Virus Update
Encouraging plateau in new cases, but testing has slowed.
Most countries are seeing declining new cases after the first month, not the U.S. just yet.
- Cases world-wide nearing 1,500,000, while the death toll hits 89,000.
- Cases in the U.S. exceeded 432,000. New York state, the hardest-hit, had more than 151,000 cases. Some 14,800 people have died of the disease in the U.S. The country recorded 1,939 deaths during the 24-hour period ended 8 p.m. Tuesday—50% more than any previous day of the pandemic.
- Tokyo found at least 180 new cases of coronavirus, the highest number yet in a single day, FNN reported in a flash headline, without attribution.
- Russia reported 1,459 new cases, up 17%, taking its total to 10,131. This is the country’s biggest daily jump yet, and Russia has now reported more than 1,000 cases for three straight days. Total deaths rose by 13 to 76.
- Italy plans to extend its nationwide lockdown by two weeks as scientists warn Prime Minister Giuseppe Conte that it’s too early to relax confinement measures, daily La Stampa reported. The government will approve a decree on Friday to extend the closures beyond the current April 13 expiration date, the newspaper said.
- German Cases Jump Infections rose by 5,633 on Thursday, compared with an increase of 4,288 a day earlier, according to data from Johns Hopkins University. Germany registered 333 new deaths from the virus, the highest daily toll so far and up from 206 the previous day.
- The current outbreak is at a critical stage, with the disease in Europe and the U.S. not effectively controlled and new cases increasing exponentially in less developed and underserved areas such as Africa, South America and India, bringing great uncertainty to the global fight against the disease, Zhang Wenhong, known for his work leading Shanghai’s Covid-19 clinical expert team, told Caixin in an interview. He said it’s unlikely that the outbreak will end this summer, and it’s very likely that a second wave will take place after the fall.
Coronavirus May ‘Reactivate’ in Cured Patients, Korean CDC Says
About 51 patients classed as having been cured in South Korea have tested positive again, the CDC said in a briefing on Monday. Rather than being infected again, the virus may have been reactivated in these people, given they tested positive again shortly after being released from quarantine, said Jeong Eun-kyeong, director-general of the Korean CDC. (…)
Fear of re-infection in recovered patients is also growing in China, where the virus first emerged last December, after reports that some tested positive again — and even died from the disease — after supposedly recovering and leaving hospital. There’s little understanding of why this happens, although some believe that the problem may lie in inconsistencies in test results. (…)
After India agreed to lift its ban on hydroxychloroquine: “Extraordinary times require even closer cooperation between friends,†Trump tweeted. Really!!!
PANDENOMICS
- World economy faces $5 trillion hit, that’s like losing Japan
- WSJ Survey: Coronavirus to Cause Deep U.S. Contraction, 13% Unemployment The coronavirus pandemic will cause a severe economic contraction, 14.4 million job losses and a spike in the unemployment rate this spring, with an economic recovery starting the second half of the year, economists forecast in a Wall Street Journal survey.
- Bank of England to directly finance extra government spending Move allows ministers to spend more in the short term to combat coronavirus without tapping the gilts market
- Spain’s economy set to suffer most from coronavirus crisis With limited fiscal room for manoeuvre, Sánchez government is desperate for help from EU
- Goldman Sees Virus Causing $75 Billion Funding Hole in Africa “Possibly the most severe impact of the crisis will be on already stretched fiscal balances,†Dylan Smith and Andrew Matheny, Goldman’s economists in London, said in a note. “Budget deficits would likely rise from an average of around 3.5% to high single digits, even before any loosening to soften the economic effects of the corona-crisis.†Earlier, the World Bank said Sub-Saharan Africa will post its first recession in 25 years as the coronavirus pandemic brings economies to a halt and disrupts global trade.
IMF, World Bank Face Deluge of Aid Requests From Developing World The health of the global economy comes down to a race between money flooding out of emerging markets amid the coronavirus pandemic and the efforts of the International Monetary Fund and World Bank to pump money back in.
(…) “We’re looking at a commodity-price collapse and a collapse in global trade unlike anything we’ve seen since the 1930s,†said Ken Rogoff, the former chief economist of the IMF, now at Harvard University. An avalanche of government-debt crises is sure to follow, he said, and “the system just can’t handle this many defaults and restructurings at the same time.â€
“It’s a little bit like going to the hospitals and they can handle a certain number of Covid-19 patients but they can’t handle them all at once,†he added, referring to the disease caused by the new coronavirus.
More than 90 countries have inquired about bailouts from the IMF—nearly half the world’s nations—while at least 60 have sought to avail themselves of World Bank programs. The two institutions together have resources of up to $1.2 trillion that they have said they would make available to battle the economic fallout from the pandemic, but the question is whether they can move quickly enough to reverse the mounting damage.
Since January, about $96 billion has flowed out of emerging markets, according to data from the Institute of International Finance, a banking group, more than triple the $26 billion outflow during the financial crisis of a decade ago. (…)
Oxfam International, a global nonprofit organization, estimates that more than half a billion people around the world could fall into poverty, defined as earning less than $5.50 a day. (…)
That trillion dollars in lending ability should be sufficient for developing and emerging economies if the virus is brought under control in the medium term, said David Dollar, a former World Bank and Treasury Department official, now at the Brookings Institution.
