The global shipping industry faces more problems from the spread of Covid-19. These shipping industry woes will translate to higher prices for American consumers.
The problem is centered in Singapore. Its migrant worker dormitories are where more than 300,000 people – mostly from India, Bangladesh or China – live in cramped rooms of up to 20 workers sleeping on bunk beds.
This housing was at the center of Singapore’s worst Covid outbreak last year. And it’s at the center again this year. Migrant workers residing in dormitories account for almost 90% of the country’s total number of infections so far.
The problem is that many of the new arrivals are from India. And the majority of these people work in the construction, marine and process sectors.
However, Singapore is tightening border controls with India. That will heavily impact productivity and profits in the maritime shipping industry. Migrant workers account for nearly 75% of the labor force in Singapore’s marine sector.
This sector is vital for a transshipment and ship fuel hub like Singapore. And that makes it important to the global shipping industry and global economy.
Keep in mind that this industry transports 80% of global trade, according to UN data.
It looks like the virus isn’t done yet with messing with the global economy . . . or your wallet.
The Big News
Global Economic Growth Slowed in First Quarter
Economic growth slowed across 37 of the world’s richest economies in the first quarter of 2021. This was due to several countries being forced to reintroduce lockdown restrictions to combat a resurgence of Covid-19. GDP in the OECD area as a whole ticked up 0.3% in the first quarter. That was down from 1% growth in the previous quarter. The headline figure masks large variations between countries, however. GDP rose 1.6% in the U.S., accelerating from 1.1% in the final quarter of 2020.
US Economy Overheating?
The speed of the U.S. rebound from the Covid-19 pandemic has left executives scrambling. They have to figure out whether labor shortages and rising prices point to a short-term economic summer heatwave . . . or a longer period of dangerous inflation.
Some of the country’s largest companies have hailed the strength of the recovery in recent earnings announcements. But they declined to predict whether the vaccination rollout and fiscal stimulus will cause problems for corporate America. “The second half will likely have more uncertainty than a normal year,” Doug McMillon, CEO of Walmart, cautioned this week.
Black Fungus Adds to Miseries for India’s Covid Victims
A sharp rise in black fungus cases during India’s severe second Covid wave has exposed the dangers of overmedication. The overprescription of steroids to treat Covid-19 patients has been blamed for an explosion of fatal black fungus infections and a shortage of the drug to treat it. Doctors have reported a surge of patients suffering from black fungus (mucormycosis). It is an infection with a mortality rate of at least 50% that starts in the nose and quickly spreads to the eyes and brain.
U.S. Border Agency to Deny Entry to Canadians Seeking Vaccine
The U.S. Customs and Border Protection agency said it would deny entry to any Canadians attempting to drive into the U.S. with the sole purpose of getting a coronavirus vaccination. Since March 2020, the U.S.-Canada border has been restricted to essential travel only. The U.S.-Canada border restriction is due to expire on May 21. But Canada may extend that for one more month.
Maine Leads the Way in Vaccinations
Maine has become the first U.S. state to have vaccinated more than half of its residents. The state has administered 1.38 million vaccine doses, according to data from the CDC released on Wednesday. This means Maine has fully vaccinated 50.1% of its total population.
The Coronavirus Numbers
Here are the numbers from Thursday at 8 a.m. ET from Johns Hopkins University:
- 164,966,830 Infected Worldwide
- 1,529,756,149 Vaccines Given Globally
- 3,419,446 Deaths
- 33,027,220 Infected in the U.S.
- 277,290,173 U.S. Vaccine Doses Administered
- 587,875 Deaths in the U.S.
Markets were in a broad risk-off mode yesterday. That was thanks to talk of greater correlation between crypto and risk assets.
Crypto prices collapsed yesterday. Bitcoin tumbled 30% to $30,000 before staging a big rally off this level. Outages at the Coinbase and Binance exchanges didn’t help. This is what fueled a sharp leg lower around midday to the lows.
But chiefly this seems to have been a run on stops triggering margin calls in the wake of China’s regulatory crackdown. This followed a period of steady losses seemingly brought about by a toppy market chart pattern and Elon Musk somewhat walking back his prior enthusiasm for the crypto.
As of this morning, the rout had stabilized. Bitcoin is trading again above $40,000. There will be a lot of stranded longs now selling into any kind of strength. Stocks exposed to crypto prices like MicroStrategy, Coinbase and Tesla were caught up in the storm, though they too closed well above their low of the day as the market recovered some of the losses.
The Fed floated a trial balloon in its April meeting. Some policymakers are thinking about tapering asset purchases. This was the first signal from the Fed. It was done on purpose. The pandemic-related stimulus may be ending.
Yours in Health & Wealth,