First, from Goldman Sachs today:
“[W]e now expect real GDP growth of 0% in Q1 (from +0.7%), -5% in Q2 (from 0%), +3% in Q3 (from +1%), and +4% in Q4 (from +2¼%), with further strong gains in early 2021. This takes our 2020 GDP forecast down to +0.4% (from 1.2%).”
Goldman Sachs currently thinks the recovery will be in Q3 and be fairly rapid. I think the timing is unknown, and the recovery will probably be tepid at first – and then pickup.
With the sudden economic stop, and with many states shutting down by closing down schools, bars and restaurants – combined with the sluggish government response, both on testing and fiscal stimulus – my view is the US economy in now in a recession (started in March 2020), and GDP will decline sharply in Q2 (as Goldman Sachs is forecasting). The length of the recession will depend on the course of the pandemic, and that is unknown at this time. Unfortunately the usual leading indicators aren’t useful with this type of event.
* Schedule for Week of March 15, 2020
* Fed Cuts Rate to Zero in Emergency Meeting
* 8:30 AM: The New York Fed Empire State manufacturing survey for March. The consensus is for a reading of 4.4, down from 12.9.
* 10:00 AM: State Employment and Unemployment (Monthly) for January 2020
From CNBC: Pre-Market Data and Bloomberg futures are limit down: S&P 500 are down 142 and DOW futures are down 1,243 (fair value).
Oil prices were down over the last week with WTI futures at $30.03 per barrel and Brent at $31.88 barrel. A year ago, WTI was at $59, and Brent was at $66 – so oil prices are down about 50% year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.21 per gallon. A year ago prices were at $2.54 per gallon, so gasoline prices are down 33 cents per gallon year-over-year.