1) The managing director Kristalina Georgieva of the IMF (International Monetary Fund) says the Fund is likely to revise downward its forecast of a 3% contraction of the GDP (Gross Domestic Product) for 2020. In turn, this will most likely cause a revision of the IMF’s forecast for a partial recovery of 5.8% in 2021. This means a longer time for a full economic recovery from the virus crisis. The IMF had forecasted that the business closures to slow the virus would throw the world into the deepest recession since the 1930’s Great Depression.
2) Gold markets have risen to their highest in more than seven years, a result of the Federal Reserve saying stocks and asset prices could suffer a significant decline as a result of the coronavirus crisis. The economic recovery could go to the end of 2021, depending on the arrival of an effective vaccine. Owning gold is considered to be a safe haven in times of economic turmoil, able to retain its value when other assets are sinking in value. Other precious metals such as silver, platinum and palladium are also experiencing a swing upward in price, but since these are commodities, their value may drop in a slower economy and reduced industrial demand.
3) The price of oil is above $30 a barrel for the first time in two months as U.S. and other country producers continue to cut production in order to restore the balance of the oil market. The world wide shut downs from the virus has drastically reduced the demand for oil world wide, with the world’s storage capacity quickly filling to maximum capacity, and for a time, producers having to pay to have their oil production removed. While the price of oil is still too low to salvage the shale oil (fracking) business in America, it still bodes well for the U.S. and world economies. Nevertheless, expectations are it will be well into the next year for the oil markets to be fully restored. Oil futures contracts that are due in June, show few signs of a resulting plunge in oil prices as when the May contracts came due and investors had to pay others to take their oil away.
4) Stock market closings for – 18 MAY 20:
Dow 24,597.37 up 911.95
Nasdaq 9,234.83 up 220.27
S&P 500 2,953.91 up 90.21
10 Year Yield: up at 0.74%
Oil: up at $32.21
1) All ready shaken by the trade war, China is now being racked by the coronavirus, with fears of the virus pushing the Chinese markets down by $393 billion dollars on the first day of trading since the Lunar New Year. This is an 8% drop on the Shanghai composite index, the biggest drop in more than four years. This is despite the biggest cash injection of China’s financial system since 2004. Additionally, commodities contracts have all posted sharp drops, a strong indication of an economic slowdown.
2) The shopping malls are dying as shopping habits of consumers change over to the internet. It’s estimated that 25% of American malls will shut their doors by 2022, and more of the 9,300 retail stores that closed in 2019 were in malls. Mall owners are searching for ways to halt the trend of shrinking retailing in malls, including buying major retail companies such as Forever 21 and Aeropostale.
3) As traditional brick-and-mortar stores continue its slide downwards, a number of companies are considered at risk of bankruptcy this next year. Stores like Neiman Marcus ply their way in red ink, including J. Crew, Francesca’s, Rite Aid, JCPenny, Pier 1, Dressbarn, Destination Maternity, Men’s Wearhouse and Stein Mart. Companies heavy into cloths and fashion ware are the ones struggling the most to avoid the bankruptcy courts.
4) Stock market closings for – 3 FEB 20:
Dow 28,399.81 up 143.78
Nasdaq 9,273.40 up 122.47
S&P 500 3,248.92 up 23.40
10 Year Yield: unchanged at 1.52%
Oil: down at $49.91
By: Economic & Finance Report
Latin America will contract this year, about -0.6% according to the The Economic Commission for Latin America and the Caribbean (ECLAC). Some Latin American countries in the region are either heading to a recession or are already in a recession.
There has be slow growth rate recorded in some countries within the region, and the slow development of China and other emerging markets have not made it easier for Latin America to do substantial trading, without the growth of Latin America’s trading partners such as China, it makes it hard for Latin America to export and generate revenue from sales of goods and products. Much of South America trades commodities with China, and this variable definitely provides the contraction period to extend throughout the whole year of 2016.
In Central America, economies are seeing a decline of -1.9% from the previous year, which was 4.3% (2015) and it is currently 3.9% (2016), according from the data reported from (ECLAC).
The Latin Caribbean countries reported growth of 0.9% from the previous year in 2015 (ECLAC). -SB
By: Economic & Finance Report
As the Fed readies to deliver remarks of their Fed Policy meeting tomorrow March 18, 2015 (Wednesday). Stock, Futures, Commodities, Forex traders are bracing if the Federal Reserve Board are going to raise interest rates.
The Fed will make their announcement after the two day policy meeting, which is usually the case by most standards. The stock market has been profiting and doing fairly well with low interest rates so increasing the interest rates could have an opposite effect toward the markets.
Noone knows exactly when the rates will actually be heightened but many analyst and observers believe it will be later in the year in the middle of the year precisely. Tomorrow trading will probably be limited until after the Feds remarks, which only makes sense, “No need to jump in front of a moving train”, as the saying goes. We shall see. -SB