Morning all.
Markets still finding support this morning with Oil recovering further and some talk in Europe about more lock down easing.
I want to turn my attention to last night’s White House Coronavirus Briefing because of Trump’s attempts to downplay the Coronavirus outlook.
If any of you have been watching these you’ll know how painful they are to watch, but the occasional meltdown from Trump or heated exchange with a reporter keep them somewhat tolerable for a while.
Trump has had a narrative he’s been wanting to push for the last couple of months, which started with his proclamation that the US would have full churches on Easter Sunday. We all know this did not happen, but that plan of getting life back to normal quickly has been evident in all that Trump does, and I often feel sorry for his medical experts trying to reign him in as I imagine they must.
Anyway, last night started with Trump getting his CDC director to walk-back the seriousness of some comments he made in an interview with the Washington Post.
Source: https://www.washingtonpost.com/health/2020/04/21/coronavirus-secondwave-cdcdirector/
Trump spent most of the time during this segment trying to convey the message that the Coranavirus “…might not even return in the fall”.
A conclusion that can be drawn here is that he thinks it will gone away before fall, in order that he can reference its return.
His narrative that this is all going away soon and the US states reopening was under threat, and with it the expectation that pent-up demand would power the US economy to record activity in Q4. I’ve been critical of this outlook all along but my main focus was on the level of unemployment holding the recovery pace back.
But now the message of the CDC is out there in a more vocal way, maybe even moreso because of Trump’s attempt to manage the message.
This is from his interview:
“We’re going to have the flu epidemic and the Coronavirus epidemic at the same time,” he said.
There was some attempt to call it fake news by the President as CNN also covered this story, but they released a pretty good rebutal.
Source: https://edition.cnn.com/2020/04/22/politics/robert-redfield-cdc-mcenany/index.html
I don’t think the markets are in prepared for the prospect that come Q4, a virus double-threat will be being faced across the US. This does not mean it will be bad or even happen, but the CDC clearly working on the basis the COVID-19 is still active towards the end of the year when the Flu season traditionally starts.
This is in stark contract to President Trump who is always talking about the light at the end of the tunnel and despite this message from the CDC director his was still pushing the image of everything being normal soon by talking about airshows for Independence Day (4th July).
To me this suggests not getting overly bullish on markets despite the virus situations starting to come under control. There is a strong likelihood that economic recovery will be slower than currently expected because some level of restrictions are going to remain in place for quite some time and some level of concern will exist to prevent people doing everything they might have done a year ago.
The big risk of course if that Trump’s push to get the US open will result in the CDC Director’s fears coming true and the US could potentially be dealing with a 2nd wave of COVID-19 in addition to a Flu season, which year-to-year you never know if it’s going to be a mild or severe one.
No one whats that, but even the precautions to avoid such a situation means more economic disruption and that has implications for GDP, employment and company earnings.
OK, I’ll leave it there for now. Thanks for your time.
$SPX500 $NSDQ100 $DJ30
