saudi Arabia and Russia alongside broad overproduction added to the oil glut.

One area where the pandemic is pushing prices higher: food.

The price index for food at home posted its largest monthly increase since February 1974. Americans stocked up at the pandemic’s outset. Since then, outbreaks have forced meat-processing plants to close and otherwise snarled supply chains. The April price index for meats, poultry, fish and eggs increased 4.3% from a month earlier.

Fed officials will look past oil markets and food costs to focus more on core prices. At least for now, coronavirus-related developments are pushing those lower. Indexes for apparel, auto insurance and airfares all posted their largest monthly declines on record.

“The fallout from the coronavirus has a large disinflationary effect on prices due to the large demand shock, plunge in oil prices, and strong dollar,” said Kathy Bostjancic, an economist at Oxford Economics. “A surge in inflation is the least of our worries.”

One reason deflation may not become an issue is government action to limit the impact of the virus’s disruption. The Fed and U.S. Treasury are pumping trillions of dollars into the economy, and many economists expect a sharp, short recession followed by a slow recovery.

A New York Fed survey out Monday found consumer inflation expectations for the next year and three years increased slightly—both now stand at 2.6%. “Respondents, however, increasingly disagree about the future path of inflation,” the survey said.

The market outlook appears less anchored. Yield movements in the Treasury inflation-protected securities, or TIPS, market show that compensation for inflation expected in five years, after the temporary impact of lower oil prices has faded, fell sharply in March before rebounding slightly, albeit at historically low levels.

Fed officials believe that consumer and market expectations for inflation affect behavior, becoming almost a self-fulfilling prophecy.

Another, longer-term concern is that large amounts of government borrowing and rising costs of doing business could push inflation uncomfortably high. Low rates and government deficits spurred consumer-price inflation after World War II and during the 1970s.

But with the loss of 20.5 million jobs and unemployment hitting a post-World War II high in April, the focus is more immediately on building a fiscal and monetary bridge until the coronavirus is contained.


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“In the near term it’s more likely, we think here at the Dallas Fed, we’ll have disinflation,” Dallas Fed President Robert Kaplan said earlier this month. “That’ll be in the shorter run, the next year or two. I do worry about, as we get back over the next few years to full capacity, with some of this stimulus and the size of the Fed’s balance sheet, do we start creating inflationary pressures? But that’s not going to be for two or three years.”





International Energy Agency Forecasts The Biggest Decline In Electricity Consumption Since The Great Depression

Pandemic Sparks Slump in Electricity Prices.



Wall Street trading floors have emptied. Spring has arrived north of the equator. Oil and gas markets have cratered. The result is a precipitous decline in electricity prices in the U.S., Europe and parts of Asia.

Closures of office blocks, shops and factories have throttled power demand, dwarfing the amount of electricity required to work from home. Globally, the International Energy Agency expects the biggest decline in electricity consumption since the Great Depression. It is as if Germany and France were both turned off for the year.

In the U.S., the drop has been most severe in New York City, center of the nation’s epidemic and home to a services sector that usually devours electricity. Wholesale power prices averaged $16.57 a megawatt-hour in the first six days of May, according to S&P Global Platts, down by more than a quarter from the start of the 2020.

Electricity trades in much the same way as raw materials like oil. In much of the U.S., power-plant owners sell electricity to utilities in a competitive wholesale market overseen by regional operators. Utilities then distribute power to customers. Both power companies and utilities protect themselves against price swings with futures, which investors use to bet whether the market is going up or down.

A key difference between electricity and oil is that power is hard to store. When there is too much to go around, particularly on windy days in places like Northern Europe, producers sometimes pay to give power away. U.S. crude futures behaved like electricity when storage space for oil dwindled in April, dropping below $0 a barrel for the first time.

In Europe, negative electricity prices have become commonplace. In auctions for the joint Germany-Luxembourg market on the European Power Exchange, prices turned negative five times in the year through April, more than all of 2019.

The crunch is shifting the math of electricity production in favor of renewable energy sources. Coal plants, among the costliest to run in the U.S., typically deliver bursts of power to the grid when demand increases. Much of that electricity isn’t needed right now. Forty percent of the world’s electricity could be generated from low-carbon sources—nuclear, wind and solar power, plus other renewables—this year, according to the IEA. That would be the highest level on record.



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Electricity prices were falling before the pandemic due to a surfeit of cheap natural gas, said Paul Cusenza, chief executive of Nodal Exchange, which runs a market for power futures. A 30% drop in U.S. gas prices over the past year—accelerated by the recent crash in energy markets—has pushed electricity prices down.

“Less demand, more low-cost generation and cheap gas,” said Dan Eager, principal analyst for European power at Wood Mackenzie. “You add that together and you have very, very low prices.”

Electricity takes an intricate route from the station where it is generated to the device it powers, hurtling down a 160,000-mile network of high-voltage cables that crisscross the U.S. before traveling to consumers along one of millions of low-voltage lines.

Wholesale prices are largely set a day ahead of time. Regional authorities forecast how much electricity will be needed at every hour the following day, based on factors like the weather. Producers bid to generate that power. Smaller trades take place on the day itself, fine-tuning supply to meet demand.

A bump in prices that takes place each weekday morning as New York City gets to work now comes an hour later, and is less pronounced, because offices aren’t opening at the same time. The city’s electricity prices were less than half their average for the time of year at the end of April, according to Nodal Exchange.

Electricity usage has started to creep higher in states that are relaxing restrictions. Still, mainland U.S. demand was 5% lower in early May than it would have been without quarantine measures, said Platts analyst Manan Ahuja.

The world will consume 5% less electricity this year than in 2019, the IEA forecasts. That is eight times the size of the decline that took place during the 2009 financial crisis. It equates to more than 1,000 terawatt-hours in lost demand, enough to power France and Germany combined.

Electricity prices normally fall in spring, before rising when air conditioners are turned on for the summer. The coronavirus shutdown has exacerbated that seasonal slump, slashing New York City’s electricity demand by 14%, according to the New York Independent Service Operator, which runs the state grid.


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“There’s still a very, very large number of [coronavirus] cases in New York City,” said Richard Dewey, president and chief executive of the NY-ISO. “I don’t anticipate the demand going up very much, at least not measurably, for probably a few weeks.”




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Global Economic Downturn – Today’s Downturn Is Comparable In Scale To That Of The 1930s

News stories often describe the coronavirus-induced global economic downturn as the worst since the Great Depression. This is likely to be literally true. Yet for many, the comparison does more to terrify than clarify. Economists say there is likely to be a big difference between a downturn that is the worst since the Depression and conditions as bad as the Depression.

“I don’t find comparing the current downturn with the Great Depression to be very helpful,” said former Federal Reserve Chairman Ben Bernanke, who has studied that 1930s era. “The expected duration is much less, and the causes are very different.”

The trajectory of the pandemic and economy remains uncertain. How quickly health officials can contain the crisis, how much the public will cooperate and whether policies will spark a swift recovery remains to be seen. Even so, many economists find a scenario rivaling the Great Depression in severity and duration hard to imagine.

“The breakdown of the financial system was a major reason for both the Great Depression and the 2007-09 recession,” Mr. Bernanke said. Today, however, “the banks are stronger and much better capitalized.”

By most estimates, the current downturn is likely to be comparable in scale and duration to that 2000s recession and the other major post-World War II recession, in the early 1980s.



Comparisons with the Depression are difficult because most of the data sets collected today didn’t exist in the 1930s. But some rough measures are available, including global trade tallies from the League of Nations, Federal Reserve data on factories and Works Progress Administration records on joblessness.

In the 1930s, industrial production fell by more than half. Production slowly made up ground for almost four years, only to decline sharply again in 1937-38. By contrast, production declined by about 15% in 2007-09 and 10% in the early 1980s.

When the coronavirus hit, industrial production had already been dipping as a result of the recent trade wars. While many factories closed as consumer demand shrunk, some are rapidly retooling. Auto makers General Motors Co. and Ford Motor Co., for example, have switched from making cars to ventilators. Medical-supply factories are struggling to keep pace with demand.

From 1929 to 1933, the economy shrank for 43 consecutive months, according to contemporaneous estimates. Unemployment climbed to nearly 25% before slowly beginning its descent, but it remained above 10% for an entire decade.

That compares with a 16-month decline in the early 1980s and an 18-month fall from 2007 to 2009. This time, many economists believe a rebound could begin this year or early next year if the virus is sufficiently contained.

While unemployment in the U.S. hit 14.7% in April and is likely to rise further, the blow today is softened by safety-net programs such as unemployment insurance.

“Many people are suffering now, and the economy won’t recover in only a quarter or two,” Mr. Bernanke said. “But if we’re able to get reasonable control of the virus, the economy will substantially recover, and this downturn should be much shorter than the Great Depression.”

The second quarter of 2020 is likely to be the worst ever for many economies. The median estimate of economists surveyed by The Wall Street Journal calls for a decline of 25% at an annual rate in the U.S. Some estimates are closer to 50%.

But annualized rates can be misleading. They assume that one quarter’s pace continues for a year. If 10% of the economy shuts down for one quarter, that would be considered a 40% decline at an annual rate.



“We’ve had this very abrupt, very sharp, immediate reduction in economic activity, driven by government policies to shut down economies. And because it’s very abrupt, the numbers are astronomical,” said Douglas Irwin, a professor at Dartmouth College who has studied U.S. trade policy during the Depression.

By contrast, he said, “The way the world evolved into the Great Depression was a slow and steady decline. It was a slow strangulation of the economy.”

As in the Depression, today’s collapse is global. But the scale is smaller, Gita Gopinath, chief economist at the International Monetary Fund, said in a briefing last month. The IMF estimates the world economy shrank about 10% during the Great Depression, versus an expectation of about 3% this year and an expected return to growth next year. Advanced economies shrank about 16% in the Depression, compared with about 6% forecast for this year.

A series of severe policy mistakes around the world exacerbated the length and severity of the Great Depression. Central banks tightened monetary policy to maintain the gold standard, which no longer exists. The result was severe deflation, which increased the value of debt and lowered incomes.

Governments also initially cut spending in reaction to declining revenue. And as economies deteriorated, countries raised trade barriers in an effort to protect their domestic industries. The result, though, was a global contraction in demand, which only deepened the depression.

This time, central banks around the world quickly slashed interest rates and deployed programs to prop up credit markets. Governments approved massive spending measures, including the roughly $2 trillion stimulus in the U.S., to help keep businesses afloat and protect jobs. And they haven’t raised trade barriers in response to the pandemic.

“I’m not going to say that everything in the policy is right, but we understand that delay worsens the economic outcomes,” said Catherine Mann, global chief economist at Citigroup.



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The Mortgage Market Never Got Fixed After 2008. Now It’s Breaking

Many mortgage companies are nonbanks that don’t have deposits or other business lines to cushion them amid the coronavirus pandemic.

Ann Winn called her mortgage company to see about pausing payments in late March, soon after she had to shut down the salon she owns in a suburb of Austin, Texas.

What followed, she said, were hours of tense calls and emails with Freedom Mortgage Corp. The company agreed to let her skip a few payments—but only if she would repay them all in a lump sum this summer. Ms. Winn didn’t know when she would be back at work, so she declined.

“I’m just not going to pay my other bills,” she said, “because I don’t want to lose my home.”

The coronavirus pandemic has delivered a gut punch to the economy and the mortgage market is particularly exposed. The virus has forced millions of homeowners to suddenly stop making payments. At the same time, many mortgage companies aren’t built to handle an economic collapse or help their customers through it.



Many of them are nonbanks that don’t have deposits or other business lines to cushion them, and they have raised concerns that fronting payments for struggling borrowers such as Ms. Winn will quickly drain them of capital.

Years ago, the financial crisis revealed the folly of churning out “liar loans.” Regulators cracked down, and mortgages made today are generally more conservative. What regulators didn’t focus on was the strength of the mortgage companies themselves. Though the loans are sturdier, the infrastructure largely didn’t change.

Over the past decade, the business of originating and servicing mortgages has moved back toward nonbanks such as Freedom Mortgage. Nonbanks made 59% of U.S. mortgages last year, the highest level on record, according to industry-research group Inside Mortgage Finance. They also made a large proportion of U.S. mortgages before 2008 but many went bust when the crisis hit.

Many nonbanks, like United Wholesale Mortgage and loanDepot.com LLC, are barely known outside the industry but dominant inside it. Quicken Loans Inc., one of the few with wide name recognition, ranked as the largest mortgage lender by originations for the first time this year, elbowing out Wells Fargo and JPMorgan Chase.

As big banks have refocused their mortgage operations on wealthier borrowers, nonbanks have stepped into the void, often representing the only path to a mortgage for buyers of lesser means. Their retreat could lock many would-be borrowers out of homeownership and make it harder for the economy to bounce back.

Nonbanks also have expanded in the crucial business of servicing mortgages. They now service roughly half of them, five times their share from a decade ago, according to the Urban Institute.


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In good times, that task involves collecting payments from borrowers and handing them to investors that own the loans, plus handling odds and ends such as taxes. In exchange, the servicer gets a slice of the interest. In bad times, servicers are supposed to create new payment plans for struggling borrowers, which takes much more work and expense. When all else fails, servicers initiate foreclosures.

For years after the crisis, regulators, mortgage executives and consumer advocates discussed how to improve this market. They floated ideas about changing the way servicers are paid so they collect a bigger fee when a loan becomes delinquent. They also considered having the servicers fund a central utility to handle defaulted mortgages. But those ideas never gained much traction, according to people involved.

“There was a big focus on the consumer experience,” said Michael Bright, the former head of government mortgage corporation Ginnie Mae, which backs Federal Housing Administration loans. “But there wasn’t much focus on the quality of a servicer.”

The structure of the U.S. mortgage market is much the same as it was before the crisis. Pools of mortgages are packaged and sold to investors around the world. When a borrower stops paying, servicers are caught in the middle, forced to front payments to the investor, even though they aren’t receiving money from the borrower.

The servicer will eventually get reimbursed if the mortgage is one of the roughly two-thirds guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. But that is a slow process and in some cases can take years.



Lawmakers recently outlined how struggling borrowers can request so-called forbearance plans, by which they pause their monthly payments. If the mortgage is government-backed, then companies are generally supposed to grant the request.

That has thrust both banks and nonbanks into the position of cushioning the blow for their customers. Nonbanks, which depend on short-term bank loans to fund their daily operations, are struggling to do so.

“This is a systemic problem,” said Karan Kaul, a senior research associate at the Urban Institute.

About 7.5% of borrowers had obtained forbearances as of April 26, according to a survey by the Mortgage Bankers Association, or MBA. That means about 3.8 million homeowners are skipping their monthly payments with permission.

If forbearance rates reach the mid-to-high teens, few servicers are expected to have the cash to meet their advance obligations, according to Warren Kornfeld, who covers nonbank mortgage companies at Moody’s Investors Service. As a result, many are now trying to gain access to additional cash.

Mortgage servicers, both banks and nonbanks, were on the hook for about $4.5 billion a month in servicing advances on government-backed loans because of forbearances as of Thursday. That is roughly 25 times more than they were on the hook for at the end of February, according to Black Knight Inc., a mortgage-data and technology firm.

Ms. Winn and her husband bought their Leander, Texas, home in 2014 using the FHA loan program, which is meant for first-time and modest-income buyers. Later, they learned their lender had passed the servicing rights to Freedom.



Ms. Winn had little interaction with Freedom until calling in March. A representative told her she could skip payments for April, May and June, but would then have to pay four months all at once. Another representative told her that she could later ask to tack the missed payments onto the end of the loan, but that there was no guarantee she would be approved.

In late April, she received a letter saying she had been automatically opted into the first plan. She intends to keep making her monthly payments anyway, since she doesn’t want to pay for four months at once.

Chief Executive Stanley Middleman said in a statement that Freedom is “managing a great deal of unplanned activity” but plans to fix any issues that arise.

“We are doing the best we can and will continue to do so,” Mr. Middleman said.

The stimulus bill provided little detail on when borrowers would have to make up deferred payments. But the regulator that oversees Fannie Mae and Freddie Mac, the government-sponsored mortgage companies that back conventional loans, clarified recently that its homeowners won’t have to make up their missed payments all at once. The FHA program has made similar comments.

Industry representatives say that forbearance plans were rolled out on a vast scale very quickly, which led to confusion among both servicers and borrowers. Bob Broeksmit, CEO of the MBA, acknowledged that there have been issues between servicers and borrowers but said that recent guidance is likely to bring more clarity.

The borrowers the nonbanks serve are often the ones that most need help. Last year, nonbanks made 86% of FHA mortgages. As of Thursday, roughly 13% of FHA loans had forbearances, according to Black Knight.


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Nonbanks say they have spent significant time bolstering their businesses for a downturn. Some said in recent earnings reports that they now expect the coronavirus fallout to be smaller than they initially feared. Still, Ginnie Mae has set up a lending facility to help companies that are out of options. Fannie Mae and Freddie Mac are only requiring servicers to advance four months’ worth of payments.

The health of nonbanks ultimately depends on keeping their funding. Worried about the surge in borrowers seeking relief, some banks have recently curtailed this lending.

Mortgage companies, both banks and nonbanks, are also pulling back on some lending to borrowers. Credit availability in April fell to its lowest since 2014, according to the MBA.

Lenders are cutting back in particular for borrowers with lower credit scores, according to the Urban Institute. But the contraction in credit is spreading to all types of loans—from jumbo mortgages to cash-out refinances.

Beverly Harris was in the process of buying a home in the Palm Springs, Calif., area in March when the type of unconventional loan she had been pre-approved for suddenly became unavailable.

The retiree, who has a high credit score and was planning to put 20% down, was expecting to use a loan that qualifies the borrower based on assets rather than income. She estimates she checked with 15 different mortgage companies and banks. All of them had stopped making those types of loans.

For now, Ms. Harris is staying put in her rental.




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Why The Stock Market Is Up Even With Historic Job Losses?

A record number of Americans just lost their job, yet stocks are moving higher. This seems paradoxical, given the economic toll — to say nothing of the emotional toll — of millions of people across the country without a job.

While some observers say it’s further indication that the stock market has become decoupled from reality, others say there are clear reasons stocks have rebounded and can continue to move higher.

For one, the jobs data in and of itself is backward looking. The April figures, which showed a record 20.5 million Americans losing their jobs, is from the height of the crisis. Since then, economies have begun to reopen. There is still a long way to go, of course, but the market is discounting what’s going to happen six months from now, when most states will be getting back to business.

Strategists also point out that the losses have been somewhat concentrated in the leisure and hospitality sector, which has overshadowed strength in other areas of the market. And with the government and federal reserve providing record stimulus measures, some argue that once businesses do get back up and running, the recovery will be swift.

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite were all slated to open higher on Friday, with the Dow poised to rally more than 300 points. Since the March 23 low, all three averages have bounced more than 30%.


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Worst over?
While the debate among health experts about how and when economies should reopen is ongoing, some states have already started easing shelter-in-place measures. A number of states including Florida began phase one reopenings on Monday. California became the latest state to lift some of its precautionary measures, with certain low-risk retailers allowed to open beginning Friday.

“The market knows that the job losses are self inflicted due to the widespread shutdowns,” Bleakley Advisory Group chief investment officer Peter Boockvar told CNBC. “Thus, now that we are beginning the reopening process the market assumes many of these people will hopefully get hired back over the coming months and quarters.”

Additionally, 78% of those that lost their job in April said they were furloughed, meaning the unemployment in theory will be temporary. Goldman strategist Jan Hatzius said this is an important distinction to make, given it suggests the recovery will be swifter.

“If job losses are concentrated in this segment [furlough], it would increase the scope for a more rapid labor market recovery when the economy eventually rebounds (because employees can be recalled to their previous jobs, as in several past recessions),” he wrote in a note to clients ahead of the report.

Pockets of strength?
At first the market sell-off was broad in nature as the uncertainty surrounding the coronavirus sent the major averages tumbling into a bear market at the fastest pace on record.

But since then, the divide between the winners and losers widened. Unsurprisingly stocks most exposed to the coronavirus threat — including hotels and airlines — have continued to trade lower. But other names are hitting new all-time highs. On Thursday the Nasdaq went positive for the year, as names like Netflix and Amazon surged to all-time highs.

“Large companies have fallen much less than smaller companies. It is likely that as a result of this crisis the strong will get stronger … and so the stock market is reflecting that in its relative valuation,” Peter Orszag, Financial Advisory CEO at Lazard and former OMB director under Obama, said on CNBC’s “Squawk Box.”



“The US consumer has proven to be the economic engine over the last decade, and investors who are buying heavily into this market believe that behavioral changes are unlikely to create a dislocation in demand longer than a couple of quarters,” added Shannon Saccocia, chief investment officer at Boston Private Wealth. That said, Saccocia said a more cautious tone is warranted, since she believes it’s a “misconception” that demand for consumer services will return quickly once government edicts lift.

Ongoing stimulus?
As the coronavirus wreaked havoc on markets, governments and central banks around the world stepped in in an effort to prop up prices.

In March, President Donald Trump signed into law a record $2 trillion federal stimulus package known as the CARES Act, while the Federal Reserve announced that it would engage in unlimited asset purchases.

“While the collapse in economic activity is historic, so too is the global policy response to cushion the impact and support a recovery as containment measures are relaxed,” JPMorgan strategist Marko Kolanovic said in a recent note to clients.

“We estimate the impact of Fed easing in both rates and credit more than compensate for the temporary hit to corporate earnings when valuing the US market via discounted earnings,” he added.

Zero rates?
As part of its stimulus measures, in March the Federal Reserve slashed interest rates to near zero. At the central bank’s most recent meeting at the end of April, it pledged to keep rates at historic lows until the economy recovers. This supports economic activity since it makes borrowing money cheaper.

“Interest rates are going to be extremely low — barely positive — for a very long period of time, so that does provide some support to equity prices,” noted Orszag.

Other factors?
Amid the ongoing uncertainty, Kate Moore, head of thematic strategy for BlackRock, said its important for investors to look through the noise and determine who the winners on the other side will be.



She believes the market is moving higher due to three reasons: the slowing rate of infection, gradual reopening of states’ economies, as well as improving relations between the U.S. and China.

“We need to continue to get government and policy support in order for the market to move forward, and for us to not just be reacting to some slightly incremental better newsflow, but to something that’s more fundamentally driven,” she said.

While many unknowns remain and the path forward is far but uncertain, famed investors are quick to note that the U.S. has bounced back before.


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“Nothing can basically stop America,” said Warren Buffett, chairman and CEO of Berkshire Hathaway, from the conglomerate’s first virtual shareholder’s meeting on Saturday. “The American miracle, the American magic has always prevailed and it will do so again.”




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U.S. Nonfarm Private Sector Lost 20 Million Jobs

The nonfarm private sector in the U.S. lost about 20.2 million jobs from March to mid-April as much of the country’s economy ground to a halt during the coronavirus pandemic.

The losses were the steepest among large businesses with 500 or more employees, which saw a decline of roughly 9 million jobs during the month, according to the ADP National Employment Report for April.

The report also said the number of job losses for its March report was revised to 149,000, instead of 27,000.


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Economists polled by The Wall Street Journal had expected the April report to show job losses of 22 million. The ADP report is based on data through April 12. The ADP Research Institute, working with Moody’s Analytics, publishes the report each month.

The service-providing sector was responsible for a majority of the losses, shedding 16 million jobs in the month. The number of service jobs lost was especially high in the leisure and hospitality sector, which saw a decline of 8.6 million jobs. The goods-producing sector was responsible for 4.2 million jobs lost.

Small businesses of fewer than 50 employees lost 6 million jobs in April, while medium businesses lost 5.3 million jobs.

“Job losses of this scale are unprecedented,” said Ahu Yildirmaz, the co-head of the ADP Research Institute. “The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession.”


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The U.S. Department of Labor is expected to release its April employment report, which covers the same period in April, on Friday. Economists are expecting it to show nonfarm payrolls down 21.5 million jobs for the month, and a rise in the unemployment rate to 16%, from 4.4% in March.




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Home Prices Are Rising During The Pandemic

The economy is shrinking, businesses are closing and jobs are disappearing due to the coronavirus pandemic. But in the housing market, prices keep chugging higher.

Home prices plunged during the last recession after a housing crash caused millions of families to lose their homes. Home values could start to erode again, especially when mortgage forbearances end, some economists warn.


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But that hasn’t been the case so far. The median home price rose 8% year-over-year to $280,600 in March, according to the National Association of Realtors. While buyer demand has softened and sales fell 8.5% that month from the prior month, the supply of homes on the market is contracting even faster, recent preliminary data shows.

“Demand absolutely just got a kick in the gut, but at the same exact time, so did supply,” said Skylar Olsen, senior principal economist at Zillow Group Inc.

