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Focus: US unemployment and Eurozone woes

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Updated 01 May 2020
Cornelia Meyer
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Focus: US unemployment and Eurozone woes

Updated 01 May 2020
Cornelia Meyer

What happened:

US first-time jobless claims jumped another 3.8 million, topping 30 million over the last six weeks.

Eurozone growth rates were dismal too, coming in at minus 3.8 percent for the eurozone as a whole, minus 5.8 percent for France, minus 5.2 percent for Spain, and minus 4.7 percent for Italy.

The corporate earnings season continued with Apple, Amazon and Twitter all either taking a hit or showing lackluster results.

Apple’s net income stood at $11.2 billion. Revenue was up by 1 percent, which was below guidance. Twitter reported a loss of $8 million, due to slagging advertising revenue, and Amazon reported a net income of $2.5 billion, down 30 percent compared to the first quarter (Q1) of 2019. Sales increased by 26 percent as orders jumped due to the coronavirus disease (COVID-19) lockdowns. Operating amidst lockdown and social distancing increased the cost base, which explains the discrepancy between revenues and profit.

US multinational energy corporation ConocoPhillips reported a loss of $1.7 billion due to the challenging environment in the oil and gas sector.

RBS was forecasting an operating profit of £519 million and beefed up its loan loss provisions to £802 million.

Budget airline Ryanair announced that it would cut 3,000 jobs, representing 15 percent of its workforce. The company’s CEO Michael O’Leary told Bloomberg that the $30 billion in state aid to some carriers but not others would lead to market distortions, penalizing some of the more profitable budget airlines.

BA (British Airways) is temporarily closing its base at Gatwick airport.

Background:

The European Central Bank (ECB) left rates unchanged despite the eurozone’s dismal GDP numbers. ECB president, Christine Lagarde, predicted the eurozone economy to contract between 5 and 12 percent for the full year of 2020. In its downside scenario for the second quarter it sees a contraction of 15 percent.

The bank did not increase its 750 billion-euro emergency asset purchase program, but Lagarde indicated willingness to do so down the line.

The ECB left interest rates prima facie unchanged. Its TLTRO-III program lets banks obtain three-year liquidity between minus 0.5 and minus 1 percent if they meet lending goals.

Under its PELTRO (pandemic emergency longer-term refinancing operations) they can get loans with maturities up to 16 months at an interest rate of minus 0.25 percent. The ECB has also allowed banks in some cases to lower the requirements on collateral to BB. These measures are tantamount to a stealth interest-rate cut and are designed to ease the stress on European lenders.

Decision making is less clear cut at the ECB than it is at the US Federal Reserve, because the eurozone consists of 19 countries with their own fiscal systems. However, both institutions showed a similar trajectory by announcing huge programs last month and only tweaking them at the margins this month, while indicating willingness to do more if necessary and emphasizing the importance of further fiscal stimulus.

The EU has so far spent 3.5 trillion euros in rescue funding. Going forward the institution will frontload its seven-year budget. It will also borrow money for a recovery program, which European Commission President Ursula von der Leyen likened to the Marshall Plan (a 1948 post-war foreign aid scheme for Western Europe) and which will be funneled through the multiannual budget to be frontloaded again.

While US first-time jobless claims for the week ending April 24 are high, new claims seem to be on a downward trajectory. More than 30 million Americans have filed for unemployment benefits over the last six weeks. US Secretary of Labor Eugene Scalia told CNBC that benefits had not trickled through to recipients at the desired speed, because many states had antiquated computer systems rendering processing the sheer number of transactions challenging.

The unemployment rate will be higher than after the financial crisis, which is bound to leave a big dent on consumer confidence and consumer spending in an economy which depends 70 percent on the consumer.

Under any scenario, employment is not going to increase as fast as people have lost jobs over the last two months.

Where we go from here:

The dismal economic news combined with lackluster earnings reports resulted in markets sliding across the board on Thursday and into Friday. This stands in stark contrast to the April performance of all major stock exchanges. The S&P 500 was up by 18 percent and the Nasdaq by 21 percent.

Again, this is a striking difference with the overall macroeconomic picture, giving rise to the question, if or rather when we shall see a downward adjustment?

 

 

— Cornelia Meyer is a Ph.D.-level economist with 30 years of experience in investment banking and industry. She is chairperson and CEO of business consultancy Meyer Resources.
Twitter: @MeyerResources

Topics: coronanomics

India’s ‘drone sisters’ navigate change in farming and social roles

Updated 1 min 50 sec ago
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India’s ‘drone sisters’ navigate change in farming and social roles

  • ‘Drone Didi’ program equips women-led self-help groups with drones for agricultural services
  • Women say they earn about $150 a month by drone-spraying fertilizer and pesticide on farms
Updated 1 min 50 sec ago
Sanjay Kumar

NEW DELHI: Rajveer Kaur enjoys the attention she receives whenever she goes out to the fields to operate her drone. Once a housewife and mother, the 29-year-old is now an independent woman, known in her region as a “drone didi” or “drone sister,” helping fertilize farmland and protect it from pests.

Kaur was working with a self-help group in her village in Faridkot district of Punjab when she was selected to join a government program providing women with drone technology for agricultural services.

