This spring, the US economy was put into an unprecedented deep freeze — and economists, investors and policymakers are about to learn the extent of the damage done.
What's happening: The US Bureau of Economic Analysis is due to release its first estimate of GDP for the April-to-June quarter on Thursday.
Economists polled by Refinitiv expect an annualized contraction of 34.1%. That would be the worst quarter since the agency started keeping quarterly records in 1947, and four times worse than the decline experienced as a result of the 2008 financial crisis.
Economists predict GDP will jump sharply in the current quarter. The Federal Reserve Bank of New York expects an annualized increase of 13.3% between July and September.
But that bounce depends in large part on the health of the American shopper, whose spending accounts for roughly two-thirds of the country's economic output.
It's not clear the rebound in consumption will hold up as coronavirus infections rise across much of the country, triggering a host of fresh restrictions. Already, high-frequency data is showing signs of weakness.
See here: Initial claims for unemployment benefits are expected to rise for the second week in a row. Economists surveyed by Refintiv predict that another 1.45 million claims were made for the week ending July 25, up from nearly 1.42 million the week prior.
The employment situation in the United States stands in stark contrast with Germany, which on Thursday reported that the unemployment rate in June was virtually unchanged compared to May, even though the country experienced its worst contraction in output since records began in 1970. That's largely due to the country's reliance on short-time work programs.
The German economy shrank 10.1% between April and June compared to the previous quarter due to historic declines in investment, consumption and exports.
That's worse than expected. But economists think it still indicates the strength of the recovery starting in May.
"Available hard data point to peak contractions of around 29% for industrial production and 15% for the services sector in April," Goldman Sachs economist Sören Radde said in a note to clients. "The quarterly growth rate of -10.1% is therefore consistent with a relatively fast rebound of both sectors."
Big Tech to report earnings after grilling from Congress
How did the most powerful tech companies in the world fare during what was probably the worst three months for the US economy on record?
That's the question from investors as Apple, Amazon, Facebook and Google-owner Alphabet report earnings on Thursday.
What these four companies have to say will carry a lot of weight.
"Thursday after the bell will be a seminal night for the Street to digest how these tech stalwarts are faring during the dark Covid storm," Wedbush Securities analyst Daniel Ives said in a research note. "Will these results/guidance be enough to keep the tech rally going or cause a red light for investors?"
Apple, Amazon, Facebook and Alphabet have helped drive the S&P 500's miraculous recovery since March, and the four companies now account for 18% of the index's value. Investors like that their online businesses are shielded from some of the direct impacts of the pandemic, and see growth potential in higher sales of cloud services and better user engagement.
But there are key questions about the outlook. Facebook and Google will need to answer questions about the health of advertising sales, while Amazon will be expected to demonstrate that it can maintain substantial growth in its cloud services division while keeping a lid on delivery costs. The release schedule for Apple's 5G iPhones has also been called into doubt.
This, too: The earnings announcements come one day after the leaders of these companies were hit with tough questions from US lawmakers armed with internal company documents that raised concerns about their competitive tactics.
Watch this space: Amazon CEO Jeff Bezos acknowledged that there is a policy that prohibits the use of third-party seller data to support Amazon's own private-label business. But, he admitted, "I can't guarantee you that policy has never been violated."
Kodak is reinventing itself, and investors are obsessed
Kodak, the former photography giant, is reinventing itself as a drugmaker — and investors are ecstatic.
The New York Stock Exchange had to halt the trading of Kodak shares 20 times on Wednesday after the company's stock skyrocketed for the second day in a row.
Following a more than 200% jump in Tuesday trading, shares gained 318% on Wednesday. At one point, they were up more than 650%.
The backstory: Kodak rebranded as a producer of materials and chemicals after its bankruptcy in 2012. Now it's pivoting to pharmaceutical ingredients with the help of a $765 million government loan from the Trump administration, part of an effort to reduce dependence on foreign drug makers.
The company already makes key materials for some pharmaceuticals, easing the transition, Kodak CEO Jim Continenza told CNN Business' Julia Chatterley on Wednesday.
The loan is the first of its kind under the Defense Production Act, and will allow Kodak to remodel and expand facilities in Rochester, New York and St. Paul, Minnesota over the next three years. The company aims to produce 25% of the active ingredients used in Americans' generic medicines.
US initial unemployment claims and the first estimate of second quarter GDP post at 8:30 a.m. ET.
Also today: Anheuser-Busch InBev, AstraZeneca, Comcast, Kraft Heinz, Mastercard, Molson Coors, Procter & Gamble, UPS and Yum Brands report earnings before US markets open. Alphabet, Apple, Amazon, Facebook and Ford will follow after the close.
Coming tomorrow: The first reading of second quarter GDP arrives for the 19 countries that use the euro.