Homes typically go under contract a month or two before the contract closes, so the March NAR data largely reflects purchase decisions made in February or January.

Even by the end of last month, many sellers were reluctant to cut prices. Only about 4% of sellers cut their prices in the week ended April 25, down from 5.7% during the same week last year, according to Realtor.com.

Some sellers say they are hanging tough because they believe their homes aren’t moving because buyers haven’t viewed them in person or are reluctant to make offers right now, not because the asking price is too high. They are waiting for stay-at-home orders to ease before deciding whether to lower the price.

“People really aren’t leaving their homes” to go house-hunting, said Sarah McMurdy, who listed her Bethesda, Md., house in late March and then opted to temporarily take it off the market in April due to the pandemic. “We’re not looking to fire-sale the house. We’re in no rush. We would rather wait this out.”



Real-estate brokerage Redfin Corp. said its measure of homebuying demand, which tracks buyer inquiries, was down 15% in the week ended April 26 compared with before the pandemic struck. Mortgage applications for home purchases around the same time were down 20% from a year earlier, according to the Mortgage Bankers Association.

Total listings of homes for sale, meanwhile, have hit a five-year low, while the median listing price was up 1% from last year at $308,000, Redfin said.

The housing market has been undersupplied for years. During the pandemic it may get worse. There were 1.5 million units for sale at the end of March, NAR said, down 10.2% from a year earlier. Homeowners are waiting to list their houses, real-estate agents say, because they have decided not to move or they are worried about letting buyers into their homes during a pandemic.

Still, some buyers are hoping for bargains. Haas El Farra and his wife were under contract to buy a house in Southern California in early March. As the coronavirus epidemic worsened, they worried they were buying at the top of the market and asked the seller to lower the price. When the seller refused, they pulled their bid and decided to keep looking for a better deal.

“Hopefully something nicer than what we were looking at will come up at an affordable price,” said Mr. El Farra, a portfolio manager.


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Prices in the Midwest showed the strongest annual growth at 9.7% in March. In the Cincinnati area, homes are selling for higher than listing price, said Donna Deaton, vice president at Re/Max Victory in Liberty Township, Ohio. Large companies in the area are still hiring, she said.

“For the most part, we’re still [competing against] multiple offers just about on every single thing,” she said.

While many economists expect home sales to tumble this year, many forecasts call for prices to climb slightly or hold flat. Mortgage-finance giant Fannie Mae said in April that it expects the median existing-home price to tick up to $275,000 this year from $272,000 last year. Capital Economics forecasts average home prices this year will fall 3% compared with last year. Zillow said Monday that home prices are likely to drop 2% to 3% from previous levels by the end of the year and recover in 2021.

In a forecast released Tuesday, housing-data provider CoreLogic called for nationwide home prices to rise 0.5% between March 2020 and March 2021. CoreLogic forecast annual price declines in some cities including Houston, Miami and Las Vegas.

A major uncertainty is whether mortgage-forbearance policies will prevent a wave of distressed sales. More than 7% of mortgages were in forbearance in the week ended April 30, according to mortgage-data company Black Knight Inc., and some homeowners can get forbearance for up to a year. But homeowners could struggle to make payments after the forbearance period ends.

“In the next 12 months it’s hard to anticipate price declines because of the mortgage forbearance in place,” said Lawrence Yun, NAR’s chief economist. “You would have to see continuing job losses for a prolonged period leading to foreclosures, and even then we may not have oversupply.”




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U.S. Economy Shrank At 4.8% Pace In First Quarter


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The decline in seasonally and inflation-adjusted gross domestic product, the broadest measure of goods and services produced across the economy, was the steepest quarterly contraction since the last recession and signaled the end of the longest expansion on record.

Consumer spending drove the drop, falling at a seasonally adjusted annual rate of 7.6%, the largest decline since the second quarter of 1980, the Commerce Department said on Wednesday. The quarter also saw a sharp decline in business investment, with the fall-off in consumer and business spending only partially offset by gains in government spending and residential investment.



“We’re going to continue to watch the economy flounder around for a while before it’s able to find its footing,” said Steve Rick, chief economist at CUNA Mutual Group, in a commentary. “Looking ahead, I still think the worst is probably yet to come for GDP,” he added.

The three-month contraction was the first time quarterly economic output shrank since the first quarter of 2014, when it declined at a 1.1% pace, and represented the steepest rate of decline since the fourth quarter of 2008, during the last recession, when it dropped 8.4%.

The Commerce Department report came hours ahead of a scheduled rate announcement from policy makers at the Federal Reserve, who will conclude a two-day policy meeting later Wednesday.

Stock futures advanced ahead of the Fed meeting’s conclusion, after which policy makers are expected to provide an update on the economy.


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The Commerce Department report said the decline in first-quarter GDP was, in part, due to the response to the spread of the coronavirus and stay-at-home orders issued in March.

“This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending,” the report said.

GDP acts as a scoreboard for the economy by measuring all goods and services produced. Its biggest component is consumer spending, which accounts for about two-thirds of the measure. First-quarter spending fell at a 7.6% annualized rate, after rising 1.8% in the fourth quarter, as social-distancing measures closed bars, restaurants and malls.

“We are in the worst economic event that we have faced as a nation and globally since the Great Depression,” Evan Greenberg, chief executive of insurance giant Chubb Ltd. said during an earnings call last week.

“The economy is shut down. The opening of the economy is going to take time, and it’s not going to happen in a smooth way. And no one knows for sure the shape or size or duration,” he added.

Spending on durable goods like new cars and appliances decreased at a 16.1% pace, while spending on nondurable goods rose 6.9%, likely a reflection of stockpiling on essentials like food and paper towels.

The Commerce Department data also offered evidence of shrinking corporate demand.

Nonresidential fixed investment—which reflects business spending on software, research and development, equipment and structures—fell at an 8.6% rate—marking the fourth straight quarter of decline.

The pace of exports dropped 8.7% in the first quarter, while the rate of imports fell by a greater amount, 15.3%, as Americans cut back on purchases of foreign goods.

The housing sector was a boon to the economy as residential investment rose at a 21% annual pace. The boost likely reflected lower short-term interest rates and mild weather propelling construction and improvements early in the quarter.

Total government expenditures were up at a 0.7% annual rate in the first quarter.

Vacations To Go, a travel agency that specializes in cruises, was coming off its best ever year in 2019 until “the floor fell out” in February as coronavirus outbreaks on cruise ships dealt a punishing blow to the industry, Chef Executive Emerson Hankamer said.

“As news grew, our business began to wane,” he said. The Houston-based company had 950 employees before the coronavirus pandemic, a number that has dropped to about 200.

“We’re hoping it’s a furlough, but there’s not a lot of clarity,” he said, “There’s a little bit of new business, but most of it is taking care of cancellations or rebooking.”

Headed into 2020, Paul Feder, 34 years old, said he could tell his local economy was booming because the waterfront houses on Lake St. Clair in his hometown of Grosse Pointe, Mich., went big in decorating their homes with Christmas lights.

“You could just tell that more people were feeling it,” he said, referring to the strong economy in the Detroit suburb. Mr. Feder was in the second round of interviews for his dream job as a business developer at an online retailer.

Now the company he hoped to work for has implemented a hiring freeze, and Mr. Feder expects to lose his current job as a digital-marketing manager. “It’s a roller coaster, every single day,” he said. “It’s just a lot of uncertainty and very difficult to map out what the future holds.”




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The Coronavirus Shutdown Will Induce The Sharpest Economic Downturn And Push The U.S. Budget Deficit To The Highest Levels Since The 1940s

Some degree of social distancing is expected to continue through the first half of 2021, the CBO said.

The economy is likely to shrink 12% in the second quarter—a 40% drop if it were to persist for a year—and the jobless rate will average 14%, the nonpartisan research service said Friday. Job losses will come to 27 million in the second and third quarters.

The federal budget deficit is expected to reach $3.7 trillion by the end of the fiscal year on Sept. 30, the CBO said, up from about $1 trillion in the 12 months through March. Congress has authorized unprecedented deficit spending to offset the shutdown of vast swaths of the U.S. economy.


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As a proportion of gross domestic product, the deficit will end the fiscal year at almost 18%, its highest level since the year after World War II ended and up from 4.6% in 2019, the CBO said.

Federal debt held by the public is projected to hit 101% of gross domestic product by the end of the fiscal year, up from 79% at the end of fiscal 2019, the CBO said.

The silver lining is that interest rates are projected to fall so low that the government’s net borrowing costs will decline even with the dramatic increase in borrowing, the CBO said. It sees the yield on 10-year Treasury notes hovering at 0.7% in the second half of this year and through 2021.

The updated forecasts, published in a blog post by CBO Director Phillip Swagel, rest on assumptions that are “subject to enormous uncertainty.” These include the extent to which the coronavirus is brought under control in the coming months and the possibility of a subsequent re-emergence.

Some degree of social distancing is expected to continue through the first half of 2021, the CBO said. But those measures are projected to diminish by roughly 75% in the second half of this year relative to the April-June quarter and continue easing into 2021.



As a result, economic activity is projected to recover from its current nadir, but only gradually. GDP is expected to contract 5.6% in 2020 from last year and to grow 2.8% in 2021.

The unemployment rate is seen topping out at 16% in the third quarter and declining to 9.5% by the end of 2021. But the CBO cautioned that those numbers understate the extent of damage because they only count people who are actively looking for a job.




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Collapse In Aircraft Demand Drove Down March Factory Orders

Orders for long-lasting factory goods fell sharply in March, driven by a collapse in demand for commercial aircraft and parts as the coronavirus spread around the world.

New orders for durable goods—products designed to last at least three years—declined 14.4% in March from the previous month, the biggest monthly drop since August 2014, the Commerce Department said Friday. New orders for February were revised to 1.1%.

Durable-goods orders are likely to decline further as the full effect of the coronavirus-related shutdowns becomes clear in the coming months.

Orders for commercial aircraft and parts fell by more than $16.3 billion, a 296% decline. Since orders are recorded on a net basis, the figure incorporates canceled orders. New orders for automobiles and parts fell 18.4% in March.

Excluding the volatile transportation sector, orders were down a more modest 0.2%. New orders for nondefense capital goods excluding aircraft—a closely watched proxy for business investment—were up 0.1%.



Analysts said the transportation sector appears to have been the first to bear the brunt of the economic shock related to the coronavirus. Other sectors will probably show similar sharp declines in the months ahead, said Gregory Daco, chief U.S. economist at Oxford Economics.

“We’re going to see steep drops across different categories,” he said.

The March durable goods data cover the month when the coronavirus outbreak started causing massive shutdowns across the U.S. economy.



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Another 4.4 Million Americans Sought Unemployment Benefits Last Week

Workers have filed more than 26 million jobless claims since start of coronavirus-related shutdowns.

About 4.4 million Americans applied for jobless benefits in the week ended April 18, the Labor Department said Thursday. Jobless claims, which are laid-off workers’ applications for unemployment-insurance payments, had reached 5.2 million a week earlier. Since the pandemic led to widespread shutdowns in mid-March, workers have filed more than 26 million unemployment insurance claims.

Some economists say unemployment claims likely peaked in late March when they reached nearly 7 million. Most states recorded a declining number of new claimants last week.


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Others expect a fresh surge of claims in future weeks as workers who were previously unable to file because of backlogged state systems are counted, and as states begin to accept applications from people who are newly eligible under a $2 trillion stimulus package, such as independent contractors and self-employed individuals.

The number of workers receiving unemployment insurance continues to rise as states process applications. In the week that ended April 11, a record 16 million Americans received unemployment payments, up from 12 million the previous week. The data date back to 1967. So-called continuing claims are reported with a one-week lag.

“These unbelievable numbers are masking a lot of the true demand, and that’s what we’re going to continue to see play out over the next month,” Maria Flynn, president of Jobs for the Future, a workforce development nonprofit, said before Thursday’s data.

Washington state offers a window into the potential impact of the federal stimulus on jobless claims. The state saw more unemployment-benefits applications on Saturday night through Sunday than during its biggest week on record, as it launched a “massive update” to its computer systems to start processing expanded unemployment benefits.

Gig-economy workers, self-employed people and those seeking part-time work were among those newly eligible to apply as the state began implementing a key provision of the law.

Rhode Island also experienced a sharp surge in claims when it began accepting applications included in the expanded unemployment assistance.



Compared with other states, Hawaii, Michigan and Rhode Island have seen a relatively large share of their labor forces apply for unemployment benefits in the past month.

Dennis Fithian, 49 years old, of Detroit, was able to register for unemployment insurance benefits relatively quickly after he was laid off from his job at sports radio station 97.1 The Ticket in early April.

Despite high claims volume in Michigan, Mr. Fithian said his wife was persistent in helping him apply online. “She would get up at 2 or 3 in the morning and keep hitting ‘refresh’ until she was able to get in,” he said.

The couple’s biggest immediate concern is losing his health insurance at the end of April—a worry made even more acute by the fact that his 14-year-old daughter suffers from a rare, incurable disease. “I mostly worked for the love of the job. It wasn’t for the great money, so we’ve always budgeted. But just looking at the summer ahead, the health insurance—that’s going to get really pricey,” he said.

The steepest employment losses appeared to occur between mid- and late March, when the economy shed about 13 million jobs, largely in leisure and hospitality, according to Federal Reserve research. By comparison, about 9 million jobs were lost over the course of the 2007-9 recession.

Oxford Economics estimates that the pandemic will result in 27.9 million lost jobs, including between 8 million and 10 million in industries such as manufacturing and construction that most states haven’t ordered to close.

The federal stimulus package was designed to blunt the economic damage from the coronavirus. As of Monday, more than 40 states were paying recipients an additional $600 a week in enhanced unemployment benefits on top of usual state payments, Labor Secretary Eugene Scalia said earlier this week.

The extra $600, which is paid in addition to regular unemployment benefits, could lead to a larger weekly paycheck than many lower-wage workers would typically earn. For others, like Joshua Price, of Syracuse, N.Y., it amounts to much less than they were previously making.

Mr. Price, 46, began receiving unemployment benefits in late March after he lost his homebound math teaching job due to government-mandated public school closures.

He gets a total of $1,104 in weekly benefits, including the extra $600 a week, which works out to 56% of his previous income.

Mr. Price normally tries to save $750 a week, but with tax bills and insurance bills, he is now saving very little. “I don’t believe I should have to go into my savings to pay bills when it’s a government-mandated work stoppage,” Mr. Price said.



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Euro Zone Business Activity Crashes To ‘Shocking’ Lows On Coronavirus Pandemic

Euro zone business activity hit another record low during April in another sign that the coronavirus pandemic is causing severe economic damage across the region.

The IHS Markit Purchasing Managers’ Index, which measures both the services industry and manufacturing, dropped to 13.5 in April, according to preliminary data. In March, the same index had already recorded its biggest ever single monthly drop to 29.7. A contraction in PMI figures — a figure below 50 — indicates a likely fall in economic growth overall.

Earlier in the session, Germany’s flash index came in at 17.1, a record low, versus a figure of 35.0 the month before. This was worse than analysts had been expecting with Phil Smith, principal economist at IHS Markit, saying it “paints a shocking picture of the pandemic’s impact on businesses.”




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Europe Needs At Least 500 Billion Euros For Recovery

Europe will need at least another 500 billion euros from European Union institutions to finance its economic recovery after the coronavirus pandemic, on top of the agreed half-a-trillion package, the head of the euro zone bailout fund said.

In an interview with Italy’s Corriere della Sera paper, published on Sunday, European Stability Mechanism Managing Director Klaus Regling said the easiest way to organize such funds would be via the European Commission and the EU budget.

“I would say that for the second phase we need at least another 500 billion euros from the European institutions, but it could be more,” Regling told the paper.



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“For that, we need to discuss new instruments with an open mind, but also use the existing institutions, because it is easier, including in particular the Commission and the EU budget. Rethinking European funds can go a long way in keeping the European Union together,” Regling said.

European Union finance ministers agreed on April 9th on safety nets for sovereigns, companies and individuals worth in total 540 billion euros.

They also agreed that the euro zone, which the IMF predicts will plunge into a 7.5% recession this year because of the pandemic, will need money to recover, but they had different ideas on how much is needed and how to raise it.

EU leaders are to discuss that at a videconference on April 23. The idea around which a compromise may emerge is likely to involve the European Commission borrowing on the market against the security of the long-term EU budget and leveraging the money to achieve a bigger effect.



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Banks Brace For A Recession

The large U.S. lenders are preparing for an economic downturn as millions remain out of work.

Big banks sent a clear message in first-quarter earnings Tuesday: This recession is going to be bad.

JPMorgan Chase & Co. and Wells Fargo & Co. set aside billions of additional dollars to get ready for a flood of customers to default on their loans as the coronavirus pandemic pummels the economy. That sunk the banks’ quarterly profits.

JPMorgan and Wells Fargo are the first big U.S. banks to report first-quarter results, and act as a bellwether for the broader economy. Neither bank has yet seen a wave of loans go bad, but they are preparing for it as the economy plunges further into a presumed recession and millions remain out of work.

Many Americans were already deep in debt before the pandemic, tapping credit cards, auto loans and student loans at record levels to cover a shortfall left by wages that remained flat for many years.

The banks for years rode all that consumer spending and borrowing to big profits. Now, they are preparing to struggle alongside their cash-strapped borrowers. Nearly 17 million Americans have sought unemployment benefits in the past three weeks. About two million homeowners are skipping their monthly mortgage payments, according to industry data.

“This is such a dramatic change of events,” said JPMorgan Chief Executive James Dimon, who returned to work a few weeks ago after emergency heart surgery. “There are no models that have ever done this.”

JPMorgan set aside an additional $6.8 billion in the quarter for potentially bad loans, largely in its consumer bank. That raised its total provision to $8.29 billion, more than the bank has had to take since 2010. But even that may not be enough, the bank warned.

The bank said the provision was based, in part, on the assumption that U.S. gross domestic product would fall an annualized 25% and unemployment would rise to more than 10% in the second quarter. But JPMorgan economists have recently amended their forecast to a 40% decline in GDP in the quarter and a 20% unemployment rate.



Wells Fargo said it set aside an additional roughly $3 billion in the quarter for potentially bad loans, both in the consumer and commercial divisions. That raised its total provision to $3.83 billion.

“We don’t know what the time frame is or how quickly the economy will recover,” said Wells Fargo CEO Charles Scharf. “What we do know is the contraction is real.”

Both banks have pledged to help troubled borrowers and small businesses by, for example, waiving late fees or allowing them to temporarily suspend their monthly payments. They have also taken a central role in disbursing government stimulus money to businesses. But that might not be enough for workers who could be out of a job and small businesses that could be shut down for many months.

Spending on credit cards dropped for both banks. JPMorgan said most customers kept up payments on credit cards through April 1, but that more customers have been late on those loans in the past two weeks. Wells Fargo said that consumers had already contacted Wells to defer more than a million payments, mostly on mortgages and auto loans.



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What’s more, banks and other lenders are starting to toughen their loan-approval standards, particularly for new customers. That means many people could find it hard to get credit just when they most need it.

Shares for both JPMorgan and Wells Fargo fell, with JPMorgan dropping about 3% and Wells Fargo losing about 4%.

JPMorgan earned $2.87 billion, down 69% from $9.18 billion a year earlier. The bank earned $0.78 per share, missing the $2.16 forecast by analysts polled by FactSet. JPMorgan revenue was down 3% to $28.25 billion. That fell short of the $29.55 billion analysts had predicted.

Wells Fargo earned $653 million, down 89% from $5.86 billion a year earlier. The bank earned 1 cent per share, missing analyst expectations of 38 cents. Wells Fargo revenue fell 18% to $17.72 billion. That missed analyst expectations of $19.4 billion.

Wells Fargo also said it took an impairment charge of $950 million on securities because of the economic and market conditions.

Some banking businesses did surge in the quarter. Corporate clients rushed to load up on cash, drawing down lines of credit from the banks and socking it away in deposit accounts. Both banks posted 6% loan growth, driven by corporate lending, and crossed $1 trillion in total loans for the first time.

“People got scared quickly and wanted to make sure they had liquidity,” Mr. Dimon said on a call with reporters.

The volatile stock market boosted JPMorgan’s trading revenues by 32%, with gains in both equities and fixed income. The Federal Reserve attempted to support the economy by twice cutting rates in the quarter, though that pinched the revenue that banks earn from interest.

Wells Fargo’s net interest income dropped 8% from a year ago. JPMorgan’s was flat, but the bank had to cut its full-year guidance.


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Australia Consumer Sentiment Collapses To 30-Year Low

A measure of Australian consumer sentiment collapsed in April to a 30-year low as social distancing restrictions due to the coronavirus pandemic threatened to push the country’s economy into its first recession in three decades.

Wednesday’s survey showed the Melbourne Institute and Westpac Bank (AX:WBC) index of consumer sentiment plunged 17.7%, its biggest monthly decline since records began 47 years ago.


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The index is now at 75.6, the lowest since 1991 during Australia’s last recession.

The survey comes as the coronavirus outbreak has spread in Australia from less than 100 cases last month to around 6,500 now, killing 62.

The details of the survey reflected large shocks to jobs and spending.

Listed companies in Australia and New Zealand have already laid off or began considering laying off at least 121,520 people, temporarily or permanently.

A separate survey of businesses on Tuesday showed conditions and confidence plummeted in March.

To support the economy, Australia’s government has announced a A$320 billion ($205.3 billion) package, including a job-keeper allowance to help businesses keep staff.

Still analysts are predicting the unemployment rate to shoot above 10%.

Wednesday’s survey showed all five sub-indexes fell in April. The biggest declines were in the near-term outlook for the economy and in attitudes towards spending.

Separately, a Commonwealth Bank (AX:CBA) analysis also out on Wednesday showed total credit and debit card expenditure in the week to April 10 dropped 20% from a year ago. Spending on services plummeted 44%.



Other bleak economic data on Wednesday showed a 90% drop in tourist arrivals from China in February from a year ago. Arrivals from Hong Kong, Singapore and Germany also slumped, according to the Australian Bureau of Statistics (ABS).

Despite the gloomy reading, Westpac Chief Economist Bill Evans expects that economic growth will resume by the fourth quarter of 2020 after three quarters of contraction.

“Australia’s pandemic experience to date has been much less debilitating than that of the hardest hit areas abroad,” Evans noted.

“The number of cases is high but has not overwhelmed Australia’s health system, with recent evidence showing a clear slowing in new cases that indicates policy measures are working to contain the spread,” he added.

Supporting that view, the International Monetary Fund (IMF) noted Australia’s fiscal response was “swift and sizable”.

The IMF predicted a 6.7% economic contraction this year, the deepest recession in Australia’s history, followed by a 6.1% expansion in 2021. Unemployment is expected to average 7.6% in 2020 and 8.9% in 2021.



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China’s Trade Slump Eases In March, But Pandemic Set To Deepen Export Downturn

The plunge in China’s exports and imports eased in March as factories resumed production, but shipments are set to shrink sharply over coming months as the coronavirus crisis shuts down many economies and puts the brakes on a near-term recovery.

Financial markets breathed a sigh of relief after customs data on Tuesday showed overseas shipments fell 6.6% in March year-on-year, improving from a 17.2% slide in January-February, as exporters rushed to clear a backlog of orders after forced production shutdowns.

Economists had forecast shipments to drop 14% from a year earlier.


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Yet, while the trade figures were not bad as feared, analysts say the export and overall growth outlook for the world’s second-biggest economy remains grim as the pandemic has brought business activity across the globe to a standstill.

“The above-expectation March trade figures do not mean that the future is carefree,” said Zhang Yi, Beijing-based chief economist at Zhonghai Shengrong Capital Management.

Zhang said he expects first-quarter gross domestic product data on Friday will likely show a contraction of 8% – the first quarterly slump since at least 1992. Analysts’ forecasts for China’s first quarter GDP ranged widely between a contraction of 2% and 16%.

“A decline in exports throughout the second quarter has been the market consensus now and a drop of 20% or more is a high-probability event. For policymakers, more policies should be rolled out to address the possible societal issues stemming from mass-scale unemployment,” Zhang said.

The data showed imports slid 0.9% from a year earlier, also above market expectations of a 9.5% drop, which the customs attributed to improving domestic demand. They had fallen 4% in the first two months of the year.

The better imports picture partly reflected shipments that were stuck in ports being cleared and catch-up demand as authorities eased restrictions. Yet, domestic consumption was far from robust with key imports such as iron ore dipping in March, underlining the broad economic strains.

“Imports should hold up better given that domestic demand looks set to stage a further recovery in the coming months,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

“But the quarter of China’s imports that feed into China’s export sector will continue to fall and hold back the recovery in imports.”

