US Federal Reserve backlash. China’s exports
This week marks the start of earnings
season. Some of the worlds’ biggest banks will be revealing their earnings,
providing a glimpse into how bad global profits have been hit.
Following steep falls in January and February, figures for China’s exports showed modest rebound for the country’s trade sector. Exports fell 3.5% yoy for March and 6.4% yoy for the first quarter despite a 15.9% decline in January and February. March also saw China record a trade surplus of $18.5bn in comparison to a deficit of $7.1bn in January and February. These figures are to be considered with caution as during the start of the quarter, China faced a supply side problem due to the pandemic however this has now shifted to a demand problem as some of China’s biggest markets in North America and Europe have gone into lockdown.
In comparison to Europe, where social payments to those out of work due to the pandemic have been ongoing since March, millions of Americans are facing lengthy delays in their receipt of crisis payments. Despite the initial promise that payments would be wired within two weeks and cheques for others to follow shortly thereafter. Those who have received tax preparation services may still have to wait months to receive their payments. Such a wait could cause significant financial stress for individuals and families with the knock on effect of bills not being paid and companies losing vital income.
According to the Financial Times, the US Federal Reserve has received backlash about its plan to provide emergency funding to states and large cities, a moved which has been described as “very short sighted”. They announced they would purchase up to $500bn of short-term debt directly from US states, counties with at least 2m residents and cities with a population of at least 1m. However, despite providing funding to municipals, only 16 counties and 10 cities are eligible for these purchases. The move ignores smaller state and local governments who may be in much more need of the assistance and will not help with long term funding as a stable buyer is required.