WASHINGTON (MaceNews) – The following is Tuesday’s status check of developments in the U.S. that can influence economic, health and political outcomes:
· Tuesday and life resumes such as it is, with the Labor Day holiday weekend a memory, a brief respite from what has become a cautious existence behind masks, closed doors, filling the role of bystanders watching a peculiar species, called by some the Covidiots who can’t quite deal with the new reality. On TV, the virus, the president, the election, the Congress – the same keywords that dominate our lives these days, with side servings of the California fires and continuing demonstrations and unrest and the markets.
· And so we come to “The Contagion Externality of a Superspreading Event,” published by a private, independent research institute headquartered in Bonn, Germany, the IZA Institute of Labor Economics. It’s a long way from Bonn to Sturgis, South Dakota, and the gathering of 500,000 mostly Harley-Davidson enthusiasts that happens every year which is a long way from the experience of most people. But in the annals of epidemiology the episode is likely to be a case study even when COVID-19 is as distant in time as the 1918 Spanish Flu. The study found that the celebration of freedom from masks and virus constraints is costing society about $12.2 billion in health care costs. Sturgis, the study finds, was a so-called Superspreader event, just as health experts and anyone else paying attention feared. The event is spawning 260,000 coronavirus cases, the study found.
· Michael Cohen’s book “Disloyal” on President Trump’s disdain for the military, on CNBC’s Rachel Maddow show: He literally had his father get a doctor to find ‘nonsensical’ bone spurs to obtain the 1Y deferment to keep him out of the military. Anything that generates deep feeling from people who agree with him is what Trump wants, Cohen said, from the “birtherism” charges against Barack Obama, which he never believed, to so many other things he’s made up and maintained, just for effect. A White House spokesperson said again it’s all lies.
· President Trump, as he traveled to Jupiter, Florida, to sign a wider ban on offshore drilling Floridians don’t like, confirmed he has discussed pumping $100 million of his own money into his campaign amid The New York Times front-pager about campaign money being tight. But no, that won’t be necessary, he said, because the campaign still has “double and maybe even triple” what was available in 2016. On his next stop he told North Carolinians, “Your state should be open.”
· The Senate returned to full operation, confirming another judge, and GOP leader Mitch McConnell said a virus relief bill will be voted on by the end of the week. Meaningless messaging is what Democrats call the measure, which to get 51 Republican votes needs to be small, with no stimulus checks. A key question is whether the Senate will see a need to repurpose any of Treasury’s unspent funds being kept in reserve to back up Federal Reserve lending. The House returns next Monday and with House Speaker Nancy Pelosi already on Capitol Hill, the optimists see some chance an actual virus relief bill can be forged with Treasury Secretary Stephen Mnuchin.
· As often happens after a weekend and apparently to an even greater extent after a holiday weekend, the reported number of coronavirus deaths dips. So only 237 added to the mortality list kept by the NYT Tracker, far below the 1,000 or so a day average up to the weekend. The past week averaged only somewhat more than 38,000 new cases a day, 9% below that of two weeks ago. There are still 35 states on the NY/NJ list of visitors required to quarantine. One of the clinical trials of a vaccine, the U of Oxford/AstraZeneca project, has been paused to review a non-fatal but unspecified negative reaction by one of the test subjects. Total U.S. deaths topped 190,000.
· One of the advantages of having a narrow leadership of a few tech juggernaut stocks on the way up is that when things go downhill, it’s mostly the leaders that shoulder the pain. So the 4.11% drop in the Nasdaq on a third day of declines was not accompanied by a lot of cross-asset distress. Tesla lost 21%. It was running another 2% in the red after hours but the general expectation seemed to be Wednesday losses overall will moderate as well. Or not.
· Upcoming economic statistics include the MBA’s weekly report on mortgage applications at 7a ET, the Redbook same-store retail report at 8:55a and the JOLTS report on job openings at 10a. Also at 10a, the Bank of Canada decision on its overnight rate target, expected to be a stand-still at 0.25%. If the statement has an edge of hawkishness USD/CAD could take a hit.
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