The overall trade surplus last month stood at $19.9 billion, compared with an expected $18.55 billion surplus in the poll and a deficit of $7.096 billion in January-February.

Stock markets in Asia extended their gains after China’s trade report, while risk sensitive currencies including the Australian and New Zealand dollars as well as the pound pulled ahead, mainly on relief on the less gloomy data. [MKTS/GLOB]

JOBS, INCOME, EXPORTS PRESSURED

China, where the novel coronavirus first emerged late last year, has reported 82,249 infections and 3,341 deaths as of April 13. Worldwide, infections have surpassed 1.8 million with over 119,000 deaths.

The pandemic’s sweeping impact on businesses and consumers has triggered an unprecedented burst of stimulus from policymakers in the past two months, with the World Trade Organization forecasting that goods trade would shrink more steeply this year than during the global financial crisis.

Beijing is trying to restart its economic engines after weeks of near paralysis to contain the pandemic that had severely restricted business activity, flow of goods and the daily life of people.

But as the virus rapidly spread to almost all of China’s trading partners, severely restraining overseas demand particularly in European and U.S. markets, Chinese factories’ export orders have been scrapped. Many privately-owned exporters have been forced to fire workers and warned about factory closures in not too distant future.

UBS Economist Tao Wang predicted that exports would decline by 20% on-year in the second quarter and 12% for the whole of 2020.

Wenzhou Juna Shoe Industry Co, which used to export 90% of its leather shoes to Russia, South Korea and Australia, had 30% of its orders cancelled last month, with clients delaying the shipments of another 20%, according to a report from China Central Television (CCTV) on Sunday.


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Half of its production lines were suspended overnight, said CCTV, citing the company manager Wan Jiayong.

Customs spokesman Li Kuiwen also warned about the difficulties facing foreign trade.

“Shrinking global demand is set to cause a shock to our country’s exports, and issues such as declining export orders have gradually emerged. The difficulties facing our foreign trade development cannot be underestimated,” said Li.

Indeed, both official and private factory surveys for March showed new export orders declined even further from February when production in the country was paused, with few signs of a strong near-term recovery.

Analysts say consumer appetite would also remain depressed as many people are worried about the possibility of new infections, job security and potential cuts to wages as the economy struggles, analyst warned.

“The sharp decline in exports and trade could put another over 10 million jobs related to exports at risk in the next couple of quarters,” UBS’ Wang said.


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World Bank Forecasts Worst Economic Slump In 40 Years

South Asian countries are likely to record their worst growth performance in four decades this year due to the coronavirus outbreak, the World Bank said on Sunday.

The South Asian region, comprising eight countries, is likely to show economic growth of 1.8% to 2.8% this year, the World Bank said in its South Asia Economic Focus report, well down from the 6.3% it projected six months ago.

India’s economy, the region’s biggest, is expected to grow 1.5% to 2.8% in the fiscal year that started on April 1. The World Bank has estimated it will grow 4.8% to 5% in the fiscal year that ended on March 31.

“The green shoots of a rebound that were observable at the end of 2019 have been overtaken by the negative impacts of the global crisis,” the World Bank report said.

Other than India, the World Bank forecast that Sri Lanka, Nepal, Bhutan and Bangladesh will also see sharp falls in economic growth.

Three other countries – Pakistan, Afghanistan and the Maldives – are expected to fall into recession, the World Bank said in the report, which was based on country-level data available as of April 7.


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Measures taken to counter the coronavirus have disrupted supply chains across South Asia, which has recorded more than 13,000 cases so far – still lower than many parts of the world.

India’s lockdown of 1.3 billion people has also left millions out of work, disrupted big and small businesses and forced an exodus of migrant workers from the cities to their homes in villages.

In the event of prolonged and broad national lockdowns, the report warned of a worst-case scenario in which the entire region would experience an economic contraction this year.

To minimize short-term economic pain, the Bank called for countries in the region to announce more fiscal and monetary steps to support unemployed migrant workers, as well as debt relief for businesses and individuals.

India has so far unveiled a $23 billion economic plan to offer direct cash transfers to millions of poor people hit by its lockdown. In neighboring Pakistan, the government has announced a $6 billion plan to support the economy.

“The priority for all South Asian governments is to contain the virus spread and protect their people, especially the poorest who face considerable worse health and economic outcomes,” said senior World Bank official Hartwig Schafer.




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U.S. Employers Cut 711,000 Jobs In March

The unemployment rate for March rose to 4.4% from 3.5% in February. It was the largest one-month increase in the rate since January 1975. The data doesn’t yet fully reflect the millions of unemployment-insurance claims individuals filed in the last two weeks of March due to the coronavirus pandemic.

The monthly decline in payrolls was the largest drop since March 2009, the worst month for job loss during the 2007-2009 recession. The Labor Department said Friday’s data reflect the effects of the coronavirus and efforts to contain it.

Employment in leisure and hospitality fell by 459,000, mainly at restaurants and bars. Declines also occurred in health care and social assistance, professional and business services, retail and construction.

The near shutdown of swaths of the U.S. economy due to the new coronavirus pandemic—from corner restaurants to manufacturing plants to international tourism—is inflicting damage on the labor market that economists say dwarfs the most significant economic downturns of the post-World War II era. And it is playing out in a matter of weeks, rather than years.

Forecasting firm Oxford Economics projects that by May, the U.S. will have lost 27.9 million jobs and have a 16% unemployment rate, erasing all the jobs gained since 2010 during the record-setting 113-month stretch of employment gains through February. That job loss would be more than double the 8.7 million positions cut from payrolls during the 2007-2009 recession and its aftermath. And those jobs were lost over 25 months.

The nonpartisan Congressional Budget Office said Thursday that the unemployment rate would exceed 10% in the second quarter. Economists from S&P Global, KPMG LLP and Bank of the West are projecting a similar rapid rise in unemployment. The highest monthly unemployment rate on record, going back to 1948, is 10.8%, set in late 1982 during the deep recession under President Reagan.

The data is likely only the start of much more severe job-loss figures in the coming months.

If shutdowns continue, the April jobs report, due out May 8, could show the largest ever one-month decline in the labor market.

“There’s no comparison to this shock,” said Gregory Daco, Oxford’s chief U.S. economist. “The sudden drop in economic activity is like what you’d see in an area after a natural disaster or a terrorist attack, but it’s occurring across the entire country.”

Laury Hammel said he furloughed 600 employees at six health clubs in New England and Utah on March 16.

“It was the darkest day of my career,” said Mr. Hammel, the chief executive of Longfellow Health Clubs. “I had to shut down the clubs, it was too risky for everyone involved.” Mr. Hammel closed his businesses before mandated to do so by states, but the layoffs occurred too late to be reflected in Friday’s data.

Normally, he said, the clubs are filled with the sounds of clanging weights, bouncing tennis balls and shouting fitness instructors. When reached on Thursday, Mr. Hammel said he was the only person inside a 100,000 square foot building in Massachusetts. “It’s dead in here,” he said.

Longfellow employees were paid for their final week of work, Mr. Hammel said, and donations from members will allow the company to pay for employee health insurance through April. He said he hopes government loans will allow him to keep up with insurance and maintenance payments—including keeping domes over the tennis courts inflated to avoid damage—until he can reopen.

Other businesses have announced mass layoffs in recent weeks—all too late for the March report.

Las Vegas casinos shut on March 18—and 10% of Nevada’s workforce has since sought unemployment assistance. That same day, Detroit auto makers laid off 150,000 workers. Marriott International said on March 22 that tens of thousands of hotel staff would be furloughed. Macy’s Inc., Gap Inc. and Kohl’s Corp. let workers go this week.

Beth Ann Bovino, S&P Global’s chief U.S. economist, projects 17 million jobs will be shed in the coming months and the unemployment rate will touch 13.5%. She expects it will take the economy until late 2022 to recover those lost jobs, and, given population growth, the unemployment rate won’t return to recent lows until 2023.

Such a recovery would be fast relative to recent recessions, but shows that the impact of the pandemic, even if lasts for a few months, will stay with the labor market for years.
“Business balance sheets are damaged, and we don’t know how many businesses will not survive,” she said.

Other economists have somewhat more positive—though still dire—forecasts for the labor market.

Forecasting firm IHS Markit projects 14 million jobs will be lost by December, based on the expectation that employment will fall sharply this spring and edge lower for the remainder of the year. The firm expects the unemployment rate to peak near 10%, or close to previous records.


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Joel Prakken, IHS Markit chief U.S. economist, said the firm’s forecast assumes a pickup in hiring among other businesses.

“I think there will be more of an offset than some realize,” he said, pointing to hiring announcements by grocery stores, online retailers, warehouses and pharmacies. Mr. Prakken projects employment will return to early 2020 levels by fall 2022. Next year, he said, it won’t be unusual for monthly jobs reports to show 700,000 or more jobs added.

“The recovery will be much faster than from past downturns,” he said.




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US Treasury Yields Sink As Investors Brace For More Harrowing Jobs Data

U.S. jobs data will be in focus Thursday, with last week’s initial jobless claims due for publication at 8:30 a.m. ET.

U.S. government debt prices were higher Thursday morning following Wall Street’s rocky start to the second quarter as the coronavirus crisis deepened.

At around 2:00 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was sharply lower at 0.5830% while the yield on the 30-year Treasury bond was down at 1.2112%.

Risk aversion from investors amid the deepening coronavirus crisis continued to plague Wall Street on Wednesday, sending the Dow 4.4% lower.

U.S. jobs data will be in focus Thursday, with last week’s initial jobless claims due for publication at 8:30 a.m. ET.

The figure is expected to be significant, with economists expecting that between 4 million and 5 million workers filed jobless claims last week, with many more anticipated as lockdowns continue to take their toll.

Four new states announced lockdown guidance on Wednesday, meaning more than 80% of Americans have now been directed to stay in their homes, according to Reuters, as the number of deaths and cases surged to new daily highs for a fourth consecutive day.

More than 216,000 cases have now been confirmed in the U.S. as of Thursday morning, with more than 5,000 deaths.

In terms of other economic data, balance of trade and import/export figures are also due at 8:30 a.m. ET.

Auctions will be held Thursday for $80 billion of 4-week Treasury bills, $60 billion of 8-week bills, and $40 billion each of 154-day and 102-day bills.





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U.S. Weekly Jobless Claims Seen At Record High

“The U.S. labor market is in free-fall,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York.



The number of Americans filing claims for unemployment benefits likely shot to a record high for a second week in a row as more jurisdictions enforced stay-at-home measures to curb the coronavirus pandemic, which economists say has pushed the economy into recession.

Thursday’s weekly jobless claims report from the Labor Department, the most timely data on the economy‘s health, is expected to show that claims blew past the previous week’s record 3.3 million. It will likely reinforce economists’ views that the longest employment boom in U.S. history probably ended in March.



More than 80% of Americans are under some form of lockdown, up from less than 50% a couple of weeks ago, leaving state employment offices overwhelmed by an avalanche of applications.

The United States has the highest number of confirmed cases of COVID-19, the respiratory illness caused by the virus, with nearly 188,000 people infected. Almost 4,000 people in the country have died from the illness, according to a Reuters tally.

“The U.S. labor market is in free-fall,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York. “The prospect of more stringent lockdown measures and the fact that many states have not yet been able to process the full amount of jobless claim applications suggest the worst is still to come.”

Initial claims for state unemployment benefits probably raced to a seasonally adjusted 3.50 million for the week ended March 28, according to a Reuters survey of economists. Estimates in the survey were as high as 5.25 million.

Claims data for the week ended March 21 is likely to be revised higher as many state employment offices reported challenges processing applications. Applications for unemployment benefits peaked at 665,000 during the 2007-2009 recession, during which 8.7 million jobs were lost.

Economists say the country should brace for jobless claims to continue escalating, partly citing generous provisions of a historic $2.2 trillion fiscal package signed by President Donald Trump last Friday and the federal government’s easing of requirements for workers to seek benefits.

As a result, self-employed and gig-workers who previously were unable to claim unemployment benefits are now eligible. In addition, the unemployed will get up to $600 per week for up to four months, which is equivalent to $15 per hour for a 40-hour workweek. By comparison, the government-mandated minimum wage is about $7.25 per hour and the average jobless benefits payment was roughly $385 per person per month at the start of this year.

“Why work when one is better off not working financially and health wise?” said a Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles.



Bank of America (NYSE:BAC) Securities said based on its tracking of reports from states and its own data models, it was forecasting claims in excess of 5.50 million for last week.

“Based on our read, 22 states are expecting approximately 2.5 million unemployment insurance claims, up from the prior week’s official nonseasonally adjusted figures of 1.4 million,” said Joseph Song, a U.S. economist at Bank of America Securities in New York.

“Meanwhile, several other states have given general guidance that claims will be higher in the upcoming report. A rough back-of-the-envelope calculation extrapolating out to all 50 states would imply close to 5.6 million new applications.”

Last week’s claims data has no bearing on the closely watched employment report for March, which is scheduled for release on Friday. For the latter, the government surveyed businesses and households in the middle of the month, when just a handful of states were enforcing “stay-at-home” or “shelter-in-place” orders.

It is, however, a preview of the carnage that awaits. Retailers, including Macy’s (N:M), Kohl’s Corp (N:KSS) and Gap Inc (N:GPS), said on Monday they would furlough tens of thousands of employees, as they prepare to keep stores shut for longer.

According to a Reuters survey of economists, the government report on Friday is likely to show nonfarm payrolls dropped by 100,000 jobs last month after a robust increase of 273,000 in February. The unemployment rate is forecast to rise three-tenths of a percentage point to 3.8% in March.

“A rough look at the most affected industries suggests a potential payroll job loss of over 16 million jobs,” said David Kelly, chief global strategist at JPMorgan (NYSE:JPM) Funds in New York. “The loss would be enough to boost the unemployment rate from roughly 3.5% to 12.5%, which would be its highest rate since the Great Depression.”


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French Manufacturing Plunges Into Deepest Slump In Seven Years

French manufacturing activity fell in March at the fastest pace in more than seven years as a nationwide lockdown to contain the coronavirus outbreak hits companies and their clients, a monthly survey showed on Wednesday.

Data compiler IHS Markit said its final Purchasing Managers’ Index (PMI) fell to 43.2 points from 49.8 in February, slightly higher than a preliminary reading of 42.9.

The plunge to its lowest point since January 2013 brought the index far away from the key 50-point line dividing expansions in activity from contractions.


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Meanwhile, manufacturers’ output and the flow of orders for new business fell to their lowest levels since the 2008-2009 global financial crisis that unleashed one of the deepest recessions in decades in many major economies.

As the coronavirus spread in France, the government imposed a lockdown on March 17, forcing large swathes of the euro zone’s second-biggest economy to shut down.

“The supply of goods is diminished, with supplier delivery times lengthening sharply and staff unable to work amid factory closures,” IHS Markit economist Eliot Kerr said.



“Meanwhile, restricted movement of people and social distancing has acted to stifle demand, delivering a double-barrelled blow to the economy,” he added.

The INSEE official statistics agency estimated last week that the economy was operating at two-thirds of its normal level, which was likely to knock 3 percentage points off growth for each month the country spends in lockdown.


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Economic Indicators: China Factory Activity Unexpectedly Expands

Factory activity in China unexpectedly expanded in March from a collapse the month before, but analysts caution that a durable near-term recovery is far from assured as the global coronavirus crisis knocks foreign demand and threatens a steep economic slump.

China’s official Purchasing Managers’ Index (PMI) rose to 52 in March from a plunge to a record low of 35.7 in February, the National Bureau of Statistics (NBS) said on Tuesday, above the 50-point mark that separates monthly growth from contraction.


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Analysts polled by Reuters had expected the March PMI to come in at 45.0.

The NBS attributed the surprise rebound in PMI to its record low base in February and cautioned that the readings do not signal a stabilization in economic activity.

That view was echoed by many analysts, who warn of a further period of struggle for China’s businesses and the broader economy due to the rapid spread of the virus across the world, the unprecedented lockdowns in several countries and the almost near certainty of a global recession.

“This does not mean that output is now back to its pre-virus trend. Instead, it simply suggests that economic activity improved modestly relative to February’s dismal showing, but remains well below pre-virus levels,” said Julian Evans-Pritchard, senior China economist at Capital Economics, in a note to clients.

The pandemic’s sweeping impact on production was underlined in two of Asia’s main export engines, Japan and South Korea. In Japan, industrial out rose at a slower pace in February and factories expect a plunge this month, while production in South Korea contracted the most in 11 years.

Economists are already forecasting a steep contraction in China’s first quarter gross domestic product, with some expecting a year-year slump of 9% or more – the first such contraction in three decades.

Nie Wen, economist at Shanghai-based Hwabao Trust, said given weak export orders, rising stockpile and soft prices, the underlying issue facing Chinese manufacturers has shifted to a lack of market demand, from production shutdowns forced by Chinese authorities.

The survey’s sub-index of manufacturing production picked up to 54.1 in March from February’s 27.8, but new export orders received by Chinese manufacturers were still mired in contraction, after ticking up to 46.4 from 28.7 in February.

Manufacturers are still facing big operational pressures, the survey showed, with over half of the respondents reporting a lack of market demand and 42% reporting financing issues, both up from the previous month.

“The biggest problem facing China’s economy in the second quarter is the slumping foreign demand,” said Nie, adding that authorities may roll out more policies on top of the billions of dollars pumped into the financial system since February to boost domestic consumption and tide over the shrinking overseas demand.

Markets reacted positively to the PMI survey, with Asian stock rising as investors seemed relieved by the rare good news as the pandemic showed few signs of abating.

China’s yuan, however, barely budged, reflecting analysts’ views that a sustainable bounce in manufacturing looked some way off despite a slowdown in China’s coronavirus infections from its peak in February.

GRIM OUTLOOK

Beijing, at great costs to the economy, had imposed draconian quarantine rules and travel restrictions to curb the pandemic that has killed more than 3,000 in the country.

While life for millions of people has started to slowly return to normal, the pace of business resumptions has been constrained by China’s efforts to guard against a second wave of infections from abroad.

The coronavirus, which originated late last year in China, has wreaked havoc along global supply chains and severely hurt foreign demand amid tight lockdowns in Europe, the United States and a number of other key economies where daily life has ground to a halt.

Already, Chinese exporters are seeing overseas orders being scrapped as the worldwide spike in coronavirus infections and deaths has forced many of the nation’s trading partners to slow or suspend production. Globally the outbreak has claimed the lives of over 37,000 people with more than 770,000 infections.

China should not set an economic growth target this year given the heightened uncertainty and avoid having to resort to “flood-like stimulus” to meet the goal, a central bank adviser said.

The service sector, which accounts for 60% of China’s GDP, also saw an expansion in activity, with the official non-manufacturing PMI rising to 52.3 from 29.6 in February, a separate NBS survey showed.

Analysts warn the outbreak could have a lingering impact despite the government loosening restrictions in recent weeks, as many people remain worried about the possibility of new infections or fretting about job security and potential cuts to wages as the economy struggles.

China’s urban jobless rate hit 6.2% in February, up one percentage point from the end of 2019, with analysts estimating about 5 million jobs lost in January-February period.

“The situation remains volatile as the trajectory of the COVID-19 virus outbreak in several key economies is still unpredictable,” ANZ analysts said in a note.






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Stimulus Check Calculator

Congress just passed a $2 trillion stimulus bill to address the growing economic crisis caused by the coronavirus pandemic.

Included are direct payments to many Americans. Individuals are eligible for up to $1,200 and couples would receive up to $2,400 — plus $500 per child.

But the payments would start phasing out for individuals with adjusted gross incomes of more than $75,000. The amount would then be reduced by $5 for every additional $100 of adjusted gross income, and those making more than $99,000 would not receive anything. The income thresholds are doubled for married couples.

Income would generally be based on one’s 2019 or 2018 tax returns.

The money will likely be deposited directly into individuals’ bank accounts — as long as they’ve already authorized the IRS to send their tax refund that way over the past two years. If not, the IRS would send out checks in the mail.

The White House has said they hope to begin distributing cash quickly, but it may take weeks before the bulk of payments go out.


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Economic Indicators: Consumer Sentiment in U.S. Slumps by Most Since October 2008

U.S. consumer sentiment plummeted in March by the most since October 2008 as mounting Covid-19 cases nationwide and business closures elevated concerns about the economy.

The University of Michigan’s final sentiment index for the month slumped 11.9 points to a three-year low of 89.1, data Friday showed. The median forecast in a Bloomberg survey of economists called for a decline to 90 after a preliminary March reading of 95.9.

Ratings for current conditions also decreased by the most since 2008, and a measure of the economic outlook dropped to the lowest level in more than three years. Stocks fell and Treasuries advanced as investors assessed the pandemic’s impact on the economy.





“The outlook for the national economy for the year ahead changed dramatically in March, with the majority now expecting bad times financially in the entire country,” Richard Curtin, director of the Michigan sentiment survey, said in a statement. “Perhaps the most important takeaway is that the largest proportion of consumers in nearly 10 years anticipated that the national unemployment rate will increase in the year ahead.”

The report provides one of the more-sobering pictures yet of how the widespread economic halt, amid efforts to help contain the virus, is impacting consumers’ attitudes. The March figures represent a drastic departure from just a month earlier, when a strong job market and cheap fuel contributed to the second-highest sentiment reading since 2004.

The university’s final survey for the month included responses through March 24, a stretch that includes significant upheaval and uncertainty in day-to-day living and the labor market, as well as in financial markets. A report yesterday showed initial claims for unemployment benefits soared to a record 3.28 million last week.

“Stabilizing confidence at its month’s end level will be difficult given surging unemployment and falling household incomes,” Curtin said. “Mitigating the negative impacts on health and finances may curb rising pessimism, but it will not produce optimism.”

April consumer sentiment data will reflect the surge in dismissals and growing Covid-19 cases, as well as progress on Capitol Hill toward a $2 trillion economic-relief package that includes direct payments to many Americans.



Most notably, the number of confirmed cases nationwide continues to rise. There are currently more than 85,000 with the disease in the U.S., the most in the world, compared with 62 people at the end of February.

The Michigan data showed an index of buying conditions for durable goods dropped in March to the lowest level since 2014.

Year-ahead financial prospects declined across all age and income subgroups, though modestly as respondents anticipated the negative effects from the pandemic would be short-lived.

The impact of the virus on consumer sentiment are likely to become more evident as monthly reports capture the tectonic shift in economic and market conditions seen over the last month. The Conference Board will publish its March confidence reading on Tuesday. Meanwhile, Bloomberg’s weekly index fell to a four-month low.





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Economic Indicators: U.K. House Sales Set To Plunge 70% On Coronavirus Lockdown Impact

U.K. house sales are set to plunge by 70% in the next three months as the coronavirus outbreak batters the economy.

The slump in the second quarter, which is usually among the most active sales periods, will be followed by a further decline in the three months through September, according to a report on Thursday from real estate portal Zoopla. The hit to prices should feed through more slowly and will depend on the extent of the economic slowdown.

Covid-19 presents a major new challenge,” Richard Donnell, director of research and insight at Zoopla, said in an emailed statement. “The initial impact of external shocks is to reduce consumer confidence and put a brake on housing demand and the number of people moving home, which we can see in our latest figures.”

The partial lockdown of the country ordered by Prime Minister Boris Johnson has restricted people’s movements and closed all but essential businesses. That has made it nearly impossible for sellers to market homes, with potential buyers unable to view properties. And the government has warned that stricter rules could be imposed if necessary.

While the logistics of the lockdown impede deals, the economic fallout from the pandemic will dictate the impact on house prices, according to Zoopla. “The greater the economic shock and rise in unemployment, the greater the potential impact on house prices over the spring and into the summer months,” according to the report.

The U.K. economy will contract by at least 10% in the first half of the year, according to Bloomberg Economics’ estimates. Senior U.K. economist Dan Hanson said support provided by the Bank of England and the Treasury should prompt a turnaround in the second half of the year if the outbreak is contained by the summer.

The virus is already weighing on deals, with the number of homes placed under offer in the seven days through March 22 down 15% from the previous week, Zoopla data show.

Prior to the outbreak, the U.K. housing market was off to its best start in four years, with price growth of 1.6% in February, up from 1.2% a year earlier, according to Zoopla’s U.K. cities index.





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Emergency Measures Taken By The Federal Reserve May Not Be Enough To Ward Off A Coronavirus-Induced Great Recession

The decline underscores the level of worry among investors since the coronavirus pandemic escalated and disrupted supply chains, sidelined workers and infected tens of thousands of people. To combat the potential economic fallout, central banks and governments have put in place various stimulus measures.

