By Lorcan Roche Kelly
The Trump administration is developing a plan to get the U.S. economy back on track based on more widespread testing of Americans. The idea would be to test, and then open, smaller cities and towns that have not already been badly hit by the coronavirus. President Donald Trump’s top economic adviser Larry Kudlow said the hope was to have the economy fully open in the next four to eight weeks. Democratic presidential nomination front-runner Joe Biden said the damage to the economy could eclipse that caused by the Great Depression.
While the U.S. is making plans to get the economy back to full activity, in Europe finance ministers failed to reach agreement on a 500 billion-euro ($543 billion) package to mitigate the impact of the outbreak. A marathon 16-hour teleconference only led to a promise of more talks tomorrow as Italy and the Netherlands stood their ground on opposite sides of the argument for so-called coronabonds. German Finance Minister Olaf Scholz said an agreement is close, and he hoped one would be reached before April 12. The ECB may have taken some of the immediate pressure for action away yesterday after it announced a further package of measures to ease market stress.
Increase in cases
While the economic cost of the shutdown is rising, the human cost continues to increase, particularly in the U.S. and Europe. The United Kingdom yesterday reported its highest number of deaths yet as Prime Minister Boris Johnson remains in intensive care where his condition is described as “stable.” Hopes of a peak in cases in Spain took a blow this morning with the country reporting 6,180 new infections and 757 deaths in the past 24 hours, the highest total in four days. A forecast by Imperial College London sees a spike in the number of deaths reported in Britain, the U.S. and Italy in the coming week.
Monday’s massive rally in U.S. stocks lost steam yesterday, with markets this morning again failing to move meaningfully higher. Overnight, the MSCI Asia Pacific Index eked out a 0.1% gain, while Japan’s Topix index closed 1.6% higher as investors looked for bargains there. In Europe, the Stoxx 600 Index was down 1.2% at 5:50 a.m. Eastern Time as data pointed to a grim outlook for some of the region’s biggest economies. S&P 500 futures were broadly unchanged, the 10-year Treasury yield was at 0.725% and gold was slightly higher.
While there’s already an awful lot going on in the oil market at the moment, investors will be watching today’s U.S. crude oil inventories number at 10:30 a.m. with interest after the EIA cut the country’s output forecast for 2020 by 1.2 million barrels per day. The minutes of the most recent Federal Reserve meeting will be published at 2:00 p.m. PriceSmart Inc. and Trulieve Cannabis Corp. are among the companies reporting earnings.