08 Apr MORE ENCOURAGING NEWS FROM NEW YORK AND NEW JERSEY
Encouraging news from both New York and New Jersey initially boosted equities. At this juncture it appears cases and deaths may not be as bad as feared, perhaps the result of social distancing and other policies that have shuttered society and the economy.
I rhetorically ask how will history judge today’s actions? Will it be viewed as apocalyptic group think, decisions based on the lack of data focusing only on the worst-case scenario and false assumptions under the guise of “abundance of caution?”
The obvious answer will depend on the ultimate outcome. Yesterday a Pew Study indicate 63% think health issues are greater than economic issues, down from 84% two weeks ago. Is this result that everyone knows someone who has lost a job? Perhaps.
Speaking of society, according to Reuters society is coping with today’s shutdown by drinking more, eating more chocolate, smoking more marijuana and cigarettes and watching more porn.
California, Colorado, Alaska and Oregon have reported a 50% increase in pot sales. According to the market research firm Nielsen, online US booze sales surged 243% in the last two weeks of March. British binge buying of alcohol surged 22% during the same time period. Nestle reports great difficulties in keeping shelves stocked.
Reuters states leading adult websites saw a 12% increase in global traffic from February 24-March 17. [Note: Pre-corona, porn was about 55% of web traffic] Sex toy sales are up 27% during the same period according to “specialty retailers.”
Some are suggesting that while the vast majority of society will survive Covid-19, society may emerge with more porn addictions, more liver/respiratory damage and greater obesity, imposing a longer-term challenge for health systems battered by the virus.
As noted several times it appears those with preexisting renal and respiratory issues, those that are overweight, are most at risk of succumbing to coronavirus. I ask will society emerge weaker and more at risk to battle future pandemics and other health scares?
What will happen today?
Last night the foreign markets were down. London was down 1.08%, Paris down 1.36% and Frankfurt down 0.74%. China was down 0.19%, Japan up 2.13% and Hang Sang down 1.17%.
The Dow should open nominally higher as the economic realization of the shutdown is now starting to become evident. For example, France’s economy contracted the most in the first quarter since WWII. Was this yesterday’s data and such was already factored into prices? At this juncture I will say yes. The next several weeks will be pivotal. If cases have peaked as the data is suggesting, the data should soon be improving as the economies reopen.
The 10-year is off 11/32 to yield 0.76%.