Those efforts, so far, have yet to stem the selloff. The S&P 500 is down 30% from its peak reached less than a month ago. Shares in the two largest U.S. companies by market value—Apple Inc. and Microsoft Corp.—each dropped more than 12% Monday.

“This is what panic looks like,” said Patrick Healey, president and founder of Caliber Financial Partners. “It doesn’t matter what the Fed did over the weekend or what they could have done, the trading activity in the market is reflective of fear and uncertainty.”

“The only thing that is going to calm markets is seeing the number of [coronavirus] cases go down,” he said.

The blue-chip index plummeted 2997.10 points, or 13%, to 20188.52, marking the second worst day in the index’s history. The S&P 500 dropped 324.89 points, or 12%, to 2386.13. And the Nasdaq Composite tumbled 970.28 points, or 12%, to end the day at 6904.59—the tech-heavy index’s steepest ever one-day fall.

All three major indexes are in a bear market.

Bank stocks were among the hardest hit Monday, with Citigroup Inc. falling 19%. Bank of America Corp. and JPMorgan Chase & Co. both declined 15%. The Fed, which took a range of actions to support bank lending, noted companies around the world are drawing down their credit lines for working capital as economic activity slows, putting pressure on lenders.

Those efforts were part of the central bank’s broader bid to stabilize the economy. It slashed its benchmark interest rate to near zero—the second emergency rate cut this month and said it would buy $700 billion in Treasurys and mortgage-backed securities, among other things.

The news sent stock futures and global stocks sliding, with some investors viewing the move as too much stimulus, too soon.

“It’s basically using up all their ammunition within a three-week span,” said Terence Wong, chief executive of Azure Capital, a Singapore-based fund management firm. “There’s nothing left. They can’t use monetary loosening as part of their arsenal anymore.”

U.S. stock trading was halted for 15 minutes shortly after Monday’s opening bell when the S&P 500 tumbled more than 7%, triggering a marketwide circuit breaker. The automatic curb on trading marked the third time in six sessions that U.S. stocks have been halted intraday.



The declines accelerated in the final hour of trading after President Trump said the virus may not be under control until July or August.

The losses were broad: Only nine stocks in the S&P 500 ended the session in the green.

Yet there were surprising bright spots, too. American Airlines Group Inc. surged 11% on talks between U.S. airlines and the government to obtain as much as $50 billion in financial assistance. Moderna Inc. skyrocketed 24% after the biotechnology company said it had tested its coronavirus vaccine on one participant involved in its clinical trial. Clorox Co. also continued climbing, rising 4.1%, on increased demand for cleaning products.

Several U.S. states and cities have said in recent days that they were closing nonessential businesses, such as movie theaters and nightclubs, to encourage social distancing and help prevent the spread of coronavirus. Public and private schools closed for nearly 30 million U.S. children. The governors of New York, New Jersey and Connecticut tightened restrictions on the public, including banning gatherings of over 50 people, shutting down bars and instituting a recommended curfew.

The closures weighed heavily on markets Monday, some investors said, and exacerbated existing concerns that the U.S. economy could slip into a recession. Consumer spending accounts for nearly two-thirds of the U.S. economy, and it remains unclear what effect a sharp reduction in shopping and dining out will have. Goldman Sachs Group projected Sunday that U.S. gross domestic product will shrink 5% in the second quarter.


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“There is going to be a significant hit to economic activity for any country with containment measures,” said Seema Shah, chief strategist at Principal Global Investors. “We’re not going shopping, we’re not going to buy lunch. The impact on smaller and medium-sized businesses is going to be enormous.”

In China, where the virus spread rapidly in early 2020, evidence of economic fallout is a little more clear. Economic statistics for January and February showed that Chinese retail sales, investment in fixed assets and industrial output all fell sharply, and more than economists expected. Output at China’s factories was 13.5% lower in the combined January-February period, compared with the year before.

“It is sending a frightening signal to the other economies,” said Jim McCafferty, joint head of Asia-Pacific equity research at Nomura in Hong Kong. “We will see a similar impact on global GDP numbers.”

Stocks in Shanghai and Hong Kong ended the day down more than 3%. The pan-continental Stoxx Europe 600 closed down 4.9%, paring earlier declines. And Japan’s Nikkei 225 index closed 2.5% lower, even after the Bank of Japan rolled out new measures, including doubling its purchases of exchange-traded equity funds, and said it wouldn’t hesitate to take more action if needed.

The steep fall in stocks globally sent investors scrambling toward U.S. government bonds. The yield on the benchmark 10-year U.S. Treasury note dropped to 0.722% from 0.946% on Friday, the largest one-day yield decline since 2009.


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Meanwhile, Brent crude, the global gauge of crude prices, fell 11% to $30.05 a barrel, its lowest level since January 2016. Oil prices have lost more than half their value since the start of the year as investors have grown concerned about waning demand for energy, including jet fuel.

And the Cboe Volatility Index, or VIX, surged higher, surpassing its 2008 record. The index is a closely watched measure of volatility in U.S. stocks. Monday marked the third day in a row that the S&P 500 swung by more than 9%.





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China January-February Exports Tumble




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China’s exports contracted sharply in the first two months of the year, and imports slowed, as the health crisis triggered by the coronavirus outbreak caused massive disruptions to business operations, global supply chains and economic activity.

The gloomy trade report is likely to reinforce fears that China’s economic growth halved in the first quarter to the weakest since 1990 as the epidemic and strict government containment measures crippled factory production and led to a sharp slump in demand.

Overseas shipments fell 17.2% in January-February from the same period a year earlier, customs data showed on Saturday, marking the steepest fall since February 2019.

That compared with a 14% drop tipped by a Reuters poll of analysts and a 7.9% gain in December.

Imports sank 4% from a year earlier, but were better than market expectations of a 15% drop. They had jumped 16.5% in December, buoyed in part by a preliminary Sino-U.S. trade deal.

China ran a trade deficit of $7.09 billion for the period, reversing an expected $24.6 billion surplus in the poll.

Factory activity contracted at the fastest pace ever in February, even worse than during the global financial crisis, an official manufacturing gauge showed last weekend, with a sharp slump in new orders. A private survey highlighted similarly dire conditions.

The epidemic has killed over 3,000 and infected more than 80,000 in China. Though the number of new infections in China is falling, and local governments are slowly relaxing emergency measures, analysts say many businesses are taking longer to reopen than expected, and may not return to normal production till April.

Those delays threaten an even longer and costlier spillover into the economies of China’s major trading partners, many of which rely heavily on Chinese-made parts and components.

China’s trade surplus with the United States for the first two months of the year stood at $25.37 billion, Reuters calculation based on Chinese customs data showed, much narrower than a surplus of $42.16 billion in the same period last year.

Soybean imports in the first two months of 2020 rose by 14.2% year-on-year as cargoes from the U.S. booked during a trade truce at the end of 2019 cleared customs.

After months of tensions and tariff hikes that dragged on bilateral trade, the world’s two biggest economies agreed an interim trade deal in January that cut some U.S. tariffs on Chinese goods in exchange for Chinese pledges to massively increase purchases of U.S. goods and services.

The U.S. expects China to honor these commitments despite the coronavirus outbreak, a senior U.S. official said in February.

VIRUS THREATENS GLOBAL RECESSION

The supply and demand shocks in China are likely to reverberate through global supply chains for months, and the rising number of virus cases and business disruptions in other countries is raising fears of a prolonged global slowdown or even recession.

In response, global policymakers have stepped up efforts to cushion the economic blow of the epidemic, with the U.S. Federal Reserve delivering an emergency rate cut last week.

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Shortages of vital parts and components from China last month cost other countries and their industries $50 billion, a United Nations agency said on Wednesday.

The virus outbreak escalated in late January just as many businesses were winding down operations or closing for the long Lunar New Year holidays, and as hundreds of millions of Chinese were returning to their hometowns.

China customs said last month it would not release separate figures for January and would combine January and February instead, in line with how some of the country’s other major indicators are released early in the year, which is intended to smooth distortions created by the holidays.

Tough public measures such as restrictions on travel and quarantines meant many of these people were unable to return to their jobs in offices, factories and ports until only recently.

Some firms which have reopened have faced shortages of parts and other raw materials as well as labor, while others report inventories of finished goods such as steel are piling up as downstream customers like car plants slowly crank up production again.

Iron ore imports rose 1.5% over the first two months, supported by firm demand at steel mills even though the coronavirus outbreak had disrupted downstream sectors.

Parts of central Hubei province, the epicenter of the outbreak and a major transport and manufacturing center, are expected to remain under lockdown well into March.

Analysts at Nomura estimate only 44% of the businesses worst affected by the outbreak had resumed operation as of March 1, and 62.1% across the economy as a whole. As such, they forecast economic growth will slump to 2% in the first quarter year-on-year, from 6% in the previous quarter.

Beijing has already stepped up support measures, including offering cheap loans to affected businesses, and policy sources have told Reuters that more steps are expected as authorities try to cushion the epidemic’s impact on the economy.

China’s commerce ministry said on Thursday that more than 70% of foreign trade companies in the coastal provinces have resumed work.

But financial magazine Caixin reported this week that some companies were keeping machines running and lights open throughout the day even though they have no goods to produce, in a bid to allow managers and local officials to inflate the official work resumption rate. Reuters wasn’t able to verify this report.




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Financial Markets – Investors Retreat From Stocks

Investors continued to pile into safe-haven assets Friday, pushing the yield on long-term U.S. government bonds to unprecedented levels and setting gold up for its best week in over a decade.





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The yield on the benchmark 10-year Treasury sank below 0.8% for the first time. Stock futures also retreated, with contracts linked to the Dow Jones Industrial Average declining 2.3%, pointing to a decline of over 600 points when the blue-chips index opens for trading in New York. On Thursday, all three major U.S. stock indexes had retreated more than 3%.

Oil prices added to the market turmoil Friday, with the global benchmark, Brent crude, declining 3.8% to $48.09 a barrel. Russia disagrees with OPEC’s preliminary agreement Thursday to cut output by 1 million barrels a day, The Wall Street Journal reported. OPEC members and their allies, led by Russia, are continuing to meet Friday in Vienna. Brent has declined 27% since the beginning of the year as the coronavirus has hammered demand.

The pan-continental Stoxx Europe 600 gauge also dropped 3.4% to its lowest level since August. Asia’s major equity benchmarks closed lower Friday, with the Shanghai Composite Index losing 1.2%.

“People are accepting the size of the crisis: they know the governments are doing the right thing but what your brain tells you logically isn’t always how you feel about something emotionally,’’ said Sebastien Galy, a senior macro strategist at Nordea Asset Management. NDA.FI -4.02% “We’re seeing the market’s emotional brain leading today.”

Investors sought out assets that are considered low in risk — such as government bonds and gold — on worries about the economic impact of the coronavirus. The yield on 10-year Treasurys slipped to 0.755%, after earlier notching a record intraday level of 0.701%. It had closed Thursday at 0.924%. The yield on the 30-year benchmark dropped to 1.352%.

The continued market jitters — even after the Federal Reserve unexpectedly cut rates and U.S. lawmakers approved roughly $8 billion in emergency spending — is focusing attention now on potential government measures to counteract the economic impacts of the coronavirus. But President Trump and White House officials have said they don’t see an immediate need to craft a broader fiscal-policy response because the economy has been faring well.




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Futures markets suggest the Fed’s key rate is likely to be in a range of just 0.25% to 0.5% by the end of April. That would be just 0.25 percentage points higher than the near-zero level that held from the depths of the global financial crisis until December 2015.

Investors are expecting rate cuts now and they are expecting [the cuts] to persist in the next two to three years,” said Homin Lee, Asia macro strategist at Lombard Odier. He said markets were pricing two to three further interest-rate reductions this year, and that these moves would only be partially reversed in the next three years.

Safe-haven assets gained, with the Japanese yen rising 0.9% against the dollar. Gold also rose 0.9%, and is on track for its best one-week performance since December 2008.

The ICE Dollar Index, which tracks the U.S. dollar against a basket of six major currencies, dropped 0.9% Friday.

Later in the day, the U.S. jobs report for February will offer fresh insights into the health of the U.S. economy before the coronavirus epidemic started to affect business activity. Economists surveyed by The Wall Street Journal are expecting 175,000 jobs to have been added last month and for the unemployment rate to be at 3.5%, a 50-year low.

The U.S. Commerce Department will also release data on the trade deficit, which is expected to have fallen to $46 billion in January from $48.88 billion the previous month.


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Australian Economic Growth Picks Up But Outlook Cloudy On Virus Fears

Australia’s economy expanded by more than expected last quarter, erasing the risk of a recession even as raging bushfires and the coronavirus crisis wreaked havoc with tourism and travel at the start of the new year.

Wednesday’s data from the Australian Bureau of Statistics (ABS) showed the A$2 trillion ($1.3 trillion) economy accelerated by 0.5% last quarter. Encouragingly, the previous quarter was revised upwards to show 0.6% increase from 0.4% earlier.

That took the annual pace to 2.3%, still well below the 2.75% that policy makers consider “trend”.

Economists had predicted a quarterly rate of 0.3%, according to a median of 16 economists polled by Reuters.

The stronger-than-expected data sent the local dollar rising 0.4% to $0.6611 from $0.6577 before.

The outlook is murkier though, as the coronavirus epidemic is seen dealing a greater blow to world economies than earlier expected.

Such are the risks that the Reserve Bank of Australia (RBA) cut interest rates to an historic low of 0.5% this week, just part of an urgent global response to the virus that saw the Federal Reserve spring an emergency policy easing.


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Prime Minster Scott Morrison has also flagged an imminent burst of targeted fiscal stimulus, a major u-turn for the conservative government that has long scorned such action.

“We view this shift in fiscal policy as a very positive development, but still expect further support from the RBA will be required given the extent of the shock and since the economy was underperforming prior to the outbreak,” said Alan Oster, chief economist at NAB.

He sees another quarter point rate cut in April and suspects the central bank would then have to consider quantitative easing including buying government bonds.


Australia-economy




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Best Stock Market Books For Beginners {2020}


#1 – The Intelligent Investor. (Revised Edition)

This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions… The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

Over the years, market developments have proven the wisdom of Graham’s strategies. While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.

Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.



#2 – Stock Investing For Dummies (Business & Personal Finance)

Grow your stock investments in today’s changing environment. Updated with new and revised material to reflect the current market, this new edition of Stock Investing For Dummies gives you proven strategies for selecting and managing profitable investments. no matter what the conditions. You’ll find out how to navigate the new economic landscape and choose the right stock for different situations—with real-world examples that show you how to maximize your portfolio.

The economic and global events affecting stock investors have been dramatic and present new challenges and opportunities for investors and money managers at every level. With the help of this guide, you’ll quickly and easily navigate an ever-changing stock market with plain-English tips and information on ETFs, new rules, exchanges, and investment vehicles, as well as the latest information on the European debt crisis.

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Stock Investing For Dummies is essential reading for anyone looking for trusted, comprehensive guidance to ensure their investments grow.



#3 – Encyclopedia of Chart Patterns

In this revised and expanded second edition of the bestselling Encyclopedia of Chart Patterns, Thomas Bulkowski updates the classic with new performance statistics for both bull and bear markets and 23 new patterns, including a second section devoted to ten event patterns. Bulkowski tells you how to trade the significant events — such as quarterly earnings announcements, retail sales, stock upgrades and downgrades — that shape today?s trading and uses statistics to back up his approach. This comprehensive new edition is a must-have reference if you’re a technical investor or trader. Place your order today.
“The most complete reference to chart patterns available. It goes where no one has gone before. Bulkowski gives hard data on how good and bad the patterns are. A must-read for anyone that’s ever looked at a chart and wondered what was happening.”
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#4 – How to Make Money in Stocks

Anyone can learn to invest wisely with this bestselling investment system!… Through every type of market, William J. O’Neil’s national bestseller, How to Make Money in Stocks, has shown over 2 million investors the secrets to building wealth. O’Neil’s powerful CAN SLIM® Investing System―a proven 7-step process for minimizing risk and maximizing gains―has influenced generations of investors.

Based on a major study of market winners from 1880 to 2009, this expanded edition gives you:

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Very few careers can offer you the freedom, flexibility and income that day trading does. As a day trader, you can live and work anywhere in the world. You can decide when to work and when not to work. You only answer to yourself. That is the life of the successful day trader. Many people aspire to it, but very few succeed. Day trading is not gambling or an online poker game. To be successful at day trading you need the right tools and you need to be motivated, to work hard, and to persevere… This book is definitely NOT a difficult, technical, hard to understand, complicated and complex guide to the stock market. It’s concise. It’s practical. It’s written for everyone. You can learn how to beat Wall Street at its own game.




 

China Economy Seen in Deeper Contraction on Factory Drop

China’s economy could be heading for a worse-than-expected first-quarter contraction after the country’s manufacturing sector reported activity at a record low in February due to the coronavirus outbreak.

The manufacturing purchasing managers’ index plunged to 35.7 in February from 50 the previous month, according to data released by the National Bureau of Statistics on Saturday. Even before that data, the median forecast of economists surveyed by Bloomberg News was that the economy would shrink in the three months through March from the last quarter of 2019, and the surprisingly weak data prompted further cuts to that view.

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Gross domestic product may now shrink by 2.5% in the first quarter from the previous period, Nomura Holdings Inc. economists led by Lu Ting said in a report Saturday after the data release. That was a cut from their previous forecast of -1.5% in a Bloomberg survey last week. Standard Chartered (LON:STAN) Plc already expected a 1.5% contraction before the data, while Australia & New Zealand Banking Group Ltd. is forecasting a 2% drop, according to reports after the release.

Bloomberg Economics now expects a contraction of 3%, but cautioned that it’s subject to considerable uncertainty.

“The extent of the slump in China, the blow to global supply chains, and the trajectory of the outbreak in China and globally are all difficult to gauge with a high degree of accuracy,” Bloomberg economists led by Chang Shu wrote in a report.

China Factory Activity Weakest on Record Due to Coronavirus

If the economy were to contract, it would be the first time that’s happened in comparable data dating back to 2011.

Pacific Investment Management Co. also sees the virus outbreak causing a contraction, forecasting a 6% annualized drop in China’s first-quarter GDP, while Barclays (LON:BARC) Bank Plc economists see an 8.9% drop, followed by a quick recovery. Pimco’s view gels with Goldman Sachs Group Inc (NYSE:GS). economists, who said in a report Friday that global GDP will shrink on a quarterly basis in the first two quarters of this year before rebounding in the second half.




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The factory PMI data may improve in March, CICC analysts including Yue Yan wrote in a note Saturday.

“Strenuous containment measures were taken after the outbreak of COVID-19, which understandably dampened economic activities in the short term,” they wrote. “With the outbreak gradually under control, government agencies have been clearing the unwanted obstacles for production resumption.”

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Nomura’s Lu also expects the March PMIs to rebound, but says activity data will be zero or negative as businesses won’t be completely back.

On a year-on-year comparison, the median forecast for first-quarter GDP growth is 4.3%. That was before Saturday’s data. Nomura and ANZ both now see it rising 2%, while Standard Chartered expects a 2.8% expansion.


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China Makes Bad Loans Disappear as Virus Pummels Banks

Chinese banks are taking extraordinary measures to avoid recognizing bad loans, seeking to shield themselves and cash-strapped borrowers from the economic fallout of the coronavirus outbreak.

Some of the measures, which include rolling over loans to companies at risk of missing payment deadlines and relaxing guidelines on how to categorize overdue debt, have the explicit approval of regulators in Beijing. Some lenders are also refraining from reporting delinquencies to the country’s centralized credit-scoring system and allowing borrowers to skip interest payments for as long as six months, according to people familiar with the matter, who asked not to be named discussing internal decisions.


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The moves will buy time for both Chinese companies and the nation’s $41 trillion banking industry, after the outbreak brought much of the world’s second-largest economy to a standstill. But they’re also fueling concern about a buildup of hidden risks on lenders’ balance sheets. Some analysts worry that China is reversing a multi-year push to increase the transparency of its financial system and undermining the long-term health of banks.

“This will provide breathing space,” said Harry Hu, a credit analyst at S&P Global Ratings. “It will also likely undermine standards, making some Chinese banks less creditworthy in the long run.”

Earlier this month, S&P said a prolonged health emergency could cause China’s non-performing loan ratio to more than triple to about 6.3%, amounting to an increase of 5.6 trillion yuan ($800 billion) in bad debt.

The push by banks and regulators to tamp down NPLs is part of a broader effort by President Xi Jinping’s government to shore up the Chinese economy, which some forecasters say may suffer a rare quarter-on-quarter contraction in the first three months of this year. In addition to pumping billions of yuan into the banking system to make it easier for lenders to extend credit, authorities have cut interest rates, reduced taxes and pledged to adopt more “proactive” fiscal policies.

Shares of Chinese banks continued to under-performer the benchmark index this year in Hong Kong. The four biggest state-owned banks are trading at an average 0.5 times their estimated book value for this year, near the record low.

The NPL measures mark an abrupt shift in China’s approach toward financial regulation. Authorities in Beijing have spent the past three years trying to instill more discipline in the banking system and develop credit markets that more accurately price risk. As part of that effort, they’ve encouraged banks to be more diligent when accounting for bad loans.

The outbreak has changed the government’s priorities. In a press conference this week, Ye Yanfei, an official at the China Banking and Insurance Regulatory Commission, said policy makers need to be more tolerant when it comes to bad loans. “Saving corporates now is saving banks themselves,” Ye said.

China isn’t the only country to have relaxed accounting standards for banks during a crisis. In April 2009, during the depths of the global recession, mark-to-market rules in the U.S. were eased after banks complained that they resulted in bigger-than-warranted writedowns on thinly traded mortgage securities. While critics of the decision said it reduced transparency, it arguably helped big American lenders recover more quickly from the crisis.

China’s ability to control the pace of NPLs during economic shocks is an advantage of its centralized financial system, according to Leland Miller, the chief executive officer of China Beige Book.

“When you have a party that controls all the counterparties in the economy — you have state banks loaning to state enterprises and you have state banks loaning to small- and medium-sized enterprises — you can tell them to lend,” Miller said in an interview on Money Undercover with Bloomberg TV’s Lisa Abramowicz. “You never have to freeze up liquidity in the same way that a commercial financial system would work.”

Yet even if China’s banks turn on the credit taps, lots of businesses may struggle to secure the funding they need to stay afloat.

A survey of small- and medium-sized Chinese companies conducted this month showed that a third of respondents only had enough cash to cover fixed expenses for a month, with another third running out within two months. About two-thirds of the country’s 80 million small businesses, including many mom-and-pop shops, lacked access to loans as of 2018, according to China’s National Institution for Finance & Development.

It remains to be seen whether the benefits of delaying NPLs will outweigh the costs. Much depends on how quickly Chinese authorities can contain the outbreak and get the country back to work. In the week to Feb. 21, the economy was likely running at 50%-60% capacity, according to Bloomberg Economics.



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A sharp recovery in coming months would likely ease concerns that banks are obscuring the true health of their balance sheets. “If they can tide the virus over, then the delinquent loans will disappear,” said Zhang Shuaishuai, a banking analyst at China International Capital Corp.

But that’s far from a given. S&P analysts see scope for caution, saying last week that it may take years for the industry to revert to normal standards for recognizing NPLs and that some banks may see their long-term health suffer as a result.



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Sustainable, Passive Income for Life – By Robert Kiyosaki.



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30-Year Treasury Yield Drops To All-Time Low Of 1.89%

The 30-year Treasury yield plunged to a record low on Friday as the coronavirus outbreak intensified fears about slowing global economic growth and caused investors to crowd into bonds. A weak reading on the U.S. services economy also helped send yields lower.


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The yield on the 30-year Treasury bond dropped about 8 basis points to hit an all-time low of 1.892% in morning trading on Friday. The yield on the benchmark 10-year Treasury note, which moves inversely to price, fell 7 basis points to around 1.453%, its lowest level since Sep. 4.

The benchmark 10-year yield has fallen nearly 50 basis points this year, while the longer-duration bond rate has also plunged by about the same magnitude.

Investors grew increasingly concerned about the potential economic fallout of China’s fast-spreading coronavirus. China’s National Health Commission reported Friday that 75,465 cases of the coronavirus had been confirmed, with 2,236 deaths nationwide.

“There isn’t anything the data can reveal on the positive side which would be sufficient to offset the coronavirus jitters that have once again weighed on risk assets and pressured rates lower,” Ian Lyngen, BMO’s head of U.S. rates, said in a note on Friday.

Earlier this week, the International Monetary Fund (IMF) warned the further spread of the deadly flu-like virus would amplify its global economic impact, with a long-lasting outbreak likely to result “in a sharper and more protracted slowdown in China.”

