33% Don’t Have $100 Saved

(Click on image to enlarge)

Source: NYC Health

China Rebounding

Governor Cuomo has claimed COVID-19 shutdowns could last as long as 9 months and up to 80% of New Yorkers could get the virus. These forecasts differ from the situation in China, Japan, and South Korea. They also differ from the recent growth rates in Italy. Chinese economic activity is rebounding. As you can see from the chart below, subway passengers, road congestion, share of migrant workers returned, and coal consumption have all increased sharply from their troughs. They are still below 2019 levels, but normalization is underway.  

Conclusion

People aren’t prepared to deal with losing their jobs. That’s why the government passed a bill to give people $1,200 in relief. Many large businesses were also not prepared. Only the most profitable corporations can deal with losing 100% of business for months. Firms don’t plan for such events. Markets apparently expect economic weakness 1 year from now. The number of new cases hasn’t stopped increasing in NYC yet. The Chinese economy is in the process of normalization.

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