Virus concerns remain high, lots of central bank news and jobless claims due. New playbookWith stocks ostensibly priced for a booming global economy the last thing investors need is the coronavirus to threaten the V-shaped recovery needed to vindicate valuations. No wonder then that some are getting increasingly nervous about news of increased hospitalizations in Texas, Arizona and Florida along with a fresh outbreak in Beijing. Keeping things in check for the moment are massive rounds of government and central bank stimulus. Bank decisionsSpeaking of monetary action, the Bank of England is expected to expand its bond-buying program by 100 billion pounds ($125 billion) with economists on the lookout for hints of more radical polices such as negative interest rates or yield-curve control. The decision is announced at 7:00 a.m. Eastern Time with a press briefing at 9:30 a.m. Elsewhere, the European Central Bank conducted its largest-ever liquidity operation, with banks drawing a record €1.3 trillion ($1.45 trillion) this morning. The Swiss and Norwegian central banks held rates unchanged. ClaimsConsensus is for another drop in initial jobless claims to a still-terribly high 1.29 million for the week ended June 13. The data published at 8:30 a.m. coincides with the June employment survey. Continuing claims are expected to hold close to 20 million amid warnings that unemployment will remain elevated for the rest of this year. In a completely different type of claim, President Donald Trump's administration is fighting to block the publication of a tell-all book by former National Security Advisor John Bolton which contains several claims that do not paint Trump in a flattering light. Markets slipInvestors are currently looking at a repeat of yesterday's small moves lower in global equities. Overnight the MSCI Asia Pacific Index slipped less than 0.1% while Japan's Topix index closed down 0.3%. In Europe, the Stoxx 600 Index was 0.3% lower at 5:50 a.m. with energy stocks among the biggest losers. S&P 500 futures were broadly unchanged, the 10-year Treasury yield was at 0.72% and oil slightly higher. Coming up...As well as claims, 8:30 a.m. sees the publication of the June Philadelphia Fed outlook. The U.S. May Leading Index is at 10:00 a.m. Monetary officials speaking later are Cleveland Federal Reserve Bank President Loretta J. Mester, St. Louis Fed President James Bullard and San Francisco Fed President Mary Daly. Kroger Co. is among the companies reporting results. What we've been readingThis is what's caught our eye over the last 24 hours. And finally, here's what Joe's interested in this morningMy vote for the most important chart of the week would be this one, showing the dual-speed nature of the Chinese economic recovery. While industrial activity is virtually back to normal, retail sales still have a long way to go.  The implications of the chart are significant in both the short and the long term. In the short term, the big question is the speed with which this gets back to a resumption of normality. Even in the U.S., where the consumer has come back faster than expected, there's still a huge haul to get back to normal, especially when you consider how much consumer demand is being augmented by fiscal aid due to expire at the end of next month.
But long term, as I've been harping on about, the most interesting macro question is whether this crisis produces meaningful demand-side reforms around the world. Will China, for example, allow its workers to earn a larger slice of GDP, so that they can spend more? And it's not just a China thing. Will Germany permanently change its approach to fiscal policy, or are the loosening moves that we've seen this year just a one-off? Another way to think of it is that arguably 40 years ago we began the golden era of supply-side moves: deregulating markets, weakening labor unions, globalizing world trade, having central banks focus on price stability. That's had all kinds of market implications, including this incredibly long bond bull market. What remains TBD is whether the crisis of 2020 will spur a similar sea change, but this time on the demand-side to address chronic shortfalls in consumption. The longer the status quo persists of high unemployment and anemic consumer spending, the more policy makers may be forced to.
Joe Weisenthal is an editor at Bloomberg. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
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