- Stock markets are rising. The U.S. market indices remain firm and bullish, with the S&P 500 Index closing yesterday above the crucial 3000 level, its 200-day moving average, and also its 61.8% Fibonacci peak-to-trough retracement. Many market analysts think the bottom of this bear market has already been reached, but some analysts see further strong falls likely in stocks over the coming weeks and months. There is a strong divergence of opinion, but we are seeing the bullish case strengthen dramatically that the recent market crash is over.
- Asian stock markets are mostly higher but the Hong Kong market has been hit as the U.S. declares its autonomy from the rest of China is seen as over.
- The Euro was boosted yesterday as the European Union announced a €750 billion coronavirus rescue plan for its economy, to stave off the worst effects of an expected Eurozone GDP decline of at least 8% this year. This pushed EUR/USD to trade above the psychologically important 1.1000 level.
- WTI Crude Oil has begun to fall from recent highs around $34 after Russia hints at production cuts.
- In Forex, riskier currencies are generally strong. The Euro is the strongest major currency at present, while the Japanese Yen is the weakest. The U.S. will release Preliminary GDP data later today.
- Coronavirus deaths in Latin America and the Caribbean are now 39% of the global daily total, well exceeding those in both the U.S.A. (25%) and Europe (approx. 25%) which shows that the epicenter of the pandemic is now in South America. Brazil alone saw over 1,000 deaths and 20,000 new confirmed cases yesterday, making the highest daily death toll of any country for the second consecutive day.
- Daily reported deaths spiked yesterday, coming in as the 3rd highest daily total yet. Daily deaths globally peaked on April 18th and daily new confirmed cases peaked just a few days ago on 22nd May. Total confirmed new cases stand at just below 5.7 million with an average case fatality rate of 6.25%. Both the total number of new cases and deaths continues to fall daily in the U.S.A. and almost everywhere in Europe outside Russia. Goldman Sachs forecast 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%. In recent days, more analysts have begun to forecast a faster economic recovery in the U.S. than had been expected.
- The rate of new coronavirus infections appears to be increasing most quickly in Brazil, India, Mexico, Peru, Chile, and Iran. Russia’s “curve” of new cases seems to be flattening. Brazil now has the second highest number of confirmed cases of any country, followed by Russia and then the U.K.