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🎙“People who have no creativity, talent, or courage are the ones who follow the rules.” - See who said it and why it matters at the bottom.
Having initially predicted they could get through the coronavirus pandemic with their businesses largely unscathed and workforces intact, U.S. corporate leaders are now starting to change their tune.
What it means: Top financial officers have consistently written down their expectations for the economy, their company's financial situation, and how many of their employees they will be able to keep on staff in recent weeks.
Driving the news: The third release of PwC’s survey of American CFOs shows 26% anticipate layoffs at their companies, a marked increase from two weeks ago when the survey found only 16% expected layoffs.
By the numbers: A vast majority (81%) of those surveyed expect COVID-19 to decrease their company’s revenue and/or profits this year, up from 58% in PwC's first survey on March 11.
What they're saying: Having talked to corporate leaders during three separate periods over the past month, Tim Ryan, U.S. chairman and senior partner at PwC, says, "It is becoming clearer and clearer ... that it’s reasonable to assume that trend will continue."
The big picture: That's bad news for employees, many of whom have been told by corporate leadership that their jobs were secure during the crisis.
A separate survey from CFO Magazine conducted March 26–April 2 among 333 CFOs found that more than one-third (35%) are laying off or furloughing employees, even though a majority said they expect a V-shaped recovery. Most said they didn’t know how many employees would be affected.
What's next: A clear division of companies is beginning to take shape, separating winners and losers. Many companies that loaded up on cash during 2019 anticipating a recession are in a better position to weather the storm.
States on both U.S. coasts formed coalitions with plans to coordinate the reopening of their economies after President Trump insisted he would have the final say. (Bloomberg)
President Emmanuel Macron extended France’s national lockdown to May 11, and the U.K. plans to extend its lockdown into May as well. (N.Y. Times)
House and Senate Democrats remain opposed to legislation that would increase the $350 billion small business lending program unless it includes additional funding for hospitals, states and food stamp recipients. (The Washington Post)
Amazon announced that it has hired 100,000 new employees, and is now "creating an additional 75,000 jobs to help serve customers during this unprecedented time." (Amazon)
U.S. earnings season for the first quarter kicks off today, with premarket reports from Wells Fargo and Johnson & Johnson among others expected to show that year-over-year earnings fell by around 10%, the weakest performance since Q3 2009, and down from a 4.3% increase forecast on Dec. 31. (FactSet)
Torsten Slok, chief economist at Deutsche Bank Securities, says he is expecting Thursday's initial jobless claims report to show 8 million Americans filed for weekly unemployment benefits last week.
On the other side: Economists Aaron Sojourner and Paul Goldsmith-Pinkham, who initially stunned markets by predicting more than 3 million claims for the week ending March 21, expect 4.8 million claims this week.
More than 2 million U.S. mortgage holders are now in forbearance, data from the Mortgage Bankers Association show, and forbearance requests jumped 78% for the week ending April 5.
By the numbers: The increase in requests is actually an exponential decline. Forbearance requests rose by 1,270% between the week of March 2 and the week of March 16, and another 1,896% between the week of March 16 and the week of March 30, MBA reported last week.
Keep it 💯: "With mitigation efforts seemingly in place for at least several more weeks, job losses will continue and the number of borrowers asking for forbearance will likely continue to rise at a rapid pace," MBA chief economist Mike Fratantoni said in a statement.
Between the lines: S&P Global warned in a note Monday that "servicers may not have adequate staff in place to handle the vast work volumes, and the enormous amounts of forbearance requests will result in very large sums of capital needed to meet servicers advancing requirements."
Seven in 10 people now consider going to the grocery store a risky act — and a majority of Americans say they've started wearing masks outside their homes at least sometimes — in the latest installment of the Axios-Ipsos Coronavirus Index.
The big picture: In Week 5 of our national poll, we're seeing in more detail just how people are adapting to common fears and changes about the "new normal."
Walmart stock rose by nearly 3% on Monday and is now less than 1% below its all-time high touched on April 6.
Quote: "People who have no creativity, talent, or courage are the ones who follow the rules."
FYI: Prince was a magnificent basketball player, who would invite his vanquished opponents inside for pancakes after beating them on his home court at Paisley Park. Watch the true story told here.