US enters critical week as states open up even as coronavirus deaths near 100,000

WASHINGTON - His smile hidden behind his mask, but his eyes giving away his delight, New York Governor Andrew Cuomo on Tuesday (May 26) morning rang the opening bell at the New York Stock Exchange after its two-month closure.

Even as the United States nears 100,000 deaths from the coronavirus, the White House is hoping this week marks a turning point. Every state is making some moves to return to business; some are even allowing religious gatherings but limiting numbers.

"We're going to turn the page on Covid-19, and we're going to start focusing on reopening," Mr Cuomo said at a briefing at the NYSE - laying out a plan for infrastructure projects and tackling ongoing transmission of the coronavirus in hard-hit neighbourhoods.

Separately, JP Morgan's managing director and chief economist Bruce Kasman told journalists in a virtual briefing that while the current economic recession is deep, the bank expects it to be short-lived, with growth bouncing back.

But he warned of lasting damage as well. Unemployment in America was forecast to reduce as people get back to work, but still be at 10-11 per cent at the end of the year.

Also, while nationwide the number of new coronavirus cases has steadily declined in recent days, epidemiologists are warning that the progress is still tenuous.

According to reported data, in 17 states including California, Georgia, Arkansas and Alabama, numbers of new cases are trending upwards.

At the NYSE, traders cheered and exchanged air high fives when Mr Cuomo rang the opening bell. The market, hungry for any sign of optimism, rose on cue, with airlines and hotels doing well in anticipation of returning demand. Oil prices also edged up.

White House economic adviser Larry Kudlow told journalists at the White House: "I think there's grounds for optimism."

"All the curves are flattening and moving downward, mortality and new cases. Second, a lot of talk about a speedy movement towards a vaccine, moving faster than these companies have ever done before. We've deregulated a lot to allow them to do that.

"Also a lot of progress on therapies and medicines, which may surface this summer. That's a big plus," he added.

There are early signs of recovery, he said.

"There's more travelling going on, more gas demand, very, very strong housing demand," Mr Kudlow added.

Dr William Schaffner, an infectious diseases expert at Vanderbilt University, told the journal The Hill that through summer there could be continued smaller outbreaks from churches, camps and nursing homes. "Further down the road we're all concerned about late fall and winter," he said. "That's where we anticipate a really substantial uptick in cases."

But the damage from a comatose economy is cutting deep, and the pressure to open up normal business is intensifying every day - not least from President Donald Trump who on Tuesday tweeted : "States should open up ASAP" .

Separately speaking to foreign journalists JP Morgan's, Mr Kasman said: "We do see a very quick turnaround in the economy and we are looking… to see roughly six to seven million jobs created in the third quarter of the year.

"That's not a complete reversal, we expect 11 per cent unemployment at the end of the year - but that is still down from 20 per cent."

The bank's global outlook is similar - a rebound in the second half of this year.

"You're getting this rebound because of stimulus, of the fact that the Federal Reserve and other central banks and policy-makers more broadly, have done a very good job limiting the magnification of the damage on financial markets, and credit markets continue to function and are growing in the US and Europe," he said.

But the gradual recovery will continue into 2021.

"The virus is contained but it's not going to go away, and we don't have a vaccine," he said. "We do expect consumer fears staying for a long time."