Yesterday was a good day for the U.S. stock market. The Dow Jones industrial average climbed by 3.4 percent and the S&P index by 3.2.
The big day on Wall Street coincided with Bernie Sanders’s announcement that he is withdrawing from the presidential race. The fact that Sanders won’t be president is fabulous news for the U.S. economy. However, we have known for about a month that Sanders had no shot. If Mr. Market soared because of Sanders’s announcement, he’s a fool.
The markets should be moving based almost exclusively on news about the Wuhan coronavirus and its economic impacts. In this regard, one analyst wrote that “with still no major secondary outbreak in Asia, the global economy might survive the pandemic without a full-blown recession.” Perhaps this sort of assessment figured into the market’s rise.
The assessment may be overly optimistic. However, markets should be paying considerable attention to whether Asia experiences secondary outbreaks.
There is some bad news on this front. Singapore is reporting a big jump in new Wuhan coronavirus cases.
I wrote about this a few days ago. Since then, things have gotten worse. Today, Singapore confirmed 287 new coronavirus infections. That’s double its all-time daily high, set the day before.
Singapore dealt effectively with its first wave of the virus through tracking/testing/isolating, rather than through a prolonged shutdown of the economy. Now, in response to the secondary wave, it has closed schools and most workplaces for a month.
The recent wave of cases is linked to outbreaks in dormitories for foreign workers. According to this report, tens of thousands of foreign blue-collar workers live in close quarters in dormitories across Singapore and form a significant part of the labor force.
To the extent that other Asian nations don’t rely so heavily on workers living in such close quarters, perhaps they can avoid the kind of second wave Singapore seems to be experiencing.