COVID-19 UPDATE: USA cases rise +4,024 to 21,677 on 4 states (IL, FL, CT and PA). Survey data reinforces partisanship in viewing this crisis. Array ( [cookie] => f5fd92-e22639-fa7c92-d9b71b-181f74 [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fsi_macro [visitor_id] => 565831 [reason] => [method] => ) 1
COVID-19 remains a global crisis and we realize that many people need to keep up with COVID-19 developments, particularly since we are moving into the more critical stage ("restart economy"), so feel free to share our commentary to anyone who has interest.
Today, we saw a trifecta of developments that dampened/tapered expectations around COVID-19. Dr. Fauci made his testimony and commented on several topics including the risks of re-opening too quickly, how schools are challenged, and downplayed the timeline for vaccine development. Congress (House Democrats) unveiled the $3T stimulus package but without bi-partisan agreement (=bad) and our Policy Strategist, Tom Block, does not see this bill passing before Memorial Day. And the third impact was the comments by investment scion, Stan Druckenmiller, who was speaking on the Economic Club of NY webcast, and he generally saw downside risks to the economic recovery and to markets (see discussion at end of this commentary).
An abstract of Tom Block's thoughts is below and I highlighted some key thoughts.
- this is not a bi-partisan agreement, so the timeline is slower, as Senate Republicans and White House will review it;
- there is $1,200 per PERSON, not family and up to $6,000 per family;
- Tom expects this to pass after Memorial Day, at the earliest
The somewhat sobering tone to these developments, coupled with normal profit taking, led to stocks falling 2% today. And reversals were seen in the large-cap secular growth leaders. But not all the news was bad. A CNN poll released today showed that a meaningful rise in Americans believe the worst is behind us compared to a month ago -- 44% vs 17% a month ago. Yes, the majority of Americans still see the worst ahead (see Point #3) but a shrinking margin. But it seems very partisan as the swing is entirely due to Republicans. These respondents moved from 70% (in April) seeing 'worst is ahead' to 71% now saying 'worst is behind.' So it is not clear where the public really stands. And continues to the reality that the public, policymakers and investors are uncertain --> uncertain = bearish from an investment positioning standpoint.
POINT #1: USA COVID-19 new cases rise to 21,677, +4,024 vs yesterday, 4 states account for most of the increase --> IL, FL, CT and PA
Total new COVID-19 cases rose to 21,677, up +4,024 from Monday's reported new cases and about flat with the tally from 2D ago. Testing was down today to 254k from 422k yesterday, so the rise in reported cases comes as there were fewer tests administered. As has been the case for the past few weeks, the data early in the week tends to be lower than midweek. And our data scientist, tireless Ken, also informed me that Kansas is now only reporting COVID-19 data 3X per week (M/W/F).
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