The number of people infected by the novel coronavirus worldwide crept closer to 2 million on Tuesday, led by a surging number of confirmed cases in the United States, amid a raucous debate over when the world’s largest economy will relax strict stay at home orders that have shuttered businesses and left over 16 million unemployed.
The center of gravity of the crisis has shifted decisively to the U.S., where testing per capita still lags other regions and new COVID-19 diagnoses rise closing in on 600,000 on 25,000 deaths. Nonetheless, market benchmarks have rallied, in part on expectations that officials will find a way to unfreeze the economy.
“It’s truly astonishing that as global economic growth forecasts are looking bleak and most countries are battling potentially one of the worst downturns in a generation, the markets are on fire and trading as though these are normal times,” said deVere Group CEO Nigel Green.
“They are not normal times. We are in uncharted waters,” he added.
A debate between Trump and America’s governors
A polarizing discussion has emerged about whether and when the U.S. economy can get back to normal — and who has the power to do make that decision — as the federal government lavishes vast sums of money on the economy to counterbalance a wrenching recession.
The fight has created a fissure between President Donald Trump and coastal governors who are outlining plans to reopen their states at an undetermined point in the future.
On Monday, Trump said on Twitter that the decision to jumpstart the economy rests with him alone, rather than the dozens of governors imposing a patchwork of dramatic social distancing measures that have shuttered businesses as over 16 million Americans are out of work.
However, the threat of a second wave of COVID-19, the disease caused by the novel coronavirus, has become an increasingly acute fear as a coalition of governors make plans to restore public life. On Monday, Trump said the possibility of a new outbreak “does weigh on my mind.”
Yet public health experts and economists have their doubts about a rapid reopening. California Governor Gavin Newsom said on Tuesday the state had “no precise timeline” for rebooting the Golden State’s economy as infections appear to plateau.
New York, the largest cluster of domestic infections, has over 200,000 cases on a death toll that exceeded 10,000 on Tuesday. Still, hospitalizations in the Empire State have fallen, an encouraging sign that a strained health care system has yet to break. Neighboring New Jersey reported its worst day yet of COVID-19 deaths at 365.
Meanwhile, China, Singapore, and South Korea — which was applauded for its aggressive efforts to bend the curve of new infections — are all grappling with cases of new infections, or recovered patients seeing “reactivated” infections.
It adds a new dimension to the furor over when it will be safe for U.S. workers to return to their jobs, and have businesses open their doors again as unemployment figures surge and a deep recession looms.
“You want to make sure the health crisis is addressed first,” Moody’s Analytics chief economist Mark Zandi told Yahoo Finance in an interview, calling the pandemic a “seminal event” that will definitively alter American life for years to come.
In a lengthy action plan released recently, Scott Gottlieb, a fellow at the American Enterprise Institute and the Trump administration’s former FDA commissioner, outlined a multi-pronged approach designed to slow the coronavirus’ domestic spread and gradually restore the economy to a sense of normalcy.
The four-phase proposal states that officials can relax social distancing policies after “a sustained reduction in cases for at least 14 days, and local hospitals are safely able to treat all patients requiring hospitalization without resorting to crisis standards of care.”
A critical aspect of ending shelter in place orders would also mean “the capacity exists in the state to test all people with COVID-19 symptoms, along with state capacity to conduct active monitoring of all confirmed cases and their contacts.” To date, the U.S. has struggled to ramp up mass testing, with fewer than 3 million tested, according to Johns Hopkins data.
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Javier David is an editor for Yahoo Finance. Follow him on Twitter: @TeflonGeek
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