SOME FACTOIDS

All markets surged yesterday on the tentative passage of the stimulus.  As I have stated, I am wondering whether the cost is worse than the disease.  As noted yesterday, the global economic cost is around $120 trillion.  Wow!

Below are some coronavirus odds.  All data is from John Hopkins and were as of 5:00 PM yesterday.

I must first write that I am not Pollyannaish nor am I throwing caution.  For example, I wash my hands before eating, using a paper towel to turn off the faucets and to open the doors back to my office.  I am also practice social distancing.

With the above disclaimers, there are 7.8 billion people in the world.  There are 458,000 known cases and 20,807 deaths.    The odds of contracting corona the virus is 0.00557%.   The odds of dying from the virus is 0.00025%.   In other words one has a 99.99975% probability of dying from something else.

The odds of winning a typical Powerball lottery is 0.001%.

In other words the odds are 500% higher of winning the Powerball than dying from corona virus.

In the US there are 53,600 cases and 703 deaths.  As in Italy, the CDC reports 99% of New York deaths the patient had underlying health issues such as heart or respiratory diseases.

According Johns Hopkins, the US percentage death rate of those infected with the disease was 1.6% on 3/18, falling to 1.3% on 3/22, 3/23 and 3/24.

It is expected diagnosed cases will increase with greater testing which will drop the percentage death rate to perhaps to the same level as the typical flu.

The media is extremely apocalyptic.  Last week more people read stories about the coronavirus than visits to adult internet sites.  Adult internet sites are/were about 55% of all Internet traffic.

According to the Atlantic Monthly 75% of all on line stories are written by robots.  Atlantic Monthly also stated 50% of all financial stories are written by robots. (Note:  I do not know how this data was collected) Story algorithms are determined by the number of hits and hyper links to a story, thus suggesting more stories beget more stories as such drive advertising dollars.

In other words, is SkyNet again out of control?

I again ask is the prevention worse than the disease?  Economic Advisor Larry Kudlow stated US fiscal stimulus is now about 30% of annual GDP.  Have the seeds of the next crisis been sowed defined as inflationary growth when the rebound commences?

I reiterate these dramatic actions are required to stem the total government induced implosion of society and the economy.  The patient is about to die without such actions.

We will overcome.  This too shall pass and we will emerge stronger and more unified.

Keep the faith!!!  And yes, Hope is a strategy.

What will happen today?  Weekly jobless claims are expected to surpass 1.7 million, vastly eclipsing the previous record  of 695,000 set in October 1982.

Last night the foreign markets were down.  London was down 1.68%,  Paris down 1.79%, and Frankfurt down 2.05%.  China was down 0.60%,  Japan down 4.51%  and Hang Sang down 0.74%.

The Dow should open “nominally lower” following the late-night Senate passage of the stimulus package.    The 10-year is up 26/32 to yield 0.792%.

 

The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.