Economic implications of a SARS/Coronavirus outbreak

[Smurf1976]

I'm not aware of any restrictions really effecting much, restaurants are open, you can go to work, the beach, take the kids anywhere, state borders are open etc etc?

You can but in terms of people spending that money they're piling up, the big one is tourism (international) and another significant one is major events, nightlife and so on. They're not the only things obviously but they're significant and still either shut or at least restricted.

In terms of concerts well for major acts, which I'm defining as simply those able to draw a large crowd, there are things being planned and there are tickets on sale but any actual concert is still a way off. Guns N' Roses tickets are reported to be selling well - but the show's still 11 months away.

Overall though there simply isn't a lot happening in terms of live music. It's one area where I'd say no, we clearly aren't anywhere close to "normal" at this point. Promoters can organise events but really there's a lot of goodwill and hope involved and a fair chance that a show doesn't end up going ahead despite being sold.

Until it happens though, that's an industry that isn't back to normal and one that a significant number of people would be happy to see operating again and spend some money on.

Smaller music events and things like nightclubs it's a similar story. Can open but social distancing ruins the economics to a point where it works only if everyone takes the hit. Some will, some won't, some have already gone broke.

 

[Smurf1976]

One sector which seems to be doing well is rubbish:

20 per cent increase in household rubbish

Australians urged to ditch rubbish habits picked up in lockdown

A surge in home-delivered food and online shopping during COVID-19 lockdowns has generated an alarming 20 per cent increase in household rubbish.

www.theage.com.au

The same article also notes this " About one-third of surveyed Victorians told researchers they intended to use their cars more in future".

For those with a longer term view, there's a lot of businesses which in some way benefit from greater use of cars. Fuel, dealerships, road construction contractors and so on. If the shift away from public transport becomes permanent then we'll in due course end up with more road infrastructure almost certainly.

 

[over9k]

Cars aren't going away. People are moving OUT of the cities.

 

[qldfrog]

Cars aren't going away. People are moving OUT of the cities.

world oil consumption next year will be above 2019, this is my bet and I do not think it is a risky one

 

[Dona Ferentes]

You can but in terms of people spending that money they're piling up, the big one is tourism (international) and another significant one is major events, nightlife and so on. They're not the only things obviously but they're significant and still either shut or at least restricted.

In terms of concerts well for major acts, which I'm defining as simply those able to draw a large crowd, there are things being planned and there are tickets on sale but any actual concert is still a way off. Guns N' Roses tickets are reported to be selling well - but the show's still 11 months away.

Overall though there simply isn't a lot happening in terms of live music. It's one area where I'd say no, we clearly aren't anywhere close to "normal" at this point. Promoters can organise events but really there's a lot of goodwill and hope involved and a fair chance that a show doesn't end up going ahead despite being sold.

Until it happens though, that's an industry that isn't back to normal and one that a significant number of people would be happy to see operating again and spend some money on.

Wiggles touring in April.

The Wiggles Live: Energetic Performances and Fun Shows — The Wiggles

Experience the excitement of The Wiggles Live! Check out our upcoming virtual events and concerts, bringing music, dancing, and laughter to you.

www.thewiggles.com.au

Locked in.
Herd immunity.

 

[Garpal Gumnut]

As we are in the midst of a chaotic system developing, "the pandemic" : "the virus", linear projections as most posters have posited are useless.

Chaos reigns atm.

Live with it.

Economic linear predictions are no longer of use.

One of the barflys at the Ross Island Hotel suggests a read of the ATM Study which he says is so time consuming he turned to drink.

gg

 

[over9k]

As we are in the midst of a chaotic system developing, "the pandemic" : "the virus", linear projections as most posters have posited are useless.

Chaos reigns atm.

Live with it.

Economic linear predictions are no longer of use.

One of the barflys at the Ross Island Hotel suggests a read of the ATM Study which he says is so time consuming he turned to drink.

gg

Absolutely correct. Hence why I've posted all the stuff showing how the hedge funds & quant traders have been absolutely pasted by us retail trading plebs (or not even kept up with the market).

There's still some space for technical analysis, but in this market it's supplementary, not primary.

 

[qldfrog]

Absolutely correct. Hence why I've posted all the stuff showing how the hedge funds & quant traders have been absolutely pasted by us retail trading plebs (or not even kept up with the market).

There's still some space for technical analysis, but in this market it's supplementary, not primary.

when the lemmings are numerous enough, they flood and submerge everything and carry around even the wisers

 

[over9k]

Hill leaders nearing long-sought stimulus deal

They're moving quickly, with hopes of passing a sweeping relief package by week's end.

www.politico.com

versus:





Optimism seems to be winning the tug-of-war... for now.

 

[sptrawler]

More pump priming, you have to love it, but at the end of the day only those businesses that actually produce something will survive IMO.
Charting is really becoming a must have skillset, with investing IMO.
It is becoming a weird world, money is becoming meaningless, just keep printing it to keep the good times rolling.
When does the piper arrive?
It really does make you wonder, how much money your house or your investments, really are worth.