“Then the central government gave us drones after giving training for a few weeks. It’s now almost a year since it has happened. I get good responses from the farmers. I also got the name of a woman operating a drone in the field,” she told Arab News.

“I was a housewife before becoming a drone pilot. My husband supports me, and it feels really good that a woman who has been a housewife can now step out and become a productive force.”

She also gets a sense of financial independence and can contribute to her household’s budget, earning on average $150 a month.

“There’s also a message in this — that a woman, even while being a housewife, can earn and become independent. She can show that she can be a pilot too — even if it means a drone pilot,” Kaur said.

“Sometimes farmers bargain, but generally I earn $4 for spraying one acre of land. It takes only five minutes. In the last eight months since I started working as a drone pilot, I’ve earned close to 100,000 rupees (around $1,160).”

She is one of the thousands of women in rural India who joined the government’s scheme to empower women-led self-help groups.

Launched by Prime Minister Narendra Modi in November 2023, the “Drone Didi” program aims to distribute 15,000 drones among the groups by the end of this year.

The 25–30 kg industrial drones are designed for agricultural use — to spray pesticides and fertilizers on farmland.

Kaur’s job involves filling the drones’ canisters with chemicals and then remotely navigating the devices over the fields to spray the crops, covering several hectares a day.

Farmers were initially reluctant, but they soon realized that the method works. Kaur’s neighbor, Manjinder Singh, was one of the first farmers to participate in the program when he sowed his field in December and had five and a half acres of land sprayed by drones.

“That was the first time I got my field sprayed by a drone. It was a new experience. It took less time, and it was very smooth,” he said.

“In terms of cost, I don’t see much difference, but it saved a lot of time and physical effort.”

What convinced farmers to rely on the services of the drone operators is that remote spraying uses much less water and is safer for the crops.

Drone operators do not walk through the fields and do not cause physical damage to the crops. They also reduce the probability of crops being infected.

“Bacterial illnesses do not get transferred from one field to another when you use a drone. You are not carrying the bacteria from one field to another because you’re not physically walking through the fields,” Roopendra Kaur, a 29-year-old drone pilot from Firozpur district, explained.

Her main job is in large fields during the sowing seasons. But in between the seasons, drone operators are active too, only their tasks are smaller — like spraying vegetable fields or chili plantations. Since getting her drone in March last year, she has earned about $1,200.

“We have got a sense of purpose in life and to be a drone didi is really a respectable profession. Farmers were initially hesitant, but they appreciate our work,” Kaur said.

“This was the first time I have stepped out of the house. I have been a housewife all my life and this is my first independent work.”

Topics: India

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Paramilitary attack on Sudan famine-hit camp kills 25: activists

Updated 16 min 3 sec ago
AFP
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Paramilitary attack on Sudan famine-hit camp kills 25: activists

  • Shelling and intense gunfire targeted the Zamzam displacement camp near El-Fasher on Friday
Updated 16 min 3 sec ago
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PORT SUDAN: Sudan’s paramilitary Rapid Support Forces on Friday killed 25 civilians including women and children, in an attack on a famine-stricken camp in Sudan’s North Darfur state, activists said.
The attack, which involved shelling and intense gunfire, “targeted Zamzam displacement camp from both the southern and eastern directions,” said the local resistance committee, a volunteer aid group in North Darfur’s besieged capital of El-Fasher.
Zamzam and other densely populated camps for the displaced around El-Fasher have suffered heavily during nearly two years of fighting between Sudan’s army and the RSF.
The paramilitaries have stepped up its efforts to complete their conquest of Darfur, Sudan’s vast western region, since losing control of the capital Khartoum last month.
Eyewitnesses described seeing RSF combat vehicles infiltrating the camp under cover of heavy gunfire.
The local resistance committee said the attack was met with counter-fire but the full extent of damage was unclear due to disrupted communications and Internet shutdowns.
Zamzam was the first part of Sudan where a UN-backed assessment declared famine last year.
The conflict in Sudan has killed tens of thousands of people and uprooted more than 12 million since a struggle for power between rival generals erupted into full-blown war on April 15, 2023.

Topics: Sudan clashes Clashes in Sudan Sudan

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Pakistan eyes fan exports to Gulf, Africa in push to boost economy

Updated 28 min 53 sec ago
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Pakistan eyes fan exports to Gulf, Africa in push to boost economy

  • Muhammad Aurangzeb calls for enhanced productivity to compete in global markets
  • Pakistan’s exports rose 8 percent to $24.7 billion in the current fiscal year through March
Updated 28 min 53 sec ago
Ismail Dilawar

