ETF Strategies To Brave The Second Wave Of Coronavirus Infections

Wall Street is now clouded by rising worries over the resurgence of the coronavirus infections in the United States. In fact, the S&P 500 lost 5.9% on June 11, marking its worst one-day fall since March 16. It was also the index’s fifth fall of at least 5% in the past three-month period. Going by Johns Hopkins University data, the number of U.S. coronavirus infections passed the grim mark of two million and more than 113,700 Americans have lost their lives. The seven-day average of new cases continued to spike in more than 20 states over the last two weeks, despite lesser number of cases being recorded in some cities and states. The surging cases might lead to Houston-area officials re-imposing stay-at-home orders (per Bloomberg News) .

The Center for Disease Control and Prevention forecasts between 118,000 and 143,000 coronavirus deaths in the United States by June 27 (per a CNN report). Moreover, a White House model has predicted that the death toll in the United States could reach 169,890 by Oct 1, with a probable range of about 133,000-290,000 deaths (per a CNN report).

Meanwhile, the Federal Reserve Chair Jerome Powell maintained a dovish stance in the FOMC meeting concluded on June 10. He informed that there is no expectation of a rate hike through 2022. The Fed has pledged to continue pumping in stimulus to support the economy and strengthen it. The central bank has also reiterated that the Fed funds rate would likely stay in the 0-0.25% range and confirmed continued bond-buying. The central bank forecasts the unemployment rate to fall to 9.3% by the end of this year. Though the figure is down from May’s 13.3%, it will be noticeably above the 3.5% recorded in February — a near 50-year low.

The unemployment rate will later likely improve to 6.5% in 2021. The U.S. GDP was projected to shrink 6.5% this year before rebounding 5% next year and 3.5% in 2022. Inflation was forecast to remain below the Fed’s 2% target through 2022.

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