The week commencing March 30 and ending April 2 global markets had a mixed reaction to the uncertainty imposed by growing COVID19 cases. The week marked the end of a battered Q1:2020 which has recorded the worst quarterly performance since 2008.
US unemployment claims doubled in a week as COVID19 continues to ravage America. Statistics from the Labor Department released Thursday reveal that 6.65 million people filed unemployment claims in the week ended March 28. This was up from the 3.31 million reported the previous week as restaurants and stores close across the globe. Further, on Friday the US department reported 701,000 drop in non-farm payrolls with Travel & Leisure accounting for the bulk of employment losses as companies in that sector shed 459,000 workers. The March unemployment rate rose to 4.4% in March from 3.5% recorded in February.
First, crude oil recorded slight gains following a tweet by President Trump that Saudi and Russia may hold talks to cut oil production and stabilize prices. Further, there were reports that Saudi has called for an emergency OPEC meeting with China increasing oil demand for its emergency reserves.
Airlines across the globe continue to bear the brunt for grounded flights. American Airlines, US largest airline, applied for payroll assistance grants from the government $2trillion stimulus plan. Emirates received a government bailout with Kenya Airways asking for a bailout to maintain the grounded aircraft, pay staff salaries and pay security, water, and electricity bills. UK budget airline EasyJet has grounded its entire fleet of planes for an undisclosed period citing unprecedented travel restrictions. The International Air Transport Association (IATA) says that airlines worldwide might need close to $200 billion (KSh20.8 trillion) capital injection for them to remain afloat.
Financial institutions, World Bank and the IMF announced that the global economy has slid into a recession. The International Monetary Fund (IMF) noted that the global economy is already in a recession propelled by COVID19 outbreak with the depth and length of the recession depending on containing the virus and having a coordinated response to the pandemic.
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