Chaos Corona 9

[Derrick Drescher]

The initial financial implications of the novel coronavirus have been severe for investors. Stocks are down drastically over the past month from their recent highs, and volatility has been significant as markets swing up and down from day to day.

Stock markets have moved steadily higher for several years since the 2008-2009 financial crisis. U.S. stocks have been the standout, rising about five-fold from the March 2009 lows to the recent February 2020 highs. For long periods of time, volatility was quite low, and investors may have become complacent as a result.

There are two important tenets of asset allocation that coronavirus has reinforced. First, that risk tolerance assessment is important to ensure an investor is not taking on more risk than they can handle in the event of a stock market downturn. It is very difficult to anticipate stock market declines in advance, and investors should be discouraged from blaming their investment advisors for not avoiding stock market losses. This month has been a good test for how much exposure an investor should have to stocks in the first place, and an important discussion point with advisors moving forward.

Interest rates have fallen. The Bank of Canada lowered the prime rate by a half per cent on March 4 and another half per cent on March 16. Variable rate debts have generally decreased by one per cent this month as a result.

Mortgage rates have fallen. Variable rates fall with the prime rate, and several institutions are now offering five-year fixed-rate mortgages well below 2.5 per cent. Borrowers should consider how best to restructure existing debts to take advantage of lower interest rates.

Those who have lines of credit should be aware that the loan agreements with their bank may allow the lender to decrease their credit limit or request repayment. If the long-term financial impacts of coronavirus lead to a recession, banks may be that much more cautious about how much risk they are taking with borrowers.

As a result, if you are counting on available room or low interest-only payments on your line of credit, be aware that the terms of your credit can change, and a recession could impact borrowers negatively. This warning is not meant to fear monger, but Canadians have become accustomed to relying on increasing credit limits and using debt to finance spending, particularly debt secured by their homes, and that may now be at risk.

If an investor does not need to sell a significant portion of their stocks over the next few years, this will allow their portfolio the time needed to recover. Selling stocks at a low point now could be a knee-jerk reaction that causes temporary losses to become permanent ones. Selling and trying to time markets on the way back up may seem appealing in theory but can be difficult to do in practice.

For young savers, the recent pullback in stocks is a buying opportunity. Stocks are on sale, and dollar cost averaging will help an investor buy more shares when prices are low for every dollar invested. Those with a lot of runway to retirement should try not to be deterred from investing as a result of this sudden bear market. If you were happy buying in early 2020 after a strong 2019, you should be even happier buying now while stocks are cheap.

Aid organizations on Monday made a plea for world leaders to boost financial support to conflict-torn Syria, where around 11 million people are in need of humanitarian assistance, on the eve of a major donor conference hosted by the European Union.

It will be the eighth annual Syria pledging conference and the fourth hosted by the EU, which estimates that it had donated around 20 billion euros ($23 billion) to Syria and the region over the years. Around 60 countries, including the U.S., key U.N. agencies and others involved in the conflict are expected to take part.

Beyond its economic impact, the coronavirus also has forced the conference to be held online. The event is usually an important opportunity for officials to meet on the sidelines to discuss thorny issues and resolve problems. Officials worry that the virtual format may reduce the conference to a number-crunching exercise.

A new Gallup poll suggests Republican voters are shedding their party affiliation in the aftermath of President Joe Biden's inauguration and amid the toxic fallout of former President Donald Trump's term.

Gallup's quarterly report on party identification among American voters found the biggest gap between Democrats and Republicans since 2012, as the GOP grappled with the January 6 attack on the Capitol, the influence of anti-democratic conspiracy theories and a series of political setbacks in Washington, D.C.

Gallup polled a nationally representative sample of 3,960 adults in telephone interviews between January and March, as Biden embarked on his drive to suppress the coronavirus pandemic and encourage unity in America's bitterly divided political sphere. The sample's margin of error was 2 percentage points.

