Global economy’s recovery hinges on stimulus, virus battle, officials say

By David Lawder and Jan Strupczewski

WASHINGTON/BRUSSELS, Oct 13 (Reuters)Global finance leaders on Tuesday said the world economy had escaped a coronavirus-triggered collapse so far, but warned that failure to conquer the pandemic, maintain stimulus and tackle mounting debt among poor nations could crush a fragile recovery.

At the start of the annual meetings of the International Monetary Fund and World Bank, the IMF issued slightly improved growth forecasts spurred by unexpectedly stronger rebounds from coronavirus lockdowns in the wealthiest countries and China.

The IMF said it now expected global gross domestic product to shrink 4.4% in 2020, compared to the 5.2% contraction it predicted in June, when business closures were at their peak. Some $12 trillion in stimulus supplied largely by advanced economies limited the damage, but poor countries and other emerging market economies faced a worsening picture, the global lender said.

“The story is

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Stocks slip as Eli Lilly halts COVID-19 trials, banks cautious on recovery

Stocks closed lower on Tuesday as investors weighed earnings from the big banks and another coronavirus vaccine setback.

The Dow Jones Industrial Average slipped, as did the S&P 500 while the Nasdaq Composite was little changed.

Ticker Security Last Change Change %
SP500 S&P 500 3511.93 -22.29 -0.63%
I:COMP NASDAQ COMPOSITE INDEX 11863.895513 -12.36 -0.10%
I:DJI DOW JONES AVERAGES 28679.81 -157.71 -0.55%

Eli Lilly, joined Johnson & Johnson, in halting its trials of a COVID-19 vaccine over safety concerns.

Ticker Security Last Change Change %
LLY ELI LILLY & COMPANY 150.08 -4.41 -2.85%
JNJ JOHNSON & JOHNSON 148.36 -3.48 -2.29%

Financials, as a group, were the biggest drag on the S&P 500 despite solid results from JPMorgan which reported a third-quarter that

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JPMorgan, Citi profits improve amid signs of recovery

CHARLOTTE, North Carolina (AP) — Two of the nation’s biggest banks — JPMorgan Chase and Citigroup — said Tuesday that their profits improved markedly over the summer, as the U.S. economy tried to bounce back from the coronavirus shutdowns that were imposed earlier this year.

Even so, both banks warned that much uncertainty remains about where the the U.S. economy is headed, and top bank executives bluntly said there is a need for another economic stimulus package to keep the economy from slipping into recession again.

“A good, well-designed stimulus package will simply increase the chance we get better outcomes,” said JPMorgan’s Chairman and CEO Jamie Dimon in an conference call with reporters.


Both Citi and JPMorgan set aside fewer funds to cover potentially bad loans, contributing to the improvement in their third-quarter results. These loan-loss reserves, as they are known, are funds banks put aside when borrowers stop paying

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The I.M.F. sees early signs of a global economic recovery.

The International Monetary Fund said on Tuesday that the world economy is beginning its ascent from the worst downturn since the Great Depression but that the deep recession caused by the coronavirus pandemic will leave scars on labor markets for years to come.

In its latest World Economic Outlook report, the I.M.F. projected that the global economy would contract 4.4 percent in 2020. The forecast was a slight improvement from its midyear projection, as the easing of lockdowns and robust fiscal and monetary policy support have helped output recover more quickly than previously expected. But the global economy is not yet out of the woods.

“This crisis is, however, far from over,” Gita Gopinath, the I.M.F.’s chief economist, wrote in a memo accompanying the report. “The ascent out of this calamity is likely to be long, uneven, and highly uncertain.”

Ms. Gopinath urged countries not to withdraw policy support prematurely

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Oil Rises Toward $40 After Recovery in Chinese Crude Imports

(Bloomberg) — Oil rebounded after its biggest daily drop in more than a week amid dollar weakness and data showing Chinese crude imports rose last month.

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Futures in New York rose around 1% toward $40 a barrel. Chinese crude imports climbed 2.1% in September from August, the General Administration of Customs said Tuesday, in a positive sign for global demand. Buying was resilient against expectations for a slowdown and volumes are likely to stay high through to the end of the year, Australia & New Zealand Banking Group Ltd. said in a note.

