Blink and you’ll miss it

Market Update: 8 April 2020

A rally by 4% in S&P overnight was whittled away to zero come the close. These days it’s hard to put a finger on a specific rationale although some talk of NYSE changing its circuit breakers alongside some note market anomalies just before closes have caused rapid price moves.  

AUD again followed the move and managed a high of 0.6208 but again sellers emerge above 62c and AUD then fell lower today to 0.6123 as the ratings agencies start to downgrade… yesterday it was CBA, ANZ and WBC by Fitch, today S&P weighed in and put Australia to AAA negative from stable. We’ve anticipated this as the agencies came under fire during the GFC for not acting faster… i.e. Lehmans was still highly rated at A2 on review 5 days before it filed for Bankruptcy – the question perhaps now is if this goes into overkill and no-one is creditworthy.

Markets still (trying) to celebrate a flatter curve, but those early to celebrate like Hong Kong, Singapore and Japan have just gone back into lockdown/tighter measures. Trump is pushing to open up the nation (not the hotspots), but perhaps needs to watch the outcome of complacency. The next experiment is today as Wuhan is expected to have its lockdown lifted. Given Boris Johnson is the example at present – in his second night in intensive care, the planned meeting on Monday to look at easing restrictions has been delayed.

There were a few upticks as well in Germany and France that took new cases higher globally. Some positives were the minor improvements in recoveries +0.5% to 21.2% globally. Deaths are what the next 2 weeks are about. Looking at the chart below, Italy, Spain and France are more advanced on the curves and their death rates soared to 11% average. US is at 3.2% and if their hospitals can’t cope, it’s not hard to expect a further 30,000 deaths.

For some silver lining, it’s reported that crime rates in South Africa and Western Australia are down.

Japan and Singapore cases crept higher…

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