LOCKDOWN DAY 4- THE COVID19 SAGE CONTINUES

We are now into day 4 of the Lockdown and I did write in detail yesterday. The significant developments yesterday and as I write now have been as below

1. The US Congress passed the Relief Bill amounting to $ 2.2 Trillion and was immediately signed on by President Trump. This Bill is quite comprehensive and should give some ideas to Indian officials too. However US Coronavirus cases continue to shoot up, however President Trump seems to be wanting to open up the country after they provide all possible medical facilities, a strategy very different from other countries.
2. The US Markets gave up some gains overnight as they had run up 20% in the run up to the passage of the bill. However volatility seems to be settling, albeit at slightly higher levels. We could still see volatility up and down but eventually markets should consolidate and then set a direction upwards after a few days or weeks
3. The UK Prime Minister has got and the Queen is suspected to have contacted the Coronavirus thus indicating the extent of its spread in the countries which did not act fast enough
4. The Indian Government has been very proactive, however the risk continues to be from the people who came into the country between the 12^th and 22^nd of March. Many of them will get it but as long as its restricted between them and their family or a few contacts it is fine
5. India reported the maximum no of cases yesterday at around 150, this was expected as many of the foreign returnes from high risk countries were allowed to come in as the Government had no option but to let their own citizens return. The people who are making a joke of the home quarantine are compromising the entire country
6. Italian infections seem to be stabilizing at higher levels and statistically it is very significant as Italy moved into a lockdown on the 10^th of March, the compliance initially was lesser than in India and the spread much greater. Hopefully the peaking will happen faster in India. I am watching Italy very closely as it’s a big case study for the world

New cases 23rd 4789, 24th 5249, 25th 5210, 26th 6203, 27th 5909

• I am confident that we will get through strongly in India. However we need to take things as they come. WHO has also announced formal trials of possible medication, the effectiveness of these will be known over the next couple of weeks.

Overall Central Bank actions, Fiscal Stimulus actions which have already been taken and might follow combined with the recognition of the seriousness of the issue should lead to stability over the next few days. However the extent and duration of economic disruption is still unknown at this stage. Extreme policy actions reduce the downside risk, however for upside potential we need to see things play out. Will write more on Monday.