Virus Economic Signals, U.S. Achilles Heel, Fed Outlook: Eco Day

(Bloomberg) -- Good morning Americas. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

  • The economic package to be unveiled by President Donald Trump will leave out for now any aid for the travel industry, which has been battered by the coronavirus outbreak, according to people familiar with the matter, raising the risk that the plan won’t go far enough to satisfy investors
  • While the official data-releases on employment, inflation and gross domestic product will eventually show the effect of the coronavirus on economic activity, they will be behind the curve in deciphering how large the effect is on U.S. consumers. Here are 5 indicators to watch instead
    • Meanwhile, the coronavirus is threatening to expose the Achilles heel of the U.S. economy: heavily leveraged companies
    • The latest reading for Bloomberg Economics’ U.S. recession probability model shows the chances of a downtown in the next 12 months rising to 53%
  • JPMorgan Chase & Co. economists predicted the U.S. Federal Reserve will cut interest rates to the lowest level since 2015 by the end of next week, a more aggressive move than anticipated by other Wall Street banks
  • Anyone expecting Germany to ride to the rescue of Europe’s economy is in for a wait, as politicians remain wary of major fiscal stimulus
  • Just as China’s factories get back on their feet after being laid low by the coronavirus, a drop in demand from their biggest trading partners around the world is coming back to give them another hit
  • Britain may once again become a model for fighting an economic slump more than a decade after setting the tone in the financial crisis
  • Exactly a week after the Fed delivered a half-point emergency interest-rate cut, Sweden’s Riksbank is making clear it sees little sense in pursuing such policy steps to fight the fallout of the coronavirus

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