| The IMF downgrades its outlook for the global economy — again. Citigroup's Fraser says she's worried about consumers in Asia. And airline passengers show just how risky opening borders is. Here are some of the things people in markets are talking about today. The International Monetary Fund downgraded its outlook for the coronavirus-ravaged world economy, projecting a significantly deeper recession and slower recovery than it anticipated just two months ago. The fund said Wednesday it now expects global gross domestic product to shrink 4.9% this year, more than the 3% predicted in April. For 2021, the fund sees growth of 5.4%, down from 5.8%. Having already warned of the biggest slump since the Great Depression, the IMF said its increased pessimism reflected scarring from a larger-than-anticipated supply shock during the earlier lockdown, in addition to the continued hit to demand from social distancing and other safety measures. For nations struggling to control the virus spread, a longer lockdown also will take a toll on growth, the IMF said. How much will it all amount to? According to IMF chief economist Gita Gopinath, $12.5 trillion. The current downturn compares with a loss of about 10% of global economic output in the 1930s, she said. A risk-off posture looked set to creep into Asian trading Thursday as investors grew anxious that the resurgence in virus cases in multiple U.S. states will hamper the economic recovery. Equity futures in Japan and Australia pointed lower after the S&P 500 declined 2.6% and Treasuries advanced along with the dollar. Data showed Florida and California set daily records for new cases, while Houston said its intensive-care unit beds are at 97% capacity. Travel stocks and other companies that had been climbing amid reopening optimism got hammered with New York, New Jersey and Connecticut requiring visitors from virus hot spots to self-quarantine. Even in the midst of an economic crisis, shareholder activists are pushing campaigns against a record number of Japanese companies. Evidently, they're not worried about the slowdown — they say the companies have more than enough cash to weather the coronavirus pandemic and boost shareholder returns. So far this year, activist investors have submitted proposals to the annual general meetings of 23 listed firms, according to data from IR Japan. That already surpasses the all-time high of 16 the year before. Money managers including Oasis Management, RMB Capital and Asset Value Investors are urging companies to buy back shares, arguing they can easily do so despite the impact of the pandemic. It's a country where return on equity for companies in the benchmark Topix index is less than half the level for those in America's S&P 500 Index. Prime Minister Shinzo Abe's administration has overhauled Japan's corporate-governance rules, seeking to encourage investors to press companies to improve profitability and capital efficiency. This has emboldened activist investors to increasingly target Japanese firms at this year's AGMs, which peak in June. Citigroup President Jane Fraser said she's worried about signs the bank is seeing in consumer behavior in Asia as it weighs what a potential recovery could look like in the U.S. Fraser, who also leads the firm's global consumer unit, said individuals in recent months have remained cautious about spending, despite the fact that certain parts of Asia weren't hit as hard by the coronavirus pandemic. "Asia has been a little concerning," Fraser said Wednesday at the Bloomberg Invest virtual conference. "The consumer is far from firing on all cylinders in Asia, and I think that's a concern for us here in America." Citigroup's consumer franchise in Asia operates in 17 markets. The bank has more than 16 million credit-card accounts in Asia and its wealth-management business in the region caters to more than 400,000 consumers. Citigroup, with more than 13,000 workers in New York, plans to start ramping up its return to the office next month, with about 5% of staff making the move in. It may defy logic, but people infected with coronavirus have been allowed to board aircraft and travel to Hong Kong in recent days. It's highlighting the challenge of controlling the pandemic while governments seek the safest ways to reopen borders. Hong Kong's health authority said one infected passenger arrived Sunday from Manila on a Cathay Pacific flight, and another on a Cathay Dragon flight from Kuala Lumpur — both were diagnosed with Covid-19 before they traveled. It also said 45 passengers on Emirates flights from Dubai over the weekend either were confirmed or probable cases. The International Air Transport Association, which represents almost 300 airlines, recommends steps such as temperature checks and wearing face masks to protect passengers and crew from infection, but the Hong Kong cases show that infected passengers can bypass voluntary requirements, and there's little airlines can do. What We've Been Reading This is what's caught our eye over the past 24 hours: And finally, here's what Adam's interested in this morning Two market dynamics have been troubling in recent days. The first is the lack of conviction in equity-market moves. Since the huge rebound in global stocks from the March lows, volumes have dried up in many places. For example: In Tokyo, about 20% fewer shares changed hands on Wednesday than the 30-day average. This speaks to just how unsure many traders are about which direction the next meaningful market move will be. The second, flagged by a BTIG strategist this week, was the fresh all-time highs reached on the Nasdaq index. The blistering rally in U.S. tech stocks is showing no signs of letting up at a time when volatility remains elevated, they noted.  There is a case to be made that those dynamics have left rich equity valuations at almost 20-time forward estimates for next year looking vulnerable. Let's see if those volumes pick up in coming days, and where that conviction lies. There's now a Japanese edition of Five Things. 世界のビジネスニュースを毎朝メールでお届けします。ニュースレターへの登録はこちら。 | 
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