Pre-market stocks: Germany falls into recession

The country’s statistical agency said this household consumption it fell abruptly. Investments in machinery and equipment have collapsed, while both imports and exports “have seen a sharp decline” compared to the fourth quarter.

The difference? Germany did not introduce strict social withdrawal measures until the relatively late March 22nd date.

However, the worst is yet to come. Capital Economics’ Jack Allen-Reynolds said he expected a 10% drop in German GDP in the second quarter.

“The blockade is easing in May and June, but only gradually, and Germany’s recovery will be limited by problems elsewhere in Europe,” he said.

The reopening of the factories will not solve the economy

Remember: the Chinese economy shrank by 6.8% in the first quarter compared to a year earlier.

While the IMF still expects China’s GDP to grow 1.2% this year, analysts warn that the country’s recovery will be on the way.

The challenge: it is relatively easy for Beijing to bring in its state-supported manufacturing and construction companies. What is proving more difficult is to encourage consumers to spend.

Here is the evaluation of the economists of the Societe Generale:

“Investments outperformed consumption and, in the context of investments, properties and infrastructure outperformed thanks to the stimulus of credit. The disappointment of retail sales could continue, as the unemployment situation and the prospects for income remain difficult”, they wrote in a research note.

What it means for everyone else: China’s economic recovery has been underway for months. Even Wuhan, the epicenter of the pandemic, emerged from the blockade on April 8.

This means that countries that are still struggling to contain coronavirus still have months and months before their economies can really begin to recover. Some may even face a lost year.

The United States faces one of the most desolate prospects.

More than 36 million Americans have filed initial unemployment claims since mid-March, putting many families in severe financial stress.

And coronavirus continues to spread, with the total number of cases in the country exceeding 1.4 million. Many consumers are unwilling to leave their homes to visit restaurants and shopping malls, even if the blocks have been loosened in their state.

How bad is it? Investors will make sense when retail sales for April are released at 8:30 ET.

Another fact: JCPenney is expected to file for bankruptcy in the near future. The iconic chain would join two other major US retailers, Neiman Marcus and J.Crew, as victims of the pandemic.

Poor Americans suffer more

The Federal Reserve on Thursday reported how unevenly the coronavirus-induced economic crisis is affecting Americans.

On the one hand, low-income people are slammed. Nearly 40% of those with a family income of less than $ 40,000 reported job losses in March, according to the central bank.

At the same time, incomes and the ability to pay current bills seemed to remain generally stable for most adults during the first few weeks of the coronavirus pandemic.

Also substantially unchanged was the percentage of people who reported being able to pay an unexpected $ 400 emergency expense entirely using cash, savings or a credit card in the next bank statement.

More from CNN’s Tami Luhby: The findings support other reports showing that low-income Americans, as well as blacks and Hispanics, are bearing the brunt of the financial fallout from the outbreak.

Come on next

US retail sales data for April will be published at 8:30 am ET. JD.com entries will be posted before the opening bell.

Also today: