Daily Comment (May 27, 2020)

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

[Posted: 9:30 AM EDT]

Risk assets appear set to follow through on their rise yesterday, reflecting not only more signs of a nascent economic recovery from the coronavirus crisis, but also a slew of new stimulus measures in the U.S., Europe and Japan.  We highlight all the key coronavirus and other news below.

COVID-19:  Official data show confirmed cases have risen to 5,615,689 worldwide, with 351,077 deaths and 2,307,901 recoveries.  In the United States, confirmed cases rose to 1,681,418, with 98,929 deaths and 384,902 recoveries.  Here is the interactive chart from the Financial Times that allows you to compare cases and deaths among countries, scaled by population.


Real Economy

U.S. Policy Responses

Foreign Policy Responses

China-Hong Kong:  In another clear sign that pro-democracy protestors are picking up where they left off during the coronavirus crisis, hundreds of demonstrators gathered to oppose the reading of a contentious law on China’s national anthem in the city’s de facto parliament, sparking renewed clashes with police.  As we’ve noted before, the spiral of tightening controls imposed by Beijing and intensifying protests is a distinct negative for Hong Kong equities.  Importantly, the U.S. is considering a range of sanctions to punish China for its crackdown on Hong Kong, including possibly imposing new restrictions on financial transactions, and freezing the assets of Chinese officials.

Russia-Libya:  The U.S. military has accused Russia of deploying fighter jets to Libya, from a base in Syria, in order to support renegade General Khalifa Haftar in his effort to take control of the country.  Russia has long supported General Haftar, but this dramatic escalation could mark a significant expansion of Russian ambitions in the region.

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