Unemployment in the U.S could soar to 32.1% as massive Furloughs begin

The Federal Reserve’s extravagant unemployment estimate means the US economy is going to go into a deeper recession

Have we just seen the Ides of March manifest itself in the financial markets? Quite possibly yes. The term that became notorious after the assassination of the famous Roman emperor, Julius Ceasar, was a turning point in Roman history. And the March of 2020 has ended one of the longest-running bull markets in US history. Not just that, the accompanying economic turmoil that the COVID-19 pandemic could bring is a much bigger worry.

There is no doubt in my mind that current health crisis adds as the tenth entry to the 9 Black Swan events that I wrote about last year. Hoping to rewrite that piece once the extent of the devastation is figured out. For now, the two main U.S indices, Dow and S&P 500 had their worst first-quarter performances ever — losing 23.2% and 20%, respectively. Looking at March alone, Dow and S&P 500 fell 13.7% and 12.5%, respectively — the worst one-month declines since 2008.

While the Chinese economy is slowly beginning to come out of the hiatus created by the Coronavirus pandemic, the economic impacts of the global pandemic are just starting to manifest outside of Asia. This is evident from the global ETFs in different regions of the world (left chart below) — — posting losses of anywhere between -18% to -51%.

The asset performance (right chart below) is indicative of the fact that people are opting for the safety of the Treasuries, Gold and U.S Dollar (cash) as they dump equities, corporate bonds & commodities. While commodities, in general, have been the hardest hit, Oil suffered the most (-66.5%) with the creation of a supply glut on top of a price war between Russia & Saudia Arabia.