S&P has revised Spain 2020 GDP downwards from +1.5% to -1.8%, rebounding +3.1% in 2021, +1.4% in 2022 and +1.5% in 2023. Meanwhile, estimates for the unemployment rate are 14.6% in 2020 compared to 14.1% in 2019, 15.6% in 2021, 15.2% in 2022 and 15.0% in 2023. For its part, Moody’s does not expand on this information; it merely confirms its ratings and outlook.
The rapid spread of the coronavirus in Spain is sparking a decline in activity for many companies, beyond just the shops, bars and restaurants which have been forced to close. Some giants such as SEAT, Volkswagen or Burger King have announced that they are going to launch temporary layoffs (so called ERTEs) to deal with the situation. The Spanish government calculates that the extraordinary measures already activated could affect up to one million jobs.
Charlie Sunnucks (Jupiter AM) | China has shown that the virus can be contained if stringent government measures are put in place, and while the economic shock is considerable, it is also acute, with the shutdown centered on weeks rather than months. The key question is how long it will take for daily activity to normalize.
DWS | The S&P 500 trades about one third below its high. This means that all price gains since the start of 2017 have disappeared. In 2008/09 much more was wiped out.
“It would be a mistake to believe that anything US Congress approves will be a definitive solution for the economy, at least in the short term. As for the size that the economic aid should have, PIMCO believes that “an increase in public spending of 4% could serve to compensate for the economic damage in the short term”
Spain had its first coronavirus death on February 13th, in Valencia. But the Spanish Ministry of Health did not know about it, or did not make it public – and we do not know what is worse – until three weeks later, March 3. This first data reflects well how this pandemic is being managed in Spain.
Telefónica’s business is responding very positively to the exceptional situation we are experiencing in three of its four main markets (Spain, Germany and the United Kingdom) according to data compiled by Renta4 analysts. As the telecoms sector is a defensive one, the analysts believe its results should hold up better than those of most sectors. Particularly given that the government considers it a “basic service”.
It will take until the end of 2022 for global GDP to recover to pre-coronavirus levels. The economic situation caused by this global coronavirus outbreak changes every day. However, the Research Institute of Aberdeen Standard Investments believes the world economy will avoid the end-of-cycle recession, even though the global shock will be significant.
Santander has became the first Ibex-35 company to quantify a preliminary impact on its accounts due to the effect of the coronavirus.In a statement to the Spanish Watchdog CNMV, the banking group said it expects no effect on its first quarter figures. But in a scenario of rapid recovery or “V”, the crisis will trim 5% off full-year 2020 profits, it added.
Philippe Waechter (Ostrum AM) | The ECB has just launched a new asset purchase operation worth 750 billion euros over the period up to the end of 2020 at least. The purchases will relate to public and private securities which are eligible for the asset purchase program (APP) previously implemented by the ECB. The weight of each state in this buying program will be that of each state in the capital of the ECB. The press release suggests a lot of flexibility in interpretation.