- The rate of increase globally in fatalities and new confirmed infections from the coronavirus pandemic has begun to plateau at best or increase linearly at worst, with total confirmed cases just over 2.4 million and a case fatality rate of 6.87%. Its epicenter is still located in New York, but even there it seems likely that the peak of this wave has already been reached, as it probably has in every European nation. 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.
- Data from New York City suggests that 0.17% 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 flu. If the case fatality rate is 0.8%, this suggests that almost one-quarter of New Yorkers have been infected with the disease so far.
- 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 where the unemployment rate is currently estimated to have hit 15%. Some nations (mostly in Europe) have begun to relax restrictions, notably Germany, Poland, Norway, the Czech Republic, Albania, Italy, and Israel. It is becoming clear that the nations which have suffered least from this first wave are New Zealand, Australia, Norway, Austria, and Israel. The situation appears to be worsening in Turkey, Russia, India, and Japan, although the Indian lockdown has been surprisingly efficient.
- While the vast majority of confirmed cases are still in Europe and the U.S.A., with the U.S.A. account for approximately one third of all cases, infections are beginning to increase notably in Latin America, especially in Brazil which is confirming about 2,000 new cases daily. 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.
- The price of crude oil reached a 21-year low price in Asian trading today, with WTI Crude Oil trading below $15 per barrel at one point, as demand for the fuel dries up due to the global economic slowdown. This is despite oil producers recently agreeing a deal to cut production overall by 10%.
- The price of Gold has continued to pull back from last week’s multi-year high price, suggesting a break to still higher prices is less likely now, but a strong bounce today would still be bullish and technically significant if it happens.
- Despite the gloomy global economic outlook, stock markets (especially in the U.S.A.) continue to look firm. Major U.S. stock indices have regained more than half of the value lost during their sharp falls in February and March – this is becoming technically significant. 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.
- Currency markets are currently dominated by relative strength in the U.S. Dollar, while the British Pound looks like the weakest currency today.
- Markets have been affected recently by high relative volatility, but this has decreased to more normal levels, although stocks are still relatively showing high volatility.