The coronavirus pandemic continues to get worse. The total number of Covid-19 infections worldwide has surpassed 45.4 million, with the death toll rising to 1.18 million. The US now has 9.2 million cases, adding a record-breaking 91.5K new ones yesterday. India has surpassed 8 million, while Brazil is approaching 5.5 million Covid-19 cases.
Europe remains the biggest hotspot for the virus at the moment, adding about 280,000 new cases yesterday, of which close to 50,000 came from France, and half as many from Spain, the UK, Italy, Belgium, and Poland each.
Investors have now lost all confidence in a speedy economic recovery in Europe, as both France and Germany (the EU’s powerhouses) announced nation-wide lockdowns for the month of November in an attempt to slow down the spread of the coronavirus and alleviate the strain on their respective healthcare systems. The United Kingdom is likely to be the next major economy to enter a national lockdown.
GDP reports from Europe today were quite upbeat. Germany, Spain, and Italy all had better than expected GDP growth in Q3, and the eurozone numbers as a whole were also quite positive. However, the better-than-anticipated GDP performance in the third quarter is not enough to support the euro, which is harmed by the prospect of further economic slowdown in Q4 due to the pandemic.
Thanks to the broad pessimism in the markets, investors are staying away from risky assets and pulling their money into safe havens such as the Japanese yen. The USD/JPY pushed 105 for the first time in weeks.
Despite positive earnings reports from the tech sector yesterday, today the stocks of many of the US’s biggest companies are dropping in price. These include Apple, Facebook, and Amazon. Google’s parent company, Alphabet, is the only one whose stock is gaining today. Ant Group’s IPO is also still continuing to attract high levels of attention among investors.
Later in the day we expect the final September PCE reports from the United States and the Michigan consumer sentiment survey, where a modest increase compared to the previous report is forecasted.