South Korea reported 52 new cases of the coronavirus on Friday, taking the country’s death toll to 156. Meanwhile, Japan reported the first fatalities from aboard the virus-hit Diamond Princess cruise ship that has been quarantined in Yokohama since early February.



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Concerns about economy?
Friday’s weak economic data also pushed the yields down. The IHS Markit services purchasing manager’s index dipped into contraction territory for February, hitting its lowest level since 2013.

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While coronavirus is the latest concern for the economy, investors have been worrying about growth and the lack of inflation for a while now. Despite some upticks over the last few years, bond yields have consistently returned back to their downtrend.

Many investors have blamed global central banks’ persistent monetary easing measures for the falling yields. Global policy makers have been slashing interest rates at the fastest rate since the financial crisis, with more than 25 cuts since the start of 2019, according to Deutsche Bank.

The bond market has been a source of concern for investors for a while now. Last summer, the benchmark 10-year yields dipped below the 2-year rate, inverting a key part of the yield curve. The inversion has been a reliable recession indicator as the phenomenon has preceded every recession over the past 50 years.


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U.K. Inflation Accelerates to Its Fastest Pace in Six Months

U.K. inflation picked up for the first time in six months, boosted by the cost of energy, motor fuel and air fares.

Consumer prices rose a stronger-than-forecast 1.8% in January from a year earlier, the fastest since July, the Office for National Statistics said Wednesday. Core inflation picked up to 1.6%. The pound erased a modest decline and was up 0.1% to $1.3014 as of 9:35 a.m. London time.

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But the acceleration is likely to prove temporary, with inflation expected to fall back in the second quarter and remain below the Bank of England’s 2% target for the next two years.

The benign inflation outlook would make it easier for the BOE to cut interest rates should the economy wobble amid critical trade talks with the European Union, though policy makers are expected to refrain for now. That’s because the labor market remains tight and confidence has improved since Prime Minister Boris Johnson’s election victory in December.

January’s inflation boost from gas and electricity was largely due to a sharp drop a year earlier when the industry regulator introduced its price cap. There was also upward pressure from auto fuel, which rose almost 2%, while air fares fell less than a year ago.

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Other figures showed pipeline pressures remained relatively subdued, with output prices rising just 1.1% year-on-year.House prices rose an annual 2.2% in December, their strongest increase in more than a year, and surveys suggest the post-election revival in the housing market gathered pace in January. Prices in London, which have borne the brunt of Brexit uncertainty, posted the fastest growth since October 2017.


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Wall Street Slips After Jobs Report


◊ Stock Market News Jobs Report ◊


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Wall Street pulled back from record levels on Friday, as investors assessed the U.S. employment report that showed jobs growth accelerated in January but included a downward revision to some previous numbers.

Nonfarm payrolls increased by 225,000 jobs last month, the Labor Department’s data showed, much higher than 160,000 jobs additions expected by economists polled by Reuters. However, the economy created 514,000 fewer jobs between April 2018 and March 2019 than originally estimated, suggesting job growth could significantly slowdown this year.

“Where the market is right now, it likes to see an economy that’s not too hot and not too cold because a much stronger economy suggests higher interest rates,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

“When you get the kind of upward move in markets, it’s not surprising to see people wanting to go into the weekend quite as long.”

Technology stocks, which outperformed broader markets this week, slipped 0.7%, weighing the most on the S&P 500. A strong four-day rally this week has put the benchmark index on pace for its best week in eight months as investors took comfort from China’s efforts to limit the economic damage from the coronavirus outbreak.

The new infections in mainland China on Thursday were down from Wednesday and Tuesday’s figures, but experts warned it was too early to identify a trend.

At 9:48 a.m. ET, the Dow Jones Industrial Average was down 0.58% at 29,208.83. The S&P 500 fell 0.44% to 3,331.09 and the Nasdaq Composite dropped 0.56% to 9,519.02.

More than 300 S&P 500 companies have reported fourth-quarter results so far, of which about 70% have topped earnings estimates, according to IBES data from Refinitiv.

Take-Two Interactive Software Inc (O:TTWO) slumped 10.6% after the videogame publisher missed estimates for quarterly adjusted revenue. AbbVie Inc gained 4.3% after the drugmaker forecast 2020 earnings above analysts’ expectations.

Uber Technologies Inc (N:UBER) shares gained about 5.7% after the ride-hailing company moved forward by a year its target to achieve a measure of profitability to the fourth quarter of 2020. Declining issues outnumbered advancers for a 2.51-to-1 ratio on the NYSE and a 2.64-to-1 ratio on the Nasdaq.

The S&P index recorded 18 new 52-week highs and one new low, while the Nasdaq recorded 31 new highs and 31 new lows.








Amazon Says It Will Create 15,000 Jobs In Bellevue

StockMarketNews.Today — Amazon said it expects to bring the 15,000 jobs to Bellevue over the next few years. More than 2,000 employees currently work in Bellevue, and the company has about 700 job openings in the city.

The company opened its first office building in Bellevue in 2017. The city is also where Amazon got its start. Amazon CEO Jeff Bezos founded the company in 1994 out of a 1,540-square-foot house in West Bellevue.

Amazon, which is headquartered in nearby Seattle, has continued to expand there despite rising tensions with local officials. Last month, the Seattle City Council council passed a bill that establishes new restrictions on corporate donations in local elections, which serves as a blow to Amazon, after it donated a record $1.5 million into Seattle’s city council races in 2019. Additionally, Seattle city council member Kshama Sawant has recently reignited efforts to enact a “head tax” on the city’s largest companies, such as Amazon, with the goal of using it to fight Seattle’s housing crisis.

The company has been growing its overall headcount and footprint. In its annual filing submitted last week, Amazon disclosed that it now has 798,000 workers across the globe, which is a 23% increase from the year-ago period. On the company’s fourth-quarter earnings call, Amazon CFO Brian Olsavsky said some of the hires were delivery workers, as it builds out one-day and same-day delivery for Prime subscribers.

Amazon is also growing in New York, where it recently signed a deal to lease more than 335,000 square feet of office space in Hudson Yards and expects to hire more than 1,500 employees. The move comes after Amazon abandoned its efforts to build a second headquarters in New York’s Long Island City neighborhood.

The company is also building out operations in northern Virginia, where it’s building its second headquarters, dubbed HQ2. So far, Amazon has hired 400 employees to work out of leased offices in Crystal City, Virginia. It also plans to bring 5,000 jobs to Nashville, Tennessee, where it expects to build two towers.







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2.  Make Money With Affiliate Programs

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Money Invested: $1,300 | Time Invested: 72 Hours | Money Earned (30 days): $7,742

How To Make Money In Affiliate Marketing: Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make. Learn More …



3. Make Extra Money Online Simply By Sharing Your Opinions

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Money Invested: $1 | Time Invested: 46 Hours | Money Earned (30 days): $429

How To Make Money by Sharing Your Opinion: A Review ( Opinion ) is an evaluation of a publication, service, or company such as a movie, video game, musical composition, book; a piece of hardware like a car, home appliance, or computer; or an event or performance, such as a live music concert, play, musical theater show, dance show, or art exhibition. Learn More …



4. Make Money With an Online Drop Shipping Business

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Money Invested: $75 | Time Invested: 144 Hours | Money Earned (30 days): $2,915

How To Make Money With an Online Drop Shipping Business: Drop shipping is a business model where you send your customers’ orders to a manufacturer or wholesaler, and they send the products directly to your customer. Learn More …





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German Industry Output Suffers Biggest Slump Since 2009

Stock Market NewsGerman industrial output registered its biggest drop in more than a decade in December, highlighting the weakness of the manufacturing sector that is dragging on overall growth in Europe‘s largest economy.

Industrial production tumbled by 3.5% on the month, undershooting expectations for a 0.2% fall, figures released by the Statistics Office showed. The drop was the biggest since January 2009, a Statistics Office official said.

The November output reading was revised to an increase of 1.2% after a previously reported 1.1% rise.

Separate trade figures showed seasonally adjusted exports edged up by 0.1% on the month while imports fell by 0.7% in December.







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StockMarketNews.Today — what is the best stock trading platform in Europe for 2020? ….  How To Choose The Best Online Broker in Europe { 2020 } …


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To evaluate brokers, you should look at the following factors:

>>> Commissions
>>> Account Minimum
>>> Account Fees
>>> Your Trading Style and Tech Needs
>>> Promotions

Look at commissions on the investments you’ll use most… Brokers generally offer a similar menu of investment options: individual stocks, options, mutual funds, exchange-traded funds, and bonds. Some will also offer access to futures trading and forex (currency) trading.


A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today


The investments offered by the broker will dictate two things: whether your investment needs will be satisfied, and how much you’ll pay in commissions. Pay careful attention to the commissions associated with your preferred investments:

Individual stocks: You’ll typically pay a per-trade commission of $4 to $7. Some brokerages also offer per-share pricing.

Options: Options trades often incur the stock trade commission plus a per-contract fee, which usually runs $0.15 to $1.50. Some brokers charge only a commission or only a contract fee.

Mutual funds: Some brokers charge a fee to purchase mutual funds. You can limit mutual fund transaction costs or avoid them completely by selecting a broker that offers no-transaction-fee mutual funds. (Mutual funds also carry internal fees called expense ratios. These are charged not by the broker, but by the fund itself.)

ETFs: ETFs trade like a stock and are purchased for a share price, so they are often subject to the broker’s stock trade commission. But many brokers also offer a list of commission-free ETFs. If you plan to invest in ETFs, you should look for one of these brokers.

Bonds: You can purchase bond mutual funds and ETFs at no charge by using no-transaction-fee mutual funds and commission-free ETFs. Brokers may charge a fee to purchase individual bonds, with a minimum and maximum charge.

Pay attention to account minimums… You can find highly ranked brokers with no account minimum. But some brokers do require a minimum initial investment, and it can skew toward $500 or more. Many mutual funds also require similar minimum investments, which means even if you’re able to open a brokerage account with a small amount of money, it could be a struggle to actually invest it.

Watch out for account fees… You may not be able to avoid account fees completely, but you can certainly minimize them. Most brokers will charge a fee for transferring out funds or closing your account. If you’re transferring to another broker, that new company may offer to reimburse your transfer fees, at least up to a limit.

Most other fees can be sidestepped by simply choosing a broker that doesn’t charge them, or by opting out of services that cost extra. Common fees to watch out for include annual fees, inactivity fees, trading platform subscriptions and extra charges for research or data.

Consider your trading style and tech needs… If you’re a beginner investor, you probably won’t need extras, like an advanced trading platform. But you may want an education and a little hand-holding. This could include videos and tutorials on the broker’s website, or in-person seminars at branches. Many brokers offer these services free to account holders.

Active traders, on the other hand, will want to look for a brokerage that supports that kind of frequency. That includes weighing a broker’s trading platforms, analysis tools, research and data offerings in addition to commissions — including discounts for high-volume traders — and fees.

Plenty of high-quality online brokers offer free demo access to trading platforms.

Take advantage of promotions… Online brokers, like many companies, frequently entice new customers with deals, offering a number of commission-free trades or a cash bonus on certain deposit amounts.

It isn’t wise to choose a broker solely on its promotional offer — a high commission over the long term could easily wipe out any initial bonus or savings — but if you’re stuck between two options, a promotion may sway you one way or the other.


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◊ Best Stock Trading Platform In Europe {2020} : Plus500 Review ◊


Plus500 is a streamlined broker that focuses on trading in a wide range of financial markets with relatively low spreads and no commissions but without offering many extra services. Plus500 has been in the forex and CFD business since 2008. They are registered in the U.K. and licensed by the Financial Conduct Authority (FCA).

The company offers access to a comprehensive product line including forex, stock indexes, equities, commodities, cryptocurrencies, ETFs and options. Plus500 is the first broker to introduce a bitcoin CFD in 2013. The company does not charge commissions on any of its trades.

All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Plus500 Ltd. (PLUS.L) is a publicly traded company on the AIM section of the London Stock Exchange since 2013 with a £1.73 billion ($2.25 billion) market capitalization and clients in more than 50 countries around the world. Plus500 offers access to more than 2,000 trading instruments.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Trust … The company is registered with the Financial Conduct Authority (FCA), CySEC, ASIC, FSCA, FMA, MAS, and the ISA, which provides good accountability and visibility. The company is required to take steps to ensure client funds are not comingled with corporate funds – ensuring that client money and assets are protected in the unlikely event that Plus500 becomes insolvent – by holding those funds in segregated accounts at regulated banks.

If Plus500 defaults, any shortfall of funds of up to £50,000 may be compensated for under the Financial Services Compensation Scheme (FSCS). If the custodian bank holding client funds goes into liquidation, any shortfall of funds of up to £85,000 may be compensated for under the FSCS.

Plus500 also offers Negative Balance Protection, ensuring that clients cannot lose more than they have put into their account. Guaranteed stop losses can be used on some instruments depending on market conditions but they are subject to a wider spread.

The company does not charge commissions on any of its trades. All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Large volume traders do not get a trading discount at Plus500 and the spread is the same whether you trade one lot or 1,000 lots.

There are no charges for normal withdrawals or terminating an account. However, inactivity fees kick in after an account has been idle for three months. Beginning traders can open an account with as little as £100.

Traders can qualify for a “professional” account, which offers a higher level of maximum leverage, but the costs are the same. Investors with a professional account may increase their maximum leverage ten-fold, from 1:30 to 1:300.

Plus500 also offers access to options trading on many markets. These are very similar to plain call and put options traded on exchanges, but they are not standardized which means that the option premium can be customized for your risk tolerance and strategy objectives.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


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Best Stock Market Sectors For 2020

♦ Stock Market Predictions For 2020 ♦ StockMarketNews.Today — After another big year for the stock market and the U.S. economy in 2019, investors are looking ahead to 2020 to determine which sectors will lead the next phase of the… Read More ›





  • Best Books For Making Money { 2020 }

    Best Books For Making Money ◊ #1 – The Book on Making Money After skipping college, Steve Oliverez worked a series of low-paying jobs before setting a remarkable goal for himself – to double his income every year. In… Read More ›

  • The Best Movies Related To Stock Market {2020}

    Top Movies Related To Stock Market {2020} #1 – The Big Short The Big Short is a 2015 American biographical comedy-drama film directed by Adam McKay. Written by McKay and Charles Randolph, it is based on the 2010 book The… Read More ›

  • Best Stock Market Books For Beginners {2020}

    Best Stock Market Books For Beginners {2020} Amazon #1 – The Intelligent Investor. (Revised Edition) This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions… The greatest investment advisor of the twentieth century, Benjamin Graham, taught… Read More ›

  • How To Make Money Online by Investing Little Money

    How To Make Money Online by Investing Little Money – StockMarketNews.Today ◊ Internet offers many opportunities to make a lot of money. Whether you’re looking to make some fast cash, or you’re after long-term, more sustainable income-producing results, there… Read More ›

  • How To Make Money During Stock Market Correction?

    How to Deal With a Stock Market Correction ◊ Stock market corrections are scary but normal. In fact, they’re a sign of a healthy market in most… Read More ›

  • How To Make Money In Online Stock Trading?

    Investing in the stock market can be a great way to have your money make money…  Stock trading is not a risk-free activity, and some losses are inevitable. However, with substantial research and investments in the right… Read More ›





Trading News: 3 Things Under the Radar This Week


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Trading News — There’s an ominous technical indicator hovering over the U.S. dollar, which could mean a move away from the greenback. But don’t go looking for value in bitcoin, according to one fund manager speaking at the World Economic Forum in Davos, Switzerland this week. Meanwhile, as lower interest rates have been a boon to equities, the run of ever-cheaper money may finally be coming to an end, according to one investment bank.



Here are three things that flew under the radar this week.

1. Dollar Hits the Death Cross

While markets were captivated this week on fundamentals, with some calling the Wuhan coronavirus a possible Black Swan, technicals weren’t overlooked.

The U.S. dollar could be in the crosshairs of the infamous death cross. The death cross happens when a 50-day moving average goes below the 200-day moving average, which happened on the last day of 2019, according to Bank of America Merrill Lynch.

When that’s been triggered in the past, the dollar has gone down seven out of eight times since 1980, Merrill said.

Adding to concerns is the fundamental backdrop of a global economy that may not need the safety of the greenback as much as it used to.

“The global economy looks like it’s healing,” TD Securities Mark McCormick said. “The reduction of uncertainty will likely allow investors to take risks … they didn’t want to take before.”

Momtchil Pojarliev, head of currencies at BNP Asset Management, is betting the dollar will fall against the euro, Japanese yen and Australian dollar as growth in those countries accelerates and their central banks raise interest rates while the Federal Reserve keeps them steady. That should narrow the gap in yields that has buoyed the U.S. currency.

2. Ray Dalio Debunks Bitcoin’s Diversification Powers

Bitcoin has been hailed in some corners as the holy grail of uncorrelated diversification assets, but famed fund manager Raymond Dalio warned earlier this week that bitcoin has no place in the real of world of investing.

With interest rates looking lower for longer and rendering cash almost useless, Dalio pushed back at the World Economic Forum in Davos, Switzerland against claims that bitcoin has a place in a diversified portfolio, pointing to the popular cryptocurrency’s lack of intrinsic value and wild swings.

“There’re two purposes of money: a medium of exchange and a store hold of wealth,” he said. “And Bitcoin is not effective in either of those cases now … It’s too volatile. Because of the volatility, you can’t go next to it.”

While there would be many who share Dalio’s view that bitcoin currently lacks the credentials to be taken seriously as a form payment, some of the most important central bankers have conceded that bitcoin has a role to play in a diversified portfolio.

“Really almost no one uses bitcoin for payments, they use it as an alternative to gold. It’s a store of value, a speculative store of value, like gold,” Federal Reserve Chairman Jerome Powell said in the summer of last year.

“Bitcoin’s consistent statistically uncorrelated nature provides an excellent source of diversification within a portfolio,” Blockhead Capital said, citing its study that measured the correlation of bitcoin’s price performance to several other assets or indices.

3. Easing Is Ending?

The main case for central banks cutting rates is receding, making the case for more accommodative monetary policy from current levels harder to justify, according to J.P. Morgan. The argument for an economic mid-year rebound has strengthened, J.P. Morgan said in a note to clients this week.

“The easing cycle is … close to an end and central bankers can take comfort that their limited and unconventional toolbox proved effective in cushioning a substantial shock,” analyst Bruce Kasman and team said.

But the biggest challenge that major central banks will face is dealing with inflation.

“With the Fed having lost confidence in translating current growth and labor market outcomes to future inflation, core inflation will likely need to move above 2% before it considers reversing last year’s ease,” J.P. Morgan said. “In refraining from reversing last year’s mid-cycle adjustment until inflation rises, the Fed will break from its past pattern of removing insurance once it became convinced that the growth scare had passed.”

Unlike the Fed, which looks happy to overshoot on inflation, the Bank of Japan will likely be content to undershoot.

Meanwhile, the “(p)ersistently low inflation remains a prime concern” for the ECB, but “creeping financial stability concerns set the bar high for additional action.”





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Stock Market News: U.S. Stocks Fall After Second Coronavirus Case Emerges

Stock Market News — The S&P 500 erased early gains and fell 0.6 per cent around lunchtime in New York. The Nasdaq Composite, which had registered an intraday record high in morning trade, was down 0.5 per cent even as upbeat earnings from Intel — which surged to its highest level since September 2000 — lifted chipmakers. The Dow also lost 0.5 per cent.

The declines followed a rise in European stocks as investors appeared to brush off concerns over the market impact of coronavirus, while there were fresh signs of life in the German economy.

The Stoxx Europe 600 rose 0.9 per cent, down from session highs but snapping four days of losses as major bourses from London to Frankfurt climbed higher. The euro dipped, falling 0.2 per cent against the dollar, after survey data showed business activity in the eurozone remained unexpectedly weak in January.

Still, activity in Germany, the eurozone’s largest economy, beat expectations. That pushed the Dax 1.4 per cent higher for its best day in more than three months.

Investors had few cues from the Asian session, where Chinese markets were closed for the lunar new year holiday. Hong Kong’s Hang Seng rose 0.2 per cent in its half-day of trading, but has still lost nearly 4 per cent this week as concerns over the outbreak of virus have weighed on investor sentiment.

The World Health Organization on Thursday held back from declaring a global emergency over the outbreak, but said its panel was split “almost 50:50”.

Paul Donovan, a strategist at UBS, said structural changes to the nature of the global economy make it hard to draw a clear analysis from events so far.

“There may be a further shift to online retail sales, limiting the damage to the consumer,” he said. But, he added “the rise of fake news on social media may spread fear faster and wider.”

The outbreak has prompted S&P Global Ratings, the credit rating agency, to warn that if the situation worsened considerably the disease could knock 1.2 percentage points off China’s economic growth this year.

Sterling fell 0.4 per cent after upbeat UK PMI data failed to convince investors that the Bank of England will hold off cutting interest rates next week. The meeting is now on a knife-edge, with traders pricing in a 48 per cent chance of a rate cut to 0.5 per cent, prices in swaps markets show.

In the US, a majority of investors are betting the Federal Reserve will maintain its pause on interest rates after three cuts last year.




Stock Market: World Economy Going Through Longest Period of Falling Trade Since 2009

Stock Market — The downturn in global trade dragged on at the end of last year, marking the longest period of contraction since the end of the financial crisis.The volume of goods trade dropped 0.6 per cent in November compared to the previous month, and was down 1.1 per cent compared to the same month in 2018, according to a closely watched world trade monitor from the Netherlands Bureau for Economic Policy Analysis (CPB).

November marked the sixth consecutive month of year-on-year contraction, the longest period of falling trade since 2009 and a sharp reversal from the 3.4 per cent expansion in November 2018.

The rate of contraction slowed in November, however, down from a 2 per cent pace in October, which was the steepest fall in a decade.

The annual contraction in trade- which is the value of exports and imports adjusted for price changes — was geographically broad-based with the eurozone, emerging Asia, the US and Latin America all reporting falling trade volumes.

However, trade was up over the previous month in emerging Asia, while the downturn became more severe in the eurozone where trade volumes dropped 1.7 per cent compared to October.

The data confirm surveys released earlier this month that showed a deterioration in global trade running until the end of the year. The exports order component of the JPMorgan Global purchasing manager index remained in negative territory in November and December, although up from September’s reading.

“International trade remains the main drag on efforts to lift growth further, so any moves that reduce tensions and barriers on this front will be especially beneficial.” Olya Borichevska, from Global Economic Research at JPMorgan.

Economists expect trade data to improve in early 2020, reflecting the signing of the US-China phase one trade deal earlier this month, as well as improving conditions in emerging economies such as Turkey. But a strong recovery is not on the cards yet.

“We think a recovery in world trade will be very modest, despite the pause in US-China hostilities” said Adam Slater, chief economist at Oxford Economics.

“World trade growth at this pace is less than half its long-term average.”







Plus500 CFD Review { 2020 }


Plus500 Rewiew 2020 — Plus500 is an international financial firm providing online trading services in contracts for difference (CFDs), across more than 2,000 securities and multiple asset classes. The company is headquartered in Israel and has subsidiaries in UK, Cyprus, Australia, Singapore and Bulgaria.

Plus500 is authorised and regulated by the Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the Australian Securities and Investments Commission (ASIC), the Monetary Authority of Singapore (MAS), and the Israel Securities Authority (ISA). It is listed on the London Stock Exchange with the ticker “PLUS” and is a constituent of the FTSE 250 Index.


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• Business & Financial News – Stock Market News Today •


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Plus500 is a streamlined broker that focuses on trading in a wide range of financial markets with relatively low spreads and no commissions but without offering many extra services. Plus500 has been in the forex and CFD business since 2008. They are registered in the U.K. and licensed by the Financial Conduct Authority (FCA).

The company offers access to a comprehensive product line including forex, stock indexes, equities, commoditiescryptocurrencies, ETFs and options. Plus500 is the first broker to introduce a bitcoin CFD in 2013. The company does not charge commissions on any of its trades.

All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platformPlus500 Ltd. (PLUS.L) is a publicly traded company on the AIM section of the London Stock Exchange since 2013 with a £1.73 billion ($2.25 billion) market capitalization and clients in more than 50 countries around the world. Plus500 offers access to more than 2,000 trading instruments.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Trust … the company is registered with the Financial Conduct Authority (FCA), CySEC, ASIC, FSCA, FMA, MAS, and the ISA, which provides good accountability and visibility. The company is required to take steps to ensure client funds are not comingled with corporate funds – ensuring that client money and assets are protected in the unlikely event that Plus500 becomes insolvent – by holding those funds in segregated accounts at regulated banks.

