by Gary Alexander

August 11, 2020

A Gallup Poll released last Tuesday said that 86% of Americans think the press is biased. Specifically, a Knight Foundation/Gallup Poll asked 20,000 Americans about the press last November through February (pre-Covid): 49% believed the press was “greatly” biased, and another 37% thought it was biased “a fair amount.” Nearly all (94%) of Republicans thought the press was biased, and 78% of Democrats agreed.

On the daily news feed, we seem to hear nothing but negative views, mostly that the U.S. leads the world by a long shot in Covid-19 deaths and cases – or that the economy is tanking at record levels, or our latest jobless rate is the worst in 80 years (vs. no change in Europe’s jobless rate) … and on and on. Woe is us!

These are mostly unfair comparisons, usually motivated by press bias, often political in origin, clearly designed with “regime change” in mind – doing whatever it takes to push the incumbent President back into the hotel business in 2021. But when it comes to fair comparisons in relevant metrics – in the economy, jobs, or Covid-19, the U.S. and Asia are recovering well, while Europe is hurting.

As usual, I will bring you facts from reliable sources, but facts I don’t see being compiled anywhere else.

First of all, the economy: In the second quarter, the U.S. economy declined 32.9% on an annualized basis, but that’s “only” -9.5% on a quarter-over-quarter basis. I haven’t seen anyone explain this, but the way you get to -32.9% is by multiplying 0.905 (that’s 100 minus 9.5) times itself four times (four consecutive quarters of a 9.5% contraction: 0.905 x 0.905 x 0.905 x 0.905 = 0.671 or -32.9%), but we won’t see four straight dismal quarters, so any such -32.9% GDP decline is a purely theoretical, mathematical exercise.

Comparing apples to apples, however, we’ve seen a –40.3% decline in the Eurozone in the same quarter (that’s a -12.1% quarter-to-quarter decline, which requires you to multiply 0.879 times itself four times).

Coronavirus Caused Gross Domestic Product Contraction Bar Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Asia is doing much better, with China’s GDP rising at a 11.5% annual rate and South Korea down only 3.3%. The worst economy in Europe is Spain, down a staggering 18.5% last quarter (a -55.9% annual rate), according to the New York Times, followed by the second and third-largest Eurozone economies: France (-13.8% quarterly, and -44.8% annualized) and Italy (-12.4% quarterly, -41.1% annualized).

Even the #1 Eurozone economy, Germany, was in worse shape than the U.S., down -10.1% quarterly (-34.7% annualized). Even our neighbor to the north, Canada (-12.0%), was doing about as poorly as Italy.

Meanwhile, the U.S. jobless rate has shot up from an all-time low in February to an 80-year high in May, while Europe’s unemployment rate has hardly budged. That seems impossible, given Europe’s deeper recession. Part of the answer is that Europe has structured an economy built on lifetime job guarantees.

Eurozone and United States Unemployment Rates Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

When it comes to stock market performances, the U.S. is also doing much better than Europe, with Asia beating the U.S., so the continental Olympics are: Gold to Asia, Silver to the U.S., and Bronze to Europe.

2020 Stock Market Performance through August 7

The U.S. market had another stellar week, as August opened with the once-laggard Russell 2000 gaining 6% last week and the Dow rising 3.8% with the S&P 500 up 2.5% to near an all-time high and NASDAQ up 2.5% to surpass 11,000 and an all-time high (+22.7% YTD), while all European markets were down.

Worldwide Stock Market Performance Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Covid-19 “Apples to Apples” Comparisons

Turning to the coronavirus pandemic, this is where the America-bashing media seem relentlessly negative to the home team. Most news media constantly tell us that we are the worst nation by far, in terms of new cases and deaths. While technically true, they seldom adjust for population. If you take an equivalent slice of the most populous nations of Europe or Latin America, the COVID death rates are nearly equivalent.

The United States has about 330 million people. If you take Germany (which has a very low COVID death rate), Britain, France, Italy, Spain, and Belgium (with a very high COVID death rate), you have the same basic population (335 million) with nearly identical total deaths (160,000). The U.S. has more “cases,” since the U.S. has issued 60 million tests vs. 43 million in the six European nations listed below:

European Covid Deaths Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Death rates in the two largest Latin American nations are roughly the same as in the U.S. and Europe:

Latin America Covid-19 Deaths Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Four European nations have much higher death rates than the U.S., but 30% of the U.S. deaths have been in just two states, New York and New Jersey which have double the death rates of any European nation.

State Covid-19 Deaths Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

The lowest numbers come from Asia, Africa, and Oceania. With 60% of earth’s population (4.6 billion out of 7.7 billion people), fewer than 15% of Covid deaths come from Asia, the continent where Covid was born. Most of these deaths are in India, but with 1.35 billion people, the death rate is just 3.1 per 100,000.

Leading East-Asian COVID Death Rates – Far Lower than All Other Continent

Leading East-Asian Covid-19 Deaths Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Many major Asian nations seem almost immune to COVID-19 deaths:

  • China, with 1.4 billion people, has only 4,678 reported deaths (0.33 per 100,000).
  • Japan, with 127 million people, has only 1,034 reported deaths (0.81 per 100k).
  • South Korea, with 52 million people, has only 302 deaths (0.58 per 100k).
  • Vietnam, with 95 million people, has only 10 deaths (.01 per 100k).
  • Burma/Myanmar, with 54 million people, has only six deaths (.01 per 100k).

You can argue that some Asian nations may be under-reporting deaths – but all of them? Not a chance.

Total Confirmed Covid-19 Deaths Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Some nations are highly advanced, others are primitive. There is no one answer, but I would suggest that some nations can resist some diseases better than others. When our group of 32 Americans toured China in 1996, over half got sick by the second week, even though we avoided tap water and questionable foods as best we could. Natives had immunities we didn’t have. The same was true of Europeans bringing bugs to Native Americans 500 years ago. Asians may have greater immunity to diseases emanating in Asia.

Other relatively untouched continents, so far, are Africa and Oceania (Australia, etc.). Good on ya, mates.

America has gotten a bad rap for its rising coronavirus cases, but this disease originated in China and spread around the world very quickly. Any blame must go to the leaders that exported the virus, not to us.

All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.

Also In This Issue

A Look Ahead by Louis Navellier
Fitch Downgrades U.S. Credit Outlook

Income Mail by Bryan Perry
Retail REITs Getting Ready to Rumble?

Growth Mail by Gary Alexander
Comparing the Continents Fairly: America vs. Europe vs. Asia

Global Mail by Ivan Martchev
The Dollar Short Squeeze is Not Over Yet

Sector Spotlight by Jason Bodner
Big-Game Hunting for “Outlier” Stocks

View Full Archive
Read Past Issues Here

About The Author

Gary Alexander
SENIOR EDITOR

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

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