Week of April 25, 2020 Weekly Recap & The Week Ahead
“The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological.” – Howard Marks
1. Oil Plunges Below Zero for First Time in Unprecedented Wipeout — the current May futures contract, which expires April 21 20, dropped to minus $37.63 a barrel. Underscoring just how acute the concern over the lack of storage is, June’s contract settled at $20.43. That gap between the two contracts is by far the biggest ever. This means that oil for delivery next month has essentially been deemed worthless, suggesting sellers may have to instead pay someone to take it off their hands.
2. First U.S. Virus Death Came Weeks Before Previously Thought — Two residents of Santa Clara County, California, who died at home on Feb. 6 and Feb. 17 were infected with the virus. The first death is 20 days earlier than what was previously thought to be the first U.S. fatality, and about three weeks before health officials identified the first Covid-19 infection without a known tie to other cases. The deaths were also weeks before cities and states began implementing widespread social-distancing measures. U.S. attempts to track the virus at the time were hampered by shortages of tests and highly limited criteria for who could be tested. In early February, the U.S. was still relying on the CDC for all testing of potential cases. Tests sent out by the agency to state and local health labs later that month turned out to be unusable, and widespread testing only became available weeks later.
3. House Ratifies $484 Billion in Aid for Pandemic Relief — Donald Trump signed a $484 billion spending package that includes more money for small businesses. The new law will also deliver tens of billions of dollars in aid to health care providers and grant $25 billion to expand virus testing. It’s unlikely to be enough, though, with lawmakers already discussing the next phase of virus rescue legislation. The news comes as the CBO said the federal budget deficit may more than triple to a record $3.7 trillion this fiscal year.
4. Cuomo announces phased plan to reopen New York — Andrew Cuomo sketched out a phased reopening beginning with construction and manufacturing, possibly on May 15, and probably upstate before NYC. Other businesses would reopen based on how essential they are. New hospitalizations must have dropped for two weeks. Bill de Blasio said in that event he’ll relax the lockdown and open up schools, companies and cultural institutions. New York had 367 deaths on Sunday, the lowest number in almost a month. Almost one-third of business economists expect operations at their companies will return to normal in five to eight weeks, though almost as many say it may be three to six months, a NABE survey showed. Georgia restaurants and movie theaters can reopen. Follow the developments with our Virus Update.
The week ahead — Economic data from Econoday.com:
