Via Zerohedge


  • India cases top 150k
  • France discontinues use of hydroxychloroquine
  • Japan, EU push new stimulus
  • Wuhan finds 200 ‘asymptomatic’ cases after testing millions
  • ECB’s Lagarde said eurozone economy could take 12% hit due to virus
  • WHO reiterates warnings about premature reopening

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California Gov. Gavin Newsom’s decision to allow retailers across the state to reopen (along with barbershops and salons in most counties) helped galvanize investors’ hopes for a “V-shaped” rebound in the US, setting US equities on the path to opening with strong gains for a second straight day on Wednesday, even after the death toll in the US surpassed 100k late Tuesday.

A few days ago, authorities in Wuhan claimed that they had tested more than 7 million people, part of an effort to quash a ‘second wave’ of the virus. Overnight, Chinese business news org Caixin reported that roughly 200 patients tested positive for the virus, all of whom were considered “asymptomatic”.

PM Narendra Modi’s heavy-handed response to the coronavirus outbreak has been credited with preventing a destabilizing outbreak in the world’s second-largest country by population. Although many Indians remain leery of the world outside their front door, infection numbers have continued to rise at a steady clip. On Wednesday, Indian public health authorities confirmed another 6,387 new infections and 170 deaths reported in the last 24 hours, bringing India’s total to 151,767 confirmed infections, and 4,337 deaths, according to Nikkei.

France’s health ministry said Wednesday it would discontinue the use of hydroxychloroquine for treating COVID-19 patients, and in all clinical trials, while health officials in India expanded the use of the controversial drug, which was famously touted by President Trump, who also claimed to be taking the medication as a kind of prophylactic. France’s decision is notable because Didier Raoult, a virologist based in Marseille, has repeatedly championed its efficacy if taken alongside zinc or a powerful antibiotic like a Z-Pak.

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Across Asia and Europe, new measures to offset the tremendous cost of the outbreak were introduced on Wednesday, with the Japanese cabinet approving another 6% of GDP in stimulus spending, just one month after approving  a first supplementary budget. Combined with the prior package, PM Shinzo Abe said that Japan will have pumped the equivalent of 40% of its GDP in stimulus spending into its economy. “With the largest policy package in the world, the Japanese economy will hold fast against this once in a hundred year crisis,” Abe said.

Just when we believed ‘coronabonds’ were as good as dead, the European Commission is reportedly planning to borrow as much as €750 billion to dole out to the hardest-hit countries, according to Commission President Ursula von der Leyen. As was widely reported in March and April, an alliance of wealthy northern states led Germany and the Netherlands seemed to have put the issue to rest, as they insisted that Italy and Spain can always submit to the European Stability Mechanism (and the punishing austerity it would almost certainly prescribe) if they needed emergency financing. Von der Leyen is expected to lay out the details of the new coronavirus relief fund on Wednesday afternoon in Europe.

Regardless of how the EU responds, ECB Chief Christine Lagarde, one of the most vocal advocates for “coronabonds” and a strong fiscal stimulus to revive Europe’s moribund economy, said Wednesday that the eurozone economy could shrink by as much as 12% this year as the “sudden stop” caused by the pandemic is expected to lead to a prolonged recession that’s even deeper than the post-GFC period.

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Authorities in Wuhan found more than 200 asymptomatic cases of the new coronavirus since launching an ambitious plan earlier this month to test the city’s entire population, according to municipal health officials.

On May 11, health authorities in the central Chinese metropolis, where the deadly virus was first detected, ordered municipal districts to start conducting nucleic acid tests on all residents. As of Saturday, the city had carried out 6.68 million tests and discovered 206 asymptomatic cases across more than 10 districts, according to notices from the municipal health commission. About 11 million people live in Wuhan.

With the number of confirmed coronavirus cases in Brazil expected to cross the 400k-threshold on Wednesday, prosecutors in President Jair Bolsonaro’s Brazil authorized the arrest of the conservative governor of Rio de Janeiro state on suspicion of corruption, Reuters reports. The arrest follows a falling-out between the governor and Bolsonaro over the latter’s handling of the outbreak.

As the number of newly confirmed cases in the US tumbled to its lowest level since March on Tuesday, the World Health Organization reiterated warnings about the dangers of scaling back coronavirus restrictions too quickly, arguing that a “premature” push to return to normalcy could unleash a brutal ‘second wave’.

“We cannot make assumptions that just because the disease is on the way down now that it’s going to keep going down,” Mike Ryan, head of the WHO’s health emergencies program, told reporters during a briefing.

Despite a flurry of research over the past few months, scientists concede that nobody really knows anything for certain about SARS-CoV-2. In the US, at least, the initial justification for the lockdown was to flatten the curve so hospitals aren’t overwhelmed. Data overwhelmingly suggests that the US accomplished this weeks ago. But the WHO’s Dr. Mike Ryan insisted that the virus could pop back up “at any time”.

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