US stocks ended down last week, paring some of the prior week’s rally, after a plunge in US hiring hinted at the extent of the pandemic’s toll on the world’s biggest economy. Meantime, oil pared some of the rally seen on Friday in the wake of hopes of production cuts.

Global job losses could reach 25 million if the coronavirus isn't controlled, according to the International Labour Organization. The US jobs market is crashing even earlier than forecast. Payrolls tumbled by 701,000 last month, before the brunt of the shutdowns, way worse than consensus. Unemployment rose to 4.4% from 3.5% and analysts said April will be even more dire.

Last week, the Dow slid 1.7% while the S&P 500 lost 2.1%. The Nasdaq Composite closed last week down 1.5%. Stocks are also deep in bear-market territory as concerns over the coronavirus outbreak have virtually shut down the global economy and have dampened sentiment around corporate profits.

WTI ended the week 32% higher after five straight weeks of declines amid rising expectations the US may join OPEC and Russia in a coordinated pact to slash global oil production to help balance a heavily oversupplied market as the coronavirus pandemic has shrunk demand. Analysts remain sceptical of a deal between the Big 3 producers but say, it's important for markets that a dialogue has started.

On the whole, we believe that a rebound in activity should come quite quickly once the Covid-19 containment measures get lifted.

The situation will remain fluid for several months and even in a world of big data, time lags in releasing official statistics will impede analysis.

We will continue to closely monitor medical updates and economic policy measures, as these are likely to offer clues as to the length and depth of the recession and the scale of the subsequent bounce before we see the impact in standard macro data.

Source: OCBC Research - 6 Apr 2020