Markets Under Pressure as Average Daily Cases Jump 30% in The USA
Wall Street is losing ground on Wednesday as investors have lost confidence in the post-coronavirus economic recovery due to a 30% surge in the 7-day average of COVID-19 in the United States from a week ago.
According to data published by the Center for Systems Science and Engineering at Johns Hopkins University, the daily cases reported in the United States are picking up in the last days. In that framework, the 7-day average of COVID-19 daily cases jumped by 30% this week compared with the previous week.
Florida, Texas, California, Arkansas, North Carolina, and Arizona are among the states with the most significant increases. Everything seems to point to a second wave of coronavirus, which is expected sooner than experts had thought possible. Before, they had not considered that option to occur before Autumn.
However, as the Director of the National Institute for Allergy and Infectious Diseases, Dr. Anthony Fauci, warned about that several times in the last months, a disorderly reopening of economies would lead to a potential increase of cases.
On Tuesday, Dr. Fauci said in a hearing before the House of Energy and Commerce Committee that the country is starting to see a "disturbing surge" in COVID-19 infections.
That's something I'm really quite concerned about, now we're going up. A couple of days ago, there were 30,000 new infections.
COVID-19: United States' Cases on The Rise Again
According to the latest update of the COVID-19 Dashboard by the CSSE, the number of cases in the United States surpassed 2.3 million; the coronavirus has killed more than 121 thousand people.
The American union is followed by another country that is a hot spot right now, Brazil, with over 1.1 million cases and over 52 thousand deaths.
Globally, the COVID-19 Dashboard has accounted for almost 9.3 million cases in 188 countries, plus over 478 thousand people have died.
A Gloomy GDP Forecast For The US And The World
In that framework, the International Monetary Forum published Wednesday its World Economic Outlook update with a warning of soaring debt levels.
According to the FMI, the United States is expected to contract 8 percent in 2020, with a decline of 5.9 percent performed in April. The FMI now forecasts a 4.9 percent contraction in global Gross Domestic Product. In April, it predicted a 3 percent decline.
The IMF said:
The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.
Markets Under Pressure
In that framework, Wall Street is trading under pressure as the surge is hurting the market sentiment. On Tuesday, gold has been trading at its highs since October 2012, while the US dollar is recovering ground. All because of risk aversion.
Stocks are currently trading near to intra-day minimums with the Dow Jones Industrial Average falling around 2 percent or over 500 points. The S&P 500 is 1.7 percent down as it has lost 54 points so far in the session.
NASDAQ Composite is 136 points down as the index is trading 1.34% negative in the session.
Safe Havens And Investments on The Rise
The Dollar Index stopped two days of decline with today's recovery. After finding support at 96.39 on Tuesday, the DXY started to rise, and it is trading 0.40 percent positive at 97.06. The chart is still bearish, but some momentum is growing for the upside.
Gold is also posting daily gains as it is trading positively for the fourth day in a row. XAU/USD broke above the 1.765 resistance on Tuesday, and today it is adding gains as investors are looking for a safe investment such as the yellow metal.
After peaking at 1.780, highest since October 2012, the XAU/USD is now trading 0.36 percent up at 1.774,06.
Mauricio is a newer member of the team and a very welcome addition. He is a financial journalist and trader with over ten years of experience in stocks, Forex, commodities, and cryptocurrencies. This experience means he has an excellent understanding of the markets and current events.