Daily Comment (March 17, 2020)

by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA

[Posted: 9:30 AM EST]

Happy St. Patrick’s Day!  To celebrate the holiday, we think it would be great if the markets could end the day “in the green.”  However, much will depend on news flow related to the COVID-19 “black swan.”  With so many fast-moving developments, equities could easily turn back into the red.  On that colorful note, we review the latest news on the epidemic and a few odds and ends related to the oil market, Russia and Israel.

COVID-19:  Official data show confirmed cases have risen to 185,067 worldwide, with 7,330 deaths and 80,236 recoveries.  In the United States, confirmed cases rose to 4,661, with 85 deaths and 17 recoveries.

Oil market:  The International Energy Agency has warned that the Saudi-Russian price war and the COVID-19 epidemic will cut the revenues of “vulnerable” producing countries like Iraq and Nigeria by up to 85%.  The warning highlights how the combined crises could spark significant fiscal stress for many less developed countries.

Russia:  The highest Russian court approved President Putin’s constitutional changes, which were passed by parliament last week.  The court’s approval removes one of the final barriers to Putin potentially staying in power until 2036.

Israel:  President Rivlin has given former military chief Gantz the first crack at forming a government after this month’s inconclusive election.  However, Prime Minister Netanyahu is appealing to legislators in Gantz’s coalition to join with him to form a broad coalition in which Gantz and Netanyahu share power.

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