A surge in COVID-19 infections can only increase the amount needed for fiscal stimulus

Today the New York Times reported that new cases of the coronavirus have reached a record high. The United States set a record with 121,000 new confirmed infections on Thursday. This followed Wednesday’s record number of 100,000 new cases. Breaking the one hundred thousand mark for the first time. It seems that America is #1, and the greatest country on earth, at least when it comes to spreading viruses. The numbers hit on November 5^th resulted in a 54% increase when compared to the prior week.

COVID-19 totaled 605,573 for the rest of the world were down Brazil and India Death tolls equal that of the U.S when combined over 250,00. Mortalities were also up, 8% in the U.S. which fared better than the rest of the globe which totaled 8,562 on Thursday a 34% gain for the day. We have halfway to the lost American souls from WWII, or a 9/11 every other day. It seems that the likely scenario of citizens gathering at polls to vote was not the smartest idea, at least all-states had implemented mail-in ballots which they distributed, collected, and counted with an ease never seen before.  Proving that once again, freedom isn’t free.

Across the pond, the Allied Forces are receiving heavy casualties. Hospitals in Europe were overwhelmed as there are more coronavirus cases than ever for the continent's second hardest hit after the. This according to hospital data from 21 countries. The data indicate that Europe has surpassed the worst days in the spring and is threatening to overwhelm hospitals.

Currently, the Czech Republic is the worst-hit nation in recent weeks, where 1,300 people are currently hospitalized with Covid-19.

The global calculation for confirmed coronavirus infections has now climbed to 48.8 million individuals this according to data released today from Johns Hopkins University.

Besides the emotional hardship for families who have members that have contracted the virus the economic fallout continues to deepen. The continued economic contraction globally will continue to worsen, and as such governments and central banks worldwide will have to increase expenditures for financial aid and accommodative monetary policies.

Currently over a quarter-million college students have contracted the virus in the United States, according to a New York Times survey.

The rise in new infections will most certainly require a massive fiscal stimulus to aid those individuals who have lost their jobs, and businesses that can no longer meet their financial obligations.

We have seen a slight downtick in the number of unemployed Americans, the unemployment rate has decreased by a full percentage point dropping to 6.9% from 7.9%. However, that means there are still approximately 10 million individuals in the United States that are unemployed.

These numbers will put enormous pressure on governments around the world requiring massive amounts of capital and resources. The net result of these expenditures can only deepen the deficits that countries are experiencing as their expenditures are much greater as the pandemic worsens.

As the pandemic grows worse the safe-haven asset class has benefited from gold trading to a three-month high, as demand for the precious yellow metal increases and concurrently the US dollar weakens. Until an effective vaccine is developed and available on a global scale, we can expect gold prices to continue to rise.

Wishing you as always, good trading and good health,