The USA has exceeded the 50,000 mark in new coronavirus infections for the first time – how will Wall Street react to these figures?
The US has exceeded the 50,000 mark for the first time in new coronavirus infections. Stock markets in Europe are rising this morning, but how will Wall Street react to these figures? With a shrug of the shoulders? Or with losses, as has been the case more often than the latest figures from California or Florida, for example, have gone through the tickers?
In any case, the trend in new coronavirus infections is alarming. Yesterday, with almost 53,000 cases, a new all-time high:
The chart shows that the downward trend in the USA was broken in mid-June, and since then the rise has been virtually dynamic.
Spike driven by Southern States
This development is being driven in particular by the southern US states. Arizona, California, Georgia, North Carolina and Texas yesterday reached new highs in newly-infected with the corona virus. Although the US is now testing significantly more, the increase in the number of people tested positive is significantly higher than the increase in the number of tests themselves:
This morning on German time, the “Corona Pope” Fauci admitted that the USA had never brought the corona virus under control. This admission comes quite late, of course. Perhaps Fauci should have made this statement before the reopening of many US states. In any case, it is mainly those US states that ended the lockdwon the earliest that are now showing the biggest increases in new infections.
All this makes it clear: the third quarter is also heavily burdened by the corona crisis. The “V-recovery is off the table“. What if the USA does not return to any semblance of normality in the third quarter either? Can the stock markets then simply continue with steep rises? JP Morgan has now warned that the bond markets were already signalling danger. The chances of a “policy mistake” would increase if the Fed or the US Congress did not take new measures soon.
Either way, the gap between the real economy and the stock markets is widening. If the US does not get a grip on the coronavirus problem very soon, the fall in the price will be correspondingly high. Otherwise, we will always need new “statistical miracles“.