U.S States Report New COVID-19 Spikes and Some Are Up for Grabs in November…

The News

While the U.S administration confuses the markets with its foreign policy on China, COVID-19 numbers have been less confusing.

Last week, we saw the total number of global new coronavirus cases surge by 205,878 on Friday, following a 169,995 rise on Thursday.

Yet, there was no major sell-off across the global equity markets, as the FED distracted the markets.

At the start of the week, we then saw the private sector PMI’s distract the markets. All of this in spite of governors of recently reopened U.S states raising concerns via the media.

With economic data on the quieter side today, there was very little else for the markets to consider.

It was either COVID-19 or the U.S administration’s confusing messages over its foreign policy with China.

The Markets

While the Asian markets found early support on positive PMIs and news that the U.S – China phase 1 agreement remained intact, the focus shifted going into the European session.

Following 29,864 new cases in the U.S on Monday, there were 34,399 new cases reported on Tuesday.

This was only marginally lower than last Friday’s 39,586 spike that contributed to the 205,878 new cases globally.

The bigger question is at what point are the numbers simply too high for the U.S administration to ignore?

Governments around the world and the WHO have continued to warn of possible spikes in new cases as economies reopen. We even heard of one district in Germany reintroduce lockdown measures.

Avoiding the need to reintroduce lockdown measures across the U.S is key, however, from a market perspective.

The Bad News

As we have frequently heard from the U.S administration, there is no going back if Trump is to be believed.

Governors of the likes of Texas, Cali, and a number of other states may have different views, however.

Does it all boil down to politics?

Interestingly, 13 governorships in 11 states are up for reelection on 3^rd November.

Republican and Texas governor Greg Abbott is among those up for reelection.

As a Republican, is Abbott’s loyalties with his electorate or with Donald Trump, who may or may not win a 2^nd term?

Perhaps in a normal world, one could argue either way. When it comes to COVID-19, however, it is a different story and you would expect governors to face the wrath of voters.

Even more so, if there is a reintroduction of lockdown measures at a time when other states continue as normal.

The Member States in Focus

Based on last week’s news and COVID-19 updates, as many as 14 states have reported spikes in new COVID-19 cases. These states reported their worst week of new coronavirus infections today.

California, Florida, and Texas are amongst the 14 that have recently reopened only to be hit by a 2^nd wave. According to the Washington Post: Alaska, Arizona, Arkansas, Kentucky, New Mexico, North Carolina, Mississippi, Oregon, South Carolina, Tennessee, and Utah were also amongst the 14.

So looking at the 14, while Texas is up for grabs, Utah is also a Republican state that is up for grabs.

Then there are the U.S territories, where Puerto Rico had also reported its worst week on record in early June. Puerto Rico is also up for grabs…

The U.S administration gamble continues over COVID-19 and Trump will probably not know what voters think until November. Swing states have always wreaked havoc. That could bring Florida into focus…

From what looked to be a walk into a 2^nd term, it’s looking a lot less clear. Worse yet, Trump may yet be free from an economic crisis. One would have to imagine that the economy would need to be on the mend for the U.S President to have any chance of a 2^nd term.

A 2^nd wave and that economic recovery would buckle and the global financial markets with it.

At the time of writing, the EUR was down by 0.27% to $1.12768 against the Dollar, with the Dow Mini in the red by 200 points. The losses are actually relatively modest considering what the implications of a 2^nd global lockdown would have…