The U.S. intelligence community concluded that China may have concealed its number of coronavirus cases, according to a report from Bloomberg. It was later on received at the White House last week.
U.S. President Donald Trump, in a coronavirus briefing last April 1, comments that the numbers reported by China seemed to be on the “light side” as he mentions:
“Their numbers seem to be a little bit on the light side, and I’m being nice when I say that […] But we [Xi Jinping] had a great call the other night. We are working together on a lot of different things including trade. They’re buying a lot, they’re spending a lot of money. They’re giving it to our farmers.”
Trump further adds that the trade deal with China is going well and they want to keep it that way.
In the midst of mixed sentiments from traders and investors, the U.S. may take another heavy beating in the weeks to come.
Wilmington Trust’s head of investment strategy Meghan Shue is foreseeing worse economic growth ahead. She warns CNBC on “Trading Nation” on April 1:
“GDP in the second quarter could be anywhere from negative 15% to negative 30%. That is a huge range which just speaks to the uncertainty facing investors at the moment […] If this is something we can get our arms around in the next 90 days or so, we’re more likely to see the market bottoming in the second quarter.”
She also believes that market losses will continue as negative coronavirus data and headlines would pile up.
Despite the ongoing price war between Saudi Arabia and Russia, oil prices surged after news of Trump meeting with oil companies this coming Friday to discuss how to prevent the oil markets from crashing.
He also told reporters that Saudi and Russia may strike a deal soon. He adds:
“Worldwide, the oil industry has been ravaged […] It’s very bad for Russia, it’s very bad for Saudi Arabia. I mean, it’s very bad for both. I think they’re going to make a deal.”
Oil would be “hellish” for the second quarter, as it is already down more than 65% year-to-date, some analysts claim. Stephen Brennock of PVM Oil Associates described the Saudi policy as one of “short-term pain for long-term gain,” as he states:
“Like all oil producers, they will not be thrilled by the prospect of $30 oil for the foreseeable future […] However, the ramp-up in output and shipments will safeguard its long-term position in several key export markets”
Meanwhile, U.S. jobless claims were reported to be over 6.6 million. Economic strategists are currently speculating that there are possibly more. Liz Ann Sonders, chief investment strategist at Charles Schwab, says:
“Sadly, this probably still underestimates the actual numbers because of the overload in the systems and not every call getting through […] Even if we’re accurately calculating the numbers, we still likely have worse to come.”
Tension rises in the U.S. as they are trying to contain the coronavirus, and an oil deal might give a short-lived spark in the markets for the foreseeable future.
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