Going Viral: All the COVID news you want to read this week
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Welcome to our wrap for investors of the key coronavirus news this week.
Australian cases: 5,108, up 91 per cent on last week
Australian deaths: 24, up 118 per cent on last week
Global cases: 1,002,159, up 113 per cent on last week
Global deaths: 51,485, up 141 per cent on last week
The ASX All Ordinaries closed down 1.93 per cent on April 2 at 5,188.70 points.
The Dow Jones 30 futures, the best indicator for how the ASX will open today, was up 1.5 per cent at 6pm on April 2 to 21,050.50 points.
Free childcare, the beginnings of a universal wage with Jobkeeper, higher unemployment benefits — Australia has become Scandinavia, if only for six months.
One economist is even suggesting the government pay tenants’ rent, after it did a deal to protect businesses from eviction if they can no longer pay rent.
Total government and RBA spending so far: just over $320bn, or 16.4 per cent of GDP.
In the last week alone the government has announced $132.7bn worth of initiatives including a universal shift towards telehealth — a mass digitisation of the medical sector that took just two weeks.
How will it pay for this largesse? Wilson Asset Management’s Geoff Wilson believes a swift change of mind on franking credit reform may be the answer, similar to what Labor was proposing pre-election last year.
Internationally, US and UK intelligence services are saying China intentionally fudged its COVID-19 numbers which led the rest of the world to underestimate the severity of the disease.
But that’s nothing on Turkmenistan, which has banned the word coronavirus from its media entirely.
While some investors are “battening down the hatches”, as one email subject line screamed late yesterday afternoon, others are all in, baby.
According to Finder, one of the most popular searches on the app is “how to invest in shares”, while global Google searches for the phrase “buy stocks” spiked by 466 per cent between March 31, 2019 and March 27 this year.
Or as per one bullish trader put it yesterday, “this economy will bloody BOOM in two months” once the government money starts to wash through the economy.
And perhaps they’re right. Westpac chief economist Bill Evans says markets are “probably six to 12 months ahead of the economy” when it comes to pricing the impact of COVID-19.
But what worries Evans and his colleagues is the US, which has 5,138 confirmed COVID-19 deaths and is not on top of the situation. Until it is, Australian markets will continue to toss and turn like a leveraged trader with a big margin call on the horizon.
What comes after that will be an economy that can no longer rely on millennial spending, says Wilson Asset Management’s Wilson.
Millennials (people aged between 23 and 39), are a generation which is already good at saving and now they’re learning a lesson in spending: as a result, buy-now-pay-later companies are not likely to recapture their pre-COVID-19 heights.
Now that most of the developed world has been told to stay inside or risk heavy fines, esports are coming into their own.
iCandy Interactive (ASX:ICI) has a big few weeks ahead, launching two major games in the next month, one of which already has 500,000 pre-registered users.
And Esports Mogul (ASX:ESH) says online esports tournament hosting — its jam — is in strong demand thanks to global travel restrictions and limitations on public gatherings.
A handful of ASX companies have landed on the Next Big Thing in corona: diagnostic kits.
Hair regrowth company Cellmid (ASX:CDY) secured supply out of China for one version that has been approved by the medical regulator, and Genetic Signatures’ (ASX:GSS) test has been given the European tick meaning it can be sold there.
If there is one place you didn’t want to be invested in before COVID-19 and *definitely* don’t want to be in now, it’s retail.
The roll call of closures is grim and with hundreds of thousands of people being introduced to the seventh circle of hell that is Centrelink and many more fearing that possibility, it’s not surprising online shopping hasn’t really taken off yet.
Oddly enough, the other sector to avoid is toll roads and parking companies, as Smart Parking (ASX:SPZ) said the UK saw a 60 per cent drop in cars and it’s been forced to defer some contracts, and Redflex Holdings (ASX:RDF) anticipated 15 per cent of its revenue would be affected as it’s dependant on volume-based projects.
Resources explorers are doing it tough too: the only way to raise money in the last month was to be a gold explorer. Anyone else may as well have had coronavirus.
Aussie gold miner Saracen Mineral Holdings (ASX:SAR), WA mineral sands miner Image Resources (ASX:IMA), and Pilbara lithium miner Altura (ASX:AJM) say COVID-19 measures will have minimal impact on production.