Gallup found that an average of 49 percent of respondents aligned themselves with the Democratic Party or defined as independents who lean towards the party. Meanwhile, 40 percent of respondents identified as Republican or Republican-leaning. The nine point gap represents the largest gulf since the end of 2012 after President Barack Obama's second electoral victory.

Gallup said recent years have seen a Democratic advantage of somewhere between four and six percentage points, meaning more Republicans are disavowing the party in the aftermath of Trump's electoral loss, his doomed efforts to retain power, and the storming of the Capitol by his supporters on January 6.

More respondents have generally identified as Democratic in Gallup polls since 1991. Republicans have only out-reported Democrats for brief periods in 1991 after the Gulf War, immediately after the 9/11 attacks, and following GOP electoral successes in the 1994, 2010 and 2014 midterms.

The widening gulf in party pride comes as Biden chalks up successes in America's coronavirus vaccine rollout and stimulus plan, both of which are broadly popular with Americans of all political persuasions.

More than 555,000 people have so far died from the virus, though the below infographic from Statista shows that nationwide deaths are at a six-month low. Infection rates are again rising across the country, but the Centers for Disease Control and Prevention said this week that 108.3 million people have received at least one dose of a vaccine, including about 63 million people who have been fully vaccinated.

Polls show that Americans are increasingly confident about returning to pre-pandemic life, and are less worried than before about catching the virus. Biden has said he hopes Americans can gather together to celebrate July 4, urging national unity to help achieve the goal.

But his appeal to cooperation appears to have fallen on deaf ears on Capitol Hill, where Republicans refused to back the president's coronavirus relief package and are gearing up to fight his proposed mammoth infrastructure bill while backing new legislation restricting voting rights in some states.

The number of respondents identifying as independents jumped from 38 percent at the end of 2020 to 44 percent in the latest Gallup poll, reflecting a historical pattern of increasing independent identification during non-election years. Still, the 44 percent is among the highest ever recorded by Gallup. The highest ever was 46 percent at the end of 2013.

Former or shy Republicans account for most of the shift, GOP identification coming in at the lowest level since early 2018 and only just above the lowest ever recorded in the telephone polling era of 22 percent at the end of 2013. That figure came as the government grappled with a costly federal shutdown amid wrangling over the Affordable Care Act.

David Brennan is Newsweek's Diplomatic Correspondent covering world politics and conflicts from London with a focus on NATO, the European Union, and the Russia-Ukraine War. David joined Newsweek in 2018 and has since reported from key locations and summits across Europe and the South Caucasus. This includes extensive reporting from the Baltic, Nordic, and Central European regions, plus Georgia and Ukraine. Originally from London, David graduated from the University of Cambridge having specialized in the history of empires and revolutions. You can contact David at d.br...@newsweek.com and follow him on Twitter @DavidBrennan100.

A last-minute revision of coronavirus testing and isolation rules, including seven days' mandatory institutional quarantine even for those with negative RT-PCR tests, led to chaos at Delhi's Indira Gandhi Airport on Friday, with passengers complaining that the changes had taken them by surprise and left dozens - many with infants - scrambling to find solutions.

"There is total chaos right now. We are inside a lounge... lots of security staff outside. We are being treated like we are in a cage... and hotels are trying to make this a business by offering deals for quarantine. We took our flight yesterday... there were no such guidelines," Sourav Dutta, one of hundreds who have been stuck inside the airport for hours, told NDTV.

Another passenger - Gouri Shankar Dash - posted a photo of his infant child sleeping on blankets on the airport floor, and said he had not been allowed to get his daughter's stroller from their luggage.

"Dear Arvind Kejriwal, I am one of the passenger of flight AI 112 from London with my 4.5 months old daughter. You locked everyone of us. At least bacche pe to rahem karte (take pity on the children). There is no food for my daughter... they didn't let me get my stroller. How cruel you guys are?" Mr Dash tweeted, tagging Prime Minister Narendra Modi in his tweet.

The confusion seemed to rise from a Delhi government notification this morning, which said passengers from the UK had to undergo seven days' institutional quarantine (and an equal period of home isolation) even if they tested negative for the virus.

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