Brief: The global economy will suffer the biggest peace-time downturn in a century before it emerges next year from a coronavirus-inflicted recession, the OECD said on Wednesday. Updating its outlook, the Organisation for Economic Cooperation and Development (OECD) forecast the global economy would contract 6.0% this year before bouncing back with 5.2% growth in 2021 - providing the outbreak is kept under control. However, the Paris-based policy forum said an equally possible scenario of a second wave of contagion this year could see the global economy contract 7.6% before growing only 2.8% next year. “By the end of 2021, the loss of income exceeds that of any previous recession over the last 100 years outside wartime, with dire and long-lasting consequences for people, firms and governments,” OECD chief economist Laurence Boone wrote in an introduction to the refreshed outlook. With crisis responses set to shape economic and social prospects for the coming decade, she urged governments not to shy away from debt-financed spending to support low-paid workers and investment.
Brief: AllianceBernstein Holding LP Chief Executive Officer Seth Bernstein said the opening of the company’s Nashville headquarters has been pushed back to the first or second quarter of 2021 after the coronavirus crisis delayed construction plans. The firm had planned to be moved in by the end of the year until the pandemic hit, Bernstein said Wednesday during a virtual conference. AllianceBernstein had $596 billion in assets under management at the end of May.
Brief: Goldman Sachs Group Inc (GS.N) commodities unit generated more than $1 billion in revenue this year through May as traders positioned their bets for the collapse in oil prices, a source familiar with the group’s finances said on Wednesday.The gains were largely driven by oil trading, the source said, though other commodities, including natural gas, power and precious metals contributed, the source said. Oil prices plunged to their lowest in years in a dramatic selloff at the start of March. U.S. crude futures at one point fell deep into negative territory as panicked traders bailed out of positions after realizing many would be forced to take physical delivery of oil without a place to put the barrels.Most of Goldman’s boost came from oil trading overseen by Singapore-based partner Qin Xiao and Anthony Dewell in London, amid the collapse in oil prices, according to Bloomberg News, which first reported the $1 billion figure, citing people with knowledge of the matter.
Brief: Billionaire bond investor Jeffrey Gundlach, the CEO of $135 billion DoubleLine Capital, sees the potential for a "wave of more higher-end unemployment' hitting white-collar workers making more than $100,000 per year as employers increasingly question the value these employees bring. In 11 weeks, more than 42 million Americans filed for unemployment insurance as the COVID-19 pandemic wrecked the economy. The bulk of these job losses hit lower-income households the hardest. "A lot of times it's not the earthquake, it's the fire," Gundlach said on a webcast for the DoubleLine Total Return Bond Fund (DBLTX), later adding that he could "easily see layoffs in various industries" affecting higher earners. Gundlach, who runs the Los Angeles-based bond investment firm, explained that one of the outcomes of remote work is it reveals who produces and who doesn't. "What people may have learned for white-collar services jobs, in particular, during the work-from-home lockdown situation, at least in my perspective — I've talked to a lot of my peers on this — I kind of learned who was really doing the work and who was not really doing as much work as it looked like on paper that they might have been doing," Gundlach said. He's witnessed this at DoubleLine, where people running "certain groups" haven't been as responsive, while the more junior members on their team have stepped up.
Brief: As lockdown eases in some countries but not in others, and as the death toll continues to rise, there may be a light at the end of this long, dark tunnel of uncertainty – as long as the world does not backtrack, back to business as usual, nor falter on the promised path toward a sustainable future. For Jamie Jenkins, co-head of the responsible global equities team at BMO Global Asset Management, it’s going to be very difficult to return to how things were before the pandemic rattled markets worldwide. “The particular nature of this current crisis, or recessionary period we’re about to go into, is different. Every time you get a drawdown in markets, every time you get some kind of shock, it tends to be different,” he says. “And what’s different about this one, from the financial crisis in ‘08/09, is that first and foremost it’s a public health crisis that is leading into a consumer crisis because of this unparalleled period of government-mandated lockdown. And so it’s a health crisis, it’s a consumption crisis, and by extension, it becomes a financial concern because of the stress on consumer income.”
Brief: Activist shareholdershave increasingly focused on ousting top bosses since the coronavirus pandemic took hold of the global economy, according to a new report from investment bank Lazard. In the second quarter, so far, 50% of all campaigns by shareholder activists have involved attacks against boards or management teams, compared to a consistent 33% in the first quarter of 2020 and the whole of 2019. The removal or replacement of top executives at European companies has become a more prominent demand since the onset of the coronavirus pandemic, according to the report. Lazard Head of European Shareholder Advisory, Rich Thomas, told CNBC’s “Squawk Box Europe” on Tuesday that leadership is “never more important” for activist investors than in times of crisis. “That is why we are seeing leadership of companies firmly in the crosshairs of many activists and activist campaigns,” Thomas explained, adding that the coronavirus crisis has taken away some of the traditional tools available to shareholder activists.