If Plus500 defaults, any shortfall of funds of up to £50,000 may be compensated for under the Financial Services Compensation Scheme (FSCS). If the custodian bank holding client funds goes into liquidation, any shortfall of funds of up to £85,000 may be compensated for under the FSCS.


best-broker-stock-market


Plus500 also offers Negative Balance Protection, ensuring that clients cannot lose more than they have put into their account. Guaranteed stop losses can be used on some instruments depending on market conditions but they are subject to a wider spread.

The company does not charge commissions on any of its trades. All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Large volume traders do not get a trading discount at Plus500 and the spread is the same whether you trade one lot or 1,000 lots.


+


There are no charges for normal withdrawals or terminating an account. However, inactivity fees kick in after an account has been idle for three months. Beginning traders can open an account with as little as £100.

Traders can qualify for a “professional” account, which offers a higher level of maximum leverage, but the costs are the same. Investors with a professional account may increase their maximum leverage ten-fold, from 1:30 to 1:300.Spreads at Plus500 were some of the lowest in the market.

Plus500 also offers access to options trading on many markets. These are very similar to plain call and put options traded on exchanges, but they are not standardized which means that the option premium can be customized for your risk tolerance and strategy objectives.


START TRADING NOW OR TRY A FREE DEMO ACCOUNT


Plus500 Deposits and Withdrawals

Plus500 Deposits and Withdrawals… This Answers the Following Questions: What is the minimum deposit for Plus500? What payment methods are accepted by Plus500? Does Plus500 accept PayPal? How to withdraw money from Plus500? How much can you withdraw from Plus500?… Read More ›

Best Stock Trading Platform In Europe {2020}

⇑⇓ Best Trading Platform Europe ⇓⇑ StockMarketNews.Today — what is the best stock trading platform in Europe for 2020? ….  How To Choose The Best Online Broker in Europe { 2020 } … Best Online Trading Platform. Start Trading Now or Try… Read More

> START TRADING NOW OR TRY A FREE DEMO ACCOUNT <

Stock Market: World Economy Going Through Longest Period of Falling Trade Since 2009

Stock Market — The downturn in global trade dragged on at the end of last year, marking the longest period of contraction since the end of the financial crisis.

The volume of goods trade dropped 0.6 per cent in November compared to the previous month, and was down 1.1 per cent compared to the same month in 2018, according to a closely watched world trade monitor from the Netherlands Bureau for Economic Policy Analysis (CPB).

November marked the sixth consecutive month of year-on-year contraction, the longest period of falling trade since 2009 and a sharp reversal from the 3.4 per cent expansion in November 2018.

The rate of contraction slowed in November, however, down from a 2 per cent pace in October, which was the steepest fall in a decade.

The annual contraction in trade- which is the value of exports and imports adjusted for price changes — was geographically broad-based with the eurozone, emerging Asia, the US and Latin America all reporting falling trade volumes.

However, trade was up over the previous month in emerging Asia, while the downturn became more severe in the eurozone where trade volumes dropped 1.7 per cent compared to October.

The data confirm surveys released earlier this month that showed a deterioration in global trade running until the end of the year. The exports order component of the JPMorgan Global purchasing manager index remained in negative territory in November and December, although up from September’s reading.

“International trade remains the main drag on efforts to lift growth further, so any moves that reduce tensions and barriers on this front will be especially beneficial.” Olya Borichevska, from Global Economic Research at JPMorgan.

Economists expect trade data to improve in early 2020, reflecting the signing of the US-China phase one trade deal earlier this month, as well as improving conditions in emerging economies such as Turkey. But a strong recovery is not on the cards yet.

“We think a recovery in world trade will be very modest, despite the pause in US-China hostilities” said Adam Slater, chief economist at Oxford Economics.

“World trade growth at this pace is less than half its long-term average.”







How To Make Money Online{ 2020 }


Internet offers many opportunities to make a lot of money. Whether you’re looking to make some fast cash, or you’re after long-term, more sustainable income-producing results, there are certainly ways you can make money online today. The truth is that making money online isn’t as difficsult as most make it out to seem.





However, if you’re looking for realistic ways to make money now, then it really truly does boil down to 11 paths you can take towards profit. Some will provide you with immediate results, helping you to address your basic monthly necessities, while others have the potential to transform your life by revolutionizing your finances in the long term…



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  • 1. Make Money as a Life Coach

LIFE

Money Invested: $45 | Time Invested: 110 Hours | Money Earned (30 days): $879

How To Make Money as Life Coach: Life coaching is the process of helping people identify and achieve personal goals through developing skills and attitudes that lead to self-empowerment. Life coaching general deals with issues such as work-life balance and career changes, and often occurs outside the workplace setting. Learn More …



Affiliate

Money Invested: $1,300 | Time Invested: 72 Hours | Money Earned (30 days): $7,742

How To Make Money In Affiliate Marketing: Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make. Learn More …



  • 3. Make Extra Money Online Simply By Sharing Your Opinions

opinion

Money Invested: $1 | Time Invested: 46 Hours | Money Earned (30 days): $329

How To Make Money by Sharing Your Opinion: A Review ( Opinion ) is an evaluation of a publication, service, or company such as a movie, video game, musical composition, book; a piece of hardware like a car, home appliance, or computer; or an event or performance, such as a live music concert, play, musical theater show, dance show, or art exhibition. Learn More …



  • 4. Make Money With an Online Drop Shipping Business

drop

Money Invested: $75 | Time Invested: 144 Hours | Money Earned (30 days): $1,915

How To Make Money With an Online Drop Shipping Business: Drop shipping is a business model where you send your customers’ orders to a manufacturer or wholesaler, and they send the products directly to your customer. Learn More …



  • 5. Write an Ebook and sell it on Amazon

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Money Invested: $55 | Time Invested: 108 Hours | Money Earned (30 days): $973

How to Make Money Selling Ebooks Online: Do you want to learn how to make an ebook from beginning to end?… Writing ebooks is one of the easiest way to earn money. You work on your own time, and when you finish the book – you will make money from it over and over again…for a very long time!. Learn More …



  • 6. Make Money on Twitter

Twitt22

Money Invested: $25 | Time Invested: 52 Hours | Money Earned (30 days): $494

How to Make Money on Twitter: Twitter is an American online microblogging and social networking service on which users post and interact with messages known as “tweets”. Selling advertising, sponsored links, and affiliate marketing. Here are a few programs that can help you make money on Twitter. Learn More …



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Money Invested: $55 | Time Invested: 110 Hours | Money Earned (30 days): $1,514

How To Make Money Selling Domain Names: Domain name is like a land on the Web. You can use domains in a variety of ways to make money. Domains increase value over time, especially if they have some commercial value. You can buy a domain name at low price and then sell it high priceLearn More …



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Money Invested: $300 | Time Invested: 72 Hours | Money Earned (30 days): $3,177

How To Make Money in Stock Trading: Investing in the stock market can be a great way to have your money make money… Stock trading is not a risk-free activity, and some losses are inevitable. However, with substantial research and investments in the right companies, stock trading can potentially be very profitable. Learn More …


  • 9. Make Money With Your Photos

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Money Invested: $1 | Time Invested: 74 Hours | Money Earned (30 days): $374

How To Earn Money Selling Photos Online: Who wouldn’t want to earn money by selling their photos online? … Did you know thousands of photographers are making hundreds even thousands of dollars every day just by selling their photos online?… In fact every month millions of photos are bought online which is used for websites, magazines, blogs, print ads, marketing materials and many more. Learn More …



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Money Invested: $1 | Time Invested: 60 Hours | Money Earned (30 days): $245

How To Make Money on Youtube: You’ve probably heard stories about regular people earning money on YouTube and thought, “Hey, I can do this too!”. Earning with YouTube is easy, but making big money with the platform can be a challenge. Learn More …



  • 11. Make Money Testing Apps

55Apps

Money Invested: $20 | Time Invested: 44 Hours | Money Earned (30 days): $197

How To Make Money Testing Apps: Testing Apps is a great way to earn extra money but it won’t make you rich. The number of opportunities you receive will depend on a number of factors, such as your demographics and your quality rating. Learn More …







◊ Plus500 Review 2020 ◊


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Best Online Trading Platform For Beginners And Professional Traders. Shares, Indices, Forex and Cryptocurrencies. Start Trading Now or Try a FREE Demo Account.


Plus500 is a streamlined broker that focuses on trading in a wide range of financial markets with relatively low spreads and no commissions but without offering many extra services. Plus500 has been in the forex and CFD business since 2008. They are registered in the U.K. and licensed by the Financial Conduct Authority (FCA).

The company offers access to a comprehensive product line including forex, stock indexes, equities, commoditiescryptocurrencies, ETFs and options. Plus500 is the first broker to introduce a bitcoin CFD in 2013. The company does not charge commissions on any of its trades.

All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platformPlus500 Ltd. (PLUS.L) is a publicly traded company on the AIM section of the London Stock Exchange since 2013 with a £1.73 billion ($2.25 billion) market capitalization and clients in more than 50 countries around the world. Plus500 offers access to more than 2,000 trading instruments.


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Trust … the company is registered with the Financial Conduct Authority (FCA), CySEC, ASIC, FSCA, FMA, MAS, and the ISA, which provides good accountability and visibility. The company is required to take steps to ensure client funds are not comingled with corporate funds – ensuring that client money and assets are protected in the unlikely event that Plus500 becomes insolvent – by holding those funds in segregated accounts at regulated banks.

If Plus500 defaults, any shortfall of funds of up to £50,000 may be compensated for under the Financial Services Compensation Scheme (FSCS). If the custodian bank holding client funds goes into liquidation, any shortfall of funds of up to £85,000 may be compensated for under the FSCS.


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Plus500 also offers Negative Balance Protection, ensuring that clients cannot lose more than they have put into their account. Guaranteed stop losses can be used on some instruments depending on market conditions but they are subject to a wider spread.

The company does not charge commissions on any of its trades. All costs are contained within the spread for each of more than 2,000 trading instruments offered on Plus500’s WebTrader platform. Large volume traders do not get a trading discount at Plus500 and the spread is the same whether you trade one lot or 1,000 lots.

There are no charges for normal withdrawals or terminating an account. However, inactivity fees kick in after an account has been idle for three months. Beginning traders can open an account with as little as £100.

Traders can qualify for a “professional” account, which offers a higher level of maximum leverage, but the costs are the same. Investors with a professional account may increase their maximum leverage ten-fold, from 1:30 to 1:300.Spreads at Plus500 were some of the lowest in the market.

Plus500 also offers access to options trading on many markets. These are very similar to plain call and put options traded on exchanges, but they are not standardized which means that the option premium can be customized for your risk tolerance and strategy objectives.


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Moody’s Cuts Hong Kong Rating


♦ Today’s Stock Market News – Tuesday, 21 January, 2020 ♦


◊ Stock Market News Today – Tuesday, 21 January, 2020 ◊

StockMarketNews.TodayMoody’s has cut Hong Kong’s credit rating, saying the government’s “slow” and ineffective response to months of protests has prompted it to reassess the Chinese territory’s institutional strengths and governance.

Hong Kong’s rating was reduced by one notch to Aa3 from Aa2, making Moody’s the second major agency to cut its rating since protests began last summer.



“The underlying drivers of the protests are certainly deep-seated and intractable,” Moody’s said. “Nevertheless, the response by Hong Kong’s government to both political demands by parts of the population and broader concerns about living standards in [Hong Kong], housing costs and equality of economic opportunities has been notably slow, tentative and inconclusive.”

The territory’s economy has come under strain — and its place as one of Asia’s pre-eminent financial hubs called into question — as chief executive Carrie Lam’s government has struggled to contain months of violent clashes between policy and protesters.

HSBC, the territory’s biggest lender, was forced this month to close branches after it was accused of helping police close an account used to raise funds for demonstrators.

Moody’s warned in its report issued late on Monday Hong Kong time that the lack of an effective response points to more “significant constraints on the autonomy of Hong Kong’s institutions than previously thought, notwithstanding the ‘one country, two systems” policy which has underpinned autonomy for the last two decades”.

When Fitch cut Hong Kong’s rating in September, it expressed concerns over the extent of Beijing’s control over the territory.

“Months of persistent conflict and violence are testing the perimeters and pliability of the ‘one country, two systems’ framework that governs Hong Kong’s relationship with the mainland, underscored by mainland officials taking a more public stance on Hong Kong affairs than at any time since the 1997 handover,” the report said.

The ‘one country, two systems’ relationship between Hong Kong and China is a crucial element that has for more than two decades drawn businesses to Hong Kong. The territory provides foreign groups with access to China and the region more generally, but with a legal system and other protections that analysts say are more closely aligned to international norms than on mainland China.

Moody’s said that signs that the relationship is fraying raise “the risk that actions by foreign governments negatively impact its competitiveness and economic strength and hinder the effectiveness of policymaking still further”. It pointed specifically to a US law passed last year that could lead to the revocation of trade and other commercial privileges Washington extends to Hong Kong.



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How To Start Investing In 2020


⇑⇓ STOCK MARKET NEWS TODAY — BUSINESS & FINANCIAL NEWS ⇓⇑

StockMarketNews.Today — Over half of Americans (55%) say they are not participating in the stock market, according to a 2019 poll of over 8,000 U.S. adults conducted by MetLife. Gen Z (18 to 24) and millennials (defined here those 25 to 34) are opting out in far greater numbers than older Americans.

For many, it comes down to fear. “There are so many choices today — it’s definitely overwhelming for people,” says David Day, a certified financial planner with Colorado-based Gold Medal Waters. “When you have too many choices and there are too many options, you end up just getting paralyzed and doing nothing.”

But experts say even if the stock market conditions aren’t perfect, it’s worth investing, be it in a retirement account or a taxable brokerage account. Don’t waste time trying to get into the market at the perfect time, says Ron Guay, a financial planner with California-based Rivermark Wealth Management.

“The best time to invest in the market is when you have the money to do so. Holding money on the sidelines in anticipation of a market dip is a loser’s game,” he says.

Here’s how financial planners recommend first-time investors get started today.

Understand what you’re willing to risk
It sounds easy to determine if you’re a conservative or aggressive investor, but it can be a bit more nuanced — especially if you haven’t invested much in the past, or have only contributed to a target date fund within a retirement account, such as a 401(k). In those instances, you may not have had to consider risk because the fund was based on your potential retirement date and allocated accordingly.

It’s a little different when you’re the one picking the funds or finding a portfolio in an individual retirement account or a taxable brokerage account that works for you. The last decade has brought a charging bull market that doesn’t seem to be losing steam. That environment of an economically sound market that consistently delivers good returns may have created unrealistic expectations among young people that markets will never go down and that investing isn’t that risky.

Take a moment to consider what you’d be willing to risk if the market experienced a sustained downturn and you lost part of your investment. If you’re not sure, there are quizzes you can take, such as the Investment Risk Tolerance Assessment created by personal financial planning professors, Dr. Ruth Lytton at Virginia Tech and Dr. John Grable at the University of Georgia.

Online investment tools can make it easier
If you’re looking for a fairly easy way to get started investing, Guay frequently suggests first-time investors open a managed account with an online investment advice service (also called a robo-advisor) like Betterment.

They do a nice job of first focusing the investor on their goal, such as building an emergency fund — a key component to financial health — or investing savings for a down payment for a first home or other large purchase, Guay says. “Many times investors want to jump right in and start buying stocks without even determining what the eventual use of the funds will be,” he says. Having a clear goal for the money will dictate how and where you invest.

Several robo-advisors, including Betterment and investing apps like Stockpile and Stash, offer fractional share investing, which allows investors to buy a portion of a stock or ETF instead of a whole unit. This makes it easier for investors with only a limited amount of money to put everything into the market, says Ryan Firth, a CFP with Texas-based Mercer Street.

Many of these platforms also make it easy to make regular contributions to your retirement accounts part of your routine, such as putting $100 aside every two weeks, a strategy that experts call dollar-cost averaging.

This is good for investors with a long time horizon and a goal like saving for retirement because it takes emotion out of the equation. Instead, you’re continually investing, week after week, no matter what the market is doing. Plus, it keeps you from selling out during market lows and buying in at market highs.

If going the DIY route: Find diversified, low-cost funds
Of course, you can invest on your own by simply signing up for an account, like a Roth IRA or a taxable brokerage account, with a brokerage such as Fidelity or Charles Schwab.

If you’re a first-time investor investing on your own, keep it as simple as possible, recommends John Crumrine, a CFP with North Carolina-based Brunswick Financial. “The easiest way to do that while still having a diversified portfolio is to invest in the broadest index funds you can find,” he says

It’s reasonable for an investor in their 20s or 30s to invest a majority, or even all of the money, in their Roth IRA in stocks because they have a longer time to recover from any potential losses. But instead of picking individual stocks, experts say to look for a total stock market exchange-traded fund (ETF) or index fund, which is a type of mutual fund. Crumrine says something like the Fidelity Total Market Index Fund (FSKAX) or the Schwab Total Stock Market Index Fund (SWTSX), both of which cover virtually the entire U.S. stock market, would be a good start. The Vanguard Total Stock Market ETF (VTI) is a similarly broad stock ETF option.

You could also look for a blend index fund, whether for a Roth IRA or a brokerage account. These types of funds contain a variety of stocks and sometimes bonds, to create a diversified investment option, says Sara Behr, a CFP and founder of California-based Simplify Financial Planning. The Vanguard Balanced Index Fund (VBINX), which has roughly 60% in stocks and 40% in bonds by tracking two indexes, is a good example of this type of blend fund.

When investing, you want to create a balanced, diversified portfolio, which means that you have your money invested in different types of assets, such as stocks and bonds. You want to set up your investments in a way that when one sector of the market is dipping, you are also invested somewhere that is performing well. To do that, you may need to invest in more than one fund.

That said, don’t get so hung up on finding that perfect fund that you don’t invest at all. “Getting invested is way more important than the difference between Fund A and Fund B,” Day says.

Keep an eye on fees
Whether you’re using a robo-advisor or investing via a brokerage, you need to understand what you’re paying for your investments. Over a third of U.S. investors think that they don’t pay any fees, a 2018 survey found. But it turns out, a vast majority do — and those fees can add up. In some cases, they’ve been found to eat away at your investment returns.

Robo-advisors offer a lot of helpful tools and easy-to-follow formats. But you are paying a bit more, usually between 0.25% and 1% of your assets, for the service’s help setting up and managing your money. That’s on top of the cost of the fund, typically referred to as the expense ratio.

By doing it yourself, you’ll avoid those management fees, but you will still have to pay the expense ratio. The average ratio across all mutual funds, including index funds, was about 0.48% in 2018, according to Morningstar. ETFs, on the other hand, carry lower average expense ratios of 0.44%. That means if you invest $1,000 into an ETF, you’ll likely pay about $4.40 in annual fees.

Most funds, and even some investment services, have minimum initial investment amounts ranging from $100 to $3,000, although you can find some with no minimum, Crumrine says. If you don’t have enough to hit the minimum and start investing right away, he says you can set up the automatic money transfers to the account until you have built up enough to meet the requirement.

Temper your expectations
“Patience is an important lesson to learn for young investors. They want to see quick results,” says Randy Gardner, an adjunct professor of financial planning at the American College of Financial Services and financial coach with the Garrett Planning Network of financial planners.

Everyone expects to have the next Microsoft or Apple or Google, Gardner says, and while there are stocks with big gains and years that the market does very well (including last year, with the S&P 500 rising 28.9%), the stock market returns a historical average of about 10%.

“We’ve been trained to expect big returns, and if we don’t get them, then we’re disappointed,” Gardner says. “A lot of people lose confidence in the markets because they don’t give the returns as quickly as people hoped.”

And don’t forget to reinvest the returns you do get, Crumrine says. “Reinvestment is one of the keys to growing your balances over time,” he says. When first purchasing a mutual fund, as part of the order entry, the investor will have an option to automatically reinvest dividends and capital gains. This option should always be selected, he adds.


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China’s Currency Extends 2020 Rally


♦ Chinese Currency News ♦


StockMarketNews.Today — China’s currency has gained further momentum — wiping out the heavy losses it took over the summer — amid cooling tensions between Beijing and Washington. The renminbi rallied as much as 0.5 per cent against the US dollar, crossing the Rmb6.9 mark for the first time since August and bringing its rise for 2020 to nearly 1 per cent. Its climb in the early days of this year highlights the upbeat sentiment among global investors and cautious optimism of an improvement in relations between the world’s two biggest economies.


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The currency in August faced its worst sell-off in a quarter century and eventually slumped to nearly 7.2 to the US dollar in a fall that ricocheted across world markets. Traders and investors closely watch the currency as a broader market bellwether to which movements in many other assets are often closely tied, according to analysts.

Equities were indeed broadly higher in Asia on Monday, with China’s benchmark CSI 300 index and Hong Kong’s Hang Seng both closing about 1 per cent higher, while in London the FTSE 100 notched a again of 0.4 per cent in morning trading.

The gains on Monday came days before the planned signing of a trade pact in Washington by US and Chinese officials, scheduled for Wednesday, that will help lock in the terms of a limited agreement reached last month. Although details on further concessions by both sides are scarce, the signing will at least prevent further levies on Chinese imports from being introduced by the US, which will also halve tariffs on $120bn of imports imposed in September.

The renewed strength for the renminbi on Monday was despite broad stability for the greenback, with the dollar index that tracks the US currency against a basket of peers essentially flat on the day. The offshore renminbi, which is not bound by the Chinese central bank’s trading band, was also back below the Rmb6.9 per dollar mark, having firmed 0.2 per cent on Monday to 6.8947.

“Obviously the market is focused on the phase one agreement,” said Mansoor Mohi-uddin, senior macro strategist at NatWest Markets, pointing to renewed strength in both the onshore and offshore rates since markets opened in 2020.

China’s central bank has been setting its daily midpoint level around which the currency is allowed to fluctuate gradually firmer since the trade truce was announced around a month ago. Still, the currency is about 7.5 per cent weaker compared to its level shortly before the first tariffs were imposed by the US in June 2018.

Plans by the administration of President Donald Trump for a new forum for economic dialogue with China helped to reinforce that message with the prospect of a return to the strategy of engagement preferred by previous US presidents.

But Mr Mohi-uddin added that short-term seasonal factors were partly behind the Chinese currency’s early hot streak.

Chinese corporations with dollar holdings, he said, often sold these to buy more renminbi at the start of the year in order to pay bonuses to workers ahead of the Chinese new year, which occurs later this month.

“That’s occurring now and helping push the dollar down against [the renminbi] irrespective of trade talks,” he said.










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◊ Best Books For Making Money ◊


#1 – The Book on Making Money


After skipping college, Steve Oliverez worked a series of low-paying jobs before setting a remarkable goal for himself – to double his income every year. In The Book On Making Money, he reveals what he learned while successfully hitting this goal for seven years in a row, growing his annual income to more than $1 million. Walking readers through the steps he took to reach his goal, he shows how they can apply the same techniques to greatly increase their own income, whether they work for someone else or run their own business. Oliverez spells out his disagreements with the traditional wisdom that tells young adults to go to school, get good grades and find a safe, steady job – advice that has left many Americans with tens or hundreds of thousands of dollars in student loans, credit card debt or mortgages on homes they can’t afford. He also assaults the idea of saving one’s way to wealth as absurd and counterproductive, using his own experience of trying to save money while poor as an example. Instead of promoting an austere lifestyle of clipping coupons and spending as little as possible, he shows how those habits can actually prevent people from becoming wealthy.


#2 – ABCs of Making Money


International Bestseller. The largely word-of-mouth success is due to its unique approach: instead of just giving the reader the usual do’s and don’ts of managing money – which it does in very clear, actionable terms – this invaluable book walks readers through the psychology of money. Do you ever wonder what makes some people successful while others are destined to struggle their whole lives? … The difference is in their Attitudes toward money. If you don’t examine this issue first, then all the self-help books and courses in the world will be a waste. The ABCs of Making Money is a simple, step-by-step guide for everyone. This common sense approach contains lots of simple checklists, self-directed exercises and tips. It demystifies the secrets of making money while providing proven strategies for the average person to painlessly create wealth. It has already helped hundreds of thousands of people and been acclaimed by universities and charities in the U.S. Amongst other things you will learn: how to achieve financial freedom, gain control of your life, eliminate financial stress and stop living paycheck to paycheck.


#3 – A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today


Learn to make money in the stock market, even if you’ve never traded before. The stock market is the greatest opportunity machine ever created. This book will teach you everything that you need to know to start making money in the stock market today. Don’t gamble with your hard-earned money. If you are going to make a lot of money, you need to know how the stock market really works. You need to avoid the pitfalls and costly mistakes that beginners make. And you need time-tested trading and investing strategies that actually work. This book gives you everything that you will need. It’s a simple road map that anyone can follow.


