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Original title: America’s epidemic economy is in a mess before the first debate
Source: Beijing Commercial Daily
For US stocks, this week will undoubtedly be a turbulent week. Under the arrangement, the US presidential campaign will begin this week. From September 29 to October 22, the current president, Republican presidential candidate Trump and Democratic presidential candidate Biden will have three clashes. In addition, non-farm data for September will also be released this week. From the outside, this important economic indicator is not optimistic for the United States, which is still fighting the epidemic.
On September 26 local time, the rules for the first debate in the 2020 US presidential election were finalized. According to the US Politico news website, Trump and Biden have already finalized the final details of the 29th debate. According to a person familiar with the situation, affected by the epidemic, the two parties decided to abandon the traditional handshake before the debate and would not replace it with an elbow.
The first debate will be held at Case Western Reserve University in Cleveland, Ohio, at 9 pm local time on September 29. The entire session will consist of six 15-minute thematic discussions.
According to the previous CNN report, the first debate will focus on 6 topics, including “The past experience of Trump and Biden”, “New coronavirus pandemic”, “Supreme Court”, “Racial discrimination”, “Economy” and ” Choices with honesty. ” . After the first debate, the vice-presidential debate will take place on October 7, and two presidential debates will be held again on October 15 and 22.
The first debate is in the current turbulent period of the stock market. In recent weeks, the S&P 500 Index has fallen 10% from an all-time high, due to investor concerns that recovery from the new corona pneumonia epidemic will take longer and the uncertainty associated with the general election. November 3.
“The debate can be a game between stocks and individual industries,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors. According to the analysis, if Biden wins the debate, he could boost actions related to global trade and renewable energy; on the contrary, Trump’s victory may benefit defense companies and fossil fuels. Currently, Biden is slightly ahead of the odds and the polls.
It is not just the debate that can disrupt the market. Before the official opening of the debate, the current economic and epidemic development in the United States showed a not optimistic trend.
On Friday, CNN reported that compared to the previous week, the number of new cases of new coronary pneumonia in 23 states in the United States continues to rise. The United States averages more than 43,000 new cases each day, which is roughly double the June average of this year. Today, the epidemic’s hot spots have become central regions like Wisconsin, Montana and North Dakota, and the new corona virus is spreading widely in rural communities and college towns.
According to statistics, in just one week from September 6 to 12, universities in the United States confirmed more than 36,000 cases of new coronary pneumonia infection. As of September 20, the number of confirmed cases in American elementary and high schools exceeded 21,000. According to a survey recently published by the Washington Post, 85% of those surveyed believe that the United States has responded poorly to the epidemic.
While the epidemic continues to rage, the US economy is also in a deep recession. According to data released by the US Department of Labor on the 24th, the number of applicants for unemployment benefits in the United States has reached a new record high, from 866,000 to 870,000. An Oxford Economics Institute analyst said: “This unemployment data shows that the United States still lacks motivation and is struggling to recover in the labor market.”
It is worth noting that the September non-farm employment report for the United States is scheduled to be released on October 2. This will be the last monthly employment report before the November presidential election. Analysts expect upcoming non-farm employment figures to show slower growth than in previous months. Coupled with a partial rebound in the participation rate, this growth is unlikely to cause the unemployment rate to drop sharply. Analysts’ median estimate shows that the number of non-farm jobs in the United States is expected to increase by 865,000 in September, well below the 1,371 million in August, and the unemployment rate has fallen slightly from 8.4% to 8.2%.
The unemployment situation is worsening, but the two sides in the United States are still at a standstill in the negotiations on a new round of the economic stimulus plan. Last week, market analysts Billy House and Saleha Mohsin revealed that several Democrats in the U.S. House of Representatives said House Democrats had begun drafting a stimulus proposal on a scale of about 2.4 trillion. dollars to use in possible discussions with Republicans in the White House and the Senate. negotiation.
In the situation of “difficult birth” of the economic stimulus plan,JPMorganChief Economist Michael Feroli lowered his forecast for GDP growth in the fourth quarter of 2020 and the first quarter of 2021. Feroli predicts that the US economy will grow by 2.5% in the fourth quarter of 2020, which is more lower than the agency’s previous expectations of 3.5%; The economic growth rate in the first quarter of next year is expected to be 2%, lower than the 2.5% previously expected.
Of course, the cost of the fiscal stimulus is not small. Economists at JPMorgan Chase also noted that the absence of a new stimulus bill also has its benefits. JPMorgan Chase lowered its forecast for the US fiscal deficit in 2021 from $ 3.5 trillion to $ 2 trillion on the grounds that there was no (stimulus) deal.
“Projects financed by deficits come at the cost of higher debt, higher taxes, and a declining standard of living for people,” said Chris Edwards, an economist at the Cato Institute for Liberal American Studies.
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