Market Overview

The terms of a possible extension or partial lifting of the quarantine in various European countries were discussed in detail yesterday. Discussions of similar prospects for the United States today are on the front pages of the world media.

The reason for such close attention can be credited to two events that followed one another over the past 24 hours, and the fact that they are connected to some extent cannot be excluded. The White House news conference was the first of them and the second surprise was a new and "improved" statistical practice concerning the fatalities in New York and some other American states.

Standing in the Rose Garden, US President Donald Trump said a lot of interesting things to the media reporters who were dispersed at a safe distance across the lawn. According to previous reports from official medical sources over the weekend, the number of daily new infected people in the United States remained flat and below 30,000 per day. Mr. Trump emphasised this fact and figuratively described it by saying: "Through the darkness, we can see the rays of light…at the end of that tunnel, we see light…more than ever before". And then he addressed the nation with a message: "I have had many discussions with medical experts... with my team and... we're very close to completing a plan to open our country... we will finalise the guidance to the Americans, we need to return a normal life".

It was not, of course, referencing an immediate and complete removal of all social distancing and other restrictions, but the US President reminded all those present of the fact that "lots of states have zero cases, or small number of cases". So, he is planning to reopen the battered economy just in some parts of the country and this will likely to be ready to go before May 1, and quarantine measures will probably be extended to other territories.

Trump said he would not press states to re-open, and indicated each state would have its own individual date for starting the process. But he said, it is the US President who gives the orders. Trump said he would "authorise" governors - despite many doubts from experts that the presidency has such powers - to implement plans in their states at the appropriate time. He said he would speak to all 50 governors about the plan on Thursday at a video conference. Trump explained in his tweet later that: "For the purpose of creating conflict and confusion, some in the Fake News Media are saying that it is the Governors decision to open up the states, not that of the President of the United States & the Federal Government. Let it be fully understood that this is incorrect... ..It is the decision of the President, and for many good reasons. With that being said, the Administration and I are working closely with the Governors, and this will continue. A decision by me, in conjunction with the Governors and input from others, will be made shortly!"

Other important quotes from the socially distant press conference were: "If we're unhappy with a state, we're going to let them know we're unhappy," Trump said, adding that he would take action if health data changed. If numbers went in the wrong direction, "we'll have to do something that's ... very serious. We'll have to maybe close them up and start all over again. But I don't think we're going to have to do that." Opposing opinions to Trump's guidelines came out immediately. New York Governor Andrew Cuomo said to CNN that he would not follow orders from Trump to reopen his state if it would endanger New Yorkers. He is arguing that "any such move would create a constitutional challenge that pits states against the federal government. And the worst possible thing he could do at this moment - to act dictatorial and to act in a partisan, divisive way. Keep the politics out of it."

Similar statements were made by the governor of Pennsylvania and several other states. However, the matter was not limited to verbal sparring. By a strange coincidence or not, New York and several other states have urgently changed the method they use to calculate the corona victims in the last 24 hours. They decided to include in this calculation all patients who died of any lung diseases, but who were not tested for the virus at all. Such persons are now officially included in the coronavirus statistics with a special term invented for this reason: New York City's Health Department said it will now also count any fatality deemed a "probable" coronavirus death as "death certificate lists as a cause of death COVID-19 or an equivalent".

Not surprisingly, the death count for April 14 immediately increased across the country to 2407 after averages of just over 1500 over the previous two days. California and Louisiana, two other coronavirus hot spots, likewise reported record daily spikes in deaths despite tentative signs across the country in recent days that the outbreak was beginning to fade. Trump commented on a CNN interview with Andrew Cuomo in his Twitter feed by saying: "Cuomo's been calling daily, even hourly, begging for everything, most of which should have been the state's responsibility, such as new hospitals, beds, ventilators, etc. I got it all done for him, and everyone else, and now he seems to want Independence! That won't happen!"

The whole hot story around the quarantine measures is becoming more and morepoliticised in the United States since the early opening of the economy is opposed mainly by governors from among the protégés of the Democratic party. The Republican representatives, on the other hand, dominate among supporters of the gradual easing of self-isolation orders. All this is not surprising given the presidential election in November. It is important for Trump's supporters to anchor in the public opinion a visible partial recovery of the economy and suppression of the jump in unemployment, while their opponents are talking about preserving the current situation for a longer time. Unfortunately, the lives of human beings and the discussion about the number of victims may become a bargaining chip in these political games over the coming months. The opposition will probably accuse the President's team of insufficient preventive measures in early stages of the epidemic while Trump will most likely emphasise at every corner how resolutely he acted repeating the list of sins of the World Health Organisation (WHO). Perhaps US officials could resume their convictions to China since the touchstone was already thrown in this direction by Senator Lindsey Graham the other day when he called to start writing off American debts to China blaming Chinese authorities who allegedly did not share important news about the virus for a long time.

Donald Trump already said that he has instructed his administration to "halt" US funding of the World Health Organisation "while a review is conducted." He added that "we have deep concerns whether America's generosity has been put to the best use possible", and that a proper assessment of WHO will be made in the meantime as well as "WHO's role in severe mismanaging and covering up the spread of the coronavirus, everybody knows what's gone on there..."

"American tax payers gave 400-500 million dollars per year for WHO but it was very much opposed to what we did from the beginning, like travel restrictions from China, fortunately I was not convinced," Trump concluded. He called to look at "those European countries that did not close air traffic on time, and what is happening there with the infection, while they followed WHO's recommendations". It is quite possible that by saying so Trump would try to disavow WHO's authority since it is on WHO's recommendations that many governors and their advisers rely when delaying the removal of the quarantine measures.

Meanwhile, the American authorities has enough reason to refer to the experience of China, which managed to localise and control the infection in a couple of months. Such effectiveness was considered largely by imposing very strict quarantine in specific large viral hotbeds, where restrictive measures were much more severe. Those severe measures included police block posts and transport isolation for longer periods. Restrictions in the rest of the Mainland China, however, was less hard-boiled.

Many controversies and the increasing battle between Trump and state governors prompted US stock exchanges to react in a subdued manner. The S&P500 and Nasdaq indexes had only slightly retreated from yesterday's peaks. Markets may probably treat all the recent statements of the US state or federal authorities as hit-and-run strategy restraining the scale of price volatility. Nevertheless, US trading sessions today and tomorrow will show what is more in the mood of investors - the former optimism or new caution. European stock markets weakened on Wednesday after a five-day rally, but they also didn't roll back significantly as the European market community is waiting for more precise information on the virus statistics and especially the particular plans of national and Brussels authorities.

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