Rising COVID-19 Cases Put A Damper On Re-openings

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Jun 27, 2020

Rising COVID-19 Cases Put A Damper On Re-openings

U.S. - Rising COVID-19 Cases Put a Damper on Re-openings

  • The rising number of COVID-19 infections gained momentum this week, with most of the rise occurring in the South and West. The rise in infections is larger than can be explained by increased testing alone and is slowing re-openings.
  • Home sales continue to show a surprising degree of resilience. New home sales rose 16.6% in May and mortgage applications for the purchase of a home are up 18% year-to-year.
  • Factory orders rebounded in May. Manufacturers appear to have solid momentum headed into the summer. Demand for light vehicles has been surprisingly robust.

 

Global - Hope Springs, But Will it be Eternal?

  • The news from Europe was encouraging this week, with PMI surveys for the Eurozone and United Kingdom rebounding, particularly for the service sector. The prospects of a faster Eurozone recovery are perhaps improving given aggressive monetary easing and hopes for a more coordinated regional fiscal response. In the U.K., Brexit uncertainties may remain a headwind for the speed of economic recovery.
  • Mexico’s central bank cut rates 50 bps to 5.00%, saying growth risks moved sharply to the downside while inflation risks were somewhat more balanced. We expect further easing from the Bank of Mexico in the months ahead.



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