Billions lost for oil companies or aircraft manufacturers, GDP in free fall, stock markets at half mast: the global economy continued Thursday to foot the bill for the pandemic and the rebound promises to be uncertain, only the tech giants seeming to float.
The figures are staggering: the GDP of the United States, released on Thursday, fell 32.9% in the second quarter, at an annualized rate, marking the official entry of the world’s largest economy into recession.
Germany, Europe’s largest economy, reported a historic plunge of 10.1% of its GDP in the second quarter and Mexico a fall of 17.3%, the largest in its history.
Be careful, however, not to compare hastily: the American evolution at an annualized rate compares the GDP to that of the previous quarter and projects the evolution over the entire year at this rate, which tends to amplify the variations.
“The GDP is the mirror, it indicates to us the bottom of the wave”, declared to hooly News Ludovic Subran, the chief economist of Allianz.
In addition to the heavy US recession, new weekly jobless claims rose to 1.43 million last week in the United States.
On the corporate side, the flurry of financial results published Thursday rocked the global stock and oil markets, with Paris dropping 2.13% at the close, Frankfurt 3.45% and London 2.31%. Wall Street finished in a more mixed fashion, the Dow Jones yielding 0.85% while the Nasdaq nibbling 0.43%.
The representatives of the “old economy” – industrial, energy-hungry, dependent on physical commercial exchanges – emerge shaken, while the American tech behemoths have resisted the pandemic well.
In the camp of the firsts, L’Oréal, Lagardère and Saint-Gobain ended in unison a gloomy European day by posting respectively a drop in net profit of 21.7% and net losses of 481 million euros and 434 million euros, misfortunes largely linked to the pandemic.
Among the latter, who released their results after the close of Wall Street, Apple saw its revenues climb 11% year on year to nearly $ 60 billion, Amazon’s net profit doubled to 5.2 billion dollars and Facebook’s almost doubled in size as well. As for Alphabet, the parent company of Google, its profit fell by nearly three billion dollars but nevertheless amounted to almost seven billion dollars.
At the start of the day, on the other side of the planet, the South Korean Samsung, one of the world leaders in cell phones and memory cards, had already seen its quarterly net profit jump 7.3%.
– “Unprecedented” –
Outside of tech, oil companies have downgraded the value of their assets, due to collapsing crude prices and demand. With the consequence of abysmal losses in the second quarter, of 8.4 billion dollars for Total, of 18.1 billion dollars for the Anglo-Dutch Royal Dutch Shell.
Aeronautics are also paying an overwhelming price to the crisis.
European aircraft manufacturer Airbus recorded a net loss of 1.9 billion euros in the first half. Big rival Boeing lost $ 2.4 billion in the second quarter. Air France-KLM for its part deplored 2.6 billion euros in losses in the second quarter.
In the automotive industry, the French manufacturer Renault suffered the heaviest net loss in its history in the first half of the year, 7.3 billion euros. The German Volkswagen, meanwhile, announced a pre-tax loss of 1.4 billion euros in the first half. Ford has deplored an operating loss of 1.9 billion USD, however lower than the five billion predicted in April.
Rail side, the French company SNCF suffered a loss of 2.4 billion euros while the German Deutsche Bahn is experiencing the worst crisis in its history with a loss of 3.7 billion.
– “Darwinian crisis” –
In the industry, heavyweights have also delivered gloomy balance sheets: steelmaker ArcelorMittal recorded a net loss of $ 559 million in the second quarter.
The food industry resisted a little better. Swiss giant Nestlé posted half-year net profit up 18.3%.
Other companies were doing well, such as the American courier group UPS, taking advantage of the increase in the number of packages ordered, and Procter & Gamble, capitalizing on the increased demand for cleaning products.
“This crisis is very Darwinian, it affects countries and sectors very differently”, with a “double trigger” impact, warns Mr. Subran. After the first shock on activity, “sectors that are already weakened in terms of profitability will have to adjust to a slower change of environment”.
However, “this crisis has revealed real growth drivers: the knowledge and knowledge economy, the digital economy” and online sales but “we are talking about a few companies”, qualifies the economist.