KARACHI: Pakistan’s Finance Minister Muhammad Aurangzeb on Friday hinted at the export of locally produced electric fans with new and improved technology to Gulf and African countries, saying it could potentially boost the country’s export economy.
Pakistan’s fan industry is primarily concentrated in the Punjab cities of Gujranwala and Gujrat, both of which play a key role in domestic production through numerous small and medium enterprises. The country’s leading brands in the sector are all based in these two urban centers, supplying products nationwide.
The finance minister’s statement comes as Pakistan looks to diversify its export base and reduce reliance on traditional sectors like textiles. With energy-efficient appliances such as fans in growing demand globally, particularly in warmer regions like the Gulf and Africa, the government is exploring ways to modernize local manufacturing and align with international standards to reinvigorate industrial output and foreign exchange earnings.
“We are looking forward for these products to not only be used in Pakistan but also have a very good market share in the exports market going forward,” Aurangzeb said while speaking on the sidelines of the “Made in Gujranwala Exhibition” at a local hotel in Islamabad.
“Our efforts now should be to take it to the exports level if we have this much productivity and it is internationally competitiveness as well,” he continued, adding it was important to figure out “how we have to take this initiative ahead to move old fans and the new technology forward.”
According to the Pakistan Bureau of Statistics, Pakistan’s exports rose by 11 percent to $30.7 billion in the last fiscal year ending June 2024. As of March this year, the country has exported $24.7 billion worth of goods, marking an eight percent increase compared to the same period a year earlier.
Aurangzeb said African and Gulf markets were ideal for the export of Pakistani products.
“We have to move toward an export-led growth,” he noted, assuring businesses of the full support of the finance ministry. “Every single sector in this country has to export.”
The government is working to revive Pakistan’s economy with the help of the International Monetary Fund (IMF). The IMF’s executive board is expected to approve a $1 billion tranche for Pakistan under its new loan program in the coming weeks.

Topics: electric fans exports

Cristiano Ronaldo, Georgina Rodriguez star in Saudi cruise campaign

Updated 45 min 28 sec ago
Arab News
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Cristiano Ronaldo, Georgina Rodriguez star in Saudi cruise campaign

Updated 45 min 28 sec ago
Arab News

DUBAI: Portuguese footballer Cristiano Ronaldo and Argentine model Georgina Rodriguez appeared together in a new campaign for Saudi Arabia’s luxury cruise line, Aroya Cruises. 

In the video, the pair exchange a lighthearted moment in Arabic, with Rodriguez saying “yalla” after selecting the cruise on her phone and Ronaldo replying with a cheerful “yalla,” meaning “let’s go.” 

The campaign then transitions into scenes of the couple exploring the cruise experience, showcasing panoramic sea views, luxurious interiors, and their private accommodation on board.

Both Ronaldo and Rodriguez shared the campaign on their social media profiles, captioning the post: “Home isn’t just a place—it’s a feeling.” 

The Aroya cruise ship features a range of amenities, including a spa, multiple restaurants, a theater, water park, retail area, kids’ zone and several swimming pools.

Currently operating primarily from Jeddah, Aroya Cruises offers voyages across the Red Sea, with stops at destinations such as Sharm El-Sheikh in Egypt, Aqaba in Jordan and Jabal Al-Sabaya Island.

Starting June 2025, the cruise line will expand its operations to the Eastern Mediterranean, with new itineraries departing from Istanbul and visiting ports in Greece and Turkiye, including Mykonos, Rhodes and Antalya.

Topics: Cristiano Ronaldo Georgina Rodriguez

Lebanon’s civil war anniversary poll: Half of respondents fear conflict could return

Updated 47 min 26 sec ago
Arab News
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Lebanon’s civil war anniversary poll: Half of respondents fear conflict could return

  • 63.3% favor abolishing sectarian political system for secular state model
  • 42.5% report direct personal or family harm from recent conflict
Updated 47 min 26 sec ago
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BEIRUT: As Lebanon marks 50 years since the outbreak of its civil war on April 13, a new poll has revealed half of the Lebanese people questioned are worried the conflict could return amid a fragile ceasefire.

The survey, conducted jointly by Annahar newspaper and International Information, sampled 1,200 Lebanese citizens across all regions between March 25 and April 2.

It showed that 51.7 percent expressed varying degrees of concern about the war’s return, while 63.3 percent believed establishing a secular civil state by abolishing the sectarian political system represented the best path forward for the country.

A total of 42.5 percent of respondents reported direct harm to themselves or family members, including deaths or injuries (23.7 percent), property damage (19.9 percent), and forced displacement (19.5 percent).

In assessing Lebanese attitudes toward Iran’s role in Lebanon, 78.6 percent of respondents evaluated this role as negative, and 75.3 percent identified Israel as Lebanon’s primary adversary.

The survey came as Israel resumed attacks on Lebanon, claiming it is targeting Hezbollah infrastructure.

In a statement, Annahar’s management described the poll as an essential tool to understand present realities by examining present and past questions, noting the significant timing on the half-century mark of a conflict whose full lessons remain unlearned.

Public opinion remains deeply divided on how to characterize the war that erupted on April 13, 1975, with 40.7 percent describing it as a Lebanese civil war while 38.5 percent view it as a war for others “fought on our soil.”

A smaller segment (8.8 percent) consider it primarily a war related to Palestinian settlement issues.

Information about the war continued to be transmitted largely through personal channels, with 81.9 percent citing family and friends as their primary source of knowledge, followed by media (44.8 percent), personal experience (28.3 percent), and academic sources (13.4 percent), according to the poll.

Topics: Lebanon Battlefield Lebanon

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