#4 – I Will Teach You to Be Rich


Personal finance expert Ramit Sethi has been called a “wealth wizard” by Forbes and the “new guru on the block” by Fortune. Now he’s updated and expanded his modern money classic for a new age, delivering a simple, powerful, no-BS 6-week program that just works. This 10th anniversary edition features over 80 new pages, including:
• New tools
• New insights on money and psychology
• Amazing stories of how previous readers used the book to create their rich lives
Master your money—and then get on with your life.


#5 – Dropshipping E-Commerce Business Model 2020

Have you always wanted to have a passive source of income to boost your current job?… Are the risks of mainstream business keeping you from living out your entrepreneurial dream?… Or simply do you shy away from investment because you don’t have “enough” capital to start a business?

If you have answered yes to any of these questions, dropshipping is the business for you. It is the only low-risk business that allows you to make to a 6 figure income a month from the comfort of your house with just a few hundred dollars as a capital.

As a dropshipper, you will play the role of intermediary, facilitating the order process for your customers without actually handling any inventory. And with dropshipping automation tools, you will be able to automate your business so that your store can run itself and make money for you with little to no effort from your end.

To guide you on your journey to unimaginable riches, Dropshipping E-Commerce Business Model lays out the finer points of establishing a dropshipping business from A to Z.

The topics featured in this book include:

The correct budget you need for start dropshipping business, without losing a penny.
>How to find the best niches and the winning products to list on your Shopify and online store.
>How to set up a payment system and stay away from being SCAMMED.
>The order fulfillment process in the details. If you won’t follow these steps, the entire business will collapse.
>How to maintain the best supplier relations for the best deals.
>The different sales channels for your dropshipping store and how to leverage them.
>How to optimize your online store for selling like CRAZY.
>10 simple but powerful and effective ways to DESTROY your competitors.

Why should you buy this particular book? Well, it has been written by an experienced dropshipping consultant with years of success in the industry, after all. And as easy as it is for anybody to make it in dropshipping, you still need a steady hand to guide you through the oft-tempestuous journey to profitability.


#6 – From Nothing: Everything You Need to Profit from Affiliate Marketing, Internet Marketing, Blogging, Online Business, e-Commerce and More… Starting With <$100


“From Nothing“contain EVERYTHING you need to start an online business in the affiliate marketing, internet marketing, blogging, and e-commerce industries… using less than $100. It doesn’t matter if you’re brand new to this or if you’ve tried for years without seeing success.

If you can bring yourself to trust a ginger millennial as your guide (difficult, I know), you’ll be on your way to first-time success in online business the moment you begin reading.


#7 – Passive Income Ideas For 2020


A Step by Step Guide to Easy Passive Income Ideas For 2020 and Beyond. Are you ready to invest your money into creating passive income streams that inflate your monthly income? These are some of the hottest, proven methods that you can start with, today.You’re not going to get rich earning a salary. You need to take those savings and make money from money. But how? It can be harrowing and risky to invest in new income streams for the first time. The chance that you will lose money is high. That’s why you need a guide just like this one.







 

U.S. Job Growth Slows – Unemployment Rate Steady At 3.5%

Stock Market News — U.S. job growth slowed more than expected in December, but the pace of hiring remains more than enough to keep the longest economic expansion in history on track despite a deepening downturn in a manufacturing sector stung by trade disputes.

The Labor Department’s closely watched monthly employment report on Friday also showed the jobless rate holding near a 50-year low of 3.5%. A broader measure of unemployment dropped to a record low 6.7% last month, though wage gains ebbed.

The report will probably not change the Federal Reserve‘s assessment that both the economy and monetary policy are in a “good place.”

Nonfarm payrolls increased by 145,000 jobs last month, with manufacturing shedding jobs after being boosted in November by the return to work of about 46,000 production workers at General Motors (N:GM) after a strike, the government’s survey of establishments showed. Milder-than-normal temperatures in December boosted hiring at construction sites.

Some of the slowdown in December is likely due to seasonal volatility associated with a later-than-normal Thanksgiving Day. Economists polled by Reuters had forecast payrolls rising by 164,000 jobs in December. Roughly 100,000 jobs a month are needed to keep up with growth in the working-age population.

Data for October and November was revised to show 14,000 fewer jobs added than previously reported. The economy created 2.1 million jobs in 2019, down from 2.7 million in 2018.

Worries that a downturn might be triggered by the Trump administration’s trade war with China spurred the Fed to cut interest rates three times in 2019. Indeed economic growth did slow last year, throttling back to 2.1% in the third quarter from 2018’s pace of nearly 3%.

Now, though, with a Phase 1 deal with China set to be signed next week, policymakers are more confident in the outlook and last month signaled borrowing costs could remain unchanged at least through this year. Economists are pegging growth at the end of last year around a 2.3% rate.

The labor market has continued to churn out jobs at a healthy clip, despite anecdotal evidence of worker shortages, which economists had feared would significantly restrain hiring.

There are, however, concerns the Labor Department’s Bureau of Labor Statistics (BLS), which compiles the employment data, may not be fully capturing the impact on payrolls of President Donald Trump’s 18-month-long trade war with China, which has pushed manufacturing into recession and led to company closures.

The government last August estimated that the economy created 501,000 fewer jobs in the 12 months through March 2019 than previously reported, the biggest downward revision in the level of employment in a decade. That suggests job growth over that period averaged around 170,000 per month instead of 210,000. The revised payrolls data will be published next month.

The projected massive revision has attracted the attention of some Fed officials. Minutes of the U.S. central bank’s Dec. 10-11 policy meeting published last week showed a “couple” of officials viewed the anticipated downgrade as an indication “that payroll employment gains would likely show less momentum coming into this year.”

Economists say downward revisions of that magnitude are often associated with early signs of a recession and suggest that the model the government uses to calculate the net number of jobs from new business and closings is faulty.

Some expect payrolls growth beyond last March could also be revised down. For now, the labor market is on solid footing, with the unemployment rate declining by five-tenths of a percentage point 2019. There was little impact on the jobless rate from annual revisions to the seasonally adjusted household survey data going back five years, which were incorporated in December’s employment report.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, fell to 6.7% in December, the lowest since the series started in 1994, from 6.9% the prior month.

The tight labor market, however, has not generated strong wage inflation. Average hourly earnings rose three cents, or 0.1%, after increasing 0.3% in November. In the 12 months through December, wages rose 2.9% after gaining 3.1% in November.

Manufacturing employment dropped by 12,000 jobs in December after jumping 58,000 in November as the GM strike ended. The industrial sector has been hurt by the U.S.-China trade war.

The Institute for Supply Management’s measure of national factory activity dropped in December to its lowest level since June 2009. The ISM’s gauge of manufacturing employment contracted for a fifth consecutive month.

Hiring at construction sites increased by 20,000 jobs in December. Government employment rose by 6,000 jobs. It is expected to accelerate in the coming months amid increased hiring for the 2020 Census.




Today’s Stock Market News – Friday, 10 January, 2020


Stock Market Today — World stocks set new record highs on Friday and the prices of safe-haven assets such as gold pulled back as investors cheered an apparent de-escalation in U.S.-Iran tensions and looked instead to prospects of improved global growth.

Markets have swiftly reversed the sharp falls seen at the start of the week after the United States killed Iran’s most senior general, believing it would not lead to a full-scale military confrontation that would rock investor confidence.

The MSCI world equity index, which tracks shares in 49 countries, has quickly resumed its rally and added another 0.1% on Friday to hit a new record high. It is almost 1.5% above the lows seen on Monday.

European shares were mixed at the open, with pan-European Euro Stoxx 50 (STOXX50E) down 0.16%, the German DAX (GDAXI) up 0.06% and Britain’s FTSE (FTSE) 0.1% ahead.

That followed record levels in the three major share indexes on Wall Street on Thursday. Stock markets have got off to a strong start in 2019 despite U.S. President Donald Trump’s decision to kill military commander Qassem Soleimani, the second most powerful figure in Iran, in a missile strike in Baghdad.

FULL CIRCLE… “In the space of a few days we appear to have swung full circle; with investors seemingly convinced that the problems in the Middle East appear to have settled down, at least for the time being,” said Michael Hewson, chief markets analyst at CMC Markets.

“Investors now have the opportunity to focus on the signing of the new U.S.-China phase one trade deal next week, as well as the health of the U.S. economy today, and in particular the labor market which has continued to look resilient,” he added, referring to all-important U.S. non-farm payrolls data due at 1330 GMT.

While markets judge the United States and Iran to be making moves to defuse the tensions, investors also welcomed news that sales of Apple’s iPhones in China in December jumped more than 18% on the year.

Investors digested the report as a prelude to the upcoming visit by China’s Vice Premier Liu He, head of the country’s negotiation team in Sino-U.S. trade talks, to Washington next week to sign a trade deal with the United States.

There were other signs of investors’ bullish mood too. MSCI’s emerging market currency index, although little changed on Friday, hit 1-1/2-year highs on Thursday in what is likely to be its sixth straight week of gains as it has also benefited from three U.S. rate cuts last year.

Safe haven assets extended their downward move. Gold eased 0.1% to $1,550 per ounce from a seven-year high of $1,610.90 hit right after Iran’s missile attack on Wednesday. Against the Japanese yen, which investors often buy in times of uncertainty, the U.S. dollar strengthened to a two-week high of 109.61 yen .


MONEY-TODAY


The dollar was little changed more broadly (DXY) and against the euro it stood at $1.1108 (EUR=). The euro fell to $1.1091 on Thursday, its lowest in about two weeks.

Oil prices, which spiked earlier this week on worries that tensions with Iran would disrupt global supplies, retreated further.

Brent crude fell 0.3% $65.20 a barrel, and was heading for its first decline in six weeks, down almost 5%.

U.S. crude oil dropped 0.4% to $59.33 a barrel and was also on track for its first weekly drop in six, falling 6% from last Friday’s close.

Government bond yields, which rose on Thursday as investors’ nerves about the situation in the Middle East eased, edged lower in early trading on Friday.

The benchmark 10-year German bond yield fell 1 basis point to -0.236% but for the week remains up almost 5 basis points, in a strong signal of investors’ willingness to pull back from safe-haven government debt for riskier assets.

The 10-year U.S. Treasury yield slipped 1 basis point to 1.849% but it too remains up 6 basis points on the week.

“Unless we have external shocks such as a resurgence of U.S.-China trade tensions or a war in the Middle East, it is hard to see the U.S. economy falling apart,” said Hiroshi Watanabe, senior economist at Sony Financial Holdings.

“There could be a great rotation to stocks from bonds. Emerging markets are likely to benefit from investors’ bullish mood too,” he added.




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  • Best Stock Market Sectors For 2020

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  • The Best Movies Related To Stock Market {2020}

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  • Best Stock Market Books For Beginners {2020}

    Best Stock Market Books For Beginners {2020} Amazon #1 – The Intelligent Investor. (Revised Edition) This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions… The greatest investment advisor of the twentieth century, Benjamin Graham, taught… Read More ›

  • How To Make Money Online by Investing Little Money

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How To Make Money Online For Beginners { 2020 }

How To Make Money Online For Beginners { 2020 } < Internet offers many opportunities to make a lot of money. Whether you’re looking to make some fast cash, or you’re after long-term, more sustainable income-producing results, there are certainly ways… Read More ›




 ◊ How To Make Money Online by Investing Little Money ◊


Internet offers many opportunities to make a lot of money. Whether you’re looking to make some fast cash, or you’re after long-term, more sustainable income-producing results, there are certainly ways you can make money online today. The truth is that making money online isn’t as difficsult as most make it out to seem.

However, if you’re looking for realistic ways to make money now, then it really truly does boil down to 11 paths you can take towards profit. Some will provide you with immediate results, helping you to address your basic monthly necessities, while others have the potential to transform your life by revolutionizing your finances in the long term…



1. Make Money as a Life Coach

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Money Invested: $45 | Time Invested: 110 Hours | Money Earned (30 days): $879

How To Make Money as Life Coach: Life coaching is the process of helping people identify and achieve personal goals through developing skills and attitudes that lead to self-empowerment. Life coaching general deals with issues such as work-life balance and career changes, and often occurs outside the workplace setting. Learn More …



2.  Make Money With Affiliate Programs

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Money Invested: $1,300 | Time Invested: 72 Hours | Money Earned (30 days): $7,742

How To Make Money In Affiliate Marketing: Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make. Learn More …



3. Make Extra Money Online Simply By Sharing Your Opinions

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Money Invested: $1 | Time Invested: 46 Hours | Money Earned (30 days): $329

How To Make Money by Sharing Your Opinion: A Review ( Opinion ) is an evaluation of a publication, service, or company such as a movie, video game, musical composition, book; a piece of hardware like a car, home appliance, or computer; or an event or performance, such as a live music concert, play, musical theater show, dance show, or art exhibition. Learn More …



4. Make Money With an Online Drop Shipping Business

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Money Invested: $75 | Time Invested: 144 Hours | Money Earned (30 days): $1,915

How To Make Money With an Online Drop Shipping Business: Drop shipping is a business model where you send your customers’ orders to a manufacturer or wholesaler, and they send the products directly to your customer. Learn More …



5. Write an Ebook and sell it on Amazon

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Money Invested: $55 | Time Invested: 108 Hours | Money Earned (30 days): $973

How to Make Money Selling Ebooks Online: Do you want to learn how to make an ebook from beginning to end?… Writing ebooks is one of the easiest way to earn money. You work on your own time, and when you finish the book – you will make money from it over and over again…for a very long time!. Learn More …



6. Make Money on Twitter

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Money Invested: $25 | Time Invested: 52 Hours | Money Earned (30 days): $494

How to Make Money on Twitter: Twitter is an American online microblogging and social networking service on which users post and interact with messages known as “tweets”. Selling advertising, sponsored links, and affiliate marketing. Here are a few programs that can help you make money on Twitter. Learn More …



7. Make Money Buying And Selling Domain Names

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Money Invested: $55 | Time Invested: 110 Hours | Money Earned (30 days): $1,514

How To Make Money Selling Domain Names: Domain name is like a land on the Web. You can use domains in a variety of ways to make money. Domains increase value over time, especially if they have some commercial value. You can buy a domain name at low price and then sell it high priceLearn More …



8. Make Money In The Stock Market – ( Day Trading )

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Money Invested: $300 | Time Invested: 72 Hours | Money Earned (30 days): $3,177

How To Make Money in Stock Trading: Investing in the stock market can be a great way to have your money make money… Stock trading is not a risk-free activity, and some losses are inevitable. However, with substantial research and investments in the right companies, stock trading can potentially be very profitable. Learn More …


9. Make Money With Your Photos

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Money Invested: $1 | Time Invested: 74 Hours | Money Earned (30 days): $374

How To Earn Money Selling Photos Online: Who wouldn’t want to earn money by selling their photos online? … Did you know thousands of photographers are making hundreds even thousands of dollars every day just by selling their photos online?… In fact every month millions of photos are bought online which is used for websites, magazines, blogs, print ads, marketing materials and many more. Learn More …



10. Earn Money With YouTube

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Money Invested: $1 | Time Invested: 60 Hours | Money Earned (30 days): $245

How To Make Money on Youtube: You’ve probably heard stories about regular people earning money on YouTube and thought, “Hey, I can do this too!”. Earning with YouTube is easy, but making big money with the platform can be a challenge. Learn More …



11. Make Money Testing Apps

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Money Invested: $20 | Time Invested: 44 Hours | Money Earned (30 days): $197

How To Make Money Testing Apps: Testing Apps is a great way to earn extra money but it won’t make you rich. The number of opportunities you receive will depend on a number of factors, such as your demographics and your quality rating. Learn More …




 

U.S. Adds 202,000 Private Sector Jobs in December

StockMarketNews.Today — U.S. private employers added a far larger-than-forecast 202,000 jobs in December, according to a report by payrolls processor ADP on Wednesday. Economists had expected the report to show a gain of 160,000 jobs.

November’s figure was revised to 124,000 from the 67,000 initially reported.

“As 2019 came to a close, we saw expanded payrolls in December,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The service providers posted the largest gain since April,driven mainly by professional and business services. Job creation was strong across companies of all sizes, led predominantly by midsized companies.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Looking through the monthly vagaries of the data, job gains continue to moderate. Manufacturers, energy producers and small companies have been shedding jobs. Unemployment is low, but will begin to rise if job growth slows much further.”

The ADP numbers come ahead of the Labor Department’s nonfarm payrolls report for December on Friday, which includes both public and private-sector employment.

Economists expect that report to show a gain of 164,000 jobs, while the unemployment rate is forecast to hold steady at 3.5%.



Today’s Stock Market News { Wednesday, 8 January, 2020 }


Buy and Sell Crude Oil Online


StockMarketNews.Today — Iran attack on US forces sends oil rising. Oil prices and global stock markets stabilised after an initial jolt of volatility in the hours after an Iranian missile strike against American forces in Iraq significantly escalated tensions in the Middle East.

President Trump is due to make a statement in the coming hours, but tweeted “all is well!” overnight, while Iran’s supreme leader said the attack was a “slap” in the face for the US but fell short of making further threats of escalation.

Brent crude was just under 1 per cent higher at $69 a barrel in early London trading, having calmed from an earlier spike to as high as $71.75 in the Asian session as investors gauged the consequences of the Iranian action and the likelihood of a US response.

S&P 500 equity futures initially slumped 1.6 per cent but were recently down 0.2 per cent. Declines in European markets were also measured, with the composite Stoxx 600 index down 0.4 per cent, and similar falls for the major bourses across the continent.

Shares in state oil company Saudi Aramco hit a new low of 34 riyal, the lowest level since the group floated on Saudi Arabia’s stock market last month, as regional markets fell.

Markets across the world were jolted after Tehran’s Revolutionary Guard said it fired “tens of rockets” at facilities in Iraq including the Ain Assad base, which hosts US troops. The attack was retaliation for a US drone strike that killed Qassem Soleimani, head of Iran’s elite Quds force responsible for overseas military operations, and marked a serious escalation in the confrontation between Iran and the US.

However, investors were reassured by an apparent absence of US casualties and the measured tone of the official responses. President Donald Trump said on Twitter that “assessment of casualties & damages [are] taking place now” and “So far, so good!” following the attack. Mohammad Javad Zarif, Iran’s foreign minister, tweeted that Iran does “not seek escalation or war, but will defend ourselves against any aggression”.

“We knew some kind of retaliation was going to happen . . . so this is not overly shocking,” said Jim Paulsen, chief investment officer at Leuthold Group. “I hate to say it but there are no casualties as of yet, so right now I would say the markets won’t be facing too much selling pressure.”


Market Volatility Index


Investors had sought safer segments of the markets in response to news of the missile attack. The price of gold, seen as a haven during times of uncertainty, climbed to a near-seven-year high, rising 2.2 per cent to $1,600 per troy ounce. In the European morning it was trading back at $1,585, a gain of 0.7 per cent.

The yield on 10-year US treasuries was down 3 basis points at 1.7899 per cent after earlier hitting a one-month low, while the Japanese yen was flat versus the dollar after rising early in the day.

Japan’s Topix stock index shed 1.4 per cent, while Hong Kong’s Hang Seng slipped 0.8 per cent. China’s CSI 300 of Shanghai- and Shenzhen-listed stocks was down 1.2 per cent.

“The major risk is that we continue to see a tit-for-tat pattern which escalates into a greater conflict,” said Chris Gaffney, president for world markets at TIAA Bank. “I expect [markets] to recover quickly from any knee-jerk selling as long as there are no additional military actions.”

But some analysts warned that any further escalation could mean Brent crude prices would keep pushing higher, to $75 per barrel.

“Depending on any potential further actions by Iran, which is likely, or a likely retaliation by the US, the price may hover around these levels or hike further to $80 a barrel and beyond,” said Iman Nasseri, managing director for the Middle East with energy consultancy FGE.


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Best Stock Market Books For Beginners {2020} Amazon


#1 – The Intelligent Investor. (Revised Edition)

This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions… The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

Over the years, market developments have proven the wisdom of Graham’s strategies. While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.

Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.



#2 – Stock Investing For Dummies (Business & Personal Finance)

Grow your stock investments in today’s changing environment. Updated with new and revised material to reflect the current market, this new edition of Stock Investing For Dummies gives you proven strategies for selecting and managing profitable investments. no matter what the conditions. You’ll find out how to navigate the new economic landscape and choose the right stock for different situations—with real-world examples that show you how to maximize your portfolio.

The economic and global events affecting stock investors have been dramatic and present new challenges and opportunities for investors and money managers at every level. With the help of this guide, you’ll quickly and easily navigate an ever-changing stock market with plain-English tips and information on ETFs, new rules, exchanges, and investment vehicles, as well as the latest information on the European debt crisis.

Incorporate stocks into your investment portfolio
> Understand and capitalize on current market conditions
> Balance risk and reward
> Explore new investment opportunities
Stock Investing For Dummies is essential reading for anyone looking for trusted, comprehensive guidance to ensure their investments grow.



#3 – Encyclopedia of Chart Patterns

In this revised and expanded second edition of the bestselling Encyclopedia of Chart Patterns, Thomas Bulkowski updates the classic with new performance statistics for both bull and bear markets and 23 new patterns, including a second section devoted to ten event patterns. Bulkowski tells you how to trade the significant events — such as quarterly earnings announcements, retail sales, stock upgrades and downgrades — that shape today?s trading and uses statistics to back up his approach. This comprehensive new edition is a must-have reference if you’re a technical investor or trader. Place your order today.
“The most complete reference to chart patterns available. It goes where no one has gone before. Bulkowski gives hard data on how good and bad the patterns are. A must-read for anyone that’s ever looked at a chart and wondered what was happening.”
— Larry Williams, trader and author of Long-Term Secrets to Short-Term Trading.



#4 – How to Make Money in Stocks

Anyone can learn to invest wisely with this bestselling investment system!… Through every type of market, William J. O’Neil’s national bestseller, How to Make Money in Stocks, has shown over 2 million investors the secrets to building wealth. O’Neil’s powerful CAN SLIM® Investing System―a proven 7-step process for minimizing risk and maximizing gains―has influenced generations of investors.

Based on a major study of market winners from 1880 to 2009, this expanded edition gives you:

>Proven techniques for finding winning stocks before they make big price gains
>Tips on picking the best stocks, mutual funds, and ETFs to maximize your gains
>100 new charts to help you spot today’s most profitable trends
>PLUS strategies to help you avoid the 21 most common investor mistakes!

“I dedicated the 2004 Stock Trader’s Almanac to Bill O’Neil: ‘His foresight, innovation, and disciplined approach to stock market investing will influence investors and traders for generations to come.’”
―Yale Hirsch, publisher and editor, Stock Trader’s Almanac and author of Let’s Change the World Inc.

“Investor’s Business Daily has provided a quarter-century of great financial journalism and investing strategies.”
―David Callaway, editor-in-chief, MarketWatch

“How to Make Money in Stocks is a classic. Any investor serious about making money in the market ought to read it.”
―Larry Kudlow, host, CNBC’s “The Kudlow Report”.



#5 – How to Day Trade for a Living

Very few careers can offer you the freedom, flexibility and income that day trading does. As a day trader, you can live and work anywhere in the world. You can decide when to work and when not to work. You only answer to yourself. That is the life of the successful day trader. Many people aspire to it, but very few succeed. Day trading is not gambling or an online poker game. To be successful at day trading you need the right tools and you need to be motivated, to work hard, and to persevere… This book is definitely NOT a difficult, technical, hard to understand, complicated and complex guide to the stock market. It’s concise. It’s practical. It’s written for everyone. You can learn how to beat Wall Street at its own game.




◊ Best Books For Making Money ◊


#1 – The Book on Making Money


After skipping college, Steve Oliverez worked a series of low-paying jobs before setting a remarkable goal for himself – to double his income every year. In The Book On Making Money, he reveals what he learned while successfully hitting this goal for seven years in a row, growing his annual income to more than $1 million. Walking readers through the steps he took to reach his goal, he shows how they can apply the same techniques to greatly increase their own income, whether they work for someone else or run their own business. Oliverez spells out his disagreements with the traditional wisdom that tells young adults to go to school, get good grades and find a safe, steady job – advice that has left many Americans with tens or hundreds of thousands of dollars in student loans, credit card debt or mortgages on homes they can’t afford. He also assaults the idea of saving one’s way to wealth as absurd and counterproductive, using his own experience of trying to save money while poor as an example. Instead of promoting an austere lifestyle of clipping coupons and spending as little as possible, he shows how those habits can actually prevent people from becoming wealthy.


