Just When You Thought It Was Safe

New coronavirus cases in Germany jumped the most since April, underscoring fears that Europe is on the brink of experiencing a second wave, even as any “wave”, anywhere pales in comparison to what the US experiences each and every day.

Germany, one of the world’s success stories in stopping the spread of the infection, reported 1,693 new cases in the 24 hours through Tuesday. That was the most in nearly four months.

European equities were rattled late last week when the UK imposed new quarantine rules for travelers. Spain and Italy have closed nightclubs and Greece moved to curtail operations at restaurants and bars. For its part, Ireland is worried it might be a little too soon for Dublin bartenders to stand on bar tops and pour shots directly into customers’ mouths (although, to be fair, that might actually be safer than drinking from glasses).

In South Korea, nearly 250 new confirmed cases were reported over a 24 hour period, up sharply from 197 the previous day. Tuesday’s total marked the third day of triple-digit case increases in the country, widely heralded as perhaps the single most successful nation on the planet at beating back the initial outbreak earlier this year.

The resurgence of the epidemic prompted Korea to institute new social distancing protocols Tuesday. Worship services are now banned in Seoul, among other locales. The latest cases were traced to a church, drawing uncomfortable comparisons with the original outbreak. Bars will be shuttered and outdoor gatherings of 100 or more people forbidden.

“If we can’t get the virus under control now we’ll have to notch up social distancing to higher levels, and that would have a big impact on our economy and people’s livelihoods”, Prime Minister Chung Sye-kyun warned, during a news conference following an emergency meeting.

News of the meeting sent the Kospi tumbling Tuesday. Volatility surged the most in months, although it looks like a mere blip on a chart given the spike in March.

South Korean shares recently logged nine consecutive days of gains, so a pullback was probably in order. New virus containment measures are as good an excuse as any.

Meanwhile, the August edition of BofA’s Global Fund Manager survey shows a big rotation into European stocks.

Just when you thought it was safe.


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2 thoughts on “Just When You Thought It Was Safe

  1. Large parts of the equity market are acknowledging this reality. Trump has left Bezos alone. Scary to think Bezos could crash the market all by himself and then buy everything on the cheap. There are examples.

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