California’s economy is now 75% open after restrictions regarding the coronavirus were eased. Apple said that nearly 100 of its stores reopened. Out of over 100 vaccines in development globally, at least eight have started being tested on humans, including candidates from Moderna Inc. and Pfizer Inc. At the same time, pharmaceutical companies like Johnson & Johnson, AstraZeneca PLC and Sanofi are building capacity to make hundreds of millions of doses of their own or their partners' vaccines. The debate on who will be first granted access to the vaccine has started. Sanofi’s CEO was summoned by President Macron in France for comments he made about the US being entitled to any vaccine first.
Federal Reserve Chairman Jerome Powell gave a video presentation on Wednesday. He rejected the use of negative rates, seeing current options as more effective, and less toxic for the banking sector. These options include the use of the Fed balance sheet. His near-term outlook remains bleak citing “significant downside risks” as he sees the unemployment rate remaining high for a while. He called for more fiscal stimulus.
The Trump administration announced a ban on any chipmaker using American equipment from supplying Huawei without US government approval. The news came via a tweet from Commerce Secretary Wilbur Ross saying, “we must amend our rules exploited by Huawei and HI Silicon and prevent US technologies from enabling malign activities contrary to US national security and foreign policy interests.” China came out opposing the measures and affirming that it will take every action to defend the rights and interests of Chinese companies and was diplomatic in urging the US to create conditions for normal trade between the two countries.
In the US, a further 2.98m people sought jobless benefits in the week ended May 8th. With initial weekly claims peaking at end-March, the latest figure brings total first time claims over the past two months to 36.5 m people. Industrial production fell by a record -11.2% in April from the previous month, while retail spending dropped -16.4%. In Europe, Euro area real GDP growth came in at -3.8% in Q1 q-o-q. Germany real GDP fell by -2.2% in Q1 compared to the previous quarter, the sharpest drop since Q1 2009. In the UK, GDP fell by -2% q-o-q in Q1. In Asia, April Industrial production in China rebounded, growing +3.9% y-o-y after collapsing -13.5% the previous month. Retail sales fell -7.5% y-o-y in April. Japan’s economy contracted by an annualized -3.4% in Q1.