It’s a new month and the start of 2020’s third quarter today, but the coronavirus still remains the market’s number one concern. According to the latest reports, Dr. Anthony Fauci, who has been the biggest authority on Covid-19 in the United States, believes that the country is not doing a very good job of containing the virus and that even more infections are in store for the US.
The states of Texas, Florida, California, and Arizona continue to report thousands of new Covid-19 cases every day. Yesterday the United States reported 46,000 new coronavirus cases. Based on Fauci’s most pessimistic estimate, the July 4th weekend (which is traditionally a time for public and family gatherings) could bring that number up to 100,000 per day.
Brazil, Mexico, Peru, and Chile are also wrestling with serious outbreaks. Outside the Americas, Russia and India are the countries with the biggest coronavirus outbreaks at the moment.
The trouble the United States is having with the coronavirus is heavily pressuring the markets today. Indices are down, including Nasdaq, which proved more resilient on the previous day.
Another reason why market sentiment is so poor at this time is China, who is already taking advantage of its brand-new security law that gave it more control over Hong Kong. 70 protesters in Hong Kong have already been arrested by the Chinese authorities just a day after the law’s passing.
It is highly likely that the United States will take action against China due to the security law. Many fear that the trade war between the two largest economies will begin again.
Meanwhile, things are quickly improving in Europe. PMIs are coming in better than expected and unemployment in Germany is stabilizing at lower numbers than previously feared. There will be eurozone-wide data on inflation and unemployment later in the week, which will offer a better representation of the European economy at present.
