Forget earnings. Investors care about one thing right now: reopening

Good morning. Can we make it three days in a row? Stocks are mixed in Asia and Europe, but U.S. futures are showing strength, buoyed by President Trump’s vow to reopen the economy.

Let’s take a closer look.

Markets update

Asia

• The major indices are mixed. Japan’s Nikkei was down while Hong Kong and Shanghai were holding on to gains.
• China’s Labor Day holiday (it actually ran over five days this year) saw a dramatic drop-off in domestic travel. Tourism revenues sank nearly 60% y-o-y.
• “This is still the first half of the marathon,” Singapore’s national development minister warns about its flattening-the-curve efforts. You may recall Singapore had what appeared to be a handle on COVID-19 contagions in March, only to see a powerful second wave.
• Disney will reopen its Shanghai theme park on May 11, one of the few uplifting tidbits to come out of yesterday’s quarterly results.

Europe

• European bourses were flat at the open, before ticking up. The benchmarked Stoxx Europe 600 began the day down 0.1% while London’s FTSE and Germany’s Dax were both trading higher.
• The ECB struck a defiant tone Tuesday night saying it remains committed to its QE-style bond-buying program to nudge inflation higher.
• That’s in response to yesterday’s bombshell German court ruling saying the central bank had overstepped its mandate in doing what central banks everywhere around the world do these days: load up their balance sheet with all manner of sovereign and corporate assets. The spread on Italian bonds ticked up on the decision, a sign of market uneasiness.
• To corporate news now… BMW cut its profit forecast this morning and Italian lender UniCredit posted a €2.71 billion ($2.94 billion) loss.
• Fresh off the presses, the European Commission has slashed its 2020 full-year eurozone growth rate forecast to -7.75%, point to “a recession of historic proportions.”

U.S.

• The Dow, S&P 500 and Nasdaq futures all point to a positive open.
• The indices closed in the green yesterday, a second straight day of gains. But all three sunk in the last hour of trade on Tuesday.
• President Trump, on a rare trip outside of Washington D.C., yesterday vowed to reopen the economy, “and open soon.”
• There are a lot of concerns that soon doesn’t turn into too soon.
• “The economics of ending a lockdown depend on fear and confidence,” UBS’s Paul Donovan wrote in his morning note today. Come out too soon and inflict damage on consumer confidence, and “the economic downturn continues independent of the lockdown policy.”
• Speaking of confidence…With the travel sector on life support, Airbnb announced it would cut 25% of its workforce.
• Speaking of reopening… Fortune‘s crack reporting staff, from Hong Kong to San Francisco, are covering what the great reopening around the world will look like. It’s called “How to Reopen.”

Elsewhere

• Gold is down, slightly.
• The dollar is up, slightly.
• Crude is climbing. WTI has had quite a run in the last week, topping $24/barrel.

The engine of the economy

A big factor in any turnaround calculus is the creditworthiness of Corporate America. With good reason. Bankruptcies and credit downgrades are decimating the retail, travel and energy sectors.

The American consumer may be in even worse shape, a dire sign for all industry sectors. The consumer is the engine of the U.S. economy. If she pulls back significantly, there will be no comeback.

That’s why yesterday’s data is so troubling. The New York Fed released its quarterly report on household debt. The numbers showed the American consumer is $14.3 trillion in the red, a new record, as today’s chart from the New York Fed shows.

The American consumer has looked pretty precarious for much of the past decade. Those red and blue lines trending up, up, up are not a good sign.

Interestingly, the global financial crisis, a decade ago, forced Americans to tighten their belts and step up savings. That didn’t last long. Over the past five years the trend has gone in the opposite direction. Fast forward to today and the American consumer has piled on a further $1.6 trillion debt since Q3, 2008. A surge in student loan, mortgage and auto loan debt is to blame for much of this debt burden. (Credit card debt has declined some, the Fed reports, a sign more of Americans’ income is shifting from spending to debt-servicing.)

It will be interesting to see if the coronavirus shock forces Americans to retrench, and turn more thrifty. That would be good for America’s household finances. But it would be bad for America’s comeback story.

***

Have a nice day everyone. I’ll see you here tomorrow.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

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Today's reads

Where's the beef? There are headlines that make me shake my head and mutter to no-one in particular, "The U.S. is not having a good pandemic." Here's another one. According to The New York Times, hundreds of Wendy's hamburger chains have run out of...hamburgers. There's a run on red meat in the U.S. as production at meat processing plants across the country plummets, putting that Memorial Day barbecue in doubt. On the bright side: nobody was going to show up anyhow.

Waiting by the mailbox. Less than half of American adults (41%) have received their stimulus check, a Fortune-SurveyMonkey survey finds. So much for a rapid injection of stimulus to help the cash-strapped through these troubled times. One group left out altogether is college students. That should be remedied, this executive says.

(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)

Market candy

Photo essay: Europe reopens

My colleagues put together a lovely photo-rich report depicting a new Europe as it slowly reopens for business. Rome makes the cut. Some bars here are doing white-glove take-away coffee service. What I'd give for an espresso from Bar Sant'Eustacchio near the Pantheon—the best espresso in the world.