U.S. virus cases approach 6 million, China’s recovery continues, and TikTok tales takes another turn.
Not going away
Cases of coronavirus in the U.S. are on the cusp of passing 6 million as the outbreak accelerates on college campuses. With some universities sending students home after an outbreak, public health experts are now saying it would be better for ill students to stay on campus rather than return to their communities. While the virus has a much lower fatality rate among younger people, there is evidence of long-term health effects from exposure to the disease. Airlines continue to be one of the industries hardest hit by the pandemic and major U.S. carriers are pulling out all the stops to try to get people to fly again.
Better data, worse debt
China’s emergence from the coronavirus shutdown continued, with a gauge of economic activity showing the services sector at its strongest level since 2018 while the expansion of the manufacturing sector remained intact. There are some caveats over the performance as tensions with the U.S. continue to be elevated both in trade and political relations. On the domestic front, the country’s biggest banks posted their worst profit decline in more than a decade as bad debt provisions jumped.
Gold Still Shines Bright
Gold prices hit new highs earlier this month, propelled by record low interest rates in many regions, inflation worries, and mounting government debt. Yet PIMCO’s valuation model indicates gold remains attractively valued, even at these levels.
The sale of the U.S. operations of ByteDance Ltd.’s TikTok video sharing app, which has drawn the attention of a diverse range of suitors, has just had another roadblock thrown in front of it. On Friday, China asserted authority over any sale of the prized asset, meaning the company is required to seek Beijing’s approval of any deal. The Trump administration’s Sept.15 deadline on a sale of the American operations added to China’s move means any deal may now be very difficult to reach.
The relentless rally in global stocks is not showing any signs of stopping today with most gauges across the world adding to gains. Overnight the MSCI Asia Pacific Index slipped 0.7% while Warren Buffett’s interest in Japanese stocks helped drive the Topix index to a 0.8% gain. In Europe, the Stoxx 600 Index was 0.4% higher at 5:55 a.m. Eastern Time, with the U.K. closed for a holiday. S&P 500 futures pointed to another session of gains today, the 10-year Treasury yield was at 0.723% and gold was unchanged.
It’s a fairly quiet start to the week on the eco-data front, with only Dallas Fed Manufacturing activity at 10:30 a.m. for U.S. investors. Federal Reserve Vice Chair Richard Clarida and Atlanta Fed President Raphael Bostic speak later. Zoom Video Communications Inc. is among the companies reporting earnings.