Following a barrage of easing measures by global central banks overnight, and more talk of German fiscal stimulus Thursday morning, stock futures have sunk back into the red as promising gains from overnight fizzled.
It seems the world is finally waking up to some disappointing realities: In many places around the US, and around the world, millions of people simply aren’t heeding advisories – and, in some cases, emergency declarations – pertaining to avoiding.
In California, the backlash against Elon Musk and Tesla has intensified as the billionaire openly beckoned employees of his Fremont, Calif. factory back to work despite a ‘shelter in place’ order requiring everyone to stay home to avoid the virus. Now that testing is finally ramping up around the country, with New York State taking the lead with its aggressive drive-thru push, the total number of cases confirmed in the US climbed to 9,415 (according to Johns Hopkins data), an increase of roughly 50% overnight.
It’s becoming increasingly clear that President Trump’s decision to stop travel from China, although prescient, was clearly not enough to stop the virus’s spread in the US. Officials squandered the entire month of February, and the Trump Administration is finally beginning to realize just how far it has fallen behind.
The biggest news overnight was out of Italy, which has been reporting record numbers of newly confirmed cases and deaths, as well as a surprising number of young and healthy people hospitalized in serious condition. Italian PM Giuseppe Conte said Thursday that the government would extend the nation-wide lockdown beyond April 3 because too many Italians are disregarding the orders. The extension comes as Italy faces an alarming milestone: On Thursday, Italy is very likely to officially overtake China as the country with the largest number of deaths from the virus. 475 people lost their lives on Wednesday, the largest daily jump yet, taking the total in Italy to 2978. Officially, China’s death toll is 3,231, according to the WHO, though many suspect the real death toll is much, much higher.
As of Thursday morning in New York, Italy has recorded 35,713 cases, along with 2,978 deaths.
After pleading with Schengen Zone members to keep their borders open, the EU has closed its external borders to non-EU citizens as a growing number of countries close their borders. In the South Pacific, Australia and New Zealand, members of the British Commonwealth, have barred non-resident, non-citizens from entry. The closures will take effect on Friday, local time.
In other news, Michel Barnier, the EU’s chief Brexit negotiator, announced on twitter Thursday that he had tested positive.
I would like to inform you that I have tested positive for #COVID19. I am doing well and in good spirits. I am following all the necessary instructions, as is my team.
For all those affected already, and for all those currently in isolation, we will get through this together.
— Michel Barnier (@MichelBarnier) March 19, 2020
By now, we’ve heard dozens of dire predictions from Wall Street banks about the economic fallout from the crisis. At this point, a recession is virtually assured, and an all-out global depression – the likes of which haven’t been seen for nearly a century in the developed world – could arrive by the second quarter, according to JPM Morgan and Mohammed El-Erian.
Now, Germany’s Ifo Institute forecast a 1.5% contraction in the German economy after one of its preliminary gauges released on Monday showed a sharp drop in sentiment.
Yesterday, we saw some rumblings about Russian disinformation campaigns targeting the West, as Vladimir Putin seizes the opportunity to destabilize the West after taking steps to fortify Russia from the onslaught (by being one of the first major countries to close its border with China, among other measures).
A document sent to European lawmakers Monday by EU officials asserted that Russia is carrying out a “significant disinformation campaign” in an effort to sow discord and panic in Western nations over the coronavirus, according to a Reuters report. Reuters apparently got its hands on the 9-page memo, and now a handful of left-wing media organizations like Axios and the Daily Beast are spreading the news.
How much longer until the West blames the severity of the “Chinese Virus” outbreak on Vladimir Putin? At any rate, despite Russia’s lockdown measures, the country recorded its first virus-related death on Thursday. A 79-year-old woman died in a Moscow hospital, the country’s pandemic response agency said on Thursday.
Yesterday, we shared a report published by the Telegraph claiming that PM Boris Johnson had asked his cabinet heads to draw up plans for a total lockdown in London, with hefty criminal penalties for all those who disobey. Dozens of reports across social media showed how millions of Londoners appear to be ignoring the government’s advice, prompting the NHS to prepare to be overwhelmed by cases. Some have warned that tens of thousands could die in the UK thanks to Johnson’s perhaps misguided hope that he could shield the British economy from the worst of the fallout by simply focusing on containing the sick. Unfortunately, one of the themes of this outbreak has been millions of people putting their own petty wants and desires above protecting the public health.
Good morning to everyone who isn’t actively interfering with the public health effort.
— Wash Your Hands Charley Grant (@CGrantWSJ) March 19, 2020
Florida and Texas have finally shut down most of the beaches where thousands of undaunted spring breakers have continued to party.
It’s likely this crisis won’t truly be over until a vaccine is mass-produced. And looking forward, headlines pertaining to drug trials for treatments and vaccines might be some of the only positive news investors get. Unfortunately, the opposite happened on Thursday, when the first scientifically controlled clinical trial of existing antiviral drugs to treat Covid-19 has delivered disappointing results.
As the FT reminds us, the next important controlled clinical trial result to look out for involves remdesivir, a drug originally developed by Gilead Sciences of the US to treat Ebola. That trial is also taking place in Wuhan. Meanwhile, in the US, a vaccine trial is underway in the Pacific Northwest.
Though the trials are continuing in Wuhan, the epicenter of the crisis, which has been struggling against the virus since it first emerged in early December, finally saw a day where no new coronavirus cases were reported. While it’s important to take this news with a grain of salt, the city has pretty much reopened for business.
A few days ago, the NYT ran a story praising India’s response to Covid-19, which had kept the number of confirmed cases down. Unfortunately, the good times couldn’t last forever, and the Indian people are finally getting a taste of the hoarding and panic that has come to dominate life in the US. After Prime Minister Modi announced plans to deliver a televised address on Thursday, which prompted Indians to scramble to stock up on essentials as they feared a national lockdown order could be delivered during that speech.
In the US, Amazon announced that it had closed one of its warehouses in New York for deep cleaning after a worker tested positive for coronavirus.This is a major threat to the US, since Amazon has emerged as a last lifeline for US consumers. If its warehouses are sidelined by the virus, the gears of consumption could truly come to a screeching halt, per Bloomberg.
Bafin, the German financial regulator, joined Italy’s Consob and a handful of other European regulators by imposing restrictions on short-selling. Though the West has been reluctant to adopt the heavy handed measures imposed on China’s population, when it comes to markets, China style crackdowns on shortsellers are apparently more palatable. Handelsblatt reported Thursday morning that Germany could move ahead with suspending its constitutional ‘debt brake’ as soon as Monday.
After UK PM Boris Johnson announced earlier this week that he would close UK schools for all except the children of essential workers and those who wouldn’t have access to food otherwise, Gavin Williamson, his education secretary, said there are “certainly no plans” at this stage to force the closures of bars and restaurants, even as speculation about a possible London lockdown continues to grow. Another government spokesperson said Thursday that there is a “zero chance” of a London lockdown.
A few minutes ago, Spain reported another alarming jump in deaths and confirmed cases that was on par with the figures coming out of Italy. Spanish Covid-19 cases rose to 17,147 (prev. 13,716) and deaths climbed to 767 (prev. 558):
Back in the US, the state of Connecticut on Thursday confirmed its second virus-linked death as health officials rush to prevent an outbreak in a nursing home near the Massachusetts border, where the patient who became the state’s first casualty had lived before being hospitalized.
Meanwhile, as millions of young people brush off the risks to their personal health due to the virus, Bloomberg has some disappointing news: New evidence from Europe and the US suggests that younger adults aren’t as impervious to the virus as they would like to think.