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Given the effects associated with the new coronavirus, U.S. economic activity registered downturn in all districts and fell sharply in most of them, according to the Federal Reserve’s Beige Book. The document considers the period until May 18, when broad social isolation measures were still in place in the U.S.

The report highlights a drop in consumers spending in retail, especially in the leisure, travel and tourism sectors. The document also points out that car sales were much lower than a year ago and indicates that most districts reported sharp declines in industrial activity, while production was “remarkably weak” in auto, aerospace and energy factories, according to a report published by Valor Econômico.

Regarding the labor market, the document pointed to a drop in employment and wages. On the other hand, inflationary pressures fell modestly.

The news contrasts with the performance of U.S. stock exchanges. The Nasdaq, for example, closed at a record high of 9.924,75 points, the highest numbers since February 2019. At the other end, the National Bureau of Economic Research (NBER) declared that the U.S. economy is officially in recession, ending a cycle of expansion that lasted 128 months. The perception of the market is that the worst is over.

Stock markets detached from U.S. economic activity

The gap between the real and financial markets is contemplated in Transfero Swiss’ investment thesis, which predicts that cryptoassets will be the best performing in the current biennium. This detachment is closely linked to the performance of central banks in the economy. For example, Bank of Japan is among the top ten shareholders of 47% of Tokyo stock exchange companies, now the third largest in the world.

The bitcoin, on the other hand, is free of government interference and has its emission limited to 21 million units, which makes it a scarce asset as precious metals such as gold and silver. Historically, these are protective assets in times of systemic crisis, such as the ones we are going through now.