Nine months into 2020, the coronavirus pandemic still poses a huge threat to humanity. Though many had hoped that all countries who undergo an outbreak will eventually recover and essentially “be done” with the coronavirus, that has not been the case.
In fact, with the approach of fall, colder weather, regular flu season, and with schools around the world opening their doors to students once more, Covid-19 appears to be making a comeback everywhere.
The world has now seen over 30 million coronavirus cases. Of those, 6.8 million have been in the United States alone. After declaring relatively lower numbers of daily infections (around 30,000-35,000) for the past couple of weeks, the US is once again seeing an increase in its own outbreak.
Yesterday the US declared 46,000 new cases - still lower than July’s records, but higher than the recent trend. According to a new study, over 50% of everyone at school (students, teachers, professors, staff) is at risk, not to mention their families or other people coming into contact with them.
Meanwhile, India, one of the most highly populated countries in the world, is still recording daily numbers that beat even the worst days of the United States - close to 100,000 cases per day. The total number of Covid-19 cases in India is now 5.2 million.
And while the United States, India, and Brazil (together with most of South America) are still dealing with the first wave of the pandemic, Europe is now seeing a strong second wave. Spain and France, which were the most affected regions during the first wave, are now in the throes of the pandemic once more.
Just yesterday, Spain declared more than 11,000 new cases, and France did 10,500. Those are similar numbers to what Spain was reporting during the peak of the pandemic, while in the case of France they are actually worse. The governments in France and Spain would like to avoid another lockdown but it remains a possibility.
The United Kingdom has also been reporting over 3,000 cases daily for the past two-three weeks, which is alarming, though still lower than the previous peak. Nevertheless, the UK government has moved ahead with new rules. At this time, it said that a national lockdown is also not completely out of the picture if the situation continues to worsen.
What does this entail for the financial markets? Most importantly, any news about a worsening in the pandemic increases the chance of lockdowns. The lockdowns, in turn, will choke the global economy further, make the recession worse, and dim the prospects of recovery in the near future. Safe havens might be the only assets to benefit from a second wave of the pandemic.
