A lot is riding on whether cities, states and countries can reopen their economies without sparking a wave of new infections.
On the health front, dispatches from around the world remain sobering. A new cluster of infections in South Korea is growing, the epidemic is worsening in Russia and a key model often cited by the White House now predicts that 147,000 Americans could die by August.
The most recent economic data is also alarming. US prices fell rapidly in April due to a huge drop in demand, with the core consumer price index, which excludes food and energy, experiencing its largest drop since the government began tracking the data in 1957.
This feeds fears among economists about whether a harmful deflationary spiral could set in, my CNN Business colleague Anneken Tappe reports. When prices fall because people aren't buying things, companies sometimes can't charge enough to make the product they're trying to sell. That means they'll stop making those products and lay off workers. That can start a vicious circle in which demand continues to fall as more people lose their jobs.
James Knightley, ING's chief international economist, told clients that prices will likely drop further, calling the collapse in demand "astonishing."
Ideally, massive stimulus efforts by the Federal Reserve and the US government will feed through the system and help raise prices down the line. But inflation has proved difficult to manage since the 2008 financial crisis, staying stubbornly low despite previous stimulus efforts, Knightley observed. That raises concerns about what can be done now.
More bad news: The UK economy shrank by 5.8% in March, the worst monthly decline since record-keeping began in 1997. The drop, reported Wednesday, is shocking considering that shops, pubs, restaurants, theaters and gyms were only closed in the final week of the month, when the government tightened lockdown restrictions.
"March's GDP figures showed that the UK economy was already in freefall within two weeks of the lockdown going into effect," Ruth Gregory, senior UK economist at Capital Economics, said in a research note.
This data — combined with massive job losses, and the knowledge that more recent figures will be even more dismal — raises pressure on officials making decisions about reopening shops, restaurants and schools.
Dr. Anthony Fauci, the top infectious disease expert in the United States, warned senators Tuesday that states and cities face serious consequences if they open up too quickly. His comments contributed to a selloff in stocks, with the S&P 500 closing 2.1% lower.
"There is a real risk that you will trigger an outbreak that you may not be able to control, which in fact, paradoxically, will set you back, not only leading to some suffering and death that could be avoided, but could even set you back on the road to try to get economic recovery," Fauci said.
The huge threat to the tourism industry this summer
Socrates Gavriel is bracing for a dramatic drop in visitors to his boutique hotel in Athens this summer.
Located a short distance from the Greek capital's commercial center, Pi Athens ordinarily welcomes droves of American and Australian tourists this time of year.
"The concern this summer is that those who will come — if and when they do — will skip the big cities and head directly to a beach location," Gavriel told my CNN Business colleague Hanna Ziady. "The hotel is a rented property and there are many bills to pay. I have invested in it heavily. We are hoping for some revenue in the summer, but we don't know if this is going to happen."
Gavriel's story is playing out across the globe, as government restrictions designed to curb the coronavirus pandemic keep billions of people at home. The plunge in travel is affecting everything from small businesses like Gavriel's to massive companies, such as Marriott and Carnival.
This just in: TUI, the world's biggest tour operator, said Wednesday that it could shed up to 8,000 jobs.
The big picture: Travel and tourism accounts for some 10% of global GDP and one in 10 jobs, according to the World Travel and Tourism Council, an industry group. As many as a third of these jobs, or more than 100 million positions, could be at risk as a result of the crisis, per the council.
Countries that rely most heavily on tourist dollars will be hardest hit. A 25% decline in tourism income will knock on average 7% off GDP among "small island developing states," a contraction that could go as deep as 16% in places such as the Maldives and Seychelles.
On the radar: The situation is also dire in Europe, which boasts half the world's international tourist arrivals. The European Commission launched guidelines for restarting tourism on Wednesday.
This is the most expensive time to buy stocks in 20 years
The US stock market is higher today than it was one year ago, despite the death and destruction unleashed by the coronavirus pandemic.
Although more than 80,000 Americans have died and over 33 million have lost jobs, Wall Street has swiftly recovered from the initial shock delivered by the health crisis. The S&P 500 has rallied 28% since its March 23 lows.
That rapid recovery has lifted market valuations into ultra-rich territory, my CNN Business colleague Matt Egan reports. The S&P 500 now trades at roughly 22.5 times projected earnings, according to Refinitiv — the most expensive valuation since October 2000 during the bursting of the dot-com bubble.
Watch this space: Some experts are warning this euphoria could set the stage for a major setback in the stock market given the steep challenges that still exist. A second wave of coronavirus infections, for example, would only further hit corporate earnings.
Even Goldman Sachs, which is bullish on stocks in the long run, is warning clients to brace for a bumpy ride this summer. The investment bank expects the S&P 500 will plunge back to 2,400 over the next three months, representing a potential decline of more than 16%.
- The US Producer Price Index for April arrives at 8:30 a.m. ET.
- The latest data on US crude inventories posts at 10:30 a.m. ET.
Coming tomorrow: Another 2.5 million Americans are expected to have filed initial unemployment claims for last week.