While last week saw the highest ever initial jobless claims on record by 4x, Friday’s announcement more than doubled that figure, at 6.6M Americans filing for initial claims in the week. These claims pushed the March unemployment rate up nearly a percent, to 4.4%. We’ve mentioned a lot about the bond market recently (here and here), and the corporate bond market has been hit fairly hard on rising default expectations amid slowing revenue and cash flow. An interesting event happened in March that is worth noting. Investment-grade debt issuance in March hit a record high of $213B, and a single week in late March accounted for $107B of issuance, putting that week alone at more investment-grade debt being issued than in nine out of 12 entire months in 2019. On Thursday, global confirmed COVID-19 cases surpassed 1 million. Confirmed cases grew at a rate in the high single-digit percentages each day, slightly down from the 10-15% daily increase we saw last week while New York saw deaths double in a few days, and roughly half of the world population is now under stay at home orders. Expectedly, measures of manufacturing and services sector sentiment fell in March into contractionary territory. While the ISM surveys were better than the low expectations, Markit’s US Services PMI survey has fallen off a cliff over the last two months, going from 53.4 in January to 39.8 in March. It’s worth noting the same caution for these numbers as we did months ago that these are survey results and can be swung by sentiment and sampling methodologies.
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