#2 – ABCs of Making Money


International Bestseller. The largely word-of-mouth success is due to its unique approach: instead of just giving the reader the usual do’s and don’ts of managing money – which it does in very clear, actionable terms – this invaluable book walks readers through the psychology of money. Do you ever wonder what makes some people successful while others are destined to struggle their whole lives? … The difference is in their Attitudes toward money. If you don’t examine this issue first, then all the self-help books and courses in the world will be a waste. The ABCs of Making Money is a simple, step-by-step guide for everyone. This common sense approach contains lots of simple checklists, self-directed exercises and tips. It demystifies the secrets of making money while providing proven strategies for the average person to painlessly create wealth. It has already helped hundreds of thousands of people and been acclaimed by universities and charities in the U.S. Amongst other things you will learn: how to achieve financial freedom, gain control of your life, eliminate financial stress and stop living paycheck to paycheck.


#3 – A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today


Learn to make money in the stock market, even if you’ve never traded before. The stock market is the greatest opportunity machine ever created. This book will teach you everything that you need to know to start making money in the stock market today. Don’t gamble with your hard-earned money. If you are going to make a lot of money, you need to know how the stock market really works. You need to avoid the pitfalls and costly mistakes that beginners make. And you need time-tested trading and investing strategies that actually work. This book gives you everything that you will need. It’s a simple road map that anyone can follow.




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China’s Had Another Record Year Of Corporate Bond Defaults

StockMarketNews.Today — A decade ago, defaults almost never happened, but that wasn’t because companies in China were always healthy. It was a reflection of the tightly controlled financial system, where companies were often linked to the government and bonds were largely bought by state-owned lenders. Authorities have often stepped in to ensure that financially troubled enterprises didn’t crash into default, out of concern over social unrest in the event of job losses or missed payroll payments.

This system imposed little discipline on borrowers. Now global investors are coming into China’s bond market. Though many companies are still state-backed, policymakers are getting more comfortable with defaults. Without them, bond buyers would have little incentive to make a careful assessment of a company’s creditworthiness.

But rising defaults also mean that global investors have to abandon some assumptions about which borrowers are safe. There are some nasty surprises on the long list of companies that have either defaulted or have seen their bond prices plunge. Among them: a would-be Wall Street-style investment bank endorsed by China’s premier and two technology companies connected to top universities. In December, a commodities company called Tewoo Group Corp. delivered the biggest dollar-bond default in two decades by a state-owned enterprise. That event “could prove a turning point,” says Todd Schubert, a managing director for fixed income at Bank of Singapore. It’s getting more dangerous to count on some companies being, in essence, too connected to fail.

china-2019

Tewoo’s businesses include mining, logistics, and infrastructure. Based in the industrial city of Tianjin, southeast of Beijing, the company defaulted when its debt had to be restructured, with bondholders being offered as little as 37 cents on the dollar. After news of Tewoo’s debt restructuring plan, Moody’s Investors Service warned investors that state-owned enterprises that aren’t “strategically important” to the government would be less likely to get bailouts.

But figuring out which companies still qualify as strategically important won’t be easy. “How many defaults can the system handle will be a question confronting the leadership in 2020,” says Andrew Collier, a managing director at Orient Capital Research. Hundreds of billions of dollars of debt could potentially become problematic. That includes credit extended to property developers and local government financing vehicles, which fund infrastructure projects. Many lack sustainable sources of revenue, and China’s economic slowdown to a pace of around 6% just makes things worse.

“It’s incredibly difficult to do true credit analysis for most borrowers in China,” says Michel Lowy, chief executive officer at Hong Kong-based banking group SC Lowy. “Ultimately it has a lot less to do with the quality of the businesses that are underneath and a lot more to do with who is supporting them, who owns them, and what is the goal of their setup.”

A lesson in how dicey bets on state support can be came in the second half of 2019, when the bonds of two state-backed tech companies tumbled in value (though they have not defaulted). Tsinghua Unigroup Co. is a chipmaker at the forefront of Beijing’s campaign to achieve global dominance in technology. Its finances had deteriorated sharply in the past three years as it borrowed to invest and make acquisitions, but it was linked to Tsinghua University, which counts President Xi Jinping and his predecessor Hu Jintao as alumni. The other company, Peking University Founder Group, a sprawling conglomerate with medical and internet businesses, is tied to Peking University, another elite school. In the past, the companies’ public ownership and connection with the tech sector might have meant their bonds were immune to default concerns.

Not so. A government push to separate academic institutions from their business ventures put a cloud over the two companies. The fact that they don’t report to China’s main state-assets overseer, but to the Ministry of Education, might also have left questions in investors’ minds. “Persistent uncertainty over the future ownership of these firms has instilled doubts over their financial position—especially since they are capital-intensive businesses with high profit uncertainty,” says Wei Liang Chang, a macro strategist at DBS Bank Ltd. Of the two businesses, investors are more worried about Founder, but the companies’ bonds tend to tank in tandem. The bonds have recovered some of their earlier losses. A spokeswoman from Unigroup said the firm is confident of meeting all bond-payment obligations. Peking Founder didn’t respond to a request for comment.

Perhaps none of the year’s subsequent troubles should have come as a surprise, given how 2019 began with a delayed payment by one of China’s largest private investment companies. China Minsheng Investment Group Corp. was founded in 2014 with the endorsement of Premier Li Keqiang, the country’s No. 2 official. CMIG had run up a lot of debt—about $34 billion as of last year—and had binged on assets, from London property to the solar-energy business to an insurer in Bermuda.

Since the delayed payment on a domestic bond in January, CMIG has been scrambling to sell assets and slashing executive pay. (In April, the company said default provisions had been triggered on two of its dollar bonds.) The company is making every effort to promote an asset, debt, and equity restructuring, it said in an emailed comment in November.

The investment bank became a statistic in the record $21 billion of defaulted bonds from Chinese issuers this year. The vast majority of that has been in the onshore market—bonds denominated in yuan and held mainly by domestic investors—but the rise in defaults in 2019 suggests more trouble could be in store in 2020 for the dollar-based debt that draws more international investors. “The willingness to pay is clearly now in question for large parts of the offshore bond market,” says Owen Gallimore, head of credit strategy at Australia & New Zealand Banking Group Ltd.




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China Plans To Set A Lower Economic Growth Target Of Around 6% In 2020


◊ China Economic Growth 2020 ◊


China plans to set a lower economic growth target of around 6% in 2020 from this year’s 6-6.5%, relying on increased state infrastructure spending to ward off a sharper slowdown, policy sources said.

Chinese leaders are trying to support growth to limit job losses that could affect social stability, but are facing pressure to tackle debt risks caused by pump-priming policies.



AI Superpowers: China, Silicon Valley, and the New World Order

THE NEW YORK TIMES, USA TODAY, AND WALL STREET JOURNAL BESTSELLER. – Dr. Kai-Fu Lee—one of the world’s most respected experts on AI and China—reveals that China has suddenly caught up to the US at an astonishingly rapid and unexpected pace.


The proposed target, to be unveiled at China’s annual parliamentary session in early March 2020, was endorsed by top leaders at the annual closed-door Central Economic Work Conference this month, according to three sources with knowledge of the meeting’s outcome.

“We aim to keep next year’s growth within a reasonable range, or around 6%,” said a source who requested anonymity. Top leaders pledged to keep economic policies stable while making them more effective to achieve growth targets in 2020, state media said on Thursday.

Next year will be crucial for the ruling Communist Party to fulfill its goal of doubling gross domestic product (GDP) and incomes in the decade to 2020.

Economic growth of nearly 6% next year could be enough to meet that goal given the economy is expected to expand about 6.2% this year, policy insiders said.

Officials at the National Development and Reform Commission and the Ministry of Finance were not immediately available for comment on Saturday.

FISCAL BOOST… The government aims to boost infrastructure investment by allowing local governments to issue more special bonds next year, but there is less room for tax cuts, the sources said.

The annual budget deficit could rise from this year’s 2.8% of GDP, but is likely to be kept within 3%, they said.

Local governments could be allowed to issue special bonds worth some 3 trillion yuan ($426.20 billion) in 2020 to fund infrastructure projects, including 1 trillion yuan front-loaded to this year, they said. “Fiscal policy will provide a key support for the economy,” said one source.

The central bank is likely to ease policy further to encourage lending and lower corporate funding costs, but it wants to avoid fanning property speculation and inflation expectations after consumer inflation hit a near eight-year high in November, the sources said.

Beijing has unveiled a raft of pro-growth measures this year, cutting taxes and fees and letting localities issue 2.15 trillion yuan in special bonds, alongside cuts in reserve requirements and lending rates to boost credit.

But top leaders have ruled out aggressive stimulus for fear of pushing up debt levels.

A trade deal with the United States could ease pressure on Chinese exporters, but more policy steps are needed to underpin weak demand at home and abroad, policy insiders said.

The United States and China cooled their trade war on Friday, announcing an agreement that reduces some U.S. tariffs in exchange for what U.S. officials said would be more Chinese purchases of American farm products and other goods.

FINANCIAL RISKS… Top leaders at the meeting listed preventing financial risks as a key priority for 2020 and called for keeping the debt-to-GDP ratio largely stable.

They also pledged to prepare “contingency plans” to cope with growing global volatility and risks. But any sharper slowdown could put more pressure on small firms, which could in turn hit smaller banks – the most vulnerable part of the banking sector, policy insiders said.

Private companies have defaulted on bond payments at a record rate this year, while capital investment has slowed. A rare state seizure of a regional bank earlier this year and state rescues of lenders have also sharpened concerns about the health of small banks.

“Small firms will continue to face big pressure next year, and that could affect the financial sector,” said one insider.







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Fed Holds Rates Steady



⇑⇓ Today’s Stock Market Quotes ⇓⇑



The U.S. Federal Reserve on Wednesday held interest rates steady and signaled borrowing costs are likely to remain unchanged indefinitely, with moderate economic growth and low unemployment expected to continue through next year’s presidential election. The decision by the U.S. central bank‘s rate-setting committee left the benchmark overnight lending rate in its current target range between 1.50% and 1.75%.

New economic projections showed a solid majority of 13 of 17 Fed policymakers foresee no change in interest rates until at least 2021. The other four saw only one rate hike next year.


The Federal Reserve Conspiracy


Notably, no policymakers suggested lower rates would be appropriate next year, a sign the Fed feels it has engineered a “soft landing” after a volatile year in which recession risks rose, the U.S. bond yield curve inverted, and trade policy disrupted markets.

“The Committee judges the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the … symmetric 2 percent objective,” the Fed said in a policy statement after the end of a two-day meeting.

There were no dissents to the policy statement, the first without opposition since the April 30-May 1 meeting. In the midst of an ongoing U.S.-China trade war, Fed policymakers said they would continue monitoring “global developments” in deciding whether interest rates need to change. They also said they would keep an eye on “muted inflation pressures,” a reflection of concern that the pace of price increases has failed to hit the central bank’s target.

Fed Chairman Jerome Powell is scheduled to hold a press conference at 2:30 p.m. EST (19:30 GMT) to discuss this week’s policy meeting, the last of the year.

After the Fed’s October policy meeting, Powell said it would take a “material” change in the economic outlook for the Fed to change rates again. The Fed cut rates three times this year, including in October.

The quarterly economic projections released on Wednesday showed little change from those in September, as policymakers sketched out an economy they feel has skirted recession risks and is poised to grow close to trend for several years more.

A reference in the October policy statement to “uncertainties” about the economic outlook was dropped on Wednesday. Gross domestic product at the median is projected to grow 2% next year and 1.9% in 2021.

Unemployment is seen staying at its current level of 3.5% through next year, rising to only 3.6% in 2021. In a demonstration of the disconnect between that low level of unemployment and inflation, the pace of prices increases is expected to rise only to 1.9% next year.

“The labor market remains strong and … economic activity has been rising at a moderate rate,” the Fed said. It added, however, that business investment and exports remained weak.


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The economy will be a central issue in U.S. President Donald Trump’s reelection campaign against a Democratic challenger likely to call for different economic policies. Trump repeatedly criticized the Fed this year for not cutting rates faster and deeper.

The Fed’s forecasts offered little obvious fodder for either Democrats or Republicans, with the economy largely seen performing as it has – far short of the 3% annual growth Trump promised to produce, but also with historically low rates of unemployment.




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Soon, 2019 will be over… therefore it’s time to start looking at some of the top stocks to buy for 2020. ⇑⇓ Today’s Stock Market Quotes ⇓⇑ United Technologies (UTX). Following a strategic review, the company decided it would spin off its… Read More ›













 

U.S. Consumer Inflation Expectations Rebound From Five-Year Low



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U.S. consumers’ inflation expectations rose slightly in November, bringing the outlook for near and medium-term inflation up from a five-year low in a New York Federal Reserve survey, potentially offering relief to policymakers worried about sagging inflation.

The median outlook for what inflation will be over the next three years rose by 0.1 percentage point to 2.5%, the survey found. Expectations for inflation over the next 12 months rose slightly by 0.02 percentage point to 2.4%. In October, both inflation outlooks were at a series low for the survey, which began in 2013.

Fed officials lowered interest rates three times this year in an effort to immunize the U.S. economy from the potential risks posed by a global slowdown, a prolonged trade war with China and a slump in business investment. Since the last rate reduction, several policymakers have emphasized the risks of inflation being too low, and signaled an openness to letting inflation run above 2% to meet the Fed’s symmetric inflation target.

Policymakers have repeatedly suggested that rates, which are now at a target range of 1.5% to 1.75%, are likely to remain on hold for the time being, unless there is a strong deterioration in the economic outlook.



The likelihood that Fed officials will hold still at this week’s policy meeting rose after last week’s blockbuster jobs report. The U.S. economy added a greater than expected 266,000 jobs in November, bringing the unemployment rate down to a 50-year low.

Consumers are also optimistic about the labor market and their job prospects, according to the New York Fed survey. Workers’ perceived risk of losing a job in the next 12 months dropped to an average of 14.4% in November, from 14.8% in October. The average chance of finding work after a job loss also rose slightly to 59.3% in November from 58.8% the month before.

Workers feel more confident in their ability to afford their bills, the survey found. The average chance of missing a minimum debt payment over the next three months fell to 11.3% in November from 11.6% the month before. Expectations for household income growth rose to 2.9% in November from 2.8% in October.




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Investors pushed up the value of risk assets on the assumption that the American economy isn’t close to signaling a recession. Stocks rallied as strong jobs and consumer sentiment reports bolstered confidence in the world’s largest economy. Treasuries fell.

The S&P 500 extended gains into a third day after data showed payrolls climbed 266,000 — the most since January — as wages topped estimates and consumer sentiment increased to a seven-month high. Treasury 10-Year yields rose above 1.8%. The dollar and oil advanced.

Investors pushed up the value of risk assets on the assumption that the American economy isn’t close to signaling a recession — a fear that has confronted investors amid an ongoing trade war. White House economic adviser Larry Kudlow says the U.S. and China are “still close” to reaching a phase-one trade agreement.

“The much stronger-than-expected 266,000 jobs created in November helps bolster hopes for a pick-up in global growth,” said Alec Young, managing director of global markets research at FTSE Russell. “It’s also a well-timed shot in the arm for investor confidence given ongoing U.S.-China trade uncertainty.”

A strong jobs report could reduce the urgency for a deal, given that escalating levies have failed to significantly dent growth. But it could also validate Federal Reserve Chairman Jerome Powell’s view that rates can stay on hold following three cuts.

Earlier Friday, equities rose after China said it’s in the process of waiving retaliatory tariffs on imports of U.S. pork and soy by domestic companies — a procedural step that may also signal a broader trade agreement with the U.S. is drawing closer.

Elsewhere, oil climbed after Saudi Arabia surprised the market by promising significant additional production cuts beyond what was agreed with fellow OPEC+ members. Th euro fell after Germany’s industrial slump unexpectedly deepened in October amid a steep decline in investment goods.




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Stocks Fall on Manufacturing Report


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Monday’s moves were a step back for stocks after they closed out their best month since June. The market has climbed to fresh highs in recent weeks, buoyed by data showing the U.S. service sector on solid footing. But lingering uncertainty over trade policy and signs of weakening in the industrial sector have kept many investors cautious.

U.S. stock futures pared gains early Monday after President Trump said on Twitter that he would restore tariffs on steel and aluminum imports from Brazil and Argentina. He also accused the two countries of devaluing their currencies.

“We’ve seen world trade slowing down. The last thing we need is more tariffs to slow it down further,” said Lucy Macdonald, chief investment officer for global equities at Allianz Global Investors. “This has been a major source of concern for investors all year: trade, primarily the U.S. and China, but also the U.S. and everywhere else.”

Stock declines then accelerated after a gauge of U.S. factory activity came in weaker than economists had expected. The Institute for Supply Management’s manufacturing index decreased to 48.1 in November from 48.3 in October, marking the fourth straight sub-50 reading. Readings below 50 indicate a contraction in activity.

Even with Monday’s declines, stocks are still up double-digit percentages in 2019 and headed for their best year since 2013. U.S. stocks are also continuing to outperform indexes around the world, with the S&P 500’s 2019 gains outpacing that of the Shanghai Composite, Japan’s Nikkei Stock Average and the Stoxx Europe 600.

But some traders say they wouldn’t be surprised if there was more volatility ahead in the final weeks of the year. “We’ve seen this movie before,” said Mohit Bajaj, director of ETF trading solutions at WallachBeth Capital, who referenced the year-end pullback from 2018. Money managers are often willing to sell to lock in their profits before the end of the year, he added.


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Markets were also hit Monday by selling in the technology sector, with losses hitting everything from payment processors to semiconductor companies. The declines appeared to be exacerbated by losses across momentum funds, Mr. Bajaj said. Such funds, which seek to track stocks with the best returns as of late, often include technology shares.

Nvidia slipped 2.8%, while Lam Research fell 1.8% Changes in analysts’ ratings also drove swings among individual stocks. Streaming media platform Roku fell 16% after Morgan Stanley lowered its rating for the company to “underperform” from “equal weight,” warning investors that revenue and profit growth would likely slow significantly in 2020.

The pan-continental Stoxx Europe 600 index swung lower after the president’s tweet, falling 1.6%. The gauge had earlier gained as much as 0.7% after China’s economy showed signs of stabilizing and a key European survey signaled better-than-expected manufacturing conditions.

Two separate surveys of manufacturers in China pointed to improving confidence and demand last month. Factory activity in the euro area also gave cause for cautious optimism, with the rate of contraction easing more than markets had expected for the 19-nation region.


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While economists said it was too early to say that China, the world’s second-largest economy, had recovered, markets earlier in the day had cheered the fact that another major risk to the global economy seemed to be diminishing.

Separately, People’s Bank of China Gov. Yi Gang said the central bank wouldn’t resort to “competitive” quantitative easing, even if interest rates in other major economies approached zero. Growth remained within a reasonable range, and inflation was relatively mild overall, Mr. Yi wrote in the Communist Party’s main political journal, Qiushi. The Shanghai Composite Index ended the day largely flat.

Meanwhile, U.S. crude oil jumped 1.7% to $56.13 a barrel after Persian Gulf officials said Saudi Arabia would push for an extension to oil-production cuts through mid-2020 at an Organization of the Petroleum Exporting Countries summit this week. The kingdom is targeting prices of at least $60 a barrel, according to a Saudi oil adviser.

Later in the week, investors will get a look at a gauge of activity in the U.S. service sector, as well as the Labor Department’s November employment report.

Economists surveyed by The Wall Street Journal expect to see a small pickup in wage growth and solid job creation, which would show investors that the labor market remains strong heading into the end of the year.



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Warning Sign For The US Economy – Personal Loans Are Growing Like A Weed

Personal loans are up more than 10 percent from a year ago, according to data from Equifax, a rapid pace of growth that has not been seen on a sustained basis since shortly before the Great Recession. All three of the major consumer credit agencies — Equifax, Experian and TransUnion — report double-digit growth in this market in recent months.

Experts are surprised to see millions of Americans taking on so much personal loan debt at a time when the economy looks healthy and paychecks are growing for many workers, raising questions about why so many people are seeking an extra infusion of cash.


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“Definitely yellow flares should be starting to go off,” said Mark Zandi, chief economist at Moody’s Analytics, which monitors consumer credit. “There’s an old adage in banking: If it’s growing like a weed, it probably is a weed.”

Personal loans are unsecured debt, meaning there is no underlying asset like a home or car that backs the loan if someone cannot repay. The average personal loan balance is $16,259, according to Experian, a level that is similar to credit card debt.

Personal loan balances over $30,000 have jumped 15 percent in the past five years, Experian found. The trend comes as U.S. consumer debt has reached record levels, according to the Federal Reserve Bank of New York.

The rapid growth in personal loans in recent years has coincided with a FinTech explosion of apps and websites that have made obtaining these loans an easy process that can be done from the comfort of one’s living room. FinTech companies account for nearly 40 percent of personal loan balances, up from just 5 percent in 2013, according to TransUnion.

More than 20 million Americans have these unsecured loans, TransUnion found, double the number of people that had this type of debt in 2012. “You can get these loans very quickly and with a very smooth, sleek experience online,” said Liz Pagel, senior vice president of consumer lending at TransUnion. “We haven’t seen major changes like this in the financial services landscape very often.”

Total outstanding personal loan debt stood at $115 billion in October, according to Equifax, much smaller than the auto loan market ($1.3 trillion) or credit cards ($880 billion). Economists who watch this debt closely say personal loans are still too small to rock the entire financial system in the way $10 trillion worth of home loans did during the 2008-09 financial crisis.

But personal loan debt is back at levels not far from the January 2008 peak, and most of the FinTech companies issuing this debt weren’t around during the last crisis, meaning they haven’t been tested in a downturn.



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“The finance industry is always trying to convince us that there are few risks to borrowing and overleveraging is not a problem,” said Christopher Peterson, a University of Utah law professor and former special adviser to the Consumer Financial Protection Bureau. “Overleveraging yourself is risky for individuals and for our country.”

The U.S. economy is powered by consumer spending, and debt helps fuel some of the purchases. Economists are watching closely for signs that Americans are struggling to pay their bills, and personal loans could be one of them.

The most common recipient of a personal loan is someone with a “near prime” credit score of 620 to 699, a level that indicates they have had some difficulty making payments in the past. “The bulk of the industry is really in your mid-600s to high 600s. That’s kind of a sweet spot for FinTech lenders,” said Michael Funderburk, general manager of personal loans at LendingTree.

Funderburk says they see a lot of consumers who are employed “doing perfectly fine” with their finances, but something unexpected happens such as job loss or a medical emergency and they end up missing a bill or accumulating more debt than they wanted.

The vast majority of customers go to FinTech providers such as SoFi, LendingTree, Lending Club and Marcus by Goldman Sachs for debt consolidation, the lenders say. People run up debt on multiple credit cards or have a medical bill and credit card debt and they are trying to make the payments more manageable. Some seek a lower monthly payment, similar to refinancing a mortgage. Others want to pay off the debt in three years to clean up their credit score.

FinTechs say they are helping people make smarter financial choices. While a credit card allows people to keep borrowing as long as they are under the credit limit, a personal loan is for a fixed amount and must be paid off over a fixed period, generally three or five years. Some online lenders allow people to shop around for the best rate, and most of the main players cap the interest rate at 36 percent to ensure they are not offering any payday loan products.

But there is concern that some Americans get personal loans to tide them over and then continue to take on more credit card or other debt.

Credit card debt has continued to rise alongside personal loans, according to the latest data from the Federal Reserve Bank of New York. TransUnion has recently noticed an uptick in retailers offering personal loans when someone comes to the cashier to buy furniture or holiday toys.

“I have mixed feelings about personal loans. They are superior to credit cards because the payments are fixed,” said Lauren Saunders, associate director of the National Consumer Law Center. “The problem is many people still have their credit card and end up running up their credit card again, so they end up in a worse situation with credit card debt and installment loans on top of it.”



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Saunders also notes these loans are mainly regulated by state law, and the rules and watchdog capabilities vary widely by state. FinTechs say they are using technology to deliver a better deal. One of their big innovations is giving people who take out personal loans a discount if they transfer the cash they get from the loan directly to pay off their bills instead of sending it to their bank account first.

“This has been one of the most successful products we have ever launched. People are trying to do the right thing and they’re getting offered a lower rate if they do balance transfer and direct deposit,” said Anuj Nayar, a financial health officer at LendingClub, a peer-to-peer lender that offers personal loans up to $40,000.

Despite the rapid growth in personal loans lately, borrowers appear to be able to pay back the debt. The delinquency rate for personal loans is 4.5 percent, according to Equifax, a low level by historical standards and well below the 8.4 percent delinquency rate in January 2008.

But as the number of Americans with one of these loans grows, so does the potential for pain if the unemployment rate ticks up and more people find themselves strapped for short-term cash.




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