Good morning and thanks for all the feedback on yesterday's video! We'll have more coming.
🎙 "I smell your secret, and I'm not too perfect to ever feel this worthless." - See who said it and why it matters at the bottom.
Illustration: Eniola Odetunde/Axios
Unemployment is likely to hit levels not seen since the Great Depression and remain elevated, economists warn, weakening the U.S. economy and making a V-shaped recovery increasingly doubtful.
The big picture: Many are looking to China's return from its coronavirus outbreak as a model, but the U.S economy is "a different ball of wax," S&P Global chief U.S. economist Beth Ann Bovino tells Axios.
Driving the news: Analysts expect today's initial jobless claims report to show another 4.5 million Americans applied for unemployment benefits last week, taking the total number of filings to more than 26 million in just the past five weeks.
Between the lines: While unprecedented government spending has helped boost sentiment on both Wall Street and Main Street, it is unlikely to accomplish its goal of keeping most workers tied to their employers, Bovino says.
By the numbers: The Small Business Administration recorded 30.2 million small businesses in the U.S. as of 2018. So, even with the expected Paycheck Protection Program funding of $322 billion being added to the initial $350 billion tranche, that would equal only around $22,250 per firm.
To wit, of the roughly 60 million Americans employed by a small businesses, only one-third work at companies with 20 employees or less, SBA data show.
Note: Axios qualified for a loan under the PPP program. More details here.
Consumer sentiment around the globe is starting to recover, data firm Morning Consult finds, despite economic projections for weakening growth and worse outcomes.
Where it stands: Ratings agency Fitch said Wednesday it expects global GDP to decline by 3.9% this year, "twice as large as the decline" it predicted just weeks ago and "twice as severe as the 2009 recession."
However, in its latest reading of consumer sentiment, Morning Consult finds respondents are showing increasing optimism about the future, as the number of people who say they expect to be worse off in a year has consistently declined.
Hubei province, the hub of China's coronavirus outbreak, saw its GDP contract by 39.2% year over year in the first quarter, the largest drop on record for any province since the founding of the People's Republic of China in 1949. (SCMP)
President Trump said he “strongly disagreed" with Georgia Gov. Brian Kemp’s decision to begin reopening parts of the state as soon as Friday. (Politico)
Private equity firm Sycamore Partners filed a lawsuit to scrap its planned takeover of Victoria’s Secret, saying owner L Brands violated portions of the proposed transaction. (WSJ)
The U.S. stock market closely tracked its performance from 2008 following the first major decline of the bear market this year, but has now diverged greatly.
What's happening: Comparing the period of 31 market days starting from Sept. 29, 2008, to the same period beginning March 9 this year, the S&P 500 has fallen by much less than it did, despite expectations for this to be a far more damaging recession.
Why it matters: The big difference was the response of U.S. policymakers.
That moment may still be to come in this recession, Colas warns.
Watch this space: Bank of America analysts predict the S&P is headed for new lows based on patterns in the VIX, or the stock market's volatility gauge, from 1987, 2002 and 2008.
Even before expected new stimulus measures are passed, the U.S. government's annual deficit will likely top $4 trillion this year, analysts at BMO Capital Markets write.
Why it matters: "These are astronomical numbers that will reshape the Treasury market for years, if not decades, to come."
By the numbers: BMO estimates the U.S. will need to borrow more than $4.3 trillion, with the bulk of debt being financed as Treasury bonds in the second and third quarters, totaling roughly $3.5 trillion — $1.9 trillion and $1.6 trillion, in each quarter, respectively.
Between the lines: The Fed is currently equipped to buy around $2.6 trillion through its quantitative easing program, leaving a $1.7 trillion mountain for the market to swallow, BMO analysts say.
What's next: The Bank of America Global Research expects Congress to pass another large package worth up to $1.5 trillion that "extends on provisions in the CARES Act and provides much needed aid to State and Local Governments."
Thanks for reading!
Quote: "I smell your secret, and I'm not too perfect to ever feel this worthless."
Why it matters: On April 23, 2016, Beyoncé released one of the greatest albums of all time, "Lemonade." Only on Tidal (with an accompanying film on HBO).
My top 6 Beyoncé songs:
2. Party (featuring Andre 3000)
3. Don't Hurt Yourself
6. Ego remix (featuring Kanye West)
What are yours?