The U.S. Economy Will Be Reopened In Three Stages
S&P 500 futures are gaining about 3% in premarket trading as investors are optimistic that the U.S. economy will start to reopen soon.
U.S. President Donald Trump has unveiled an idea to restart commercial activity in three stages, on a state-by-state basis. To enter the primary stage, states will need to show a decline in coronavirus cases for 14 days.
Then, they’re going to need to make sure that there’s no devour in cases during the initial phase of reopening. during this case, they’ll be ready to proceed to the second stage, which allows more businesses to open and doesn’t put restrictions on non-essential travel.
The third stage may be a return to normal life, although some adjustments will likely need to be made. Investors finally see some real light at the top of the tunnel, therefore the massive rebound is about to continue.
However, the market will need to face the negative economic data at one point, and China’s example shows it won’t be pretty.
China’s First-Quarter GDP Declines By 6.8%
China reported that its first-quarter GDP shrank by 6.8% while analysts expected it to say no by 6.5%. Given the magnitude and therefore the complexity of the developments both in China and every one over the planet , China’s results fall under the “in line with expectations” category.
China’s GDP results indicate that the second-quarter U.S. GDP results would be very ugly. China had just one province under the lockdown, and also benefited from the completion of past orders in March.
The International fund expects that China will end the year with GDP growth of 1.2%, while U.S. GDP is predicted to shrink by 5.9%. Currently, all signs are pointing to the very fact that the U.S. GDP performance for second quarter, which is that the acute phase of the crisis, are going to be much worse than China’s leads to its most problematic quarter.
Stock Of The Day – Gilead
Gilead shares are currently gaining about 12% in premarket trading following a report that the company’s drug remdesivir could help coronavirus patients.
The report is predicated on a limited sample of patients and it remains to be seen whether the drug is effective or not, but speculators want to urge into the stock to possess an opportunity to participate during a major rally just in case remdesivir will convince be a cure for COVID-19.
I’d expect very volatile trading in Gilead shares today.