Markets Walk Dangerous Tightrope Before U.S. Stimulus Expires
“The remarkable rebound in U.S. equities from the depths of the Covid-19 crisis in March faces a fresh test in coming weeks, with the American economy set for a withdrawal of a key stimulus support. The average unemployment benefit for Americans put out of work will tumble by more than 60% at the end of July, hobbling the incomes of millions of laid off workers — many of whom may not be able to return to their jobs given the renewed shutdowns now affecting swathes of the economy from California to Florida.”
Threat of 4 Million U.K. Unemployed Piles Pressure on Sunak
“U.K. Chancellor of the Exchequer Rishi Sunak’s record spending plans to support the economy this year may not prevent the biggest spike in unemployment in more than three decades. Data on Tuesday showed the gross domestic product expanded much slower in May than expected. The nation’s fiscal watchdog followed that with predictions that laid bare the damage that threatens to scar the economy for years to come. Unemployment could surge to 12% at the end of this year and, under a pessimistic scenario, could peak at 13.2% early in 2021.”
China Set to Post Return to Growth After Easing Lockdowns
“China’s economy is set to post a return to growth for the second quarter, with a range of indicators due Thursday to confirm the upward trend as the nation slowly climbs out of the virus-induced slump. Gross domestic product is forecast to have expanded 2.4% in the three months to June, according to the median estimate of economists surveyed by Bloomberg. That reverses the historic decline of 6.8% in the first quarter compared to the same period last year.”
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