Crude dropped 2.9% Monday as several supply disruptions that have supported prices subsided. Libya’s largest oil field could be at full capacity by next week, while Royal Dutch Shell Plc, BHP Group and Chevron Corp. said they’ve begun resuming operations at Gulf of Mexico platforms after Hurricane Delta. That followed the cancellation of an oil

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What does jobs report mean for recovery?

As the shocking news emerged that the president and first lady tested positive for the coronavirus, some investors may have wondered if this was the “October Surprise” they feared. Presuming that the President recovers, investors are also absorbing the last employment report before the election. The September jobs report showed that the pace of

Jill Schlesinger 

economic progress is slowing down. The economy added a lower than expected 661,000 new positions, the smallest rise since the job recovery began and a significant deceleration from the spring bounce back. (Note: recent announcements of layoffs from large airlines, Disney, publisher Houghton Mifflin, insurer Allstate, and designer Ralph Lauren, were not included in the September report.)

The U.S. now has 10.7 million fewer workers employed than it did in February. To put that into perspective, for the five years starting in 2015 through 2019, the economy added a total of just over 11.6

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China’s Exports Seen Sustaining Recovery in September as Markets Reopen | Investing News

BEIJING (Reuters) – China’s exports likely posted a fourth straight month of gains in September as more trading partners reopened their economies, a Reuters poll showed, while imports are also expected to have edged back into growth.

Exports have not been as severely affected by the global slowdown as some analysts had feared, due in part to record shipments of medical supplies and robust demand for electronic products, adding to hopes for a sustained economic recovery.

In September, exports are expected to have risen 10% from a year earlier, according to a median estimate of a Reuters poll of 24 economists. Imports likely rose 0.3% on year, improving after back-to-back decline in July and August.

Exports in August rose a solid 9.5% year-on-year, the strongest gain since March 2019.

Stronger exports could signal a faster and more balanced recovery for the Chinese economy, which is rebounding from a record first-quarter

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August JOLTS Report Conforms To Prior Early Recession Recovery Pattern

Yesterday’s JOLTS report for August showed a jobs market that is still just beginning to mend. Hires were up, and layoffs and discharges were down, which is good, but job openings and voluntary quits both declined.

We are far enough along past the worst of the pandemic jobs losses that it is worthwhile to compare the state of the various JOLTS components with the two previous recoveries from recession bottoms in the series’ histories (this is because the JOLTS data only dates from 2001).

In the two past recoveries:

  • First, layoffs declined
  • Second, hiring rose
  • Third, job openings rose and voluntary quits increased, close to simultaneously

Let’s examine each of those in turn. In each case, I break out 2001-19 in a first graph and then this year in a second.

This first graph compares layoffs and discharges (blue) with the 4-week average of initial jobless claims (red):

Figure 1

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Broadstone Net Lease- The K-Shaped Recovery Makes The Newest Net Lease REIT A Buy (NYSE:BNL)

Thesis

Broadstone Net Lease went public in late September of this year. The company’s diversified portfolio insulates it from covid risks. Its stable properties have been protected by essential tenants, keeping rental collections above 90% for Q2. With a superior portfolio, ample acquisition opportunities post-IPO, and a discounted valuation, Broadstone is positioned to benefit from the K-shaped net lease recovery.

Diversified Portfolio

Broadstone has a highly diversified portfolio consisting of industrial, healthcare, office, restaurant, and retail properties. A majority of BNL’s portfolio consists of industrial (44%), healthcare (20%), and office (10%), all of which are subject to very little negative impact from covid. Each of these three sectors had over 95% Q2 rental collection rates.

Source- 10-Q

These three sectors also provide protection against the growth in e-commerce, a potential long-term threat to the viability and necessity of net lease properties.

Industrial Portfolio

  • Set to benefit from the increasing penetration
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Analysis: China is winning the global economic recovery

China built its relatively quick recovery through several measures, including stringent lockdown and population tracking policies intended to contain the virus. The government also set aside hundreds of billions of dollars for major infrastructure projects, and offered cash incentives to stimulate spending among its populace. The payoff has been evident, as tourism and spending rebounded during last week’s busy Golden Week holiday period.

By the end of the year, China’s share of global GDP is likely to rise by about 1.1 percentage points, according to a CNN Business calculation using World Bank data. That’s more than triple the share it gained in 2019. By contrast, the United States and Europe will see their shares dip slightly.

All told, China’s economy is expected to be worth about $14.6 trillion by the end of 2020, roughly equivalent to 17.5% of global GDP.

Even without the disruption caused by the virus, China’s share

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