Kicking off the summer, U.S. markets limped into the week with modest gains despite a disturbing rise in global cases of Covid-19.
MANHATTAN (CN) — The number of cases of Covid-19 has increased rapidly over recent weeks, not just in the United States but in South America, some parts of Asia, and even areas of Europe that thought the virus was behind them.
But for Wall Street, it is mostly business as usual.
Florida and Arizona were among states reporting record highs of new coronavirus cases over the weekend, while the World Health Organization on Sunday reported the biggest daily increase in global coronavirus cases at 183,000.
To date, more than 8.9 million people have been infected by Covid-19 worldwide, while 468,000 have died, according to data compiled by Johns Hopkins University. In the United States, 2.2 million people have contracted Covid-19, while roughly 120,000 have died.
The uptick in Covid-19 cases has not diminished the market, though, only restrained it a bit.
At the opening bell, the Dow Jones Industrial Average dropped 80 points, with the S&P 500 suffering a similarly small decrease. The Nasdaq gained just a few points at the open.
Abroad, markets were similarly flat, with most major exchanges in Asia closing slightly below 0% and European markets poised for a slightly downbeat day.
Some analysts are leery about the uptick in cases. “While death rates have declined, the sheer increase in new cases almost assures that the numbers will inch back up, especially if the disease turns wildly exponential once again,” Boris Schlossberg of BK Asset Management wrote Monday.
“That’s why despite markets’ nonchalant attitude COVID data may be the most important economic statistics of the day as it may force yet another wave of lockdowns or at very least retreat of economic activity,” he wrote.
Despite the rise of coronavirus, however, some are staying optimistic. In an investor’s note, UBS analysts wrote that recent actions by the Federal Reserve would continue to prop up markets and fend off market volatility.
“The global economy is starting to show signs of bottoming out, helped by surging money supply and aggressive fiscal stimulus,” UBS Chief Investment Officer Mark Haefele wrote in the note. “As earnings are likely to recover in the second half of the year and excess liquidity continues to support risk assets, we see further upside potential in global equities, in particular among sectors that have lagged the rally so far.”
Wall Street received some good news on Monday from the Federal Reserve Bank of Chicago, which reported its national activity index rose to 2.61 points in May, a steep increase from the -17.89 reported in April.
Market watchers also may have been happy with the decision last week by the Treasury Department, which announced it would disclose the names and details of loans under the Paycheck Protection Program.
The program, which had faced criticism for its haphazard rollout and the fact that many larger, publicly traded companies were able to jump the line at banks, also became a lightning rod for Treasury Secretary Steven Mnuchin over transparency concerns.
Mnuchin initially had rebuffed requests by House Democrats last week for a list of the names of all PPP recipients, the dollar amounts of the loans, and the names of applicants who did not receive loans.
But on Friday evening Mnuchin buckled and said the Small Business Administration would provide data on PPP loans, including borrower names, demographic data, loan amounts, and the jobs supported with the loans.
“We are striking the appropriate balance of providing public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors, and independent contractors,” Mnuchin said in a statement.
Not all PPP recipients would be revealed: Borrowers who received less than $150,000 in PPP funds — roughly one-quarter of the total pot of money —would be exempt from such disclosures. For loans under $150,000, the SBA would list only the loan total, business type, and some demographic categories.
The PPP application form itself says the SBA must supply information about borrowers to requestors under the Freedom of Information Act. The information available for disclosure, according to the application form, consists of the names of the borrower company; the borrower’s officers, directors, stockholders, or partners; the collateral pledged to secure the loan; the amount of the loan; the maturity of the loan; and the purpose of the loan. Only a borrower’s “proprietary data” would be redacted under FOIA requests, the form states.
According to the latest data from the SBA, more than $512 billion has been lent to 4.5 million small businesses. Of that total, 22% were for loans of $350,000 to $1 million, while 35% were for loans of $1 million to $10 million.