- The rate of increase globally in fatalities and new confirmed infections from the coronavirus pandemic has begun to plateau, with total confirmed cases just over 2 million and a case fatality rate of 6.64%. Its epicenter is still located in New York, but even there it seems likely that the peak of this wave has already been reached. A world recession or possibly even depression from the pandemic appears to be inevitable, with Goldman Sachs forecasting a 34% drop in U.S. Q2 annualized GDP and other analysts seeing a 30% unemployment rate in the near future. If correct, these will be the worst such numbers seen since the 1930s, but it should be noted many analysts continue to see a much better outlook for U.S. unemployment. The WTO has forecasted that global trade is set to fall by one third.
- There is increasing discussion of the economic cost of the pandemic in hard hit countries and talk of reopening economies, especially in the United States. However such plans seem detached from the reality of the situation. Some lesser-hit nations such as Austria and Denmark are beginning to relax lockdown restrictions, and even Spain and Italy are making some minor relaxations.
- The price of Gold reached a 7-year high price near $1750 an ounce earlier this week, but has pulled back, suggesting a break to still higher prices is less likely now.
- WTI Crude Oil is falling again, after trading yesterday at a new 18-year low below $20 per barrel.
- Despite the gloomy global economic outlook, stock markets (especially in the U.S.A.) continue to be strong, and other risky assets continue to rise. Major U.S. stock indices have regained more than half of the value lost during its recent fall from peak to low – this is becoming technically significant. Many analysts think the bottom of this bear market has already been reached, but other analysts see further strong falls likely in stocks over the coming weeks and months. There is a strong divergence of opinion.
- Currency markets are currently dominated by relative strength in the U.S. Dollar, while the Euro looks to be the weakest currency today.
- Markets have been affected by high relative volatility, but this is generally decreasing, although stocks are still showing high volatility.
- The U.S. will release unemployment claims data later today which will provide an indication of the depth of the economic damage being caused by the coronavirus pandemic.