ISA Risk Alert: The Coronavirus Crisis (7th of April)

Daily Summary

The number of known cases of the coronavirus (Covid-19) around the world rose to over 1,350,000, while the number of fatalities linked to the pandemic surpassed 75,000.  Two months ago, the corresponding figures were just 35,000 and 720.

For the first time since January, China did not record a single Covid-19-related death over the past 24 hours.  Despite this, Beijing continued to proceed with caution with regards to the easing of the lockdown in the world’s most-populous country.

In Europe, more than 3,500 fatalities related to this outbreak were recorded over the past 24 hours, while in North America, this number was nearly 1,300.  Meanwhile, the number of cases and fatalities in regions such as Latin America and the Middle East continued to rise at a faster pace.

While other initially skeptical world leaders have largely accepted the severity of the coronavirus crisis, Brazil’s President Jair Bolsonaro has remained a holdout as he continued to downplay the threat that the virus posed to his country.  This has led to growing tensions between President Bolsonsaro and Brazil’s Health Minister Luiz Henrique Mandetta, who has become the most trusted figure in the government due to his honest assessments of the crisis.  This resulted in reports that President Bolsonaro intends to fire him.

Key Developments

Boris Johnson’s Condition Deteriorates: Shortly after being hospitalized due to his infection by Covid-19, British Prime Minister Boris Johnson had to be transferred to an intensive care unit after his condition deteriorated.  Foreign Minister Dominic Raab assumed leadership of the government.

US-3M Deal: After being accused of securing face masks destined for other countries, the United States reached a deal with 3M to import 166 million masks that it manufacturers in China over the next three months, while allowing 3M to continue to export masks from the US.

Trend to Watch

A number of major sporting leagues and events are considering holding their competitions in quarantined locations, without fans.  While the logistics are daunting, the loss of potential television revenues has driven these efforts to find a suitable solution.

The Coming Days

The impact of the coronavirus crisis on the global real estate market will be watched closely, as the market is currently at a standstill.  A prolonged crisis could result in real estate bubbles bursting around the world, as demand takes years to recover.