Global equity markets rise on optimism for economic reopening: WSJ
China’s military chief in Hong Kong vows to uphold ‘national sovereignty’: CNN
Responding to China’s security law, Taiwan’s president backs Hong Kong: CNBC
Memorial Day weekend crowds raise concern for coronavirus infections: MW
World Health Organization warns of ‘second peak’ for Covid-19: CNBC
WHO suspends Covid-19 testing of malaria drug hydroxychloroquine: Reuters
China preparing for ‘worst case’ economic scenario: SCMP
German consumer sentiment rebounds slightly in May after dramatic decline: Gfk
Daily change in US Covid-19 deaths fell to 2-month low on Monday (May 25): JHU

Remember and honor our military men and women.

Disabled American Veterans
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● Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace
Matthew C. Klein
Excerpt via Barron’s
The open global trading system has been in trouble for years. The coronavirus could push it over the edge, and if we’re not careful, the world could see a breakdown of the international economic and financial order, as happened in the 1930s.
The most obvious impact of the virus on trade is that Covid-19 has forced governments, businesses, and consumers to appreciate the vulnerabilities created by global supply chains. Shortages of everything from meat to disinfectant wipes and face masks have been exacerbated by export controls imposed by China, Europe, and other producers.
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The Law of Regression to the Tail: How to Mitigate COVID-19, Climate Change, and Other Catastrophic Risks
Bent Flyvbjerg (University of Oxford)
13 May 2020
Regression to the mean is nice and reliable, regression to the tail is reliably scary. We live in the age of regression to the tail. It is only a matter of time until a pandemic worse than Covid-19 will hit us, and climate more extreme than any we have seen so far. What are the basic principles for navigating such risks, for government, business, and the public?
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US set to withdraw from another nuclear arms treaty: CNN
In threat to Hong Kong’s independence, China signals stricter oversight: BBC
China omits growth target, suggesting challenging economic outlook: WSJ
US-China tensions rise on new front: financial markets: CNBC
Economist predicts 40%-plus of lost jobs in US are gone forever: NY Times
UK retail spending crashed 18% in April–biggest monthly drop on record: FT
US Leading Economic Index continued to fall in April after record drop: CB
US existing home sales fell sharply in April: CNBC
Philly Fed Mfg Index in May still reflects deep sector downturn: MW
US jobless claims continued to surge last week, rising 2.4 million: CNBC
Composite PMI survey data for April points to deep loss for US GDP in Q2:

The coronavirus crisis has reordered expectations and valuations in global markets, but searching for the deepest discounts (based on negative return) delivers a familiar result: the commodities realm continues to offer the darkest shade of red.

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US-China tensions expected to deteriorate ahead of US election: CNBC
Is a 2nd virus wave an economic threat? Maybe not, says Fed’s Bullard: WSJ
Today’s US jobless claims report expected to show 2.4 million rise: Reuters
China imposes limited lockdown after new coronavirus outbreak: WSJ
Eurozone PMI for May: economic contraction eases as lockdowns lift: IHS Markit
Japan’s severe economic contraction continues in May via PMI data: IHS Markit
Highly indebted ‘zombie’ companies at risk in US economy: CNBC
All 50 states are reopening their economies. What happens next? NY Times
S&P 500 rises to highest close since March 5:

Shares of growth stocks are in a class of their own this year after ticking into positive territory this week for year-to-date performance. The fractional gain through yesterday’s close (May 19) sets this corner of factor investing apart from the rest of the field, which remains in various degrees of loss so far in 2020, based on a set of exchange-traded funds.

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Economic reopenings proceed throughout US and around the world: WSJ
New virus outbreak in China highlights struggle to contain Covid-19: Bloomberg
CBO projects 38% decline in US economic output in Q2: CNBC
Iranian navy says it will continue to operate in Gulf after US warning: Reuters
Taiwan president rejects China’s plan for reunification: Reuters
UK inflation fell in April to slowest pace since 2016: Bloomberg
World trade volumes expected to “fall precipitously” in 1H:2020: WTO
US housing starts fell 30% in April and settled at a 5-year low: CNBC

Longer is better for analyzing the stock market, which is why Professor Robert Shiller’s data set (with an 1871 starting date) is one of the great free resources on the internet for studying the history of US equities. With that in mind, let’s review how the current drawdown for the S&P 500 compares over the past century and a half.

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