- The price of crude oil has appeared to stabilize just above $25 per barrel.
- Stock markets remain surprisingly strong even as the economic damage of the coronavirus pandemic increases. U.S. indices have regained almost 60% of their losses, which is technically significant as an inflection point. Many market 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.
- The rate of increase globally in new confirmed infections and deaths from the coronavirus pandemic seems to have peaked, at least for a first wave, although this may be at least partially due to the pandemic moving into South American countries which tend to have worse reporting systems. Total reported deaths globally have been falling since April 18th and daily new confirmed cases since April 24th. Total confirmed new cases stand at more than 4.1 million with an average case fatality rate of 6.89%. The pandemic’s epicenter is still located in the U.S.A., but even there it seems as if the peak of this wave has probably already been reached, while this looks more certain also for every European nation. However, new cases seem to be plateauing, not falling, in both the U.S.A. and the U.K.
- 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. The U.S. now sees an unemployment rate of 15% and a drop in 1st Q GDP of 4.8%.
- Data from New York City suggests that 0.24% of the entire population of the city has recently died while infected with the coronavirus, which is one of the strongest pieces of hard evidence that the disease has a significantly higher mortality rate than any common flu. Similar data from Bergamo, Italy suggests an estimate from between 0.20% to 0.50%, indicating that claims of coronavirus having a significantly lower IFR are unlikely to be accurate. With recent antibody tests suggesting 21% of the city has been infected, this suggests an infection fatality rate of almost 1%.
- France, Italy, and some other nations (mostly in Europe) have begun to ease restrictions as it becomes clear the first wave’s peak has passed. The countries which seem to have suffered least from this first wave are New Zealand (which is close to having eliminated the disease completely), Australia, Norway, Austria, Greece, and Israel.
- The rate of new coronavirus infections appears to be increasing fastest in Brazil, Russia, and India.
- While the vast majority of confirmed coronavirus cases are still in Europe and the U.S.A., with the U.S.A. accounting for approximately one third of all cases, infections are beginning to increase dramatically in Latin America, which is now accounting for almost one quarter of global deaths. The situation is especially bad in Brazil which is now confirming more than 10,000 new cases and 600 deaths daily, and in Mexico. The President of Brazil Jair Bolsonaro has been seen in public recently suffering from a dry cough, leading to speculation he is infected, as he continues to play down the disease as no worse than the flu.
- Currency markets are dominated by relative strength in the Australian Dollar, while the Japanese Yen looks like the weakest currency today.