Reuters reported that global coronavirus cases have surpassed 5 million and that Latin America has surpassed the United States and Europe, reporting the bulk of new daily cases worldwide.
It represents a new phase in the spread of the virus, which initially peaked in China in February before large-scale epidemics followed in Europe and the United States.
Latin America accounted for about a third of the 91,000 cases reported earlier this week. Europe and the United States each accounted for just over 20%.
Many of these new cases originated in Brazil, which recently surpassed Germany, France and the United Kingdom to become the third largest epidemic in the world, behind the United States and Russia.
Cases in Brazil are now increasing at a daily rate, just behind the United States.
The first 41 cases of coronavirus were confirmed in Wuhan, China, in January. 10 and it took the world until April 1 to reach its first million cases. Since then, around 1 million new cases have been reported every two weeks, according to a Reuters count.
With more than 5 million cases, the virus has infected more people in less than six months than the annual total of severe influenza cases, which the World Health Organization estimates about 3 to 5 million worldwide.
The pandemic has claimed the lives of more than 326,000 people, but the actual number is believed to be higher as tests are still limited and many countries do not include deaths outside of hospitals.
More than half of the total deaths have been recorded in Europe.
Meanwhile, markets have lagged governments around the world by encouraging loosening of social distancing and boosting their populations and businesses. We observed 61.8% Fibonacci retracements in the US benchmarks, which is a significant step from the previous financial market crashes. The question now is whether the financial markets can continue to recover, or whether it was a typical “hope” correction fueled before the real pain and prolonged market collapse?
The world faces a protracted health crisis
Although there is no way to say exactly what the economic damage will be from the global COVID-19 coronavirus pandemic, it has been assumed that the combination of the virus, an oil market price war and an inflated economic bubble fueled by quantitative easing and low interest rates (aka the Fed-put) can only lead to one thing.
Initial estimates suggest that if the virus were to become a global pandemic, most large economies would lose at least 2.4% of their gross domestic product (GDP) in 2020. This equates to about a global growth rate. from 3% falling to around 2.4%. However, these estimates were made before the pandemic and the subsequent consequences of widespread restrictions on social contact to stop the spread of the virus. The result has put a key to the workings of the global financial system and has blurred the workings of the global economy. As a result, we saw the Dow Jones declare its biggest drop in a day by nearly 3,000 points on March 16, 2020 – breaking its previous record of 2,300 points which had only been established four days earlier.
Not only is the world facing a protracted health crisis, but without an ounce of demand left in the global economy, it is this dynamic that makes economists wonder if the COVID-19 pandemic could drive to a global recession on the scale of the Great Depression. To combat such a scenario, many governments are increasing their offer of monetary well-being to citizens. There are also mechanisms to ensure that companies have access to the funds necessary to keep their staff employed throughout the pandemic. But the reality is, no matter how much mud you throw against the wall, it won’t stick until there is a vaccine, cure, or both.
In addition to the dangers to public health and the well-being of populations, the resulting closings and closings could have lasting effects on people and societies, ultimately destroying life as we know it and the prospect of an economic recovery. Business owners will be hesitant to hire staff for fear of a second or third wave, and people will be afraid to try to return to work. A vaccine is far away and even when it has been discovered and approved, it will take a long time to filter the world’s population. There is also geopolitical uncertainty in this regard – a bridge to cross when we get there and it will be an additional risk that markets will have to consider sooner or later. Who will get the vaccine first?
At a very basic level, high structural unemployment is inevitable and, with this, consumer confidence and the speed of economic recovery will undoubtedly prevent any rapid economic recovery. There were deep-rooted structural problems for the global economy before the virus, such as demography, which will now be exposed earlier. Whatever form or form the world begins to recover from isolation, it is also likely to reveal a wider gap between the poor and the poor, as well as the wealth gap between the young and the old . The magnitude of the ramifications of what has just happened around the world will pose significant educational and employment challenges that risk losing a second generation.
The next wave
As governments attempt the fate of the second wave of COVID-19, with no choice, the chances of such a result are apparently high considering that there are already new cases in China, in Russia and even in South Korea who had been rented out for its containment of the first wave. As written in a previous update to Wednesday’s session in the United States, “as traders, we are intrinsically looking to the past for clues to what may happen in the future.”
The influenza pandemic of 1918 (the Spanish flu) experienced three major waves, from March 1918, its peak occurred in a second wave at the end of the same year. The second wave was a stronger mutation than the first version of the virus and the United States. The Centers for Disease Control and Prevention (CDC) said the second wave was responsible for the majority of deaths in the United States – the likely country of origin for the flu. It should also be noted that a third wave arrived in early 1919 and lasted until the middle of the year when, according to the CDC, the Spanish flu “subsided”.
Either the markets are complacent, or the erasure of the next financial market is acquired in advance and it is only a matter of time until the tidal wave of COVID-19 hits our trading screens. We keep an eye on the 5-year US Treasury rates and the 61.8% Fibonacci retracements in the US benchmarks. With yields oscillating with the lows, the closer they are to zero, the more likely depression will be. As the stock markets breathe the fumes, 61.8% is the gold ration where we expect the top of the correction to solidify – otherwise, the 78.6% could be the bear’s last defense .