Pandemic remains a threat

The pandemic stays a menace to the financial system and inventory market because the variety of circumstances stays excessive, argues Actual Cash’s Bret Jensen.

The U.S. recorded extra official deaths from the virus in 2021 in comparison with 2020, based on information from Johns Hopkins, he identified in a current Actual Cash piece. The variety of deaths rose over 58,000 in September as a result of Delta variant, in comparison with 23,000 fatalities in September 2020.

The roles market stays weak and in September there have been 194,000 further jobs, effectively beneath consensus, making it “the worst month for job progress to this point in 2021,” Jensen wrote.

The provision chain bottlenecks additionally persist whereas commodities proceed to rise. The value of crude reached $80 (U.S.) a barrel for the primary time in seven years and aluminum costs reached their 13-year highs lately. All these elements will affect the quantity of future progress.

“All these elements make me assume projections for fourth-quarter GDP progress will proceed to return down within the coming weeks,” he wrote.

The present GDP consensus progress estimate is 5.5 per cent for the fourth quarter. In the meantime, the Atlanta Federal Reserve lowered its GDP progress estimate for the third quarter to 1.3 per cent from a July estimate of 6.1 per cent.

Buyers ought to stay cautious concerning the markets, Jensen argues.

“Falling progress projections in all probability gained’t buoy funding sentiment, though they could scale back the Federal Reserve’s plans to taper on the margin,” he wrote. “Regardless, the persevering with affect from COVID-19 months into the pandemic is simply another reason I stay cautious on the markets.”

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