New Zealand now has 111 active Covid-19 cases, with Auckland still at Alert Level 3 and the rest of the country at Level 2 [1]. The number of new cases per day appears to be relatively stable at 7-10, which is a good sign that we are not in exponential growth and that this outbreak may be contained. However, there is always the potential for a more severe outbreak to occur and we should not get complacent. A sign of how serious this virus is, is that the New Zealand general election has been delayed four weeks for the third time in history [2].
Covid-19 is, in my option, the main driver for the New Zealand market movement currently. Efficient contact tracing and the fact that Cabinet is meeting on Monday to discuss the possible easing of Auckland’s lockdown being positives for the market [3]. The S&P/NZX 50 is reaching new all-time highs, closing Friday at 11,836, an increase of approximately 3% for the week and almost at its record high of 12,073 from February [4].
Across the ditch, Australia seems to be controlling their second wave well. Cases have been dropping for weeks now, with daily cases being below one-third of the peak cases of the second wave and the number of active cases dropping sharply [5]. However, as deaths are a lagging metric, we are still seeing daily deaths above their first wave peak, although dropping quickly. The S&P/ASX 200 index closed the week down slightly at 6111 (-0.24%) [6].
For the US, cases have almost topped 5.8 million, making up 25% of the world’s 23.1 million cases [7]. The 7-day moving average of daily cases has been dropping slowly for around a month now [8]. However, the 7-day moving average of daily deaths has been relatively constant for around the same amount of time. This is not a promising sign as that would imply that the death rate was increasing or, the more likely scenario, that cases are going undetected. The S&P 500 ended the week up around 0.35%, setting a record high and the NASDAQ Composite (which is heavily weighted towards tech stocks) ended up around 1.8% at a record high of 11,264 [9, 10]. U.S. jobless claim rose above 1 million after dropping below 1 million last week for the first time since March, which is not a good sign [11]. Time will tell if this is the start of the second wave of job losses.
Notable milestones in the market were Apple being the first US public company to hit a $2 trillion market cap and Tesla reaching all-time highs of over $2000 per share [12, 13]. Apple was the first company to reach $1 trillion in August 2018 and has doubled in value in the last two years [14].
In other news, at the Democratic National Convention, Joe Biden became the official Democrat nominee for president in the upcoming U.S. election [15]. The convention was held virtually for the first time ever, due to Covid-19. Additionally, there were speeches from Bernie Sanders, Michelle and Barack Obama, Alexandria Ocasio-Cortez and many more [16].
My clips of the week-
- https://youtu.be/EViqSEAbHls- ‘Japan GDP Slides by Annualised 27.8%’, Bloomberg Markets and Finance
- https://youtu.be/xhpZHjL_BVs- ‘Can the FAANGs Sustain Their Rally?’, Bloomberg Markets and Finance
- https://youtu.be/QxyGFUXXUI8- ‘Mutated Virus Strain Not Seen as More Deadly: John Hopkins’, Bloomberg Markets and Finance
- https://youtu.be/s3m_PnGxGhA- ‘Stocks Are Overextended, CalSTRS CIO Ailman Says’, Bloomberg Markets and Finance
References
[1] Ministry of Health NZ, "COVID-19 (novel coronavirus)," 22 August 2020. [Online]. Available: https://www.health.govt.nz/.
[2] 1 News, "Covid-19 causes general election to be delayed for just third time in NZ history," 17 August 2020. [Online]. Available: https://youtu.be/nDRM2Ng-2rI.
[3] Ministry of Health NZ, "COVID-19 (novel coronavirus) update - 21 August, 2020 1pm | Ministry of Health NZ," Youtube, Wellington, 2020.
[4] Yahoo! Finance, "S&P/NZX 50 INDEX GROSS (^NZ50)," 22 August 2020. [Online]. Available: https://nz.finance.yahoo.com/.
[5] Worldometers, "Australia Coronavirus," 22 August 2020. [Online]. Available: https://www.worldometers.info/.
[6] Yahoo! Finance, "S&P/ASX 200 (^AXJO)," 22 August 2020. [Online]. Available: https://nz.finance.yahoo.com/.
[7] Worldometer, "COVID-19 CORONAVIRUS PANDEMIC," 22 August 2020. [Online]. Available: https://www.worldometers.info/.
[8] Worldometer, "United States Coronavirus," 22 August 2020. [Online]. Available: https://www.worldometers.info/.
[9] Yahoo! Finance, "S&P 500 (^GSPC)," 22 August 2020. [Online]. Available: https://nz.finance.yahoo.com/.
[10] Yahoo! Finance, "NASDAQ Composite (^IXIC)," 22 August 2020. [Online]. Available: https://nz.finance.yahoo.com/.
[11] Bloomberg Markets and Finance, "U.S. Jobless Claims Rise to More Than 1 Million," 21 August 2020. [Online]. Available: https://youtu.be/gsga-ldOtWY.
[12] Yahoo! Finance, "Apple Inc. (AAPL)," 22 August 2020. [Online]. Available: https://nz.finance.yahoo.com/.
[13] Yahoo! Finance, "Tesla, Inc. (TSLA)," 22 August 2020. [Online]. Available: https://nz.finance.yahoo.com/.
[14] J. Bursztynsky, "Apple becomes first U.S. company to reach a $2 trillion market cap," CNBC, 19 August 2020. [Online]. Available: https://www.cnbc.com/.
[15] Biden For President, "Joe Biden for President," 2020. [Online]. Available: https://joebiden.com/. [Accessed 22 August 2020].
[16] Democratic National Convention, "Democratic National Convention Schedule," 2020. [Online]. Available: https://www.demconvention.com.