 

[over9k]

Futures nosedived on the news. Obviously already being used as "this is why we need stimulus" stick to whack the politicians with.

 

[over9k]

AU budget not as bad as expected:

 

[over9k]

Choppy day. Light volume. The market liked what powell had to say. Bit of a snoozefest.



Still waiting on stimulus deal:

 

[over9k]

Fedex reports earnings tomorrow.

 

[over9k]

The International Labour Organisation has just released its full report on the virus's impact on the asia-pacific and, well, it's pretty difficult to get your head around the scale of it all:


"The crisis has resulted in an estimated loss of 81 million jobs in 2020 over pre-crisis trends and an additional 22 million to 25 million employed persons pushed into the realm of extreme poverty, living with expenditure of less than $1.90 per person per day... The COVID-19 impact on the labour market was felt first and foremost through the reduction in working hours induced by national lockdown and containment measures. The Asia–Pacific region was the first to feel the sting of the virus in early 2020, and some countries reacted quickly with strict lockdown protocols to prevent further contagion. In the first quarter of 2020, total working hours across the region were already 7.3 per cent below the hours spent on work in the last quarter of 2019 (ILO 2020a). The loss of working hours in the first quarter was equivalent to a loss of 125 million full-time equivalent jobs (based on a 48-hour work week). Results for the second quarter were significantly worse, with working hours in Asia and the Pacific estimated to have decreased by 15.2 per cent from fourth quarter 2019, which translates to a loss of 265 million fulltime equivalent jobs. The largest loss in working hours across the world is estimated to have occurred in South Asia (with a decline of 27.3 per cent in the second quarter, equivalent to 170 million full-time jobs).".







"The results in figure 5 reveal Macau (China) and the Maldives, which are heavily dependent on tourism, as having the largest downward revisions of economic growth, with their economies expected to shrink by 52 per cent and 19 per cent, respectively, in 2020. Among the economies in the Pacific Islands subregion, Fiji and Vanuatu are projected to shrink the most, with a stark downward revision from the solid positive economic growth rates expected before the crisis. Within South-East Asia, Malaysia, Philippines and Thailand were among the hardest:"

In short, the more exposed to (reliant on) tourism they are, the more they've been hit. Or in this case, annihilated. Depressing, but not surprising.


However, trade between countries is still waaaaaay down, so the manufacturing-based ones have still been hit hard:



And here's a bit of data comparing now to the GFC & asian financial crises:



Dunno if there's any young lads reading this but that should at least give you an idea of how bad things were in the GFC, with many industries like tourism being smashed in the exact same way as recessions bring us back to the classic econ 101 fundamentals of inferior vs superior goods. Superior goods that we buy when we're flush with cash (like holidaying) are always the first to go when money gets tight and now is no exception.

And to get more granular, here's the data for the percentage reduction (so the figure represents the percentage of jobs lost) of each of the worst hit sectors/occupations, all of which is probably exactly what your gut has already told you:



You can read the full 94 page report here: https://www.ilo.org/wcmsp5/groups/p...bangkok/documents/publication/wcms_764084.pdf

If there's one positive note to all of this it is that Q3 was waaaay better than Q2, so we appear to be on the path to recovery. I'll obviously update & compare with the Q4 data once we have it.


The IMF has forecasted the full year as follows:



AU looks to have come somewhere in the middle - hasn't fared great (no tourists or foreign students), but done OK (still selling rocks by the zillion).

 

[over9k]

Meanwhile:



Some pretty hardcore shutdowns are now a virtual certainty.

 

[over9k]

Oh here are how asia's markets have all fared over the past year which I forgot to add to the previous post and can't edit now:

 

[over9k]

MYEFO out today.

Cliff notes:



But:




I showed in one of my previous posts that jobkeeper has "only" ended up costing 90 billion vs the 100 billion forecast so AU's doing quite a bit better than expected.

 

[qldfrog]

Ok, now we are seeing a start of a resurgence in nsw: weather related but lockdown will not be politically possible until early jan, so this will set the widespread base for the autumn fire, vaccine lol ...or not
Question is have we learnt about the OS experience.
Considering we still see ads asking you to reduce drinking, but noone recommending vitamin D/zinc for our elderly ..I doubt it
So we are going to be hammered, where does that fit ASX wise?

 

[Smurf1976]

So we are going to be hammered, where does that fit ASX wise?

We're in a very strange world where entire industries have shut down for an extended period, international borders have been shut and in some cases even cities have had a border placed around them, everything from kindergartens to funerals have been thrown into chaos, there's been an actual stock market crash (remember that) and yet the financial markets are showing incredible optimism.

There's no rational sense to it other than "Don't fight the Fed" or in our case the RBA.