“I think they have the resources for 2020. A key question is going to be to what extent this whole public-health crisis continues on in 2021,†Mr. Dollar said.
Ocean Carriers Idle Container Ships in Droves on Falling Trade Demand More than 10% of the global boxship fleet are anchored as Western markets lock down against the coronavirus pandemic
Container ship operators have idled a record 13% of their capacity over the past month as carriers at the foundation of global supply chains buckle down while restrictions under the coronavirus pandemic batter trade demand.
Maritime data provider Alphaliner said in a report Wednesday that shipping lines have withdrawn vessels with capacity totaling about 3 million containers in efforts to conserve cash and maintain freight rates.
Alphaliner, based in Paris, said more than 250 scheduled sailings will be canceled in the second quarter alone, with up to a third of capacity taken out in some trade routes. The biggest cutbacks so far have hit the world’s main trade lanes, the Asia-Europe and trans-Pacific routes. (…)
Ship brokers say giant ships that move more than 20,000 containers each now are less than half full. (…) “But laying up ships for an extended period is a mortal danger for any operator.â€
Fed Minutes Reveal Alarm Over Coronavirus Disruptions to Economy, Market
(…) “All participants viewed the near-term U.S. economic outlook as having deteriorated sharply in recent weeks and as having become profoundly uncertain,†the minutes said. (…)
Officials highlighted the “extremely large degree†of uncertainty, but stated explicitly that rates would stay at zero “until policymakers were confident that the economy had weathered recent events and was on track to achieve the Committee’s maximum employment and price stability goalsâ€.
Some officials last month favored efforts to discourage banks from repurchasing shares or paying dividends. (…)
Actually, the minutes reveal that “several participants commented that banks should be discouraged from repur-chasing shares from, or paying dividends to, their equity holders in the wake of the proposed measures.â€
THE OIL SLICK
Saudi Arabia and Russia have signalled they could agree to cuts but only if the United States and others outside a group known as OPEC+ chip in. Washington has repeatedly pushed back saying U.S. drillers have already reduced output for economic reasons, and that it had no plans to orchestrate further cuts.
U.S. lawmakers, meanwhile, have threatened Saudi Arabia with legislation that would pull economic and military support for the kingdom if it does not stabilize oil prices.
“If the Kingdom fails to act fairly to reverse this manufactured energy crisis, we would encourage any reciprocal responses that the U.S. government deems appropriate,†said a letter to the crown prince signed by nearly 50 Republican U.S. Representatives.
Senate Republicans introduced a bill in March to remove U.S. troops, missiles and defence systems from the kingdom if it does not cut output. (…)
Asked if a natural decline in U.S. oil output due to weak oil prices could count as a contribution to global production cuts, Kremlin spokesman Dmitry Peskov said: “These are absolutely different reductions.†(…)
The U.S. Energy Information Administration said on Wednesday that oil output dropped 600,000 barrels per day last week. Its longer-term projections show U.S. oil output averaging 11 million bpd in 2021, which correlates to about a 2 million-bpd decline from the late 2019 peak.
While U.S. antitrust law prevents oil producers in the United States from colluding to prop up prices, it does not prevent state regulators or the federal government from ordering lower production levels, according to legal experts. (…)
Russia is ready to cut its oil output by 1.6 million barrels per day, according to a TASS news agency report citing an unnamed Energy Ministry official on Wednesday. (…)
OPEC sources said Riyadh wanted any cuts calculated from April levels. But Russia has said cuts should be based on first-quarter levels.
“The issue is still the baseline,†an OPEC source said. (…)
Goldman Sachs:
(…) while the prospect of a deal can support prices in coming days, we believe this support will soon give way to lower prices with downside risk to our near-term WTI $20/bbl forecast. Ultimately, the size of the demand shock is simply too large for a coordinated supply cut, setting the stage for a severe rebalancing. While the path of the demand normalization will remain key to the subsequent price recovery, lasting supply cuts will matter too and could create upside risks to our $40/bbl October Brent forecast.
- 13/34–Week EMA Trend (via CMG Wealth)
Airbnb Paying More Than 10% Interest on $1 Billion Financing
WeWork has stopped paying rent at some U.S. locations, in the latest sign that the co-working company is aggressively trying to cut costs as the economic downturn eats into its revenue.
But beware, the number of cases greatly depends on the number of tests and the U.S. seems to have recently slacked off on testing:
The experience of countries further ahead in the battle against COVID-19 also suggests the road to recovery will not be straightforward. While there are signs of a resumption of normal life in China, including in Wuhan, cinemas have closed again. Meanwhile, Singapore, which had implemented a much-touted test and trace system, was forced into announcing a more formal lockdown, effective today, as it was unable to effectively squash the virus.
During a call lasting more than 16 hours, finance chiefs couldn’t reconcile their contrasting visions for the steps needed to help European economies recover. Countries led by France and Europe’s hardest-hit south were pitted against Germany and other hawkish northern states over the need to issue joint debt. Another call is scheduled for Thursday. 
